[Federal Register Volume 66, Number 150 (Friday, August 3, 2001)]
[Proposed Rules]
[Pages 40802-40832]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-19151]



[[Page 40801]]

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Part II





Environmental Protection Agency





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40 CFR Part 52



Approval and Promulgation of Implementation Plans; Indiana; Ozone; 
Proposed Rule

  Federal Register / Vol. 66, No. 150 / Friday, August 3, 2001 / 
Proposed Rules  

[[Page 40802]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[IN136-1; FRL-7022-4]


Approval and Promulgation of Implementation Plans; Indiana; Ozone

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA proposes to approve the following as revisions to the 
Indiana State Implementation Plan (SIP) for the Chicago-Gary-Lake 
County ozone nonattainment area, i.e., for the Indiana portion of this 
bi-state ozone nonattainment area: An ozone attainment demonstration; a 
post-1999 ozone Rate-Of-Progress (ROP) plan; a contingency measures 
plan for both the ozone attainment demonstration and the post-1999 ROP 
plan; a commitment to conduct a mid-course review of the ozone 
attainment demonstration; motor vehicle conformity emission budgets for 
Volatile Organic Compounds (VOC) and Oxides of Nitrogen ( 
NOX) and the State's commitment to revise the emission 
budgets using the MOBILE6 emissions factor model; and a Reasonably 
Available Control Measure (RACM) analysis. EPA proposes to revise the 
existing NOX emissions control waiver for the Indiana 
portion of the Chicago-Gary-Lake County ozone nonattainment area to 
eliminate the waiver for those NOX emission sources that the 
State has assumed will be controlled in the ozone attainment 
demonstration. These controlled sources include Electrical Generating 
Units (EGUs), major non-EGU boilers and turbines, and major cement 
kilns in Lake and Porter Counties. The existing NOX 
emissions control waiver remains in place for Reasonably Available 
Control Technology (RACT), New Source Review (NSR), and certain 
requirements of vehicle Inspection and Maintenance (I/M) and 
transportation and general conformity. Finally, EPA proposes to 
incorporate into the SIP a portion of an agreed order between U.S. 
Steel (currently USX Corporation) and the Indiana Department of 
Environmental Management (IDEM) signed by IDEM on March 22, 1996. The 
portion of the agreed order proposed for incorporation into the SIP 
requires U.S. Steel to establish a coke plant process water treatment 
plant at its Gary Works.

DATES: Written comments must be received on or before September 4, 
2001.

ADDRESSES: Written comments should be sent to J. Elmer Bortzer, Chief, 
Regulation Development Section, Air Programs Branch (AR-18J), U.S. 
Environmental Protection Agency, 77 West Jackson Boulevard, Chicago, 
Illinois 60604.
    Copies of the State's submittals addressed in this proposed rule 
and other relevant materials are available for public inspection during 
normal business hours at the following address: U.S. Environmental 
Protection Agency, Region 5, Air and Radiation Division, 77 West 
Jackson Boulevard, Chicago, Illinois 60604 (please telephone Edward 
Doty at (312) 886-6057 before visiting the Region 5 office).

FOR FURTHER INFORMATION CONTACT: Edward Doty, Regulation Development 
Section, Air Programs Branch (AR-18J), U.S. Environmental Protection 
Agency, Region 5, 77 West Jackson Boulevard, Chicago, Illinois 60604, 
Telephone Number: (312) 886-6057, E-Mail Address: [email protected].

SUPPLEMENTARY INFORMATION: Throughout this document whenever ``we,'' 
``us,'' or ``our'' is used, we mean EPA. Whenever ``you'' or ``me'' is 
used, we mean you the reader of this proposed rule or the sources 
subject to the requirements of the State as discussed in the State's 
submittal or in this proposed rule.
    This section provides additional information by addressing the 
following topics and questions:

I. What Action is EPA Proposing Today?
II. Background Information
    A. What is a State Implementation Plan (SIP)?
    B. What is the Federal Approval Process for a SIP?
    C. What Does Federal Approval of a State Regulation Mean?
    D. What are EPA's Options for Action on a State SIP Submittal?
    E. What Ozone Nonattainment Area is Addressed by the State 
Submittal Reviewed in This Proposed Rule?
    F. What Prior EPA Rulemakings Relate to or Led to the State 
Submittal Reviewed in This Proposed Rule?
    G. What is the Time Frame for EPA to Take Action on the State 
Submittal?
    H. What are the Basic Components of the State Submittal and What 
are the Subjects Covered in this Proposed Rule?
III. Ozone Attainment Demonstration and Emissions Control Strategy
    A. Background Information and Requirements Placed on the Ozone 
Attainment Demonstration
    1. What Clean Air Act requirements apply to the State's ozone 
attainment demonstration?
    2. What is the history of the State's ozone attainment 
demonstration and how is it related to EPA's NOX SIP 
Call?
    3. What are the modeling requirements for the ozone attainment 
demonstrations?
    4. What additional analyses may be considered when the ozone 
modeling fails to show attainment of the ozone standard?
    5. Besides the modeled attainment demonstration and adopted 
emission control strategy, what other elements must be addressed in 
an attainment demonstration SIP?
    6. What are the relevant EPA policy and guidance documents?
    B. Technical Review of the State's Submittal
    1. When was the attainment demonstration addressed in public 
hearings, and when was the attainment demonstration submitted to the 
EPA?
    2. What are the basic technical components of the submittal?
    3. What modeling approach was used in the analyses to develop 
and validate the ozone modeling system?
    4. How were the 1996 base year emissions developed?
    5. What procedures and sources of projection data were used to 
project the emissions to the attainment year?
    6. How were the 1996 and 2007 emission estimates quality 
assured?
    7. What is the adopted emissions control strategy?
    8. What were the ozone modeling results for the base period and 
for the future attainment period with the selected emissions control 
strategy?
    9. Do the modeling results demonstrate attainment of the ozone 
standard?
    10. Does the attainment demonstration depend on future 
reductions of regional emissions?
    11. Has the State adopted all of the regulations/rules needed to 
support the ozone attainment strategy and demonstration?
    C. EPA's Evaluation of the Ozone Attainment Demonstration 
Portion of the State's Submittal
    1. Did the State adequately document the techniques and data 
used to derive the modeling input data and modeling results of the 
analyses?
    2. Did the modeling procedures and input data used comply with 
the Clean Air Act requirements?
    3. Did the State adequately demonstrate attainment of the ozone 
standard?
    4. Has Indiana adequately documented the adopted emissions 
control strategy?
    5. Is the emissions control strategy acceptable?
IV. Post-1999 Rate-of-Progress (ROP) Plan
    A. What is a Post-1999 ROP Plan?
    B. What is the ROP Contingency Measure Requirement?
    C. What Indiana Counties are Covered by the Post-1999 ROP Plan?
    D. Who is Affected by the Indiana Post-1999 ROP Plan?
    E. What Criteria Must a Post-1999 ROP Plan Meet to be Approved?
    F. What Changes Did Indiana Make to the 1990 VOC Base Year 
Emissions Inventory In This Submission?
    G. Why were the 1996 15 Percent ROP Target Level and the 1999 9 
Percent ROP Target Level for Lake and Porter

[[Page 40803]]

Counties Recalculated, and Does Indiana Have to Revise The Prior ROP 
Plans?
    H. How Were the 1996 and 1999 Target Emission Levels for Lake 
and Porter Counties Recalculated?
    I. How Were the Post-1999 Emission Targets and Emission 
Reduction Requirements Calculated?
    J. What are the Criteria for Acceptable ROP Emission Control 
Strategies?
    K. What are the Emission Control Measures In Indiana's Post-1999 
ROP Plan?
    L. Are the Emission Control Measures and Calculated Emission 
Reductions Acceptable to the EPA?
    M. Are the Planned Emissions Reductions Adequate to Meet the ROP 
Emission Reduction Requirements, Including ROP Contingency Measure 
Requirements?
    N. How Does The ROP Plan Affect Outstanding Plan Requirements 
for Contingency Measures on the 15 Percent ROP Plan and the Post-
1996 9 Percent ROP Plan?
V. Contingency Measures Plan
    A. What are the Requirements for Contingency Measures Under 
Section 172(c)(9) and Section 182(c)(9) of the CAA?
    B. How Do the Northwest Indiana Attainment Demonstration and ROP 
SIP Address the Contingency Measure Requirements?
    C. Do the Northwest Indiana Attainment Demonstration and ROP 
Plans Meet the Contingency Measure Requirements?
VI. Mid-Course Review Commitment
    A. Did Indiana Submit a Mid-Course Review Commitment?
VII. NOX Waiver
    A. What is the History of the NOX Emissions Control 
Waiver in the Chicago-Gary-Lake County Ozone Nonattainment Area?
    B. What are the Conclusions of the State Regarding the Impact of 
the Ozone Attainment Demonstration on the NOX Control 
Waiver?
    C. What are the Conclusions That Can Be Drawn Regarding the 
NOX Control Waiver From Data Contained in the State's 
Ozone Attainment Demonstration?
    D. What are the EPA Conclusions Regarding the Existing 
NOX Waiver Given the Available Ozone Modeling Data?
VIII. Mobile Source Conformity Emissions Budgets and Commitment to 
Re-Model Using Mobile6
    A. What Are the Requirements for Mobile Source Conformity 
Emissions Budgets?
    B. How Were the Indiana Attainment Demonstration and ROP 
Emissions Budgets Developed?
    C. Did Indiana Commit to Revise the Budgets When EPA Releases 
MOBILE6?
    D. Are the Indiana Emissions Budgets Adequate for Conformity 
Purposes?
IX. Reasonably Available Control Measure (RACM) Analysis
    A. What are the Requirements for RACM?
    B. How Does This Submission Address the RACM Requirement?
    C. Does the Northwest Indiana Attainment Demonstration Meet the 
RACM Requirement?
X. Administrative Requirements

I. What Action Is EPA Proposing Today?

    Based on a review of all available information, Clean Air Act (CAA) 
requirements, and relevant EPA guidance, we propose to approve: (1) 
Indiana's 1-hour ozone attainment demonstration for the Chicago-Gary-
Lake County ozone nonattainment area; (2) Indiana's post-1999 ROP plan 
(an ROP plan covering the time period of November 15, 1999 through 
November 15, 2007) for the Indiana portion of the Chicago-Gary-Lake 
County ozone nonattainment area (the Northwest Indiana area); (3) 
Indiana's contingency measure plans for both the ozone attainment 
demonstration and the post-1999 ROP plan; (4) Indiana's commitment to 
conduct a mid-course review of the ozone attainment demonstration; (5) 
Indiana's ROP and attainment motor vehicle conformity emission budgets 
for VOC and NOX in the Northwest Indiana area; and (6) 
Indiana's RACM demonstration for the Northwest Indiana area.
    We propose to modify an existing NOX emissions control 
waiver (the NOX emissions control waiver has been in place 
since January 1996) for the Northwest Indiana area. The existing 
NOX emissions control waiver was based on ozone modeling 
data showing that NOX emission reductions in the ozone 
nonattainment area would not contribute to attainment of the ozone 
standard in this nonattainment area. However, ozone modeling supporting 
the ozone attainment demonstration addressed in this proposed rule 
shows that statewide NOX emission controls at EGUs, major 
non-EGU boilers and turbines, and major cement kilns are beneficial and 
will contribute to attainment of the 1-hour standard in the 
nonattainment area and its downwind environs \1\. The attainment 
demonstration further shows that the ozone standard will be attained by 
the applicable attainment date without the use of additional 
NOX emission controls \2\ (beyond other NOX 
emission controls already implemented and/or modeled in the ozone 
attainment demonstration) in the ozone nonattainment area. 
Consequently, such additional NOX emission controls are in 
excess of what is needed to attain the ozone standard.
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    \1\ It is not clear to what extent the NOX controls 
within the ozone nonattainment area itself will contribute to 
attainment of the ozone standard; the modeling results do not 
differentiate the impacts of NOX emission controls for a 
subpart of the State. Nonetheless, the State has relied on these 
NOX emission controls, both inside of the nonattainment 
area and statewide, to attain the ozone standard.
    \2\ The additional NOX emission controls not 
considered in the ozone attainment demonstration include 
NOX RACT, NOX NSR, and additional mobile 
source NOX controls, including vehicle inspection/
maintenance (I/M) emission cutpoints.
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    We propose to modify the existing NOX control waiver to 
remove from the emissions control waiver the EGUs, major non-EGU 
boilers and turbines, and major cement kilns for which the State 
included emission controls in the ozone attainment demonstration. Based 
on the ``excess emissions'' control provisions of section 182(f)(2) of 
the CAA, however, we propose to retain the NOX waiver for 
RACT, NSR, and certain transportation and general conformity, and I/M 
\3\ requirements.
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    \3\ States with NOX waivers are still required to 
prepare motor vehicle emissions budgets consistent with the ozone 
attainment demonstrations and to use these emissions budgets in 
conformity analyses.
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    Finally, we propose to incorporate into the SIP part of an agreed 
order between U.S. Steel and IDEM signed by IDEM on March 22, 1996. 
This part (section 3 of Exhibit E, ``Clean Water Coke Quench Project'') 
of the agreed order requires U.S. Steel to establish a coke plant 
process water treatment plant at its Gary Works, and results in VOC 
emissions reductions relied on in the post-1999 ROP plan. We are not 
incorporating the remaining portions of the agreed order into the SIP 
because the State is not relying on these portions of the agreed order 
to meet the CAA requirements addressed in this proposed rule.

II. Background Information

A. What Is a State Implementation Plan (SIP)?

    Section 110 of the CAA requires states to develop air pollution 
control regulations (rules) and strategies to ensure that state air 
quality meets the National Ambient Air Quality Standards (NAAQS). Each 
state must submit the rules and emission control strategies to the EPA 
for approval and promulgation into a federally enforceable SIP.
    Each federally approved SIP protects air quality primarily by 
addressing air pollution at its points of origin. The SIPs can be and 
generally are extensive, containing many state rules or other 
enforceable documents and supporting information, such as emission 
inventories, monitoring documentation, and modeled attainment 
demonstrations.

B. What Is the Federal Approval Process for a SIP?

    In order for state rules and emission control strategies to be 
incorporated into the federally enforceable SIPs, states

[[Page 40804]]

must formally adopt the rules and emission control strategies 
consistent with state and federal requirements. This process generally 
includes public notice, public hearings, public comment periods, and 
formal adoption by state-authorized rulemaking bodies.
    Once a state rule or emissions control strategy is adopted, the 
state submits it to us for inclusion into the SIP. We must provide 
public notice and must seek additional public comment regarding our 
proposed action on the submission. If we receive adverse comments, we 
must address them prior to any final federal action (we generally 
address them in a final rulemaking action).
    All state rules and supporting information approved by the EPA 
under section 110 of the CAA are incorporated into federally approved 
SIPs. Records of such SIP actions are maintained in the Code of Federal 
Regulations (CFR) at Title 40, part 52, titled ``Approval and 
Promulgation of Implementation Plans.'' The actual state rules which 
are approved are not reproduced in their entirety in the CFR, but are 
``incorporated by reference,'' which means that EPA has approved given 
state rules with specific effective dates, has identified the rules in 
the CFR, and, thereby, has identified the full texts of the rules by 
reference.

C. What Does Federal Approval of a State Regulation Mean?

    Enforcement of a state rule before and after it is incorporated 
into a federally approved SIP is primarily a state responsibility. 
After a rule is federally approved, however, section 113 of the CAA 
authorizes EPA to conduct enforcement actions against violators. 
Citizens are also offered legal recourse to address violations as 
described in section 304 of the CAA.

D. What Are EPA's Options for Action on a State SIP Submittal?

    Depending on the circumstances unique to each of the SIP 
submissions, we may propose one or more of several types of approval, 
or disapproval in the alternative (or a combination if our rulemaking 
process involves separable portions of a SIP submission). In addition, 
these proposals may identify additional actions that may be necessary 
for a state to complete before EPA may fully approve the submissions.
    The CAA provides for EPA to approve, disapprove, partially approve, 
or conditionally approve a state's submission. The EPA must fully 
approve a submission if it meets the requirements of the CAA.
    If a submission is deficient in some way, EPA may disapprove the 
submission. In the alternative, if portions of the submission are 
approvable, EPA may partially approve and partially disapprove the 
submission, or may conditionally approve the submission based on a 
state's commitment to correct the deficiency by a date certain, not 
later than one year from the date of EPA's final conditional approval.
    The EPA recognizes that, in some limited circumstances, it may be 
appropriate to issue a full approval for a submission that consists, in 
part, of an enforceable commitment by a state. Unlike the commitment 
for a submission correction under a conditional approval, such an 
enforceable commitment can be enforced in court by EPA or citizens. In 
addition, this type of commitment may extend beyond one year following 
EPA's final approval action. Thus, EPA may accept such an enforceable 
commitment where it is infeasible for the state to accomplish the 
necessary action(s) in the short term.

E. What Ozone Nonattainment Area Is Addressed by the State Submittal 
Reviewed in This Proposed Rule?

    The December 21, 2000 submittal of IDEM reviewed here primarily 
deals with attainment of the 1-hour ozone standard in the Northwest 
Indiana area (the Indiana portion of the Chicago-Gary-Lake County ozone 
nonattainment area). As noted above, this area includes Lake and Porter 
Counties. We are separately rulemaking on the attainment plan for the 
Illinois portion of the Chicago-Gary-Lake County ozone nonattainment 
area.

F. What Prior EPA Rulemakings Relate to or Led to the State Submittal 
Reviewed in This Proposed Rule?

    On December 16, 1999 (64 FR 70514), the EPA proposed to 
conditionally approve the 1-hour ozone attainment demonstration for the 
Northwest Indiana area submitted by IDEM on April 30, 1998. The April 
30, 1998 attainment demonstration submittal was based on a range of 
possible emission control measures reflecting various emission control 
alternatives, and did not specify a single set of emission control 
measures that the State had adopted as an emissions control strategy. 
We based our December 16, 1999 proposed conditional approval on the 
State's commitment to adopt and submit, by December 31, 2000, a final 
ozone attainment demonstration SIP revision and a post-1999 ROP plan, 
including the necessary State-adopted air pollution control rules 
needed to support and complete the ozone attainment demonstration and 
post-1999 ROP plan. In the alternative, we proposed to disapprove the 
attainment demonstration if, by December 31, 2000, the State did not 
adopt an emissions control strategy supported by its modeled ozone 
attainment demonstration, and did not submit adequate motor vehicle 
emission budgets for VOC and NOX for the Northwest Indiana 
area that comply with EPA's transportation conformity regulations. In 
addition, we conditioned our approval on the State submitting, by 
December 31, 2000, an enforceable commitment to conduct a mid-course 
review of the ozone attainment plan in 2003. As noted below, this 
submittal time has been delayed until 2004 to allow the states to 
assess the impacts of the NOX SIP Call rules following their 
implementation.
    The December 16, 1999 proposed rulemaking noted that, if the EPA 
issued a final conditional approval of the State's April 30, 1998 
submission \4\, the conditional approval would revert to a disapproval 
if the State did not adopt and submit a complete SIP submission with 
the following elements by December 31, 2000: (1) A final adopted ozone 
modeling analysis that fully assesses the impacts of regional 
NOX emissions reductions, models a specific local emissions 
reduction strategy, and reconsiders the effectiveness of the existing 
NOX emissions control waiver (see a discussion relating to 
the NOX emissions control waiver below); (2) adopted 
emission control measures needed to meet the post-1999 ROP requirements 
(a post-1999 ROP plan covering the period of November 15, 1999 through 
the ozone attainment year); and (3) local VOC and regional 
NOX emission control measures sufficient to support the 
final ozone attainment demonstration. If the State made this complete 
submission by December 31, 2000, we noted that we would propose action 
on the new submission for the purpose of determining whether to issue a 
final full approval of the ozone attainment demonstration.
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    \4\ To date, the EPA has not issued a final rule conditionally 
approving the State's April 30, 1998 submittal. As noted in this 
proposed rule, the State has submitted a revised ozone attainment 
plan, negating the need for the EPA to complete the conditional 
approval of the April 30, 1998 submittal.
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    As noted below, the December 21, 2000 submittal, in part, addresses 
a post-1999 ROP plan for the Northwest Indiana area. The post-1999 ROP 
plan provides required emission reductions in addition to Indiana's 15 
percent ROP plan (VOC emission reductions

[[Page 40805]]

occurring prior to November 15, 1996) and 9 percent post-1996 ROP plan 
(VOC emission reductions occurring prior to November 15, 1999) for this 
ozone nonattainment area. On July 18, 1997 (62 FR 38457), we published 
a final rule approving Indiana's 15 percent ROP plan. On January 26, 
2000 (65 FR 4126), we published a final rule approving Indiana's post-
1996 ROP plan. These final rules addressed the emission control 
measures selected by the State to achieve required ROP emission 
reductions, and addressed the State's calculation of the 1996 and 1999 
VOC emission targets for the Northwest Indiana area.
    The December 21, 2000 submittal includes, as part of the ozone 
attainment demonstration, the modeled impacts of regional 
NOX emission reductions. These regional NOX 
emission reductions must be reviewed in light of the fact that a 
NOX emissions reduction waiver exists for the Chicago-Gary-
Lake County ozone nonattainment area. On January 26, 1996 (61 FR 2428), 
we published a final rule approving the NOX emissions 
control waiver based on a showing that NOX emission 
reductions in the ozone nonattainment area would not contribute to 
attainment of the 1-hour ozone standard. Through the January 26, 1996 
rulemaking, the EPA granted exemptions from the RACT and NSR 
requirements for major stationary sources of NOX and from 
certain vehicle I/M and transportation and general conformity 
requirements for NOX in the Northwest Indiana area.\5\
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    \5\ The NOX waiver does not include an exemption from 
the need for the State to adopt motor vehicle NOX 
emission budgets for the Northwest Indiana area to support 
transportation and general conformity reviews. After the State has 
submitted and EPA has approved a motor vehicle NOX 
emissions budget to be used for conformity purposes, the 
NOX waiver is no longer applicable for transportation or 
general conformity as the State must consider the NOX 
emissions budgets when making conformity determinations.
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    Since EPA waived the NOX requirements based on a 
demonstration that NOX emission controls in the ozone 
nonattainment area are not beneficial toward attaining the ozone 
standard, the State may not receive credit for NOX emission 
controls in the ozone nonattainment area toward ROP requirements and 
attainment of the ozone standard unless the State can demonstrate that 
such emission controls are actually beneficial for attainment of the 
ozone standard. The State, in its December 21, 2000 submittal, is now 
demonstrating that certain regional NOX emission controls 
(including some controls on EGUs, major non-EGU boilers and turbines, 
and major cement kilns in the Northwest Indiana area) would contribute 
toward attainment of the ozone standard.\6\ We are proposing, based on 
the information submitted, to revise the NOX waiver for the 
Northwest Indiana area, as further explained below.
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    \6\ Statewide NOX emission controls on major non-EGU 
boilers and turbines and major cement kilns were also considered in 
the ozone attainment demonstration, but specific controlled 
NOX sources for these source categories were not 
identified for the Northwest Indiana area.
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G. What Is the Time Frame for EPA To Take Action on the State 
Submittal?

    As noted above, the EPA is providing a 30-day public comment period 
for this proposed rule. This comment period is typical for such 
proposed rules and is critical in this case given the relatively tight 
time constraints under which the EPA is operating. More specifically, 
to meet the schedule of an existing consent agreement between the EPA 
and the Natural Resources Defense Council, the EPA must complete final 
rulemaking approving the December 26, 2000 submittal by October 15, 
2001 or must publish a proposed Federal Implementation Plan (FIP) for 
the Northwest Indiana area by that date.

H. What Are the Basic Components of the State Submittal and What 
Are the Subjects Covered in This Proposed Rule?

    The December 21, 2000 Indiana submittal and this proposed rule 
address the following topics: (1) An ozone attainment demonstration for 
the Chicago-Gary-Lake County ozone nonattainment area and the Grid M 
modeling domain; (2) the post-1999 ROP plan for the Northwest Indiana 
area; (3) contingency measures for the post-1999 ROP plan and for the 
ozone attainment demonstration; (4) ROP and attainment motor vehicle 
transportation conformity emission budgets; and (5) Indiana's 
commitments for a mid-course review of the ozone attainment 
demonstration. This proposed rule also addresses: (1) The status of 
rule adoption and implementation needed to support the ozone attainment 
demonstration and post-1999 ROP plan; (2) revisions to the existing 
NOX control waiver for the Chicago-Gary-Lake County ozone 
nonattainment area; and (3) a RACM analysis for the Northwest Indiana 
area.
    In this notice, we do not respond to the public comments submitted 
on our December 16, 1999 proposed rule on Indiana's April 30, 1998 
ozone attainment demonstration submittal. We will address those 
comments along with comments addressing this proposed rule when we take 
final action on Indiana's ozone attainment demonstration and other plan 
elements.

III. Ozone Attainment Demonstration and Emissions Control Strategy

A. Background Information and Requirements Placed on the Ozone 
Attainment Demonstration

1. What Clean Air Act Requirements Apply to the State's Ozone 
Attainment Demonstration?
    The CAA requires the EPA to establish National Ambient Air Quality 
Standards (NAAQS) for certain widespread air pollutants that cause or 
contribute to air pollution that is reasonably anticipated to endanger 
public health or welfare. Clean Air Act sections 108 and 109. In 1979, 
EPA promulgated the 1-hour ozone standard at a level of 0.12 parts per 
million (ppm) (120 parts per billion [ppb]). 44 FR 8202 (February 8, 
1979). An area exceeds the 1-hour ozone standard each day in which an 
ambient air quality monitor records an 1-hour average ozone 
concentration above 0.124 ppm. An area violates the ozone standard if, 
over a consecutive 3-year period, more than 3 daily exceedances are 
recorded or are expected to occur at any monitor in the area or in its 
immediate downwind environs. The highest of the fourth-high daily peak 
ozone concentrations over the 3-year period at any monitoring site in 
the area is called the ozone design value for the area. The CAA 
required the EPA to designate as nonattainment any area that was 
violating the 1-hour ozone standard, generally based on the air quality 
monitoring data for the 3 year period from 1987 through 1989. Clean Air 
Act section 107(d)(4); 56 FR 56694 (November 6, 1991). The CAA further 
classified these areas, based on the areas' ozone design values, as 
marginal, moderate, serious, severe, or extreme. Clean Air Act section 
181(a). Marginal nonattainment areas were suffering the least 
significant air quality problems and extreme nonattainment areas had 
the most significant air quality problems.
    The control requirements and date by which attainment of the 1-hour 
ozone standard needs to be achieved vary with an area's classification. 
Marginal areas are subject to the fewest mandated control requirements 
and have the earliest ozone attainment date. Moderate, serious, severe, 
and extreme areas are subject to more stringent planning and control 
requirements but are provided more time to attain the standard. Serious 
nonattainment areas were required to attain the 1-hour ozone standard 
by November 15, 1999, and severe ozone nonattainment areas are

[[Page 40806]]

required to attain the ozone standard by November 15, 2005 or November 
15, 2007 depending on the areas' ozone design values. The Chicago-Gary-
Lake County ozone nonattainment area is classified as ``severe-17'' and 
its attainment date is November 15, 2007.
    Under sections 182(c)(2) and 182(d) of the CAA, states with serious 
or severe ozone nonattainment areas were required to submit, by 
November 15, 1994, demonstrations of how the nonattainment areas would 
attain the 1-hour ozone standard and how they would achieve ROP 
reductions in VOC emissions of 9 percent of the base year anthropogenic 
emissions for each 3-year period until the attainment date (following 
an initial 15 percent reduction in the VOC emissions by November 15, 
1996). In some cases, NOX emission reductions can be 
substituted for the required VOC emission reductions to achieve ROP.
2. What Is the History of the State's Ozone Attainment Demonstration 
and How Is It Related to EPA's NOX SIP Call?
    Notwithstanding significant efforts by the states, in 1995 EPA 
recognized that many states in the eastern half of the United States 
could not meet the November 15, 1994 time frame for submitting 
attainment demonstration SIP revisions because emissions of 
NOX and VOC in upwind states (and the ozone formed by these 
emissions) affected these nonattainment areas and the full impact of 
this effect had not yet been determined. This phenomenon is called 
ozone transport.
    On March 2, 1995, Mary D. Nichols, EPA's then Assistant 
Administrator for Air and Radiation, issued a memorandum to EPA's 
Regional Administrators acknowledging the efforts made by states but 
noting the remaining difficulties in making attainment demonstration 
SIP submittals.\7\ Recognizing the problems created by ozone transport, 
the March 2, 1995 memorandum called for a collaborative process among 
the states of the eastern half of the Country to evaluate and address 
transport of ozone and its precursors. This memorandum led to the 
formation of the Ozone Transport Assessment Group (OTAG) \8\ and 
provided for the states to submit the attainment demonstration SIPs 
based on the expected time frame for OTAG to complete its evaluation of 
ozone transport and to take into consideration the OTAG ozone modeling 
results.
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    \7\ Memorandum, ``Ozone Attainment Demonstrations,'' issued 
March 2, 1995. A copy of the memorandum may be found on EPA's web 
site at http://www.epa.gove/ttn/oarpg/t1pgm.html.
    \8\ Letter from Mary A. Gade, Director, State of Illinois 
Environmental Protection Agency, to the members of the Environmental 
Council of States (ECOS), dated April 13, 1995.
---------------------------------------------------------------------------

    In June 1997, OTAG completed its process. OTAG submitted to EPA the 
results of its technical air quality modeling efforts, which quantified 
the impact of the transport of ozone and its precursors. OTAG 
recommended consideration of a range of regional, state-wide 
NOX emission control measures.
    In recognition of the length of the OTAG process, in a December 29, 
1997 memorandum, Richard Wilson, EPA's then Acting Assistant 
Administrator for Air and Radiation, provided until April 1998 for 
states to submit the following elements of their attainment 
demonstration SIPs for serious and severe nonattainment areas: (a) 
Evidence that the applicable emission control measures in subpart 2 of 
part D of title I of the CAA were adopted and implemented or were on an 
expeditious course to being adopted and implemented; (b) lists of 
measures needed to meet the remaining ROP emissions reduction 
requirements and to reach attainment; (c) for severe areas only, a 
commitment to adopt and submit the emission control measures necessary 
for attainment and the ROP plans through the attainment year by the end 
of 2000 \9\; (d) commitments to implement the SIP control programs in a 
timely manner to meet ROP emission reduction milestone targets and to 
achieve attainment of the ozone standard; and (e) evidence of a public 
hearing on each state's submittal.\10\ In addition, state submissions 
due in April 1998, under the Wilson policy, should have also included 
motor vehicle emissions budgets.
---------------------------------------------------------------------------

    \9\ In general, a commitment for severe areas to adopt by 
December 2000 the control measures necessary for attainment and ROP 
plans through the attainment year applies to any additional measures 
necessary for attainment that were not otherwise required to be 
submitted earlier. (This memorandum was not intended to allow states 
to delay submission of measures required under the Clean Air Act.) 
Thus, this commitment applies to any control measures or emission 
reductions on which any state relies for purposes of a modeled 
attainment demonstration.
    \10\ Memorandum, ``Guidance for Implementing the 1-Hour Ozone 
and Pre-Existing PM10 NAAQS,'' issued December 29, 1997. 
A copy of this memorandum may be found on EPA's web site at http://www.epa.gov/ttn/oarpg/t1pgm.html.
---------------------------------------------------------------------------

    Building upon the OTAG recommendations and technical analyses, in 
November 1997, EPA proposed action addressing the ozone transport 
problem. In its proposal, the EPA found that current SIPs in 22 states 
and the District of Columbia (23 jurisdictions) did not meet the 
requirements of section 110(a)(2)(D) of the CAA because they did not 
adequately regulate statewide NOX emissions that 
significantly contribute to ozone nonattainment in downwind states. 62 
FR 60318 (November 7, 1997). The EPA finalized that rule in September 
1998, calling on the 23 jurisdictions to revise their SIPs to require 
NOX emission reductions within each jurisdiction to a level 
consistent with a NOX emission budget identified in the 
final rule. 63 FR 57356 (October 27, 1998). The final rule is commonly 
referred to as the NOX SIP Call.
    EPA completed final rulemaking on the NOX SIP Call on 
October 27, 1998, requiring states to address transport of 
NOX and ozone to other states. To address transport, the 
NOX SIP Call established state-specific emission budgets for 
NOX that the 23 jurisdictions were required to meet through 
enforceable SIP emission control measures adopted and submitted by 
September 30, 1999. The EPA did not identify specific NOX 
sources that the states must regulate nor did the EPA limit the states' 
choices regarding where within the states to achieve the emission 
reductions.
    On May 25, 1999, the U.S. Court of Appeals for the District of 
Columbia issued an order staying the SIP submission requirement of the 
NOX SIP Call. On March 3, 2000, the Court issued a decision, 
which largely upheld EPA's final NOX SIP Call rule, with 
certain exceptions that do not affect this proposed rule. On June 23, 
2000, the Court lifted the stay. Finally, August 30, 2000, the Court 
issued an order providing that EPA could not require SIPs to include a 
source control implementation date earlier than May 31, 2004.
3. What Are the Modeling Requirements for the Ozone Attainment 
Demonstrations?
    The EPA provides that states may rely on a modeled attainment 
demonstration supplemented with additional evidence to demonstrate 
attainment of the ozone standard.\11\ In order to have complete ozone 
modeling attainment demonstration submissions, states should have 
submitted the required

[[Page 40807]]

modeling analyses and identified any additional evidence that EPA 
should consider in evaluating whether areas will attain the ozone 
standard.
---------------------------------------------------------------------------

    \11\ The EPA issued guidance on air quality modeling that is 
used to demonstrate attainment of the 1-hour ozone NAAQS. See U.S. 
EPA (1991), Guideline for Regulatory Application of the Urban 
Airshed Model, EPA-450/4-91-013 (July 1991). A copy may be found on 
EPA's web site at http://www.epa.gov/ttn/scram/(file name: 
``UAMREG''). See also U.S. EPA (1996), Guidance on Use of Modeled 
Results to Demonstrate Attainment of the Ozone NAAQS, EPA-454/B-95-
007 (June 1996). A copy may be found on EPA's web site at http://www.epa.gov/ttn/scram/(file name: ``O3TEST'').
---------------------------------------------------------------------------

    For the purposes of demonstrating attainment of the ozone standard, 
the CAA (section 182(c)(2)(A)) requires states with serious and severe 
ozone nonattainment areas to use photochemical dispersion modeling or 
an analysis method EPA determines to be as effective to assess the 
adequacy of emission control strategies and to demonstrate attainment 
of the ozone standard. The photochemical dispersion modeling system is 
set up using observed meteorological conditions conducive to the 
formation of ozone. The meteorological conditions are selected based on 
historical data for high ozone periods in the nonattainment area or in 
its associated modeling domain. Emissions for a base year and monitored 
ozone and ozone precursor (generally VOC and NOX) 
concentrations are used to evaluate the modeling system's ability to 
reproduce actual monitored air quality values (ozone and other 
associated pollutants). Following validation of the modeling system for 
the base year, ozone precursor emissions are projected to an attainment 
year and modeled in the photochemical modeling system to predict air 
quality levels in the attainment year. Projected emission changes 
include source emissions growth up to the attainment year and emission 
controls implemented by the attainment year.
    A modeling domain is chosen that encompasses the ozone 
nonattainment area and surrounding upwind and downwind areas. 
Attainment of the ozone standard is demonstrated when all predicted 
ozone concentrations in the attainment year in the modeling domain are 
at or below the ozone NAAQS or at an acceptable upper limit above the 
NAAQS permitted under certain conditions as explained in EPA's 
guidance. An optional Weight-Of-Evidence (WOE) determination may be 
used to address uncertainty inherent in the application of 
photochemical grid models. See the discussion of possible WOE 
determination tests and analyses below.
    The EPA guidance identifies the features of a modeling analysis 
that are essential to obtain credible results. First, the State must 
develop and implement a modeling protocol. The modeling protocol 
describes the methods and procedures to be used in conducting the 
modeling analyses and provides for policy oversight and technical 
review by individuals responsible for developing or assessing the 
attainment demonstration (state and local agencies, EPA regional 
offices, the regulated community, and public interest groups). Second, 
for purposes of developing the information to put into the model, the 
state must select historical high ozone days (days with ozone 
concentrations exceeding the ozone standard) that are representative of 
the ozone pollution problem for the nonattainment area. Third, the 
state needs to identify the appropriate dimensions of the area to be 
modeled, i.e., the modeling domain size. The modeling domain should be 
larger than the designated ozone nonattainment area to reduce 
uncertainty in the nonattainment area boundary conditions and should 
include any large upwind sources just outside of the ozone 
nonattainment area. In general, the modeling domain is considered to be 
the area where control measures are most beneficial to bring the 
nonattainment area into attainment of the ozone NAAQS. Fourth, the 
state needs to determine the modeling grid resolution (the modeling 
domain is divided into a three-dimensional grid). The horizontal and 
vertical resolutions in the modeling domain affect the modeled 
dispersion and transport of emission plumes. Artificially large grid 
cells (too few vertical layers and horizontal grids for a given modeled 
volume) may artificially dilute pollutant concentrations and may not 
properly consider impacts of complex terrain, meteorology, and land/
water interfaces. Fifth, the state needs to generate meteorological 
data and emissions that describe atmospheric conditions and inputs 
reflective of the selected high ozone days. Finally, the state needs to 
verify that the modeling system is properly simulating the chemistry 
and atmospheric conditions through diagnostic analyses and model 
performance tests (generally referred to as model validation). Once 
these steps are satisfactorily completed, the model is ready to be used 
to generate air quality estimates to evaluate emission control 
strategies and to support an ozone attainment demonstration.
    The modeled attainment test compares model-predicted 1-hour daily 
maximum ozone concentrations in all grid cells for the attainment year 
(2007 for the Chicago-Gary-Lake County ozone nonattainment area) with 
all selected emission control measures (emissions control strategy) in 
place to the level of the ozone NAAQS. A predicted peak ozone 
concentration above 0.124 ppm (124 ppb) indicates that the area may 
exceed the ozone standard in the attainment year under the tested 
emissions control strategy and that the emissions control strategy may 
be inadequate to attain the ozone standard.
    EPA's guidance recommends that states use either of two modeled 
attainment or exceedance tests for the ozone attainment demonstration, 
a deterministic test or a statistical test. The deterministic test 
requires a state to compare predicted 1-hour daily maximum ozone 
concentrations for each modeling domain grid cell for each modeled day 
\12\ to the ozone attainment level of 0.124 ppm. If none of the 
predictions exceed 0.124 ppm, the test is passed.
---------------------------------------------------------------------------

    \12\ The initial, ``ramp-up'' day for each modeled high ozone 
episode is excluded from this determination.
---------------------------------------------------------------------------

    The statistical test takes into account the fact that the 1-hour 
ozone NAAQS allows exceedances. If, over a 3-year period, an area has 
an average of 1 or fewer daily exceedances per year at any monitoring 
site, the area is not violating the ozone standard. Thus, if the state 
models an extreme day, considering meteorological conditions that are 
very conducive to high ozone levels, the statistical test provides that 
a prediction of an 1-hour ozone concentration above 0.124 ppm up to a 
certain upper limit may be consistent with attainment of the standard.
    The acceptable upper limit for modeled peak ozone concentrations in 
the statistical test is determined by examining the levels of ozone 
standard exceedances at monitoring sites which meet the 1-hour ozone 
NAAQS. For example, a monitoring site for which the four highest 1-hour 
average ozone concentrations over a 3-year period are 0.136 ppm, 0.130 
ppm, 0.128 ppm, and 0.122 ppm is attaining the standard. To identify an 
acceptable upper limit, the statistical likelihood of observing ozone 
air quality exceedances of the standard of various concentrations is 
equated to the relative severity of the modeled day. The upper limit 
generally represents the maximum ozone concentration observed at a 
location on a single day, and would be the only ozone reading above the 
standard that would be expected to occur no more than an average of 
once a year over a 3-year period. Therefore, if the maximum ozone 
concentration predicted by the model is below the acceptable upper 
limit, in this case 0.136 ppm, then EPA might conclude that the modeled 
attainment test is passed. Generally, exceedances well above 0.124 ppm 
are very unusual at monitoring sites meeting the ozone NAAQS. Thus, 
these upper limits are rarely substantially higher than the attainment 
level of 0.124 ppm.

[[Page 40808]]

4. What Additional Analyses May Be Considered When the Ozone Modeling 
Fails To Show Attainment of the Ozone Standard?
    When the ozone modeling does not conclusively demonstrate 
attainment of the ozone standard through either a deterministic test or 
a statistical test, additional analyses may be presented to help 
determine whether the area nevertheless will attain the standard. As 
with other predictive tools, there are inherent uncertainties in some 
of the photochemical modeling inputs, such as the meteorological and 
emissions data bases for individual days and in the methodology used to 
assess the severity of an exceedance at individual sites. EPA's 
guidance recognizes these limitations, and provides a means for 
considering other evidence to help assess whether attainment of the 
NAAQS is likely. The process by which this is done is the WOE 
determination.\13\
---------------------------------------------------------------------------

    \13\ States may choose to submit WOE determinations even when 
the ozone modeling results pass either the deterministic test or the 
statistical test. This may be done to support the attainment 
demonstration, recognizing that the ozone modeling results possess a 
certain degree of uncertainty.
---------------------------------------------------------------------------

    Under a WOE determination, a state can rely on and EPA will 
consider factors such as: Other modeled attainment tests, e.g., a 
rollback analysis; Other modeled outputs, e.g., changes in the 
predicted frequency and pervasiveness of ozone standard exceedances and 
predicted changes in an area's ozone design value; actual observed air 
quality trends; estimated emissions trends; analyses of air quality 
monitoring data; the responsiveness of the model predictions to further 
emission controls; and, whether there are additional emission control 
measures that are or will be approved into the SIP but that were not 
included in the ozone modeling analysis. This list is not an exhaustive 
list of factors that may be considered, and the factors considered 
could vary from case to case. EPA's guidance contains no limit on how 
close a modeled attainment test (a deterministic test or a statistical 
test) must be to passing to conclude that other evidence besides an 
attainment test is sufficiently compelling to suggest attainment. The 
further a modeled attainment test is from being passed, however, the 
more compelling the WOE determination needs to be.
    EPA's 1996 modeling guidance also recognizes a need to perform a 
mid-course review as a means for addressing uncertainty in the modeling 
results, particularly if a WOE determination is needed to support an 
ozone attainment demonstration. Because of the uncertainty in long term 
projections, EPA believes a viable attainment demonstration that relies 
on a WOE determination needs to contain provisions for periodic review 
of monitoring, emissions, and modeling data to assess the extent to 
which refinements to emission control measures are needed. The mid-
course review is further discussed below.
5. Besides the Modeled Attainment Demonstration and Adopted Emission 
Control Strategy, What Other Elements Must be Addressed in the 
Attainment Demonstration SIP?
    In addition to the modeling analysis and WOE determination 
supporting the attainment demonstration, the EPA has identified the 
following key elements which must also be adopted by the state and 
approved by the EPA in order for EPA to approve the 1-hour ozone 
attainment demonstration SIPs.
    a. Clean Air Act measures, and other measures relied on in the 
modeled attainment demonstration. This includes adopted and submitted 
rules for all Clean Air Act required measures for the specific area 
classification. This also includes measures that may not be required 
given the area's ozone classification but that the state relied on in 
its attainment demonstration or in its ROP plan.
    The state should have adopted the emission control measures 
required under the CAA for the area's ozone nonattainment 
classification. In addition, states with severe ozone nonattainment 
areas had until December 2000 to adopt and submit additional emission 
control measures needed to achieve ROP through the attainment year and 
to attain the ozone standard. For purposes of fully approving a state's 
SIP, the state needs to adopt and submit rules for all VOC and 
NOX controls within the ozone modeling domain and within the 
state that are relied on to support the modeled ozone attainment 
demonstration.
    Table I presents a summary of the CAA requirements that need to be 
met for each severe ozone nonattainment area. These requirements are 
specified in section 182 of the CAA. Information on more measures that 
states may have adopted or relied on in their current SIP submissions 
is not shown in the table.
---------------------------------------------------------------------------

    \14\ The NOX NSR requirements do not currently apply 
in the Northwest Indiana area based on a NOX waiver 
granted to Indiana on January 26, 1996 (61 FR 2428).
    \15\ The NOX RACT requirements do not currently apply 
in the Northwest Indiana area based on a NOX waiver 
granted to Indiana on January 26, 1996 (61 FR 2428).
    \16\ To provide interim progress, EPA accepted 9 percent VOC/
NOX emission reduction plans to cover ROP requirements 
between 1996 and 1999. The states with severe nonattainment areas 
were required to meet the remainder (post-1999) of the ROP 
requirements through the submittal of a final ROP plan with adopted 
emission control regulations by December 2000. We review Indiana's 
post-1999 ROP plan later in this proposed rule.

     Table I.--CAA Requirements for Severe Ozone Nonattainment Areas
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
 NSR Requirements for VOC and NOX, Including an Offset Ratio of
 1.3:1 and a Major Source VOC and NOX Emissions Threshold of 25 Tons Per
 Year \14\
 RACT for VOC and NOX \15\
 Enhanced Vehicle I/M
 15 Percent VOC Control Plan for ROP Through 1996
 3 Percent VOC/NOX Reduction Per Year Through the Ozone Standard
 Attainment Year--Post-1996 ROP \16\
 RACM
 Contingency Measures
 Base Year Emissions Inventory
 Stage II Gasoline Vapor Recovery At Retail Service Stations
 Reformulated Gasoline
 Measures to Offset Growth in Vehicle Miles Traveled (VMT)
 Emission Statement Rules Requiring Sources to Periodically
 Submit Summaries to Their VOC and NOX Emissions
 Ozone Attainment Demonstration
 Clean Fuels Fleet Program
 Enhanced Ambient Monitoring (Photochemical Assessment
 Monitoring System [PAM])
------------------------------------------------------------------------


[[Page 40809]]

    b. NOX reductions affecting boundary conditions. 
Emission reductions that will be achieved through EPA's NOX 
SIP Call are expected by the EPA and the states to reduce the levels of 
ozone and ozone precursors entering ozone nonattainment areas and ozone 
modeling domains at their boundaries, and to reduce the NOX 
emissions generated within the ozone modeling domains. The ozone levels 
at the boundary of the local modeling domain are reflected in modeled 
attainment demonstrations and are, along with the concentrations of 
other pollutants entering the modeling domain, referred to as 
``boundary conditions.'' The boundary conditions and the ozone 
generated and transported within the modeling domains are expected to 
be impacted by the NOX emission reductions resulting from 
the NOX SIP Call in many areas. Therefore, EPA believes it 
is appropriate to allow states to continue to assume the NOX 
emission reductions resulting from the NOX SIP Call in areas 
outside of the local ozone modeling domains. If states assume emission 
reductions other than those resulting from the NOX SIP Call 
within their states but outside of the ozone modeling domains, the 
states must also adopt emission control regulations to achieve those 
additional emission reductions in order to have approvable ozone 
attainment demonstrations. States subject to the NOX SIP 
Call, particularly those relying on the NOX SIP Call-based 
emission reductions as part of their ozone attainment demonstrations, 
are expected to have adopted the NOX emission control 
regulations needed to comply with the NOX SIP Call. In these 
areas, approval of the ozone attainment demonstrations is dependent on 
the approval of the NOX emission control regulations.
    As provided above, any emission controls assumed by a state within 
a local ozone modeling domain must be adopted by the state and approved 
by us to receive our final approval of the state's 1-hour ozone 
attainment demonstration SIP.
    c. Motor vehicle emissions budgets. The EPA believes that 
attainment demonstration and ROP SIPs must necessarily estimate the 
motor vehicle VOC and NOX emissions that will be produced in 
the attainment and milestone years and must demonstrate that these 
emissions, when considered with emissions from all other sources, are 
consistent with attainment of the ozone standard and ROP. The estimate 
of motor vehicle emissions is used to determine the conformity of 
transportation plans and programs to the SIP, as described by section 
176(c)(2)(A) of the Act. For transportation conformity purposes, the 
estimate of motor vehicle emissions is known as the ``motor vehicle 
emissions budget.'' EPA believes that appropriately identified motor 
vehicle emissions budgets are a necessary part of attainment 
demonstration and ROP SIPs, and that EPA must find these budgets to be 
adequate before we can give final approval to the attainment 
demonstration and ROP SIPs.
    d. Mid-course review. An enforceable commitment to conduct a mid-
course review (MCR) and evaluation of the attainment demonstration 
based on air quality and emissions trends at some time prior to the 
attainment year must be included in the attainment demonstration SIP 
before it can be approved by the EPA, particularly if the SIP depends 
on a WOE determination to demonstrate attainment of the ozone standard. 
States with severe and extreme ozone nonattainment areas should also 
provide for a MCR because of the uncertainty inherent in emission 
projections that extend 10 to 15 years into the future. (See EPA's 
``Guidance on Use of Modeled Results to Demonstrate Attainment of the 
Ozone NAAQS,'' June 1996.) The MCR shows whether the adopted emission 
control measures and emissions control strategy (all measures combined 
into a single plan) are sufficient in timing and extent to reach 
attainment of the ozone standard by the area's attainment deadline, or 
whether additional emission control measures may be necessary.
    A MCR is a reassessment of the modeling analyses and more recent 
monitoring and emissions data to determine if a prescribed emissions 
control strategy is resulting in emission reductions and air quality 
improvements needed to attain the ozone standard as expeditiously as 
practicable but no later than the statutory attainment date. The EPA 
believes that an enforceable commitment to perform a MCR is a critical 
element of a WOE determination.
    For severe areas, such as the Chicago-Gary-Lake County ozone 
nonattainment area, the state(s) must submit an enforceable commitment 
(Indiana has submitted such a commitment as discussed below). The 
commitment must provide the date by which the MCR will be completed. 
The EPA believes that the MCR process should be done immediately 
following the ozone season (April through October in Indiana) in which 
the states have implemented the NOX regulations resulting 
from the NOX SIP Call and that the states should submit the 
results to us by the end of that calendar year. Because the Court of 
Appeals ordered that EPA cannot require states to establish a 
NOX source compliance date prior to May 31, 2004, EPA 
believes that the MCR should be performed following the 2004 ozone 
season and that the results should be submitted by the end of 2004.
    Following submittal of MCR analysis results, we and the state would 
review the results and determine whether the state needs to adopt and 
submit additional emission control measures for purposes of attainment. 
We are not requesting that states commit now to adopt new emission 
control measures as a result of this process. It would be impractical 
for the states to make a commitment for such control measures that is 
specific enough to be considered enforceable. Moreover, the MCR could 
indicate that upwind states may need to adopt some or all of the 
additional emission controls needed to ensure that a downwind state/
area attains the ozone standard. We would determine whether additional 
emission controls are needed in the state in which a nonattainment area 
is located or in upwind states, or in both. We would require the 
appropriate state(s) to adopt and submit new emission control measures 
within a period specified at that time. We anticipate that these 
findings would be made as SIP Calls under section 110(k)(5) of the CAA 
and, therefore, the period for the submission of the measures would be 
no longer than 18 months after we make a finding. A guidance document 
regarding the MCR process is located on EPA's web site at http://www.epa.gov/ttn/scram.
6. What Are the Relevant EPA Policy and Guidance Documents?
    The relevant policy documents for ozone attainment demonstrations 
and their locations on EPA's web site are listed below:
    a. U.S. EPA, Guideline for Regulatory Application of the Urban 
Airshed Model, EPA-450/4-91-013, (July 1991), Web site: http://www.epa.gov/ttn/scram/ (file name: ``UAMREG'').
    b. U.S. EPA, Guidance on Use of Modeled Results to Demonstrate 
Attainment of the Ozone NAAQS, EPA-454/B-95-007, (June 1996), Web site: 
http://www.epa.gov/ttn/scram/ (file name: ``O3TEST'').
    c. Memorandum, ``Ozone Attainment Demonstrations,'' from Mary D. 
Nichols, issued March 2, 1995, Web site:http://www.epa.gov/ttn/oarpg/t1pgm.html.
    d. Memorandum, ``Extension of Attainment Dates for Downwind 
Transport Areas,'' issued July 16, 1998,

[[Page 40810]]

Web site: http://www.epa.gov/ttn/oarpg/t1pgm.html.
    e. Memorandum, ``Guidance for Implementing the 1-Hour Ozone and 
Pre-Existing PM10 NAAQS,'' from Richard Wilson, issued 
December 29, 1997, Web site: http://www.epa.gov/ttn/oarpg/t1pgm.html.
    f. ``Guidance for Improving Weight of Evidence Through 
Identification of Additional Emission Reductions, Not Modeled,'' U.S. 
EPA, Office of Air Quality Planning and Standards, November 1999, Web 
site: http://www.epa.gov/ttn/scram/.
    g. ``Serious and Severe Ozone Nonattainment Areas: Information on 
Emissions, Control Measures Adopted or Planned and Other Available 
Control Measures,'' Draft Report, U.S. EPA, Ozone Policy and Strategies 
Group, November 3, 1999.
    h. Memorandum, ``Guidance on Motor Vehicle Emissions Budgets in 1-
hour Attainment Demonstrations,'' from Merrylin Zaw-Mon, Office of 
Mobile Sources, November 3, 1999, Web site: http://www.epa.gov/oms/transp/traqconf.htm.
    i. Memorandum, ``1-Hour Ozone Attainment Demonstrations and Tier 2/
Sulfur Rulemaking,'' from Lydia Wegman and Merrylin Zaw-Mon, Office of 
Air Quality Planning and Standards and Office of Mobile Sources, 
November 8, 1999, Web site: http://www.epa.gov/oms/transp/traqconf.htm.
    j. Draft Memorandum, ``1-Hour Ozone NAAQS-Mid-Course Review 
Guidance,'' from John Seitz, Director, Office of Air Quality Planning 
and Standards, Web sit: http://www.epa.gov/ttn/scram/.

B. Technical Review of the State's Submittal

1. When Was the Attainment Demonstration Addressed in Public Hearings, 
and When Was the Attainment Demonstration Submitted to the EPA?
    The State of Indiana held a public hearing on the ozone attainment 
demonstration on November 15, 2000. IDEM submitted the attainment 
demonstration to EPA on December 21, 2000.
2. What Are the Basic Technical Components of the Submittal?
    Since Indiana, along with Illinois, Michigan, and Wisconsin, 
jointly participates in the Lake Michigan Air Directors Consortium 
(LADCO) and since LADCO has conducted the ozone analyses used to 
develop the ozone attainment demonstration, technical support documents 
developed by LADCO form the main bases for Indiana's ozone attainment 
demonstration. Three documents from LADCO provide much of the technical 
support for the attainment demonstration. These documents are:
    a. ``Midwest Subregional Modeling: 1-Hour Attainment Demonstration 
for Lake Michigan Area--Summary,'' LADCO, September 18, 2000;
    b. ``Technical Support Document--Midwest Subregional Modeling: 1-
Hour Attainment Demonstration for Lake Michigan Area,'' LADCO, 
September 18, 2000; and
    c. ``Technical Support Document--Midwest Subregional Modeling: 
Emissions Inventory,'' LADCO, September 27, 2000.
    Indiana, like Illinois and Wisconsin, has included a state-specific 
cover letter and a state-specific synopsis of the ozone attainment 
demonstration. As part of their respective ozone attainment 
demonstrations, all three States included the LADCO documents listed 
above to support their adopted emission control strategies and ozone 
attainment demonstrations.
    A number of other related submittal components are discussed in 
later sections of this proposed rule. This section deals exclusively 
with the technical aspects of Indiana's 1-hour ozone attainment 
demonstration, focusing on the ozone modeling results and supporting 
air quality and emissions analyses.
3. What Modeling Approach Was Used in the Analyses to Develop and 
Validate the Ozone Modeling System?
    The LADCO States, as participants in the Lake Michigan Ozone Study 
(designed to establish the modeling system and its base input data and 
to validate the modeling system) and in the Lake Michigan Ozone Control 
Program (designed to select and test possible emission control 
strategies), used the same modeling approach to develop the basis for 
each State's ozone attainment demonstration, although each State 
selected a different emissions control strategy for their respective 
ozone attainment demonstration. The modeling approach is documented in 
LADCO's September 18, 2000 Technical Support Document (TSD) and is 
summarized in LADCO's September 18, 2000 modeling summary (see above).
    The heart of the modeling system is the Urban Airshed Model-Version 
V (UAM-V) photochemical dispersion model developed originally for 
specific application in the Lake Michigan area. This is the same 
version of the model that was used during the OTAG analysis of ozone 
transport and ozone transport control measures.
    For purposes of the local ozone attainment demonstration, UAM-V was 
implemented on a local modeling domain and grid configuration that was 
established based on consideration of areas of high ozone 
concentrations (generally the ozone nonattainment areas) in the Lake 
Michigan States and of possible upwind source areas impacting these 
high concentration areas. The primary modeling domain is referred to as 
Grid M. This grid extends east to the most eastern portion of Michigan 
(and to central Ohio, eastern Kentucky, and eastern Tennessee); north 
to the northern end of Michigan's Lower Peninsula (and to the north of 
Green Bay, Wisconsin); west to include the eastern thirds of Iowa and 
Missouri; and south to the southern border of Tennessee. The horizontal 
grid is rectangular in shape (see Figure 1 of the September 18, 2000 
TSD). The modeling has the following horizontal and vertical 
resolutions:

Horizontal Resolutions

    Approximately 12 kilometers x 12 kilometers--all modeling runs.
    Approximately 4 kilometers x 4 kilometers--for selected runs to 
give better resolution in the area along the western shore of Lake 
Michigan.

Vertical Resolution

    7 vertical layers with the following height ranges (above terrain) 
in meters: 0-50; 50-100; 100-250; 250-500; 500-1500; 1500-2500; and 
2500-4000.
    A sub-regional portion of the grid, centered (east to west) on the 
lower portion of Lake Michigan, was also considered to allow a more 
detailed analysis of the high ozone areas of Grid M. The use of Grid M 
and the sub-regional portion of Grid M allowed the consideration of 
both urban scale analyses and ozone transport. It should be noted that 
the modeling results from the modeling runs with the tighter 4 
kilometer resolution were generally consistent with the results for the 
12 kilometer resolution.
    Four high ozone episodes in the Lake Michigan area were modeled. 
These episodes were: June 22-28, 1991; July 14-21, 1991; June 13-25, 
1995; and July 7-18, 1995. These episodes were selected because: (1) 
They were judged to be representative of typical high ozone episodes in 
the Lake Michigan area and because they represent a variety of 
meteorological conditions that have been found to be conducive to high 
ozone concentrations in this area; (2) there is an intensive data base 
available for the 1991 episodes; and (3) several of

[[Page 40811]]

these episodes (the July episodes) were modeled as part of the OTAG 
analyses, providing ozone transport and modeling domain boundary data.
    The following input data systems and analyses were used to develop 
input data for the ozone model:
    a. Emissions. UAM-V requires a regional inventory of gridded, 
hourly estimates of speciated VOC, NOX, and carbon monoxide 
(CO) emissions. The States provided emission inventories which were 
processed through the Emissions Modeling System-1995 version (EMS-95). 
Emissions were prepared for a 1996 base year (used to test model 
performance), a 2007 base year (considering growth and previously 
adopted emission control measures), and several 2007 emission control 
strategy/sensitivity scenarios. The emission inventories include 1996 
state periodic inventory data for stationary point and area sources, 
updated state transportation data, excess NOX emissions 
produced by heavy-duty vehicles as a result of built-in ``defeat'' 
devices, updated growth and emissions control data, and EPA's latest 
emission reduction credits for the mobile source Tier II/Low Sulfur 
program. Temperature data affecting mobile source and evaporative 
emissions and biogenic emissions were generated using the RAMS3a 
meteorological model. Biogenic emissions were based on EPA's BEIS2 
model, with an adjustment of the isoprene emissions in the Ozarks \17\. 
Point source emissions for some sources were addressed through the use 
of Plume-in-Grid (PiG) \18\ techniques incorporated within UAM-V. An 
additional discussion of the development of the modeled emission 
inventories is presented below.
---------------------------------------------------------------------------

    \17\ Analyses of initial ozone modeling results indicated that 
initial isoprene emission estimates for the Ozarks had unrealistic 
impacts on the ozone concentrations modeled for the Lake Michigan 
area. Background ozone monitoring data did not support the high 
background/transported ozone levels modeled to result from this 
upwind source area. A study, known as OZIE, was conducted to 
reanalyse the isoprene emissions for the Ozarks. Based on the 
preliminary results of the OZIE study, LADCO concluded that the 
isoprene emissions for the Ozarks should be reduced by a factor of 2 
(halved).
    \18\ Sources to be addressed through PiG techniques were 
selected based on their magnitudes of NOX emissions (the 
top 100 ranked stacks) and locations (the next 34 topped ranked 
stacks in the Lake Michigan and St. Louis areas).
---------------------------------------------------------------------------

    b. Meteorology. UAM-V requires gridded 3-dimensional hourly values 
of wind speed, wind direction, temperatures, air pressure, water vapor 
content, vertical diffusivity, and, if applicable, clouds and 
precipitation. Most meteorological inputs were derived through 
prognostic modeling with the RAMS3a model. Cloud and precipitation data 
were developed based on observed National Weather Service data. 
Preliminary analyses of the modeled meteorological data results showed 
adequate representation of the observed airflow features and good 
agreement between modeled and measured wind speeds, temperatures, and 
water vapor levels. LADCO, has concluded, however, that errors or 
uncertainties in the meteorological data may have affected the UAM-V 
results (albeit not significantly enough to invalidate the modeling 
results based on EPA recommended validation criteria). The errors have 
been minimized to the extent possible and suppressed through 
``nudging'' using observed National Weather Service data at 12-hour 
intervals.
    c. Boundary Conditions. Boundary conditions were developed by 
applying UAM-V over the OTAG modeling domain (this modeling domain 
covered most of the eastern half of the United States) for the selected 
high ozone episodes at a 36 kilometer grid resolution. The modeling was 
conducted to be consistent with the modeling used in the OTAG analyses.
    Base-case modeling was conducted to evaluate model performance by 
comparing observed and modeled ozone concentrations. The model 
performance evaluation consisted of comparisons of the spatial 
patterns, temporal profiles, and magnitudes of modeled and measured 1-
hour (and 8-hour) ozone concentrations.
    In making the comparison of modeled and observed ozone 
concentrations, 1996 emissions were assumed to be reasonably similar to 
1995 emissions, but significantly lower than 1991 emissions. To account 
for the 1991-1996 differences, a set of simple ``backcast'' emission 
factors were derived by comparing the county-level emissions in the 
1991 Lake Michigan Ozone Control Program emissions inventory with the 
1996 base year emissions inventory.
    Peak daily 1-hour modeled ozone concentrations for each episode 
were analyzed and compared to the observed peak ozone levels in the 
modeling domain. For each type of comparison, the following conclusions 
were developed.

Spatial Patterns

    This analysis showed that areas of high modeled ozone 
concentrations correspond acceptably with areas of high measured ozone 
concentrations in the Lake Michigan area. Rural (generally upwind of 
the Lake Michigan ozone nonattainment areas) measured and modeled ozone 
concentrations were found to compare favorably. Peak modeled ozone 
concentrations over Lake Michigan, however, appear to be underestimated 
on many days.

Temporal Patterns

    Time series plots of 1-hour modeled and measured ozone 
concentrations by monitoring site were compared. The hour-to-hour and 
day-to-day variations of modeled and measured ozone concentrations were 
found to compare favorably. The modeling system seems to over-predict 
nighttime ozone concentrations and to under-predict peak daytime ozone 
concentrations, but performs within acceptable limits (see a discussion 
of the modeling validation below). At the monitoring sites with high 
measured ozone concentrations, the mid-afternoon modeled ozone 
concentrations are low.

Magnitude Comparisons

    Ozone statistics, unpaired peak accuracy, average accuracy of peak 
ozone concentrations, normalized bias results, and normalized gross 
error results are provided in the modeling system documentation. The 
model performance statistics for the Lake Michigan modeling domain 
subregion comply with EPA's recommended acceptance ranges. The 
statistics of the modeling system performance, however, demonstrate the 
tendency of the modeling system to underestimate measured peak ozone 
concentrations.

Other Factors

    The modeling system's response to changes in ozone precursor 
emissions has been assessed by conducting sensitivity analyses and by 
comparing the differences in modeled and measured ozone concentrations 
and changes in emissions between 1991 and 1996. This assessment 
indicates that the model is responsive to changes in ozone precursor 
emissions and is consistent with observed air quality data and 
emissions data.
    To assess the effects of grid resolution, analyses were conducted 
comparing modeling results for resolutions of 4 kilometers and 12 
kilometers. Plots of predicted peak concentrations were analyzed for 
these two grid resolutions. In general, it appears that model 
performance at a resolution of 4 kilometers is comparable to that at a 
resolution of 12 kilometers.
    The LADCO States have concluded that the modeling system 
performance is acceptable for air quality planning purposes (for the 
purposes of assessing the impacts of emission control strategies).

[[Page 40812]]

    To test ozone attainment strategies, the LADCO States have 
projected emissions from the base year to 2007, the attainment year. 
The future emissions have been modified to reflect the various tested 
emission control strategies.\19\ All other inputs to the ozone modeling 
system have been fixed at the levels used in the validated base year 
modeling analyses.
---------------------------------------------------------------------------

    \19\ For a listing of the emission control measures modeled in 
the various emission control strategies, see Table 6, ``Control 
Measures,'' in LADCO's September 27, 2000 ``Technical Support 
Document: Midwest Subregional Modeling: Emissions Inventory'' or 
Section 5, ``Strategy Modeling,'' and Table 4, ``Control Measures,'' 
of LADCO's September 18, 2000 ``Technical Support Document: Midwest 
Subregional Modeling: 1-Hour Attainment Demonstration for Lake 
Michigan Area,'' both of which were included in Indiana's December 
21, 2000 attainment demonstration submittal.
---------------------------------------------------------------------------

    The remainder of the questions in this section of this proposed 
rule address the States' efforts to demonstrate attainment using the 
validated ozone modeling system and focuses on evaluating the 
attainment strategy. For additional discussions of the efforts to 
validate the modeling system, you are referred to the discussions of 
these efforts in the December 16, 1999 proposed rule (64 FR 70496).
4. How Were the 1996 Base Year Emissions Developed?
    Besides being used to develop and validate the ozone modeling 
system, base year emissions were also used to project the attainment 
year emissions and, through comparisons with the attainment year 
emissions and analyses of monitored and modeled ozone concentrations, 
to support the adequacy of the selected emissions control strategy. For 
the purposes of the attainment demonstration used here, 1996 was 
selected to be the base year of the analyses.
    The September 27, 2000 LADCO emission inventory TSD documents the 
development of the base year emissions, as well as the projection and 
development of the attainment year emissions used in the attainment 
strategy modeling and attainment demonstration. The following 
summarizes the development of base year emissions as documented in 
LADCO's September 27, 2000 TSD.
    For the 1996 base year, emission rates for point and area sources 
were either provided by the EPA (from the NOX SIP Call 
documentation) or by the States based on 1996 periodic emission 
inventories. Where appropriate, EPA's NOX data were 
supplemented or corrected using state-specific data, as noted in 
LADCO's September 27, 2000 TSD.
    Emission rates for on-road mobile sources were calculated through 
the use of EMS-95 based on a mobile source activity level, e.g., 
vehicle miles traveled (VMT), and the MOBILE5b emission factor model. 
The sources of the VMT, vehicle speed, and vehicle mix data are 
summarized in LADCO's September 27, 2000 TSD. Relative to previous 
emissions modeling, vehicle speeds were increased and vehicle mix 
distributions were shifted to heavier vehicles based on more recent 
data (the increased use of sports utility vehicles has increased the 
relative vehicle mixes of light duty gasoline trucks, increasing per 
VMT emissions rates). Mobile source emissions of NOX were 
also increased for heavy-duty diesel vehicles as the result of the use 
of built-in ``defeat'' devices. These increased NOX 
emissions were estimated by applying a processor supplied by the EPA.
    Day-specific biogenic emissions were calculated using EPA's BEIS2 
model. As noted above, comparisons of emission estimates and measured 
isoprene concentrations in the Ozarks indicated that the BEIS 2 
isoprene emission estimates for the Ozarks are overestimated by a 
factor of 2.
    As noted above, a number of refinements of the emissions estimates 
must be made to support the ozone modeling system. These refinements 
include spacial, temporal, and species processing and resolution. This 
was accomplished through the use of EMS-95. County-level point source 
emissions were spatially distributed based on facility or stack 
coordinates. County-level area source emissions were spatially resolved 
based on surrogates, such as population distributions and land use 
data. Mobile source emissions were calculated for each modeling grid 
cell by EMS-95, not requiring further resolution.
    Daily average point source emissions were temporally allocated 
based on using facility-specific reported operating schedule 
information. Daily average area source emissions were temporally 
allocated using category-specific hourly distribution profiles. Mobile 
source and biogenic source emissions are directly temporally resolved 
through the use of EMS-95, which includes temporal emission profiles 
for these categories.
    The speciation profiles in EMS-95 were obtained from the latest 
version of EPA's SPECIATE data base.
    To quality assure the base year emissions data, a top-down 
evaluation of the emissions inventory was performed using ambient ozone 
precursor data collected from the Photochemical Assessment Monitoring 
Stations (PAMS) in the Lake Michigan area. The evaluation included 
comparisons of monitored and calculated VOC to NOX emissions 
ratios, the relative amounts of individual VOC species, and the 
measured and calculated reactivity of VOC compounds.
5. What Procedures and Sources of Projection Data Were Used To Project 
the Emissions to the Attainment Year?
    The future year emission inventories used in the Lake Michigan 
Ozone Control Program and in the ozone attainment demonstration were 
derived from the base year emissions inventory. The base year emissions 
inventory was projected to 2007 by applying scalar growth factors for 
most source categories. Each LADCO State provided estimates of source 
growth and control factors by source sector. Source growth and emission 
control factors used in EPA's NOX SIP Call were also 
considered, particularly for EGUs. Table 1 of the LADCO September 27, 
2000 TSD documents in detail the sources of 2007 emission estimates by 
source categories along with the sources of 1996 emissions and emission 
control factors and is included by reference here.
6. How Were the 1996 and 2007 Emission Estimates Quality Assured?
    To improve the reliability of the modeling source emission 
inventories, several quality assurance activities were performed by the 
State emission inventory personnel, the emission modelers (those people 
responsible for speciating and temporally and spatially resolving the 
emissions data for use in the ozone modeling system), and the 
photochemical modelers. These activities included:

Development and Implementation of an Emissions Quality Assurance Plan

    A standardized set of data and file checks were documented in a 
LADCO draft emissions quality assurance (QA) plan. This plan identifies 
the emissions quality assurance procedures to be followed by the State 
emission inventory personnel. Each State was responsible for quality 
assurance of its own emissions inventory data before providing these 
data to the LADCO emission modelers. The quality assurance of the data 
by the States included reviewing many EMS-95 emissions reports for 
consistency with other State-specific emissions data.

Emission Reports

    EMS-95 itself performs a number of emission checks and generates 
reports flagging possible emission errors and

[[Page 40813]]

summarizing data that can be checked against alternative emission data 
sets/reports. Table 7 of LADCO's September 27, 2000 TSD lists the EMS-
95 standardized QA reports and is included by reference here. These 
reports were generated in the preparation of the Grid M emissions data 
and were used for QA efforts.

Review by Photochemical Modelers

    The photochemical modelers quality assured the emissions 
inventories by generating and reviewing spatial plots of emissions by 
source sector/type. The reviews were designed to detect spatial 
anomalies (misplaced or missing sources). The modelers also conducted 
emission total checks against EMS-95 summary reports.

Stack Parameter Checks

    A contractor, Alpine Geophysics, was employed, in part, to QA the 
point source emissions data. Alpine Geophysics discovered errors in the 
stack parameters and other point source data, including potential 
errors in gas exit velocities, emission rates, and physical stack 
parameters, for many point sources in the previous versions of the 
modeling system emission inventories. This review was distributed to 
the LADCO States to get the States to correct their respective point 
source emissions data.
7. What Is the Adopted Emissions Control Strategy?
    To select possible emission control strategies, the LADCO States 
have modeled the ozone impacts of a number of emission control 
strategies for VOC and NOX. After testing and reviewing the 
ozone impacts of various strategies and considering CAA-mandated 
emission control requirements (including the requirements of the 
NOX SIP Call), Indiana has adopted an emission control 
strategy that is consistent with LADCO Strategy Run 13 (SR 13) as the 
emission control strategy that will be pursued to attain the 1-hour 
ozone standard in the Chicago-Gary-Lake County ozone nonattainment 
area. Table II lists the emission controls included in SR 13.

               Table II.--SR 13--Emission Control Strategy
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
                          VOC EMISSION CONTROLS
------------------------------------------------------------------------
Stationary Point Sources:
     RACT in Ozone Nonattainment Areas.
     NSR--Lowest Achievable Emission Rates (LAER) and Emission
     Offsets in Ozone Nonattainment Areas.
Non-Road Mobile and Other Area Sources:
     Federal Phase II Small Engine Standards.
     Federal Marine Engine Standards.
     Federal Heavy Duty Vehicle ( 50 horsepower)
     Standards--Phase I.
     Federal Reformulated Gasoline--Phase I and II in Mandatory
     Areas.
     Commercial/Consumer Solvent and Architectural Coating
     Emission Controls.
     Stage I and Stage II Gasoline Service Station Vapor
     Controls in Ozone Nonattainment Areas.
     Autobody Refinishing, Degreasing, and Dry Cleaning Emission
     Controls in Ozone Nonattainment Areas.
On-Road Mobile Sources:
     Federal Reformulated Gasoline--Phase I and II in Mandatory
     (Ozone Nonattainment) Areas.
     Basic and Enhanced Vehicle I/M in Ozone Nonattainment
     Areas.
     Tier 1 Light Duty Vehicle and Heavy Duty Vehicle Emission
     Standards.
     Clean Fuel Fleets in Serious and Above Ozone Nonattainment
     Areas.
     9.0 Pounds per Square Inch (psi) Reid Vapor Pressure
     Gasoline Everywhere in the Ozone Modeling Domain.
------------------------------------------------------------------------
                          NOX EMISSION CONTROLS
------------------------------------------------------------------------
Utility Stationary Sources:
     Title IV Phase 1 and Phase 2 Acid Rain Controls.
     Prevention of Significant Deterioration (PSD) and New
     Source Performance Standards (NSPS) for major NOX Sources (NOX
     emissions  250 tons per year).
     RACT and NSR Limits in Non-waivered Ozone Nonattainment
     Areas.
     0.25 Pounds NOX per Million British Thermal Units of Heat
     Input (0.25 Pounds NOX/MMBtu) Emission Limit in Illinois, Indiana,
     Kentucky, and Tennessee.
     Missouri State Rule (0.25 pounds NOX/MMBtu in the Eastern
     Third of the State and 0.35 Pounds NOX/MMBtu in the Western Two-
     thirds of the State).
     Michigan State NOX Rule.
Non-Utility Stationary Sources:
     RACT and NSR Limits in non-waivered ozone nonattainment
     areas.
     PSD and NSPS for major NOX sources.
     Indiana NOX Rule for Major Non-utility Sources (60 Percent
     Reduction of NOX Emissions at Major Non-Utility Sources).
     Michigan NOX rule for major non-utility sources,
Non-Road and Other Area Sources:
     Federal Reformulated Gasoline--Phase I.
     Federal Phase II Small Engine Standards.
     Federal Marine Engine Standards.
     Federal Heavy Duty Vehicle Standards--Phase I.
     Federal Reformulated Gasoline--Phase II in Mandatory Areas.
     Federal Locomotive Standards, Including Rebuilds.
     High Compression Engine 4 grams Standard.
On-Road Mobiles Sources:
     Enhanced Vehicle I/M in Serious and Above Non-waivered
     Ozone Nonattainment Areas.
     Basic Vehicle I/M in Moderate Non-waivered Ozone
     Nonattainment Areas.
     Tier 1 Light Duty Vehicles and Heavy Duty Vehicle Emission
     Standards.
     Federal Reformulated Gasoline--Phase II in Mandatory Areas.
     Clean Fuel Fleets in Mandatory Areas.

[[Page 40814]]

 
     National Low Emission Vehicle Program.
     Heavy Duty Vehicle 3 grams/mile Standard.
------------------------------------------------------------------------

Please note that although the emissions control strategy includes 
certain NOX and VOC emission controls for states other than 
Indiana, this emissions control strategy does not obligate these other 
states to these emission controls. These states, however, are otherwise 
obligated under the CAA to achieve the emission reductions represented 
by this assumed emissions control strategy through mandated emission 
control requirements (e.g., RACT), EPA's SIP Call regulations (e.g., 
NOX controls in Michigan, Kentucky, and Tennessee), or as 
part of an attainment demonstration (e.g., NOX control 
measures in Wisconsin and Missouri). Thus, although each state is 
selecting its own emissions control strategy that may deviate from the 
one listed above, the ultimate emission reductions reflected by that 
strategy are otherwise mandated for the area and, thus, may be relied 
on for purposes of the Indiana attainment demonstration.
    Indiana will implement emission controls consistent with the 
modeled emissions control strategy, including, in some instances (as 
discussed elsewhere in this proposed rule) emission controls with lower 
emission limits than modeled in the adopted emissions control strategy 
within Indiana itself. The status of the Indiana emission control 
measures is discussed below.
    In the ozone modeling, the emission controls required by the CAA 
were assumed for all states within Grid M, and were assumed for all 
areas outside of Grid M in modeling used to determine the background 
ozone and ozone precursor concentrations for Grid M.
    Indiana has developed NOX control rules to achieve a 
required cap on the State's NOX emissions. Indiana has 
adopted NOX rules for EGUs, non-EGU boilers and turbines, 
and cement kilns (EPA proposed to approve these rules on July 2, 2001, 
66 FR 34864) consistent with EPA's NOX SIP Call. These 
NOX rules will achieve NOX emissions reductions 
in Indiana sufficient to or exceeding the NOX emissions 
reduction included in SR-13. Other states in Grid M have also submitted 
adopted or draft NOX rules to comply with the NOX 
SIP Call. In addition, Wisconsin and Missouri (neither are subject to 
the NOX SIP Call at this time) have adopted and submitted 
NOX EGU rules. EPA approved Missouri's NOX EGU 
rule on December 28, 2000 (65 FR 82285). EPA proposed to approve 
Illinois' NOX EGU rule on August 31, 2000 (65 FR 52967), and 
proposed to approve Illinois' non-EGU (major non-EGU boilers and 
turbines and major cement kilns) rules on June 28, 2001 (66 FR 34382).
    Table III compares the VOC and NOX emission rates by 
major source sector in Grid M for the 1996 base year and for the 
adopted emission control strategy, SR 13, in 2007.

                                           Table III.--Comparison of 1996 and SR 13 (2007) Emissions in Grid M
                                                                 [Emissions in tons/day]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Point--Non-  Area--offroad                                 Biogenic
                        Pollutant                          Point--EGU      EGU          mobile     Area--other  Onroad--mobile    sources       Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
VOC:
    1996 Base Year......................................           32        2,335         1,716         4,780          3,633        30,816       43,312
    SR 13...............................................           37        1,771         1,167         4,410          2,671        30,816       40,872
NOX:
    1996 Base Year......................................        5,844        1,876         2,138           602          5,681         2,000       18,141
    SR 13...............................................        3,033        2,047         1,748           734          3,359         2,000      12,921
--------------------------------------------------------------------------------------------------------------------------------------------------------
 Source: Table 3, ``Technical Support Document--Midwest Subregional Modeling: Emissions Inventory,'' September 27, 2000.

8. What Were the Ozone Modeling Results for the Base Period and for the 
Future Attainment Period With the Selected Emissions Control Strategy?
    Table IV presents the Grid M peak observed and modeled ozone 
concentrations for the high episode days selected for the modeling 
analysis and attainment demonstration. The following modeled peak 
concentrations are presented: (a) The modeled validation peak ozone 
concentrations for Grid M; (b) the modeled Grid M peak ozone 
concentrations using the 1996 base year emissions; and (c) the 2007 
predicted ozone concentrations for ozone control strategy SR 13. All 
modeled and monitored ozone concentrations are 1-hour averages and 
represent peak ozone concentrations anywhere within Grid M.

                      Table IV.--Peak Monitored and Modeled Ozone Concentrations for Grid M
                                          [Ozone concentrations in ppb]
----------------------------------------------------------------------------------------------------------------
                                                                                         Peak ozone
                                                                            Peak ozone    modeled     Peak ozone
                            Date                               Peak ozone    modeled     1996 base   modeled  SR
                                                                observed    validation      year          13
                                                                                         emissions
----------------------------------------------------------------------------------------------------------------
6-25-91.....................................................          104          123          123          111
6-26-91.....................................................          175          136          138          117
6-27-91.....................................................          118          139          127          111
6-28-91.....................................................          138          124          102           93
7-16-91.....................................................          130          129          108          104
7-17-91.....................................................          137          119           89           87

[[Page 40815]]

 
7-18-91.....................................................          170          137          108          104
7-19-91.....................................................          170          137          112          110
7-20-91.....................................................          138          168          150          130
6-21-95.....................................................          112          123          122          118
6-22-95.....................................................          119          131          131          122
6-23-95.....................................................          123          128          128          116
6-24-95.....................................................          166          136          136          123
6-25-95.....................................................          108          125          124          119
7-12-95.....................................................          146          118          118          104
7-13-95.....................................................          178          147          146          127
7-14-95.....................................................          150          140          140          126
7-15-95.....................................................          154          156          156         130
----------------------------------------------------------------------------------------------------------------
 Sources: Table 6, ``Technical Support Document--Midwest Subregional Modeling: 1-Hour Attainment Demonstration
  for Lake Michigan Area,'' September 18, 2000.

    From the above, you can see that the ozone modeling results for the 
selected emissions control strategy do show potential ozone standard 
exceedances on July 20, 1991 and July 13-15, 1995 when the projected 
2007 emissions are considered in the modeling. As noted in LADCO's 
September 18, 2000 summary of the attainment demonstration, simple 
modeling and assessment of the potential future peak ozone 
concentrations (using projected emissions and considering possible 
emissions controls) (a deterministic test) does not demonstrate 
attainment of the ozone standard because of these modeled ozone 
standard exceedances. Additional analyses were conducted to support the 
attainment demonstration for this and other emission control 
strategies.
    Our most relevant current ozone modeling/attainment demonstration 
guidance (Guidance on Use of Modeled Results to Demonstrate Attainment 
of the Ozone NAAQS, EPA-454/B-95-007, June 1996) provides for a 
statistical test as an alternate to a deterministic test to demonstrate 
attainment of the ozone standard (passing a statistical test can be 
used to support an ozone attainment demonstration even if a 
deterministic test is not passed). Under a statistical test, three 
benchmarks must be passed.
    Benchmark 1 of the statistical test requires that the number of 
days with modeled ozone standard exceedances in each modeling domain 
grid cell must be less than 3 and that any modeled ozone standard 
exceedances occur on a ``severe'' day (severe days are determined by 
ranking high ozone days over many years and considering the ranking of 
the days covered in the modeled ozone attainment demonstration). Ten of 
the days modeled by LADCO were determined to be ``severe,'' including 
July 20, 1991 and July 15, 1995.
    Benchmark 2 of the statistical test requires that the maximum 
modeled ozone concentration on severe days shall not exceed 130 ppb to 
160 ppb, depending on the ``severity'' of the meteorological conditions 
on the modeled days. For the ozone attainment demonstration addressed 
in this proposed rule, LADCO's analysis of the severity of the modeled 
days led LADCO to conclude that the peak ozone concentration limit 
should be 130 ppb.
    Finally, benchmark 3 of the statistical test requires that the 
number of modeling domain grid cells with peak ozone concentrations 
above or equal to 125 ppb must be reduced (from the number in the 
modeled base period) by 80 percent on each ``severe'' day.
    Indiana has determined that emissions control strategy SR 13 leads 
to modeled peak ozone concentrations meeting all three benchmarks of 
the statistical test. See LADCO's September 18, 2000 ``Technical 
Support Document: Midwest Subregional Modeling: 1-Hour Attainment 
Demonstration for Lake Michigan Area.'' Therefore, attainment of the 
ozone standard is demonstrated through modeling for the SR 13 emissions 
control strategy.
    In light of the inherent uncertainties in the ozone modeling and to 
further support the ozone attainment demonstration, LADCO has also 
chosen to conduct two additional analyses that are components of a WOE 
analysis. First, LADCO has conducted a relative attainment test. Using 
the base period observed ozone design values for various ozone 
monitoring sites and the modeled peak ozone concentrations for the 
domain grid cells in the vicinities of these monitors, LADCO has 
predicted 2007 ozone design values for these monitoring sites (this 
procedure is referred to as the ``relative reduction factor'' test). 
For SR 13, the relative reduction factor test leads to predicted ozone 
design values below the ozone standard for all ozone monitoring sites 
considered, with the highest projected ozone design values being 124 
ppb at an unmonitored mid-Lake Michigan location (a synthetic base 
period ozone design value was used for this site) and 124 ppb for a 
Michigan City, Indiana ozone monitoring site.
    Second, LADCO conducted two air quality analyses to further support 
the ozone attainment test. An ozone trends analysis shows a 
considerable amount of progress toward attaining the ozone standard. 
Local ozone levels have significantly declined over time, while 
incoming ozone concentrations (transported ozone concentrations) remain 
relatively high. Analyses of VOC emissions show that reduced local VOC 
emissions is primarily responsible for the lowered local ozone 
concentrations. LADCO concludes that the best ozone control strategy 
for the lower Lake Michigan area is to control local VOC emissions 
(within the urban nonattainment areas) and domain-wide, regional 
NOX emissions (the purpose of EPA's NOX SIP Call 
and Indiana's adoption of NOX emission control rules for 
EGUs, non-EGU boilers and turbines, and cement kilns). This implied 
emission control approach is compatible with the emission control 
strategy selected by Indiana.
    The WOE analyses further support the conclusions of the attainment

[[Page 40816]]

demonstration and counter any concerns that may be raised regarding the 
inherent uncertainties in the ozone modeling and the tendency of the 
modeling system to under-predict some peak ozone concentrations (the 
modeling system also over-predicts some peak ozone concentrations).
9. Do the Modeling Results Demonstrate Attainment of the Ozone 
Standard?
    Based on LADCO's ozone modeling results, EPA believes that LADCO 
and, in particular, the State of Indiana have demonstrated attainment 
of the 1-hour ozone standard for the Chicago-Gary-Lake County ozone 
nonattainment area based on the adopted SR 13 emissions control 
strategy.
10. Does the Attainment Demonstration Depend on Future Reductions of 
Regional Emissions?
    Yes. The adopted emissions control strategy includes regional 
NOX emission reductions for the State of Indiana as well as 
for surrounding states in compliance with EPA's NOX SIP 
Call. LADCO has concluded that regional NOX emissions 
reductions are crucial to attainment of the 1-hour ozone standard in 
the Lake Michigan area.
11. Has the State Adopted All of the Regulations/Rules Needed To 
Support the Ozone Attainment Strategy and Demonstration?
    Indiana has adopted and is implementing all emission controls 
required under the CAA, including the emission controls contained in 
Indiana's 15 percent and post-1996 ROP plans.
    The State of Indiana has submitted adopted NOX rules for 
EGUs, major non-EGU boilers and turbines, and major cement kilns. The 
State adopted these rules on June 6, 2001, and, as noted above, we 
proposed to approve these rules on July 2, 2001 (66 FR 34864). It 
should be noted here that the NOX rules being adopted by 
Indiana will provide significantly greater statewide NOX 
emission reductions than were assumed for the subject controlled 
sources in the adopted emission control strategy SR 13. Indiana is 
proceeding with the implementation of NOX rules to comply 
with EPA's NOX SIP Call, which addresses the transport of 
NOX and ozone. The NOX rule being implemented by 
Indiana for EGUs will achieve a NOX emission limit of 0.15 
pounds NOX/MMBtu rather than the 0.25 pounds NOX/
MMBtu NOX emission limit modeled for the attainment 
strategy. The State is also implementing NOX emission 
controls for major non-EGU boilers and turbines and for major cement 
kilns to comply with EPA's NOX SIP Call (SR 13 assumes a 60 
percent NOX emission reduction from major non-EGU sources, 
which approximates the NOX emissions impacts of the 
NOX SIP Call emission control regulations to be implemented 
in Indiana). The additional NOX emission controls are needed 
to reduce NOX and ozone that are transported to other 
states.

C. EPA's Evaluation of the Ozone Attainment Demonstration Portion of 
the State's Submittal

1. Did the State Adequately Document the Techniques and Data Used To 
Derive the Modeling Input Data and Modeling Results of the Analyses?
    Yes. The State's submittal thoroughly documents the techniques and 
data used to derive the modeling input data. The submittal adequately 
summarizes the modeling inputs and outputs and the conclusions drawn 
from the modeling outputs. Therefore, we conclude that Indiana has 
successfully documented the ozone modeling and that its attainment 
demonstration is complete from a documentation standpoint. This 
includes documentation of a selected emissions control strategy, which 
was lacking in the State's April 1998 ozone attainment demonstration 
submittal.
2. Did the Modeling Procedures and Input Data Used Comply With the 
Clean Air Act Requirements?
    Yes. The State of Indiana, through LADCO, has used the UAM to model 
attainment of the 1-hour ozone standard. The State has documented the 
modeling results and the input data considered. The modeling procedures 
and input data comply with the requirements of the CAA as well as with 
EPA policy.
3. Did the State Adequately Demonstrate Attainment of the Ozone 
Standard?
    Yes. Indiana, in accordance with EPA's December 1997 attainment 
demonstration guidance, has demonstrated that attainment of the 1-hour 
ozone standard is achievable by November 15, 2007 provided projected 
reductions in background ozone and ozone precursor concentrations occur 
as the result of the implementation of EPA's NOX SIP Call. 
EPA has determined that the adopted emission control strategy, 
including local VOC emission control measures and regional 
NOX emission control measures, is adequate for the 
attainment of the ozone standard.
4. Has Indiana Adequately Documented the Adopted Emissions Control 
Strategy?
    Yes. The emission controls included in the adopted strategy have 
been identified and their cumulative emission impacts have been 
documented.
5. Is the Emissions Control Strategy Acceptable?
    Yes. The adopted emissions control strategy relies significantly on 
the adoption of regional NOX emission controls by Indiana. 
Indiana has adopted rules to reduce NOX emissions from EGUs, 
major non-EGU boilers, and major cement kilns to comply with EPA's 
NOX SIP Call. The EPA proposed to approve these rules on 
July 2, 2001 (66 FR 34864). We can not approve the attainment 
demonstration until we have also fully approved all of the 
NOX emission control rules relied on in the State's ozone 
attainment demonstration. Assuming that we will approve Indiana's 
NOX rules prior to or by the time we promulgate final 
approval of the ozone attainment demonstration, we find the ozone 
attainment demonstration to be approvable.

IV. Post-1999 Rate-of-Progress (ROP) Plan

A. What Is a Post-1999 ROP Plan?

    Section 182(c)(2)(B) of the CAA requires states with ozone 
nonattainment areas classified as serious and above, including the 
Northwest Indiana area (which is classified as severe nonattainment for 
the one-hour ozone standard), to adopt and implement ROP plans to 
achieve periodic reductions in ozone precursors (VOC and/or 
NOX) after 1996. The requirement is intended to ensure that 
an area makes definite and reasonable progress toward attainment of the 
ozone NAAQS. Since Indiana has already adopted and implemented a post-
1996 ROP plan to meet the requirements of section 182(c)(2)(B) through 
November 15, 1999 (EPA approved this plan on January 26, 2000, 65 FR 
4126) and since the ROP plan reviewed here addresses the ROP 
requirements for the period after November 15, 1999, we refer to the 
ROP plan reviewed in this proposed rule as the ``post-1999 ROP plan.''
    The post-1999 ROP emission reductions are to occur at a rate of 9 
percent of baseline emissions \20\ (later

[[Page 40817]]

referred to as ``adjusted baseline emissions''), net of emissions 
growth, averaged over each 3-year period through the attainment year 
(2007 for the Chicago-Gary-Lake County ozone nonattainment area). The 
State must achieve the first 9 percent ROP milestone (i.e., 9 percent 
emission reduction, net of growth) by November 15, 2002, another 9 
percent ROP milestone by November 15, 2005, and the remaining 6 percent 
ROP milestone by November 15, 2007.
---------------------------------------------------------------------------

    \20\ ``Baseline emissions'' are defined in section 182(b)(1)(B) 
of the CAA as the total amount of actual VOC or NOX 
emissions from all anthropogenic sources in the area during calendar 
year 1990, excluding emissions that would be eliminated due to: (1) 
Any measure relating to motor vehicle exhaust or evaporative 
emissions promulgated by the EPA by January 1, 1990; and (2) any 
regulations concerning Reid Vapor Pressure promulgated by the EPA by 
November 15, 1990 or required to be promulgated under section 211(h) 
of the CAA.
---------------------------------------------------------------------------

B. What Is the ROP Contingency Measure Requirement?

    Section 172(c)(9) of the CAA requires states with ozone 
nonattainment areas classified as moderate and above to adopt 
contingency measures by November 15, 1993. Such measures must provide 
for the implementation of specific emission control measures if an 
ozone nonattainment area fails to achieve ROP or to attain the NAAQS 
within the time-frames specified under the CAA. Section 182(c)(9) of 
the CAA requires that, in addition to the contingency measures required 
under section 172(c)(9), the contingency measure portion of the SIP for 
serious and above ozone nonattainment areas must also provide for the 
implementation of specific measures if an area fails to meet any 
applicable milestone in the CAA. As provided in these sections of the 
CAA, the contingency measures must take effect without further action 
by the state or by the EPA upon failure of the state to meet ROP 
emission reduction milestones or to achieve attainment of the ozone 
NAAQS by a required deadline.
    Our policy, as provided in the April 16, 1992 ``General Preamble 
for the Implementation of Title I of the Clean Air Act Amendments of 
1990'' (General Preamble) (57 FR 13498), states that the contingency 
measures, in total, must be able to provide for emission reductions 
equal to or greater than 3 percent of the 1990 baseline emissions 
(sufficient emission reductions to equal one year of ROP).
    While all contingency measures and rules must be fully adopted by 
the states, states can use the contingency measures in one of two 
different ways. A state can choose to implement contingency measures 
before a milestone deadline, choosing to implement them along with ROP 
measures and prior to the milestone date. Alternatively, a state may 
decide not to implement a contingency measure until an area has 
actually failed to achieve a ROP or attainment milestone. In the latter 
situation, the contingency measure emission reduction must be achieved 
within one year following identification of a milestone failure by the 
EPA.

C. What Indiana Counties Are Covered by the Post-1999 ROP Plan?

    The post-1999 ROP plan covers emission reduction requirements for 
the Northwest Indiana area (Lake and Porter Counties). The VOC emission 
reduction requirements, as discussed below, are determined relative to 
the adjusted baseline (1990) VOC emissions in this area. Section 
182(c)(2)(C) of the CAA permits the State to substitute NOX 
emission controls to meet part of the VOC emission reduction 
requirements for ROP provided that the NOX emission 
reduction produces an ozone reduction equivalent to that achieved from 
the required VOC emission reduction. Indiana has not relied on 
NOX control substitution to achieve the ROP requirements.

D. Who Is Affected by the Indiana Post-1999 ROP Plan?

    The post-1999 ROP plan does not itself create any new emission 
control requirements. Rather, it is a demonstration that existing 
regulations or regulations being developed to meet other emission 
reduction requirements are sufficient to achieve the required ROP 
emission reduction requirements.
    The post-1999 ROP plan refers to various emission control 
regulations that have contributed to or will contribute to achieving 
the required ROP emission reductions for the 1999-2002, 2002-2005, and 
2005-2007 periods in the Northwest Indiana area. These regulations, 
both federal and State, affect a variety of industries, businesses, 
and, through the vehicle I/M program and other mobile source emission 
reduction requirements, motor vehicle owners. Most of these 
regulations, however, are already federally enforceable through the 
approved SIP or through rules promulgated by EPA.

E. What Criteria Must a Post-1999 ROP Plan Meet To Be Approved?

    Our January 1994 guidance document, ``Guidance on the Post-1996 
Rate-Of-Progress Plan and the Attainment Demonstration,'' provides 
States with the appropriate methods to calculate the emission 
reductions needed to meet the ROP emission reduction requirements. A 
complete list of ROP guidance documents is provided in the direct final 
approval of Indiana's Post-1996 ROP Plan (65 FR 4126, January 26, 
2000).

F. What Changes Did Indiana Make to the 1990 VOC Base Year Emissions 
Inventory in This Submission?

    As in the post-1996 ROP plan, the State has documented a change in 
the 1990 base year VOC emissions in the December 21, 2000 submittal. In 
response to public comments regarding the post-1996 ROP plan, the State 
reviewed the on-road mobile source emissions. The post-1996 ROP plan 
had used county-wide estimates of Vehicle Miles Traveled (VMT) and 
vehicle speed distributions and, in the post-1996 ROP plan, the State 
did not disaggregate the VMT estimates by vehicle class. The new data 
provide information on the VMT, speed, and vehicle mix data with more 
resolution.
    In previous ROP plans, Indiana obtained mileage data primarily from 
the Indiana Department of Transportation through the use of the Highway 
Performance Modeling System (HPMS). The detail of the mileage 
information was limited to broad roadway classifications, and county-
specific vehicle mix data were not available.
    To fulfill transportation conformity requirements, the Northwest 
Indiana Regional Planning Commission (NIRPC) developed a travel demand 
model. The information contained in the model includes the VMT 
distribution of the vehicles, the speeds of the vehicles, and the 
vehicle type mix of the vehicles on a link-by-link basis. These data 
produced more accurate vehicle emissions data than the county-wide 
inputs.
    The revised 1990 mobile source emissions estimates differ 
significantly from those previously determined for the 1990 base year 
and used in the post-1996 ROP plan. The 1990 on-road mobile source VOC 
emission estimates for Lake and Porter Counties are being revised 
downward from 119,231 pounds per day (PPD) to 71,560 PPD. This results 
in a significant decrease in the total 1990 base year VOC emissions for 
Lake and Porter Counties relative to those assumed in the post-1996 ROP 
plan and previously approved by the EPA (65 FR 4126, January 26, 2000). 
Table V. compares the previously approved VOC emissions for Lake and 
Porter Counties with those documented in the State's post-1999 ROP 
plan.

[[Page 40818]]



       Table V.--Original and Revised 1990 Base Year VOC Emissions
                   [Lake and Porter Counties, Indiana]
------------------------------------------------------------------------
                                           Previous \21\   Revised \22\
                                          VOC  emissions  VOC  emissions
             Source category                (pounds per     (pounds per
                                               day)            day)
------------------------------------------------------------------------
Point sources...........................         350,771         350,771
Area Sources............................          83,821          83,821
On-Road Mobile Sources..................         119,231          71,560
Off-Road Mobile Sources.................          23,367          23,367
Biogenics...............................          42,880          42,880
                                         -------------------------------
      Totals............................         620,070   \23\ 572,399
------------------------------------------------------------------------
\21\ Source: 65 FR 4131, January 26, 2000--table titled ``Total VOC
  Emissions'' coupled with Table 3.1 (``1990 Lake and Porter Total VOC
  Emissions'') in ``Post-1999 Rate of Progress Plans: Northwest Indiana
  Severe Ozone Nonattainment Area: Lake and Porter Counties, Indiana,''
  December 21, 2000 State of Indiana submittal, Appendix F. Assume all
  source category emissions in Table 3.1 are unchanged from previously
  approved levels except on-road mobile source emissions, as documented
  by the State in the December 21, 2000 submittal.
\22\ Emissions taken directly from Table 3.1 of ``Post-1999 Rate of
  Progress Plans: Northwest Indiana Severe Ozone Nonattainment Area:
  Lake and Porter Counties, Indiana,'' December 21, 2000 State of
  Indiana submittal, Appendix F.
\23\ Note that the total VOC emissions given here differs slightly from
  the total specified by IDEM. IDEM documented a total VOC emissions of
  572,398 pounds per day (PPD). The total given here is mathematically
  correct given the available data. The difference between this total
  (572,399 PPD) and that documented by IDEM is probably due to rounding
  differences. It is assumed that IDEM maintained data in fractional
  PPD, whereas we are working with emissions, as documented, in non-
  fractional PPD, leading to the rounding differences. We are proposing
  to approve the revision of the 1990 base year VOC emissions as
  summarized by the State.

    IDEM has concluded that the 1990 base year emissions were actually 
significantly lower than those used in the post-1996 ROP, and has 
requested that the 1990 SIP base year inventory be adjusted 
accordingly. The calculation of emission reduction requirements for the 
post-1999 ROP plan are based on the revised VOC emissions. IDEM has 
noted in the December 21, 2000 submittal that this revision in base 
year emissions results in the need for revisions in the prior (1996 and 
1999) ROP target emission levels.

G. Why Were the 1996 15-Percent ROP Target Level and the 1999 9-Percent 
ROP Target Level for Lake and Porter Counties Recalculated, and Does 
Indiana Have To Revise the Prior ROP Plans?

    The 15 percent ROP emission target level (1996 milestone year) and 
the post-1996 ROP emission target level (1999 milestone year) had to be 
recalculated because IDEM has revised the 1990 base year VOC emissions 
inventory and because these emission target levels are input data for 
the calculation of subsequent ROP emission target levels. Each 
succeeding ROP milestone emission target level incorporates the 
preceding milestone year emission target level. Changing the base year 
emissions results in the need for a cascading calculation of milestone 
year emission target levels.
    The need for new calculated emission target levels does not 
necessitate revisions of prior ROP plans. Since subsequent milestone 
year emission target levels incorporate recalculations of preceding 
emission target levels, any shortfall in emission reductions resulting 
from the revisions in emission estimates is eliminated by appropriately 
adjusting the milestone year emission targets for years following the 
year of the revised emission estimates. For example, if the base year 
(1990) VOC emission estimates are lowered, as is the case here, 
subsequent milestone year emission target levels, those for 1996, 1999, 
2002, 2005, and 2007, should be appropriately lowered.

H. How Were the 1996 and 1999 Target Emission Levels for Lake and 
Porter Counties Calculated?

    IDEM calculated the 1996 and 1999 emission target levels, and 
presented these data in electronic spreadsheet tables to support the 
post-1999 ROP plan (we are including in the docket for this proposed 
rule hard copies of the spreadsheet data tables). We present in Tables 
VIa and VIb the State's calculations of the 1996 and 1999 VOC emission 
target levels using data supplied in the State's post-1999 ROP plan and 
supporting spreadsheets with one correction as noted below. The formula 
in brackets, [], in the following tables (and in other tables in this 
section of the proposed rule) show how emission values are calculated 
from other parameters within the same tables.
    Note that we have included in Table VIb one factor that Indiana did 
not include in its calculations. This factor is the ``fleet turnover 
correction factor.'' This factor, as discussed in our January 1994 
``Guidance on the Post-1996 Rate-Of-Progress Plan and the Attainment 
Demonstration'' (EPA-452/R-93-015), is needed to account for non-
creditable mobile source emission reductions occurring between 
milestone years as a result of the Federal Motor Vehicle Emission 
Control Program (FMVCP). IDEM, in making its ROP calculations, has 
assumed that this correction factor is accounted for in the FMVCP 
emission reduction used to calculate the ROP emission reduction 
requirement for each milestone period, and that a separate fleet 
turnover correction factor is not needed to account for non-creditable 
emission reductions. However, based on section 182(b)(1)(D) of the CAA 
and our January 1994 post-1996 ROP guidance, we believe that this 
assumption is incorrect. Our calculated ROP emission target levels and 
required total emission reduction requirements presented here account 
for the fleet turnover correction factors for each milestone year 
following 1996. This difference in approach (between IDEM and EPA) with 
regard to this correction factor accounts for the differences between 
our ROP estimates and those of IDEM as reflected in the subsequent 
tables and discussion.

   Table VIa.--Recalculated 1996 VOC Emission Target Level for Lake and
                             Porter Counties
------------------------------------------------------------------------
                                                          VOC  emissions
                 VOC emissions parameter                    (pounds per
                                                               day)
------------------------------------------------------------------------
1990 Total VOC Emissions................................         572,398
1990 ROP Baseline Emissions (A).........................         529,518
1990-1996 Non-Creditable Emission Reductions (B)........         158,586
1990 Adjusted Base Year Emissions (C) [(A)- (B)]........         370,932

[[Page 40819]]

 
15 Percent of Adjusted Base Year Emissions (D)..........          55,640
1996 Target Emissions Level [(C)-(D)]...................        315,292
------------------------------------------------------------------------
(A) Total VOC Emissions minus Biogenic Emissions (42,880 PPD).
(B) Non-Creditable Emission Reductions include: Coke Oven By-Product
  Recovery Emission Reduction = 130,169 PPD; Federal Motor Vehicle
  Control Program = 27,689 PPD (these emission reductions were taken
  from the spreadsheet data submitted to support the post-1999 ROP
  plan); and Reid Vapor Pressure (RVP) Restrictions = 728 PPD.


     Table VIb.--Recalculated 1999 Emission Target Level for Lake and
                             Porter Counties
------------------------------------------------------------------------
                                                           VOC emissions
                 VOC emission parameter                     (pounds per
                                                               day)
------------------------------------------------------------------------
1990 ROP Baseline Emissions (A).........................         529,518
1990-1999 Non-Creditable Emission Reductions (B)........         193,337
1990 Adjusted Base Year Emissions (C) [(A)-(B)].........         336,181
9 Percent of Adjusted Base Year Emissions (D)...........          30,256
Fleet Turnover Correction (E)...........................           4,865
1996 Target Emissions Level (F).........................         315,292
1999 Target Emissions Level [(F)-(D)-(E)]...............        280,171
------------------------------------------------------------------------
(A) From Table VIa above.
(B) Non-Creditable Emission Reductions include: Coke Oven By-Product
  Recovery Emission Reduction = 160,055 PPD; Federal Motor Vehicle
  Control Program = 32,554 PPD (these emission reductions were taken
  from the spreadsheet data submitted by IDEM to support the post-1999
  ROP plan); and Reid Vapor Pressure (RVP) Restrictions = 728 PPD.
(E) This is the difference between the 1996 and 1999 FMVCP emission
  reductions. Note that IDEM does not include this factor in their
  calculation of the 1999 target emission level.
(F) From Table VIa above.

    Comparing the State's derived 1999 VOC emissions target level 
(285,036 PPD) and the 1999 VOC target emissions level given in Table 
VIb, it can be seen that IDEM and EPA do not arrive at the same 1999 
emissions target level. As noted above, this difference is due to our 
inclusion of a fleet turnover correction factor in the calculation of 
the 1999 target emissions level. This difference is reflected in the 
calculation of 2002, 2005, and 2007 VOC emission target levels 
summarized below, where we compare Indiana's calculation of emission 
reduction targets and required emission reduction levels with our 
calculation of the emission reduction targets and required emission 
reduction levels.

I. How Were the Post-1999 Emission Targets and Emission Reduction 
Requirements Calculated?

    Tables VIIa, VIIb, and VIIc summarize the calculation of the 2002, 
2005, and 2007 VOC emission reduction targets and the VOC emission 
reductions required to meet ROP requirements in each of these milestone 
years. Both the State's calculations and our calculations are 
presented. We present our calculations in a side-by-side comparison to 
facilitate assessment of the State's ROP plan.

 Table VIIa.--Calculation of the 2002 VOC Emission Reduction Target and
                     Emission Reduction Requirement
                    [VOC emissions in pounds per day]
------------------------------------------------------------------------
                                              Indiana
         VOC emission parameter              emissions     EPA emissions
                                             estimate        estimate
------------------------------------------------------------------------
1990 ROP Baseline Emissions (A).........         529,518         529,518
1990-2002 Non-Creditable Emission                176,950         176,950
 Reductions (B).........................
1990 Adjusted Base Year Emissions (A)-           352,568        352,5689
 (B)....................................
Percent of Adjusted Base Year Emissions           31,731          31,731
 (C)....................................
FMVCP Fleet Turnover Correction (D).....               0           8,585
1999 Emissions Target Level (E).........         285,036         280,171
2002 Emissions Target Level (F) [(E)-(C)-        253,305         239,855
 (D)]...................................
Projected 2002 Emissions (G)............         248,413         248,413
VOC Emission Reduction Needed to Achieve         (4,892)          8,558
 ROP (H) [(G)-(F)]......................
------------------------------------------------------------------------
(A) From Table VIa.
(B) Non-Creditable Emission Reductions include: Coke Oven By-Product
  Recovery Emission Reduction = 135,083 PPD; Federal Motor Vehicle
  Control Program = 41,139 PPD; and Reid Vapor Pressure (RVP)
  Restrictions = 728 PPD. All data taken from Appendix F of Indiana's
  December 21, 2000 submittal.
(D) This is the difference between the 1999 and 2002 FMVCP emission
  reductions.
(E) The State's estimate is taken from Appendix F of the December 21,
  2000 submittal. EPA's estimate is taken from Table VIb of this
  proposed rule.
(G) From Appendix F of the State's December 21, 2000 submittal.
(H) Emissions in parentheses, (), indicate projected emissions below the
  ROP emission target levels.


 Table VIIb.--Calculation of the 2005 VOC Emission Reduction Target and
                     Emission Reduction Requirement
                    [VOC emissions in pounds per day]
------------------------------------------------------------------------
                                              Indiana
         VOC emission parameter              emissions     EPA emissions
                                             estimate        estimate
------------------------------------------------------------------------
1990 ROP Baseline Emissions (A).........         529,518         529,518
1990-2005 Non-Creditable Emission                179,980         179,980
 Reductions (B).........................
1990 Adjusted Base Year Emissions (A-B).         349,538         349,538
9 Percent of Adjusted Base Year                   31,458          31,458
 Emissions (C)..........................
FMVCP Fleet Turnover Correction (D).....               0           1,653
2002 Emissions Target Level (E).........         253,305         239,855
2005 Emissions Target Level (F) [ E-C-D]     (I) 221,846         206,744

[[Page 40820]]

 
Projected 2002 Emissions (G)............         203,508         203,508
VOC Emission Reduction Needed to Achieve        (18,338)        (3,236)
 ROP (H) [ G-F].........................
------------------------------------------------------------------------
(A) From Table VIa.
(B) Non-Creditable Emission Reductions include: Coke Oven By-Product
  Recovery Emission Reduction = 136,460 PPD; Federal Motor Vehicle
  Control Program = 42,792 PPD; and Reid Vapor Pressure Restrictions =
  728 PPD. All data taken from Appendix F of Indiana's December 21, 2000
  submittal.
(D) This is the difference between the 2002 and 2005 FMVCP emission
  reductions.
(E) The State's estimate is taken from Appendix F of the December 21,
  2000 submittal. EPA's estimate is taken from Table VIIa of this
  proposed rule.
(G) From Appendix F of the State's December 21, 2000 submittal.
(H) Values in parentheses, (), indicate projected emissions below the
  ROP emissions target levels.
(I) This value is taken from Appendix F of the State's December 21, 2000
  submittal. The value we would calculate given the input data
  documented here would be 221,847 PPD, slightly different from the
  State's documented value. Rounding differences can explain this small
  difference.


 Table VIIc.--Calculation of the 2007 VOC Emission Reduction Target and
                     Emission Reduction Requirement
                    [VOC emissions in pounds per day]
------------------------------------------------------------------------
                                              Indiana
         VOC emission parameter              emissions     EPA emissions
                                             estimate        estimate
------------------------------------------------------------------------
1990 ROP Baseline Emissions (A).........         529,518         529,518
1990-2007 Non-Creditable Emission                181,015         181,015
 Reductions (B).........................
1990 Adjusted Base Year Emissions (A)-           348,503         348,503
 (B)....................................
6 Percent of Adjusted Base Year                   20,910          20,910
 Emissions (C)..........................
FMVCP Fleet Turnover Correction (D).....               0             117
2005 Emissions Target Level (E).........         221,846         206,744
2007 Emissions Target Level (F) [(E)-(C)-        200,936         185,717
 (D)]...................................
Projected 2007 Emissions (G)............         197,759         197,759
VOC Emission Reduction Needed to Achieve         (3,177)         12,042
 ROP (H) [(G)-(F)]......................
------------------------------------------------------------------------
(A) From Table VIa.
(B) Non-Creditable Emission Reductions include: Coke Oven By-Product
  Recovery Emission Reduction = 137,378 PPD; Federal Motor Vehicle
  Control Program = 42,909 PPD; and Reid Vapor Pressure Restrictions =
  728 PPD. All data taken from Appendix F of Indiana's December 21, 2000
  submittal.
(D) This is the difference between the 2005 and 2007 FMVCP emission
  reductions.
(E) The State's estimate is taken from Appendix F of the December 21,
  2000 submittal. EPA's estimate is taken from Table VIIb of this
  proposed rule.
(G) From Appendix F of the State's December 21, 2000 submittal.
(H) Emissions in parentheses, (), indicate projected emissions below the
  emissions target level.

    The data in Tables VIIa through VIIc indicate that the State and 
EPA arrive at different emission target levels and different ROP 
emission reduction requirements. This is due to one factor, the 
difference in the approaches of IDEM and EPA with regard to the 
consideration of a fleet turnover correction factor. We believe that 
this correction factor is needed to fully remove the non-creditable 
impacts of the FMVCP as required by section 182(b)(1)(D) of the CAA. 
Application of the FMVCP fleet turnover correction factor, as noted 
above, is discussed in EPA's January 1994 ``Guidance on the Post-1996 
Rate-Of-Progress Plan and the Attainment Demonstration'' (EPA-452/R-93-
015). As indicated below, however, EPA has determined that the 
differences between IDEM's and EPA's approaches to the consideration of 
this correction factor does not cause sufficient differences in our ROP 
calculations to cause us to propose disapproval of Indiana's post-1999 
ROP plan. Even when the fleet turnover correction factor is considered, 
Indiana's plan provides for sufficient VOC emission reductions to 
achieve the required ROP through the attainment year.

J. What Are the Criteria for Acceptable ROP Emission Control 
Strategies?

    Under section 182(b)(1)(C) of the CAA, emission reductions claimed 
for ROP are creditable to the extent that the emission reductions have 
actually occurred before the applicable ROP milestone dates. The CAA 
requires that to be creditable, emission reductions must be real, 
permanent, and enforceable. At a minimum, the emission reduction 
calculation methods should follow the following four principles: (1) 
Emission reductions from control measures must be quantifiable; (2) 
control measures must be enforceable; (3) interpretation of the control 
measures must be replicable; and (4) control measures must be 
accountable (see 57 FR 13567). Post-1996 plans must also adequately 
document the methods used to calculate the emission reduction for each 
emission control measure.
    Section 182(b)(1)(D) of the CAA places limits on what emission 
control measures states can include in ROP plans. All permanent and 
enforceable control measures occurring after 1990 are creditable with 
the following exceptions: (1) FMVCP reductions due to requirements 
promulgated by January 1, 1990; (2) RVP reductions due to RVP 
regulations promulgated by November 15, 1990; (3) emission reductions 
resulting from Reasonably Available Control Technology (RACT) ``Fix-
Up'' regulations required under section 182(a)(2)(A) of the CAA; and 
(4) emission reductions resulting from vehicle I/M program ``Fix-Ups'' 
as

[[Page 40821]]

required under section 182(a)(2)(B) of the CAA.

K. What Are the Emission Control Measures In Indiana's Post-1999 ROP 
Plan?

VOC Emission Control Measures
    Table VIII specifies the VOC emission control measures relied on in 
the post-1999 ROP plan and their associated VOC emission reductions for 
each milestone year as calculated by IDEM.

     Table VIII.--Northwest Indiana VOC Emission Reduction Measures
                 [Emission reductions in pounds per day]
------------------------------------------------------------------------
                                       Emission reduction level--PPD
       VOC control measure        --------------------------------------
                                       2002         2005         2007
------------------------------------------------------------------------
Mobile Source Measures:            ...........  ...........  ...........
    Federal Non-Road Engine              1,711        3,477        2,394
     Standards...................
Point Source Measures:             ...........  ...........  ...........
    Petroleum Refineries National  ...........  ...........        5,198
     Emission Standard for
     Hazardous Air Pollutants
     (NESHAP)....................
    Sinter Plant Rule (State Rule       37,920  ...........  ...........
     326 IAC 8-13)...............
    US Steel Agreed Order--        ...........  ...........          905
     Supplementary Environmental
     Project.....................
    Volatile Organic Liquid        ...........  ...........        2,653
     Storage RACT (State Rule 326
     IAC 8-9)....................
    Cold Cleaner Degreasing        ...........  ...........   \24\ 4,769
     (State Rule 326 IAC 8-3)....
Area Source Measures:              ...........  ...........  ...........
    Municipal Solid Waste                1,365  ...........  ...........
     Landfill (State Rules 326
     IAC 8-8 and 326 IAC 8-8.1)..
    Commercial/Consumer Solvent    ...........  ...........        2,210
     Reformulation...............
                                  --------------------------------------
        Total Creditable VOC            40,996        3,477  \25\ 18,129
         Emission Reductions.....
------------------------------------------------------------------------
\24\ See the discussions below concerning EPA's calculation of the VOC
  emission reduction for the Cold Cleaning Degreasing rule. EPA
  calculates a VOC emission reduction of 3,661 pounds/day for this
  source category.
\25\ With EPA's correction to the emission reduction estimate for Cold
  Cleaning Degreasing, this total VOC emission reduction estimate would
  be decreased to 17,021 pounds/day.

    The following summarizes the emission controls and the associated 
emission reduction calculation procedures documented in Indiana's Post-
1999 ROP Plan. In most cases, milestone year emission reductions were 
determined by comparing projected uncontrolled emissions with projected 
controlled emissions for each controlled source category.

Federal Non-Road Engine Standards

    These standards are federally required for all small non-road, 
spark-ignited engines, including 2-stroke, 4-stroke, and diesel 
engines. Indiana calculated emission reductions according to EPA 
guidance. The calculated emission reductions consider the impacts of 
fuel standards as well as the federal emission standards. To calculate 
the emission reduction, Indiana used EPA guidance to apply a percentage 
emission reduction per equipment type. The emission control is 
cumulative, providing additional emission reduction each milestone 
period as older equipment is replaced by new, compliant equipment.

Sinter Plant Rule

    This rule (326 IAC 8-13) applies to sintering processes that exist 
as of the effective date of the rule at integrated and steel 
manufacturing facilities in Lake and Porter Counties. The rule sets an 
emission limit of 0.12 pounds VOC per ton of sinter produced during the 
summer months (May through September), unless a source owner or manager 
can demonstrate that this level of emissions control is not reasonably 
available. If it is determined that this emission level is infeasible 
for a particular source, then a VOC emission level resulting from the 
product of 0.25 pounds VOC per ton of sinter and a daily production 
rate must be achieved. The production rate must be based on the 1990 
through 1994 average production rate or on an alternative, more 
representative production rate. The emission limit for the rest of the 
year (October through April) has been set at 0.36 pounds VOC per ton of 
sinter.
    The calculated emission reduction level was based on the less 
stringent of the control options. The calculated emission reduction 
also reflects the fact that a limit on production is instituted when 
the higher emissions limit is approved by the State. This provides a 
cap on throughput.
    The Sinter Plant Rule was approved by the EPA on July 5, 2000 (65 
FR 41350).

Municipal Solid Waste Landfill

    This rule (326 IAC 8-8) is based on the federal New Source 
Performance Standards for new and existing municipal solid waste 
landfills with a design capacity equal to or greater than 2.5 million 
megagrams and that emit equal to or more than 50 megagrams per year (55 
tons per year) of non-methane organic compounds. The State rule also 
applies to new and existing solid waste landfills with design 
capacities greater than or equal to 100,000 megagrams of solid waste 
and that emit more than 50 megagrams per year (55 tons per year) of 
non-methane organic compounds.
    Indiana calculated the emission reduction based on an emission 
destruction efficiency of 98 percent and a collection efficiency 
ranging from 50 to 60 percent, yielding an overall VOC emission control 
efficiency of 49 to 59 percent. A rule effectiveness factor of 80 
percent is also used in the calculation of the emission reduction 
level.
    EPA approved this rule on March 28, 2000 (65 FR 16323).

Commercial/Consumer Solvent Reformulation

    This is a federal rule (``National Volatile Organic Compound 
Emission Standards for Consumer Products,'' 40 CFR part 59, subpart C). 
The VOC emission reduction was calculated using available EPA guidance. 
The total emission reduction was calculated by assuming emission 
reduction levels for each of several controlled product categories and 
for each consumer production classification in Indiana's Area Source 
Inventory.

[[Page 40822]]

Petroleum Refineries NESHAP

    The federal petroleum refineries NESHAP (40 CFR part 63, subpart 
CC) applies to all existing and new petroleum refineries. The rule 
requires control of air toxics (including some VOC) from miscellaneous 
process vents, equipment leaks, storage vessels, and wastewater 
collection and treatment systems.
    Indiana calculated the emission reductions according to EPA 
guidance. Indiana's Post-1999 ROP Plan documents the assumptions made 
for each controlled petroleum refinery source type.

U.S. Steel Agreed Order--Supplementary Environmental Project

    Under a March 22, 1996 agreed order between Indiana and U.S. Steel, 
VOC controls are to be achieved through a supplementary environmental 
project to be performed by U.S. Steel for the coke quenching operations 
at the Gary Works. (The supplementary environmental project is 
specified in section 3 (``Clean Water Coke Quench Project'') of Exhibit 
E in the March 22, 1996 agreed order.) Based on this supplemental 
environmental project portion of the agreed order, U.S. Steel 
established a new process water treatment plant at the Gary Works coke 
plant. This water treatment plant uses a biotreatment process based on 
an innovative Integral Activated Sludge System comprised of two 2.14 
million gallon tanks operated in parallel, each containing an anoxic 
zone, aerobic zone, and an integral clarifier system. The water 
treatment plant uses oil/tar separation tanks, skimmers, equalization 
tanks, and an ammonia still to treat the water before it is sent to the 
Integral Activated Sludge System and on to the quenching system. The 
removal of the oils, tars, and ammonia will remove nearly all of the 
VOC found in the pre-treated water, minimizing the VOC release from 
coke quenching, reducing the VOC emissions by an estimated 905 pounds/
day. This is just one of the supplementary projects being performed by 
U.S. Steel to fulfill the requirements of the agreed order.
    IDEM submitted the agreed order to the EPA to support the ozone 
attainment demonstration. We are proposing to incorporate section 3 
(``Clean Water Coke Quench Project'') of Exhibit E of this agreed order 
into the SIP, making it federally enforceable. We are not proposing to 
take action on other portions of the agreed order for the purposes of 
this proposed rule.
Volatile Organic Liquid Storage RACT
    The State adopted this rule (326 IAC 8-9) on May 3, 1995. 
Compliance was phased in, with the majority of the requirements 
applicable by May 1, 1999. The rule applies to storage vessels with a 
capacity greater than 39,000 gallons that are used to store volatile 
organic liquids with a maximum true vapor pressure of 1.52 pounds per 
square inch or greater. The rule requires the use of an internal 
floating roof with vapor-mounted primary and secondary seals and 
controlled fittings on fixed roof and internal floating roof tanks. For 
external floating roof tanks, the rule requires the replacement of 
vapor-mounted seals with liquid mounted seals or shoes and installation 
of secondary seals with controlled fittings. The compliance date for 
this rule for external floating roof and fixed roof tanks was May 1, 
1996. Internal floating roof tanks had up until 10 years after this 
date to achieve compliance with this rule. IDEM estimates that this 
rule will result in a VOC emissions reduction of 2,653 pounds/day by 
2007.
    The following information was taken into consideration to calculate 
the VOC emission reduction for this rule. The VOC emission reduction 
for fixed roof tanks is estimated to be 96 percent. For internal 
floating roof tanks, the VOC emission reduction is expected to be 29 
percent. The expected VOC emission reduction for external floating roof 
tanks is unknown because no data is available that can be used to 
determine the number of tanks in each vapor pressure range by seal 
type, but a 50 to 80 percent VOC emission reduction could be expected 
depending on the capacity and baseline control status of the tanks. The 
State assumed a 50 percent emission reduction coupled with an 80 
percent rule effectiveness (assumed rule effectiveness for all tank 
types).
    EPA approved the Volatile Organic Liquid Storage RACT Rule on 
January 17, 1997 (62 FR 2593).
Cold Cleaner Degreasing
    The State adopted this rule (326 IAC 8-3-8) in November 1998. 
Compliance was phased in, with the majority of the requirements 
applicable by March 2001. This rule applies to processes that use a 
solvent to remove grease, oil, or dirt from the surface of a part prior 
to surface coating or welding. In cold cleaning, a part to be cleaned 
is dipped into or sprayed with a solvent. Sources that commonly have 
cold cleaning degreasing units include auto repair shops and other 
industries. The rule reduces the VOC emissions from cold cleaning 
degreasers by establishing a vapor pressure limit for the solvents. 
Suppliers are required to provide a low vapor pressure solvent to users 
in the affected counties and to keep transaction records. Users are 
required to use only low vapor solvents and to keep records of their 
solvent purchases.
    IDEM estimates that this rule results in a 67 percent reduction of 
VOC emissions for this source category. IDEM's documentation calculates 
that this rule provides for a VOC emission reduction of 4,769 pounds/
day in the Northwest Indiana area.\26\ EPA, however, is only crediting 
Indiana with a VOC emission reduction of 3,661 pounds/day. This 
calculation revision is based on the fact that perchloroethylene 
(perc), which is a solvent used in some cold cleaner degreasing units, 
has been determined to be negligibly reactive, and, therefore, delisted 
as a VOC. Pursuant to a May 13, 1993 memorandum from the EPA's Office 
of Air Quality Planning and Standards to EPA's Regional Branch Chiefs 
on ``Perchloroethylene Emissions from Degreasing,'' perc makes up 23 
percent of the solvent used in degreasing operations. The projected 
2007 VOC emissions from cold cleaning degreaser operations is 7,097 
pounds/day. To account for the adjustment to remove the perc emissions, 
this emissions level is decreased to 5,465 pounds/day (a 23 percent 
reduction from the 7,097 pounds/day emissions level). The 67 percent 
emissions reduction due to the Cold Cleaner Degreaser rule is then 
calculated to be 3,661 pounds/day.
---------------------------------------------------------------------------

    \26\ Indiana based this emission reduction estimate on EPA 
guidance existing as of 1990. EPA's estimate presented here is based 
on subsequent guidance.
---------------------------------------------------------------------------

    The EPA proposed to approve this rule on June 7, 2001 (66 FR 
30656). Final action on this rule must be completed before the EPA 
takes final action on the State's ROP plan.

L. Are the Emission Control Measures and Calculated Emission Reductions 
Acceptable to the EPA?

    We find the estimated emission reduction estimates to be acceptable 
for all reduction categories. The emission reduction estimates have 
been adequately documented. Finally, the emission reduction estimates 
are supported by State rules, which will be fully approved before we 
give final approval to the ROP plan, a State agreed order, which we are 
proposing to incorporate by reference into the SIP making it federally 
enforceable, and by federal emission control requirements.

[[Page 40823]]

M. Are the Planned Emissions Reductions Adequate To Meet the ROP 
Emission Reduction Requirements, Including ROP Contingency Measure 
Requirements?

    The State, in Appendix F of the December 21, 2000 submittal, 
documents that the VOC emissions reductions resulting from the selected 
ROP emission control measures will be sufficient to meet the ROP 
emission reduction requirements for 2002, 2005, and 2007, including 
meeting the contingency requirements \27\ for each milestone year.
---------------------------------------------------------------------------

    \27\ The ROP contingency requirement is 3 percent of the 1990 
adjusted base year VOC emissions. Indiana has chosen to implement 
sufficient emission controls to pre-implement (prior to being 
triggered by emission reduction shortfalls) the contingency emission 
reduction for each of the milestone years.
---------------------------------------------------------------------------

    As noted above, we have calculated ROP emissions reduction 
requirements differing from those calculated by IDEM. The question is 
now whether the emission reductions planned by Indiana are sufficient 
to meet the emission reduction requirements we have calculated. Table 
IX presents a comparison of our calculated emission reduction 
requirements and the emission reductions expected to occur in each ROP 
milestone period (during each 3 year period between milestone years) or 
by each milestone year. In this table, we have also included the VOC 
emission reductions needed to meet the contingency requirement to test 
whether Indiana's ROP plan would actually meet the contingency 
requirement through the implementation of emission controls prior to 
each milestone year.
---------------------------------------------------------------------------

    \28\ 3 percent of 1990 adjusted base year emissions. The 1990 
adjusted base year emissions are specific to each milestone year as 
noted in Tables VIIa through VIIc of the proposed rule.
    \29\ See Table VIII of this proposed rule.

   Table IX.--Comparison of Planned VOC Emission Reductions and ROP and Contingency Measure Emission Reduction
                        Requirements (as Determined by EPA) for Lake and Porter Counties
                                        [VOC emissions in pounds per day]
----------------------------------------------------------------------------------------------------------------
                                                                    Contingency        Total
                                                   ROP required      emission       creditable       Emission
                 Milestone year                    VOC emission      reduction       emission        reduction
                                                     reduction      needed \28\     reductions     shortfall (A)
---------------------------------------------------------------------------------------\29\---------------------
2002............................................           8,558          10,577          40,996        (21,861)
2005............................................         (3,236)          10,486           3,477        (28,665)
2007............................................          12,042          10,455          17,021       (33,675)
----------------------------------------------------------------------------------------------------------------
(A) Values in parentheses, ( ), indicate that the creditable emission reductions exceed the sum of the ROP
  required VOC emission reduction and the contingency emission reduction needed for a given milestone year.
  Excess emission reductions are credited against emission reduction requirements for succeeding milestone
  years.

    From Table IX, you can see that the Northwest Indiana area will 
have sufficient VOC emission reductions to achieve the ROP emission 
reduction requirements for each of the milestone years. In addition, by 
each milestone year, sufficient VOC emission reductions will be 
achieved to provide for the 3 percent contingency emission reduction 
needs. Therefore, the ROP plan meets the calculated emission 
requirements of both the State and EPA. The ROP plan provides 
sufficient VOC emission reductions to meet all ROP requirements.

N. How Does the ROP Plan Affect Outstanding Plan Requirements for 
Contingency Measures on the 15-Percent ROP Plan and the Post-1996 9-
Percent ROP Plan?

    As noted in the final rulemaking for 15 percent ROP plan (62 FR 
38457, July 18, 1997) and the final rulemaking for the post-1996 ROP 
plan (65 FR 4126, January 26, 2000), the EPA did not approve the 
contingency plans related to those ROP plans. Technically, the State is 
still obligated to meet these planning requirements or to demonstrate 
the adequacy of the 15 percent ROP plan and the post-1996 ROP plan for 
meeting the 1996 and 1999 emission targets (274,553 PPD [1996] and 
292,021 PPD [1999] as defined in the final rules, versus 309,993 PPD 
[1996] and 275,798 [1999] based on the revised 1990 base year 
emissions, as discussed above).
    The contingency plans for the 1996 and 1999 milestone years would 
have to have provided for contingency measures yielding a total VOC 
emission reduction with a maximum of 10,940 PPD. Table IX shows that 
the VOC emission reductions expected to result from the current ROP 
plan exceed the current ROP requirements by an amount greater than this 
maximum contingency requirement. The current ROP plan is adequate to 
also cover these prior contingency requirements. We, therefore, 
conclude that this ROP plan meets all outstanding contingency plan 
requirements, and that the State has met all contingency planning 
requirements through the current time. It is not necessary for the 
State to revisit the contingency plans for the 15 percent ROP plan and 
the post-1996 ROP plan. We propose to approve those contingency plans 
as effectively being met by the current ROP and contingency plans.

V. Contingency Measures Plan

A. What Are the Requirements for Contingency Measures Under Section 
172(c)(9) and Section 182(c)(9) of the CAA?

    Sections 172(c)(9) and 182(c)(9) of the CAA require SIPs to contain 
additional measures that will take effect without further action by a 
state or EPA if an area fails to meet ROP requirements or attain the 
standard by the applicable date. The CAA does not specify how many 
contingency measures are needed or the magnitude of emissions 
reductions that must be provided by these measures. However, EPA 
provided guidance interpreting the control measure requirements of the 
CAA contingency requirements in the April 16, 1992, General Preamble 
for Implementation of the Clean Air Act Amendments of 1990. See 57 FR 
13498, 13510. In that guidance, EPA indicated that states with moderate 
and above ozone nonattainment areas should include sufficient 
contingency measures so that, upon implementation of such measures, 
additional emissions reductions of up to 3 percent of the emissions in 
the adjusted base year inventory (or such lesser percentage that will 
cure the identified failure) would be achieved in the year following 
the

[[Page 40824]]

year in which the failure has been identified. States must show that 
their contingency measures can be implemented with minimal further 
action on their part and with no additional rulemaking actions, such as 
public hearings or legislative reviews. The additional 3 percent 
emission reduction would ensure that progress toward attainment occurs 
at a rate similar to that specified under the ROP requirements for 
severe areas (i.e., 3 percent emission reduction on average per year) 
and that the State will achieve these emission reductions while 
conducting additional control measure development and implementation as 
necessary to achieve the ozone standard.
    EPA has determined that federal measures can be considered to 
analyze whether the contingency measure requirements have been met. 
While these measures are not SIP-approved contingency measures which 
would apply if an area fails to attain, EPA believes that existing 
federally enforceable measures that are achieving emission reductions 
during the relevant period can be used to provide the necessary 
substantive relief. Therefore, federal measures may be used in the 
analysis, to the extent that the attainment demonstration does not 
otherwise rely on them or take credit for them. (See, e.g., 66 FR 586, 
615 (January 3, 2001).)

B. How Do the Northwest Indiana Attainment Demonstration and ROP SIP 
Address the Contingency Measure Requirements?

    The CAA contingency measure requirements require states to have 
contingency measures for the ROP plan and for the attainment 
demonstration. Since the measures are required to take effect without 
further action by the state or EPA if an area fails to meet the 
applicable requirement, there are slightly different considerations 
that apply to contingency measures for ROP plans and for the attainment 
demonstration.
Contingency Measures for the ROP Plans
    Measures used to meet the contingency requirement for ROP plans 
have to take effect without further action in a reasonable time-frame. 
As noted above in the discussion of Indiana's post-1999 ROP plan, 
Indiana simply added the VOC emission reduction that would be required 
for contingency measures to the ROP emission reduction requirement for 
each milestone year. The State then identified total creditable 
reductions that will be implemented by each milestone year, fulfilling 
both the core ROP plan requirements and the contingency requirement 
(See ROP approval section of this notice). For example, in the 2002 
rate of progress plan, the reduction requirement for the 9 percent ROP 
is -4,892 pounds/day. (Excess reductions from previous ROP plans 
provided for lower 2002 estimated emissions than the target level.) The 
contingency requirement is 10,577 pounds VOC/day. Indiana calculated 
the total required reduction of 5,685 pounds/day (10,577-4,892). 
Indiana identified 40,996 pounds/day of reductions in VOC emissions 
that would be implemented by 2002, thus fulfilling the ROP and 
contingency measure requirements. Likewise, contingency measure 
reductions were calculated for the 2005 and 2007 milestone years and 
were met with measures that will have been implemented prior to the 
last year of each ROP period (prior to November 15, 2005 and prior to 
November 15, 2007). These contingency measures adequately fulfill the 
ROP contingency requirements for Northwest Indiana.
    However, to the extent that some of emission control measures were 
included in the modeled attainment demonstration emission control 
strategy, they cannot all be used as attainment demonstration 
contingency measures. They are not in ``excess'' of the emission 
control measures needed to demonstrate attainment.
Contingency Measures for the Attainment Demonstration
    Calculation of Indiana's total 1990 adjusted base year inventory 
for VOC emissions for the nonattainment area is detailed in EPA's July 
18, 1997 (62 FR 38457) approval of the 15 percent ROP plan and in 
Indiana 15 percent ROP plan submittal and subsequent ROP submittals. 
Indiana's 1990 adjusted base year inventory of VOC emissions for 2007 
for the Northwest Indiana nonattainment area is 348,503 pounds per day 
(lb/day). Per EPA's guidance, Indiana's contingency measures should 
achieve VOC reductions equivalent to 3 percent of the adjusted base 
year inventory, or 10,455 lb/day.
    Indiana has identified surplus emissions reductions that occur 
through 2009 that are available as contingency measure reductions for 
the attainment demonstration contingency requirement. As provided 
above, these contingency measure reductions are not the same emission 
reductions as the contingency measures relied on for the ROP plans.
    The total amount of VOC emission reduction needed for Indiana to 
meet the contingency measure requirement in the Northwest Indiana area 
is 10,455 lb/day. Indiana has demonstrated a VOC emission reduction of 
10,533 lb/day to fulfill the requirement. The control measures and the 
calculated reduction are listed in the following table:

     Indiana Attainment Demonstration Contingency Measure Reductions
------------------------------------------------------------------------
                                                           VOC reduction
                     Control measure                         (lb/day)
------------------------------------------------------------------------
U.S. Steel Agreed Order--Supplementary Environmental                 905
 Project................................................
Volatile Organic Liquid (VOL) Storage RACT..............           2,653
Cold Cleaner Degreasing.................................           3,661
On-Board Diagnostics....................................           1,375
Mobile Source Emissions.................................           1,939
      Total.............................................          10,533
------------------------------------------------------------------------

The emission reductions indicated here are those emission reductions 
resulting from the noted emission controls but which have not been 
claimed for achieving ROP and were not included in the modeled 
attainment demonstration.
    Indiana relies on a number of State and federal rules to serve as 
contingency measures. The State measures have already been implemented 
and include: The U.S. Steel Agreed Order; the VOL Storage RACT; and the 
Cold Cleaner Degreasing rule. (We approved the VOL Storage RACT on 
January 17, 1997 (62 FR 2593) and proposed to approve the Cold Cleaner 
Degreasing rule on June 7, 2001 (66 FR 30656).) In addition, several 
federal measures are relied upon which achieve reductions in the 2007-
2009 time-frame, including the On-Board Diagnostics rule, and mobile 
source measures from the Federal Motor Vehicle Emissions Control 
Program. Indiana documented the methodology for the calculation of the 
emission reductions, and this documentation is available in the Docket. 
The measures and the reduction calculations are summarized here. More 
detail on these emissions calculations is provided in the Docket.
U.S. Steel Agreed Order--Supplementary Environmental Project
    As noted above, this project entails a new water treatment plant 
which uses oil/tar separation tanks, skimmers, equalization tanks, and 
an ammonia still to treat quench water before the water is sent to an 
Integral Activated Sludge System as part of a new coke plant water 
treatment process. The expected VOC emissions reductions from the 
implementation of this supplementary environmental project, which were 
not credited toward the attainment demonstration, are 905 lb/day.

[[Page 40825]]

VOL Storage RACT
    As noted above in the discussion of Indiana's post-1999 ROP plan, 
IDEM has calculated the VOC emissions reduction for this control 
measure to be 2,653 lb/day in 2007. This emission reduction was not 
credited in the ozone attainment demonstration, and, therefore, can be 
credited toward the contingency measure requirements.
Cold Cleaning Degreasing Rule
    As noted above in the discussion of Indiana's post-1999 ROP plan, 
EPA is only crediting Indiana with a VOC emission reduction of 3,661 
pounds/day for this emissions control rule in 2007.
On-Board Diagnostics Test and Mobile Source Emissions
    The On-Board Diagnostics (OBD) test standards have already been 
adopted by Indiana in 326 IAC 13-1.1.\30\ The State was to have begun 
OBD testing in its inspection and maintenance program by January 1, 
2001. However, on March 28, 2001, the EPA Administrator signed a final 
rulemaking to amend the vehicle inspection and maintenance program 
requirements to incorporate a check of the OBDs system and to extend 
the date that States need to comply until January 1, 2002. 
Implementation of this check in the Northwest Indiana area will begin 
in January 2002. Indiana estimated the amount of VOC emissions 
reductions resulting from OBD testing that will occur in 2008 and 2009. 
The result of this estimate, 1,375 pounds/day, is listed in the table.
---------------------------------------------------------------------------

    \30\ The OBD test standards are federal requirements, and, as 
such, do not necessitate the approval of 326 IAC 13-1.1 by the EPA 
before the OBD-based emissions reductions can be credited to the 
Post-1999 ROP plan.
---------------------------------------------------------------------------

    The reductions in mobile source emissions represent the difference 
between estimated mobile source emissions for Lake and Porter Counties 
in 2007 and those in 2009. This estimate was made by applying the 
MOBILE5b-produced VOC ``All Vehicle'' emission factors for 2007 and 
2009 to the projected average summer weekday VMT for the respective 
years, specific to Lake and Porter Counties. The average speed (37.0) 
and VMT projections used in this calculation were derived from the 
Northwestern Indiana Regional Planning Commission's travel demand 
model. The 2007 and 2009 emission factors were produced by using the 
same standard MOBILE5b inputs that were used for the attainment 
demonstration. Based on these calculations, the projected emission 
reduction from the mobile source contingency measures is 1,939 lb/day.
    These reductions meet the criteria for reductions to be used as 
contingency measures for the attainment demonstration. The measures are 
already adopted for implementation and will provide for specific 
emission control measures after 2007 if the area fails to attain the 
ozone standard. The measures will take effect without any further 
action by the State or by the EPA Administrator. Since the emission 
reductions will occur subsequent to November 15, 2007, the reductions 
are surplus to the attainment demonstration and were not modeled in the 
attainment demonstration. Therefore, the EPA proposes to approve these 
measures as contingency measures for the Northwest Indiana ozone 
attainment demonstration.

C. Do the Northwest Indiana Attainment Demonstration and ROP Plans Meet 
the Contingency Measure Requirement?

    Indiana has identified contingency measures which will provide for 
a 3 percent reduction in VOC emissions from the 1990 adjusted base year 
inventory, as required by section 172(c)(9)and section 182(c)(9) of the 
CAA appropriately to provide approvable contingency plans for both the 
attainment demonstration and the ROP plans. Indiana identified excess 
(excess to the requirements of ROP) emission reductions sufficient to 
meet the contingency requirement for the Post-1999 ROP plan for each of 
the milestone years. Indiana, however, did not specify which reductions 
were considered for contingency purposes. Rather, Indiana added the 3 
percent required contingency (approximately 10,500 tons/day) emission 
reduction to the ROP requirements for each milestone year and then 
identified creditable reductions, that were being implemented before 
the last year of each milestone period to fulfill the requirement. This 
same set of emissions control measures, however, could not be used to 
fulfill the attainment demonstration requirement since some of the 
measures were not excess to the emission reductions modeled in the 
attainment demonstration. Indiana filled this 10,455 lb/day gap by 
identifying excess emissions reductions occurring subsequent to 
November 15, 2007 that were not needed for ROP and that had not been 
modeled in the attainment demonstration, which only included emission 
reductions through November 15, 2007.
    The only remaining question or issue is the timing of the post-2007 
emission reductions. As noted above, the General Preamble indicates 
that the contingency measure emission reductions should be achieved in 
the year following the year in which the attainment failure has been 
identified. For the Northwest Indiana area, the attainment date is 
November 15, 2007. Therefore, the critical attainment ozone season is 
April through October of 2007 (the last ozone season prior to the 
attainment date). Following this ozone season, it will take the State 
of Indiana and other States in the Northwest Indiana downwind environs 
several months to review and quality assure the 2007 ozone data. EPA 
must then use these data to make the determination of attainment, which 
can take up to 6 months after the end of the 2007 ozone season. This 
means that the determination of attainment will not occur until 
sometime in 2008. Therefore, 2009 is the ``year following the year'' in 
which EPA is expected to make the determination of attainment, and 
Indiana can take credit for any emission controls implemented between 
2007 and 2009.

VI. Mid-Course Review Commitment

A. Did Indiana Submit a Mid-Course Review Commitment?

    Indiana has submitted a MCR commitment. Although Indiana does not 
rely on weight-of-evidence in the final 1-hour ozone attainment 
demonstration, Indiana has submitted a MCR commitment letter. In the 
December 16, 1999 proposed rulemaking, the EPA provided for Indiana to 
submit a MCR commitment letter because the 1-hour ozone attainment 
demonstration submitted in 1998 had modeling which relied on weight-of-
evidence. The most recent modeling submitted in the attainment 
demonstration SIP does not rely on weight-of-evidence to demonstrate 
attainment.\31\ EPA's June 1996 guidance also recommends a mid-course 
review for severe and extreme areas due to the uncertainty of emissions 
projections that extend out for a number of years in the future. The 
MCR is a good check on whether the projected emissions reductions are 
occurring and whether progress is being made toward attainment of the 
1-hour ozone standard. Indiana and the other Lake Michigan States have 
submitted letters of commitment to complete the MCR.
---------------------------------------------------------------------------

    \31\ As noted above, the State's attainment demonstration did 
include weight-of-evidence to further bolster the validity of the 
ozone attainment demonstration. In this case the weight-of-evidence 
is viewed as a useful component of the ozone attainment 
demonstration given the inherent uncertainties of photochemical 
dispersion modeling, such as that employed through the use of the 
UAM.
---------------------------------------------------------------------------

    Indiana submitted a letter dated February 21, 2000, which contained 
a

[[Page 40826]]

commitment to complete a mid-course review. The letter and other 
documents were discussed at a public hearing on November 15, 2000. This 
commitment provided that Indiana would perform the MCR within 2 years 
after the implementation of the statewide NOX emission 
controls. More recently, Indiana has submitted a letter dated June 4, 
2001 in which Indiana commits to submit the mid-course review by 
December 31, 2004, the date recommended by EPA.

VII. NOX Waiver

A. What Is the History of the NOX Emissions Control Waiver 
in the Chicago-Gary-Lake County Ozone Nonattainment Area?

    Part D of the CAA establishes the SIP requirements for 
nonattainment areas. Subpart 2, part D of the CAA establishes 
additional provisions for ozone nonattainment areas. Section 182(b)(2) 
of this subpart requires the application of RACT regulations for major 
stationary VOC sources located in moderate and above ozone 
nonattainment areas as well as in ozone transport regions. States with 
affected areas were required to submit RACT regulations by November 15, 
1992. Section 182(a)(2)(C) requires the application of NSR regulations 
for major new or modified VOC sources located in marginal and above 
ozone nonattainment areas as well as in ozone transport regions. States 
were required to adopt revised NSR regulations by November 15, 1992. 
Section 182(f) requires States to apply the same requirements to major 
stationary sources of NOX as apply to major stationary 
sources of VOC. Therefore, the RACT and NSR requirements also apply to 
major stationary sources of NOX in ozone nonattainment areas 
and in ozone transport regions (the Chicago-Gary-Lake County ozone 
nonattainment area is not part of an ozone transport region).
    The section 182(f) requirements are discussed in detail in EPA's 
``State Implementation Plans; Nitrogen Oxides Supplement to the General 
Preamble for the Implementation of Title I of the Clean Air Act 
Amendments of 1990'' (57 FR 55628, November 25, 1992). For ozone 
nonattainment areas located outside of an ozone transport region, the 
NOX emission control requirements do not apply to 
NOX sources if: (1) The EPA determines that net air quality 
benefits are greater in the absence of NOX emission 
reductions; or (2) the EPA determines that additional reductions of 
NOX emissions would not contribute to attainment of the 
ozone standard in the area. Where any one of these tests is met (even 
if the other test is failed), the NOX RACT and NSR 
requirements of section 182(f) would not apply and may be ``waived.'' 
See section 182(f)(1). In addition, under section 182(f)(2) of the CAA, 
if the EPA determines that excess reductions in NOX 
emissions would be achieved under section 182(f)(1) of the CAA, the EPA 
may limit the application of section 182(f)(1) to the extent necessary 
to avoid achieving such excess emission reductions.
    In addition to determining the applicability of NOX 
requirements for RACT and NSR, the section 182(f) waiver process may 
also determine the applicability of certain requirements applicable to 
NOX under the CAA's mobile source transportation and general 
conformity requirements, which assure conformity of federal and state 
transportation programs and projects to approved SIPs. The general and 
transportation conformity requirements are found at section 176(c) of 
the CAA. The conformity requirements apply on an area-wide basis in all 
ozone nonattainment areas. The EPA's transportation conformity final 
rule \32\ and general conformity rule \33\ reference the section 182(f) 
exemption process as a means for exempting an affected area from 
certain NOX conformity requirements. The approval of a 
section 182(f) exemption petition in favor of a NOX waiver 
results in the exemption of marginal and above ozone nonattainment 
areas from the emission reduction tests \34\ with respect to 
NOX under the transportation and general conformity 
requirements of the CAA. See EPA's May 27, 1994 memorandum entitled 
``Section 812(f) Nitrogen Oxides (NOX) Exemptions-Revised 
Process and Criteria,'' from John Seitz, Director of the Office of Air 
Quality Planning and Standards. However, once NOX emission 
budgets are established under attainment demonstrations and ROP plans, 
areas must meet the NOX emission budgets notwithstanding the 
existence of NOX waivers.
---------------------------------------------------------------------------

    \32\ ``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. or 
the Federal Transit Act,'' as amended August 15, 1997 (62 FR 43780).
    \33\ ``Determining Conformity of General Federal Actions to 
State or Federal Implementation Plans; Final Rule,'' November 30, 
1993 (58 FR 63214).
    \34\ Prior to the approval of an ozone attainment demonstration 
or a ROP plan, an ozone nonattainment area granted a NOX 
waiver may be exempted from the conformity requirements for build/
no-build test and a less-than-1990 emissions test. After an 
attainment demonstration or a ROP plan containing motor vehicle 
emissions budgets is approved and the emissions budgets are found to 
be adequate by the EPA, conformity determinations must be conducted 
using the motor vehicle emissions budgets and the NOX 
waiver no longer applies for conformity purposes.
---------------------------------------------------------------------------

    Similarly, under the I/M program final rule (57 FR 52950), November 
5, 1992, the section 182(f) petition is also referenced to determine 
applicability of I/M-based NOX emission reductions (I/M 
NOX emission cut-points). The I/M requirements for serious 
and above ozone nonattainment areas are found at section 182(c)(3) of 
the CAA. Basic I/M testing programs must be designed such that no 
increase in NOX emissions occur as a result of the programs. 
So long as this is done, if a NOX waiver petition is granted 
to an area required to implement a basic I/M program, the basic I/M 
NOX emission cut-points may be omitted. Enhanced I/M testing 
programs must be designed to reduce NOX emissions consistent 
with an enhanced I/M performance standard. If a NOX waiver 
petition is granted to an area required to implement an enhanced I/M 
program, the NOX emission reduction is not required, but the 
enhanced I/M program must be designed to offset NOX emission 
increases resulting from the repair of vehicles due to hydrocarbon or 
carbon monoxide emission failures detected through the I/M program.
    As part of a July 13, 1994 submittal from LADCO, the States of 
Illinois, Indiana, Michigan, and Wisconsin petitioned the EPA for a 
waiver of the NOX emission requirements of section 182(f) of 
the CAA and for a waiver of above-described NOX emission 
control requirements for conformity and basic and enhanced I/M in the 
ozone nonattainment areas in the Lake Michigan ozone modeling domain 
(this includes the Chicago-Gary-Lake County ozone nonattainment area). 
The EPA reviewed this petition in proposed rulemaking on March 6, 1995 
(60 FR 12180) and in final rulemaking on January 26, 1996 (61 FR 2428). 
The final rulemaking approved the existing waiver of RACT, NSR, and 
certain I/M and general conformity NOX requirements in the 
subject ozone nonattainment areas. The EPA also granted an exemption 
from certain transportation conformity NOX requirements for 
ozone nonattainment areas classified as marginal or transitional within 
the Lake Michigan ozone modeling domain on February 12, 1996 (61 FR 
5291). These exemptions were granted based on a data analysis/modeling 
demonstration showing that additional NOX emission 
reductions either would not contribute to or would interfere with 
attainment of the 1-hour ozone standard for ozone nonattainment areas 
within the ozone modeling domain.

[[Page 40827]]

    The continued approval of the exemption was made contingent on the 
results of the States' final ozone attainment demonstrations and 
emission control plans for the ozone modeling domain \35\ (61 FR 2428, 
January 26, 1996). It was noted that the ozone modeling in the final 
ozone attainment demonstrations would supersede the ozone modeling 
information that provided the basis for the support of the 
NOX emissions control waiver. To the extent that the final 
attainment plans include NOX emission controls on major 
stationary sources in the ozone nonattainment areas in the Lake 
Michigan ozone modeling domain, we noted that we would remove the 
NOX emissions control waiver for those sources. We agreed 
that the NOX emissions control waiver should be continued 
for all sources and source categories not covered by new NOX 
emission controls in the final attainment demonstrations. Consistent 
with those statements, EPA is reconsidering the existing NOX 
waiver as part of the rulemaking on the final ozone attainment 
demonstration plans.
---------------------------------------------------------------------------

    \35\ At the time the NOX control exemption was 
granted, the States had not completed the final ozone attainment 
demonstrations for the Lake Michigan ozone modeling domain. The 
NOX exemption/waiver petition was supported by ozone 
modeling data available at the time of the exemption approval. This 
ozone modeling data included sensitivity analyses investigating the 
potential impacts of NOX emission changes on peak ozone 
concentrations within the ozone modeling domain. It was recognized 
that the final ozone attainment demonstrations could ultimately be 
based on different input data that would provide a different picture 
of the impacts of NOX emission changes on peak ozone 
concentrations.
---------------------------------------------------------------------------

B. What Are the Conclusions of the State Regarding the Impact of the 
Ozone Attainment Demonstration on the NOX Control Waiver?

    The State of Indiana has included NOX emission controls 
resulting from plans to meet EPA's NOX SIP Call as critical 
components of the ozone attainment demonstration for the Northwest 
Indiana area. The State concludes that, in light of the NOX 
controls for certain sources included in the final 1-hour ozone 
attainment demonstration, the NOX waiver is now moot for 
these sources. The attainment demonstration and ROP plans, however, do 
not take credit for NOX emission reductions resulting from 
the implementation of NOX RACT, NOX NSR, and 
vehicle I/M NOX emission cut-points.

C. What Are the Conclusions That Can Be Drawn Regarding the 
NOX Control Waiver From Data Contained in the State's Ozone 
Attainment Demonstration?

    The State has taken credit for NOX emission reductions 
in the Northwest Indiana area resulting from the new EGU, major non-EGU 
boilers and turbines, and major cement kiln NOX emission 
control regulations. Chart 4.3 in the State's December 2000 
``Attainment Demonstration And Technical Support Document: Northwest 
Indiana Severe Ozone Nonattainment Area: Lake and Porter Counties, 
Indiana'' clearly demonstrates a significant NOX emission 
reduction in Northwest Indiana expected to occur as the result of EPA's 
NOX SIP Call.

D. What Are the EPA Conclusions Regarding the Existing NOX 
Waiver Given the Available Ozone Modeling Data?

    The fact that the State and LADCO have modeled ozone benefits for 
NOX emission controls, including NOX emission 
controls on EGUs, major non-EGU boilers and turbines, and major cement 
kilns in the Northwest Indiana area, indicates that the NOX 
waiver as initially granted should be revisited. The initial broad 
waiver was based on the demonstration that NOX controls in 
the ozone nonattainment areas within the Lake Michigan ozone modeling 
domain \36\ would not lower peak ozone concentrations in the modeling 
domain. The final ozone attainment demonstration shows that this 
earlier conclusion is no longer supported given the currently available 
ozone modeling data. The final attainment demonstration supports the 
conclusion that NOX controls on EGUs, large non-EGU boilers 
and turbines, and cement kilns, to the extent planned to occur as a 
result of compliance with EPA's NOX SIP Call, will lower 
peak ozone concentrations in Grid M and in the modeling domain 
originally considered in the granting of the NOX waiver.
---------------------------------------------------------------------------

    \36\ At the time of the granting of the waiver, the Lake 
Michigan ozone modeling domain was substantially smaller than Grid 
M, covering the Northeast portion of Illinois, Northwest portion of 
Indiana, Southeast portion of Wisconsin, and Southwest portion of 
Michigan centering on the lower half of Lake Michigan.
---------------------------------------------------------------------------

    In this notice, EPA proposes to amend the NOX waiver to 
the extent that the State has assumed NOX emission reduction 
credits for EGUs, major non-EGU boilers and turbines, and major cement 
kilns under the NOX SIP Call to support the ozone attainment 
demonstration. The NOX waiver would be removed for those 
NOX sources controlled under the rules implementing the 
ozone attainment demonstration, that is, for all sources covered by the 
State's NOX rules in the Northwest Indiana area.
    Since additional NOX emission controls beyond those 
already planned in the ozone attainment demonstration are not needed to 
attain the ozone standard in the ozone modeling domain and since 
Indiana has not assumed NOX emission reductions resulting 
from certain emission control requirements as part of the ozone 
attainment demonstration and post-1999 ROP plan, the NOX 
waiver remains supportable for RACT, NSR, transportation and general 
conformity, and I/M. This conclusion is consistent with the excess 
NOX emission reduction test provisions of section 182(f)(2) 
of the CAA. NOX emission reduction credits for these waived 
emission control measures are not assumed in the State's ozone 
attainment demonstration. EPA, therefore, proposes to shift the basis 
for the NOX waiver from section 182(f)(1) of the CAA, as 
indicated in the January 1996 approval of the existing waiver, to 
section 182(f)(2) of the CAA.

VIII. Mobile Source Conformity Emissions Budgets and Commitment To 
Re-model Using MOBILE6

A. What Are the Requirements for Mobile Source Conformity Emissions 
Budgets?

    Section 176(c) of the CAA requires states to establish criteria and 
procedures to ensure that federally supported or funded projects 
conform to the air quality planning goals in the applicable SIP. This 
requirement applies to transportation plans, programs and projects 
developed, funded or approved under title 23 U.S.C. or the Federal 
Transit Act (transportation conformity) and to all other federally 
supported or funded projects (general conformity). EPA's transportation 
conformity rule requires that transportation plans, programs, and 
projects conform to state air quality implementation plans and 
establishes the criteria and procedures for determining whether or not 
they do conform. Conformity to a SIP means that activities will not 
produce new air quality violations, worsen existing violations, or 
delay timely attainment of the national ambient air quality standards.
    Attainment demonstrations and ROP Plans are required to contain 
adequate motor vehicle emissions budgets derived from the mobile source 
portion of the demonstrated attainment and ROP emission inventories. 
The motor

[[Page 40828]]

vehicle emissions budgets establish caps on mobile source emissions. 
VOC and NOX emissions associated with transportation 
projects, transportation improvement programs, and long-range 
transportation plans cannot exceed these caps. The criteria for judging 
the adequacy of motor vehicle emissions budgets are detailed in the 
transportation conformity regulations in 40 CFR 93.118.

B. How Were the Indiana Attainment Demonstration and ROP Emissions 
Budgets Developed?

    Indiana has submitted mobile source emissions budgets for VOC and 
NOX for the 2007 attainment year based on the emissions 
analyses included in the attainment demonstration. Indiana has also 
submitted mobile source emission budgets for VOC for the year 2002 and 
2005 based on the ROP emissions calculations. The following outlines 
the techniques used by Indiana to derive the VOC and NOX 
emissions budgets.
    VMT growth estimates were derived consistent with the 15 percent 
ROP plan and 9 percent ROP plan for the Northwest Indiana area. An 
interagency consultation process involving the Indiana Department of 
Transportation (INDOT), IDEM, the Federal Highway Administration, the 
EPA and NIRPC took place. The 2007 budgets are consistent with the 
attainment demonstration. EPA found the emission budgets to be adequate 
on May 31, 2000 (see 65 FR 38277, June 20, 2000). The State estimated 
the benefits of the Tier II engine regulations and low sulfur gasoline 
requirements by using the EPA MOBILE5 information sheet #8. The 2002 
and 2005 VOC motor vehicle emission budgets likewise used the same 
transportation network assumptions and MOBILE modeling, the only 
difference being the year and the transportation system and controls 
that are in place in the respective years. Emission factors were 
generated for 2002, 2005 and 2007 using EPA's MOBILE5b emission factor 
model. The emission factors for 2005 and 2007 were then adjusted to 
reflect implementation of the Tier II/Low Sulfur gasoline program by 
using the EPA-supplied information sheet since this national program 
will be in place in 2004. The resulting motor vehicle emissions budgets 
for the 2007 attainment year are 9.4 TPD of VOC and 24.29 TPD of 
NOX. The VOC budget for ROP for 2002 is 13.13 TPD, and the 
VOC budget for 2005 is 10.99 TPD. The 2002 and 2005 budgets are based 
on the control measures identified in the ROP portion of the submittal. 
Since Indiana relied on emission reductions from Tier 2 under the EPA-
supplied information sheet, Indiana has committed to revise the 
emissions budgets within 2 years after the release of the MOBILE6 
emission factor model. Indiana addressed these emissions budgets and 
its commitment to revise the budgets using MOBILE6 in the attainment 
demonstration submittal.
    The LADCO attainment demonstration modeling includes the most 
recent 2007 Northwest Indiana link based transportation network 
provided to LADCO by NIRPC. The mobile source control measures 
considered in the development of the emissions budgets include: 
enhanced vehicle inspection and maintenance (I/M); federal reformulated 
gasoline; the Federal Motor Vehicle Emissions Control Program, federal 
gasoline vapor pressure requirements, the National Low Emission Vehicle 
program; the Heavy Duty Diesel Vehicle standards, and the Tier II/Low 
Sulfur gasoline requirements. The attainment demonstration modeling 
conducted by LADCO for the Northwest Indiana area and Grid M, as was 
discussed earlier in this notice, demonstrated attainment of the 1-hour 
ozone standard.

C. Did Indiana Commit To Revise the Budgets When EPA Releases MOBILE6?

    In order for EPA to approve attainment demonstrations, states whose 
attainment demonstrations include the effects of the Tier II/Low Sulfur 
gasoline program need to commit to revise and resubmit their attainment 
demonstration motor vehicle emission budgets based on MOBILE6 after EPA 
releases the new emission factor model, because Tier II reductions 
cannot be properly accounted for using the current version of the model 
(MOBILE5b). This policy was detailed in the supplemental notice of 
proposed rule issued on July 28, 2000 (65 FR 46383). Indiana committed 
to revising its 2002, 2005 and 2007 motor vehicle emissions budgets 
within two years of the release of MOBILE6. In addition, no conformity 
determinations will be made during the second year following the 
release of MOBILE6 unless adequate MOBILE6-derived budgets are in 
place. If the State fails to meet its commitment to submit revised 
budgets using MOBILE6, EPA could make a finding of failure to implement 
the SIP, which would start a sanctions clock under CAA Section 179.

D. Are the Indiana Emissions Budgets Adequate for Conformity Purposes?

    Indiana's motor vehicle emission budgets were posted on the EPA Web 
site (http://www.epa.gov/otaq/traq) for the 30-day adequacy public 
comment period. The comment period associated with the Web posting 
closed March 28, 2001. We received no comments on the adequacy of the 
budgets. Based on EPA's review of the State's 2002, 2005 and 2007 motor 
vehicle emission budgets, we found the budgets adequate in a letter to 
the State on May 9, 2001. Subsequently, we published a notice in the 
Federal Register on May 29, 2001 (66 FR 29126) announcing this finding. 
The finding was effective on June 13, 2001. The finding is available at 
EPA's conformity website: http://www.epa.gov/otaq/transp/, (once there, 
click on the ``Conformity'' button, then look for ``Adequacy Review of 
SIP Submissions for Conformity'').
    The criteria by which we determine whether a SIP's motor vehicle 
emission budgets are adequate for conformity purposes are outlined in 
40 CFR 93.118(e)(4). Please note that an adequacy review should not be 
used to prejudge EPA's ultimate approval of the SIP. Even if we find a 
budget adequate, the SIP could later be disapproved. We have described 
our process for determining the adequacy of submitted SIP budgets in 
guidance (May 14, 1999 memo titled ``Conformity Guidance on 
Implementation of March 2, 1999 Conformity Court Decision''). We 
followed this guidance in making our adequacy determination. EPA is 
today proposing to approve the motor vehicle emissions budgets. Since 
Indiana has committed to revise the emissions budgets following the 
release of the MOBILE6 emission factor model, our approval of the 
emission budgets reviewed here would only last until we receive the 
revised emissions budgets and find them to be adequate.
    As we proposed on July 28, 2000 (65 FR 46383), the approval action 
we are proposing today will be effective for conformity purposes only 
until revised attainment motor vehicle emissions budgets are submitted 
and we have found them to be adequate. The revised MOBILE6 attainment 
emissions budgets will apply for conformity purposes as soon as we find 
them to be adequate.
    We are limiting the duration of our approval in this manner because 
we are only approving the attainment demonstrations and their emissions 
budgets because the State has committed to revise them using MOBILE6. 
Therefore, once we have confirmed that the revised MOBILE6 emissions 
budgets are adequate, they will be more appropriate than the emissions 
budgets we are proposing to approve for conformity purposes now.
    If the revised emissions budgets raise issues about the sufficiency 
of the attainment demonstration, EPA will work with the States on a 
case-by-case

[[Page 40829]]

basis to address these issues. If the revised emissions budgets show 
that motor vehicle emissions are lower than the budgets we are 
proposing to approve, a reassessment of the attainment demonstration's 
analysis will be necessary before reallocating the emission reductions 
or assigning them to the motor vehicle emissions budgets as a safety 
margin. The area must assess how its original attainment demonstration 
is impacted by using MOBILE6 versus MOBILE5 before it reallocates any 
apparent motor vehicle emissions reductions resulting from the use of 
MOBILE6.

IX. Reasonably Available Control Measure (RACM) Analysis

A. What Are the Requirements for RACM?

    Section 172(c)(1) of the CAA requires SIPs to contain RACM as 
necessary to provide for attainment. EPA has previously provided 
guidance interpreting the RACM requirements of section 172(c)(1) of the 
CAA. See 57 FR 13498, 13560. In that guidance, EPA indicated its 
interpretation that potentially available measures that would not 
advance the attainment date for an area would not be considered RACM. 
EPA also indicated in that guidance that states should consider all 
potentially available measures to determine whether they were 
reasonably available for implementation in the area, and whether they 
would advance the attainment date. Further, states should indicate in 
their SIP submittals whether measures considered were reasonably 
available, and, if measures are reasonably available, they must be 
adopted as RACM. Finally, EPA indicated that states could reject 
potential RACM measures either because they would not advance the 
attainment date, would cause substantial widespread and long-term 
adverse impacts, or would be difficult or impossible to implement for 
various reasons related to local conditions, such as economics or 
implementation concerns. The EPA also issued a recent memorandum on 
this topic, ``Guidance on the Reasonably Available Control Measures 
(RACM) Requirement and Attainment Demonstration Submissions for Ozone 
Nonattainment Areas.'' John S. Seitz, Director, Office of Air Quality 
Planning and Standards. November 30, 1999. Web site: http://www.epa.gov/ttn/oarpg/t1pgm.html.

B. How Does This Submission Address the RACM Requirement?

    The Northwest Indiana attainment demonstration addresses RACM 
through several aspects of the submittal. Mobile source measures have 
been addressed through evaluation of Transportation Control Measures 
(TCMs) and Rate of Progress (ROP) Plans in the Northwest Indiana area. 
Stationary sources and area sources were addressed by Indiana through 
an exhaustive search for cost-effective controls and additional 
emission reductions as part of the ROP planning process to determine 
the most reasonably available control measures. Also, Indiana has 
adopted control measures which have gone beyond the federally-mandated 
stationary and area source controls. Perhaps most importantly, the 
Northwest Indiana attainment demonstration contains UAM modeling which 
demonstrates that the Northwest Indiana area cannot attain solely 
through VOC reductions in the Northwest Indiana nonattainment area. 
Attainment of the 1-hour ozone standard in the Northwest Indiana area 
relies on reductions of transported ozone to attain the 1-hour ozone 
standard. To demonstrate attainment of the 1-hour ozone standard, the 
Lake Michigan Air Directors Consortium (LADCO) modeling used reductions 
on the order of 50-60 percent for VOCs in the severe nonattainment 
areas. The Northwest Indiana attainment demonstration relies on 
emission reductions of over 65 percent, including both ROP creditable 
emission reductions and non-creditable emission reductions. Any 
potential emission reductions from the implementation of any additional 
potential RACM measures would be very small compared to the ROP 
emission reductions that will be reached by the 2007 attainment date.
The Consideration and Implementation of Transportation Control Measures 
(TCMs)
    The following paragraphs describe the process that has been used to 
evaluate reasonably available TCMs in the Northwest Indiana area. IDEM 
has worked with NIRPC and various stakeholder groups to evaluate and 
implement TCMs which are reasonably available. IDEM conducted the first 
exhaustive look at TCMs in 1993 as part of its efforts to comply with 
Section 182(d)(1)(A) of the Clean Air Act, which requires severe 
nonattainment areas to develop a ``VMT Offset SIP'' to identify and 
adopt ``specific and enforceable transportation control strategies and 
transportation control measures(TCMs) to offset any growth in emissions 
from growth in vehicle miles of travel.'' A consultant, Cambridge 
Systematics, developed a report on April 30, 1993, entitled ``TCMs to 
Offset Emissions from VMT Growth in Northwest Indiana.'' This study 
revealed that no additional TCMs needed to be adopted to meet the 
requirements of the VMT Offset SIP. However, the study also provided 
valuable information on the feasibility and effectiveness of TCMs in 
the Northwest Indiana area. As a starting point, it recognized a wide 
range of potential measures, including those listed in section 108(f) 
and then looked in more detail at specific measures that are likely to 
provide the most benefits and be reasonably available in the Northwest 
Indiana area. Of all the strategies identified, the State and NIRPC 
determined that the only strategy that could potentially have 
appreciable impact was area-wide ride sharing incentives. The next 
three most effective strategies, the transit improvement package, the 
South Shore Line Park-and Ride program and Transportation Management 
were identified to have a maximum of a 0.33 percent effect on VMT.
    Indiana and NIRPC further evaluated potential TCMs in 1998 in the 
process of developing further ROP plans and the attainment 
demonstration. August and September 1998 Fact Sheets presented at these 
meetings are available in the docket. Again, an extensive set of 
potential measures, including area-wide ridesharing incentives were 
evaluated. However, in comparison to the reductions that were being 
accomplished through national mobile source measures and the reductions 
that could be accomplished through regional NOX measures, 
the reductions that could be achieved were minimal, not substantial 
enough to advance the attainment date, and also, in most cases, more 
costly. Due to federal measures and the State ROP plan measures, 
emissions of VOCs from motor vehicles in the Northwest Indiana area are 
expected to decrease nearly 75 percent between 1990 and 2007. As these 
measures go into place, reducing the mile per gallon emissions from 
vehicles and the total contribution to nonattainment from the mobile 
source sector, additional mobile source measures become less 
reasonable, more costly on a dollar per ton emissions reduction basis 
and less likely to advance the attainment date. For these reasons, 
additional TCMs in the Northwest Indiana area are not considered RACM.
    Even though these measures are not expected to advance the 
attainment

[[Page 40830]]

date, NIRPC has implemented a wide range of transportation projects 
which provide long term air quality benefits as part of its conformity 
requirements and which, in part are supported by the Congestion 
Mitigation and Air Quality (CMAQ) Program. The CMAQ program funds are 
administered by the Federal Highway Administration; however, selection 
of projects takes place at the MPO level. These projects include 
increased commuter parking at transit stations, new transit service 
into Chicago, signal coordination projects, a vanpool program, an 
intelligent transportation system on the most congested freeway, I-94, 
a transit needs analysis and bicycle and pedestrian programs.
Stationary Source and Area Sources RACM Analysis
    IDEM has examined all sources in the nonattainment area for 
possible reductions. The Indiana 15 percent ROP plan, 9 percent ROP 
plan and the continuing 3 percent per year ROP emission reductions have 
resulted in the implementation of emission controls on a wide variety 
of sources and have gone beyond the federally mandated requirements for 
a severe nonattainment area. Indiana, in cooperation with the other 
Lake Michigan States of Illinois, Wisconsin and Michigan, worked to 
consider regional control measures and strategies to bring the four 
State Lake Michigan area into attainment. The control measures 
considered were part of the Lake Michigan Ozone Control Program (LMOP). 
The procedures used to identify, evaluate, and select possible control 
measures were described in a 1992 document entitled, ``Protocol for 
Selection of Control Measures and Strategies for Modeling.'' LADCO 
provided several opportunities for comments on this protocol, including 
conducting public hearings and distributing the protocol to 
stakeholders for comments. The protocol's purpose included, ``to insure 
that no reasonable control measures were omitted from consideration and 
to establish a process to analyze and assess the potential impacts of 
each control measure in an objective and equitable manner.'' Initially, 
a large number of control measures which reduced VOC and/or 
NOX emissions were examined in white papers prepared and 
distributed for public comment. The measures were then evaluated and 
ranked for modeling as part of the attainment demonstration modeling.
    The State considered an extensive list of potential control 
measures and chose measures which went beyond the federally mandated 
controls, and which were found to be cost-effective and technologically 
feasible. In addition to the federally mandated measures, Indiana chose 
to adopt several programs including, most recently, comprehensive rules 
requiring reductions at sinter plants and cold cleaning degreasing 
operations for emission reductions substantial enough to exceed the ROP 
requirements. These regulations went beyond federally mandated controls 
and are documented in the State's submittals. Through the post-1999 and 
prior ROP plans, the most significant area source categories have been 
addressed, including degreasing, commercial/consumer products, surface 
coating, and petroleum transport and refueling. Total creditable ROP 
reduction measures amount to 104 TPD of VOC emissions reductions in the 
Northwest Indiana ozone nonattainment area. Indiana used the ROP 
process to identify and implement all reasonably available control 
measures leaving only measures achieving small reductions in VOCs, 
resulting in high cost-effectiveness values. Through this process, all 
of the following were implemented in Northwest Indiana:

------------------------------------------------------------------------
                                                             Emission
                                                            reductions
      15% ROP summary for Lake and Porter Counties         (pounds VOC/
                                                               day)
------------------------------------------------------------------------
              Creditable Reduction From Mandatory Controls
------------------------------------------------------------------------
Mobile Sources:
    Enhanced Vehicle Inspection and Maintenance (I/M)              6,817
     Program (326 IAC 13-1.1)...........................
    Federal Reformulated Gasoline Program (40 CFR Part            14,905
     80, Subpart D).....................................
Area Sources:
    Stage II Gasoline Vapor Recovery (326 IAC 8-4-6)....           9,824
    Federal Architectural and Industrial Maintenance               2,920
     (AIM) Coatings Rule................................
Point Sources:
    Non-Control Techniques Guideline (CTG) Reasonably              4,559
     Available Control Technology (RACT) Rule (326 IAC 8-
     7).................................................
------------------------------------------------------------------------
            Creditable Reductions From Non-Mandatory Controls
------------------------------------------------------------------------
Point Sources:
    Coke Oven Battery Shutdowns at Inland Steel Flat              23,609
     Products (326 IAC 6-1-10.1(k)(5))..................
Area Sources:
    Automobile Refinishing (326 IAC 8-10)...............           4,679
    Residential Open Burning (326 IAC 4-1)..............             929
      Total Creditable Reductions from 15 percent ROP             68,242
       plan.............................................
------------------------------------------------------------------------


------------------------------------------------------------------------
                                                             Emission
   The post-1996 ROP plan control strategies and their      reductions
                   emission reductions                     (pounds VOC/
                                                               day)
------------------------------------------------------------------------
Coke Oven By-Product Recovery Plant NESHAP (40 CFR Part           55,371
 61 Subpart L)..........................................
Inland Steel Coke Battery Shutdowns (326 IAC 6-1-                  6,666
 10.1(k)(5)) (40 CFR 52.770(c)(99)).....................
Reformulated Gasoline Use in Small Engines (40 CFR Part              575
 80)....................................................
New Small Engine Emission Standards (40 CFR Part 90)....           6,034
Volatile Organic Liquid Storage Reasonably Available               2,700
 Control Technology (326 IAC 8-9) (40 CFR
 52.770(c)(111))........................................
Coke Oven NESHAP (40 CFR Part 63 Subpart L).............           6,314
      Total Emission Reduction from Post-1996 9 percent           77,660
       ROP plan.........................................
------------------------------------------------------------------------

    For the additional emission reductions that are achieved in the 
2002, 2005 and 2007 ROP plans, please see the ROP section in this 
proposed rule. The result of this comprehensive plan is that all of the 
most significant point and area source emissions that are reasonable to 
control are covered by either RACT or a specific Indiana rule targeted 
at achieving reasonable VOC reductions. Reductions from any other 
potential RACM measures are relatively small; certainly far less than 
the ROP reductions and the reductions that were modeled by LADCO in the 
Lake Michigan area attainment demonstration.
    Based on reviews of the State's analysis of measures and lists of 
control measures which have been implemented in other nonattainment 
areas, EPA believes that there are no other emission control measures 
that Indiana could have implemented that would have accelerated 
attainment. EPA is not aware of other practicable measures which will 
result in comparable emissions reductions that

[[Page 40831]]

can be implemented sooner than those contained in Indiana's ROP.
Modeling Analysis
    The State's air quality modeling results indicate that additional 
VOC and NOX controls, beyond those already addressed in the 
ozone attainment demonstration and those to be achieved through EPA's 
NOX SIP Call, within the nonattainment area will not 
accelerate attainment of the ozone standard. Air quality modeling was 
conducted by LADCO for the four Lake Michigan States. LADCO and the 
four States also conducted special monitoring of ozone and ozone 
precursors to support the attainment demonstration modeling efforts. A 
significant conclusion of the monitoring study is that there are high 
levels of ozone and ozone precursors entering the Lake Michigan region. 
The high boundary conditions were measured to be on the order of 70-110 
ppb of ozone on some hot summer days. This transported ozone 
significantly contributes to ozone exceedances in the region. Elevated 
ozone levels were found to extend well upwind of the Lake Michigan 
region covering large areas of the eastern United States. These results 
and those of other areas led to the OTAG effort.
    The initial LADCO modeling and sensitivity tests found VOC 
emissions in the nonattainment area would need to be reduced as much as 
90 percent to provide for attainment of the 1-hour ozone standard if 
the transported ozone were not reduced. However, if reductions in 
boundary conditions were considered, then the VOC reduction target is 
still very high, on the order of 50-60 percent depending on the 
boundary conditions. The sensitivity tests found that reducing 
NOX in the nonattainment area could actually increase ozone 
concentrations and, thus, the area was granted a NOX waiver 
in 1996. This is discussed in detail in the section on the 
NOX waiver in this proposal. Thus, reductions in 
NOX in the nonattainment area will not bring the area into 
attainment and reductions in VOCs of 90 percent in the nonattainment 
area are not possible without draconian measures. Indiana has already 
explored all possible RACM to find reductions for the ROP and any other 
possible VOC reductions from sources in the Northwest Indiana area 
would not be enough to reach attainment or advance the attainment date.
    Indiana has submitted these modeling analyses in the Phase I and II 
attainment demonstration submittals. The results of modeling reductions 
in emissions only within the nonattainment area did not demonstrate 
attainment of the ozone standard, and, therefore, this demonstrates 
that such emission reductions alone could not advance the attainment 
date. It was only when the boundary conditions were changed that the 
modeling demonstrated attainment. The long range transport of ozone and 
precursor emissions from upwind of the area were the significant 
contributor to the nonattainment problem. Air quality modeling, which 
EPA performed in association with the NOX SIP Call, (63 FR 
57356) confirmed the states' analyses. These modeling runs conclusively 
show that the Northwest Indiana area cannot attain the ozone standard 
without the NOX SIP Call measures to reduce transported 
ozone. Reductions from other potential RACM measures are comparatively 
small and would not advance the attainment date.
    In December of 2000, Indiana submitted air quality modeling and a 
strategy for reducing emissions, including statewide NOX 
reductions needed to meet the NOX SIP Call. The Technical 
Support Document for the subregional modeling analysis contains a 
variety of control strategies modeled to evaluate their impact on ozone 
air quality. Of particular importance is the sensitivity run SR1a, 
which evaluated the impact of one of the more substantial VOC reduction 
measures, Tier II/Low Sulfur gasoline. This measure was calculated by 
LADCO to provide a VOC reduction of about 200 TPD in 2007 for the 
entire Lake Michigan Nonattainment area. The modeling results summarize 
that the improvement in ozone air quality from this measure provides a 
1-2 ppb ozone concentration improvement. Any of the VOC control 
measures that were not selected for implementation as part of Indiana's 
ROP or attainment plan are significantly smaller than the Tier II/Low 
Sulfur control measure (produce significantly VOC emission reductions). 
For example, the most potentially beneficial TCM, according to the 
Cambridge Systematics report, area-wide ridesharing, would only produce 
a maximum VOC emission reduction benefit of half a ton per day. Thus, 
their contribution to improving ozone air quality would be much less 
than 1 ppb and would not advance attainment of the ozone standard 
earlier than 2007.
    As previously described, the modeling analyses submitted by Indiana 
and conducted by LADCO showed that it was only when the states tested 
the impacts of NOX reductions beyond the boundaries of the 
nonattainment area that the modeling indicated improvements in air 
quality to the degree necessary to attain the standard. In other words, 
the transport of ozone and precursor emissions from upwind areas 
significantly contribute to the Northwest Indiana and Lake Michigan 
States nonattainment problem. Air quality modeling which EPA performed 
in association with the NOX SIP Call (63 FR 57356) confirmed 
the States' analyses.
    Indiana held public hearings on these materials and took public 
comment on the modeling and conclusions. Any measures that have not 
been included would provide only marginal air quality improvements, and 
at significantly greater expense. Additional control measures beyond 
the measures being implemented under the 3 percent per year ROP 
emission reductions in the Northwest Indiana area and regional 
NOX emission reductions are, therefore, not reasonable since 
the implementation of such measures will not significantly improve air 
quality and, to make a significant impact, would need to be draconian 
in nature.
    Thus, the Northwest Indiana area relies on reductions from outside 
the nonattainment area from EPA's NOX SIP Call and section 
126 rule (65 FR 2674, January 18, 2000) to reach attainment. In the 
NOX SIP Call (63 FR 57356), EPA concluded that 
NOX emission reductions from various upwind states were 
necessary to provide for timely ozone attainment in various downwind 
states. The NOX SIP Call, therefore, established 
requirements for control of sources of significant emissions in all 
upwind states. However, these reductions were not slated for full 
implementation until May 2003. Further, the United States Court of 
Appeals for the District of Columbia Circuit recently ordered that EPA 
could not require full implementation of the NOX SIP Call 
prior to May 2004. Michigan, et al., v. EPA, D.C. Cir. No. 98-1497, 
Order of Aug. 30, 2000. In addition, all of the necessary VOC 
reductions that are modeled in the attainment demonstration for the 
Northwest Indiana area will not be in place until 2007. Thus, the 
attainment demonstration modeling indicates that the area successfully 
achieves the emissions reductions necessary to reach attainment in 2007 
and that additional potential RACM could not advance the attainment 
date.

C. Does the Northwest Indiana Attainment Demonstration Meet the RACM 
Requirement?

    The EPA has reviewed the submitted attainment demonstration 
documentation, the process used by the Metropolitan Planning 
Organization and the State to review TCMs, other possible

[[Page 40832]]

reduction measures for point and area sources, and the emissions 
inventory for the Northwest Indiana area. Although EPA encourages areas 
to implement available RACM measures as potentially cost-effective 
methods to achieve emissions reductions in the short term, EPA does not 
believe that section 172(c)(1) requires implementation of potential 
RACM measures that either require costly implementation efforts or 
produce relatively small emissions reductions that will not be 
sufficient to allow the area to achieve attainment in advance of full 
implementation of all other required measures.
    EPA does not believe that section 172(c)(1) requires implementation 
of additional measures for Northwest Indiana, but this conclusion is 
not necessarily valid for other areas. For other areas, some of which 
may be ``upwind'' areas, such measures may in fact be RACM, and the 
States in which such areas are located have a responsibility to 
determine whether additional measures are RACM. In addition, if in the 
future EPA moves forward to implement another ozone standard, this RACM 
analysis would not control what is RACM for this or any other areas for 
that other ozone standard.
    Furthermore, EPA encourages areas to implement technically 
available and economically feasible measures to achieve emissions 
reductions in the short term even if such measures do not advance the 
attainment date, since such measures will likely improve air quality. 
Also, over time, emission control measures that may not be RACM now for 
an area may ultimately become feasible for the same area due to 
advances in control technology or more cost-effective implementation 
techniques. Thus, areas should continue to assess the state of control 
technology as they make progress toward attainment and consider new 
control technologies that may in fact result in more expeditious 
improvement in air quality.
    The attainment demonstration for the Northwest Indiana area 
indicates that the ozone benefit expected to be achieved from regional 
NOX emission reductions (such as from the emission controls 
complying with the NOX SIP Call) are substantial. In 
addition, many of the measures designed to achieve emissions reductions 
from within the nonattainment area will also not be fully implemented 
prior to the 2007 attainment date. Therefore, EPA concludes that since 
the reductions from potential RACM measures do not nearly equate to the 
reductions needed to demonstrate attainment, none of these measures 
could advance the attainment date prior to full implementation of the 
NOX SIP Call-base rules and full implementation of the ROP 
measures, and, thus, there are no additional potential local measures 
that can be considered RACM for this area. Additionally, the area 
cannot advance the attainment date because all of the ROP emission 
reductions (3 percent per year up to the 2007 attainment year) have 
been modeled in the attainment demonstration, and the modeling 
indicates that the reductions are needed to reach attainment of the 1-
hour ozone standard by 2007. All of the ROP measures will not be fully 
implemented until the 2007 attainment date, and, thus the area will not 
be able to advance the attainment date.

X. Administrative Requirements

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), this 
proposed action is not a ``significant regulatory action'' and 
therefore is not subject to review by the Office of Management and 
Budget. This proposed action merely proposes to approve state law as 
meeting federal requirements and imposes no additional requirements 
beyond those imposed by state law. Accordingly, the Administrator 
certifies that this proposed rule will not have a significant economic 
impact on a substantial number of small entities under the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.). Because this rule proposes to 
approve pre-existing requirements under state law and does not impose 
any additional enforceable duty beyond that required by state law, it 
does not contain any unfunded mandate or significantly or uniquely 
affect small governments, as described in the Unfunded Mandates Reform 
Act of 1995 (Public Law 104-4). This proposed rule also does not have a 
substantial direct effect on one or more Indian tribes, on the 
relationship between the Federal Government and Indian tribes, or on 
the distribution of power and responsibilities between the Federal 
Government and Indian tribes, as specified by Executive Order 13175 (65 
FR 67249, November 9, 2000), nor will it have substantial direct 
effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government, as specified 
in Executive Order 13132 (64 FR 43255, August 10, 1999), because it 
merely proposes to approve a state rule implementing a federal 
standard, and does not alter the relationship or the distribution of 
power and responsibilities established in the Clean Air Act. This 
proposed rule also is not subject to Executive Order 13045 (62 FR 
19885, April 23, 1997), because it is not economically significant.
    In reviewing SIP submissions, EPA's role is to approve state 
choices, provided that they meet the criteria of the Clean Air Act. In 
this context, in the absence of a prior existing requirement for the 
State to use voluntary consensus standards (VCS), EPA has no authority 
to disapprove a SIP submission for failure to use VCS. It would thus be 
inconsistent with applicable law for EPA, when it reviews a SIP 
submission, to use VCS in place of a SIP submission that otherwise 
satisfies the provisions of the Clean Air Act. Thus, the requirements 
of section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (15 U.S.C. 272 note) do not apply. As required by section 3 
of Executive Order 12988 (61 FR 4729, February 7, 1996), in issuing 
this proposed rule, EPA has taken the necessary steps to eliminate 
drafting errors and ambiguity, minimize potential litigation, and 
provide a clear legal standard for affected conduct. EPA has complied 
with Executive Order 12630 (53 FR 8859, March 15, 1988) by examining 
the takings implications of the rule in accordance with the ``Attorney 
General's Supplemental Guidelines for the Evaluation of Risk and 
Avoidance of Unanticipated Takings'' issued under the executive order. 
This proposed rule does not impose an information collection burden 
under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501 et seq.).

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Volatile organic 
compounds, Nitrogen oxides, ozone.

    Authority: 42 U.S.C. 7401 et seq.

    Dated: July 24, 2001.
William E. Muno,
Acting Regional Administrator, Region 5.
[FR Doc. 01-19151 Filed 8-2-01; 8:45 am]
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