[Federal Register Volume 67, Number 85 (Thursday, May 2, 2002)]
[Rules and Regulations]
[Pages 22168-22241]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-10332]



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Part II





Environmental Protection Agency





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40 CFR Part 52



Approval and Promulgation of Air Quality Implementation Plans; Montana; 
Billings/Laurel Sulfur Dioxide State Implementation Plan; Final Rule 
and Proposed Rule

  Federal Register / Vol. 67, No. 85 / Thursday, May 2, 2002 / Rules 
and Regulations  

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Environmental Protection Agency

40 CFR Part 52

[MT-001-0007, MT-001-0008, MT-001-0009 and MT-001-0010; FRL-7175-1]


Approval and Promulgation of Air Quality Implementation Plans; 
Montana; Billings/Laurel Sulfur Dioxide State Implementation Plan

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: EPA is partially approving and partially disapproving the 
Billings/Laurel sulfur dioxide (SO2) State Implementation Plan (SIP) 
revisions submitted by the State of Montana in response to a SIP Call. 
EPA is also limitedly approving and limitedly disapproving one 
provision of the SIP revisions. The SIP revisions establish, and 
require seven sources to meet and monitor compliance with, SO2 emission 
limitations and other requirements in the Billings/Laurel area. The 
intended effect of this action is to make federally enforceable those 
provisions that EPA is approving and to disapprove those provisions 
that do not meet applicable requirements. EPA is taking this action 
under sections 110 and 179 of the Clean Air Act (Act). In a separate 
action being published today, EPA is proposing action on other 
provisions of the Billings/Laurel SO2 SIP.

EFFECTIVE DATE: This final rule is effective June 3, 2002.

ADDRESSES: Copies of the documents relevant to this action are 
available for public inspection during normal business hours at the Air 
and Radiation Program, Environmental Protection Agency, Region 8, 999 
18th Street, Suite 300, Denver, Colorado, 80202 and copies of the 
Incorporation by Reference material at the Air and Radiation Docket and 
Information Center, Environmental Protection Agency, 401 M Street, SW, 
Washington, DC 20460. Copies of the State documents relevant to this 
action are available for public inspection at the Montana Department of 
Environmental Quality, Air and Waste Management Bureau, 1520 E. 6th 
Avenue, Helena, Montana 59620.

FOR FURTHER INFORMATION CONTACT: Laurie Ostrand, EPA, Region 8, (303) 
312-6437.

SUPPLEMENTARY INFORMATION:

Table of Contents

Definitions

I. Summary of EPA's Final Action
II. EPA's Action on the State of Montana's Submittals
    A. Why Is EPA Approving Parts of the State of Montana's Plan?
    B. Why Is EPA Disapproving Parts of the State of Montana's Plan?
    C. Why Is EPA Proposing Action on Parts of the State of 
Montana's Plan?
    D. What Happens When EPA Approves Parts of the State of 
Montana's Plan?
    E. What Happens When EPA Disapproves Parts of the State of 
Montana's Plan?
    F. What Happens When EPA Limitedly Approves and Limitedly 
Disapproves Parts of the State of Montana's Plan?
III. Other Issues Pertaining to State Authority
    A. How Do the State-Only Provisions Affect EPA's Actions?
    B. How Does Montana's Environmental Audit Act Affect EPA's 
Actions?
IV. Other Rulemaking Actions
    A. How Does This Final Action Relate to EPA's SIP Call?
    B. Why Is EPA Not Imposing Sanctions?
V. What Comments Were Received on EPA's Proposed Action and How Is 
EPA Responding to Those Comments?
VI. Administrative Requirements

Definitions

    For the purpose of this document, we are giving meaning to certain 
words or initials as follows:
    (i) The words or initials Act or CAA mean or refer to the Clean Air 
Act, unless the context indicates otherwise.
    (ii) The initials CEMS mean or refer to continuous emission 
monitoring systems.
    (iii) The words EPA, we, us or our mean or refer to the United 
States Environmental Protection Agency.
    (iv) The initials FIP mean or refer to Federal Implementation Plan.
    (v) The initials MBER mean or refer to the Montana Board of 
Environmental Review.
    (vi) The initials MDEQ mean or refer to the Montana Department of 
Environmental Quality.
    (vii) The initials MSCC mean or refer to the Montana Sulphur & 
Chemical Company.
    (viii) The initials NAAQS mean or refer to the national ambient air 
quality standards.
    (ix) The initials SIP mean or refer to the State Implementation 
Plan.
    (x) The initials SO2 mean or refer to sulfur dioxide.
    (xi) The words State or Montana mean the State of Montana, unless 
the context indicates otherwise.
    (xii) The initials TSD mean or refer to the Technical Support 
Document.
    (xiii) The initials YELP mean or refer to the Yellowstone Energy 
Limited Partnership.

I. Summary of EPA's Final Action

    Apart from those provisions we are disapproving, limitedly 
approving/limitedly disapproving, proposing to act on in a separate 
action published today (see discussion below), or not acting on, we are 
approving all other aspects of the Billings/Laurel SO2 SIP, which the 
State of Montana submitted in response to our SIP Call. See Background 
section V.D. in our proposed rulemaking action published on July 28, 
1999 (64 FR 40791) for a discussion of the SIP Call. Our approval is 
based on several interpretations of provisions of the SIP. The 
interpretations described in our proposed approval still apply except 
that, based on comments received, we have revised the interpretation of 
``low sulfur fuel gas.'' See section V.Q. below. We caution that if we 
find it too difficult to enforce certain variable (or pro-rated) 
emission limitations at several of the sources or if data are not 
available to determine the emission limitations on a regular basis, we 
will reconsider our approval. Also, if we determine that the State-only 
provisions, as implemented, appear to limit or constrain or otherwise 
have a chilling effect on the Montana Department of Environmental 
Quality's (MDEQ's) enforcement of the SIP, we will reconsider our 
approval or take other appropriate action under the Act. Our 
reconsideration could occur under section 110(k)(6) of the Act or we 
could complete another SIP Call under sections 110(a)(2)(H) and 
110(k)(5) of the Act. We caution that if sources are subject to more 
stringent requirements under other provisions of the Act (e.g., section 
111 new source performance standards; Title I, part C prevention of 
significant deterioration; or SIP-approved permit programs under Title 
I, part A), our approval of the SIP (including emission limitations and 
other requirements), would not excuse sources from meeting these other, 
more stringent requirements. Also, our action on this SIP is not meant 
to imply any sort of applicability determination under other provisions 
of the Act (e.g., section 111; Title I, part C; or SIP-approved permit 
programs under Title I, part A).
    We are disapproving the following provisions of the Billings/Laurel 
SO2 SIP \1\:
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    \1\ The SIP was submitted in the form of orders, stipulations, 
exhibits and attachments for each source covered by the plan. The 
majority of the requirements are contained in the exhibits. 
Throughout this document when we refer to an exhibit, we mean 
exhibit A to the stipulation for the specified source.
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     The escape clause (paragraph 22 in the ExxonMobil \2\ and 
MSCC stipulations and paragraph 20 in the

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Cenex, Conoco, Montana Power, Western Sugar and YELP stipulations).
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    \2\ Between our July 28, 1999 proposal action and this action, 
Exxon's name was changed to ExxonMobil. Our July 1999 proposal 
simply referred to Exxon.
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     The MSCC stack height credit and emission limitations on 
the sulfur recovery unit (SRU) 100-meter stack (paragraph 1 of the 
ExxonMobil stipulation, paragraphs 1 and 2 of the MSCC stipulation, and 
section 3(A)(1)(a) and (b) and 3(A)(3) of the MSCC exhibit).
     The emission limitation on MSCC's auxiliary vent stacks, 
section 3(A)(4) of MSCC's exhibit.
     The attainment demonstration, because of improper stack 
height credit and emission limitations at MSCC.
     The attainment demonstration for lack of flare emission 
limitations at Cenex, Conoco, ExxonMobil, and MSCC.
     The attainment demonstration, because of the disapproval 
of the emission limitation for MSCC's auxiliary vent stacks.
     The Reasonably Available Control Measures (RACM) 
(including Reasonably Available Control Technology (RACT)) and 
Reasonable Further Progress (RFP) requirements for Cenex.
     The provisions that allow sour water stripper emissions to 
be burned in the flare at Cenex and ExxonMobil (the following phrase 
from section 3(B)(2) of Cenex's exhibit A and section 3(E)(4) of 
ExxonMobil's exhibit A: ``or in the flare''; the following phrases in 
section 4(D) of Cenex's exhibit A and section 4(E) of ExxonMobil's 
exhibit A: ``or in the flare'' and ``or the flare''. )
    We are limitedly disapproving the following provision:
     The emission limitation for the 30-meter stack at MSCC 
(section 3(A)(2) of MSCC's exhibit A) because it lacks a reliable 
compliance monitoring method.
    We are not acting on the following provisions:
     The provisions in section 6(B)(3) of MSCC's exhibit that 
require certain monitoring equipment to support the variable emission 
limitations.
    In a separate action published today, we are proposing action on 
the following provisions of the Billings/Laurel SO2 SIP submitted on 
July 29, 1998 \3\:
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    \3\ In our July 28, 1999 proposed action we proposed to 
conditionally approve these provisions based on the Governor's 
commitment to address concerns we had raised. The Governor submitted 
a SIP revision on May 4, 2000 which was intended to fulfill the 
commitments. Since the Governor has submitted a SIP revision to 
fulfill the commitments, we are not finalizing our proposed 
conditional approval and instead are proposing separate action on 
parts of the July 29, 1998 submittal (i.e., those parts we proposed 
to conditionally approve on July 28, 1999) and all of the May 4, 
2000 submission (which is some cases modified the provisions of the 
July 29, 1998 submittal).
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     YELP's emission limitations (in section 3(A)(1) through 
(3) of YELP's exhibit).
     ExxonMobil's coker CO-boiler emission limitation (in 
section 3(B)(1) of ExxonMobil's exhibit).
     ExxonMobil's F-2 crude/vacuum heater stack emission 
limitations and attendant compliance monitoring methods (specifically, 
section 3(A)(2) of exhibit A; section 3(B)(3) of exhibit A; the 
following phrase from section 3(E)(4) of exhibit A ``except that the 
sour water stripper overheads may be burned in the F-1 Crude Furnace 
(and exhausted through the F-2 Crude/Vacuum Heater stack) or in the 
flare during periods when the FCC CO Boiler is unable to burn the sour 
water stripper overheads, provided that: (a) such periods do not exceed 
55 days per calendar year and 65 days for any two consecutive calendar 
years, and (b) during such periods the sour water stripper system is 
operating in a two tower configuration.''; section 4(E) of exhibit A; 
and method #6A of attachment #2,\4\ of exhibit A).
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    \4\ In our July 28, 1999 proposal action, we proposed to 
conditionally approve all of attachment #2 of ExxonMobil's exhibit. 
We should have limited our proposed conditional approal to only 
method #6A of attachment #2 of ExxonMobil's exhibit.
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     ExxonMobil's fuel gas combustion emission limitations and 
attendant compliance monitoring methods (in sections 3(A)(1), 3(B)(2), 
4(B), and 6(B)(3) of ExxonMobil's exhibit).
     Cenex's combustion sources emission limitations and 
attendant compliance monitoring methods (specifically, section 
3(A)(1)(d) of exhibit A; the following phrase from section 3(B)(2) of 
exhibit A ``except that those sour water stripper overheads may be 
burned in the main crude heater (and exhausted through the main crude 
heater stack) or in the flare during periods when the FCC CO boiler is 
unable to burn the sour water stripper overheads from the ``old'' SWS, 
provided that such periods do not exceed 55 days per calendar year and 
65 days for any two consecutive calendar years.''; section 4(B) of 
exhibit A; section 4(D) of exhibit A; and method #6A of attachment #2 
\5\ of exhibit A).
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    \5\ In our July 28, 1999 proposal action, we proposed to 
conditionally approve all of attachment #2 of Cenex's exhibit. We 
should have limited our proposed conditional approval to only method 
#6A of attachment #2 of Cenex's exhibit.
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    We have also revised the regulatory text from what was proposed. 
The regulatory text appears at the end of this notice. The proposed 
regulatory text started at 64 FR 40807 (July 28, 1999). As indicated 
later in this notice, we are not selecting the order of sanctions as we 
had proposed. Therefore, we are not including the regulatory text that 
was proposed for 40 CFR 52.32(b). Also, we proposed to conditionally 
approve several provisions of the SIP. Since we are not finalizing the 
conditional approval of those provisions, and instead are proposing 
action on them in a separate notice being published today, the 
regulatory text at the end of this notice also excludes from the 
incorporation by reference the provisions we proposed to conditionally 
approve. See 40 CFR 52.1370(c)(46)(i)(A), (C) and (G). We also expanded 
40 CFR 52.1370(c)(46)(i)(A) and (C) to explicitly indicate the phrases 
not being incorporated by reference at this time. Additionally, based 
on comments received, we are not acting on an additional provision of 
MSCC's exhibit and excluding it from the incorporation by reference. 
See 40 CFR 52.1370(c)(46)(i)(E). Finally, we added regulatory text at 
the end of this notice to indicate those provisions of the stipulations 
and/or exhibits that we are partially or limitedly disapproving. See 40 
CFR 52.1384(d).

II. EPA's Action on the State of Montana's Submittals

A. Why Is EPA Approving Parts of the State of Montana's Plan?

    On July 28, 1999 (64 FR 40791) we proposed to partially approve the 
Billings/Laurel SO2 SIP. Our proposed rulemaking action discussed 
several issues that we resolved with the State as well as 
interpretations we made of several provisions in the Billings/Laurel 
SO2 SIP. We have considered the comments received \6\ and still believe 
we should partially approve the plan as proposed except that we are 
limitedly approving/disapproving one provision of the SIP, the emission 
limitation for the 30-meter stack at MSCC, that we had proposed to 
partially approve.
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    \6\ The comments received and our response to the comments are 
discussed below in section V., entitled ``What Comments Were 
Received on EPA's Proposed Action and How Is EPA Responding to Those 
Comments?''
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    Additionally, EPA believes partially and limitedly approving the 
Billings/Laurel SO2 SIP meets the requirements of section 110(l) of the 
Act. The approved provisions of the plan strengthen the Montana SIP by 
providing specific control strategies and compliance determining 
methods for SO2 sources in Billings/Laurel, Montana which further the 
goals of and achieve progress toward attaining the SO2 NAAQS.

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B. Why Is EPA Disapproving Parts of the State of Montana's Plan?

    In our July 28, 1999 proposed rulemaking, we proposed to partially 
disapprove portions of the Billings/Laurel SO2 SIP. We have considered 
the comments received and still believe we should partially disapprove 
the SIP as proposed. In addition, because of comments received we are 
not acting on an additional provision of the SIP. See the discussion in 
section II.B.2 below. Finally, because of comments received, we are 
limitedly disapproving one provision of the SIP. See the discussion in 
section II.B.6 below. The parts of the Plan we are disapproving follow:
1. Escape Clause
    Each stipulation contains a paragraph which allows a source to 
withdraw its consent to the stipulation. The ``escape clause'' is 
printed in full in our July 28, 1999 proposed rulemaking action (see 
right column of 64 FR 40797).
    We are disapproving the escape clause because, if sources invoke 
the escape clause, the MDEQ will no longer have a plan to implement. 
Specifically, we are disapproving the following: paragraph 22 in the 
ExxonMobil and MSCC stipulations; paragraph 20 in the Cenex, Conoco, 
Montana Power, Western Sugar and YELP stipulations. If sources invoke 
the escape clause after our final action on the SIP, we expect to 
respond by issuing another SIP Call under sections 110(a)(2)(H) and 
110(k)(5) of the Act or taking other appropriate action under the Act. 
Additionally, with the disapproval of the escape clause, the provisions 
of the SIP that we approve will remain federally enforceable even if 
one or more of the sources invoke the escape clause. While our 
disapproval of the escape clause eliminates the risk of a source's 
future attempt to nullify the SIP, we do not believe our disapproval 
renders the SIP more stringent than the State of Montana intends, 
because our disapproval does not change the stringency of any of the 
substantive requirements the State of Montana has imposed and is 
currently able to enforce under the SIP. Moreover, a source's exercise 
of the escape clause would not represent the State's decision to 
suspend its own SIP or constitute any decision on the part of the State 
to change the SIP's enforceable requirements. Finally, since the escape 
clause is a provision that EPA could not lawfully approve under title I 
of the CAA, the only alternative to EPA's partial disapproval would be 
a total disapproval of the SIP, which we believe the State would not 
favor over today's action.
2. MSCC Stack Height Credit and Emission Limitations on the Sulfur 
Recovery Unit (SRU) 100-Meter Stack
    We are disapproving MSCC's SRU 100-meter stack height credit and 
emission limitations (paragraph 2 of the MSCC stipulation and sections 
3(A)(1)(a) and (b) and 3(A)(3) of the MSCC exhibit) used in the 
attainment demonstration modeling for the Billings/Laurel area. We 
believe it is necessary to disapprove MSCC's emission limitations 
because the State of Montana has set limitations based on an amount of 
stack height credit for MSCC that is not supportable under section 123 
of the Act or our stack height regulations.
    Our July 28, 1999 proposed rulemaking action (starting in the left 
column of 64 FR 40798), and TSD to that proposal, discuss the Act's 
stack height requirements (see those documents for the complete 
discussion).
    Additionally, because of comments received we are not acting on the 
monitoring provisions in section 6(B)(3) of MSCC's exhibit. Since we 
are disapproving MSCC's variable emission limitation, we believe it 
does not make sense to approve section 6(B)(3) of MSCC's exhibit, which 
requires MSCC to install certain monitoring equipment to support the 
use of the variable limitation. Section 6(B)(3) would be needed only if 
we were approving MSCC's variable emissions limitation.
3. Language in ExxonMobil and MSCC's Stipulations Related to 
Incorporation of Earlier Stipulations and Apportionment of the Airshed
    Paragraph 1 of the ExxonMobil and MSCC stipulations discusses a 
contested case hearing and resultant February 2, 1996 stipulation and 
incorporates the February 2, 1996 stipulation by reference. We do not 
believe it is appropriate to incorporate the February 2, 1996 
stipulation into the SIP because it discusses procedures and schedules 
for developing emission limitations for ExxonMobil and MSCC that have 
subsequently been developed and that, for MSCC, are not approvable (see 
discussion on stack height issue at MSCC in section II.B.2, above). 
Paragraph 1 of the ExxonMobil and MSCC stipulations also contains a 
statement that the company enters into the stipulation ``in part, to 
preserve [the company's] rights to apportionment of the airshed 
resulting from the present SIP revision.'' Insofar as this statement 
implies that the companies or other air pollution sources are entitled 
to a property interest in the ambient air in the Billings/Laurel area 
or enjoy a right to pollute the ambient air, this statement conflicts 
with the purpose and requirements of the Act and has no basis under 
federal law. By this statement we do not mean that we do not recognize 
emission rights created by statute (e.g., Titles I and IV of the Act). 
However, the phrase ``right of apportionment of the airshed'' implies 
possessory rights to the ambient air. We are concerned that the phrase 
might imply rights less conditional than those created by the Act. 
Therefore, we are disapproving paragraph 1 of the ExxonMobil and MSCC 
stipulations.
4. MSCC Auxiliary Vent Stacks
    We are disapproving the MSCC auxiliary vent stacks emission 
limitation (section 3(A)(4) of MSCC's exhibit). We believe it is 
necessary to disapprove this emission limitation because the exhibit 
does not restrict the sulfur content of the fuel burned in the boilers 
and heaters, when they are exhausting from auxiliary vent stacks, and 
lacks a monitoring method that would make the emission limitation 
practically enforceable. Without a restriction on the fuel burned and a 
compliance monitoring method, there is the potential that exceedances 
of the emission limitation would go undetected.
5. Attainment Demonstration \7\
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    \7\ One commenter stated that we did not acknowledge that 
Montana submitted two separate attainment demonstrations for SO2--
one for the Billings area and one for the Laurel area. The commenter 
indicated that the Laurel area was modeled assuming the SIP 
prescribed emission limitations for Cenex and the pre-SIP potential 
emissions for the Billings sources. Therefore, the Laurel SIP 
demonstrates compliance with the NAAQS regardless of whether a 
revised SIP is approved and implemented in Billings. The Billings 
area was modeled assuming all sources in Laurel and Billings area 
are at SIP prescribed emission rates. Therefore, the Billings SIP 
depends upon approval of the Laurel SIP to demonstrate attainment. 
The commenter is requesting that we acknowledge the two attainment 
demonstrations in our final action and treat the two separately in 
that action. We agree with the commenter and acknowledge that there 
are two attainment demonstrations--one for the Billings area and one 
for the Laurel area. However, since the flare issue applies to 
sources in Billings and in Laurel, we still believe the attainment 
demonstration for both areas should be disapproved for lack of 
enforceable flare emissions at the applicable sources.
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    For us to fully approve a SIP, the SIP must show that the NAAQS 
will not be violated, i.e., that the area demonstrates attainment. 
Attainment demonstrations are usually carried out with computer models 
that are approved by us. The computer models take numerous factors into 
consideration to predict the effects that emissions from various 
sources will

[[Page 22171]]

have on levels of pollutants in the air. Models consider the typical 
meteorology and topography of the area, as well as physical parameters 
at a plant site, e.g., the height, temperature, and velocity at which 
pollutants are emitted. Based on these factors, as well as restrictions 
placed on sources to control their emissions, models are used to 
predict the highest pollution levels that can be expected to occur in 
the future. For the reasons discussed below, we are disapproving the 
attainment demonstrations for the Billings/Laurel SIP.
a. Improper Stack Height Credit and Emission Limitation at MSCC
    The MDEQ used EPA-approved dispersion models to demonstrate 
attainment of the SO2 NAAQS in the Billings/Laurel area. However, the 
modeling for the July 29, 1998 submittal of the SIP relied on emission 
limitations at MSCC that were established with a stack height credit 
that exceeded the good engineering practice (GEP) stack height. As 
discussed above in section II.B.2, we are disapproving the emission 
limitations and stack height credit for the 100-meter stack at MSCC. We 
are also disapproving the attainment demonstration because it relies on 
these improper emission limitations and stack height credit.
b. Lack of Flare Emission Limitations
    With the July 29, 1998 submittal of the SIP, the State of Montana 
removed all reference to flare emission limitations from the exhibits 
submitted for Federal approval. In June 1998, the MBER adopted 
``Additional State Requirements'' (hereinafter referred to as ``State-
only provisions'') for each of the seven sources in the Billings/Laurel 
area. The State-only provisions include flare emission limitations and 
reporting requirements for the four sources that have flares (Cenex, 
Conoco, ExxonMobil, and MSCC). Because the State-only provisions were 
not submitted for inclusion in the Billings/Laurel SO2 SIP, they may be 
enforced only by the MDEQ.
    Since flare emissions were considered part of the attainment 
demonstration and since there appear to be routine emissions from 
flares, we believe the SIP should contain enforceable emission 
limitations for these emission points. Therefore, we are disapproving 
the SIP as it applies to the attainment demonstration for lack of 
enforceable emission limitations for flares. See our July 28, 1999 
proposed rulemaking action, middle column, 64 FR 40801, for more 
information on this issue.
c. Disapproval of MSCC Auxiliary Vent Stacks Emission Limitation
    As indicated above, we are disapproving the emission limitation on 
the auxiliary vent stacks in MSCC's exhibit because the exhibit does 
not restrict the sulfur content of the fuel burned in the boilers and 
heaters, when they are exhausting from auxiliary vent stacks, and lacks 
a monitoring method that would make the emission limitation practically 
enforceable. The attainment demonstration relies on the auxiliary vent 
stacks emission limitation at MSCC. Since we are disapproving the 
emission limitation, we believe it is also necessary to disapprove the 
attainment demonstration.
6. MSCC 30-Meter Stack
    We are limitedly disapproving/limitedly approving the MSCC 30-meter 
stack emission limitation (section 3(A)(2) of MSCC's exhibit). We 
believe it is necessary to limitedly disapprove this emission 
limitation because the exhibit does not adequately limit the fuel 
burned in the boilers and heaters that are exhausting from the 30-meter 
stack, and does not provide a monitoring method that would make the 
emission limitation practically enforceable.\8\
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    \8\ In some cases, a SIP rule may contain certain provisions 
that meet the applicable requirements of the Act, but that are 
inseparable from other provisions that do not meet all the 
requirements. Although the submittal may not meet all of the 
applicable requirements, we may consider whether the rule, as a 
whole, has a strengthening effect on the SIP. If this is the case, 
limited approval may be used to approve a rule that strengthens the 
existing SIP as representing an improvement over what is currently 
in the SIP and as meeting some of the applicable requirements of the 
Act. At the same time we would disapprove the rule of the SIP for 
not meeting all of the applicable requirements of the Act. Under a 
limited approval/disapproval action, we approve and disapprove the 
entire rule even though parts of it do and parts do not satisfy 
requirements under the Act. The rule remains a part of the SIP, even 
though it has been limitedly disapproved, because the rule 
strengthens the SIP. The disapproval only concerns the failure of 
the rule to meet a specific requirement of the Act and does not 
affect incorporation of the rule as part of the approved, federally 
enforceable SIP.
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7. Burning of Sour Water Stripper (SWS) Emissions in the Flare at Cenex 
and ExxonMobil
    With the July 29, 1998 submittal of the SIP, Cenex's and 
ExxonMobil's exhibits now allow SWS emissions to be burned in the 
flare. As discussed above, flare emission limitations were deleted from 
the July 1998 submittal. Therefore, SWS emissions, if burned in the 
flare, are unregulated. We believe that unless flares have an 
enforceable emission limitation, it is unacceptable to allow SWS 
emissions to be burned in the flare. Because we believe that allowing 
SWS emissions to be burned in the unregulated flare is not an 
acceptable approach, we are disapproving those provisions of the Cenex 
and ExxonMobil stipulations that would allow such approach (the 
following phrase from section 3(B)(2) of Cenex's exhibit A and section 
3(E)(4) of ExxonMobil's exhibit A: ``or in the flare''; the following 
phrases in section 4(D) of Cenex's exhibit A and section 4(E) of 
ExxonMobil's exhibit A: ``or in the flare'' and ``or the flare''.)
8. Reasonably Available Control Measures (RACM) Including Reasonably 
Available Control Technology (RACT) and Reasonable Further Progress 
(RFP) at Cenex
    As indicated earlier, we are disapproving the attainment 
demonstration for the SIP. Because we are disapproving the attainment 
demonstration, we conclude that the RACM (including RACT) and RFP 
requirements have not been met in the Laurel SO2 nonattainment area.\9\ 
See discussion in sections III.C.(15) and (16) of our TSD for further 
information.
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    \9\ RACM (including RACT) and RFP requirements only apply in 
areas designated as nonattainment.
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C. Why Is EPA Proposing Action on Parts of the State of Montana's Plan?

    In our July 28, 1999 proposed rulemaking action, we proposed to 
conditionally approve several provisions of the Billings/Laurel SO2 SIP 
based on a commitment from the Governor of Montana to adopt specific 
enforceable measures by a specified date. See the July 28, 1999 action, 
64 FR 40802--40803, for a complete discussion of those parts of the 
plan we proposed to conditionally approve. On May 4, 2000, the Governor 
of Montana submitted a SIP revision to fulfill his commitment. Since 
the Governor has fulfilled his commitment, we believe it is not 
necessary to finalize the conditional approval. Instead, a separate 
proposed rulemaking on parts of the July 29, 1998 submittal (i.e., 
those parts we proposed to conditionally approve on July 28, 1999) and 
all of the May 4, 2000 submittal (which in some cases modified the July 
29, 1998 submittal) is also being published today.
    The specific provisions of the July 29, 1998 submittal on which we 
are proposing a separate action today include:
    (1) YELP's emission limitations (section 3(A)(1) through (3) of 
YELP's exhibit);

[[Page 22172]]

    (2) ExxonMobil's coker CO-boiler emission limitation (section 
3(B)(1) of ExxonMobil's exhibit);
    (3) ExxonMobil's F-2 crude/vacuum heater stack emission limitations 
and attendant compliance monitoring methods (section 3(A)(2) of exhibit 
A; section 3(B)(3) of exhibit A; the following phrase from section 
3(E)(4) of exhibit A ``except that the sour water stripper overheads 
may be burned in the F-1 Crude Furnace (and exhausted through the F-2 
Crude/Vacuum Heater stack) or in the flare during periods when the FCC 
CO Boiler is unable to burn the sour water stripper overheads, provided 
that: (a) such periods do not exceed 55 days per calendar year and 65 
days for any two consecutive calendar years, and (b) during such 
periods the sour water stripper system is operating in a two tower 
configuration.''; section 4(E) of exhibit A; and method #6A of 
attachment #2, of exhibit A);
    (4) ExxonMobil's fuel gas combustion emission limitations and 
attendant compliance monitoring method (sections 3(A)(1), 3(B)(2), 
4(B), and 6(B)(3) of ExxonMobil's exhibit); and
    (5) Cenex's combustion sources emission limitations and attendant 
compliance monitoring methods (section 3(A)(1)(d) of exhibit A; the 
following phrase from section 3(B)(2) of exhibit A ``except that those 
sour water stripper overheads may be burned in the main crude heater 
(and exhausted through the main crude heater stack) or in the flare 
during periods when the FCC CO boiler is unable to burn the sour water 
stripper overheads from the ``old'' SWS, provided that such periods do 
not exceed 55 days per calendar year and 65 days for any two 
consecutive calendar years.''; section 4(B) of exhibit A; section 4(D) 
of exhibit A; and method #6A of attachment #2 of exhibit A.)
    Because we are proposing separate action on the above provisions, 
at this time we are not incorporating these provisions into the 
Federally approved SIP. See the regulatory text that follows at the end 
of this document.

D. What Happens When EPA Approves Parts of the State of Montana's Plan?

    Once we approve a SIP, or parts of a SIP, the portions approved are 
legally enforceable by us and citizens under the Act.

E. What Happens When EPA Disapproves Parts of the State of Montana's 
Plan?

    Once we disapprove a SIP, or parts of a SIP, the disapproved 
portions are still enforceable at the State level but not at the 
Federal level. By disapproving parts of the plan, we are determining 
that the requirements necessary to demonstrate attainment in the area 
have not been met and we may develop a plan or parts of a plan to 
assure that attainment will be achieved. Also, in some cases, once we 
disapprove a plan, sanctions may be imposed. As noted below, at this 
time, sanctions will not be imposed in the Billings/Laurel area as a 
result of this partial and limited disapproval.

F. What Happens When EPA Limitedly Approves and Limitedly Disapproves 
Parts of the State of Montana's Plan?

    Once we limitedly approve/disapprove a SIP, or parts of a SIP, 
those provisions are legally enforceable by us and citizens under the 
Act. Under a limited approval/disapproval action, we approve and 
disapprove the entire rule even though parts of it do and parts do not 
satisfy requirements under the Act. The rule remains a part of the SIP, 
however, even though there is a disapproval, because the rule 
strengthens the SIP. The disapproval only concerns the failure of the 
rule to meet specific requirements of the Act and does not affect 
incorporation of the rule as part of the approved, federally 
enforceable SIP. To the extent the rule fails to satisfy requirements 
of the Act, we intend to develop a plan or parts of a plan to meet such 
requirements.

III. Other Issues Pertaining to State Authority

A. How Do the State-Only Provisions Affect EPA's Actions?

    In our July 28, 1999 proposed rulemaking action we indicated that 
in June 1998, the MBER adopted ``Additional State Requirements'' for 
each of the seven sources in the Billings/Laurel area. These 
requirements (hereinafter referred to as the ``State-only provisions'') 
were not submitted for inclusion in the SIP and are enforceable only by 
the State of Montana. See 64 FR 40803, bottom right column of our July 
28, 1999 action for a complete discussion of the State-only provisions.
    We have considered the comments received on our discussion of 
State-only provisions in our proposal and still believe it is 
appropriate to conclude that since the State-only provisions were not 
included in the Billings/Laurel SO2 SIP, we are not approving or 
disapproving these provisions nor are we relying on these provisions in 
approving or disapproving other provisions in the submitted SIP. 
Nothing in this action should be construed as making any determination 
or expressing any position regarding the State-only provisions or their 
impact on the SIP. State-only provisions can affect only State 
enforcement of the SIP and cannot have any impact on federal 
enforcement authorities. We may at any time invoke our authority under 
the Act, including, for example, sections 113, 114, or 167, to enforce 
the requirements of the Billings/Laurel SO2 SIP independent of any 
State enforcement effort. We may take action to enforce the SIP 
regardless of any State compliance determination or any constraint on 
State enforcement discretion which the State-only provisions may 
impose. In addition, citizen enforcement under section 304 of the Act 
is likewise unaffected by the State-only provisions.
    If we were to determine that the State-only provisions, as 
implemented, appeared to limit, constrain, or otherwise have a chilling 
effect on state enforcement of the SIP, we would reconsider our 
approval or take other appropriate action under the Act. Our 
reconsideration could occur under section 110(k)(6) of the Act or we 
could complete another SIP Call under sections 110(a)(2)(H) and 
110(k)(5) of the Act. Other appropriate action could include a finding 
of failure to implement the SIP under section 179(a)(4) of the Act or 
enforcement action under section 113(a)(2) of the Act, or both.

B. How Does Montana's Environmental Audit Act Affect EPA's Actions?

    On May 5, 1997, the Governor of Montana signed a bill enacted by 
the legislature (the Voluntary Environmental Audit Act, Mont. Code Ann. 
Secs. 75-1-101 et seq. (1999), (H.B. 293, effective October 1, 1997)) 
that creates immunity under State law from penalties for violations 
discovered during a voluntary environmental audit and creates a 
judicial privilege under State law for information contained in an 
environmental audit report.
    In our July 28, 1999 action we indicated that nothing in our 
proposal action should be construed as making any determination or 
expressing any position regarding the State of Montana's audit 
privilege and penalty immunity law or its impact upon any provisions in 
the SIP, including the proposed revision at issue.
    However, our concerns about the effect of the audit law on the 
State's ability to enforce the SIP have been addressed by a formal 
agreement with the State. On December 13, 1999, EPA and the State 
entered into a Memorandum of Agreement (``MOA'') (see document # IV.C-
32) concerning the effects of the audit law on state implementation and 
enforcement of all federal environmental programs in

[[Page 22173]]

Montana. Under the MOA, as long as the agreement and the State's legal 
interpretations of the audit law are in effect and functioning as 
intended, we and the State agree that State environmental programs, 
including the SIP, have sufficient authority to obtain and maintain EPA 
approval.
    The State of Montana's audit privilege and immunity law affects 
only state enforcement and does not have any impact on federal 
enforcement authorities. We may at any time invoke our authority under 
the Act, including for example, sections 113, 114, or 167, to enforce 
the requirement or prohibitions of the State of Montana's plan, 
independent of any state enforcement effort. In addition, citizen 
enforcement under section 304 of the Act is likewise unaffected by a 
state audit privilege or immunity law.

IV. Other Rulemaking Actions

A. How Does This Final Action Relate to EPA's SIP Call?

    In our July 28, 1999 proposal we indicated that our March 4, 1993 
letter requesting revision of the Billings/Laurel area SO2 SIP (see 
document # II.G-1) stated that the letter was not final Agency action 
subject to judicial review, and that a final Agency action would occur 
when we made a binding determination regarding the State's response. We 
have considered the comments received on our proposed rulemaking action 
and still believe it is appropriate to finalize action on the SIP Call 
and on the State of Montana's response to the March 4, 1993 letter; we 
are making a binding determination regarding the SIP Call and the State 
of Montana's response to the letter with this final rulemaking action.

B. Why Is EPA Not Imposing Sanctions?

    In our July 28, 1999 proposed rulemaking action, starting at 64 FR 
40804, right column, we proposed that the sanctions specified in 
section 179(b) of the Act should apply if our proposed disapproval 
action became a final disapproval action. We also requested comment on 
whether we should accelerate the sanctions under section 110(m) of the 
Act. After reviewing the comments\10\ received on our proposal action, 
we have decided not to select the order of sanctions that would apply 
in the Billings/Laurel area at this time. Consequently, if the 18-month 
sanctions clock that starts with today's disapproval of Montana's SIP 
expires without the State having corrected the identified deficiencies, 
no sanctions will be imposed. In the future, if we choose to select the 
order of mandatory sanctions or to apply early discretionary sanctions, 
we would do so through rulemaking.
---------------------------------------------------------------------------

    \10\ See footnote 7 above.
---------------------------------------------------------------------------

V. What Comments Were Received on EPA's Proposed Action and How Is 
EPA Responding to Those Comments?

Summary of Comments and Responses

    Following is a summary of the comments received on the proposed 
rulemaking and our responses. The following is an outline of the 
subjects on which we received comments:

A. SIP Call
B. Sanctions
C. Flares
D. Dispersion Modeling
E. EPA's Partial Approval
F. Due Process for SIP Approval
G. Escape Clause
H. Language in ExxonMobil and MSCC Stipulations Related to 
Incorporation of Earlier Stipulations and Apportionment of the 
Airshed
I. Default Approval of SIP
J. Department Discretion
K. Quarterly Data Recovery Rate (QDRR)
L. Effect of the Montana Voluntary Environmental Audit Act
M. Effect of State-only Provisions
N. Enforcement and MDEQ Staffing
O. Reasonably Available Control Measures (RACM) Including Reasonably 
Available Control Technology (RACT) and Reasonable Further Progress 
(RFP) at Cenex
P. MSCC Auxiliary Vent Stacks
Q. MSCC's 30-meter Stack
R. ExxonMobil's and Cenex's Refinery Fuel Gas Limitation
S. Variable Emission Limitations
T. Minor Sources
U. Compliance Determining Method--ExxonMobil's Coker CO-Boiler Stack 
and F-2 Crude/Vacuum Heater Stack
V. Effect of the 1990 Amendments to the Clean Air Act
W. Stack Height Issues

A. SIP Call

    We issued a request for revision of the Billings/Laurel area SO2 
SIP by letter to the Governor of Montana, dated March 4, 1993 (see 
document # II.G-1). The request letter reflected our preliminary 
finding regarding the SIP's substantial inadequacy (SIP Call), and was 
published in the Federal Register on August 4, 1993 (58 FR 41430) (see 
document # II.G-3). In the request letter, we declared that the SIP 
Call would become final agency action when we made a binding 
determination regarding the State of Montana's response to the SIP 
Call. We proposed to make such binding determination regarding the SIP 
Call when we proposed to partially approve, conditionally approve, and 
partially disapprove the Billings/Laurel SO2 SIP revisions submitted by 
the State on Montana in response to the request letter. See 64 FR 
40791, 40804 (July 28, 1999) (see document # III.A-2).
Summary of Comments and Response
    Two commenters objected that the SIP Call is invalid and should be 
withdrawn.
    We have considered the comments received and still believe our 
March 4, 1993 letter was appropriate and that we should make the SIP 
Call for the Billings/Laurel area a final agency action.
    The following is a summary of the comments received and our 
response to the comments:
    (1) Comment: Two commenters (MSCC letter, document # IV.A-19, 
comment #'s 1, 125; Goetz letter, document # IV.A-18, exhibit D, 
comment # III, p. 43) stated that the SIP Call is invalid and that 
subsequent actions by the State in response to the 1993 letter and by 
EPA on the State's SIP revision are invalid as well. These commenters 
submitted extensive comments on the dispersion modeling that was the 
basis of the 1993 letter, claiming that the modeling was defective and 
was not supported by monitoring data.
    Response: We will address the comments on dispersion modeling and 
monitoring in section V.D. of this document, together with similar 
comments concerning the State's modeled demonstration of the 
effectiveness of the new SIP emission limitations. Please see section 
V.D., below (``Dispersion Modeling''). Here we will address other 
comments on the validity of the SIP Call.
    (2) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment # 1; MSCC letter, document # IV.A-20, comment #'s 3.A, 3.B), 
stated that the SIP Call violates due process because it undoes an 
earlier approval of the existing SIP, while the letter was not made by 
rulemaking, was not properly noticed, and did not provide for timely 
and effective challenge because it was not denoted a final agency 
action. The commenter further stated that irreversible changes occurred 
without opportunity to challenge the underlying premises of the 1993 
letter. Another commenter (Goetz letter, document # IV.A-18, exhibit D, 
comment # III, p. 43) stated that because the 1993 letter was not 
binding, presumably because it was not issued by rulemaking, no one 
could challenge its validity.
    Response: The SIP Call does not violate due process. The provisions 
of the Act that authorize us to call for SIP revisions do not require 
rulemaking

[[Page 22174]]

until the Agency proceeds to make the SIP Call binding and final. 
Sections 110(a)(2)(H) and 110(k)(5) of the Act require (1) that we 
notify the State when we find that the applicable implementation plan 
is substantially inadequate to protect the NAAQS, and (2) that we make 
the notice public. When we sent our letter to the Governor of Montana 
on March 4, 1993 and published the letter in the Federal Register, see 
58 FR 41430 (August 4, 1993) (document # III.G-3), we in effect 
provided our preliminary views regarding the SIP's substantial 
inadequacy and provided the State an early opportunity to respond to 
our assessment. Thus, we did not make a final, binding finding, and 
thus were not required to use notice and comment rulemaking procedures 
to issue the letter. Rather, the final binding action regarding the SIP 
Call, as well as our action on the State's response to the 1993 letter, 
is occurring in today's rulemaking. The SIP Call does not ``undo'' our 
prior approval of the 1977 SIP for the area or turn that approval into 
a disapproval. Any SIP Call denotes that the existing SIP has become 
inadequate, whether due to changes in conditions such as increased 
emissions, a change in requirements, or, as in this case, a change in 
our ability to measure the effectiveness of the SIP control strategy to 
protect air quality.
    The opportunity to participate in the SIP development process that 
began with our letter to the Governor was provided by the public 
participation requirements of the Montana SIP and the proposed 
rulemaking in this action. See 64 FR 40791, 40806 (July 28, 1999) 
(document # III.A-2). The opportunity to review and comment on the 
proposed rule, which the commenters have exercised, satisfies the 
requirements of procedural due process mandated for SIP approval 
actions by sections 110(a) and 110(k) of the Act and section 553 of the 
Administrative Procedure Act. Under those provisions, the requirements 
of due process are satisfied by publication of a notice of proposed 
rulemaking with an opportunity for submission of written comments prior 
to final action. The Act does not require formal adjudication or formal 
rulemaking. See Cleveland Electric Illuminating Co. v. E.P.A., 572 F.2d 
1150, 1157 (6th Cir. 1978); Buckeye Power, Inc. v. EPA, 481 F.2d 162, 
172 (6th Cir. 1973).
    The appropriate mechanism for obtaining a formal hearing on our 
rulemaking on the SIP Call and on the SIP is to file a petition for 
review of this final action in the United States Court of Appeals for 
the Ninth Circuit, as provided by section 307(b) of the Act. The 
procedural requirements for exercising the opportunity for judicial 
review of our final action are discussed elsewhere in this document.
    (3) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment #'s 1, 2nd page, 3, 4, 66 and other comments) stated that our 
SIP Call is an entirely discretionary act that was inadequately 
justified.
    Response: The statutory provision authorizing SIP Calls provides 
that ``[w]henever the Administrator finds that the applicable 
implementation plan for any area is substantially inadequate to attain 
or maintain the relevant national ambient air quality standard.* * * 
the Administrator shall require the State to revise the plan as 
necessary to correct such inadequacies.'' Section 110(k)(5) of the Act 
(emphasis added). While it is true that EPA has some discretion in 
finding whether a SIP is substantially inadequate, the use of the 
imperative ``shall,'' rather than the optional ``may,'' appears to 
require EPA action as mandatory and not discretionary, once we make a 
finding of substantial inadequacy.
    The same commenter believes the SIP Call is not adequately 
justified and that the Administrator should withdraw the 1993 letter. 
We believe our technical support document for the SIP Call (document # 
II.G-2) adequately justifies our final binding decision to call for a 
SIP revision and that no withdrawal of the1993 letter is necessary.
    (4) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment # 1, 2nd page) stated that our SIP Call intrudes on the primary 
responsibility of the State to implement the Clean Air Act, contrary to 
section 101 of the Act. Another commenter (Goetz letter, document # 
IV.A-18, exhibit D, comment # V, p. 61) raised the same objection to 
our proposed action on the SIP.
    Response: Section 101 of the Act, ``Congressional findings and 
declaration of purpose,'' is not a prescriptive provision and does not 
require particular action by anyone. But it does provide a statement of 
Congressional intent, which the remaining provisions of the Act 
effectuate. For example, section 101(a)(3) states a congressional 
finding that air pollution prevention and control are the ``primary 
responsibility of States and local governments''; section 101(a)(4) 
states a finding that ``[f]ederal financial assistance and leadership 
is essential for the development of cooperative Federal, State, 
regional, and local programs to prevent and control air pollution.''
    These and other provisions of section 101 of the Act declare an 
intent to create a cooperative relationship between the federal 
government and the States ``to protect and enhance the quality of the 
Nation's air resources, so as to promote the public health and 
welfare'' as expressed by section 101(b). As the courts have 
recognized, ``The CAA simply 'establishes a program of cooperative 
federalism that allows the States, within limits established by federal 
minimum standards, to enact and administer their own regulatory 
programs, structured to meet their own particular needs.' '' 
Commonwealth of Virginia v. Browner (80 F.3d 869, 883 (1996) (quoting 
Hodel v. Virginia Surface Mining & Reclamation Ass'n, 452 U.S. 264, 
289, 101 S.Ct. 2352, 2367-68 (1981)).
    The intent to create a cooperative relationship for air pollution 
control is effected by the other provisions of the Act, including 
section 109, which authorizes us to establish NAAQS; by section 110(a), 
which directs States to assume the primary responsibility of developing 
SIPs to protect the NAAQS; and by section 110(k)(5), which authorizes 
us to take a leadership role by calling for revision when SIPs are 
found inadequate. Montana's action here, developing and submitting a 
SIP revision in response to our 1993 letter, fulfills the congressional 
intent that States take primary responsibility for air pollution 
control. In the federal partnership, both functions are necessary: both 
the primary responsibility assumed by the States and our standard-
setting and oversight role.
    (5) Comment: Two commenters (MSCC letter, document # IV.A-19, 
comment # 2; Goetz letter, document # IV.A-18, exhibit D, comment, p. 
9) stated that we improperly constrained the State's action in 
responding to the 1993 letter, by placing time limits on the State's 
response and threatening to impose sanctions and withhold federal funds 
if the State did not submit timely SIP revisions. One of the commenters 
(MSCC letter, document # IV.A-20, comment # 4F) also stated that until 
we have promulgated a formal SIP Call for Montana, and given Montana 
the statutory time following final promulgation of the formal SIP Call, 
we are not required and may not be authorized to promulgate a FIP. 
Another commenter (McGarity letter, document # IV.B-1) stated that the 
process has taken too long.
    Response: The maximum allowable time limits for submission of 
revisions in response to a SIP Call are established by statute. Section 
110(k)(5) of the Act

[[Page 22175]]

provides that we ``may establish reasonable deadlines (not to exceed 18 
months after the date of such notice) for the submission of such plan 
revisions.'' (Emphasis added.) However, the statute does not require us 
to establish a deadline in all cases. In our letter of March 4, 1993, 
we requested that Montana submit its revisions within an 18-month 
timeframe, which is consistent with the maximum allowable time where we 
are making a SIP Call binding and final. Under the letter, the SIP 
revisions were due on September 4, 1994 if the State chose to comply 
with the request. The State submitted the revisions on September 6, 
1995, nearly a year later than this date. These revisions were modified 
and resubmitted on August 27, 1996, April 2, 1997 and July 29, 1998. In 
light of these facts, it is not necessary to establish a further 
schedule and deadline for the State to respond to the SIP Call in 
today's rulemaking, since we already have received the State's 
response.
    We did not impose sanctions on Montana for failure to submit the 
revisions on time, but we did indicate that sanctions would apply in a 
letter to the State dated September 19, 1994 (document # IV.C-31). This 
letter and subsequent letters to the State on the timing of sanctions, 
dated March 14, 1996 (document #'s II.B-16 and B-17), were premature, 
and we later corrected them. Our authority to impose sanctions under 
section 179 of the Act can only be implemented after we conduct 
rulemaking to select the order of the sanctions to be imposed for 
failure to meet requirements of the Act. See section 179(a) of the Act. 
Because we did not promulgate a general rule for applying sanctions for 
failure to meet a SIP Call, we can impose them only through specific 
rulemaking that achieves two things: first, making the SIP Call binding 
and final so that the State's response becomes a ``required'' 
submission under the Act; and second, selecting the order of mandatory 
sanctions that will apply if the State fails to respond or if EPA 
disapproves the State's response. In our proposed rulemaking action we 
proposed to take the prerequisite rulemaking actions and to apply 
sanctions in the event that our partial disapproval of the SIP 
revisions became final action. See 64 FR 40791, 40804 (July 28, 1999) 
(document # III.A-2). (Our final action on the proposal to impose 
sanctions is discussed in section V.B., below.)
    With respect to whether we can promulgate a FIP without completing 
formal rulemaking on the SIP Call, by this action, we are promulgating 
a formal SIP Call and can now propose a FIP to fill any gaps created by 
our disapproval of the Billings/Laurel SO2 SIP. We do not agree with 
the commenter that the Act requires us to give the State additional 
time to respond to the SIP Call and SIP disapproval, before we propose 
a FIP. Section 110(c) of the Act requires that we promulgate a FIP ``at 
any time within 2 years after'' we disapprove a SIP revision in whole 
or in part. There is no minimum time period before we may promulgate a 
FIP, but rather a two-year maximum time within which we must promulgate 
a FIP. Because the State has already had nearly nine years in which to 
respond to the initial 1993 letter, we do not believe that allowing 
additional time will serve the public interest in protecting the NAAQS 
through federally enforceable limitations on SO2 emissions.
    (6) Comment: Two commenters (MSCC letter, document # IV.A-19, 
comment # 2; Goetz letter, document # IV.A-18, exhibit D, comment # 2, 
p. 9) also stated that the untimely threat to impose sanctions exerted 
improper and extreme pressure on Montana and the sources in the area to 
respond to the 1993 letter. One commenter (MSCC letter, document # 
IV.A-19, comment # 1, 3rd page) stated that the threat of sanctions was 
coercive and had the effect of forcing the State to impose emission 
limitations that were unauthorized and unconstitutional.
    Response: These comments will be addressed in section V.E., below, 
discussing the Tenth Amendment and other constitutional and statutory 
challenges to our SIP action.
    (7) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment # 1, 1st page) stated that the 1993 letter was invalid because 
the letter incorrectly stated that the existing SIP for the area did 
not contain enforceable emission limitations.
    Response: Contrary to the commenter's statement, the 1993 letter 
does not contain a statement that the pre-1993 SIP did not include 
enforceable emission limitations. When we issued the 1993 letter, we 
were aware that some enforceable limitations on SO2 emissions were in 
place. We took those limitations into account in our analysis. For 
example, the modeling demonstration that formed the basis of the 1993 
letter showed violations of the NAAQS for SO2 at emission levels 
allowed under existing emission limitations. The 1993 letter did state 
our view that the SIP in effect at that time was inadequate to attain 
and maintain the SO2 NAAQS and that emission reductions would likely be 
necessary to protect the NAAQS.
    (8) Comment: One commenter (MSCC letter, document # IV.A-20, 
comment #'s 3J, 3K, 3N, 3Q, 3R) stated that the SIP Call is not 
binding, adequate or legally effective to say the SIP was inadequate 
because allowable and actual emissions have been reduced and voluntary 
improvements have occurred since 1993. Additionally, the commenter 
stated that since the 1993 letter additional information and facts have 
become available to further dispute or moot the results of the 1993 
modeling and any opinion based thereon.
    Response: The 1993 letter was supported by the evidence available 
at the time it was issued. That evidence could not have taken into 
account future events such as more restrictive emission limitations in 
state permits. Such later actions are irrelevant to the validity of the 
1993 letter, though possibly relevant to Montana's response to the 
letter. Voluntary reductions in emissions since the 1993 letter are 
also irrelevant; they do not affect the validity of the 1993 letter or 
our rulemaking on the SIP Call and the SIP revisions.
    (9) Comment: Two commenters (MSCC letter, document # IV.A-20, 
comment #'s 3.H., 3.L; Goetz letter, document # IV.A-18, exhibit D, 
comment # III.B, pp. 44-45) stated that the SIP Call is not binding, 
adequate or legally effective to say the SIP was inadequate because 
ambient monitoring in the Billings/Laurel area, both before and after 
the 1993 letter, did not show any violations of the SO2 NAAQS.
    Response: For a discussion of whether contrary monitoring data 
invalidate the computer modeling used for the SIP Call and SIP 
development, readers are referred to the response to comments on 
modeling in section V.D., below. With respect to measurements of 
current concentrations, the emissions inventory for the Billings/Laurel 
area indicates that actual SO2 emissions have declined since 1993. One 
commenter (MSCC letter, document # IV.A-20, comment # 3.Q) notes that 
CEMS at the sources show lower emission rates now than at the time of 
the modeling. Ambient concentrations of SO2 measured by the area's 
monitoring network, not surprisingly, show a similar decline. To the 
extent that these reductions reflect the State's efforts to restrict 
emissions as part of its control strategy, they demonstrate the 
effectiveness of Montana's response to the SIP Call.

B. Sanctions

    We proposed that the regulatory scheme issued for sanctions 
generally, under 40 CFR section 52.31, should also

[[Page 22176]]

apply here if our proposed partial disapproval of the SIP became a 
final action or if our adopted final conditional approvals later 
converted to disapprovals. We proposed to apply the sanction rule's 
provisions regarding the timing of sanctions. We also asked for comment 
on whether we should impose sanctions under section 110(m) of the Act 
to make the sanctions effective immediately upon the effective date of 
partial disapproval or conversion from conditional approval to 
disapproval, and on the geographic scope of any such discretionary 
sanctions.
Summary of Comments and Response
    Eight commenters submitted comments on our sanctions proposal. Five 
of the eight commenters were opposed to our imposing sanctions, one 
commenter seemed only opposed to sanctions in Billings, and two 
commenters felt we should go beyond what was proposed and apply 
sanctions throughout the State. Some commenters were also opposed to 
applying sanctions immediately.
    We have considered the comments received, and in our final rule, at 
this time, we have decided not to select the order of sanctions that 
would be necessary to apply mandatory sanctions (section 179(b)), or to 
impose discretionary sanctions (section 110(m)) in the Billings/Laurel 
area or anywhere else in the State of Montana. Thus, sanctions are not 
automatic in the Billings/Laurel area as a result of our partial and 
limited disapproval of the SIP, even if the State does not correct the 
identified deficiencies within the 18-month period starting with 
today's disapproval. To apply mandatory sanctions under section 179, we 
must complete a rulemaking action to specify the order of sanctions. 
Because the sanctions are not automatic before such action is 
completed, we believe we can use some of the principles of 
discretionary sanctions in deciding whether or not sanctions should be 
applied in the Billings/Laurel area.
    We are not required to apply discretionary sanctions under section 
110(m) of the Act. Section 110(m) says ``[t]he Administrator may apply 
any of the sanctions listed in section 179(b) at any time (or at any 
time after) the Administrator makes a finding, disapproval or 
determination under paragraphs (1) through (4), respectively, of 
section 179(a) in relation to any plan or plan item...required under 
the Act...'' Further, in the preamble of our rulemaking action for 
discretionary sanctions we indicated that we will exercise section 
110(m) sanctions earlier than 18 months only in cases where: (1) the 
State has indicated an explicit resistance to resolving a plan or 
program deficiency or to making a required plan or program submittal; 
or (2) special circumstances, particular program needs, or time 
constraints dictate the need for use of such sanctions. See 59 FR 1481 
(middle column), January 11, 1994.
    In this particular case, the State initially submitted a SIP in 
September 1995 and then spent several years revising and updating the 
SIP to, among other things, address our concerns with previous SIP 
submittals. In a letter dated September 27, 1999 from Mark Simonich, 
Montana Department of Environmental Quality (MDEQ), to William 
Yellowtail, EPA, the MDEQ expressed a desire to correct the SIP so that 
it is approvable. (See document # IV.A-31.)
    This history shows that the State has not shown resistance to 
resolving its plan deficiency or to making the required plan submittal. 
In addition, sources were required to meet the emission limitations in 
the Billings/Laurel SO2 SIP when the State's Board Order was signed 
(June 12, 1998), except where another effective date is specified in 
the exhibit A or attachment(s). Therefore, on the whole, the plan is 
being implemented now.
    Because of the State's efforts to submit an approvable SIP and 
because the SIP is being implemented, we believe that it is not 
appropriate to apply discretionary sanctions in the Billings/Laurel 
area, or anywhere else in the State of Montana, at this time. In the 
future, if we choose to apply discretionary sanctions or to select the 
order of mandatory sanctions that would apply, we would do so through 
rulemaking.
    The following is a summary of the comments received and our 
response to the comments:
    (1) Comment: Several commenters stated that sanctions are not 
appropriate in any form, because there have been substantial reductions 
in SO2 emissions and ambient concentrations in the area; the area meets 
the NAAQS; and the State and industry have made a good faith effort to 
submit a SIP to us. (See State letter, document # IV.A-23, comment #'s 
1A, 1B, 1C, 1D, 1E; Cenex letter, document # IV.A-26, Montana Petroleum 
Association letter, document # IV.A-17; ExxonMobil letter, document # 
IV.A-28, State letter, document # IV.A-31, MSCC letter, document # 
IV.A-20, comment # 4B, 6A; MSCC letter, document # IV.A-19, comment #'s 
112, 114.)
    Response: We agree that the State of Montana has made a good faith 
effort to submit an approvable SIP and that is why we have decided not 
to apply sanctions at this time. However, we do not agree that 
substantial reductions in SO2 emissions and ambient concentrations 
alone should warrant not applying the sanctions. Although sources over 
the past several years have reduced their actual SO2 emissions, and 
there has been a corresponding reduction in monitored ambient 
concentrations, the SIP allows sources to emit more SO2 than they 
actually do. Also, we have long held that SO2 monitoring may not be a 
true indication of ambient concentrations because of the nature of SO2 
plumes. See our September 16, 1982 memorandum from Sheldon Meyers, 
Director, Office of Air Quality Planning and Standards to David Kee, 
Director, Air and Management Division, Region V, entitled ``Milwaukee 
SO2 Nonattainment Designation,'' and April 21, 1983 memorandum from 
Sheldon Meyers, Director, Office of Air Quality Planning and Standards 
to Regional Air Division Directors, entitled ``Section 107 Designation 
Policy Summary'' (document #'s IV.C-26 and IV.C-27, respectively). In 
both memoranda, we indicate that in most SO2 cases, a small number of 
monitors is usually not representative of the air quality for the 
entire area. See also response to comments D.2.a. and b.
    (2) Comment: One commenter stated that imposing sanctions on 
Montana is unfair because the State made a good faith effort to develop 
the plan; the plan contains all the necessary elements and shows 
attainment; the plan may be unnecessary and later overturned by a court 
or even a subsequent Administrator; and EPA's criticism of the lack of 
approved emission limitations at this point source arises solely from 
EPA's failure to approve a reasonable plan and demonstration, and not 
the State's failure to submit it. The commenter also stated that 
Montana is not being treated equally with other areas that are 
attaining the NAAQS. (See MSCC letter, document # IV.A-20, comment #'s 
4B, 4D, 4E, 6; MSCC letter, document # IV.A-19, comment # 112.)
    Response: As indicated above, we agree that the State of Montana 
has made a good faith effort to submit an approvable SIP and that is 
why we have decided not to apply sanctions at this time. We do not 
agree that the plan submitted by the State contains all the necessary 
elements and shows attainment. See our proposed rulemaking action and 
TSD, document #'s III.A-2 and III.B-1, respectively, for a complete 
explanation of why we do not believe the submitted plan contains all 
the necessary elements. We do not

[[Page 22177]]

agree that we should not impose sanctions because of speculation about 
future challenges to our action or subsequent EPA Administrators. 
Finally, we do not agree that Montana is not being treated equally with 
other areas that are attaining the NAAQS.
    (3) Comment: Several commenters stated acceleration of sanctions is 
not appropriate. (See Conoco letter, document # IV.A-24; Cenex letter, 
document # IV.A-26.) One commenter stated it is not appropriate to 
accelerate sanctions for failure to submit a SIP that we could approve 
in response to a SIP Call the commenter believes was not binding. (See 
MSCC letter, document # IV.A-19, comment # 111.)
    Response: We agree that it is not appropriate to accelerate 
sanctions, at this time. The ability to accelerate sanctions comes 
under our discretionary sanction authority in section 110(m) of the 
Act. As indicated above, in the preamble of our rulemaking action for 
discretionary sanctions we indicated that we will exercise section 
110(m) sanctions earlier than 18 months only in cases where: (1) the 
State has indicated an explicit resistance to resolving a plan or 
program deficiency or to making a required plan or program submittal; 
or (2) special circumstances, particular program needs, or time 
constraints dictate the need for use of such sanctions. See 59 FR 1481 
(middle column) January 11, 1994. We believe the State has not shown an 
explicit resistance to resolving a plan deficiency or making a required 
plan submittal. At this time we do not believe there are special 
circumstances which warrant accelerating sanctions.
    We do not agree with the commenter who stated that we should not 
accelerate sanctions because the plan is approvable and the 1993 letter 
was not binding. The issue of whether the 1993 letter was binding is 
discussed in section V.A., above. Our proposed rulemaking action and 
TSD provides a full explanation of why we believe the SIP is not fully 
approvable. See document #'s III.A-2 and III.B-1, respectively.
    (4) Comment: Several commenters stated that sanctions are not 
appropriate since we were involved when the SIP was developed. The 
commenters stated our involvement blurred the State's primary role in 
developing the SIP and our role in approving the SIP. (See State 
letter, document #IV.A-23, comment #'s 1B, 1C, 1E; Cenex letter 
document # IV.A-26)
    Response: We do not agree that we should not impose sanctions since 
we were involved when the SIP was being developed. We generally review 
and comment on SIPs as they are being developed and during the public 
comment period. Often states will ask for our interpretation of the 
Act, regulations and guidance so that SIPs, once submitted, will be 
approvable. In its comments on the proposal, the State of Montana 
portrayed our involvement in the SIP development as ``extensive and at 
times, overreaching.'' We do not agree with this characterization of 
our involvement and review. However, since we are not applying 
sanctions, at this time, we do not believe it worthwhile to debate the 
appropriateness of our involvement with respect to whether that should 
have any bearing on whether to apply sanctions.
    (5) Comment: Several commenters stated that imposing sanctions 
sends the wrong message to the State and sources for their efforts and 
is inconsistent with the intent of Congress, which is clean air, not 
punishment. (See State letter, document # IV.A-23, comment # 1E.)
    Response: We do agree that, in this case, sanctions may send the 
wrong message to the State for its SIP efforts and therefore we are not 
applying the sanctions. We do not agree, however, that applying 
sanctions would be inconsistent with Congressional intent. By 
authorizing sanctions for certain kinds of state planning failures, 
Congress intended to assure that SIPs and SIP revisions would be 
developed on time, would provide adequate controls, and would otherwise 
satisfy Act planning requirements.
    (6) Comment: Several commenters stated that imposing sanctions in 
this case is a discretionary act by EPA and due to the circumstances in 
this case the sanctions should not be imposed. (See State letter, 
document # IV.A-23, comment # 1E; Cenex letter, document # IV.A-26; 
MSCC letter, document # IV.A-20, comment # 4A; MSCC letter, document # 
IV.A-19, comment # 112.) One commenter stated we are creating a rule 
structure just so that we could impose sanctions in Montana. (See MSCC 
letter, document # IV.A-20, comment # 4A.) One commenter questions 
whether we can impose discretionary sanctions under section 110(m) of 
the Act in cases such as this where section 179 is not applicable. (See 
State letter, document # IV.A-23, comment # 1E.)
    Response: We agree that applying sanctions is a discretionary act 
in this case and due to the circumstances the sanctions should not be 
applied at this time. We also agree with the commenter that in our 
proposal we were creating a rule structure to impose sanctions. Because 
sanctions are not automatic in this particular case we believed we had 
to create a rule to impose them.
    With respect to the commenter who questioned whether we could apply 
section 110(m) in cases where EPA is not exercising its authority under 
section 179, we already addressed this issue when we finalized our 
criteria for exercising discretionary sanctions under the title I of 
the Act (59 FR 1476, January 11, 1994). In the January 11, 1994 action, 
59 FR 1479-1480, we indicated that ``EPA believes that section 110(m) 
and section 179, although interrelated, do set up two distinct 
sanctions processes.'' Additionally, on page 1480 of the January 11, 
1994 action, third column we indicated that ``EPA disagrees that 
section 179 provides the sole authority for imposing sanctions. * * * 
In fact, the EPA believes the reference to statewide sanctions under 
section 110(m) makes it clear that section 110(m) establishes a 
different authority to sanction states.* * *''
    While our sanctions authority under both provisions is triggered by 
a state failure regarding a required submission under the Act, we 
believe we have independent authority under section 110(m) to impose 
sanctions, even if we have not completed a separate rulemaking under 
section 179 to select the sequence of mandatory sanctions. We are 
choosing not to impose discretionary sanctions at this time. If we 
decide to impose sanctions in the future under section 110(m) we would 
propose them through notice and comment rulemaking and the public could 
comment at that time.
    (7) Comment: One commenter stated that sanctions are not 
appropriate because the 1993 letter was not binding, adequate and/or 
legally effective as a determination that the SIP was inadequate. The 
same commenter stated we need to go through a rulemaking process on the 
SIP Call before we can start a sanction clock. The commenter stated 
that until we go through a rulemaking process we have circumvented the 
public notice, comment and appeals process that should precede any 
sanctions. (See MSCC letter, document # IV.A-20, comment #'s 3A, 3B, 
4B, 4C, 4D, 5E.)
    Response: In this case, we do not agree that sanctions would be 
inappropriate merely because the 1993 letter was not binding. Today's 
final action itself makes the SIP Call binding, and partially and 
limitedly disapproves the State's response to the SIP Call. Section 
179(a) of the Act provides the statutory authority to apply sanctions 
for disapprovals of a SIP, in whole or in part, that is required to be 
submitted

[[Page 22178]]

under a SIP Call (section 110(k)(5)). Today's rulemaking renders the 
SIP Call binding and final, and takes final disapproval action on the 
State's required response. Therefore, under the statute, EPA would have 
the authority to select the order of sanctions that would be necessary 
to apply mandatory sanctions (section 179(b)), or impose discretionary 
sanctions (section 110(m)), if we conducted the prerequisite rulemaking 
and if the State failed to correct the identified deficiencies within 
18 months of such rulemaking.
    (8) Comment: Several commenters stated the geographic scope of the 
highway sanctions should be the entire state and the offset sanctions 
the Billings/Laurel area. (See YVCC letter, document # IV.A-30.) One 
commenter stated the geographic scope of the sanctions should be just 
the Laurel area. (See Conoco letter, document # IV.A-25).
    Response: As indicated above, at this time, we are deciding not to 
apply sanctions anywhere in the State of Montana. Two commenters felt 
we should apply 2-to-1 emission offset sanctions in the Billings area. 
For the most part, 2-to-1 emissions offset sanctions can only be 
applied in areas designated as nonattainment. If we had elected to 
apply sanctions, since Billings is not a designated nonattainment area, 
we could not apply 2-to-1 emission offset sanctions there. See our 
January 11, 1994 final rulemaking action on discretionary sanctions, 59 
FR 1479-1480, for a more detailed discussion on the geographic scope of 
sanctions.
    (9) Comment: Several commenters stated sanctions would 
disproportionately affect Laurel and Cenex. (See Cenex letter, document 
# IV.A-26; MSCC letter, document # IV.A-20, comment # 5; MSCC letter, 
document # IV.A-19, comment # 114.) One commenter stated it is unfair 
to apply sanctions in Laurel because Laurel is a nonattainment area 
only in name; ambient data show the area is attaining the standard; 
Laurel is being punished for issues that are occurring in Billings and 
to which Laurel does not contribute. (See MSCC letter, document # IV.A-
20, comment #'s 5A, 5C; MSCC letter, documment # IV.A-19, comment # 
114.) This same commenter stated that once an area is designated 
nonattainment it is impossible to be redesignated to attainment. (See 
MSCC letter, document # IV.A-20, comment # 5B.) Finally, this commenter 
stated that Laurel's nonattainment designation occurred many years ago 
and was not the result of the issues identified in the current SIP. 
(See MSCC letter, document # IV.A-20, document 5D; MSCC letter, 
document # IV.A-19, comment # 114.) This commenter further stated that 
the CAA 1990 requirement that designations be reaffirmed is 
unreasonable in this case. (See MSCC letter, document # IV.A-19, 
comment #65.) This commenter stated that the area is more controlled 
now than at the time of Laurel's nonattainment designation and that it 
is hard to believe that not approving the SIP will jeopardize the 
NAAQS. (See MSCC letter, document # IV.A-20, comment # 5G.)
    Response: As indicated above, at this time, we are deciding not to 
apply sanctions in Montana. If we had decided to apply sanctions just 
in the nonattainment area impacted by the Billings/Laurel SO2 SIP, then 
the commenters are correct that Laurel and Cenex would have been 
impacted more by the sanctions then the rest of the area and sources. 
We do not agree with the commenter who stated that applying sanctions 
in Laurel would be punishing Laurel for a Billings issue. Our proposed 
disapproval of the SIP, because of the lack of flare provisions, also 
pertains to Laurel; flare issues pertain in Laurel and Billings.
    One commenter questions whether Laurel should be designated as a 
nonattainment area (presumably because the designation of Laurel 
impacts the sanctions that could apply). The fact is that Laurel is a 
designated nonattainment area. We cannot redesignate the area until the 
State submits a redesignation request and maintenance plan which we can 
approve. Contrary to the commenter's suggestion, redesignations of SO2 
areas from nonattainment to attainment have occurred across the 
country. See, for example, 66 FR 14087 (March 9, 2001) and 65 FR 35577 
(June 5, 2000). Prior to the Clean Air Act Amendments of 1990 (1990 
CAAA), Laurel had an approved Part D plan but was still designated as 
nonattainment because the State had not submitted a redesignation 
request. Because Laurel was designated as nonattainment prior to 
enactment of the 1990 CAAA, upon enactment of the 1990 CAAA, Laurel 
remained a nonattainment area by operation of law. See section 
107(d)(1)(C)(i) of the Act. Although one of the commenters states these 
requirements are unreasonable, we are required to implement the law. 
Since the 1990 CAAA, we determined that the SIP for the Billings/Laurel 
area was not adequate to protect the NAAQS. We do not believe we could 
approve a redesignation request and maintenance plan for Laurel until 
we determine that the SIP for Laurel is adequate to protect the NAAQS, 
i.e., until we approve the SIP submitted in response to the SIP Call.
    One commenter wonders how non-approval of the SIP will jeopardize 
attainment since the area is more controlled now than when Laurel was 
initially designated as nonattainment. What the commenter seems to be 
asserting is that there is no need for a SIP. We disagree. We found the 
SIP inadequate under the Act, and, thus, it is incumbent on the State 
to submit an adequate SIP. Whether emissions in the area have gone down 
since we issued our 1993 letter or since the State adopted the 
stipulations for the SIP is irrelevant. Our concern under the Act must 
be whether the federally approved and enforceable SIP meets the 
requirements of the Act. Congress gave EPA the ultimate approval role 
for SIPs.
    (10) Comment: One commenter stated that damage done by sanctions 
can not be undone. Because of offset sanctions, sources may avoid 
projects, shut down or spend more money than is necessary (leaving 
sources at a competitive disadvantage). Withholding highway funds could 
cause a safety problem for people. Also, once a highway budget is lost 
it is irretrievable. (See MSCC letter, document # IV.A-20, comment # 
5F; MSCC letter, document # IV.A-19, comment # 113.)
    Response: It is difficult to respond to comments which speculate 
about what might happen in the future. At this point, we are deciding 
not to apply sanctions. However, as indicated above, Congress intended 
sanctions to be used to assure that SIPs and SIP revisions would be 
developed on time, would provide adequate controls, and would otherwise 
satisfy Act planning requirements. Applying sanctions may have adverse 
effects. However, highway funds used for safety and environmental 
projects cannot be withheld for sanctions applied under section 179 or 
110(m) of the Act.
    (11) Comment: One commenter stated that sanctions should not be 
imposed because of a dispute between the State and Federal governments 
regarding an interpretation of a regulation. The commenter stated 
sanctions should not be imposed until the differences are resolved or 
adjudicated. (See MSCC letter, document # IV.A-20, comment #'s 4D, 4E; 
MSCC letter, document # IV.A-19, comment # 114.)
    Response: We do not agree that sanctions should not be applied 
merely because of a dispute between the State and EPA regarding an 
interpretation of a regulation. In this particular case, we told the 
State in 1996 that we could not

[[Page 22179]]

approve the plan based on its interpretation of the stack height 
regulations. In 1998, the State submitted revisions to the plan knowing 
that the plan would be disapproved in part.

C. Flares

    We proposed to disapprove the SIP as it applies to the attainment 
demonstration because of the lack of enforceable emission limitations 
for flares. We also proposed to disapprove provisions of the SIP that 
allowed certain gas streams at Cenex and ExxonMobil to be burned in the 
flare.
Summary of Comments and Response
    Eleven commenters submitted comments pertaining to our proposal 
impacting flares. Seven of the commenters opposed and three supported 
our proposed disapproval of the attainment demonstration for lack of 
flare limitations. Two commenters opposed and two supported our 
proposed disapproval of provisions that allowed certain gas streams at 
Cenex and ExxonMobil to be burned in the flare. One commenter noted 
that agencies across the country have struggled with flares.
    We have considered the comments received and still believe it is 
appropriate to disapprove the SIP as it applies to the attainment 
demonstration for lack of flare emission limitations.
    The following is a summary of the comments received and our 
response to the comments:
    (1) Comment: Several commenters (State letter, document # IV.A-23, 
comment # 3; YVCC letter, document # IV.A-29; Zaidlicz letter, document 
# IV.A-30) stated that the attainment demonstration is incomplete 
without flare limitations. Several commenters (State letter, document # 
IV.A-23, comment # 3; Conoco letter, document # IV.A-28) stated that 
the State's current flare provisions should be or have been sufficient. 
Other commenters (Conoco letter, document # IV.A-24; ExxonMobil letter, 
document # IV.A-28; MSCC letter, document # IV.A-19, comment #'s 55, 
76; MSCC letter, IV.A-20, comment # 7; Cenex letter, document # IV.A-
26) stated we are mistaken in disapproving the attainment demonstration 
because the SIP lacks flare emission limitations and that we did not 
provide a valid reason for the proposed disapproval or why flares must 
have specific emission limitations. One commenter (MSCC letter, IV.A-
20, comment #'s 7B, C and D) stated that our disapproval of the 
attainment demonstration for lack of enforceable flare limitations even 
though flares are modeled is in error and that the modeling of the 
flares provides a small degree of conservatism in the modeling and is 
an exercise of state discretion for determining the background SO2 
concentrations.
    Response: We continue to believe that the SIP as it applies to the 
attainment demonstration is not approvable since it does not have 
enforceable limitations on flares. Additionally, we believe our 
rationale in the proposed approval (64 FR 40801 of our July 28, 1999 
proposal) provided a simple and logical reason why the attainment 
demonstration should not be approved and why flares must have emission 
limitations. We have not reviewed the State's current flare provisions 
because they were never submitted to us for review or approval. 
However, we did review and comment on earlier versions of the flare 
provisions that the State had adopted.
    In the following documents we provided comments on earlier flare 
provisions adopted by the State: December 15, 1994 letter from Douglas 
M. Skie, Chief, Air Programs Branch, EPA, to Jeffrey Chaffee, Acting 
Administrator, Air Quality Division, Montana Department of Health and 
Environmental Sciences (see document # IV.C-17); April 19, 1995 letter 
from Douglas M. Skie, Chief, Air Programs Branch, EPA, to Jeffrey 
Chaffee, Administrator, Air Quality Division, Montana Department of 
Health and Environmental Sciences (see document # IV.C-18); June 3, 
1997 letter from Jack W. McGraw, Acting Regional Administrator, EPA, to 
Mark Simonich, Director, Montana Department of Environmental Quality 
(see document # II.C-8); March 6, 1998 letter from Richard R. Long, 
Director, Air Program, EPA to Mark Simonich, Director, Montana 
Department of Environmental Quality (see document # II.C-10); and June 
5, 1998 letter from Richard R. Long, Director, Air Program, EPA to Mark 
Simonich, Director, Montana Department of Environmental Quality (see 
document # II.E-7).
    (2) Comment: Several commenters (Conoco letter, document # IV.A-24; 
American Petroleum Institute letter, document # IV.A-25; Cenex letter, 
document # IV.A-26; ExxonMobil letter, document # IV.A-28; MSCC letter, 
document # IV.A-19, comment # 55) stated that neither our regulations 
(40 CFR 51.281) nor the Act (section 110(a)(2)(A)) require that all 
control strategies in the SIP must be federally enforceable; State 
enforceability is sufficient. One commenter (MSCC letter, document # 
IV.A-20, comment # 7A) stated our proposed disapproval of the 
attainment demonstration is in error since flare limitations exist on 
the State level.
    Response: We do not agree that some of the control strategies 
adopted by the State do not need to be submitted to us and made part of 
the federally approved SIP. The general air quality management 
philosophy is that we establish NAAQS; States develop, and submit to 
us, control programs to attain and maintain these NAAQS. We either 
approve or disapprove these control programs and to the extent they are 
approved they are legally enforceable by us and citizens under the 
Act.\11\
---------------------------------------------------------------------------

    \11\ See our TSD (document # III.B-1, at p. 5) and 64 FR 40791 
at p. 40805 (document # III.A-2).
---------------------------------------------------------------------------

    This philosophy is reiterated in the General Preamble, 57 FR 13497 
(April 16, 1992) \12\ (document # II.A-15), at page 13567, right 
column: ``[i]t is important to note that projections of the effect of 
planned air pollution control measures contained in the SIP's are not 
merely assumed but are enforced by regulations adopted as part of the 
SIP. Therefore, if the control measures are not implemented 
sufficiently to result in required reductions, the State or local 
agency, or EPA, can take action to enforce implementation of the 
regulations. This provides a means of achieving, at least in part, the 
goal of attainment and further progress required in the Act.'' The 
control measures cannot be enforced by citizens and us if the State 
does not submit them as a SIP revision and we do not make them 
federally enforceable by our approval of the SIP.
---------------------------------------------------------------------------

    \12\ The General Preamble, a document we issued following the 
1990 Clean Air Act Amendments, describes our preliminary views on 
how we should interpret various provisions of title I of the Act.
---------------------------------------------------------------------------

    Further, our discussion on the lack of flare emission limitations 
in our TSD and proposed rulemaking \13\ provides citations in 40 CFR 
part 51 to support the philosophy that all the control measures 
necessary for attainment and maintenance of the NAAQS must be included 
as part of the SIP.
---------------------------------------------------------------------------

    \13\ See our TSD (document # III.B-1, at p. 37) and 64 FR 40791 
at p. 40801 (document # III.A-2).
---------------------------------------------------------------------------

    The commenters point to 40 CFR 51.281 and section 110(a)(2)(A) of 
the Act as not requiring that every control strategy (relied on for 
attainment and maintenance of the NAAQS) be included as part of the 
federally approved SIP. The commenters state that State enforceability 
of certain control strategies satisfies these provisions. We believe 
the commenters are reading the Act and CFR incorrectly.
    Section 110(a)(2)(A) of the Act says ``[e]ach implementation plan 
submitted by the State under this Act shall be adopted by the State 
after reasonable

[[Page 22180]]

notice and public hearing. Each such plan shall--(A) include 
enforceable emission limitations and other control measures, means, or 
techniques * * *, as well as schedules and timetables for compliance, 
as may be necessary or appropriate to meet the applicable requirements 
of the Act.'' There are several important ideas in this section that 
the commenters are ignoring. First, the section presumes that the plan 
is being submitted to us. The State enforceable provisions for flares, 
which the commenters say meet section 110(a)(2)(A), have not been 
submitted to us. Second, the plan that is submitted to us shall contain 
enforceable emission limitations to meet the applicable requirements of 
the Act, e.g., show attainment and maintenance of the NAAQS. If a plan 
is lacking in certain control measures necessary for attainment, then 
it does not meet section 110(a)(2)(A) of the Act. Finally, the 
definition of ``applicable implementation plan,'' in section 302(q) of 
the Act, supports the notion that the implementation plan is what is 
submitted and approved by us. The implementation plan, under the Act, 
does not consist of measures that are only enforceable by the State and 
were not included in the submission to EPA.
    Forty CFR 51.281 indicates that any emission limitations necessary 
for attainment and maintenance of the NAAQS must be adopted as rules 
and regulations and be enforceable by the State. The commenters rely on 
the first sentence of this section as evidence that control measures 
for attainment and maintenance need only be State enforceable and do 
not need to be submitted as part of the plan. However, the commenters 
are ignoring the second sentence of this section which says that 
``[c]opies of all such rules and regulations must be submitted with the 
plan.'' The definition of ``plan,'' in 40 CFR 51.100(j), supports the 
notion that the implementation plan is what is submitted and approved 
by us. Forty CFR 51.281 and 40 CFR 51.100(j), read together, support 
the theory that all control measures relied on for attainment and 
maintenance of the NAAQS must be submitted as part of the plan. The 
implementation plan, under 40 CFR part 51, does not consist of 
unsubmitted measures that are only State-enforceable.
    (3) Comment Several commenters (Conoco letter, document # IV.A-24; 
Cenex letter, document # IV.A-26; ExxonMobil letter, document # IV.A-
28) stated that since our modeling guidance in 40 CFR part 52, appendix 
W, footnote (e) of section 9.1.2 does not require modeling of 
malfunctions (these are not normal operations and not considered in 
determining allowable operations when modeling), emissions from flares 
during operations that are not normal (startup, shutdown, malfunctions 
and process upsets) should not be considered in determining the 
allowable emissions when modeling relative to the SIP.
    Response: We agree with the commenters that our modeling guideline 
in 40 CFR part 52, appendix W, section 9.1.2, footnote (e) indicates 
that malfunctions are not modeled to determine the allowable 
limitation. We do not agree with commenters that our modeling guideline 
explicitly or implicitly does not require the modeling of emissions 
that result from operations that are not normal and routine or that 
operation of flares at the Billings/Laurel sources is not normal and 
routine, at least in part. The 150 lbs/3-hr flare emission limitation 
used in the attainment modeling does not reflect malfunction emissions, 
but rather emissions from routine operations at the refineries. Bob 
Raisch's September 28, 1995 letter to us (document # II.B-18, first 
page of the enclosure to the letter) says ``[t]he Department and each 
of the refineries estimated that amount of sulfur dioxide which is 
emitted from each flare during routine operations of the refinery.'' 
Tim Schug's January 22, 1999 letter to us (document # IV.C-12) 
indicates that a flare is a safety device that is used to manage 
combustible gases. Mr. Schug also indicates that ``[i]n addition, small 
and continuous quantities of gases may routinely be directed to the 
flare.'' Conoco's comments on our proposal (document # IV.A-24) says 
``[r]outine emissions are expected to be less than 150 lbs SO2 per 3-
hour period * * *'' Therefore, it appears that the State and industry 
agree that emissions from the flares occur on a routine basis.
    Thus, for purposes of this action, we need not reach the issue of 
whether non-routine startups, shutdowns, etc. should be modeled. In 
this case, the State modeled routine flare emissions assuming they 
would be limited to 150 lbs of SO2 per 3-hour period, but did not 
include corresponding emission limits in the SIP submitted to us. This 
is the basis for our disapproval of the attainment demonstration for 
lack of flare emission limitations.
    (4) Comment One commenter (Conoco letter, document # IV. A-24) 
referred to our concern that if we approved the SIP without making the 
State-only requirements federally enforceable, the sources could direct 
emissions from other process units to the flares to avoid violating any 
emission limitation or other requirement. Further, we indicated that it 
did not appear that sources could be penalized through the SIP if such 
circumvention occurred. Conoco stated that these concerns are misplaced 
since Montana Regulations and the ``Other Minor Sources'' provision of 
the stipulations prevent this. Two other commenters (YVCC letter, 
document # IV.A-29; Zaidlicz letter, document # IV.A-30) stated flares 
could be used to circumvent other emission limitations.
    Response: In our proposed action we indicated that if there were no 
emission limitations on flares it appeared that sources could direct 
emissions from other process units to the flare to avoid violating an 
emission limitation or other requirement. We indicated that it did not 
appear that sources could be penalized through the SIP if such a 
circumvention occurred. One commenter stated our concern was misplaced 
because of existing State regulations and the ``Other Minor Sources'' 
provisions in the SIP.
    The ``Other Minor Sources'' provision in the SIP does not alleviate 
our concern because this provision addresses the emissions of sulfur 
bearing gases from other minor sources which are not otherwise subject 
to the SIP. Our concern assumes that emissions being diverted to the 
flare are otherwise subject to the SIP.
    We assume that the commenter is referring to the State's 
circumvention regulation as ``existing State regulations.'' The State's 
circumvention regulation, approved into the SIP, states, ``(1) No 
person shall cause or permit the installation or use of any device or 
any means which, without resulting in reduction in the total amount of 
air contaminant emitted, conceals or dilutes an emission of air 
contaminant which would otherwise violate an air pollution control 
regulation.'' Based on the title, it seems that the State's 
circumvention regulation should address the concern we raised. However, 
after further review of the regulation we are not convinced that it 
could prevent sources from directing emissions from other process units 
to the flare to avoid violating an emissions limitation or other 
requirement.
    Therefore, we continue to believe that establishing emission 
limitations on flares or some other enforceable mechanism is necessary 
to prevent sources from redirecting emissions to the flare in order to 
avoid violating emission limitations elsewhere.
    (5) Comment: Several commenters (Conoco letter, document # IV.A-24; 
American Petroleum Institute letter, document # IV.A-25; Cenex letter,

[[Page 22181]]

document # IV.A-26; ExxonMobil letter, document # IV.A-28; MSCC letter, 
document # IV.A-19, comment #'s, 55, 75, 76, 118; MSCC letter, document 
# IV.A-20, comment # 7F; Goetz letter, document # IV.A-18, exhibit C) 
stated that other SIPs do not limit emissions from flares, that this 
SIP should not either, and that our action here is arbitrary. One 
commenter (MSCC letter, document # IV.A-20, comment #'s 7E, 7F) stated 
our proposal to disapprove the attainment demonstration was in error 
because flare limitations are not required federally and flares are not 
stacks. One commenter (Goetz letter, document # IV.A-18, exhibit C) 
found that the Utah, Washington and Wyoming SIPS do not require 
limitations on flares. Finally, one commenter (MSCC letter, document # 
IV.A-19, comment #'s 77, 118) stated that if we determine that the 
Billings SIP is inadequate because of the lack of flare limitations we 
need to determine that all SIPs are inadequate and do a national 
rulemaking.
    Response: We do not agree that just because other SIPs may not have 
limitations on flares that the Billings/Laurel SO2 SIP should not 
either. We believe that when an area has been determined to not be 
attaining the NAAQS, it is reasonable to apply extra measures to assure 
that the area attains and maintains the NAAQS. Since the State 
identified a concern with flare emissions and included the emissions in 
the attainment demonstration, we believe it is reasonable to make 
restrictions on flares federally enforceable. With respect to Utah, the 
commenters are correct that the federally approved PM-10 SIP for Salt 
Lake and Utah Counties does not contain SO2 flare emission limits.\14\ 
We have identified this as an issue with the Utah PM-10 SIP and are 
working with the State to address the issue. Wyoming does not contain 
any SO2 nonattainment areas, and the one PM-10 nonattainment area, 
Sheridan, does not contain any refineries. Washington does not have any 
SO2 nonattainment areas. However, the Tacoma PM-10 nonattainment area 
in Washington does contain a refinery (see document #IV.C-14). EPA 
found in our October 12, 1994 (59 FR 51506) and October 25, 1995 (60 FR 
54599) approvals of the PM-10 SIP for Tacoma that it is unlikely that 
precursors of PM-10 contribute significantly to PM-10 levels which 
exceed the NAAQS in that area. PM-10 precursor emissions (SO2) were not 
controlled as part of this SIP.
---------------------------------------------------------------------------

    \14\ In PM-10 nonattainment areas, the control requirements 
applicable to major stationary sources of PM-10 also apply to major 
stationary sources of PM-10 precursors unless we determine such 
sources do not contribute significantly to PM-10 levels in excess of 
the NAAQS in that area (see section 189(e) of the Act). The General 
Preamble (document # II.A-15) contains guidance addressing how EPA 
intends to implement section 189(e) of the Act (see 57 FR 13539-
13540 and 13541-13542). In the Utah PM-10 SIP, SO2 emissions at 
sources were controlled because SO2 is a precursor of PM-10.
---------------------------------------------------------------------------

    Therefore, although commenters cite specific examples of states 
near Montana that do not limit SO2 emissions from flares, we believe 
the situation in the Billings/Laurel area is sufficiently different to 
warrant the establishment of SO2 limitations on flares.
    For the same reasons stated above, we do not agree that we need to 
do a national rulemaking to require that all SIPS contain limitations 
on flares.
    Finally, we do not agree that flare limitations are not required on 
a federal level. What is required on a federal level are emission 
controls that will assure attainment of the NAAQS. In this particular 
case, since the attainment demonstration assumes flare emissions were 
controlled we believe the SIP should contain federally enforceable 
emission limitations on flares. With respect to the comment that flares 
are not stacks, the commenter is correct in that our definition of 
stack in 40 CFR 51.100(ff) indicates that flares are not included. 
However, just because an emission point is not a stack by definition 
does not mean that the emission point should not be controlled. There 
are numerous examples of fugitive emissions, which are not emitted from 
stacks, being controlled in SIPS. See, for example, the East Helena 
Lead SIP which was approved at 66 FR 32760 (June 18, 2001); the SIP 
establishes emission limits and work practices for loading, unloading 
and movement of material containing lead, for emissions from buildings, 
and for emissions from roads and parking lots on and off the facility 
property.
    (6) Comment: Several commenters (Conoco letter, document # IV.A-24; 
Cenex letter, document # IV.A-26; MSCC letter, document # IV.A-20, 
comment # 7G) stated that instead of disapproving the SIP, flare 
emissions should be removed from the attainment demonstration. One 
commenter (MSCC letter, document # IV.A-20, comment # 7G) stated that 
flare emissions should be included with other background sources.
    Response: We do not agree that the appropriate way to address flare 
emissions is to ``sweep them under the carpet'' or incorporate them 
with background sources. As mentioned above, it is widely accepted that 
routine emissions occur at flares. The State was concerned enough about 
these emissions that it chose to regulate them at the State level and 
considered them in the attainment demonstration. We believe that 
turning our back on an issue simply because it is difficult to address 
is not appropriate under the Act. The Act presumes that states will 
develop an appropriate mix of controls to protect air quality. The 
State identified the flares as an attainment issue. If the flares are 
not limited by enforceable limitations, attainment will not be assured.
    (7) Comment: Several commenters (American Petroleum Institute 
letter, document # IV.A-25; Cenex letter, document # IV.A-26; Montana 
Petroleum Association letter, document # IV.A-27; MSCC letter, document 
# IV.A-19, comment #'s 55, 76) stated that flares are primarily 
emergency relief devices and limiting flares puts a refiner in an 
untenable position of having to choose between possible limitation 
violations or endangering the plant or its workers. These commenters 
also stated that flare use is essential and no reasonable alternative 
exists.
    Response: Our proposed action is not intended to jeopardize the 
safety of refineries, their workers, or neighbors. Our SIP policy \15\ 
has long recognized that imposing penalties for violations of emission 
limitations for sudden and unavoidable malfunctions caused by 
circumstances entirely beyond the control of the owner or operator may 
not be appropriate. States and EPA have the ability to exercise 
enforcement discretion to refrain from taking enforcement action in 
these circumstances.
---------------------------------------------------------------------------

    \15\ See document # IV.C-13, September 20, 1999 memorandum 
entitled ``State Implementation Plans: Policy Regarding Excess 
Emissions During Malfunctions, Startup, and Shutdown.'' This policy 
updates previous EPA policy, dating back to 1982, on this issue.
---------------------------------------------------------------------------

    However, we are not convinced that flare use is always essential or 
that no reasonable alternative exists. We know that other refineries, 
either because of enforcement action or a company decision, have 
reduced flaring through better operation and maintenance procedures 
throughout the refinery and/or by installing flare gas recovery systems 
to compress and recycle to the gas plant(s), gases that had previously 
been sent or released to the flare. See EPA's Enforcement Alert 
entitled ``Frequent, Routine Flaring May Cause Excessive, Uncontrolled 
Sulfur Dioxide Releases,'' Volume 3, Number 9, EPA 300-N-00-0014 
(revised), October 2000 (document # IV.C-72).
    (8) Comment: Several commenters (American Petroleum Institute 
letter,

[[Page 22182]]

document # IV.A-25; Goetz letter, document # IV.A-18, exhibit C; MSCC 
letter, document # IV.A-19, comment #'s 55, 75) stated that since 
measuring flow and concentration of hydrogen sulfide of the gas stream 
flowing to the emergency flare is very difficult, the flares should not 
be controlled.
    Response: We do not agree. First, we are not convinced that 
measuring flow and content of the flare is impossible. We are 
evaluating potential methods for measuring flare flow and content in 
preparation of our FIP. Second, other means are available to determine 
SO2 emissions from flares apart from measuring flare flow and content. 
To meet the ``State-only'' requirements for flares it appears that the 
refineries and MSCC are calculating SO2 emissions based on good 
engineering judgement.
    (9) Comment: Several commenters (American Petroleum Institute 
letter, document # IV.A-25; Cenex letter, document # IV.A-26; 
ExxonMobil letter, document # IV.A-28; Montana Petroleum Association 
letter, document # IV.A-27; Conoco letter, document # IV.A-28) stated 
our action is precedent-setting and more data should be collected to 
justify the costs and the benefits of imposing emergency flare 
limitations.
    Response: At this point we are not imposing flare limitations; we 
are disapproving the attainment demonstration for lack of flare 
emission limitations.
    (10) Comment: Several commenters (Cenex letter, document # IV.A-26; 
American Petroleum Institute letter, document # IV.A-25; MSCC letter, 
document # IV.A-19, comment # 75; Conoco letter, document # IV.A-28) 
stated the emissions from flares are inconsequential based on the 
potential to emit levels in the SIP modeling and have little ambient 
impact. Two commenters (YVCC letter, document # IV.A-29; Zaidlicz 
letter, document # IV.A-30) stated SO2 emissions from flaring are 
significant. Other commenters (ExxonMobil letter, document # IV.A-28; 
American Petroleum Institute letter, document # IV.A-25; Conoco letter, 
document # IV.A-28) stated that SO2 emissions and ambient 
concentrations are at an all-time low and the imposition of 
extraordinary flare limitations is unnecessary.
    Response: We do not agree that flare emissions are inconsequential 
and have little ambient impact.
    The State modeled emissions from flares at 150 lbs of SO2/3-hours. 
This 3-hour modeled value equates to 219 tons of SO2/year for each 
source (((150 lbs SO2/3-hrs) * (8 3-hr periods/day) * (365 days/year))/
(2000 lbs/ton)). A major source in a nonattainment area, under 40 CFR 
section 51.165, is a source that emits 100 tons per year or more of a 
pollutant subject to regulation under the Act. Under 40 CFR section 
51.166, a major source in an attainment area, is a source that emits 
100 tons per year or more of a pollutant subject to regulation under 
the Act if the source is a listed source category (refineries are a 
listed source category) and 250 tons per year or more of a pollutant 
subject to regulation under the Act if it is not a listed source 
category. Under the Title V operating permit regulations, 40 CFR 
section 70.2, a major source is a source that emits or has the 
potential to emit 100 tons per year or more of any pollutant. 
Therefore, based on our regulations, the modeled emissions from flares 
at each source, in and of themselves, are considered major. Also, as 
part of the attainment demonstration, the State assumed each of the 
refineries and MSCC had one flare; the cumulative flare emissions from 
all sources is 876 tons of SO2/year. We do not think flare emissions 
are inconsequential.
    Also, there is the real possibility that flares emit more than the 
modeled SO2 level. Following its flare velocity and energy performance 
test, Conoco estimated flare emissions from the flare header at its 
Billings refinery at approximately 91 lbs of SO2/hour (see document # 
IV.C-2). This is equivalent to 399 tons of SO2/year.
    Regarding the ambient impact of flare emissions, Bob Raisch's 
September 28, 1995 letter to us (document # II.B-18, first page of the 
enclosure to the letter) indicates that ``[t]he inclusion of routine 
flare emissions actually required lowering of the emission limitations 
at other sources within the refinery.'' Based on this statement, we 
believe that flares do have significant ambient impact.
    (11) Comment: One commenter (Cenex letter, document # IV.A-26) 
stated that over-reliance on or misapplication of three of our policy 
memoranda pertaining to excess emissions during startup and shutdown 
(i.e., the Bennett/Rasnic memos) has contributed to our concerns about 
the flare issue. Another commenter (MSCC letter, document # IV.A-19, 
comment #'s 55, 75) stated we cannot apply startup, shutdown and 
malfunction policy to events that cannot reasonably be controlled; that 
flares must be used during maintenance activities and neither industry 
nor the State agree with our interpretation that startup, shutdown and 
malfunction are avoidable.
    Response: We do not agree that our flare concerns stem from any 
over-reliance on or misapplication of our policy pertaining to excess 
emissions during startup, shutdown and malfunction. Our proposed 
disapproval of the SIP stems from the fact that gas streams are sent 
routinely to the flare to be burned, causing SO2 emissions from flares. 
The attainment demonstration assumes that flares are limited yet the 
SIP submitted by the State does not contain limitations on flares. 
Therefore, we believe that attainment of the SO2 NAAQS cannot be 
assured without limitations on flares.
    Earlier versions of the State's SIP (those submitted prior to the 
July 1998 submittal) contained exemptions from the flare limitations 
for startups, shutdowns and malfunctions. We were concerned about the 
automatic exemptions to emission limitations because attainment and 
maintenance of the SO2 NAAQS cannot be assured if exemptions to 
limitations are allowed. However, since the State removed the flare 
provisions from the SIP submitted to us, our concerns about startup, 
shutdown and malfunction were mooted. Note that our policy on excess 
emissions during startup, shutdown and malfunctions has been reaffirmed 
and reissued (document # IV.C-13).
    (12) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment #75) stated we insisted that the State model flares and that we 
objected long after the State made clear it would not regulate flare 
emissions.
    Response: We do not recall requiring the State to model flares. Our 
recollection is that we deferred to the State's judgement as to which 
flares should be explicitly modeled.
    Also, EPA did not wait until the last minute to voice concerns 
about flares. Our initial comments on the flare provisions date back to 
December 1994. In the following documents we provided comments on the 
flare provisions: December 15, 1994 letter from Douglas M. Skie, Chief, 
Air Programs Branch, EPA, to Jeffrey Chaffee, Acting Administrator, Air 
Quality Division, Montana Department of Health and Environmental 
Sciences (see document # IV.C-17); April 19, 1995 letter from Douglas 
M. Skie, Chief, Air Programs Branch, EPA, to Jeffrey Chaffee, 
Administrator, Air Quality Division, Montana Department of Health and 
Environmental Sciences (see document # IV.C-18); June 3, 1997 letter 
from Jack W. McGraw, Acting Regional Administrator, EPA, to Mark 
Simonich, Director, Montana Department of Environmental Quality (see 
document # II.C-8); March 6, 1998 letter from

[[Page 22183]]

Richard R. Long, Director, Air Program, EPA to Mark Simonich, Director, 
Montana Department of Environmental Quality (see document # II.C-10); 
and June 5, 1998 letter from Richard R. Long, Director, Air Program, 
EPA to Mark Simonich, Director, Montana Department of Environmental 
Quality (see document # II.E-7).
    (13) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment #75) stated the State carefully considered this and determined 
flares should not have federal limitations. Another commenter (McGarity 
letter, document # IV.B-1) stated that regulating emissions from flares 
is a technical area that state agencies around the country have 
struggled with. There are many valid technical difficulties associated 
with monitoring and controlling emissions from flares.
    Response: We do not agree with the commenter that the State 
carefully considered the flare issue and determined flares should not 
have federal limitations. Based on the State's comments submitted in 
response to our proposed action (see document # IV.A-23), the commenter 
is not representing the State's position accurately.
    In its comments to our proposed action (see document # IV.A-23, 
comment #3) the State said, ``[t]he State agrees with EPA that the SIP 
is incomplete without enforceable emission limitations applicable to 
flares, and that such limitations should correspond to the emission 
rates used in the attainment demonstrations. However, after significant 
effort to address the issue, the State was unable to find a workable 
solution that would meet EPA's concerns.''
    We agree with the commenter that it appears that state agencies 
across the country have struggled with limiting emissions from refinery 
flares. However, as indicated in response to comment # 7, above, it 
appears that there have been recent strides in reducing and measuring 
emissions from flares.
    (14) Comment: Two commenters (Cenex letter, document # IV.A-26; 
ExxonMobil letter, document # IV.A-28) stated that we should not 
disapprove the provisions that allow the burning of certain gas streams 
at Cenex and ExxonMobil in the flare because ExxonMobil and Cenex have 
a way to account for the emissions and under the State-only provisions 
the flare emissions are limited. Two commenters (YVCC letter, document 
# IV.A-29; Zaidlicz letter, document # IV.A-30) agree that sour water 
stripper emissions, if burned in the flare would be unregulated. These 
commenters stated that sour water stripper emissions should be sent to 
a sulfur recovery unit instead of burned in a combustion unit.
    Response: We proposed to disapprove provisions of the SIP that 
allow Cenex and ExxonMobil to burn sour water stripper emissions in the 
flare (in Cenex's exhibit sections 3(B)(2) and 4(D), only as they apply 
to flares, and in ExxonMobil's exhibit sections 3(E)(4) and 4(E), only 
as they apply to flares). Commenters stated we should not propose to 
disapprove these provisions since Cenex and ExxonMobil have methods to 
determine SO2 emissions when these specific gas streams are burned in 
the flare. Although we understand that the SIP provides a means to 
determine SO2 emissions when these gas streams are burned in the flare, 
the flare does not have any limitations that are enforceable under the 
federal SIP. Therefore, although the SO2 emissions from the gas streams 
burned in the flare can be accounted for, the emissions are not 
limited. We believe that attainment of the SO2 NAAQS can not be assured 
without enforceable limitations on the flare. We continue to believe 
that the provisions that allow the burning of sour water stripper 
emissions in Cenex and ExxonMobil's flare should be disapproved. 
However, in this action we cannot require that the sources be 
prohibited from burning sour water stripper emissions in a combustion 
unit or that they send the sour water stripper emissions to the sulfur 
recovery unit. We can only approve or disapprove the SIP as submitted 
by the State. Likewise, we cannot create any new requirements by our 
action on the SIP.
    (15) Comment: Several commenters (Conoco letter, document # IV.A-
24; Montana Petroleum Association letter, document # IV.A-27; 
ExxonMobil letter, document # IV.A-28) recommend that we conditionally 
approve, rather than disapprove, the SIP as it applies to flares, so 
that differences between us and the State can be worked out.
    Response: We cannot conditionally approve the SIP with respect to 
flares unless the Governor of Montana commits to revise the SIP to 
address our concerns. See section 110(k)(4) of the Act. At this time we 
have not received such a commitment.

D. Dispersion Modeling

    Based on our regulations and the characteristics of the Guideline 
models in appendix W, in our proposed rulemaking we found that the 
State of Montana used the appropriate computer models for analyzing the 
adequacy of the existing SIP and for setting emission limitations in 
the SIP revision to protect the SO2 NAAQS. However, for several reasons 
discussed in our proposed rulemaking and TSD we proposed to disapprove 
the attainment demonstration.
Summary of Comments and Response
    Two commenters believed that the dispersion modeling that formed 
the basis for both the 1993 letter and the attainment demonstration was 
invalid. Two commenters also proposed using other models for attainment 
demonstration purposes. One commenter wanted us to acknowledge that 
there were two modeling attainment demonstrations; one for the Laurel 
area and one for the Billings area.
    We have reviewed the comments received and still believe that 
Montana used the appropriate computer models for analyzing the adequacy 
of the existing SIP and for setting emission limitations in the SIP 
revision to protect the SO2 NAAQS. We also acknowledge that there are 
two modeling demonstrations.
    The following is a summary of the comments received and our 
response to the comments:
1. Validity of the Computer Models
    (a) Comment: Two commenters (MSCC letter, document # IV.A-19, 
comment # 1; MSCC letter, document # IV.A-20, comment # 8.B; Goetz 
letter, document # IV.A-18, exhibit D, comment # III, p. 43) stated 
that computer modeling of SO2 concentrations in the Billings/Laurel 
area was invalid because the models used by the State were screening 
models that over-predict concentrations. One of the commenters (MSCC 
letter, document # IV.A-20, comment # 3D) stated that EPA's conclusion 
that the existing SIP was inadequate was not based on the output of an 
Appendix A model.
    Response: We do not agree with the commenters that only screening 
models were used. We also disagree with the assertion that EPA's SIP 
Call was not based on the output of an appendix A model. Appendix A to 
appendix W of part 51, Summaries of Preferred Air Quality Models, 
provides key features of refined air quality models preferred for 
specific regulatory applications. In the modeling studies for both the 
SIP Call and the attainment demonstration of the revised SIP, an 
analysis was performed using the modeling techniques and data bases 
recommended in our ``Guideline on Air Quality Modeling (Revised)'' 
(``EPA Guideline'' or ``Guideline''). Our Guideline is found in 40 CFR 
part 51, appendix W.
    Two Guideline models were used. For ``simple terrain'' below the 
tops of stacks, the ISC2 model was used. ISC2,

[[Page 22184]]

a revised version of ISC, is a refined dispersion model that is 
preferred by EPA for a wide range of regulatory applications in simple 
terrain. See 40 CFR part 51, appendix W, section 4.1.a and appendix A 
to appendix W. ISC2 was listed in appendix A to the Guideline at the 
time the modeling analyses for the Billings/Laurel SIP were performed. 
(The current version of the Guideline lists ISC3 as a preferred model. 
See 40 CFR part 51, appendix A to appendix W, A.5. ISC3 is a more 
refined version of ISC2 and did not exist at the time of the modeling 
analyses for the Billings/Laurel area.) For terrain above the tops of 
stacks, COMPLEX I was used. This is a preferred screening technique, 
which is incorporated into ISC2 to evaluate concentrations of SO2 in 
``complex terrain.'' See appendix W at section 5.2.1. A screening model 
may over-predict concentrations or may under-predict concentrations in 
comparison to concentrations that will actually occur in the future. 
COMPLEX I is not an appendix A model; however, as mentioned above, it 
is part of ISC2/ISC3 which is an appendix A model. Section 5.2.1.a of 
the Guideline indicates that for complex terrain any of the identified 
screening techniques (including COMPLEX I) may be used consistent with 
the needs, resources and available data of the user. Section 5.2.2.a of 
the Guideline indicates that when results of the screen analysis 
demonstrate a possible violation of the NAAQS or the controlling PSD 
increments, a more refined analysis may need to be conducted. For 
reasons discussed later in this section, a more refined model could not 
be applied for complex terrain in the Billings/Laurel area.
    (b) Comment: One commenter, (MSCC letter, document # IV.A-19, 
comment # 6) stated that modeling is required under the Act only for 
reports to Congress and for prediction of the effect of emissions 
(presumably from new sources)--not for determination of SIP adequacy.
    Response: The statutory provision that authorizes the use of 
modeling is not limited as the comment suggests. Section 110(a)(2)(K) 
of the Act requires that all SIPs must

provide for--
    (i) the performance of such air quality modeling as the 
Administrator may prescribe for the purpose of predicting the effect 
on ambient air quality of any emissions of any air pollutant for 
which the Administrator has established a national ambient air 
quality standard, and
    (ii) the submission, upon request of data related to such air 
quality modeling to the Administrator.

    By its terms, this provision does not limit the use of modeling to 
making reports to Congress or permitting new sources. An essential 
function of air quality modeling is determination of SIP adequacy; so, 
too, is the establishment of emission limitations for existing sources 
as part of SIP development. Air quality modeling is, in fact, the only 
reliable means of determining the adequacy of an SO2 SIP to protect the 
NAAQS, as will be explained in more detail below.
    (c) Comment: Two commenters (MSCC letter, document # IV.A-19, 
comment # 107; Goetz letter, document # IV.A-18, exhibit D, comment #'s 
III.C, p. 46, and III.F, p. 55) stated that the models should have been 
validated in the Billings/Laurel area.
    Response: As EPA Guideline models, ISC2 and COMPLEX I have been 
standardized and validated through scientific study and application in 
many areas of the country. We authorize the direct use of Guideline 
models in regulatory applications such as SIP Calls and SIP 
development, ``without a formal demonstration of applicability'' in the 
local area, as long as the models are used as directed in appendix W. 
See 58 FR 38816, 38825 (July 20, 1993) (rulemaking by which our 
modeling guideline was codified as a regulatory requirement).
    Validation of the model in the local area where it will be applied 
is not required for any of the standardized Guideline models or 
approved screening techniques. On-site validation is required only for 
alternative models, which are proposed by industry or states to be used 
in lieu of our Guideline model. Industry in the Billings/Laurel area 
and the State of Montana did not propose to collect the necessary air 
quality/meteorological data and perform the statistical performance 
evaluation and comparison of models that would be necessary to apply an 
alternative model for the Billings/Laurel area SIP revision. If an 
alternative model could be shown to perform better than ISC2/COMPLEX I, 
it would yield somewhat more accurate predictions of ambient impacts of 
SO2 emissions, but such an effort would require a minimum of one year 
of on-site data gathering and considerable expense in research costs. 
The results of such a study could dictate the need for either higher or 
lower emission control limitations.
    (d) Comment: Two commenters (MSCC letter, document # IV.A-20, 
comment #'s 3.G and 3.S; Goetz letter, document # IV.A-18, exhibit D, 
comment # III.C, p. 46) stated that a prior agreement (1977 
Stipulation) required the State to validate any models used in the 
Billings/Laurel area, but that the State's 1984 studies showed that the 
model used was ``invalid'' for the area. The model determined to be 
invalid in 1984 is being used in the Billings/Laurel area now. The MDEQ 
has completed a ``performance evaluation'' of the model, not a 
validation study. One of the commenters (Goetz letter, document # IV.A-
18, comment # III, p. 43) stated that, in response to a SIP Call based 
on defective modeling, the State developed a SIP based on defective 
modeling.
    Response: Although our regulations do not require local validation 
of the models (see D.1.(c), above), MDEQ did perform an evaluation 
study in the Billings/Laurel area in 1994, using monitoring data to 
determine how accurately the models were performing. The evaluation 
study compared monitored data with modeled predictions for the same 
site. The evaluation study showed that model performance by ISC2 and 
COMPLEX I exceeded the levels of accuracy that we expected for this 
application and exceeded the performance of the models in similar tests 
elsewhere in the country. We do not believe the SIP Call and 
subsequently developed SIP are based on defective modeling. See also 
the response to Comment (g), below.
    (e) Comment: One commenter (Goetz letter, document # IV.A-18, 
exhibit D, comment # III.F, p. 56) stated that the 1994 evaluation 
study showed a failure to correlate modeled results and monitored data 
at 13 of 88 data points.
    Response: The evaluation study showed that the model passed the 
statistical test at 75 data points, an acceptable level. Moreover, the 
study showed that the ISC2/COMPLEX I model predicted concentrations 
within plus or minus 20 percent of monitored levels. This is an 
unusually high correlation. We would expect errors in the highest 
estimated concentrations of plus or minus 10 to 40 percent to be 
typical for models of this type. See the Guideline on Air Quality 
Models, appendix W at 10.1.2. (We would not expect the study to predict 
concentrations within a ``factor of two,'' the correlation which the 
commenter (Goetz letter, document # IV.A-18, exhibit D, comment # 
III.A, p. 44) attributed to us as an acceptable test of model 
performance.) Where the model failed the test, MDEQ attributed the 
discrepancy to an underestimate of actual SO2 emissions at Cenex, not a 
flaw in the model itself.
    (f) Comment: One commenter (Goetz letter, document # IV.A-18, 
exhibit D, comment # III.F) also stated that ISC2

[[Page 22185]]

should have been evaluated in elevated terrain near the tops of stacks.
    Response: Such an evaluation might be possible in an area that has 
a single source with only one or a few stacks. Because of the large 
number of stacks in Billings, all at different elevations, it would be 
impossible to establish a single value for ``stack-top'' elevation; 
such a study would not be meaningful. In any case, a local validation 
study is not required for a nationally validated model, such as ISC2/
COMPLEX I.
    (g) Comment: Two commenters (MSCC letter, document # IV.A-20, 
comment #; Goetz letter, document # IV.A-18, exhibit D, comment # 
III.C, p. 46) stated that MDEQ conducted a validation study of COMPLEX 
I in the Billings/Laurel area in 1983-84 and that the model failed 
miserably.
    Response: Having reviewed the test report (see document # IV.A-17, 
exhibit # 88), we conclude that this was not a true validation study. A 
true validation study of COMPLEX I would involve placing large numbers 
of temporary monitors, called ``sampling bags,'' on nearby hillsides 
and measuring the impacts of tracer gases emitted from individual 
stacks to determine which stacks are impacting which areas of elevated 
terrain. The data collected from the array of monitors would then be 
compared with modeled predictions based on real-time measured emissions 
from all the sources. We conducted studies of this kind, at great 
expense, to validate COMPLEX I and other dispersion models on a 
national level in the 1980's. Our validation studies showed that 
COMPLEX I did not perform as well as refined models, but performed well 
enough to serve as a screening tool for use in valley areas with 
multiple stacks, like the Billings/Laurel area.
    The State study in 1983-84 used the existing limited monitoring 
network of seven monitors, few of which were located in elevated 
terrain. Tracer gases were not employed, and SO2 emissions estimates 
for the Billings sources were unreliable at the time. The MDEQ's 
conclusion that COMPLEX I was not appropriate for modeling sources in 
Billings, as reported by one commenter (Goetz letter, document # IV.A-
18, exhibit D, comment III.C, p. 46), was based on an inadequate 
evaluation and is not pertinent to the validity of the SIP Call or the 
attainment demonstration.
    (h) Comment: One commenter (Goetz letter, document # IV.A-18, 
exhibit D, comment III.E, pp. 51-54) cited case law to support his 
assertion that the computer models that were used to develop the SIP 
for the Billings/Laurel area required on-site validation.
    Response: The cases cited in the comment are concerned with the 
less reliable models that predated the standardized Guideline models 
now incorporated into appendix W. For example, in State of Ohio v. 
United States EPA, 784 F.2d 224 (6th Cir. 1986), the Sixth Circuit held 
that EPA arbitrarily relied on the CRSTER computer model to set air 
pollution limitations for two electric utility plants on Lake Erie. The 
CRSTER model, now obsolete, was used to predict concentrations of SO2 
over the Lake under unusual meteorological and topographic conditions 
for which the model had not been validated. The facts in the Ohio case 
distinguish it from the Billings/Laurel area SO2 SIP. Unlike the CRSTER 
model, the models used for the Billings/Laurel area have performed well 
in similar applications elsewhere in the country involving similar 
topographic features and similar meteorological characteristics. There 
are no unusual conditions in the Billings/Laurel area that would tend 
to undermine the reliability of ISC2 and COMPLEX I; on-site validation 
would be redundant.
    (i) Comment: One commenter (MSCC letter, document # IV.A-20, 
comment # 8.A) stated that models must take into account the unique 
characteristics of the area where they are used and that modeling for 
the Billings/Laurel SIP failed to take the area's unique 
characteristics into account.
    Response: Modeling for the SIP considered all Billings/Laurel area 
sources, stack parameters, building dimensions, emission rates, terrain 
elevations, and five years of continuous meteorological data collected 
at a representative location. We believe that this data set adequately 
accounts for the unique characteristics of the area.
    (j) Comment: One commenter (Goetz letter, document # IV.A-18, 
exhibit D, comment # III.E. p. 52) quoted the State of Ohio opinion as 
supporting the position that ``EPA's own guidelines'' recognize the 
importance of validating a model with monitored data from the local 
area.
    Response: The ``guidelines'' referred to have been superseded. The 
court was referring to the 1978 version of the EPA Guideline on Air 
Quality Models 6, which did encourage local validation. This version 
was superseded in 1986 by an extensive revision of the Guideline. At 
that time, we conducted national validation studies on all existing 
computer models and replaced some of them with more reliable models. In 
1993, the revised Guideline was incorporated directly into 40 CFR part 
51 as appendix W. See 58 FR 38816 (July 20, 1993).
    (k) Comment: One commenter (Goetz letter, document # IV.A-18, 
exhibit D, comment # III.E. p. 53-54) also cited Cincinnati Gas & 
Electric Co. v. Environmental Protection Agency, 578 F.2d 660 (6th Cir. 
1978) and Columbus & Southern Ohio Elec. Co. v. Costle (638 F.2d 910 
(6th Cir. 1980) as indicating the necessity for on-site validation.
    Response: In these cases, the Sixth Circuit remanded regulatory 
decisions to EPA when the agency's model (MAXT-24) used assumptions 
that were successfully challenged by local studies. The MAXT-24 model, 
again, has been superseded nationally and is not an EPA Guideline 
model. These cases do not discredit the application of nationally 
validated Guideline models, ISC2 and COMPLEX I, in the Billings/Laurel 
area.
2. Effect of ``Contradictory'' Monitoring Data
    (a) Comment: Two commenters (MSCC letter, document # IV.A-19, 
comment # 1; MSCC letter, document # IV.A-20, comment #'s 3.H and 3.I; 
Goetz letter, document # IV.A-18, exhibit D, comment #'s III.A and 
III.B, pp. 44-45) stated that ambient air monitoring is more accurate 
than computer modeling and that monitoring data for the Billings/Laurel 
area do not support the models' predicted violations of the SO2 NAAQS. 
One commenter (MSCC letter, document # IV.A-19, comment # 119) 
suggested that rather than issuing a SIP Call, we should have 
questioned how our models or the State's monitors could be so far 
wrong.
    Response: Monitoring is not more accurate than computer modeling, 
except for determining ambient concentrations under real-time 
conditions at a discrete location. Monitoring is limited in time as 
well as space. Monitoring can only measure pollutant concentrations as 
they occur; it cannot predict future concentrations when emission 
levels and meteorological conditions may differ from present 
conditions. Computer modeling, on the other hand, can analyze all 
possible conditions to predict concentrations that may not have 
occurred yet but could occur in the future. As stated in the Guideline 
on Air Quality Models (``the Guideline'') ``[m]odeling is the preferred 
method for determining emission limitations for both new and existing 
sources. When a preferred model is available, model results alone 
(including background) are sufficient.'' 40 CFR part 51, appendix W, 
section 11.2.2. In the usual case, regulators may rely on the results 
of modeling and are not required to

[[Page 22186]]

consider measured data from local ambient monitoring.
    (b) Comment: One commenter (Goetz letter, document # IV.A-18, 
exhibit D, comment # III.A, p. 44) stated that monitoring data may 
reasonably be used as an acceptable technique to demonstrate that the 
air quality in a region is being protected; monitoring data are facts, 
while models use assumptions.
    Response: The Guideline states, ``Due to limitations in the spatial 
and temporal coverage of air quality measurements, monitoring data 
normally are not sufficient as the sole basis for demonstrating the 
adequacy of emission limits for existing sources.'' Forty CFR part 51, 
appendix W, section 1.0.b. The use of measured data in lieu of model 
predictions for SIP development is discouraged, because it is 
impossible to capture worst case conditions, for either emission levels 
or meteorology, with only a few monitors. Monitored data may be used in 
certain, limited circumstances and only if monitors are located at 
points of maximum concentration. See id. at section 11.2.2. Even then, 
locations of maximum concentration may not remain the same, but may 
change from year to year in response to changes in emission patterns 
and emission rates from existing sources, installation of new emission 
sources, and meteorological variability.
    Even the most extensive monitoring network does not represent 
future concentrations of pollutants and thus cannot predict future 
violations. Modeling, on the other hand, can predict for all possible 
conditions and can show how well the emission limitations in the SIP 
will protect air quality under future conditions. Modeling assumes the 
maximum emission levels allowed under applicable emission limitations 
and assumes worst case meteorological conditions based on evidence of 
historical meteorological patterns. Models operate on assumptions, but 
the assumptions are based on facts. The models analyze the combined 
effects of the worst case values of the two variables (emission levels 
and meteorology) on ambient concentrations of pollutants at a multitude 
of ``receptors'' or sites, to predict maximum concentrations that may 
not have occurred yet, but could occur in the future.
    In general, appendix W and the Guideline models have been adopted 
by rulemaking in accordance with the Administrative Procedures Act. 
They may not be challenged in this action; they could have been 
challenged only by timely petition to the U.S. Court of Appeals for the 
D.C. Circuit in accordance with section 307(b) of the Act.
    (c) Comment: Two commenters (MSCC letter, document # IV.A-19, 
comment # 1; Goetz letter, document # IV.A-18, exhibit D, comment # 
III, p. 43) stated that we ignored contradictory information from the 
monitors in favor of modeling when we issued the 1993 letter, thus 
invalidating the SIP Call.
    Response: Historically, the seven monitors in the Billings/Laurel 
area (the State added a new monitor in 1999) have not measured 
violations of the SO2 standards. We were aware of the non-supportive 
monitoring information at the time of the 1993 letter and discussed the 
data in our letter (see document # II.G-1). There we cited cases that 
approve EPA's reliance on modeling results in the face of apparently 
contrary monitoring data. In Northern Plains Resource Council v. U.S. 
Environmental Protection Agency, 645 F. 2d 1349 (9th Cir. 1981), for 
example, the court held that EPA's reliance on a model would be 
arbitrary and capricious only if ``EPA ignored reliable data that so 
undermined EPA model projections that reliance on the model was 
irrational.'' See 645 F.2d at 1362.
    In the SIP Call, we are not ignoring reliable data. We analyzed the 
available monitoring data, compared it with modeling results, and 
determined that it did not undermine the modeling results because the 
data had not been obtained at locations where the models predicted 
maximum concentrations of SO2. In addition, real time monitoring data 
was available to the operators of some of the industry sources, who 
could have controlled their operations to avoid NAAQS exceedances when 
concentrations approached critical levels. For these reasons, we 
conclude that the lack of monitored violations do not undermine the 
models' projections.
    (d) Comment: Two commenters (MSCC letter, document # IV.A-20, 
comment # 3.L; Goetz letter, document # IV.A-18, exhibit D, comment # 
III.B, p. 45) stated that, after the 1993 letter, the State moved its 
monitors to two of the locations where maximum concentrations were 
predicted, but that these monitors still have not registered violations 
of the SO2 NAAQS.
    Response: The monitors' failure to register violations is not 
surprising. Information provided by the sources and MDEQ indicates that 
actual emissions have declined since 1993. Modeling can analyze the 
combined effects of the highest allowable emission levels and worst-
case meteorological events at numerous receptors to predict violations. 
Any one monitor is unlikely to measure such synchronous events at a 
single location. When actual emission levels are lower than allowable 
emissions and, as in the Billings/Laurel area, are actually declining, 
monitored levels cannot be expected to match computer modeling results.
    In Northern Plains Resource Council, the Ninth Circuit observed 
that monitored data can only be used to validate (or, by implication, 
invalidate) a model, if the data are collected under the same 
conditions for which the model is predicting ambient concentrations. 
See 645 F.2d at 1364. For the Billings/Laurel SIP Call, the model 
predicted violations at allowable levels, the maximum levels of 
emissions permitted under the existing SIP. It is unlikely that the 
sources in the area were emitting SO2 at maximum allowable levels at 
the same time, during the most adverse meteorological conditions. 
Furthermore, even now, monitors are not located at many locations where 
the SIP Call modeling indicated NAAQS violations. Therefore, the 
monitoring data were not collected under the same conditions for which 
the models were predicting violations. Although these conditions may 
not have occurred yet, they can occur in the future. The SIP Call is 
necessary to protect the air quality in the Billings/Laurel area now 
and in the future.
    The same point was made in another case, PPG Industries, Inc. v. 
Costle, 630 F.2d 462 (6th Cir. 1980). There the court agreed with EPA 
that ``projected future violations may provide the basis for a 
nonattainment designation in currently clean areas.'' 630 F.2d at 464. 
Contrary monitoring data would not necessarily bar a nonattainment 
designation (or a SIP Call) based on modeling to protect the NAAQS in 
the future. The court held that ``EPA need only offer record support of 
the accuracy of the model used.'' Id. at 467. Record support for the 
model used for the Billings/Laurel SIP Call is provided by the EPA 
Guideline, appendix W.
    The PPG Industries court observed that if EPA based its action on 
predictions of future violations, ``monitored data which merely show 
historical attainment of air quality standards'' do not undermine the 
agency's decision. Id. at 468. The monitored data being offered to 
contradict modeling results must show that the modeled predictions are 
``unsupportable.'' Id. The commenters have not shown that the modeled 
predictions of violations in Billings/Laurel are unsupportable in 
comparison to monitoring data, for the reasons already cited--the lack 
of monitoring

[[Page 22187]]

data from locations of predicted maximum concentrations, the lack of 
monitoring data for impacts of maximum allowable emissions, the 
possibility that source operators changed operations when feedback from 
monitors indicated concentrations of SO2 approaching the critical 
values, and the possibility that sources were emitting at reduced 
levels when the most adverse meteorological conditions occurred.
3. Usefulness of More Refined Models
    (a) Comment: Two commenters (MSCC letter, document # IV.A-20, 
comment #'s 3.T, 3.U, and 8C; Goetz letter, document # IV.A-18, exhibit 
D, comment #'s III.D.3, pp. 50-51) stated that a more refined computer 
model should have been used to develop the revised SIP for the 
Billings/Laurel area. They commented that the CTDMPLUS model, in 
particular, is more accurate and predicts lower concentrations in areas 
of complex terrain than COMPLEX I. These commenters pointed out that 
CTDMPLUS was used instead of COMPLEX I to develop the SO2 SIP for East 
Helena, Montana.
    Response: The Billings/Laurel area differs in several respects from 
the East Helena area. East Helena has only one significant source of 
SO2, the Asarco lead smelter. The smelter has three tall stacks that 
emit most of the source's SO2. In the Billings/Laurel area, there are 
seven industrial sources with a combined total of several dozen 
different stacks that must be modeled. CTDMPLUS is limited in its 
ability to consider the impacts of more than a few emission points at 
the same time. The complexity involved in applying CTDMPLUS to develop 
emission limitations and show attainment for so many different emission 
points would make the modeling analysis infeasible in the Billings/
Laurel area. The complexity of the analysis would also preclude the use 
of variable emission limitations, which are now in place at some of the 
Billings/Laurel sources.
    In addition, it is not possible to accurately apply CTDMPLUS 
without a scientifically rigorous set of local meteorological data. 
Such data were available for East Helena, but not for the Billings/
Laurel area. In East Helena, Asarco collected the appropriate on-site 
meteorological data for use in CTDM-PLUS modeling, including upper air 
measurements that were representative of conditions at plume height. 
The meteorological monitoring program was submitted to EPA and MDEQ in 
August 1992 for approval, and data collection began in May 1993. There 
are no similar data available in the Billings area for application of 
CTDMPLUS.
    (b) Comment: Two commenters (MSCC letter, document # IV.A-19, 
comment # 54; MSCC letter, document # IV.A-20, document # 3V; Goetz 
letter, document # IV.A-18, exhibit D, comment #'s III.D.3, p. 51; 
III.H, p.59) stated that MSCC proposed to gather the necessary 
meteorological data for the Billings/Laurel area. These commenters 
asserted that MDEQ's and EPA's failure to approve the proposal resulted 
in an arbitrary and capricious reliance on an outdated and over-
predictive screening model (COMPLEX I).
    Response: MSCC submitted a meteorological monitoring proposal in 
1996, nearly three years after the modeling protocol for Billings/
Laurel was developed and applied. Within a month of receiving MSCC's 
meteorological monitoring proposal from MDEQ, we reviewed it and 
responded that the proposal raised serious problems that could 
potentially invalidate any data collected. See letter from Kevin 
Golden, EPA, to John Coefield, MDEQ, September 26, 1996 (document # 
IV.C-28). To our knowledge, the company did not revise and re-submit 
its proposal.
    (c) Comment: Two commenters (MSCC letter, document # IV.A-20, 
comment # 3.U; Goetz letter, document # IV.A-18, exhibit D, comment # 
III.D.1 and 2, p. 48) stated that MSCC's consultant, Michael Machler, 
applied CTDMPLUS in modeling tests at a site in Billings called 
Sacrifice Cliffs, located in elevated terrain. The results were 50-60 
percent lower than those predicted by COMPLEX I and were in close 
agreement with monitoring data at the site, which indicated levels one-
half to one-third the concentrations predicted by COMPLEX I.
    Response: One of the commenters (Goetz letter, document # IV.A-18, 
exhibit D, comment # III.D.3) admitted that meteorological data from 
East Helena were used for these modeling tests, because the specific 
data inputs needed for the model were not available for Billings. For 
CTDMPLUS, unlike ISC2/COMPLEX I, predictions may be very sensitive to 
changes in upper air meteorological conditions, such as plume altitude, 
wind, and turbulence. These conditions must be measured locally to 
generate appropriate data inputs for the model. Using critical 
meteorological data from another site would invalidate any testing with 
CTDMPLUS. In addition, a single monitor is insufficient to test any 
model. In areas such as Billings, where SO2 concentration gradients are 
high (i.e., a significant change in concentrations between receptor 
points), a dense monitoring network is necessary to adequately test a 
model.\16\
---------------------------------------------------------------------------

    \16\ ``Interim Procedures for Evaluating Air Quality Models 
(Revised),'' EPA-450/4-84-023, September 1984, page 48 (document # 
IV.C-78).
---------------------------------------------------------------------------

    (d) Comment: One commenter (Conoco letter, document # IV.A-24, p.3) 
suggested that if we believe the SIP needs to be modeled again to 
address the modeling concerns EPA raised in the proposed rulemaking, we 
should consider using the CALPUFF model for future modeling. The 
commenter noted that CALPUFF was used in a study in West Virginia and 
Ohio to establish SO2 controls within the study area. Another commenter 
(Goetz, document # IV.A-18, exhibit D, comment # III.D.2) stated that 
MSCC's consultant, Michael Machler suggested that CALPUFF could be used 
in the Billings/Laurel area.
    Response: We do not agree that CALPUFF should be used in the 
Billings/Laurel area. CALPUFF is a refined model that has been applied 
in complex terrain, but is not listed in the Guideline on Air Quality 
Models as a preferred model. It is not appropriate for regulatory 
applications, without further study. A similar model, MESOPUFF, is 
listed in appendix W for evaluating long-range transport issues (i.e., 
distances greater than 50 kilometers from the source). This model would 
not be considered appropriate, however, for evaluating near-source 
impacts, such as those evident in the Billings/Laurel area. Ohio and 
West Virginia used CALPUFF in a non-guideline application, following 
the protocol for an on-site modeling evaluation study provided in 
appendix W, section 3.2 (``Use of Alternative Models''). Alternative 
models are used on a case-by-case basis, when the EPA Regional Office 
believes such use is justified. We do not believe that application of 
CALPUFF is appropriate for the Billings/Laurel area at this time 
because its applicability has not been established (or even proposed).
    (e) Comment: One commenter (Goetz letter, document # IV.A-18, 
exhibit D, comment # III.D.2, p. 49) indicated that Michael Machler, a 
consultant for MSCC, suggested that another model, AERMOD, be used in 
complex terrain.
    Response: AERMOD is a new model that was not available when the SIP 
modeling protocol was developed in 1993. It has been discussed as a 
possible future replacement for ISC in the modeling Guideline. At this 
time, it has not been proposed for public review and comment. Reviewing 
all the facts, we conclude that MDEQ used the best

[[Page 22188]]

available models to perform computer modeling for the Billings/Laurel 
SIP.
    (f) Comment: One commenter (Goetz letter, document # IV.A-18, 
exhibit D, comment # III.D, p. 47) stated that the modeling receptor on 
Sacrifice Cliffs is the most controlling and ``drives the entire SIP,'' 
implying that modeling for complex terrain is the most critical element 
of the attainment demonstration and that a refined model should have 
been used for complex terrain. The commenter also stated that the most 
controlling receptors for MSCC, ExxonMobil and YELP are not on 
Sacrifice Cliffs, but in the hills to the south.
    Response: There are in fact a number of different receptor sites 
where predicted concentrations of SO2 in the pre-SIP revision scenarios 
exceeded the SO2 NAAQS, both in complex terrain and in simple terrain. 
There is not one receptor site that is most controlling for the SIP. 
Many of the sources in the current SIP attainment demonstration have 
emission limitations based on predictions from ISC2, the refined EPA 
Guideline model. Other sources are controlled based on the approved 
screening model, COMPLEX I.
    It is not clear what the commenter means by ``controlling 
receptors'' for various sources. As one might expect, the maximum 
incremental contributions from each source generally were predicted to 
occur close to that individual source. If a receptor location close to 
a specific source is predicted to exceed the NAAQS, the State would 
have the option of controlling emissions from the nearby source, or 
reducing emissions from the ``background sources.'' Given the large 
number of facilities and emission points in the Billings/Laurel area, 
emission reductions were needed from a number of sources to show NAAQS 
attainment at all receptors.
    (g) Comment: One commenter (Goetz letter, document # IV.A-18, 
exhibit D, comment #'s III.D.3, p.50; III.H, p. 59) stated that using 
the less refined, less accurate COMPLEX I model for complex terrain for 
the SIP Call and SIP modeling is entirely arbitrary and capricious.
    Response: COMPLEX I is a Guideline screening model, and its 
application is appropriate under our regulations as long as it is 
applied as directed by appendix W. COMPLEX I results may be used for 
all regulatory purposes unless a refined model is available, which was 
not the case for the Billings/Laurel area. If any approved model were 
to over-predict ambient concentrations and call for more restrictive 
emission limitations than a hypothetical, more refined model, the 
modeled attainment demonstration would not be invalid. Courts have 
accepted that a certain level of over-prediction is allowed by the Act. 
In Cleveland Electric Illuminating Co. v. EPA, 572 F.2d 1150 (6th Cir. 
1978) cert. den. 439 U.S. 910, 99 S.Ct. 278 (1978), for example, the 
Sixth Circuit approved EPA's reliance on an earlier computer model 
(RAM) for setting SO2 limitations in a federal implementation plan, 
even though an industry study showed that the RAM model over-predicted 
violations and was contradicted by data from ambient monitoring.
    The court observed:

    SO2 emissions have a direct impact upon the health and the lives 
of the population of Ohio--particularly its young people, its sick 
people, and its old people. If the RAM model did over-predict 
emission rates, such a conservative approach was apparently 
contemplated by Congress in requiring that EPA plans contain 
``emission limitations * * * necessary to insure attainment and 
maintenance'' of national ambient air standards. 572 F.2d at 1164 
(emphasis in original) (citing former 42 U.S.C. section 1857c-
5(a)(2)(B), now revised and recodified at 42 U.S.C. 7410(a)(2)).
4. Inputs Used in Computer Models
    (a) Comment: One commenter (Goetz letter, document # IV.A-18, 
exhibit D, comment # III.G, pp. 57-58) stated that the use of non-local 
meteorological data ``exacerbates the arbitrariness'' of the computer 
modeling; the commenter objected to the use of data from Great Falls, 
Montana and from the Billings airport. Another commenter (MSCC letter, 
document # IV.A-20, comment # 8.D) also criticized us for using non-
local data in the models.
    Response: The computer modeling was not rendered unreliable by the 
use of non-local meteorological data. The modeling protocol that was 
used for the SIP revision was developed by the State in early 1993 and 
approved by us in August 1993. The protocol development process 
included substantial input and comments from the public, including 
industry groups and their constituents. No meteorological towers or 
vertical temperature soundings were available in the Billings/Laurel 
area to provide on-site data for upper air conditions, one component of 
the meteorological data needed for computer modeling. Instead, MDEQ 
used representative data from Great Falls, which, although 180 miles 
from Billings/Laurel, is similarly located on the high plains to the 
east of the Rocky Mountains. Thus MDEQ made use of available data for 
upper air conditions that were most representative of the conditions in 
the Billings/Laurel area. This approach is approved by us. See 40 CFR 
part 51, appendix W, section 9.3.
    MDEQ used temperature sounding data from Great Falls in the ISC2/
COMPLEX I model to determine mixing height. For point source emissions 
with significant plume rise, such as the emissions from the Billings/
Laurel sources, predicted concentrations from ISC2/COMPLEX I are 
relatively insensitive to changes in mixing height, and use of non-
local meteorological data for this purpose would not make a significant 
difference. CTDMPLUS, by contrast, requires considerably more detailed 
upper air input information than ISC2. CTDMPLUS predictions may be very 
sensitive to changes in several conditions that can only be measured 
with a meteorological tower, such as plume altitude, wind, and 
turbulence. As we discussed in section V.D.3.a, above, specialized 
local meteorological data, which were unavailable for the Billings/
Laurel area, would be needed to apply this model accurately.
    (b) Comment: One commenter (Goetz letter, document # IV.A-18, 
exhibit D, comment # III.G) stated that MDEQ improperly used data from 
the Billings airport to represent meteorological conditions in the 
lower atmosphere, that this location is not representative, because it 
is miles from both the sources and the critical receptors, and that 
data from the ambient monitors should have been used.
    Response: We agree with MDEQ that the Billings airport data are 
representative of the area. Meteorological data from the ambient 
monitors at Lockwood Park, Brickyard Lane, Coburn Road and Laurel were 
not used because these monitors, located in the Yellowstone River 
Valley, are subject to variable ground-level conditions and are not 
representative of conditions affecting plume-height emissions as they 
are transported over the valley. The most representative data available 
were those obtained at the airport, which is located on a bluff above 
the valley, not subject to localized meteorological effects that occur 
along the valley floor.
    (c) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment # 1; MSCC letter, document # IV.A-20, comment #'s 3M, 3O) 
stated that the SIP Call is flawed because the modeling used factually 
inaccurate assumptions for emission rates, stack parameters, and other 
factors.
    Response: The SIP Call modeling used data inputs from an earlier 
emissions inventory that did contain some errors. These errors were 
corrected, and the corrected inputs were used in the modeling for SIP 
development. The SIP

[[Page 22189]]

Call modeling showed NAAQS violations at many sites at allowable 
emission levels. With corrected inputs, the modeling continued to 
predict NAAQS violations as much as two times over the national 
standard, thus supporting the SIP Call.
    (d) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment # 108) stated that CEMS data now indicate an error in the 
assumed buoyancy flux for MSCC's main stack; the current modeling 
protocol contains an assumption which significantly underestimates the 
average rise in emissions. Any revised modeling should correct this 
assumption.
    Response: We agree that future modeling should include all 
corrected data. In any modeling analysis, input data are based on the 
best available information at the time of the analysis. CEMS 
measurements of flow and temperature data provide the best estimates of 
stack parameters, and values based on CEMS data should be used in any 
future SIP modeling for Billings provided the CEMS data are accurate. 
Other data inputs have been corrected and added, as we discussed in the 
TSD for this rulemaking (document # III.B-1). Any future modeling in 
the Billings/Laurel area should incorporate all corrections. The SIP 
limitations are based on the best information available at the time the 
attainment demonstration was modeled, and the same will be true for any 
FIP limitations that are developed.
    (e) Comment: MSCC's consultant, Michael Machler, stated that he had 
identified problems in the past with the way mixing heights are 
calculated in dispersion modeling. He stated that EPA has apparently 
corrected the problem and that ISC3, the newer version of the ISC2 
model used for the Billings/Laurel SIP, now provides for more accurate 
calculations of mixing height. The modeling for the SIP used the older 
version, however, and has not been updated with respect to calculation 
of mixing heights. See Goetz letter, document # IV.A-18, exhibit E, 
page 1.
    Response: In 1994, when the State performed the modeling for the 
attainment demonstration, MDEQ used the most accurate information and 
the best data base available at the time. ISC2 was then the preferred 
Guideline model. The newer ISC3 is comparatively more refined, but the 
correction in calculation of mixing heights would not make a 
significant difference in this case, because the Billings SIP modeling 
predictions (ISC2 and COMPLEXI) are relatively insensitive to changes 
in mixing height. We would not expect to see any significant changes in 
predicted concentrations with the newer version of the model. In 
addition, dispersion models and data bases are continually being 
improved. The task of demonstrating attainment could never be completed 
if we or the State were compelled to update the analysis with each new 
refinement. For the FIP, we intend to continue to use ISC2 as the 
applicable model to fill in the gaps in the State's attainment 
demonstration created by our disapproval of the emission limitations 
for MSCC's 100-meter stack. Some source parameters have been corrected 
since the 1994 modeling analysis (see Response V.D.4.(d), above), but 
we intend to use the same meteorological data and modeling protocols 
the State used, so that the results will be comparable.
5. Two Modeling Demonstrations
    (a) Comment: One commenter (State letter, document # IV.A-23) 
stated that we did not acknowledge that Montana submitted two separate 
attainment demonstrations for SO2--one for the Billings area and one 
for the Laurel area. The commenter indicated that the Laurel area was 
modeled assuming the SIP prescribed emission limitations for Cenex and 
the pre-SIP potential emissions for the Billings sources. Therefore, 
the Laurel SIP demonstrates compliance with the NAAQS regardless of 
whether a revised SIP is approved and implemented in Billings. The 
Billings area was modeled assuming all sources in the Laurel and 
Billings areas are at SIP prescribed emission rates. Therefore, the 
Billings SIP depends upon approval of the Laurel SIP to demonstrate 
attainment. The commenter is requesting that we acknowledge the two 
attainment demonstrations in our final action and treat the two 
separately in that action.
    Response: We agree with the commenter and acknowledge that there 
are two attainment demonstrations--one for the Billings area and one 
for the Laurel area. However, since the flare issue applies to sources 
in both Billings and in Laurel, we still believe the attainment 
demonstration for both areas should be disapproved for lack of 
enforceable flare emissions at the applicable sources. See flare 
discussion in section C, above.

E. EPA'S Partial Approval

    In our July 28, 1999 action (64 FR 40791), we proposed to partially 
approve, conditionally approve and partially disapprove the Billings/
Laurel SO2 SIP.
Summary of Comments and Response
    Two commenters objected because we did not fully approve the SIP. 
Among other things, the commenters stated that our proposed action 
intruded on State responsibility; raised Tenth Amendment concerns; and 
may violate the U.S. Constitution. One commenter submitted concerns 
regarding the conditional approval.
    We have considered the comments received and still believe our 
proposal to partially approve and partially disapprove\17\ the 
Billings/Laurel SO2 SIP was a correct action.
---------------------------------------------------------------------------

    \17\ We had also proposed to conditionally approve the SIP. On 
May 4, 2000 the Governor of Montana submitted a SIP revision to 
fulfill the commitments on which the proposed conditional approval 
was based. Since the Governor has fulfilled has commitment, we 
believe it is not appropriate to finalize the conditional approval. 
Instead, we will complete notice-and-comment rulemaking on those 
portions of the July 29, 1998 submittal we proposed to conditionally 
approve on July 28, 1999 and all of the May 4, 2000 submittal.
---------------------------------------------------------------------------

    The following is a summary of the comments received and our 
response to the comments.
1. Intrusion Into State Regulatory Decision
    (a) Comment: More than one commenter (Goetz letter, document #IV.A-
18, exhibit D, pp.61-63; MSCC letter, document #IV.A-19, comment #16; 
MSCC letter, document #IV.A-20, comment #1.C) argued that EPA's 
proposed action intrudes on the primary responsibility of State and 
local governments to implement the Clean Air Act. In the view of one of 
the commenters (Goetz), it is the State's role to balance the interests 
of the seven emitting sources in the Billings/Laurel area, and EPA has 
no authority to disturb the balance the State has struck. The commenter 
claimed that EPA may not approve the emission limits for some of the 
sources while disapproving MSCC's emission limits. According to the 
commenter, if EPA is going to disapprove MSCC's limits, the whole SIP 
should be remanded to the State to allow the State to re-evaluate the 
entire mix of emission limits in the area. The commenter cited case law 
to support these comments, including case law that suggests that EPA 
may not interfere with the State's choices of emission limitations as 
long as the NAAQS are met. The commenter also cited case law from the 
7th Circuit that suggests that EPA may not render a SIP more stringent 
through partial approval. In the commenter's view, EPA's proposed 
actions trigger serious Tenth Amendment concerns.
    Response: We agree that the Act grants the States the primary

[[Page 22190]]

responsibility to select emissions limitations for sources. However, 
the Act also reserves to us a fundamental responsibility to ensure that 
SIPs meet the requirements of the Act. See, e.g., Union Electric 
Company v. EPA, 96 S.Ct. 2518 (1976); sections 110(a)(2)(A), 110(k), 
and 110(l) of the Act. In the instant case, our responsibility is 
broader than the commenter portrays it--yes, we must ensure that the 
SIP shows attainment of the NAAQS, but we must also ensure that the SIP 
meets the requirements of section 123 of the Act and our stack height 
regulations in showing attainment. Congress understood that emissions 
controls and dispersion through tall stacks were two different means to 
attainment of the NAAQS. Congress chose to restrict the use of 
dispersion techniques to meet the NAAQS and directed us to adopt 
regulations to carry out this restriction. In this case, one reason we 
cannot fully approve the Billings/Laurel SIP is that MSCC's emission 
limits are based on stack height credit that is inconsistent with our 
stack height regulations.
    Another reason we cannot fully approve the SIP is that the State's 
submission lacks enforceable emission limitations on flares. Without 
enforceable limitations on these sources of SO2 emissions, the SIP 
fails to satisfy the requirement of section 110(a)(2)(A) of the Act 
that each plan include ``enforceable emission limitations . . . as may 
be necessary or appropriate to meet the applicable requirements of this 
chapter.'' MDEQ established a State-only limitation on flare emissions. 
Modeling demonstrates that the limitation is necessary to protect the 
NAAQS. Unless an equivalent limitation is included in the federally 
enforceable SIP, the implementation plan for the Billings/Laurel area 
will be deficient, because it does not fully meet the planning 
requirements of section 110 of the Act nor adequately protect air 
quality in the area. For this reason as well, we are disapproving the 
attainment demonstration.
    We do not believe that our action to disapprove the attainment 
demonstration and MSCC's emission limits is inconsistent with the cases 
the commenter has cited. Once we have determined that a portion of a 
SIP is inadequate, section 110(k)(3) of the Act grants us the authority 
to partially approve parts of a SIP that are consistent with the Act's 
requirements, while disapproving parts that are inconsistent with the 
Act's requirements. That is what we are doing here--we are disapproving 
MSCC's emission limits because they are inconsistent with the 
requirements of the Act and our regulations. We are not obligated to 
uphold a State's balancing of emission limits among relevant sources 
where the State's emission limits for one of the sources do not meet 
the requirements of the Act. We have no authority to ``remand'' a SIP 
to a State, as the commenter suggests. Instead, we have approval and 
disapproval authorities provided by the Act, and once we disapprove all 
or part of a required SIP, we have an obligation to issue a FIP 
pursuant to section 110(c) of the Act.
    It is only through a FIP that we would determine substitute 
emission limits for MSCC, as the 7th Circuit case cited by the 
commenter clearly states. Thus, as discussed further in section 
V.E.1.d, below, our disapproval of MSCC's emission limits does not 
render the SIP more stringent than the State intended.
    We do not believe our partial disapproval triggers Tenth Amendment 
concerns. States are not coerced by the provisions of the Act directing 
them to adopt SIPs; the federal government may bear the regulatory 
burden in whole or in part, instead. See, Commonwealth of Virginia v. 
Browner, 80 F.3d 869, 882 (4th Cir. 1996). The State remains free to 
revise the SIP emission limits for MSCC and for other sources as well, 
but before we will approve such a revision, the revision must meet the 
requirements of the Act and our regulations, including stack height 
requirements. This issue is further discussed in section V.E.2, below.
    (b) Comment: One commenter stated that the court in Commonwealth of 
Virginia v. Environmental Protection Agency (108 F.3d 1397 (D.C.Cir. 
1997)) held that Section 110 of the Act did not confer upon EPA the 
authority to condition our approval of the plan of any state on the 
state's adoption of a specific control measure, and that we could not 
condition approval of the Billings/Laurel SO2 SIP on a particular 
emission limitation for MSCC's 100-meter stack. See Goetz letter, 
document #IV.A-18, exhibit D, comment #V, p. 63.
    Response: We agree with the commenter that this is a correct 
statement of the holding in Commonwealth of Virginia. However, in this 
case we are not conditioning approval of the Billings/Laurel SO2 SIP on 
the State's adoption of a specific control measure. We are disapproving 
an emission limitation (i.e., 100-meter stack emission limitation) 
because it violates the prohibition of section 123 of the Act on giving 
credit for stack heights in excess of good engineering practice.\18\ 
The State nevertheless remains free to devise specific emission 
limitations for the sources, provided it can demonstrate that the 
selected limits will insure attainment of the NAAQS and the limits meet 
the requirements of section 110(a)(2) of the Act.
---------------------------------------------------------------------------

    \18\ We are also disapproving the escape clause in all the 
stipulations, MSCC auxiliary vent stack emission limit, the 
attainment demonstration (because of the stack height issue, flare 
issue and auxiliary vent stack issue), the provisions that allow 
sour water stripper emissions to be burned in the flare at Cenex and 
ExxonMobil, and the plan for failing to meet RACM/RACT.
---------------------------------------------------------------------------

    The commenter cited an earlier Supreme Court opinion (Train v. 
Natural Resources Defense Council, 421 U.S. 60 (1975)) to support his 
position that we lack authority to disapprove the emission limitation 
for MSCC's 100-foot stack. That opinion, quoted in Commonwealth of 
Virginia, held that EPA does not have authority to disapprove a State's 
choice of emission limitations if they are part of a plan which, as a 
whole, satisfies the requirements of section 110(a)(2) of the Act. 
According to the Train court, EPA may disapprove a State's plan and 
promulgate a FIP only if the State's plan does not protect the NAAQS. 
Otherwise, ``the State is at liberty to adopt whatever mix of emission 
limitations it deems best suited to its particular situation.'' 
Commonwealth of Virginia, 108 F.3d at 1407-1408, quoting Train, 421 
U.S. at 79.
    We do not agree that Train creates a bar to our disapproval of an 
emission limitation that does not comply with section 123 of the Act. 
That case was decided in 1975, before the 1977 amendments to the Clean 
Air Act added section 123 with its prohibition against allowing credit 
for excessive stack height. Train was also decided before the 1990 
amendments added section 110(k), which contains specific criteria for 
EPA action on SIPs, including the condition that each SIP or SIP 
revision must ``meet all the applicable requirements'' of the Act. 
Train, therefore, does not preclude us from disapproving state emission 
limitations that conflict with specific provisions of the Act and EPA's 
implementing regulations. See also section 110(l) of the Act.
    Commonwealth of Virginia, too, was not concerned with stack 
heights; that case concerned an EPA regulation imposing California's 
automobile emission standards on the states in the Northeast Ozone 
Transport Region. The court undertook a statutory analysis of 
complicated interactions among four different sections of the Act 
(sections 110, 177, 184, and 202) before concluding that section 110 
did not give EPA the authority to prescribe specific

[[Page 22191]]

SIP limitations in that case.\19\ In Commonwealth of Virginia, we were 
not simply disapproving a state implementation plan; we were directing 
states to adopt particular emission limitations. In this case, we are 
disapproving particular limitations in Montana's plan; we are not 
prescribing a particular limitation. The State retains the authority to 
adopt any emission limitation or mix of limitations it chooses as part 
of the Billings/Laurel SO2 SIP, as long as the measures comply with all 
applicable provisions of the Act, including section 123, and EPA's 
regulations implementing the Act. We believe that neither Train nor 
Commonwealth of Virginia precludes our action here, which is authorized 
by section 123 and section 110(k) of the Act.
---------------------------------------------------------------------------

    \19\ To the extent that Commonwealth of Virginia may be read as 
holding that section 110(k)(3) conditions EPA's approval of a SIP 
revision on meeting section 110(a)(2) criteria only and not on 
meeting other requirements of the Act (see 108 F.3d at 1409), such 
an interpretation is incorrect. Section 110(k)(3) states, ``[the 
Administrator shall approve such submittal as a whole if it meets 
all of the requirements of this chapter.'' The phase ``this 
chapter'' means the entire Act, which comprises Chapter 85 (``Air 
Pollution Prevention and Control'') of Title 42 of the U.S. Code 
(``Public Health and Welfare''). Section 110 of the Act is one 
section of Subchapter I (``Programs and Activities'') of Chapter 85. 
By the plain words of section 110(k)(3), EPA may approve a SIP or 
SIP revision only if it meets all the applicable requirements of 
Chapter 85 and thus all requirements of the Act. See also section 
110(l) of the Act.
---------------------------------------------------------------------------

    (c) Comment: One commenter stated that the whole SIP should be 
remanded to allow the State to re-evaluate the entire mix of 
limitations, so fairness can be preserved. See Goetz letter, document 
#IV.A-18, exhibit D, comment #V, p. 62.
    Response: We informed the State as early as July 1996 (see document 
#II.C-5) that the stack height credit which MDEQ proposed to allow for 
MSCC's 100-meter stack did not comply with our stack height 
regulations. The State could have acted at any time before adopting and 
submitting the SIP revision in July 1998 to limit the stack height 
credit for MSCC and re-evaluate some or all of the SO2 emission 
limitations in light of the more limited credit. Since the State did 
not take that action, we are now disapproving the stack height credit 
and emission limitations for the 100-meter stack at MSCC. We plan to 
propose a FIP to fill in the gap with an appropriate emission 
limitation that both demonstrates attainment and complies with our 
stack height requirements. The promulgation of a FIP, however, will not 
relieve the State of its primary responsibility to adopt a fully 
satisfactory SIP; the State continues to have the authority and 
responsibility to re-evaluate the appropriateness of emission 
limitations for the Billings/Laurel area and to submit a SIP revision 
that will satisfy all statutory requirements, including the section 123 
prohibition against credit for stack height in excess of good 
engineering practice.
    (d) Comment: One commenter (Goetz letter, document #IV.A-18, 
exhibit D, comment #V., p. 63) stated that our partial disapproval 
makes the SIP more stringent than the State intended, an effect 
prohibited under the Act.
    Response: The holdings in Bethlehem Steel Corp. v. Gorsuch, 742 
F.2d 1028 (7th Cir. 1984), cannot be considered binding outside the 
Seventh Circuit. Assuming for purposes of responding to the comment 
that Bethlehem Steel governs our action on Montana's SIP, in this case, 
the SIP is not more stringent than the State intended. In contrast to 
the situation in Bethlehem Steel, we are not disapproving a part of a 
SIP regulation that contains an exemption from an emission limitation 
that we are approving in another part of the same regulation. In 
Bethlehem Steel, the court held that we could not use our partial 
approval/partial disapproval authority in this way to delete a limiting 
condition on a state requirement and make the portion of the 
requirement remaining in the federally approved SIP more stringent than 
the original regulation adopted by the state. See 742 F.2d at 1036. The 
court acknowledged that we have the authority to set more stringent 
limitations, as necessary to protect the NAAQS, but held that we must 
do so through adopting a Federal Implementation Plan (``FIP''); we 
cannot avoid the extra procedural process of adopting a FIP by simply 
disapproving the SIP in part. See id. at 1035.
    Our disapproval of the stack height credit extended by the State to 
MSCC does not make the federally approved SIP more stringent than the 
State stipulation, and we are not attempting to avoid promulgating a 
FIP. Partial disapproval here does not give us the power to enforce an 
emission limitation from which the source would be exempt under state 
law. The same is true for our disapproval of the attainment 
demonstration for lack of flare emission limitations. The effect of our 
partial disapproval is just the opposite: the emission limitations 
established by the State for MSCC's 100-meter stack and for the flares 
are state-enforceable, but not federally enforceable. To establish a 
more stringent, federally enforceable limitation for MSCC or the 
flares, we must promulgate a FIP. This is exactly what we intend to do, 
to fill all the regulatory gaps created by our partial disapproval of 
the SIP. This is the remedy approved by the Seventh Circuit when a 
State's SIP is inadequate or otherwise fails to meet Act requirements.
    (e) Comment: One commenter (MSCC letter, document #IV.A-19, p. 5 
and comment #60) stated that EPA has not identified emission limits it 
proposes to impose on MSCC. According to the commenter, this silence 
makes it infeasible for MSCC or the State to determine the effects of 
EPA's proposals on MSCC. This commenter said that the correct approach 
before EPA takes final action is for EPA to identify and explain its 
alternative so all parties may intelligently comment on them.
    Response: The purpose of our action here is not to establish 
emission limits for MSCC. The purpose is to determine whether the 
State's SIP submittal meets the requirements of the CAA and our 
regulations. We think we have adequately described why aspects of the 
SIP do not meet CAA requirements and why partial disapproval is 
warranted. As a legal matter, we cannot impose alternative emission 
limits through a SIP disapproval, but, instead, can impose such limits 
only through promulgating a FIP. Although we could have separately 
proposed a FIP simultaneously with our disapproval of the SIP, we chose 
not to and are not required to under the CAA. Our disapproval of the 
SIP has no immediate impacts on MSCC or any other source. If and when 
we promulgate a FIP for the area, we will first propose the FIP, 
including emission limits for sources subject to the FIP, provide an 
opportunity for the oral presentation of data, views, or arguments, and 
take written comment from the public.
    (f) Comment: One commenter (MSCC letter, document #IV.A-19, #60) 
stated that EPA's FIP, which is yet to come, may be inconsistent with 
the law or may be impractical for the State to impose.
    Response: We believe we have adequately explained, in our proposed 
disapproval, and in this final disapproval, our bases for rejecting 
portions of the SIP. We believe comments regarding a future FIP are 
irrelevant to this action; any such concerns may be raised if and when 
we propose a FIP. Moreover, if and when EPA adopts a FIP, EPA and not 
the State will ``impose'' its requirements.
2. Constitutional Question: Tenth Amendment
    (a) Comment: Two commenters (Goetz letter, document #IV.A-18, 
exhibit D, comment #2, p. 9; MSCC letter, document #IV.A-19, comment 
#1, 3rd

[[Page 22192]]

page) stated that through the SIP Call process and our proposed action 
on the SIP we exerted undue influence over Montana's SIP development 
process.
    Response: We did not exert undue influence or coerce the State into 
taking action in response to the 1993 letter. Under the Clean Air Act, 
states have the basic choice of whether or not to participate in the 
federal regulatory scheme. See Commonwealth of Virginia v. Browner, 80 
F.3d 869, 882 (4th Cir. 1996). States are sovereigns in their own right 
and independently make regulatory decisions affecting industry within 
their borders. Similarly, we independently exercise the authority 
provided by Congress to endorse or reject those decisions, for example 
by approving or disapproving a SIP. Although we may advise a state as 
to what we may or may not approve under the Act, states retain 
responsibility for their regulatory decisions. See, e.g. Air California 
v. U.S. Dept of Transportation, 654 F.2d 616 (9th Cir. 1981) (the 
danger of losing federal funding may have exerted strong pressure but 
did not relieve a state governmental entity of responsibility for its 
decision). In that case, the Ninth Circuit declared that ``concepts of 
coercion and duress are inappropriate in characterizing dealings 
between federal and state governments.'' 654 F.2d at 621. See also 
Shell Oil Co. v. Train, 585 F.2d 408, 414 (9th Cir. 1978) (federal 
advice to a state agency ``cannot be equated with any kind of 
coercion''). We do not believe that the SIP Call or our response to 
requests for assistance from MDEQ took the form of coercion, nor 
compelled MDEQ to make particular choices in developing a control 
strategy for the Billings/Laurel area.
    (b) Comment: Two commenters (MSCC letter, document # IV.A-19, 
comment # 12 and Goetz letter, document # IV.A-18, exhibit D, comment # 
V, p. 63) stated that our partial disapproval violates the principle of 
primacy set forth in the Act and triggers serious Tenth Amendment 
concerns.
    Response: We do not believe that our action on the Billings/Laurel 
SIP raises Tenth Amendment concerns. Federal governmental action can be 
viewed as coercing a particular state action in violation of the Tenth 
Amendment to the Constitution only when the State has no choice but to 
participate in the federal regulatory framework. See, Printz v. United 
States, 117 S.Ct. 2365 (1997); New York v. United States, 505 U.S. 144, 
112 S. Ct. 2408 (1992). Our authority under the Act to disapprove parts 
of a SIP does not raise the same level of sovereignty concerns found in 
those cases: partial disapproval does not compel a state legislature to 
adopt a federal regulatory program, as in New York, or commandeer state 
officials to execute a federal law, as in Printz.
    Under the Tenth Amendment, federal law may be designed to induce 
state action. See Commonwealth of Virginia v. Browner, 80 F.3d. 869, 
881 (4th Cir. 1996) (citing FERC v. Mississippi, 456 U.S. 742, 766, 102 
S.Ct. 2126, 2141 (1982)). Neither the Act nor EPA compels states to 
adopt SIPs or particular SIP provisions. But we can induce or persuade 
states to adopt SIPs and SIP revisions and to make these conform to 
federal requirements if states wish to obtain EPA approval of their 
SIPS. See Commonwealth of Virginia, 80 F.3d at 881, where, in the 
context of an operating permit program under Title V of the Act, the 
Fourth Circuit ruled that ``the CAA does not compel the states to 
modify their standing rules; it merely induces them to do so.'' That 
case flatly rejected the argument that the incentives contained in the 
Act to encourage approvable state participation amount to coercion. 
Since Montana remains free under the Act to choose to not participate 
in the CAA regulatory scheme, our final action on the SIP Call and the 
SIP cannot be viewed as compelling the State's action.
    (c) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment #'s 1, 4th page, 2, and 3) stated that we used our sanctions 
and funding powers to coerce the State to take positions that 
conflicted with prior agreements with industry and otherwise infringed 
on MSCC's rights.
    Response: By threatening to impose sanctions, we did not coerce or 
compel state action on the SIP Call; to the extent that the threat of 
sanctions had any effect on SIP development, it only helped to induce 
or persuade the State to respond. On some issues, we were unable to 
persuade the State of the correctness of our position, hence our 
partial disapproval. In Commonwealth of Virginia, the Fourth Circuit 
held that although the sanctions provisions of the Clean Air Act 
potentially burden the States, ``they amount to inducement rather than 
`outright coercion.' '' 80 F.3d at 881. The court declared that the 
highway funding sanction is allowed by the Spending Clause (U.S. Const. 
art. I, Sec. 8, cl. 1), allowing Congress to limit the award of federal 
funds to provide for the ``general welfare,'' which, as defined by the 
Commerce Clause (U.S. Const. art I, Sec. 8, cl. 3), ``gives Congress 
the power to regulate `activities causing air or water pollution or 
other environmental hazards that may have effects in more than one 
State.' '' Id. (quoting Hodel v. Virginia Surface Mining & Reclamation 
Ass'n. 452 U.S. 264, 282, 101 S.Ct. 2352, 2363 (1981)). The Fourth 
Circuit held that the highway sanction does not rise to the level of 
``outright coercion,'' because it does not deny all highway funding in 
a state, only in non-attainment areas and only for projects that do not 
promote safety or reduce air pollution. Id. The highway sanction, 
therefore, ``is a valid exercise of the Spending Power. As a valid 
exercise of that power, it also comports with the requirements of the 
Tenth Amendment.'' 80 F.3d at 882.
    The Commonwealth of Virginia court also held that the offset 
sanction, which limits new construction or modification of major 
stationary sources of air pollution in non-attainment areas, is 
constitutional because it regulates private pollution sources, not 
states as governmental entities. Id. The offset sanction, therefore, 
does not violate ``the principles of federalism embodied in the Tenth 
Amendment.'' Id., citing New York v. United States, 505 U.S. at 174, 
112 S.Ct. at 2427; and Hodel, 452 U.S. at 288, 101 S.Ct. at 2366.
    The final sanction we can use to induce the State to develop an 
adequate SIP is to develop a FIP for the area, in lieu of all or part 
of the state plan. This sanction, too, does not raise Tenth Amendment 
concerns. Under the Commerce Clause, Congress may preempt state law 
completely, or it may take the less drastic step of allowing the states 
to avoid preemption by adopting and implementing their own state plans, 
as long as these are adequate to address congressional concerns. Hodel, 
452 U.S. at 289, 101 S.Ct. at 2366; Commonwealth of Virginia, 80 F.3d 
at 883. Although section 110 of the Act provides that each State 
``shall, after reasonable notice and public hearing, adopt and submit'' 
a SIP, this language does not impose a mandatory duty on the States, 
but ``merely gives the States the first opportunity to adopt and submit 
a plan.'' Sierra Club v. Indiana-Kentucky Electric Corp., 716 F.2d 
1145, 1148 (7th Cir. 1983). A State may not be compelled to develop or 
submit a SIP. District of Columbia v. Train, 521 F.2d 971, 984 (D.C. 
Cir. 1975) (vacated on other grounds, 431 U.S. 99, 97 S.Ct. 1635 
(1977)). If an adequate plan is not submitted, however, EPA may 
establish a plan for the State. Id. Because the State is not commanded 
to regulate, Montana could choose not to develop a SIP and instead let 
us promulgate and enforce a FIP for the Billings/Laurel area. In that 
case, the full regulatory burden would be borne by the federal 
government, and the sanction is constitutional. See Hodel, 452 U.S. at

[[Page 22193]]

288, 101 S.Ct. at 2366; Commonwealth of Virginia, 80 F.3d at 882. 
Montana could also choose, and has chosen, not to address all the 
questions about the adequacy of the SIP that we raised in our proposed 
rulemaking action, and let us promulgate a FIP to fill the gaps caused 
by our partial disapproval. Neither partial disapproval nor 
promulgation of a FIP, both of which are authorized by the Act, 
violates the Tenth Amendment.
3. Constitutional Question: Delegation of Legislative Power
    (a) Comment: One commenter (Goetz letter, document # IV.A-18, 
exhibit D, comment # VI, p. 64) stated that EPA's application of the 
stack height rule to MSCC constitutes an unconstitutional delegation of 
legislative power and cited a recent DC Circuit case, American Trucking 
Ass'n, Inc. v. EPA, 175 F.3d 1027 (D.C. Cir. 1999). In the commenter's 
opinion, EPA's stack height rule, as interpreted by EPA in this case, 
is so loose and poorly drafted as to give the agency virtually 
unfettered administrative discretion to make policy choices as it sees 
fit. The commenter asserted that MSCC is faced with a situation in 
which the State and EPA interpret the stack height regulations 
differently.
    Response: First, the D.C. Circuit has already upheld the stack 
height regulations. They may not be challenged now based on the 
commenter's theory. Second, we do not believe the non-delegation 
doctrine is relevant to our interpretation or implementation of our own 
regulations, which have already been determined to be valid. Our 
application of our regulations is not a constitutional question. 
Instead, the question is whether our interpretation and application of 
our regulations in this case is consistent with the regulations or not. 
As we have explained elsewhere, we believe that our interpretation of 
the stack height regulations is reasonable.
    We also note that the case relied on by the commenter has been 
reversed by the United States Supreme Court. See Whitman v. American 
Trucking Associations, Inc., et al., 531 U.S. 457, 121 S.Ct. 903, 149 
L.Ed 2d 1, February 27, 2001.
    Regarding the claim of differing State and EPA interpretations, it 
is not unusual that we find it necessary, in the role Congress gave us 
vis-a-vis SIPs, to disapprove part or all of a SIP submitted by a state 
because we disagree with the state regarding the appropriate 
interpretation of the Clean Air Act or our regulations. This does not 
create a constitutional flaw in our action.
4. Constitutional Question: Taking of Private Property
    (a) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment # 13) stated that our partial disapproval of the stack height 
credit for MSCC's 100-meter stack and our consequent disapproval of the 
emission limitations for that stack constitute a ``taking'' of private 
property for public purposes, presumably under the Fifth Amendment of 
the Constitution. The same commenter (MSCC letter, document # IV.A-19, 
comment #'s 52 and 53) stated that our action transfers emission rights 
from MSCC to other entities in future apportionment of the airshed, and 
that we should pay MSCC just and reasonable compensation for eroding 
the value of private property or creating ``involuntary servitude'' 
(sic).
    Response: These comments are untimely. Our partial disapproval does 
not have the effect of disturbing the stack height credit given by the 
State or the state-enforceable emission limitation for this source. The 
effect of our partial disapproval is to decline to make the emission 
limitation for the 100-meter stack federally enforceable. Our 
disapproval creates a gap in the federally enforceable SIP, which we 
intend to fill by adopting a FIP. If we propose to adopt a FIP which, 
in MSCC's belief, effects a regulatory taking of MSCC's property for 
public purpose without just compensation, MSCC could raise the takings 
issue at that time. It is premature to raise the issue now.
    Even if the issue were ready to be addressed at this time, 
regulation under the Act in general does not represent an 
unconstitutional ``taking'' of private property under the Fifth 
Amendment. See Sierra Club v. Environmental Protection Agency, 540 F.2d 
1114, 1139-1140 (D.C. Cir. 1976) (``The use of private land certainly 
is limited, but the limitation is not so extreme as to represent an 
appropriation of the land''). See also South Terminal Corp. v. 
Environmental Protection Agency, 504 F.2d 646, 678 (1st Cir. 1974) 
(``The takings clause is ordinarily not offended by regulation of uses, 
even though the regulation may severely or even drastically affect the 
value of the land or real property''). In order to comply with the Act 
and our regulations, a future SIP or FIP might have to impose a lower 
emission limit on MSCC, but this would not amount to a taking, any more 
than the imposition of other emission limits on MSCC would amount to a 
taking.
    (b) Comment: One commenter (Goetz letter, document # IV.A-18, 
exhibit D, comment # VII, pp. 65-66) stated that our disapproval of 
parts of the ExxonMobil and MSCC stipulations relating to incorporation 
of earlier stipulations and apportionment of the airshed is 
unauthorized and may constitute an unconstitutional taking of MSCC's 
property. The commenter further stated that the Act provides for 
property rights in airsheds through its provision for emission trading 
and that MSCC's tenure in the area creates rights in the airshed. These 
are valuable property rights which may not be taken without just 
compensation under the Fifth Amendment to the U.S. Constitution, the 
commenter claimed. Another commenter (MSCC letters, document # IV.A-19, 
comment #'s 50, 51, and 52; and document # IV.A-20, comment # 14) 
stated that our position on ``property right'' defies the Constitution. 
A scarce resource is being partitioned between competing users, as with 
water rights. If the government takes property, it must make MSCC whole 
through just compensation. Another commenter (ExxonMobil letter, 
document # IV.A-28) stated that references to the earlier stipulations 
should be deleted from the EPA-approved SIP. (The reader is referred to 
further discussion of the incorporation of earlier stipulations in 
section V.H., below.)
    Response: The short answer is that our disapproval of the 
particular language in the State stipulations does not affect any 
rights enjoyed by MSCC, including any property rights in the 
atmosphere, if they exist. Our disapproval affects only the federal 
enforceability of provisions of the State stipulations. The provisions 
themselves remain in effect as to their state enforceability. There has 
been no taking of property that would raise Fifth Amendment concerns.
    Even if our action were to affect MSCC's ``emission rights'' under 
the SIP, these are not ``private property'' protected under the Takings 
Clause of the Fifth Amendment. To the extent that MSCC has emission 
rights, they are created by the enforceable emission limitations of the 
SIP. It would be an exercise in circular reasoning to turn emission 
rights created under a federal regulatory program into property rights 
that cannot be altered by further regulation under the same program 
without triggering constitutional protections against a governmental 
taking. The emission rights created under the Act, whether part of a 
SIP emissions trading program or the acid rain program or new source 
review, are limited by and have value within the statutory program 
only. They do not exist outside of the Act. We can alter the

[[Page 22194]]

emission limitations of a SIP that give rise to such emission rights, 
thus changing their value, as long as our action has a proper 
regulatory purpose such as protection of the NAAQS. Since we have not 
yet proposed a FIP, a claim that we have improperly changed the value 
of MSCC's emission rights is premature.
    The argument that MSCC has established rights to emit merely by 
having ``tenure'' in the Billings area is without foundation. Because 
MSCC was constructed before 1977, it is true that at that time the 
source was not subject to pre-construction permit requirements under 
the Act and was ``grandfathered'' or exempted from prevention of 
significant deterioration (``PSD'') requirements. However, since 
passage of the Act in 1970, MSCC has been subject to potential 
limitation of its emissions under the Act to protect the SO2 NAAQS. 
This potential became an actual limitation in 1977, under the original 
Billings/Laurel SIP, and again in 1996-98, under the SIP revisions that 
have been adopted by the State. MSCC and the other sources in the area 
do not enjoy any rights to emit pollutants that would cause or 
contribute to a violation of the NAAQS, and currently permitted 
allowable emissions levels do not constitute private property rights. 
See, e.g., 40 CFR 70.6(a)(6)(iv): ``The permit does not convey any 
property rights of any sort, or any exclusive privilege.''
    (c) Comment: One commenter (Goetz letter, document # IV.A-18, 
exhibit D, comment # VII, p. 65) cited a Supreme Court opinion, Eastern 
Enterprises v. Apfel, 524 U.S. 498, 118 S.Ct. 2131 (1998), to support 
his contention that disapproval of the phrase ``apportionment of the 
airshed'' in paragraph 1 of the MSCC stipulation effects a taking of 
MSCC property.
    Response: As already stated, partial disapproval of the SIP does 
not affect any rights, including property rights, enjoyed by MSCC or 
the other Billings/Laurel sources. In addition, neither the emission 
rights existing under the SIP nor the State's apportionment of the 
``airshed ''\20\ have the effect of creating property rights. See 
response to the immediately preceding comment, Comment 4(b) above.
---------------------------------------------------------------------------

    \20\ Actually, what is referred to as the ``airshed'' is the 
difference between the ``background'' levels of SO2 without 
contribution from any of the industrial sources and the NAAQS for 
SO2; it is this difference which the State has apportioned among the 
industrial sources in the Billings/Laurel area in its effort to 
fairly burden each one. This difference in SO2 concentrations is not 
a tangible thing capable of being possessed. Note that the 
``background'' was both modeled and monitored. Monitored regional 
background concentrations of SO2 were obtained from remote, rural 
monitoring sites. These yielded a fairly pristine background. In the 
modeled attainment demonstration, the background for any single 
source consists of the regional background plus the background 
contribution from any other sources upwind that are explicitly 
included as inputs to the model.
---------------------------------------------------------------------------

    Even if MSCC did hold an interest in ``private property'' created 
by the ``apportionment of the airshed'' described in the stipulation, 
the Eastern Enterprise opinion does not support MSCC's position that 
such property has been taken. Eastern Enterprise concerns the effect of 
the Coal Industry Retiree Health Benefit Act of 1992 on a coal company 
that last operated in 1965. The legislation required the company to pay 
into a new retirement fund, to provide lifetime benefits for widows of 
employees who had worked for the company 30 to 50 years prior to the 
legislation's enactment. The case is extraordinary, in that there was 
no taking of specific property or assets of the company, but rather 
imposition of financial liability that would amount to many millions of 
dollars. The Supreme Court reached beyond previous case law to apply 
the Takings Clause to a statute that placed such a ``severe, 
disproportionate, and extremely retroactive'' burden as to upset 
``fundamental notions of justice.'' 118 S.Ct. at 2152. The decision 
essentially involved application of the principles behind the Ex Post 
Facto Clause of Article 1, Sec. 9, clause 3 of the U.S. Constitution, 
prohibiting retroactive criminal sanctions, to the retroactive 
imposition of liability in a non-criminal setting, by deeming such 
liability to be a ``taking.'' See 118 S.Ct. at 2151, citing Calder v. 
Bull, 3 Dall. 386 (1798).
    The Eastern Enterprise decision is not relevant in this rulemaking. 
Nowhere in this rulemaking, including our disapproval of the phrase 
``apportionment of the airshed,'' do we impose any financial liability 
on MSCC, let alone a liability so burdensome that it might be construed 
as a ``taking'' of MSCC's property. Nor is this rulemaking a form of 
retroactive governmental action based on activity engaged in before the 
effective date of the regulation, let alone one that ``improperly 
places a severe, disproportionate, and extremely retroactive burden'' 
on MSCC, in the words of Eastern Enterprises, 118 S.Ct. at 2153. Our 
action of partially approving the SIP has a prospective, rather than a 
retroactive, effect on the federal enforceability of the Billings/
Laurel plan.
5. Constitutional Questions: Other
    (a) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment # 13) raised various other constitutional challenges to our 
proposed action, including interference with private contract; seizure 
of private property or effects, infringement on equal protection under 
the law; subjection to unusual punishment, double jeopardy, ex post 
facto laws, or laws having the effect of bills of attainder; and 
involuntary servitude.
    Response: We regard these arguments as inapplicable to the matter 
at hand. To the extent that we understand the arguments as raised in 
the comment, they are either untimely or unfounded. The commenter's 
argument that the Act may not authorize action by EPA that infringes on 
MSCC's right to be afforded equal protection under the law, for 
example, is untimely. Our partial disapproval only affects the federal 
enforceability of the emission limitation for MSCC's 100-meter stack. 
It is premature to claim that a federally enforceable emission 
limitation for MSCC would so unfairly burden MSCC in comparison with 
other sources in the area as to violate the guarantee of equal 
protection provided by the Fifth Amendment through incorporation of the 
Fourteenth Amendment to the U.S. Constitution. We have not yet proposed 
a federally enforceable limitation for MSCC.
    (b) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment # 1, pp. 3 and 4; comment # 13) stated that our actions have 
interfered with MSCC's contract rights created in the 1977, 1996, and 
1998 stipulations with the State. In particular, the commenter claims 
that we have impaired MSCC's rights to good engineering design credit 
for the 100-meter stack, protection from non-validated modeling, and a 
guaranteed level of SO2 emissions.
    Response: One premise of the comment seems to be that MSCC has an 
entitlement or contract right to a 100-meter stack based on a 1977 
State determination of GEP, and a State stipulation based on that 
determination. However, our 1985 stack height regulations specifically 
provided for varying degrees of ``grandfathering'' for stacks built 
before certain dates. For reasons unknown to us, MSCC did not actually 
start building its 100-meter stack until late 1993 (document # IV.A-17, 
exhibit #37), and, thus, under our 1985 stack height regulations, the 
stack does not qualify for any form of grandfathering. Various 
industrial sources challenged our 1985 stack height regulations on 
grounds similar to or the same as those raised by the commenter. The 
Court of Appeals for the D.C. Circuit rejected these challenges. NRDC 
v. Thomas, 838 F.2d

[[Page 22195]]

1224, 1249-1251 (D.C. Cir. 1988). Under section 307(b) of the Act, it 
is also too late for MSCC to attempt to resurrect these failed 
arguments. Thus, we do not believe MSCC has an entitlement or contract 
right to a 100 meter stack height credit.
    Also, assuming for the sake of argument that the stipulations 
between MSCC and the State could be considered private contracts and 
not governmental regulatory actions, the assertion that we have 
unconstitutionally infringed on the rights created by such contracts is 
without foundation. The Contract Clause of the U.S. Constitution, 
Article 1, Sec. 10, clause 1, prohibits states from passing any ``law 
impairing the obligation of contracts.'' It does not apply to Acts of 
Congress, nor does the due process clause of the Fifth Amendment make 
this prohibition applicable to a review of congressional legislation 
(or, by implication, an agency action). See Washington Star Co. v. 
International Typographical Union Negotiated Pension Plan, 729 F.2d 
1502, 1507 (D.C. Cir. 1984). See also Eastern Enterprises v. Apfel, 118 
S.Ct. 2131, 2148 (1998) (``[c]ontracts, however express, cannot fetter 
the constitutional authority of Congress,'' quoting Connolly v. Pension 
Benefit Guaranty Corporation, 475 U.S. 211, 223-224, 106 S.Ct. 1018, 
1025 (1986)).
    In addition, as stated above, our disapproval of MSCC's emissions 
limitations merely affects the federal enforceability of those 
limitations and does not alter or interfere with MSCC's obligations or 
rights under State law. So, the commenter's complaint is untimely in 
any event.
    (c) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment # 13) stated that our action or the Act infringes on various 
other constitutional protections by effecting a seizure of private 
effects, double jeopardy, cruel and unusual punishment, or by having 
the effect of bills of attainer or ex post facto laws, or by creating 
involuntary servitude.
    Response: These constitutional challenges are also unfounded. The 
protection against seizure of property or effects under the Fourth 
Amendment pertains to the prohibition against ``unreasonable search and 
seizure'' of evidence by law enforcement officers in a law enforcement 
proceeding. This rulemaking does not involve an enforcement proceeding, 
and no effects have been seized from any person. Similarly, the Fifth 
Amendment's prohibition against double jeopardy for the same offense, 
the Eighth Amendment's protection against cruel and unusual punishment, 
and the prohibitions in Article 1, Sec. 9, clause 3, against bills of 
attainder (imposing liability without judicial process) and ex post 
facto laws (imposing criminal sanctions for acts engaged in prior to a 
law's effective date) only concern the constitutionality of imposing 
sanctions on individuals for unlawful acts. They are not applicable to 
this rulemaking.
    Finally, no individual has been compelled to labor for another, or 
to engage involuntarily in any activity whatsoever, in violation of the 
Thirteenth Amendment's prohibition against involuntary servitude. If 
the commenter intended to refer to a servitude on the land, in the 
sense of a burden on one property for the benefit of another, this too 
is not relevant, because ``servitude on the land'' refers to the 
creation of easements under common law, which does not apply to this 
rulemaking.
    (d) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment # 59) stated that the Act unconstitutionally deprives citizens 
and the regulated community of effective recourse to the courts with 
its broad prohibition of later challenges to rules.
    Response: Reflecting Congress' interest in finality of agency 
action, section 307(b) of the CAA requires that appeals of agency 
action occur within sixty days of rule promulgation, or if grounds for 
appeal arise after promulgation, within sixty days after such grounds 
arise. The constitutionality of this limitation on challenges to agency 
action has been upheld. See Lloyd A. Fry Roofing Co. v. EPA, 554 F.2d 
885, (8th Cir. 1977).
6. Statutory Challenge
    (a) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment #'s 3, 5, 7, 10, 11 and 15) stated that our proposed partial 
approval of the Billings/Laurel SIP revisions is inappropriate because 
the enforceable emission limitations adopted by the State exceed those 
required by the Act; that we should approve only the provisions that 
are federally required and should disapprove or otherwise remand the 
rest of the SIP to the State.
    Response: In general, section 116 of the Act provides that States 
may adopt emission standards stricter than national standards. The 
United States Supreme Court has interpreted this provision together 
with section 110 of the Act to mean that States may submit 
implementation plans more stringent than federal law requires and that 
EPA must approve such plans if they meet the minimum requirements of 
section 110(a). See Union Electric Co. v. Environmental Protection 
Agency, 427 U.S. 246, 266, 96 S.Ct. 2518, 2529 (1976). In other words, 
we do not have the option of disapproving more stringent state 
requirements, but must approve them as long as they meet Act criteria 
for SIPs.
    It is difficult to say which, if any, SIP limitations are more 
stringent than the Act requires. The Act does not actually establish 
emission limitations for SIPs, but requires that the emission 
limitations adopted by a State must be sufficient to ``assure that 
national ambient air quality standards are achieved.'' See section 
110(a)(2)(C) of the Act. The determination of sufficiency is made by a 
modeling demonstration. See section 110(a)(2)(K) of the Act; see also 
40 CFR 51.112, which provides that ``[t]he adequacy of a control 
strategy shall be demonstrated by means of applicable air quality 
models, data bases, and other requirements specified in the appendix W 
of this part.'' The Act requires States both to attain and maintain the 
standards. See section 110(k)(5) of the Act. The control strategy must 
be demonstrated to protect the NAAQS in the present as well as in the 
future, providing an allowance for some level of emissions growth.
    (b) Comment: One commenter (MSCC letter, document #IV.A-19, comment 
#1, 3rd page) stated that the levels of control imposed in the 
Billings/Laurel SIP plan exceed the authority directly available to the 
federal government in its regulation of interstate commerce.
    Response: The federal government's authority to regulate air 
pollution under the Commerce Clause of the Constitution has long been 
established. See, e.g., District of Columbia v. Train, 521 F.2d 971, 
988 (D.C. Cir. 1975); vacated and remanded on other grounds sub nom. 
EPA v. Brown, 431 U.S. 99, 97 S.Ct 1635 (1977); Sierra Club v. 
Environmental Protection Agency, 540 F.2d 1114, 1139 (D.C. Cir. 1976), 
cert. den., 430 U.S. 959, 97 S.Ct. 1610 (1977). In Hodel, the Supreme 
Court indicated its agreement with these decisions. See 452 U.S. at 
282, 101 S.Ct. at 2363. The comment implies that our authority to 
approve SIPs is limited to minimal protection of the NAAQS. The courts 
have not interpreted the Act in this way and have not limited our 
authority to approve SIPs to approval of only a minimum of protection. 
See Union Electric Company v. Environmental Protection Agency, ibid. 
See also Sierra Club, 540 F.2d at 1139 (``Regulation of air pollution 
clearly is within the power of the federal government under the 
commerce clause, and we can see no basis on which to distinguish

[[Page 22196]]

deterioration of air cleaner than national standards from pollution in 
other contexts''). If Montana had submitted emission limitations that 
could be shown by modeling to be more stringent than necessary to 
attain and maintain the SO2 NAAQS, we would have to approve those 
limitations as long as they satisfied other Act requirements.
7. Conditional Approval
    (a) Comment: One commenter (Yellowstone Valley Citizens Council, 
document # IV.A-29) expressed concern that the MDEQ might disregard any 
timeframes proposed by us and feared that the State would drag its feet 
in fulfilling its commitment to make revisions to the SIP. The 
commenter suggested that we demand that the Racicot Administration 
ensure timely execution of necessary changes to the SIP with clear 
expectations and consequences for failure to implement these changes.
    Response: On May 4, 2000 the Governor of Montana submitted a SIP 
revision to fulfill the commitments on which the proposed conditional 
approval was based. Since the Governor has fulfilled his commitment, we 
believe it is not appropriate to finalize the conditional approval. 
Instead, we will complete notice-and-comment rulemaking on those 
portions of the July 29, 1998 submittal we proposed to conditionally 
approve on July 28, 1999 and on all of the May 4, 2000 submittal.

F. Due Process for SIP Approval

    On July 28, 1999 (64 FR 40791), we proposed action on the Billings/
Laurel SO2 SIP through informal rulemaking, as authorized by section 
110(k) of the Act and the Administrative Procedures Act (APA), 5 U.S.C. 
553.
Summary of Comments and Response
    One commenter submitted comments on our rulemaking process 
requesting more formal rulemaking procedures.
    We have considered the comments received and still believe our 
informal rulemaking process authorized by section 110(k) of the Act and 
the Administrative Procedures Act (APA), 5 U.S.C. 553 is appropriate 
and sufficient.
    The following is a summary of the comments received and our 
response to the comments.
    (1) Comment: One commenter (Goetz letter, document #IV.A-18, 
exhibit D, comment #VIII., p. 66) requested that we afford MSCC the 
right to conduct discovery of our documents and cross-examine EPA 
witnesses in this rulemaking, to satisfy substantial due process 
procedural protections.
    Response: Due process in the context of the SIP Call is discussed 
in section V.A.2, above. We are taking action on the SIP Call and on 
the Billings/Laurel SIP through informal rulemaking, as authorized by 
section 110(k) of the Act and the Administrative Procedure Act (APA), 5 
U.S.C. 553. The requirements of due process for this rulemaking are met 
under those provisions by publication of a proposed rulemaking action 
with an opportunity for submission of written comments to be considered 
by the agency prior to taking final action.
    Section 110 of the Act does not require hearings on the record, or 
even a hearing and oral presentation of comments prior to issuing a 
binding SIP Call or approval or disapproval of a SIP. See section 
307(d) of the Act omitting SIP approvals from a long list of EPA 
actions, including the promulgation or revision of a FIP, which are 
subject to the requirement of section 307(d)(5) of an opportunity for 
the oral presentation of views in addition to the submission of written 
comments. Section 110 of the Act requires only the minimum procedural 
requirements of section 553 of the APA, including public notice and 
opportunity for submission of written comments. See Indiana & Michigan 
Electric Co. v. Environmental Protection Agency, 509 F.2d 839, 846 (7th 
Cir. 1975); Buckeye Power, Inc. v. EPA, 481 F.2d 162, 172 (6th Cir. 
1973).
    Even when an opportunity for hearing is required, as for 
promulgation of a FIP, we are not required by statute to give regulated 
entities the opportunity to cross-examine EPA witnesses in an 
adjudicatory hearing. See Cleveland Electric Illuminating Co. v. 
E.P.A., 572 F.2d 1150, 1157 (6th Cir. 1978), where petitioners sought 
remand of our action on a FIP and a full evidentiary hearing, including 
cross-examination of EPA witnesses. The Sixth Circuit declined, 
stating:

Administrative rulemaking which is to be preceded by extensive 
hearings where ``a party is entitled to present his case or defense 
by oral or documentary evidence, to submit rebuttal evidence, and to 
conduct such cross-examination as may be required for a full and 
true disclosure of the facts . . .'' (5 U.S.C. Sec. 556(d) (1967) is 
required only when the last sentence of section 553(c) of the APA 
applies. This section provides:

    ``When rules are required by statute to be made on the record 
after opportunity for an agency hearing, sections 556 and 557 of 
this title apply instead of this subsection.'' (Emphasis added). (5 
U.S.C. Sec. 553(c)(1967)).

(Sections 556 and 557 of the APA outline the requirements for 
extensive, adjudicatory-type hearings.)

572 F.2d at 1157, citing Buckeye Power, 481 F.2d at 172. In other 
words, full-scale evidentiary hearings that allow for presentation of 
evidence and cross-examination of opposing witnesses are only required 
when section 553(c) of the APA applies, and that section applies when 
and only when ``rules are required by statute to be made on the record 
after opportunity for an agency hearing.'' 5 U.S.C. 553(c). This 
interpretation has been approved by the Supreme Court. See United 
States v. Allegheny-Ludlum Steel Corp. 406 U.S. 742, 92 S.Ct. 1941 
(1972).
    The Act does not require rulemaking ``on the record after 
opportunity for an agency hearing'' for a SIP Call or approval or 
disapproval of a SIP or SIP revision, or indeed for any other 
rulemaking. The requirement of section 307(d)(5) of an opportunity for 
hearing, which applies to FIPs but not SIPs, only requires ``an 
opportunity for the oral presentation of data, views, or arguments, in 
addition to an opportunity to make written submissions,'' as well as a 
record of the proceedings and an opportunity for submission of rebuttal 
and supplementary information. The formal adjudicatory procedures of 
sections 556 and 557 of the APA do not apply to this or any other EPA 
rulemaking under the Act.
    (2) Comment: One commenter (Goetz letter, document # IV.A-18, 
exhibit D, comment # VIII, p. 66) stated that even if the SIP approval 
process does not normally require formal procedures, procedural 
requirements should not be treated rigidly and traditional procedures 
may not be automatically adequate to provide due process (citing Walter 
Holm & Co. v. Hardin, 449 F.2d 1009, 1015 (D.C. Cir 1971); O'Donnell v. 
Shaffer, 491 F.2d 59, 52 (D.C. Cir. 1974); Seacoast Anti-Pollution 
League v. Costle, 572 F.2d 872 (1st Cir. 1978) (ordering a remand of 
our permit decision under the Clean Water Act for the limited purpose 
of allowing the administrator to determine whether cross-examination 
would be useful).
    Response: These cases concern the interpretation of statutory 
procedural requirements other than Clean Air Act requirements. Two 
other cases cited in the comment do concern the Clean Air Act but are 
not controlling: Kennecott Copper Corp. v. Environmental Protection 
Agency, 462 F.2d 846, 850 (D.C. Cir. 1972)(stating that ``there are 
contexts . . . in which the minimum requirements of the Administrative 
Procedure Act may not be sufficient'' and remanding the SO2 secondary 
standards to the Administrator for a statement explaining how he 
derived

[[Page 22197]]

the standard); Bunker Hill Co. v. Environmental Protection Agency, 572 
F.2d 1286 (9th Cir. 1977)(remanding a SIP rulemaking for hearing with 
right of cross-examination, discussed below).
    (3) Comment: One commenter (Goetz letter, document # IV.A-18, 
exhibit D, comment # VIII, p. 66) stated that MSCC is entitled to 
greater procedural protections in this rulemaking, because much of the 
focus is on one party (MSCC) in a matter involving factual disputes and 
requiring the resolution of highly complex and technical issues.
    Response: Our partial disapproval of the SIP is not limited only to 
issues involving MSCC's 100-meter stack. We are also disapproving the 
SIP in part for failure to establish an enforceable limitation on flare 
emissions. This aspect of our partial disapproval involves three other 
sources in addition to MSCC. The stack height issue itself, where the 
focus is on MSCC, involves our interpretation of our stack height 
regulation, primarily a question of law. In any case, as the Cleveland 
Electric Illuminating Co. court noted, typically the decisions which 
Congress assigns to administrative agencies are of the type that would 
be called technical and complex; yet Congress and the Supreme Court 
have not given courts the responsibility to pick and choose agency 
hearing procedures based on the complexity of the questions presented. 
See 572 F.2d at 1160.
    In a few cases, the courts have granted more extensive procedural 
protections than those required by statute. In Bunker Hill Co. v. 
Environmental Protection Agency, the Ninth Circuit required a formal 
evidentiary hearing with cross-examination of witnesses in a remand of 
our disapproval of a SIP control strategy for a lead smelter. 572 F.2d 
at 1305. The state plan imposed 72 percent control of SO2 emissions 
from a lead smelter; the court found that we were ``substituting 
standards that would guarantee 82 percent control.'' Id. at 1291. 
Apparently, we promulgated federal emission limitations for the source, 
although it is not clear from the opinion whether we promulgated a FIP. 
In Bunker Hill, the company objected that our emission limitations were 
technologically and economically infeasible. The court remanded the 
matter to us to further consider the technological feasibility of our 
proposed limitations and required us to allow the company to cross-
examine our experts on the technological feasibility of the proposed 
control measures. Id. at 1305. The Ninth Circuit stated that cross-
examination was not strictly required by the APA, since we were not 
conducting rulemaking ``on the record,'' but that cross-examination 
would ``help crystalize the varying contentions of the experts'' on 
complex technical issues and aid the court in reviewing final action. 
Id.
    In contrast to the rulemaking in Bunker Hill, this rulemaking is 
simply an approval and disapproval action on a SIP. We are not 
promulgating or imposing already promulgated federal emission 
limitations. By our rulemaking, MSCC will not be subject to limitations 
more stringent than the requirements of the State SIP, and those 
requirements are not disturbed by this rulemaking. Nor is there any 
claim that MSCC is being subjected to requirements that are 
technologically infeasible. Thus, there is no apparent need to 
crystallize the contentions of experts on factual matters of a ``highly 
complex and technical nature'' in order to aid a court in reviewing our 
decision. The same due process concerns the Ninth Circuit found in 
Bunker Hill are not at play in this rulemaking. Just as the Cleveland 
Electric Illuminating Co. court observed, when it declined to follow 
the example of the Bunker Hill opinion, we do not find ``any legal 
requirement or practical need'' for a hearing, with or without cross-
examination. See 572 F.2d at 1160.
    The other case the commenter cited as requiring cross-examination 
in a rulemaking that was not ``on the record,'' Marine Space 
Enclosures, Inc. v. Federal Maritime Comm'n., 420 F.2d 577 (D.C. Cir. 
1969), concerns a decision by the Federal Maritime Commission, under 
the Shipping Act of 1916, to award a contract for constructing a 
maritime passenger terminal. The statute, as interpreted by the court, 
required a hearing prior to decision. The D.C. Circuit remanded for a 
public hearing, but did not require the commission to provide the 
opportunity for cross-examination, saying that the issues might be 
adequately developed more informally: ``we refrain at this juncture 
from specifying that our remand order requires an evidentiary 
hearing.'' 420 F.2d at 890. Even the decision in that case that a 
hearing was required does not appear pertinent to this rulemaking, 
where the Clean Air Act does not require one.
    We decline to grant an opportunity for hearing in this rulemaking. 
The Clean Air Act and the APA do not require it. Nor do we believe that 
any unusual due process concerns would impel us to override the usual 
procedures mandated by statute and case law. The commenters who have 
submitted written comments on our proposed rulemaking have exercised 
the opportunity to present their views to us through that mechanism; a 
full record has been prepared on which our rulemaking will be made 
final, and the record provides an adequate basis for judicial review.

G. Escape Clause

    We proposed to disapprove the escape clause (a provision in the SIP 
that allows each source to withdraw its consent to the stipulation and 
thus nullify the SIP as it pertains to that source) because, if sources 
invoke the escape clause, the MDEQ would no longer have a plan to 
implement.
Summary of Comments and Response
    One commenter opposed and three commenters supported our proposed 
action.
    We have considered the comments received and still believe it is 
appropriate to disapprove the escape clause as proposed.
    The following is a summary of the comments received and our 
response to the comments:
    (1) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment #'s 46 and 70) stated that disapproving the ``escape clause'' 
will render the SIP revision more stringent than the State intended and 
interfere with the State's agreement with industry to be even-handed in 
allocating the burdens of the SIP. That same commenter (MSCC letters, 
document # IV.A-19, comment # 47 and document # IV.A-20, comment # 12) 
stated that our disapproval of the escape clause should not have the 
effect of making provisions of the stipulations federally enforceable 
if they have been nullified by a source invoking the escape clause. 
Other commenters (Yellowstone Valley Citizens Council letter, document 
# IV.A-29, and Zaidlicz letter, document # IV.A-30) stated that the 
escape clauses in all the stipulations must be disapproved. One 
commenter (ExxonMobil letter, document # IV.A-28) stated that the 
escape clause does not need to be included in the final EPA-approved 
SIP, since the function of the escape clause was to allow all parties 
to negotiate the SIP in good faith and ensure consistent SO2 control 
strategies and is not needed now that the State has adopted the 
stipulations.
    Response: The escape clause in each stipulation allows each source 
to withdraw its consent to the stipulation and thus nullify the SIP as 
it pertains to that source, if the initial control strategy adopted by 
the State (or EPA as a FIP) for any of the other affected sources in 
the Billings/Laurel area is not ``substantially similar in its common 
terms'' to the source in question's

[[Page 22198]]

stipulation and attached exhibit of emission limitations. The 
opportunity to invoke the clause exists up to 60 days after receiving 
written notice of the final adoption of the control strategy.
    We have no authority under the Act to approve as part of a 
federally enforceable SIP a provision that could render the SIP or any 
part of it unenforceable or void. Section 110(k)(3) of the Act 
authorizes us to approve a SIP if it meets all the applicable 
requirements of the Act, including the requirement of enforceable 
emission limitations under section 110(a) of the Act. Other than 
disapproving the escape clause as part of a partial disapproval of the 
SIP, our only option in the face of it is to disapprove the entire SIP, 
a course of action we are confident the State would not prefer us to 
take. Instead, by disapproving the escape clause, we are meeting the 
requirements of the Act and ensuring the federal enforceability of the 
approvable portions of the SIP, without in any way changing the 
substantive SIP requirements or creating new requirements. There may be 
some question about the State's ability to enforce the SIP if the 
escape clause is invoked. In our proposed rulemaking action, we stated 
that if any source invoked the escape clause, we would issue a SIP Call 
or take other appropriate action under the Act to address the resulting 
inadequacy of the State's plan.
    This aspect of our partial disapproval does not impermissibly make 
the SIP more stringent than the State intended. Readers are referred to 
the discussion of the effect of our partial approval/partial 
disapproval in section V.E., above. The State carried out its intended 
allocation of the burdens of the control strategy when it established 
emission limitations for each of the sources in their respective 
stipulations. Our disapproval of the escape clause does not disturb 
these state decisions. The state-enforceable stipulations and all their 
terms and conditions, including the escape clause, remain in effect at 
the state level.
    (2) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment # 123) stated that disapproval of the escape clause appears to 
be a usurpation of a court function by changing a contract, based on 
the representations of one party to the contract (apparently, referring 
to the State).
    Response: To the extent that we understand the commenter, it 
appears to invoke the same concern referred to earlier that our action 
interferes with a private right of contract in violation of the 
Constitution. The reader is referred to the discussion of 
constitutional challenges to our partial disapproval in section V.E., 
above. Alternatively, the commenter may object to our interpretation of 
the escape clause on the basis that the clause is a contractual right 
which only a court can interpret. In this rulemaking, we are 
interpreting the escape clause as a provision of the SIP which affects 
the adequacy of that plan, in light of the statutory criteria that 
govern our approval action. Courts have ruled that our interpretation 
of the provisions of SIPs is entitled to deference. See, e.g., American 
Cyanamid Co. v. Environmental Protection Agency, 810 F.2d 493, 498 (5th 
Cir. 1987); American Lung Ass'n of N.J. v. Kean, 670 F.Supp 1285, 1291 
(D.N.J. 1987).

H. Language in ExxonMobil and MSCC Stipulations Related to 
Incorporation of Earlier Stipulation and Apportionment of the Airshed

    We proposed to disapprove language in ExxonMobil and MSCC's 
stipulations related to incorporation of earlier stipulations and 
apportionment of the airshed.
Summary of Comments and Response
    Two commenters opposed and one commenter supported our proposed 
action.
    We have considered the comments received and still believe it is 
appropriate to disapprove the language in ExxonMobil and MSCC's 
stipulations related to incorporation of earlier stipulations and 
apportionment of the airshed.
    The following is a summary of the comments received and our 
response to the comments:
    (1) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment # 81) stated that our disapproval of the two provisions of the 
MSCC and ExxonMobil stipulations is inappropriate, because the State 
case and settlement agreement are legal facts; our disapproval 
overturns a state order by the MBER giving legal effect to the 
settlement and to MSCC's contract rights. Another commenter (ExxonMobil 
letter, document # IV.A-28) stated that they agreed that these 
references should be deleted from the EPA-approved SIP.
    Response: Our disapproval of paragraphs 1 and 2 of the MSCC 
stipulation and paragraph 1 of the ExxonMobil stipulation does not 
overturn the order of the MBER and does not affect the State's 
agreement with ExxonMobil and MSCC. Excluding the reference to the 
board order from the EPA-approved SIP clarifies that the order is not 
federally enforceable, thereby avoiding any confusion that might have 
ensued if we had included the reference in our approval. Our action 
does not adversely affect MSCC's contract rights, because it does not 
alter the settlement agreement.
    (2) Comment: One commenter (MSCC letter, document # IV.A-20, 
comment # 13) stated that our disapproval of the reference to the 1996 
settlement between MSCC, ExxonMobil, and Montana is a selective attempt 
to change the record in that case. The stipulation that resulted from 
the settlement is not void or fully accomplished. The commenter stated 
that if we believe that the reference should be removed because it is 
not needed, then we should disapprove every other detailed requirement 
not required by the Act and remand them all to the state.
    Response: By disapproving the provisions related to the settlement 
agreement, we do not attempt to revise the record. The public record of 
the administrative case between MSCC, ExxonMobil, and the State is 
found in the state-adopted SIP, where the provisions are included in 
the MSCC and ExxonMobil stipulations. Our disapproval of these 
provisions does not hinge on whether or not the February 1996 
stipulation was accomplished or was necessary. Our disapproval stems 
from our concern that including these provisions in the EPA-approved 
SIP might imply that the settlement agreement itself is federally 
enforceable. That result would be inappropriate, because we are 
disapproving two SIP elements that directly resulted from the 
agreement, the stack height demonstration and SO2 control plan for MSCC 
with respect to the 100-meter stack. Approving the provisions that 
reference the State's agreement on these issues could create confusion 
about their possible federal enforceability and possibly conflict with 
our explicit disapprovals.
    (3) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment #'s 14, 16, and 81) stated that our position that no federally 
cognizable right to emit exists is unreasonable; and that we have 
approved emission rights for some sources but not for MSCC. Another 
commenter (Goetz letter, document # IV.A-18, exhibit D, comment # VII, 
p. 65) stated that our proposal not to approve the part of ExxonMobil's 
and MSCC's stipulations related to apportionment of the airshed is 
improper. These commenters (MSCC letter, document # IV.A-19, comment 
#'s 43 and 51 and Goetz letter, document # IV.A-18, exhibit D, comment 
# VII, p. 65) stated that, contrary to our position that an implied

[[Page 22199]]

right to pollute conflicts with the Act, the Act itself provides for 
``emission rights'' and property rights in airsheds through emission 
trading.
    Response: In our proposed rulemaking action, we proposed to 
disapprove paragraph 1 of the ExxonMobil and MSCC stipulations for an 
additional reason, because the paragraph contained the statement that 
the companies were entering into the settlement agreement, in part, to 
preserve their respective ``rights to apportionment of the airshed.'' 
See 64 FR at 40800. We declared that this statement conflicts with the 
purpose and obligations of the Act because air pollution sources do not 
have an ownership interest in the ambient air or a right to pollute 
under the Act. See id.
    Our proposed disapproval of the statement about apportionment may 
not have been artfully expressed. We did not mean to imply that we do 
not recognize emission rights created by statute. The commenters are 
correct that the Act authorizes various kinds of emission rights. 
Section 110(a)(2) of the Act, for example, provides that SIPs may use 
``auctions of emissions rights'' and other forms of emissions trading 
as an enforceable emission control technique; Title IV of the Act 
authorizes trading in emission allowances under the acid rain program. 
Permanent and enforceable emission reductions may also be sold as 
offsets for purposes of allowing sources to construct or modify under 
new source review under part C (attainment areas) and part D (non-
attainment areas) of title I of the Act.
    Such statutory rights to emit pollutants are not permanent, but may 
be changed by regulatory action. In a future SIP revision, the State 
might choose to redistribute some of the burden of SO2 control in the 
Billings/Laurel area to achieve a different policy goal. Because the 
rights are created by and can be diminished by regulatory action, they 
are not the kind of private property protected under the Fifth 
Amendment to the Constitution. See the discussion of takings and 
emission rights in section V.E, above.
    The phrase ``rights to apportionment of the airshed'' implies 
possessory rights to the ambient air, as if the State or the United 
States could allocate the atmosphere, like land or mineral rights, to 
competing claimants. We were concerned that the phrase might imply 
rights less conditional than those actually created under the Act and 
that, if we approved this language into the federally enforceable SIP, 
our approval might imply that ExxonMobil or MSCC have unconditional 
rights to emit at the levels established in the State stipulations, 
regardless of the effect of our partial disapproval of the SIP.

I. Default Approval of SIP

    We proposed action on the Billings/Laurel SO2 SIP on July 28, 1999.
Summary of Comments and Response
    One commenter submitted comments regarding default approval of the 
SIP.
    We have considered the comments received and do not agree with the 
commenter.
    The following is a summary of the comments received and our 
response to the comments.
    (1) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment #'s 57 and 124) stated that more than one year has elapsed from 
the date of the Governor's submission of the SIP revisions for the 
Billings/Laurel area before we published the proposed rule to approve, 
disapprove, and conditionally approve the SIP. The commenter believes 
that our failure to take final action on the SIP may have resulted in 
automatic statutory approval of the submission. A proposed action is 
not a final action.
    Response: The SIP revisions submitted by the State have not been 
approved by default. The requirements for our action on a SIP 
submission are found in section 110(k) of the Act. Section 110(k)(1) 
requires us to make a completeness finding within 60 days of receipt of 
a SIP or SIP revision, or the submission will be deemed complete six 
months after it is submitted. If the plan is complete, section 
110(k)(2) requires us to take appropriate action within 12 months of 
the completeness finding or the date the submission is deemed complete. 
The Billings/Laurel SIP revisions were finally submitted on July 29, 
1998. We did not make a completeness determination on this submission. 
The revision was deemed complete as a matter of law on January 29, 
1999; the twelve-month deadline for action would be January 29, 2000. 
We proposed to approve the revisions in part, disapprove them in part, 
and conditionally approve other parts on July 28, 1999.
    The commenter is correct that the deadline for action is met, not 
by publishing a proposed action, but by final rulemaking. The commenter 
is incorrect in suggesting that failure to meet the 12-month deadline 
means that the SIP submission is approved by default. The Act does not 
authorize default approval of a SIP; SIPs must be approved under 
sections 110(k)(3) and (4) of the Act. These provisions require our 
affirmative action to approve or disapprove through rulemaking, after 
public notice and opportunity for comment.

J. Department Discretion

    We proposed to partially approve the SIP because the State had 
addressed our earlier concerns with director discretion provisions in 
the SIP. Our proposal was based on the July 1998 submittal of the SIP 
and our interpretation of the modification process.
Summary of Comments and Response
    One commenter opposed and two commenters supported our proposed 
action.
    We have considered the comments received and still believe it is 
appropriate to partially approve the SIP as submitted since the State 
had addressed our earlier concerns with director discretion provisions.
    The following is a summary of the comments received and our 
response to the comments:
    (1) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment # 69) stated that it is unnecessary under the Act to obtain our 
approval for exercises of state discretion allowed by the SIP. The 
commenter believes that Montana should be free to implement changes as 
``necessary and expedient''; in the unlikely event Montana implemented 
a change which made the SIP inadequate, we could call for a SIP 
revision. The commenter objects to the ``dual approval provisions'' of 
the SIP as making the administrative change process unduly cumbersome. 
Two other commenters (Yellowstone Valley Citizens Council letter, 
document # IV.A-29, and Zaidlicz letter, document # IV.A-30) stated 
that we must review every SIP language change.
    Response: Section 110(i) of the Act prohibits states and EPA, 
except in certain limited circumstances which do not apply to the 
Billings/Laurel SIP, from taking any action to modify a requirement of 
a SIP except by SIP revision. We do not agree that Montana or EPA 
should be free to make changes in SIPs whenever ``necessary or 
expedient.'' The Act requires that changes in SIP requirements must be 
made by the SIP revision process, because that process gives the public 
the opportunity to review and comment on the reasonableness and 
adequacy of the requirements that are to be imposed, and gives us an 
opportunity to review and approve all changes.
    The Billings/Laurel SIP allows for an informal administrative 
process for making certain clerical changes and for approving 
alternative requirements in the SIP, primarily with respect to 
monitoring. The State and we consider

[[Page 22200]]

these changes and approvals so insignificant that they may be made with 
our approval but without public review, without contravening the intent 
of section 110(i) of the Act. The SIP describes the process by which 
the State will propose such changes and approvals for us to review and 
approve before they can be implemented. If the process is used in 
accordance with the clarifications we made in our proposed rulemaking 
action (See 64 FR at 40796), we believe that it satisfies the intent of 
section 110(i). Any change that does not qualify for the informal 
approval process must be processed as a SIP revision under section 
110(a)(2). EPA's ``White Paper Number 2 for Improved Implementation of 
the Part 70 Operating Permits Program'' by Lydia N. Wegman, Office of 
Air Quality Protection and Standards, dated March 5, 1996, allows for 
an alternative mechanism for making changes to SIPs through the Title V 
permit process (attachment to document # II.C-8).
    We will review all changes to the language and implementation of 
the Billings/Laurel SIP to ensure that they are the kinds of minor 
administrative changes that are appropriate to make without a SIP 
revision. This up-front process of review and approval will be less 
cumbersome for the State and regulated industry than having us 
undertake an after-the-fact inquiry into the appropriateness of a 
particular change and then initiate a SIP Call, if we identify an 
inadequacy.

K. Quarterly Data Recovery Rate (QDRR)

    We proposed to approve the provisions pertaining to the quarterly 
data recovery rate (QDRR) for the CEMS because the State had addressed 
our earlier concerns with QDRR provisions in the SIP. Our proposal was 
based on the July 1998 submittal of the SIP and our interpretation of 
the QDRR requirements.
Summary of Comments and Response
    One commenter opposed and four commenters supported our proposed 
action.
    We have considered the comments received and still believe it is 
appropriate to partially approve the SIP as submitted since the State 
had addressed our earlier concerns with QDRR provisions.
    The following is a summary of the comments received and our 
response to the comments:
    (1) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment # 71) objected to a statement by MDEQ that obtaining data 100 
percent of the time is required under the SIP. This commenter believes 
that this statement is not what MSCC agreed to; data may not always be 
recoverable because of other requirements or events not under the 
reasonable control of the source. Two commenters (Yellowstone Valley 
Citizens Council letter, document # IV.A-29, and Zaidlicz letter, 
document # IV.A-30) stated that they support 100 percent CEMS 
availability, unless data loss is adequately justified. One commenter 
(ExxonMobil letter, document # IV.A-28) agreed with our assessment for 
QDRR. One commenter (McGarity letter, document # IV.B-1) stated that 
missing data must be heavily penalized and suggested that information 
on CEMS data availability should be instantaneously accessible to 
Yellowstone County residents so they can participate in the compliance 
assurance process. Finally, this commenter suggested that the regulated 
industry must be required to develop an approved Quality Assurance 
Control Plan (QAPP) for CEMS that addresses daily self zero and 
calibration auditing and annual RATA.
    Response: We agree that CEMS should be in operation and their data 
retrievable at all times, unless failure to operate or other loss of 
data is adequately justified. QDRR is the percentage of the time in 
each quarter when CEMS are operating and generating valid hourly data 
about SO2 emissions. The stipulations entered into between the State 
and each source in the Billings/Laurel area originally set a QDRR of 90 
percent and an allowance of up to 192 hours per quarter when CEMS data 
could be unavailable without the State taking enforcement action. Given 
the high reliability of CEMS when they are operated properly, we 
believe that the goal for CEMS data recovery should be 100 percent. 
Anything less than that should be excused only if the loss of data has 
been documented and justified.
    In the final version of the SIP, the State deleted the allowance 
for 192 hours of missing CEMS data per quarter and explicitly required 
the sources to use ``best efforts'' to achieve the highest QDRR that 
would be technically feasible. The 90 percent QDRR remains in the 
stipulations as a trigger level for state action as an assumed level of 
technical feasibility. The State, EPA, and citizens can still take 
action to enforce the CEMS data requirement when a source has met the 
90 percent QDRR but is missing ten percent or less of CEMS data for a 
quarter; i.e., when its data recovery rate is greater than 90 but less 
than 100 percent. The source must show that the data loss was 
documented at the time it occurred and was justified, for example, 
because it was caused by a lightning strike, electrical power outage, 
or other circumstance beyond the operator's control.
    With respect to the QAPP, auditing and annual RATA comment, the 
exhibit to the stipulations, and an attachment to the exhibit, for each 
source contain CEM performance specification requirements for the SO2 
and H2S CEMS and flow meters. These requirements include daily testing 
and annual RATAs. In addition to the exhibit requirements for CEMS and 
flow meters, other documents addressing CEMS operations are to be 
developed. These documents include quality assurance plans and standard 
operating procedures. These other documents are not being included in 
the SIP. See discussion in section M below.

L. Effect of the Montana Voluntary Environmental Audit Act

    We stated in our proposed rulemaking that Montana's audit privilege 
and penalty immunity law, the Voluntary Environmental Audit Act, Mont. 
Code Ann. Secs. 75-1-101 et seq. (1999), (H.B. 293, effective October 
1, 1997) can affect only state enforcement and cannot have any impact 
on federal enforcement authorities. We stated that our proposed action 
should not be construed as making any determination or expressing any 
position regarding the State's audit privilege and penalty immunity 
law.
Summary of Comments and Response
    One commenter expressed an opinion of how the State should 
implement its audit privilege and penalty immunity law and EPA 
oversight of the SIP.
    We have considered the comment received and believe our statements 
in our proposed rulemaking action on the State's audit privilege and 
penalty immunity law are still appropriate.
    The following is a summary of the comments received and our 
response to the comments:
    (1) Comment: One commenter (Yellowstone Valley Citizen's Council 
letter, document # IV.A-29) stated that the State should implement 
Montana's Environmental Voluntary Audit Act (``Audit Law'') in a manner 
that prevents violations of federal law, and that we should be vigilant 
in oversight of state enforcement of the SIP in cases where alleged 
polluters invoke the immunity provisions of the Audit Law.
    Response: Our concerns about the effect of the Audit Law on the 
State's ability to enforce the SIP have been addressed by a formal 
agreement with the State. On December 13, 1999, EPA and the State 
entered into a Memorandum of Agreement (``MOA'')

[[Page 22201]]

(see document # IV.C-32) concerning the effects of the Audit Law on 
state implementation and enforcement of all federal environmental 
programs in Montana. EPA and the State agreed that, as long as the 
State's legal interpretation of the Audit Law (as memorialized in a 
November 25, 1998 letter from Governor Marc Racicot and Attorney 
General Joseph Mazurek to EPA Regional Administrator William P. 
Yellowtail) and the MOA are in effect, State programs have sufficient 
authority to maintain or obtain delegation of federal environmental 
programs. The MOA resolved any outstanding issues between the State and 
EPA concerning our delegation or approval of federal programs in the 
state of Montana, including SIP approvals. In our proposed rulemaking 
action, we declared that the Audit Law affected only state enforcement 
authorities and had no effect on the ability of EPA or citizens to 
enforce the SIP under relevant provisions of the Act. See 64 FR at 
40804. This view continues to be true. We agree with the comment that 
we should exercise our oversight role with particular care when the 
Audit Law is invoked by an owner or operator of a source seeking 
immunity from civil or administrative penalties for violation of the 
Billings/Laurel SIP.

M. Effect of State-Only Provisions

    We stated in our proposed rulemaking that we were not acting on 
State-only provisions that were not submitted as part of the SIP. 
However, if we were to determine that the State-only provisions, as 
implemented, appeared to constrain, or otherwise have a chilling effect 
on the State enforcement of the SIP, we would reconsider our approval 
or take other appropriate action under the Act.
Summary of Comments and Response
    One commenter expressed a concern that the State-only provisions 
might create loopholes for industrial sources to avoid enforcement.
    We have considered the comments received and believe our statements 
in our proposed rulemaking action on the State-only provisions are 
still appropriate.
    The following is a summary of the comments received and our 
response to the comments:
    (1) Comment: One commenter (Yellowstone Valley Citizen's Council 
letter, document # IV.A-29) stated that the placement of certain 
technical aspects of monitoring requirements and the flare provisions 
in a ``state-only'' section of the stipulations created potential 
loopholes for the industrial sources to avoid enforcement. The 
commenter expressed concern that other technical issues might be hiding 
in the state-only stipulations.
    Response: The ``Additional State Requirements'' adopted by the MBER 
in June 1998 include documents that were not incorporated into the SIP 
submitted to us for approval in July 1998. These documents include 
quality assurance plans and standard operating procedures manuals for 
the CEMS for the Billings/Laurel sources, together with corrective 
actions plans and alternative monitoring plans. We believe that the 
exclusion of these documents from the federally enforceable SIP will 
not have an adverse effect on the implementation or enforcement of SIP 
requirements. We believe that the opposite could be true: inclusion of 
the documents in the federally enforceable SIP might have adversely 
impacted the ability of EPA and citizens to enforce the SIP, because 
the documents contain department discretion provisions which could 
potentially constrain enforcement efforts. For that reason, in our 
proposed rulemaking action we expressed our concern that the state-only 
provisions related to CEMS might limit or have a chilling effect on 
state enforcement of the SIP and our intention to take appropriate 
action under the Act, if we found that were true. See 64 FR at 40803--
40804. We intend to address the exclusion of flare provisions from the 
SIP in a future FIP, as discussed in section V.C., above. We are 
unaware of any other technical issues or potential loopholes that might 
be contained in the state-only provisions.

N. Enforcement and MDEQ Staffing

    In our Technical Support Document for our proposed Action on the 
Billings/Laurel SO2 SIP (document # III.B-1), we proposed to approve 
the Billings/Laurel SO2 SIP as meeting the ``enforcement program and 
stationary source regulations'' requirements.
Summary of Comments and Response
    Three commenters expressed the concern that MDEQ lack sufficient 
resources to adequately implement and enforce the SIP.
    We have considered the comments received and still believe it is 
appropriate to conclude that the Billings/Laurel SO2 SIP meets the 
``enforcement program and stationary source regulations'' requirements.
    (1) Comment: Three commenters expressed the concern that MDEQ lacks 
sufficient resources to adequately implement and enforce the SIP. Two 
commenters (Yellowstone Valley Citizen's Council letter, document 
# IV.A-29, and Zaidlicz, document # IV.A-30) stated that we must insure 
that the SIP is enforceable and that the State will have adequate 
resources allocated to effectively implement, monitor and police it. 
One of these commenters stated that two MDEQ staff members are 
responsible for the enforcement of air quality standards for eastern 
Montana, where 70 percent of the air pollution sources and most of the 
CEMS are located, and that the workload is too great for two people. 
This commenter also indicated they supported a bill in the last Montana 
legislative session to increase staff in eastern Montana, but MDEQ 
testified against the bill and it was defeated. Finally, this commenter 
stated that we should monitor SIP implementation carefully to safeguard 
the goal of improving air quality in the Billings/Laurel area. The 
other commenter expressed the concern that the MDEQ does not have 
adequate resources and staff to track compliance and maintenance of the 
Billings/Laurel SIP and other federally mandated air quality programs 
being delegated for state jurisdiction and that this puts human health 
and safety in jeopardy.
    Another commenter (McGarity letter, document # IV.B-1) stated that 
turnover and low staff salaries have left MDEQ in a shambles; MDEQ 
staff is under-resourced and over-worked, and cannot be counted on to 
develop and enforce complicated compliance plans. This commenter urged 
us to keep it as simple as possible--no ``bells,'' no ``whistles,'' and 
no parametric monitoring with statistical averaging over ill-defined 
periods of time. This commenter also stated that we should seriously 
consider assuming SO2 program responsibility until the MDEQ is in a 
position to do an adequate job.
    Response: Congress intended that states have primary responsibility 
for implementing and enforcing their SIPs. We have an oversight 
secondary role and may take enforcement action under section 113 of the 
Act for violation of a SIP when a state does not take action or when 
its action is considered ineffective. We intend to carry out our 
oversight responsibility with particular care in the Billings/Laurel 
area, where we have already identified potential concerns about the 
practical enforceability of certain provisions of the SIP.
    We have regular meetings with MDEQ to discuss all compliance issues 
related to the Act. We review facilities with identified violations and 
discuss the State's proposed or on-going action to address these 
violations. There is no indication at this time that MDEQ is failing to 
meet its responsibility to

[[Page 22202]]

monitor compliance and take appropriate enforcement with respect to the 
federally enforceable SIP. These Billings/Laurel SIP revisions have not 
been subject to our oversight until now, when this final partial 
approval will make most of the provisions federally enforceable. We 
will oversee the State's efforts to monitor compliance with the new 
requirements after today's final rulemaking, with particular emphasis 
on the variable emission limitations and the effects of state-only 
provisions, which were identified in our proposed rulemaking. See 64 FR 
at 40794-40795 and 40803-40804. If we find that the State lacks 
adequate resources to pursue any violation of the Billings/Laurel SIP 
or if a state enforcement response is inadequate, we will take 
appropriate action.

O. Reasonably Available Control Measures (RACM) Including Reasonably 
Available Control Technology (RACT) and Reasonable Further Progress 
(RFP) at CENEX

    We proposed to conclude that the RACM (including RACT) requirements 
have not been met in the Laurel SO2 nonattainment area.
Summary of Comments and Response
    Two comment letters contained comments pertaining to our proposal 
on RACM (including RACT) and RFP. The two commenters stated we should 
not be disapproving the SIP as it pertains to these requirements.
    We have considered the comments received and still believe it is 
appropriate to conclude that the RACM (including RACT) requirements 
have not been met in the Laurel SO2 nonattainment area.
    The following is a summary of the comments received and our 
response to the comments:
    (1) Comment: One commenter (Cenex letter, document # IV.A-26) 
stated that since our concern regarding flares is a non-issue the 
Laurel area has demonstrated compliance with the SO2 NAAQS and RACM/
RACT and RFP have been met.
    Response: We do not believe our concerns regarding flares are a 
non-issue. We still believe the attainment demonstration is not 
approvable without enforceable emission limitations on flares. See our 
response to flare-related comments in section V.C., above. As indicated 
in our TSD (document # III.B-1), for SO2 we interpret RACM (including 
RACT) as those control measures that are necessary for attainment of 
the NAAQS. Section 171(1) of the Act defines RFP as the ``annual 
incremental reductions in emissions * * * which are required for 
purpose of ensuring attainment of the applicable NAAQS by the 
applicable date.''
    Since we believe that the State has not demonstrated attainment of 
the SO2 NAAQS in Laurel because the SIP lacks enforceable limitations 
for flares, we believe it is necessary to conclude that the RACM 
(including RACT) and RFP requirements have not been met.
    (2) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment 
# 109) stated that proposing to disapprove the attainment demonstration 
is not related to determining that RACM/RACT have not been met.
    Response: See response to comment (1) above
    (3) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment 
# 110) stated that Laurel is in compliance with the NAAQS, that 
modeling shows attainment of the NAAQS in Laurel, and that our 
dissatisfaction with the Billings model should not impact our 
determination about RFP.
    Response: See response to comment (1) above. Additionally, our 
disapproval of the attainment demonstration is not based entirely on 
the Billings stack height issue. Therefore, the Billings area modeling 
is not the sole reason why we believe it is necessary to conclude that 
the RFP requirements have not been met.

P. MSCC'S Auxiliary Vent Stacks

    We proposed to disapprove the emission limitation on the auxiliary 
vent stacks because the SIP does not restrict the type of fuel burned 
in the boilers and heaters when they are exhausting out the auxiliary 
vent stacks.
Summary of Comments and Response
    Three commenters submitted comments on our proposed action. One 
commenter believes that adjustments should be made to MSCC's exhibit 
and the other commenters believe we are being overly burdensome.
    We have considered the comments received and still believe it is 
appropriate to disapprove the emission limitation on the auxiliary vent 
stacks because the SIP does not restrict the sulfur content of the fuel 
burned in the boilers and heaters when they are exhausting out the 
auxiliary vent stacks and does not contain a monitoring method that 
would make the emission limitation practically enforceable.\21\
---------------------------------------------------------------------------

    \21\ In our proposed action on MSCC's auxiliary vent stacks we 
indicated that we believed it was appropriate to disapprove the 
emission limit on the auxiliary vent stacks because the SIP did not 
restrict the type of fuel burned in the boilers and heaters when 
exhausting out the auxiliary vent stacks. After reviewing the 
comments received on our proposed action of MSCC's 30-meter stack 
emission limit (see comments and responses in V.Q., below), we still 
believe the auxiliary vent stack emission limitation should be 
disapproved. However, in lieu of restricting the type of fuel 
burned, we believe the SIP should restrict the sulfur content of the 
fuel burned and provide a method for measuring the sulfur content of 
that fuel, i.e., make the emission limit practically enforceable.
---------------------------------------------------------------------------

    The following is a summary of the comments received and our 
response to the comments:
    (1) Comment: One commenter (Simonich letter, document # IV.A-23, 
comment # 4C) agrees that adjustments should be made to the SIP to 
address auxiliary vent stacks.
    Response: We agree with the commenter.
    (2) Comment: The other commenters (Goetz letter, document # IV.A-
23, exhibit C; MSCC letter, document # IV.A-19, comment #'s 68, 80, 
121; MSCC letter, document # IV.A-20, comment # 10B) stated that the 
auxiliary vent stack sources are trivial and even if the limitations 
were exceeded this would not harm the attainment of the NAAQS since 
these vents are not contributing to the controlling receptor. One of 
the commenters (MSCC letter, document # IV.A-19, comment #'s 80, 121; 
MSCC letter, document # IV.A-20, comment # 10A) stated that our concern 
regarding the potential for the auxiliary vent stacks to exceed their 
emission limitation if fuel high in H2S were burned is not unique to 
MSCC. The commenter stated we should strike the limitation rather than 
add more burdens to the source. Commenters (MSCC letter, document # 
IV.A-19, comment # 10C; Goetz letter, document # IV.A-23, exhibit C) 
stated that having an emission limitation invites the question of how 
are the emissions to be monitored and enforced, how is the gas to be 
determined to be low sulfur or sweetened. One commenter (MSCC letter, 
document # IV.A-19, comment #'s 10D, 10E) indicated that we never 
raised this issue in prior discussions and that other local vents in 
Yellowstone County are not covered by federally enforceable 
limitations.
    Response: Although the commenter believes the auxiliary vent stack 
emissions are trivial, we assume that emission limitations on the 
auxiliary vent stacks, along with the other emission limitations in the 
SIP, were established to assure attainment of the NAAQS. Therefore, we 
also assume that if any of the limitations are exceeded, attainment of 
the NAAQS cannot be assured. Regardless of whether the

[[Page 22203]]

auxiliary vent stack emission limitations are needed for attainment, 
the State included the auxiliary vent stack emission limitations in the 
SIP as an enforceable control strategy. We are concerned whether the 
emission limitations are truly enforceable and want to assure that they 
are. There may be other local vent stacks in the Yellowstone County 
area that do not contain specific emissions limitations in the SIP. We 
believe the SIP does not need to contain emission limitations on other 
local vent stacks but does need to contain emission limitations on the 
MSCC auxiliary for two reasons. First, the MSCC auxiliary vent stacks 
are part of a major source that is already being controlled in the SIP. 
Second, we assume that the other local vent stacks are truly minor 
sources and all these other minor sources' (e.g., local vent stacks) 
emissions have been included in the background concentration used in 
modeling. We typically include minor emission points (where the 
emission point is the entire source) in the background concentration.
    The commenter stated that the potential to violate the auxiliary 
vent stack emission limitation if it burns fuel high in H2S is not 
unique to MSCC. We are assuming that the commenter means that other 
sources could burn fuel high in H2S and violate their limitations. 
Although this is true, other sources controlled by the SIP have CEMS or 
other methods to measure H2S or sulfur content in fuel burned and flow 
of the fuel to heaters and boilers. Therefore, for the other sources 
there is a better tool to assess whether emission limitations are being 
met.
    We realize that the emissions from the auxiliary vent stacks at 
MSCC are not large. However, to assure that the emission limitation is 
being met, we believe the sulfur content of fuel burned in the heaters 
and boilers, when they are exhausting through the auxiliary vent 
stacks, should be restricted and that compliance with the emission 
limitation should be monitored by measuring the H2S concentration in 
the fuel. The MSCC exhibit submitted as part of the SIP already 
contains reporting provisions that require MSCC to submit quarterly 
reports which include estimates of the 3-hour and 24-hour SO2 emissions 
from the 30-meter stack and auxiliary vent stack (see document II.E-2, 
sections 7(C)(1)(k) and (l) of the MSCC exhibit). MSCC will need to 
know the H2S concentration of the fuel burned in the boilers and 
heaters to be able to estimate the 3-hour and 24-hour SO2 emissions 
from the auxiliary vent stacks. We do not envision that restricting the 
sulfur content of fuel burned in the boilers and heaters when they are 
venting out the auxiliary vent stacks and monitoring the H2S 
concentration of the fuel burned will impose unduly burdensome 
compliance or reporting requirements on MSCC.
    Finally, we agree that we may not have raised this issue in prior 
comments we provided the State on the SIP. We try to identify all our 
concerns with SIPs when we review them in draft form. However, just 
because we have not identified a potential problem with a draft SIP 
does not preclude us from addressing that concern when the SIP is 
submitted in final form. We understand that the earlier MSCC exhibits 
(those submitted prior to the July 1998 submittal) adopted by the State 
did not contain provisions to address the auxiliary vent stacks. Thus, 
we did not have the chance to raise the issue until after the SIP was 
submitted.

Q. MSCC's 30-Meter Stack

    We proposed to approve the SIP as it applies to MSCC's 30-meter 
stack emission limitation for SO2, even though the 30-meter stack does 
not have a CEMS or parametric monitoring system. Our proposed approval 
relied on the fact that the SIP restricts the units that can exhaust 
through the 30-meter stack to certain boilers and heaters, which may 
only burn low sulfur fuel gas or natural gas. We believed that the fuel 
limitation on the boilers and heaters would assure compliance with the 
emission limitation. The sulfur concentration in natural gas is 
generally low enough, we believe, to assure compliance with the SO2 
limitation. However, as we stated in our proposal, we were concerned 
that the SIP does not provide a definition of the term ``low sulfur 
fuel gas.'' We proposed to interpret the term ``low sulfur fuel gas'' 
to mean ``properly sweetened fuel gas.'' The MDEQ indicated to us that 
MSCC supplies the same sweetened refinery fuel gas it burns in its 
boilers and heaters to the ExxonMobil refinery, and that concentrations 
of H2S in the refinery fuel gas at ExxonMobil measure less than 100 ppm 
under normal operating conditions. Our proposed approval thus relied on 
our interpretation of the term ``low sulfur fuel gas'' and some 
assurance about the levels of H2S in the fuel gas MSCC burns in its 
boilers. In our proposal, we stated that we might create a definition 
for the term ``low sulfur fuel gas'' when we promulgated a FIP to fill 
in the gaps for SIP provisions we were proposing to disapprove.
Summary of Comments and Response
    We received two comments pertaining to our interpretation of ``low 
sulfur fuel gas.'' One commenter suggested that we approve a specific 
definition of the term, while the other commenter objected to our 
interpretation.
    We have considered the comments received and, on further 
investigation, conclude that our interpretation of the term ``low 
sulfur fuel gas'' to mean properly sweetened fuel gas is not sufficient 
to assure compliance with the 30-meter stack limitation at MSCC. 
Because the 30-meter stack lacks a CEMS, parametric monitoring system, 
or other reliable compliance monitoring method, in this final action we 
are limitedly approving the emission limitation on the 30-meter stack 
for its strengthening effect on the SIP, but are limitedly disapproving 
the limitation for its lack of a compliance monitoring method.
    The following is a summary of the comments received and our 
response to the comments:
    (1) Comment: One commenter (Zaidlicz letter, document #IV.A-30) 
stated that the definition of ``low sulfur content'' should be no more 
than 30 ppm, rather than the proposed 100 ppm.
    Response: In our proposed approval we did not assign a numerical 
value to the term ``low sulfur fuel gas.'' Instead, we relied on an 
interpretation of the term as meaning ``properly sweetened fuel gas'' 
that has been treated in an amine unit to remove H2S. In acting on a 
submitted SIP revision, we can only approve or disapprove the 
requirements the State has adopted in the SIP. We have no authority, as 
part of our approval or disapproval under section 110(k) of the Act, to 
create a definition for an undefined term in the SIP.
    In response to the comment, we investigated further to determine 
what level of H2S concentrations would assure compliance with the 30-
meter stack limitation in the ``worst case.'' The State provided 
calculations to show the H2S concentration in fuel gas that MSCC would 
need to achieve in order to meet the 30-meter stack emission limitation 
if all of the boilers and heaters allowed to vent to the 30-meter stack 
were venting at the same time (see document # IV.C-23). The State found 
that, to meet the emission limitation under these conditions the 
maximum H2S concentration could not exceed 280 ppm, assuming a nominal 
fuel gas value of 1,000 Btu's per standard cubic foot (Btu/scf). The 
calculations indicate, however, that the nominal fuel gas value at MSCC 
could be between 350 and 1500 Btu/scf. We re-ran the calculations,

[[Page 22204]]

assuming a worst-case nominal fuel gas value of 350 Btu/scf. We found 
that, in order to meet the 30-meter stack emission limitation when all 
five boilers and heaters are venting to the 30-meter stack at that 
nominal fuel gas value, the maximum H2S concentration could not exceed 
100 ppm (see document # IV.C-24).\22\ Thus it is not necessary to 
restrict the concentrations to 30 ppm or less. The problem remains, 
however, that ``low sulfur fuel gas'' is not defined in the SIP as 
meaning fuel gas with H2S concentrations of 100 ppm or less. In 
addition, MSCC does not have a monitoring system to measure H2S 
concentrations in its fuel gas.
---------------------------------------------------------------------------

    \22\ Our calculations were based on information received from 
the DEQ on April 21, 1998 (document # IV.C-23). However, based on 
MDEQ's Operating Permit Technical Review Document for MSCC's Title V 
permit, the fuel burning potential of boilers H-1, H1-A, H1-1, and 
H1-2, which may exhaust to the 30-meter stack, may be underestimated 
by 15 percent of more (document # IV.C-75). Therefore, the H2S 
concentration of the fuel gas may need to be less than the 1000 ppm 
we calculated for the 30-meter stack emission limit to be achieved.
---------------------------------------------------------------------------

    (2) Comment: The other commenter (MSCC letter, document # IV.A-19, 
comment # 78; MSCC letter, document # IV.A-20, comment #11) objected to 
our interpretation regarding ``properly sweetened fuel gas.'' The 
commenter stated that our interpretation is unnecessary and leads to 
further confusions. According to this commenter, even if the gas were 
not properly sweetened, the stack could still meet its limit. The 
commenter believes that MSCC has agreed not to vent the prior high SO2 
emissions from the 30-meter stack, and that should be sufficient for 
purposes of SIP approval. The commenter also believes that it is 
``beyond reason'' to even limit the 30-meter stack and that we should 
disapprove the SIP for establishing a limitation on such a minor 
source. The commenter stated that the concept was to be gas meeting the 
terms of the Montana sulfur in fuel rule, as clarified by the 
stipulation.
    Response: The commenter stated that it is unreasonable to even 
limit the emissions from the 30-meter stack, because they are so minor. 
We assume that the emission limitation on the 30-meter stack, along 
with the other emission limitations in the SIP, was established to 
assure attainment of the NAAQS. Therefore, we also assume that if any 
of the emission limitations are exceeded, attainment of the NAAQS 
cannot be assured. Regardless of whether the 30-meter stack emission 
limitation is needed for attainment, the State believed it was 
necessary to include the limitation in the SIP as an enforceable 
control strategy.
    Generally, when emission limitations are established in SIPs, we 
require that the SIP contain methods to assure that the limitations are 
being met and are enforceable. For the 30-meter stack limitation, the 
SIP requires that MSCC report the date and time when emissions are 
exhausted from the stack, the particular units that are exhausting from 
the stack, and engineering estimates of emissions from the stack. More 
specifically, the SIP limits the units (the particular boilers and 
heaters) that can exhaust from the stack and the type of fuel (``low 
sulfur fuel gas'' or natural gas) the boilers and heaters can burn when 
they are exhausting out the 30-meter stack. We recognize that the 
emissions from the 30-meter stack are not large. Nonetheless, in order 
to assure that the emission limitation is being met at all times, we 
believe that the type of fuel burned in the boilers and heaters when 
they are exhausting through the 30-meter stack would need to be limited 
and better defined.
    Our proposed approval of MSCC's 30-meter stack limitation relied on 
our interpretation of the term ``low sulfur fuel gas'' as meaning 
``properly sweetened fuel gas'' which has been treated in an amine unit 
to remove hydrogen sulfide. Both comments called this interpretation 
into question. When we investigated further, we determined that 
compliance with the 30-meter stack limitation can be assured if the 
fuel gas burned in the boilers and heaters that exhaust to the stack is 
limited to H2S concentrations of 100 ppm or less (see document #'s 
IV.C-23 and IV.C-24).\23\ Not only is an interpretation or definition 
of the term ``low sulfur fuel gas'' necessary to assure compliance with 
the 30-meter stack emission limitation, the interpretation or 
definition must also incorporate the notion that ``low sulfur'' fuel 
gas has H2S concentrations of 100 ppm or less. MSCC, however, lacks a 
monitoring system to measure H2S concentrations in the fuel gas burned 
in the boilers and heaters that vent to the 30-meter stack, and so 
lacks a method to assure that only ``low sulfur fuel gas'' is being 
burned.
---------------------------------------------------------------------------

    \23\ See footnote 22.
---------------------------------------------------------------------------

    We tried to determine if an alternative method of measuring H2S 
concentrations could be used. In its September 3, 1998 letter, the 
State indicated that MSCC burns the same sweetened refinery fuel gas in 
its boilers and heaters that it returns to ExxonMobil, implying that 
the H2S concentration of the refinery fuel gas burned in MSCC's heaters 
and boilers would be equivalent to the H2S concentration measured in 
ExxonMobil's refinery fuel gas (see document # II.E-9). According to 
the letter, available data from ExxonMobil's H2S monitors show that 
ExxonMobil's refinery fuel gas rarely exceeds 100 ppm H2S. However, we 
have since learned that, before ExxonMobil measures the H2S 
concentration, it may dilute the refinery fuel gas it receives from 
MSCC with natural gas (see document # IV.C-25). The H2S concentration 
measured in ExxonMobil's refinery fuel gas thus could be lower than the 
H2S concentration in the fuel gas burned in MSCC's heaters and boilers. 
As a consequence, the H2S concentration of ExxonMobil's refinery fuel 
gas cannot be used as an indicator of the H2S concentration of fuel gas 
burned in MSCC's heaters and boilers; the H2S monitoring system at 
ExxonMobil will not serve to assure compliance with the emission 
limitation on MSCC's 30-meter stack.
    The commenter stated that the intention was that the gas would meet 
the terms of the Montana sulfur in fuel rule as clarified by the 
stipulation. Montana's sulfur in fuel rule, found in the Administrative 
Rules of Montana (ARM) 17.8.322, limits the sulfur content of liquid, 
solid or gaseous fuels burned. MSCC's stipulation, paragraph 14, 
modifies ARM 17.8.322 to ``mean that no person shall burn solid, 
liquid, or gaseous fuels such that the aggregate sulfur content of all 
fuels burned within a plant during any day exceeds one pound of sulfur 
per million BTU fired. The rule shall be interpreted to allow for a 
daily deviation of 0.1 pound of sulfur per million BTU fired. The rule 
shall be interpreted to allow the blending of all fuels burned in a 
plant during a given time period in determining the aggregate sulfur 
content for purposes of the rule, and it shall not be construed to 
require the blending or physical mixing of fuels at any given furnace 
or heater within the plant complex.'' Because MSCC's stipulation 
modifies how ARM 17.8.322 is interpreted, we do not understand how 
relying upon the ``modified'' rule would address our concern. 
Specifically, MSCC's stipulation interprets ARM 17.8.322 as applying on 
a ``plant-wide'' basis. Therefore, boilers and heaters not vented to 
the 30-meter stack would be considered in determining whether the 
sulfur in fuel meets the rule. Additionally, MSCC's stipulation 
indicates that the sulfur in fuel requirement is a ``daily'' 
requirement. MSCC could not assure compliance with a 3-hour emission 
limit based on a daily requirement. Finally, even if the sulfur in fuel 
rule is

[[Page 22205]]

controlling, the sulfur content in the fuel would still need to be 
determined to assure compliance with the sulfur in fuel rule.
    In response to the comments received and as a result of further 
investigation of the issue, we conclude that the emission limitation 
for MSCC's 30-meter stack is not practically enforceable. The 
limitation on fuel for the heaters and boilers that vent to the stack 
is not adequate to assure compliance with the emission limitation, 
because the fuel limitation does not specifically limit the level of 
H2S in the fuel and, in any case, MSCC lacks a method for measuring H2S 
concentrations in the fuel. We are limitedly approving the emission 
limitation for the 30-meter stack for its strengthening effect on the 
SIP, but are limitedly disapproving the limitation for the lack of a 
compliance monitoring method that would make the emission limitation 
practically enforceable. In a later action, we intend to develop and 
promulgate a compliance monitoring method for the emission limitation 
for MSCC's 30-meter stack, when we complete a FIP to fill in the gaps 
for the SIP provisions we are disapproving today.

R. ExxonMobil's and CENEX'S Refinery Fuel Gas Limitation

    We proposed to conditionally approve the SIP as it applies to 
ExxonMobil's refinery fuel-gas combustion emission limitations and 
attendant compliance monitoring methods, in sections 3(A)(1), 3(B)(2), 
4(B), and 6(B)(3) of ExxonMobil's exhibit, because the Governor 
committed to address our concerns with the method for monitoring 
compliance with the emission limitation. We also proposed to approve 
Cenex's method for determining H2S in the refinery fuel gas.
    On May 4, 2000 the Governor of Montana submitted a SIP revision to 
fulfill the commitments on which the proposed conditional approval was 
based.
Summary of Comments and Response
    Five comment letters contained comments on our proposed action. 
Three commenters believe we should place more requirements on sources. 
One commenter agreed with our proposed conditional approval and one 
commenter sought further clarification on several issues discussed in 
our TSD.
    We have considered the comments received. However, since the 
Governor has fulfilled his commitment, we believe it is not appropriate 
to finalize the conditional approval. Instead, we will complete notice-
and-comment rulemaking on parts of the July 29, 1998 submittal (i.e., 
those parts we proposed to conditionally approve on July 28, 1999) and 
all of the May 4, 2000 submittal.
    Even though we intend to complete separate rulemaking action on 
parts of the July 29, 1998 and all of the May 4, 2000 submittal, below 
we are responding to the comments received:
    (1) Comment: Two commenters (YVCC letter, document # IV.A-29; 
Zaidlicz letter, document # IV.A-30) stated we should set an H2S 
limitation of 160 ppm (NSPS) on refinery fuel gas burned in heaters and 
boilers; sources can meet a lower level. These commenters also stated 
that methods for determining compliance with SO2 emission limitations 
(H2S concentration and flow meters) can be nebulous and may be subject 
to error particularly when the H2S concentrations exceed the level at 
which the H2S CEMS can monitor and manual methods are used to determine 
compliance. One commenter (McGarity letter, document # IV.B-1) stated 
industry should be required to accept either fuel firing limitations on 
process heaters and boilers or H2S concentration limitations (e.g., 160 
ppm H2S).
    Response: Two commenters stated our proposed action should go 
further by setting H2S limitations on refinery fuel gas. As part of our 
proposed action on the SIP, we cannot establish limitations more 
stringent than the State submitted as part of its SIP. Under the SIP 
process, we evaluate the State submittal to see if it meets the 
requirements of the Act. We proposed to approve those provisions that 
meet the Act and proposed to disapprove or conditionally approve those 
provisions that do not measure up to the Act's requirements.
    In the case of ExxonMobil's refinery fuel-gas combustion emission 
limitation, the State has modeled this limitation, along with other 
enforceable limitations in the SIP, and determined that the area will 
attain the NAAQS. Under this SIP, we cannot require the State to do 
more than adopt enforceable measures that will assure attainment of the 
NAAQS.
    These commenters also stated that the methods to determine 
compliance with the fuel gas combustion emission limitations are 
nebulous particularly when the H2S CEMS are over-ranged. We assume that 
the commenters are referring to our proposed approval of Cenex's method 
to determine H2S in the refinery fuel gas. Cenex is to use CEMS to 
determine H2S concentrations. During times when the H2S concentration 
exceeds the range the H2S CEM can monitor, Cenex is to initiate fuel 
gas sampling analysis on a once per three hour period sampling 
frequency using the Tutwiler method in 40 CFR 60.648 (or another method 
approved by the MDEQ and EPA) to determine the H2S concentration.
    We cannot require that CEMS always be used to monitor compliance 
with emission limitations; other methods, if proven acceptable, can be 
used. The CEMS and the Tutwiler method are methods that have been 
adopted by us. Additionally, when the Tutwiler method is used, Cenex's 
exhibit requires that it initiate fuel gas sampling analysis on a once 
every three-hour period sampling frequency. Therefore, every three hour 
period will be analyzed to monitor whether or not Cenex is in 
compliance with its fuel gas combustion emission limitation. We 
understand that the frequency at which the H2S CEMS frequency is over-
ranged is very low. Therefore, we believe the CEMS and the Tutwiler 
method (used when the H2S concentration exceeds the level at which the 
H2S CEMS can monitor), with 3-hour sampling, are acceptable methods to 
monitor compliance with the emission limitations.
    (2) Comment: One commenter (ExxonMobil letter, document # IV.A-28) 
stated it is appropriate to conditionally approve its fuel gas 
combustion emission limitation and attendant compliance monitoring 
method.
    Response: As mentioned above, since the Governor has fulfilled his 
commitment, we are not finalizing the conditional approval. Instead, we 
will complete separate rulemaking action on parts of the July 29, 1998 
submittal (i.e., those parts we proposed to conditionally approve on 
July 28, 1999) and all of the State's May 4, 2000 submittal.
    (3) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment #'s 73, 74) wanted clarification on what we meant when we 
indicated that 800 ppm is not controlling at ExxonMobil and its 
significance. The commenter stated that the State determined that the 
analyzer range is significant for its purposes. Secondly, the commenter 
wanted to know what we meant when we alleged that ExxonMobil exceeded 
its fuel gas limitation due to problems at MSCC.
    Response: The commenter is correct that the State has determined 
that the analyzer range is sufficient. In the State's May 4, 2000 
submittal, the State has not revised ExxonMobil's exhibit to address 
our concerns. We will address the May 4, 2000 submittal in a separate 
rulemaking action.

[[Page 22206]]

    One commenter wanted clarification on what we meant when we 
indicated that 800 ppm is not controlling at ExxonMobil, and the 
significance of that. The SO2 SIP limits the SO2 emissions from 
combustion sources, not the concentration of H2S or other sulfur 
compounds in the fuel burned. In the case of fuel gas combustion 
sources, compliance with the limitation is monitored by knowing the 
concentration of H2S in the fuel and the flow of the fuel to the 
combustion sources (H2S concentration * flow rate * constant = lbs SO2/
hour). We learned, however, that there could be situations when the H2S 
concentration in the fuel gas could exceed the level at which the H2S 
CEMS could monitor. Therefore, sources could be exceeding the fuel gas 
combustion limitation and the State and EPA wouldn't know because the 
H2S CEMS would not record the true H2S concentration. We generally 
believe section 110(a)(2)(A) of the Act requires that emissions 
limitations in SIPS be enforceable at all times.
    For Cenex, the SIP contains an alternative method to determine H2S 
concentrations when H2S concentrations exceed the level the H2S CEMS 
can monitor. For Conoco, we were less concerned about the range of 
concentrations the H2S CEMS could monitor because all of Conoco's 
boilers and heaters are limited by either new source performance 
standards (NSPS) or a permit to a level equivalent to NSPS (i.e., 160 
ppm of H2S). Therefore, Conoco's H2S CEMS may only be spanned to read 
to 300 ppm and that is acceptable because any reading over 150 ppm 
would be considered a violation.
    Although ExxonMobil has spanned its H2S CEM to read between 1200 to 
1300 ppm, we understand that there still could be situations when the 
fuel gas could exceed the level at which ExxonMobil's H2S CEMS can 
monitor. Also, there are no regulations or permits that require 
ExxonMobil to limit the H2S ppm concentration in the refinery fuel gas 
combusted in ExxonMobil's heaters and boilers. At one point, the State 
believed its sulfur-in-fuel regulation would require ExxonMobil to meet 
an H2S concentration of 800 ppm in the refinery fuel gas. However, the 
Billings SIP modifies how the State's sulfur-in-fuel rule applies at 
the Billings/Laurel sources and ExxonMobil is not required to meet the 
H2S limitation of 800 ppm in its refinery fuel gas.
    The commenter also wanted to know what we meant when we alleged 
that ExxonMobil exceeded its fuel gas limitation due to problems at 
MSCC. In our TSD (see document # III.B-1), we indicated that we were 
aware that on several occasions during the summer of 1998, ExxonMobil 
exceeded its fuel gas combustion limitation due to problems either at 
MSCC or with ExxonMobil's amine unit. We became aware of the emission 
limitation exceedance based on three letters ExxonMobil sent to the 
MDEQ, on September 14, October 1, and October 30, 1998 (see document 
#'s IV.C-19, 20 and 21, respectively). In those letters, ExxonMobil 
indicated that on two separate occasions (one in July and one in 
August, 1998) its fuel gas was not being properly treated. On one 
occasion, MSCC was performing maintenance and ExxonMobil was switching 
to its backup amine unit when ExxonMobil found that its fuel gas was 
not properly treated. On the other occasion, a thunderstorm caused a 
local power outage. MSCC was unable to treat ExxonMobil's refinery fuel 
gas for 74 minutes. Those were the situations we were referring to in 
our TSD.

S. Variable Emission Limitations

    We proposed to approve the SIP as it applies to the variable 
emission limitations at Montana Power and ExxonMobil. We proposed to 
disapprove the SIP as it applies to the variable emission limitations 
at MSCC due to the stack height issue. Our proposed approval for 
Montana Power and ExxonMobil's variable limitation had several caveats. 
If we were to find that the variable emission limitations are not 
practically enforceable by the MDEQ or us, that the back-up monitoring 
systems are not sufficient to assure on a regular basis that data are 
available to determine the emission limitations, or that MDEQ is unable 
to adequately review and assure the quality of the monitoring data on 
which both limitations and compliance are based, we would reconsider 
our approval.
Summary of Comments and Response
    Four commenters submitted comments on our variable emission 
proposal. One commenter questioned whether the State has the resources 
to implement the variable emission limitations. Several commenters took 
exception to our characterization of the variable emission limitation, 
commenting that we portrayed the variable limitations negatively and 
the commenters stated they should be portrayed in a positive manner. 
Finally, several commenters wondered how we were going to address 
MSCC's variable limitation when we adopt a FIP.
    We have considered the comments received and still believe it is 
appropriate to approve the SIP as it applies to the variable emission 
limitations at Montana Power and ExxonMobil, with the caveats mentioned 
in our proposal, and to disapprove the SIP as it applies to the 
variable emission limitations at MSCC due to the stack height issue.
    The following is a summary of the comments received and our 
response to the comments:
    (1) Comment: One commenter (Zaidlicz letter, document # IV.A-30) 
stated that MDEQ does not have adequate resources to continually review 
monitoring data for compliance with the variable emission limitations 
at ExxonMobil, MSCC and Montana Power.
    Response: Comments on MDEQ resources are being addressed 
separately. See section V.N., above.
    (2) Comment: Several commenters (Goetz letter, document # IV.A-18, 
exhibit C; State letter, document # IV.A-23, comment # 4B) took 
exception to our characterization of the air quality effect of the 
variable emission limitations. The commenters stated our 
characterization does not address the benefits of variable emission 
limitations. For example, in the traditional approach to establishing 
emission limitations through dispersion modeling, the emission 
limitation is a function of an assumed buoyancy. Normally, a relatively 
buoyant plume is assumed. With variable emission limitations, the 
actual buoyancy of the plume is considered in establishing the emission 
limitation. At low buoyancy flux, emissions are limited much more than 
would occur in a normal SIP. One commenter stated that variable 
emission limitations are more protective of the NAAQS. The commenters 
stated variable emissions are a much superior approach to setting 
emission limitations. One commenter stated that our concerns about the 
variable limitation are inappropriate because of the practical nature 
of the instrumentation used to determine compliance (instruments are 
very reliable) and the modeling. The commenter stated the instruments 
used to determine the buoyancy flux are very reliable and that the same 
instruments used to determine compliance for a fixed limitation would 
also be used to determine compliance with a variable limitation.
    Response: As indicated in our proposed rulemaking, we evaluate SIPs 
in relation to several provisions of the Act. In addition to looking at 
air quality impacts of SIPs, we also need to assure that SIPs are 
enforceable. Although we may agree with the commenters that the 
variable emission limitations will result in fewer emissions when the 
buoyancy

[[Page 22207]]

of the plume is lower, we also believe that variable limitations add a 
level of complexity when trying to enforce. One commenter points out 
that the same instruments would be used to determine compliance whether 
the emission limitation was fixed or variable and that a variable 
limitation should not make any difference. Although the same 
instruments may be used to determine compliance whether the limitation 
is fixed or variable, we believe that these instruments will be 
generating significantly more information for variable limitations than 
for fixed limitations. For example, in addition to confirming that the 
source is in compliance with the limitation, agencies will also need to 
confirm that the variable emission limitation was determined correctly. 
Therefore, we believe that variable emission limitations increase the 
workload and add a layer of complexity that is not found with fixed 
emission limitations. Because of this enforcement complexity, we do not 
agree with the commenters that variable emission limitations are a 
superior approach to setting emission limitations.
    However, we still believe it is appropriate to approve the variable 
emission limitations in the SIP with a ``wait and see'' approach. As 
indicated in our proposal, if we find it is too difficult to enforce, 
we will reconsider our approval.
    (3) Comment: Several commenters (State letter, document # IV.A-23, 
comment # 4D; Goetz letter, document # IV.A-23, exhibit C; MSCC letter, 
document # IV.A-19, comment # 44) stated that we should adopt variable 
emission limitations for MSCC if we adopt a FIP for MSCC. One commenter 
stated we should use the methodology laid out in the February 2, 1996 
stipulation between ExxonMobil, MSCC and MDEQ, with more current CEM 
data from MSCC, to develop the FIP. One commenter stated that since we 
had not approved the variable limitation at MSCC, we had left a 
question as to whether we would approve a variable limitation for MSCC 
when we promulgated a FIP.
    Response: We are only addressing the SIP, and not a FIP, at this 
time. Therefore, comments pertaining to a FIP should be resubmitted in 
response to a FIP proposal.
    (4) Comment: Several commenters (State letter, document # IV.A-23, 
comment # 4D; Goetz letter, document # IV.A-23, exhibit D; MSCC letter, 
document # IV.A-19, comment #'s 45, 72, 122) stated we should make 
clear in our approval of the SIP what should happen to MSCC's redundant 
monitoring and data substitution requirements that are required in the 
State's existing SIP. Some commenters stated that these requirements 
were only needed for the variable limitation and that since we are not 
approving the variable limitation, approving the redundant monitoring 
and data substitution requirements would make the federally approved 
SIP more stringent than the State intended. Commenters stated that any 
FIP should also address the issues of redundant monitoring and data 
substitution requirements.
    Response: We assume that the commenters are referring to section 
6(B)(3) of MSCC's exhibit which requires MSCC to install certain 
monitoring equipment to support the use of variable emission 
limitations. Since we proposed to disapprove the variable limitation at 
MSCC, the commenters stated we should clarify our approval of these 
provisions.
    Section 6(B)(3) states, ``[b]y January 1, 1999, or a date 6 months 
after EPA approval of the Buoyancy Flux monitoring contained in this 
document (whichever date is later)* * *'' MSCC is to install and 
maintain certain pieces of back-up monitoring equipment. Since we are 
disapproving MSCC's variable emission limitation, we believe it does 
not make sense to approve section 6(B)(3) of MSCC's exhibit because 
section 6(B)(3)'s existence is conditioned on something that is not 
happening. That is, we interpret section 6(B)(3) to apply only if we 
approve MSCC's variable emissions limitation. Therefore, we are not 
acting on section 6(B)(3) of MSCC's exhibit because we are disapproving 
the variable emission limitations.
    Finally, future FIP monitoring requirements will be addressed at a 
later time.
    (5) Comment: One commenter (Goetz letter, document # IV.A-23, 
exhibit D) stated that our tentative approval of the variable emission 
limitation is improper and amounts to unauthorized intrusion into the 
primacy of the State's authority to allocate the ultimate mix of 
emission controls in order to meet the NAAQS. The commenter also stated 
that the partial approval leaves MSCC in limbo with no enforceable 
emission limitation.
    Response: We do not agree that we are tentatively approving the 
variable emission limitation. As proposed, we are approving the 
variable emission limitation at ExxonMobil and Montana Power and 
disapproving it at MSCC. We do not believe we would be intruding on the 
primacy of the State to select the strategies to attain the NAAQS by 
partially approving and partially disapproving the plan. As indicated 
earlier in the flare discussion (section V.C., above), the general air 
quality management philosophy of the Act is that we establish NAAQS, 
and States develop, and submit to us, control programs to attain and 
maintain these NAAQS. We either approve or disapprove these control 
programs and to the extent they are approved they are legally 
enforceable by us and citizens under the Act. See also our discussion 
in section V.E., above regarding comments on our partial approval of 
the SIP.
    We indicated in our proposal that we had concerns with the variable 
emissions limitation, but that we were going forward with an approval. 
Regardless of whether or not we stated in our proposed rulemaking 
action our recourse for addressing any future concerns about the 
variable emission limitation, the Act provides us with the authority to 
require that the SIP be revised or to correct any action we later find 
to be in error. Section 110(k)(5) says ``[w]henever the Administrator 
finds that the applicable implementation plan for any area is 
substantially inadequate to attain or maintain the relevant national 
ambient air quality standard.* * * or to otherwise comply with any 
requirement of this Act, the Administrator shall require the State to 
revise the plan as necessary to correct such inadequacies* * *'' 
Section 110(k)(6) provides the authority to revise our action on a plan 
if we find our action to be in error. Therefore, we do not believe our 
approval of the variable emission limitation was tentative or improper. 
Our proposal provided the State, sources and public with notice of our 
concern about the variable limitations and our recourse should those 
concerns come to fruition. The Act gives us the authority to address 
any future problems with the variable emission limitation, or any other 
aspect of this SIP, regardless of whether or not we identify our 
concerns in our approval of the SIP.
    Finally, the commenter stated that our partial approval leaves MSCC 
in limbo with no enforceable emission limitation. Since we are 
disapproving the emission limitations on the 100-meter stack, the 
commenter is correct in that there will be no federally enforceable 
emission limitations on the 100-meter stack. However, we intend to 
address this issue by adopting a FIP. In the meantime, the 100-meter 
stack is subject to State-enforceable limitations on the 100-meter 
stack.

[[Page 22208]]

T. Minor Sources

    In our TSD to our proposed rulemaking action (page 44), pertaining 
to the discussion of MSCC's auxiliary vent stacks, we indicated that 
the prior stipulations (those submitted prior to the July 29, 1998 
submittal) appeared to provide an exemption for minor sources, which 
the auxiliary vent stacks could be construed to be.
Summary of comments and responses
    One commenter wanted further explanation of our comment. We are 
providing that explanation below.
    (1) Comment: One commenter (MSCC, letter, document # IV.A-19, 
comment #79) requested that we explain what we meant on page 44 of our 
technical support document where we indicated that the prior 
stipulations (those submitted prior to the July 29, 1998 submittal) 
appeared to provide an exemption for minor sources that possibly 
included the auxiliary vent stacks. The commenter stated that there are 
other minor sources that are exempt from the SIP, the nation has 
millions of minor sources, and the prior SIPs as well as the existing 
SIP are adequate to control minor sources at MSCC.
    Response: We initially raised concerns about the auxiliary vent 
stack emissions in our June 3, 1997 letter to Mark Simonich (see 
document # II.C-8). Our concern was that the exhibit to the stipulation 
(submitted by the Governor on August 27, 1996) appeared to only limit 
the named heaters and boilers if they were vented to the 100-meter or 
the 30-meter stack. If emissions from the named heaters and boilers 
were vented out the auxiliary vent stacks, the heater and boilers were 
only limited by the minor source provisions ;\24\ there were no 
specific emission limitations on the heaters and boilers when vented 
out the auxiliary vent stacks. Since the State believed it was 
necessary to limit and model the 30-meter stack when the heaters and 
boilers were vented to it, we were concerned that if all the emissions 
from the heaters and boilers were vented to the auxiliary vent stacks, 
which have lower stack heights than the 30-meter stack, then attainment 
could not be assured.
---------------------------------------------------------------------------

    \24\ We were also concerned that the minor source provisions (in 
the exhibit submitted by the Governor on August 27, 1996) might not 
apply to the auxiliary vent stacks because the minor source 
provisions indicated that they applied to the ``control of emissions 
of sulfur bearing gases from minor sources such as ducts, stacks, 
valves, vessels, and flanges which are not otherwise subject to this 
Exhibit A.'' Since the named heaters and boilers were already 
subject to Exhibit A, we were concerned that the minor source 
provisions might not apply to the auxiliary vent stacks at the named 
heaters and boilers.
---------------------------------------------------------------------------

    In his January 30, 1998 letter (see document # II.C-9), Mark 
Simonich agreed that the SIP did not limit the emissions of the named 
heaters and boilers when they are vented through their respective 
auxiliary vent stacks. The letter indicated that MSCC and the 
Department intended to model these emissions and modify the stipulation 
as needed. The July 29, 1998 submittal contained the modeling 
demonstration and revisions to the stipulation to address the auxiliary 
vent stacks.

U. Compliance Determining Method--ExxonMobil's Coker CO-Boiler Stack 
and F-2 Crude/Vacuum Heater Stack

    We proposed to conditionally approve the SIP as it applies to the 
coker CO-boiler stack emission limitation and F-2 crude/vacuum heater 
stack emission limitations and the attendant compliance monitoring 
method (sections 3(E)(4) and 4(E) (only as they apply to the F-2 crude/
vacuum heater stack), 3(A)(2), 3(B)(1), 3(B)(3) and attachment 2 of 
ExxonMobil's exhibit), based on the Governor's commitments to adopt a 
compliance monitoring method for the coker CO-boiler stack emission 
limitation and to revise attachment 2 (of the exhibit).
    On May 4, 2000, the Governor of Montana submitted a SIP revision to 
fulfill the commitment on which the proposed conditional approval was 
based.
Summary of Comments and Responses
    We received three comment letters on our proposed conditional 
approval of ExxonMobil's coker CO-boiler stack emission limitation and 
F-2 crude/vacuum heater stack emission limitations and the attendant 
compliance monitoring method (sections 3(E)(4) and 4(E) (only as they 
apply to the F-2 crude/vacuum heater stack), 3(A)(2), 3(B)(1), 3(B)(3) 
and attachment 2.) Two commenters stated we should require CEMS on 
ExxonMobil's coker CO-boiler stack and one of the commenters stated we 
should have CEMS on the F-2 crude/vacuum heater stack. One commenter 
agreed with our proposal.
    We have considered the comments received. However, since the 
Governor fulfilled his commitments, we believe it is not appropriate to 
finalize the conditional approval. Instead, we will complete notice-
and-comment rulemaking on parts of the July 29, 1998 submittal (i.e., 
those parts we proposed conditional approval on July 28, 1999) and all 
of the May 4, 2000 submittal.
    Even though we intend to complete separate rulemaking action on 
parts of the July 29, 1998 submittal and all of the May 4, 2000 
submittal, below we are responding to the comments received:
    (1) Comment: Two commenters (Zaidlicz letter, document # IV.A-30 
and McGarity letter, document # IV.B-1) stated ExxonMobil's coker CO-
boiler emission limitation should be enforced through CEMS. One 
commenter (McGarity letter, document # IV.B-1) stated ExxonMobil's F-2 
crude/vacuum heater stack should contain CEMS. The commenter stated SO2 
compliance cannot be demonstrated with best engineering algorithms 
unless all the H2S in the feed refinery fuel gas (including 
sour water stripper emissions and other streams that are plumbed 
upstream of the combustion unit) are regularly measured or there is an 
SO2 CEMS.
    Response: We cannot require that every emission point be enforced 
through CEMS. Other methods, such as engineering calculation, are 
acceptable if the State can demonstrate that the calculations are 
representative of SO2 emissions. With the May 4, 2000 submittal, the 
State has developed a method to monitor compliance with ExxonMobil's 
coker CO-boiler emission limitation and is revising attachment 2 of 
ExxonMobil's exhibit. We will evaluate the methods the State developed 
in a separate rulemaking action.
    (2) Comment: One commenter (ExxonMobil letter, document IV.A-28) 
agreed with our assessment that the coker CO-boiler stack emission 
limitation and F-2 crude/vacuum heater stack emission limitations and 
the attendant compliance monitoring method should be conditionally 
approved.
    Response: As mentioned above, since the State has fulfilled its 
commitment, we are not finalizing the conditional approval. Instead, we 
will complete separate rulemaking action on parts of the July 29, 1998 
submittal (i.e., those parts we proposed to conditionally approve on 
July 28, 1999) and all of the State's May 4, 2000 submittal.

V. Effect of the 1990 Amendments to the Clean Air Act

    (1) Comment: One commenter (MSCC letter, document # IV.A-20, 
comment # 3.P) expressed a belief that the Clean Air Act amendments of 
1990 superseded requirements for attainment demonstrations for SIPs for 
three nonattainment areas in California under the prior Act and that we 
could not take action on this SIP until we clarified the effect of the 
1990 amendments on other

[[Page 22209]]

attainment demonstrations. The same commenter stated that EPA must 
determine whether Montana needs to submit a SIP that relies on a 
modeled attainment demonstration in light of the 1990 amendments. See 
MSCC letter, document # IV.A-20, comment # 4.G.
    Response: Generally, the 1990 amendments to the Clean Air Act do 
not affect our pre-existing powers concerning the approval of plans or 
plan revisions. Commonwealth of Pennsylvania Dept. of Environmental 
Review v. Environmental Protection Agency, 932 F.2d 269, 272 (3rd Cir. 
1991). We are uncertain what the commenter means when he states that 
the amendments superseded requirements for attainment demonstrations 
and that EPA must determine whether a modeled attainment demonstration 
is necessary under the current Act. The 1990 amendments did not revise 
the planning requirements for SO2. The 1990 amendments did revise the 
planning requirements for three criteria pollutants: ozone, carbon 
monoxide, and PM-10. See CAA title I, part D, subparts 2, 4, and 4 
(sections 181 through 190 of the Act). We clarified the effect of these 
extensive revisions with respect to various aspects of SIP development 
in our published guidance titled ``General Preamble for the 
Implementation of Title I of the Clean Air Act Amendments of 1990'' 
(``General Preamble''). See generally 57 FR 13497 (April 16, 1992)--
document # II.A-15.
    The 1990 Act amendments that affected requirements for 
nonattainment areas for ozone, for example, (Act title I, part D, 
subpart 2, sections 181-185B) changed the attainment deadlines for 
these areas and may have had an effect on several pending actions 
against EPA related to our approval of SIPs for the Los Angeles area. 
The 1990 amendments had a more limited effect on the planning 
requirements for SO2. The amendments did not alter attainment deadlines 
or establish new requirements for attainment demonstrations for SO2 
SIPs, but simply required States with SO2 nonattainment areas to submit 
a plan that complied with general planning requirements, including a 
part D permit program for major new and modified sources. See section 
191 of the Act. See also, General Preamble, 57 FR at 13546, where we 
said that if a nonattainment SO2 plan had been approved for an area 
before the 1990 Amendments and we subsequently found the plan to be 
substantially inadequate, as we did for the Laurel nonattainment area, 
the plan must be revised to provide for attainment within five years 
from the finding of inadequacy. The State of Montana submitted the 
required plan revision for the Laurel SO2 nonattainment area as part of 
the SIP revisions for the Billings/Laurel area. Because of the direct 
relationship between receptors and emission sources, the use of models 
to demonstrate attainment of the SO2 NAAQS continues to be a necessary 
and appropriate planning tool in SO2 nonattainment and SIP Call areas.

W. Stack Height Issues

    In our July 28, 1999 action (64 FR 40791) we proposed to disapprove 
MSCC's stack height credit and emissions limitations used in the 
attainment demonstration modeling for the Billings/Laurel area. We also 
proposed to disapprove MSCC'S emissions limitations because the State 
set the limitations based on an amount of stack height credit for MSCC 
(97.5 meters) that is not supportable under section 123 of the Act and 
EPA's stack height regulations. Generally speaking, a source allowed 
greater stack height credit will have less stringent emissions 
limitations in the SIP. Such a source is able to rely to a greater 
degree on dispersion, rather than emissions controls, to help ensure an 
area meets the NAAQS.
Summary of Comments and Response
    We received numerous comments on our proposal. Most of the comments 
were from MSCC and its consultants. They objected to our proposed 
disapproval of the stack height credit and emissions limitations for 
MSCC. The State also submitted comments objecting to our proposal. 
Several other commenters also submitted comments on this issue, some 
objecting to our proposal and others favoring our proposal.
    We have considered the comments received and still believe we 
should finalize our proposed disapproval of the MSCC's stack height 
credit and SRU 100-meter stack emissions limitations. None of the 
adverse comments has convinced us that our interpretation of the Act 
and our regulations is unreasonable or that we should change our 
proposed course of action.
    To assist the reader, we have attempted to separate the comments 
and our responses into categories. Some comments and responses that 
relate to stack height questions are contained in other sections of 
this document--for example, comments that raise constitutional 
questions are grouped with other comments based on the Constitution. 
(See section V.E., above.)
    The following is a summary of the comments received and our 
response to the comments.
    1. Issues Related to NSPS
    Although the State approved above-formula stack height credit for 
MSCC, and required MSCC to use an NSPS emission rate in the fluid 
modeling demonstration that the State approved, the State did not 
require MSCC to meet the NSPS emission rate in the SIP. As we described 
in our proposed disapproval and TSD, we read the language of our stack 
height regulations to require sources that wish to obtain above-formula 
stack height credit to have a SIP limit that is no higher than the NSPS 
limit used in fluid modeling. In the alternative, a source may justify 
use of an alternative limit in fluid modeling by showing that it cannot 
meet the NSPS limit. In this instance, a source would then have to have 
a SIP limit no higher than this alternative limit. Such an alternative 
limit would be determined through a Best Available Retrofit Technology 
(BART) analysis pursuant to EPA guidance. We typically refer to such an 
alternative limit as a ``BART limit.''
    Because MSCC's emissions limitations in the SIP are not consistent 
with the NSPS limit used in MSCC's above-formula fluid modeling, we 
proposed to disapprove MSCC's 97.5 meter stack height credit and SRU 
100-meter stack emissions limitations. We received numerous comments on 
this issue and have considered them. Nothing in the comments has caused 
us to change our position on this issue.
    (a) Comment: One commenter (MSCC letter, document #IV.A-19, comment 
#'s 20, 21, 89; MSCC letter, document #IV.A-20, comment #1.J) stated 
that EPA should find that the State properly applied the explicit 
provision of the rules for use of NSPS or other feasible emission rates 
in the approved fluid modeling and that the State was not required to 
impose the NSPS or other feasible emission rate as an ongoing operating 
limit. The commenter claimed that the rule defines GEP without 
reference to actual emission limits; that instead, GEP is properly used 
to define emission limits under section 123 of the Act and EPA's 
regulations, and to establish an emission limit before establishing GEP 
is circular logic.
    Response: We addressed these objections in the TSD to our proposal, 
and we stand by that discussion--see TSD pages 61-66. We continue to 
read the stack height regulations to require a source to at least meet 
the NSPS/BART limit as a condition of obtaining above-formula stack 
height credit. Establishing an upper bound for an emission limit

[[Page 22210]]

before establishing GEP stack height is not circular. It merely 
reflects EPA's conscious decision to limit situations in which sources 
would want or need above-formula stack height credit and to restrict 
such credit to sources that would be well-controlled as EPA decided to 
define that term. EPA's approach was entirely consistent with Congress' 
intent that above-formula stack height credit should be granted only in 
rare circumstances and with utmost caution. See NRDC v. Thomas, 838 
F.2d 1224, 1242; Sierra Club v. EPA, 719 F.2d 436, 450.
    In addition to the language we cited in our TSD, there is 
additional preamble language that is relevant to this issue. Under the 
heading, ``Summary of Modifications to EPA's Proposal Resulting from 
Public Comments'', we stated the following:

``Section 51.1(ii)(3) (should refer to (kk)(1)) has been revised as 
discussed elsewhere in this notice to specify that an emission rate 
equivalent to NSPS must be met before a source may conduct fluid 
modeling to justify stack height credit in excess of that permitted 
by the GEP formulae.''

50 FR 27905, July 8, 1985, emphasis added. Again, it is clear that the 
NSPS rate was not intended as a mere modeling assumption.
    (b) Comment: One commenter (State letter, document #IV.A-23, pp. 
17-19) stated that the rule and section 123 contain no requirement that 
a source must meet the NSPS limit on an ongoing basis. The commenter 
claimed that the rules and section 123 pertain to the determination of 
GEP stack height and do not impose the NSPS limit or any other emission 
limit. According to the commenter, the term ``allowable emission'' does 
not create the requirement EPA says it does, particularly given the 
context in which it is found.
    Response: We disagree with the commenter regarding our rule and the 
use of the term ``allowable emission.'' See our response to the 
previous comment. We agree that section 123 does not impose an emission 
limit for granting above-formula stack height credit. The D.C. Circuit 
recognized this, but held that EPA had the discretion under 123 to 
apply control-first in the above-formula context. NRDC v. Thomas, 838 
F.2d 1224, 1241 (D.C. Cir. 1988). This is what EPA did, by requiring 
that a source granted above-formula stack height credit meet the NSPS 
or BART alternative rate as an ongoing limit. The State's reading of 
the regulation would read the term ``allowable'' out of the regulation, 
but this language cannot be ignored. See, e.g., Market Co. v. Hoffman, 
101 U.S. 112, 115--116 (1879); Reiter v. Sonotone Corp., 442 U.S. 330, 
339 (1979).
    In addition, the context must be considered. Our interpretation is 
consistent with the form of the proposed regulation. In the proposal, 
we proposed the use of one of three emission rates in the fluid 
modeling demonstration. It is clear from the following language from 
the proposal that we used the terms ``emission rate'' and ``emission 
limitation'' interchangeably and that we viewed the emission rate used 
in fluid modeling demonstrations as an upper bound for subsequent 
emission limits:

``It was not necessary under the previous definition of ``excessive 
concentrations'' to establish a source emission limitation prior to 
conducting fluid modeling because the definition required only that 
sources show an increase in concentration due to downwash, wakes, or 
eddy effects. With the revised definition, it will be necessary to 
specify an emission rate in the fluid model, in order to determine 
whether a NAAQS or PSD increment is being exceeded. Consequently, 
the Agency will require in its technical support document that the 
emission limitation be established based on either: (1) The 
existing, approved emission limit; (2) any applicable technology-
based emission limit, such as the new source performance standards 
(NSPS); or (3) the emission limit that would result from the use of 
GEP formula stack height, whichever is applicable to the source 
being modeled. Once the emission limitation is identified, fluid 
modeling may consider the actual downwash, wake, and eddy effects of 
nearby terrain features and structures on ground level 
concentrations. Sources will then be allowed to calculate stack 
height credit based on that height needed to eliminate excessive 
concentrations caused by such effects.''

49 FR 44878, 44882, November 9, 1984.
    We viewed the emission rate to be used in fluid modeling as a limit 
on future emissions--in the Agency's view, the limit used in fluid 
modeling and above-formula GEP stack height credit were inexorably 
linked, and the above-formula stack height credit had no validity 
unless the emission limit established prior to conducting fluid 
modeling was honored. (As we discuss elsewhere, one way in which the 
emission limit is honored is if the SIP establishes a lower limit based 
on other factors or requirements that are more controlling than 
downwash.)
    (c) Comment: Two commenters (State letter, document #IV.A-23, p. 
19; Goetz letter, document #IV.A-18, exhibit D, p. 23) stated that it 
is inappropriate for EPA to rely on or resort to the preamble to the 
stack height regulations or legislative history when the plain language 
of the rules is clear. These commenters claimed that the preamble 
should not be used to create ambiguity where none exists or to alter 
the rule language. According to the commenters, the rules require use 
of the NSPS limit in the fluid modeling demonstration but do not 
address the emission limitation that will apply after the determination 
of GEP stack height. One of the commenters (State) asserted that the 
preamble language selected by EPA is unpersuasive and taken out of 
context, and that other preamble text clearly supports the commenters' 
position.
    Response: As noted in our TSD (p. 61), the plain language of the 
rule refers to the ``allowable emission rate'' to be used in the fluid 
modeling demonstration, and the word ``allowable'' is used in our 
regulations to denote an enforceable emission limit. The word 
``allowable'' would be extraneous if we were merely trying to indicate 
that the NSPS would be assumed for demonstration purposes. We believe 
our intent was clear--the emission rate used in the fluid modeling 
demonstration was not a mere assumption, but a cap on emissions that a 
source would have to meet as a condition of obtaining above-formula 
stack height credit. At the very least, the use of the term ``allowable 
emission rate,'' combined with the possibility that a source could 
justify an alternative emission rate in certain circumstances, renders 
the regulation ambiguous and subject to reasonable interpretation by 
EPA. See, e.g., Martin v. Occupational Safety & Health Review Comm'n, 
499 U.S. 144, 150-151 (1991); Udall v. Tallman, 380 U.S. 1, 16 (1965); 
Walker Stone Company, Inc. v. Secretary of Labor, 156 F.3d 1076, 1080 
(10th Cir. 1998). This also makes it reasonable for us to consult other 
documents implementing and interpreting the regulation. The preamble to 
the regulation is particularly important for interpreting the 
regulation because it was issued contemporaneously with the regulation 
and was essential to meet the requirements of the Administrative 
Procedure Act (providing EPA's basis for issuing the rule for purposes 
of judicial review.) The preamble clearly explains what we intended by 
the language ``allowable emission rate''--namely, that the NSPS would 
be an ultimate cap on emissions for sources seeking above-formula stack 
height credit. Our reading of the preamble language is reasonable; the 
commenters' reading is strained.
    (d) Comment: One commenter (MSCC letter, document #IV.A-19, comment 
#82) claimed that EPA uses improper criteria for evaluating GEP stack 
height credit in the SIP, that EPA may only consider 40 CFR 51.100 and 
section 123 of the Act, that the preamble, guidance

[[Page 22211]]

documents, TSD for the stack height regulations, and memos are not 
appropriate to consider unless the rule itself is unclear. The 
commenter claimed the rule is clear. According to the commenter, EPA 
seeks to use these documents as regulations, or in place of the 
regulations, when such collateral writings are not subject to 
rulemaking, notice, comment or appeal. The commenter asserted that if 
the rule is so unclear, as alleged by EPA staff, to require so much 
collateral explanation, it is or may be unconstitutionally vague and 
void. Also, the commenter claimed that EPA's selection of interpretive 
documents is incomplete. According to the commenter, EPA has not 
included correspondence specific to this case, has omitted court 
decisions on the current rule, EPA's own brief in defending the rule to 
the court, or the collateral demonstrations provided by MSCC.
    Response: We believe the heading in the TSD (document #III.B-1), 
``Criteria for Evaluation,'' may be a bit misleading. We are evaluating 
the SIP against the statutory and regulatory requirements. We are not 
seeking to use other documents as regulations, but to help explain the 
regulations. Regarding the central issue, whether it is appropriate to 
consult documents other than the rule and statute, please see our 
response to the previous comment.
    The list of documents under ``Criteria for Evaluation'' on page 51 
of the TSD is not exhaustive. We have cited to and included in our 
record numerous other documents, and have considered the record as a 
whole in reaching our final decision.
    We do not believe the regulation is unconstitutionally vague; in 
any event, this is a complaint about the regulation itself, which may 
not be raised in this action.
    (e) Comment: Two commenters (State letter, document #IV.A-23, p. 
21; Goetz letter, document #IV.A-18, exhibit D, pp. 24-26) stated that 
EPA's own Guideline for Determination of Good Engineering Practice 
Stack Height makes clear that the GEP stack height credit is first 
calculated and then this height is input into an air quality model to 
set SIP emission limitations. They also assert that the Guideline makes 
clear that the NSPS emission rate is used only for the fluid modeling 
demonstration. According to these commenters, nowhere does the 
Guideline even hint that the NSPS emission rate would constrain the 
ultimate emission limit for sources seeking above-formula stack height 
credit. The commenters argue that the State followed the process 
outlined in EPA's Guideline in setting MSCC's SIP emission limit.
    Response: The commenters are correct that the Guideline 
contemplates a two-step process in which first, GEP stack height credit 
is determined and second, an emission limitation is set. However, the 
commenters gloss over a critical aspect of the Guideline. When the 
Guideline discusses the process for setting emission limitations in 
above-formula situations, the Guideline, at pages 58-59, cross-
references item G of Table 3.1 of the Guideline: \25\
---------------------------------------------------------------------------

    \25\ We have discovered that there are two different versions of 
the Guideline. The version submitted by MSCC as Exhibit 131 cross-
references item F of Table 3.1. We refer to the version we included 
in our docket as document #II.A-12, which cross-references item G of 
Table 3.1.

``Sources with a physical stack height greater than the GEP height 
based on Equation 1, that wish to establish the correct emission 
limit should input the GEP height (given by Equation 1, fluid model 
or field study) into an air quality model to set the emission 
---------------------------------------------------------------------------
limitations. Refer to Table 3.1, item G.''

Table 3.1, item G, at page 51 of the Guideline, describes the process 
for establishing GEP stack height for stacks above formula height and 
indicates that the resultant physical stack height should be used to 
set emission limits. However, a footnote to this statement reads as 
follows:

``Where some other meteorological condition is more controlling than 
downwash, adjust the emission rate to avoid a violation of a NAAQS 
or available PSD increment.''

Thus, under the Guideline it might be necessary to adjust the emission 
limit downward from the NSPS or BART rate used in the fluid modeling or 
field demonstration. By the same token, if some other more controlling 
meteorological condition is not present, it is clear the Guideline 
considers downwash to be controlling, and the emission limit must be 
consistent with the NSPS or BART value used in the fluid modeling or 
field demonstration.
    Other language from the Guideline confirms this interpretation. At 
page 52, the Guideline states:

``In conducting a demonstration, a source should use the modeled 
stack height, input the applicable emission rate that is equivalent 
to NSPS for that source category \1\, and add in the background air 
quality as determined by procedures contained in two EPA guidance 
documents (EPA, 1978, 1981).''

    Footnote 1 to the above text reads as follows:

``However sources may on a case-by-case basis demonstrate that such 
an emission is not feasible for their situations and determine their 
emission limitations based on Best Available Retrofit Technology.'' 
(emphasis added)

It is apparent that we viewed the ``applicable emission rate'' used in 
the fluid modeling or field study as an emission limitation, that might 
have to be adjusted downward during dispersion modeling to address 
meteorological conditions more controlling than downwash, but that 
could not be adjusted upward. This reading is consistent with the 
language of the regulation, preamble, and numerous other EPA documents 
that we have cited in this rulemaking.
    (f) Comment: Two commenters (Goetz letter, document #IV.A-18, 
exhibit D, pp. 19-21; MSCC letter, document #IV.A-20, comment # 1.D) 
stated that no one suggested that the NSPS would have to be the 
applicable emission limit because the rule is clear that the NSPS 
emission rate is for purposes of the demonstration only. The commenters 
asserted that EPA's failure to notify the State or MSCC during late 
1995 and the first few months of 1996 that the NSPS would have to be 
used as an actual limit is evidence that the regulation does not 
require that the NSPS be applied as an ultimate emission limit.
    Response: Our meteorologist did not suggest that the NSPS would 
have to be the applicable emission limit during the time period 
mentioned for two reasons. First, at that time, the focus of the 
various parties' efforts was not on final emission limits, but on the 
design of the wind tunnel study. Second, our meteorologist was 
initially not aware that the NSPS would have to be the applicable 
emission limit. However, as explained in response to other comments, we 
disagree with the commenter's assertion that the rule is clear that the 
NSPS emission rate is for purposes of the demonstration only. On the 
contrary, the rule requires that the NSPS be met as the applicable 
emission limit. We also disagree that our not having notified MSCC 
during late 1995 and the first few months of 1996 that the NSPS would 
have to be used as an actual limit is evidence that the regulation does 
not require that the NSPS be applied as an ultimate emission limit. 
Instead, it is merely evidence that we were not focusing on ultimate 
emission limits and had not yet addressed the requirement. Elsewhere in 
this document, we have explained in detail why we think the regulation 
requires that the NSPS apply as an ultimate cap on emission limits in 
above-formula situations.
    (g) Comment: One commenter (State letter, document #IV.A-23, p. 20) 
stated that the fact that Congress intended

[[Page 22212]]

above-formula stack height credit be granted only in rare circumstances 
does not support EPA's position or offer insight into the question at 
issue. The commenter asserted that Congress' intent is too vague to 
define the boundaries of EPA discretion. According to the commenter, 
nothing in the CAA, the implementing regulations, or background to 
section 123 supports the proposition that Congress intended to override 
a state's authority to determine actual emission rates under section 
110 of the CAA. The commenter argued that section 123 does not give EPA 
authority to actually set an emission limit.
    Response: In concluding that control first was an appropriate 
regulatory approach in the above-formula context, the Court of Appeals 
for the D.C. Circuit noted Congress' intent that above-formula stack 
height credit be granted only in rare circumstances and with utmost 
caution. NRDC v. Thomas, 838 F.2d 1224, 1241-1242, (D.C. Cir. 1988). We 
believe that our interpretation of the stack height regulations is 
consistent with Congressional intent and that this is another reason 
our interpretation is entitled to deference. Our interpretation ensures 
that sources will only receive above-formula stack height credit when 
they are first willing to try to address downwash concerns by 
installing NSPS or BART-level controls. Contrary to the commenter's 
assertion, it is quite evident that section 123 restricts a state's 
authority to set SIP emission limits. By upholding our use of control 
first in the above-formula context, the D.C. Circuit further defined 
the parameters that apply to establishing SIP emission limits. States 
remain free to establish emission limits for sources, as long as they 
are consistent with the requirements of section 123 and the stack 
height regulations. In this case, the State would not have to cap 
MSCC's stack emissions at the NSPS level if the State relied on the 65 
meter de minimis stack height credit, instead of above-formula credit, 
in setting MSCC's SIP limits.
    (h) Comment: One commenter (MSCC letter, document #IV.A-20, comment 
#8) stated that MSCC's stack height credit was granted with utmost 
caution.
    Response: The State may have granted the credit after considerable 
analysis, but for the reasons stated in this document, we do not 
believe the 97.5 meter stack height credit the State approved for 
MSCC's 100-meter stack is valid under section 123 of the Act and our 
stack height regulations.
    (i) Comment: Two commenters (MSCC letter, document #IV.A-19, 
comment #24; MSCC letter, document #IV.A-20, comment #2.Q; State 
letter, document #IV.A-23, p. 20) disputed EPA's claim that the Court 
in NRDC v. Thomas upheld the requirement to meet the NSPS as a 
condition of above-formula stack height credit. The commenters claimed 
the issue was not before the Court and was not addressed by the Court. 
One of the commenters (MSCC) claimed that the court merely held that 
EPA had the discretion under section 123 to impose the NSPS as a 
presumption for above-formula stack height credit and never held that 
EPA was actually applying the NSPS as a precondition for obtaining GEP 
credit. Another commenter (State) cited an EPA Region 3 letter and an 
EPA Headquarters letter and claimed EPA has made inconsistent 
statements regarding the presence of a dispute regarding the NSPS 
requirement; in this commenter's view, EPA's position would mean the 
delegation of the court's decision making responsibilities to the 
parties and their briefs.
    Response: We addressed this issue in detail in the TSD for our 
proposal, and we stand by that discussion. See TSD pages 64-66. The 
Court in NRDC v. Thomas upheld the stack height regulations, and in 
doing so, specifically held that EPA had the discretion to impose 
control-first in the above-formula context. NRDC v. Thomas, 838 F.2d 
1224, 1241. Using the NSPS as a mere modeling assumption is not the 
same as ``control-first.'' Our preamble made clear that control-first 
meant the imposition of controls as a prerequisite to stack height 
credit. 50 FR 27896, July 8, 1985.
    It is true that there was no dispute before the court regarding the 
existence of the NSPS requirement (all parties understood that the NSPS 
would have to be met as a prerequisite for above-formula stack height 
credit). However, the propriety of this requirement was most certainly 
argued before the court. See TSD pages 64-66. Despite the arguments of 
the industry petitioners, the court upheld our regulations.
    Regarding our reference to the briefs in the NRDC v. Thomas case, 
it was the State in its opinion about the stack height regulations that 
first cited the briefs as evidence of EPA's intent in the stack height 
regulations. (See memorandum dated August 1, 1996 from Jim Madden to 
Mark Simonich, attachment to document #II.C-9.) This led us to examine 
some of those briefs in detail. We think the briefs reflect the nature 
of the dispute before the court and the understanding of the parties 
regarding the requirements of the stack height regulations at the time 
the regulations were promulgated.
    Regarding Region 3's 1988 letter (October 6, 1988 letter from 
Marcia Mulkey to John Proctor, document #IV.C-65), the views expressed 
by Region 3 counsel in 1988 support our position in almost every 
respect. Ms. Mulkey completely rejected Mr. Proctor's assertion that 
the NSPS was a mere modeling assumption. Among other things, Ms. Mulkey 
concluded that Mr. Proctor's reading of the regulations would render 
the above-formula stack height analysis artificial and unrelated to the 
health and welfare criteria which the D.C. Circuit, in the Sierra Club 
v. EPA case, had held must be used to define excessive concentrations 
in the above-formula context.
    Regarding the narrow portion of the letter that the commenter 
focuses on, Ms. Mulkey was indicating that no party to the NRDC v. 
Thomas case had raised the alternative interpretation that Mr. Proctor 
was asserting (that the NSPS was a mere modeling assumption) and that 
the Court's holding, approving EPA's stack height regulations, was in 
no way dependent on this alternative interpretation. Thus, in Ms. 
Mulkey's view, EPA remained free to interpret the stack height 
regulations to require that NSPS or BART be met as an emission limit. 
We agree with Ms. Mulkey's conclusion, as far as it goes. But, in 
addition, the NRDC v. Thomas court specifically upheld the application 
of control-first in the above-formula context, and, as we note above, 
control-first is not a mere modeling assumption.
    The April 20, 1989 Headquarters letter from Gerald Emison to John 
Proctor (document #II.A-7) that the commenter cites indicated that 
Headquarters fully endorsed Region III's conclusions and supporting 
rationale in Ms. Mulkey's October 6, 1988 letter, but also cited from 
the NRDC v. Thomas opinion, and stated, ``We believe that the opinion 
indicates clearly that the court regarded the presumptive NSPS emission 
limit as a limit that must be complied with once the fluid modeling was 
completed * * *'' The Emison letter cited to language in the opinion 
dealing with industry concerns that the NSPS would not be attainable, 
language that indicated the court understood the NSPS would be a cap on 
ultimate emissions. (``* * * industry petitioners assert that in order 
to use the NSPS presumption, EPA must be able to point to substantial 
evidence that it is attainable by most of the affected sources. But as 
EPA allows any source to use a higher emissions rate when NSPS is 
infeasible, there is no need for any sort of generic demonstration that 
it is normally so.'' NRDC v. Thomas, at 1242.) We note that the court 
did not

[[Page 22213]]

respond to the industry concerns by saying the NSPS was a mere modeling 
assumption, and that a higher SIP limit might result from dispersion 
modeling.
    Ultimately, the central question is whether we are reading the 
stack height regulations reasonably. Either we are reasonable in 
reading the regulations to require a source to meet the NSPS or BART as 
a prerequisite for above-formula stack height credit or we are not. If 
our longstanding interpretation is reasonable, we believe it is too 
late for anyone to challenge the requirement because the NRDC v. Thomas 
court already upheld the stack height regulations. And, all the 
arguments about lack of notice and inappropriateness of applying NSPS 
to sources not otherwise subject to the NSPS are irrelevant; they 
should have been advanced at the time EPA adopted the regulations and 
first asserted its interpretation, or not at all.
    (j) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment # 23) stated that EPA relied on the availability of approvable 
feasibility studies as a justification for not having any evidence in 
the record regarding the validity of the NSPS presumption. The 
commenter asserted that since such studies are not possible, EPA's and 
the court's reliance on such studies to approve the NSPS presumption is 
flawed.
    Response: This comment goes to the validity of the 1985 stack 
height regulations themselves and is not relevant to our action on the 
SIP before us. In any event, the commenter's conclusion that such 
studies are not possible is not supported. The fact that one State has 
not been able to gain EPA approval for an infeasibility analysis for 
one source does not mean that such studies are not possible. Studies 
may be ``doggedly pursued;'' that does not mean they reflect sound 
analysis.
    (k) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment # 32; MSCC letter, document # IV.A-20, comment #'s 2.P and 
second 5.E) stated that it is unfair and unlawful to apply the NSPS to 
MSCC, because MSCC is not a new source, and because the law does not 
require meeting the NSPS as a precondition of obtaining above-formula 
stack height credit. Another commenter (CPP letter, document # IV.A-18, 
exhibit A, p. 5) also asserted that MSCC is not a new source and the 
NSPS should not apply.
    Response: We addressed this issue in the TSD to our proposal, and 
we stand by that discussion. See TSD pages 58-60. Also, please see our 
responses to previous comments.
    (l) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment # 33) stated that there is no source category clearly 
applicable to sulfur recovery plants built prior to 1976 and that there 
is no source category applicable to existing sulfur recovery plants 
built before 1976 and 1970 that are not located within the bounds of a 
petroleum refinery or under the control of a petroleum refinery.
    Response: First, MSCC agreed to the use of the NSPS applicable to 
sulfur recovery plants for purposes of its fluid modeling 
demonstration. It is not convincing for the commenter to now complain 
that MSCC's sulfur recovery plant is not within the source category to 
which the NSPS applies. Second, the commenter misinterprets the NSPS. 
The regulation specifically provides that ``the Claus sulfur recovery 
plant need not be physically located within the boundaries of a 
petroleum refinery to be an affected facility provided it processes 
gases produced within a petroleum refinery.'' 40 CFR 60.100(a). 
Clearly, MSCC's sulfur recovery plant falls within this description. 
See also 41 FR 43866, October 4, 1976. In promulgating 40 CFR 
51.100(kk)(1), we recognized that some sources would be grandfathered 
and not strictly subject to the NSPS; however, we believed it was 
appropriate to use the NSPS for the source category to which the source 
belonged, even if the individual source was not subject to the NSPS 
under part 60. Thus, we believe it is appropriate to use the 40 CFR 
part 60, subpart J standards when evaluating the emission limits for 
MSCC in an above-formula scenario.
    (m) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment #'s 33, 58, 96) stated that no source reading EPA's proposed or 
final stack height regulations would have had notice that the agency 
would impose NSPS as an operating limit on it as a condition of 
receiving GEP stack height credit. The commenter objected to EPA's 
reasoning in the proposal that MSCC's problems with the stack height 
rule should have been appealed when the rule was published. The 
commenter claimed that a reasonable person reading the rule text could 
not have foreseen the meaning that EPA now assigns to the rule. The 
commenter asserted that EPA has modified many aspects of the stack 
height regulations by reference to and interpretation of internal 
guidance and memos, and court briefs and decisions.
    Response: To the extent this is a claim that EPA provided 
inadequate notice of the NSPS and other requirements in the 1985 stack 
height regulations, we believe this claim could only be raised in a 
challenge to the stack height regulations themselves, and is not 
relevant to this rulemaking action. See TSD pages 60-61. In any event, 
we disagree with the commenter's assertion that no source would have 
had notice that the agency would impose NSPS as an operating limit in 
above-formula situations. Our final stack height rulemaking notice and 
materials in the rulemaking record made clear that the NSPS or 
alternative limit used in above-formula fluid modeling determinations 
would have to be met as a condition of obtaining above-formula credit. 
See 50 FR 27898, 27905, July 8, 1985; documents cited at page 54 of our 
TSD. As we pointed out in the TSD to our proposal, other persons 
reading the final rule understood this and registered their objections 
with EPA and the NRDC v. Thomas court. See TSD at pages 60-61, 64-65. 
See also memorandum dated June 19, 1985 from Eric Ginsburg to Files 
entitled, ``Conference Call With OMB to Discuss Concerns about the 
Stack Height Regulations,'' document # II.A-13; letter dated June 21, 
1985 from R. E. Boyle, President, Ormet Corporation, to Lee Thomas, 
Administrator, EPA, regarding ``Section 123 Stack Height Regulations,'' 
document # IV.C-63; letter dated June 17, 1985 from W. S. White, Jr., 
Chairman of the Board, American Electric Power Company, Inc., to Lee 
Thomas, regarding ``EPA Stack Height Regulations--Ohio Power Company's 
Kammer Plant,'' document # IV.C-62; letter dated June 20, 1985 from 
Henry V. Nickel, Hunton & Williams, to Lee Thomas, regarding ``'Red 
border'' draft stack height rules,'' document # IV.C-61; letter dated 
June 21, 1985 from Congressman Allan B. Mollohan to Lee Thomas, 
document # IV.C-60; letter dated June 20, 1985 from R. E. Disbrow, 
President, American Electric Power Company, Inc., to The Honorable 
Robert C. Byrd, regarding ``EPA Stack Height Regulations--Ohio Power 
Company's Kammer Plant Marshall County, West Virginia,'' document # 
IV.C-59; letter dated June 27, 1985 from Richard F. Celeste, Governor, 
Ohio, to Lee Thomas, regarding ``EPA Stack Height Regulations--Ohio 
Power Company's Kammer Plant,'' document # IV.C-58.
    We also disagree with the commenter's assertion that we have 
modified the stack height regulations without rulemaking or somehow 
ignored the rule's plain language. As to the specific interpretation 
issues raised by the commenter, we discuss these in detail in responses 
to other comments. As a general proposition, we believe we

[[Page 22214]]

have appropriately consulted the statute, the preamble to the stack 
height regulations, relevant case law, and other documents to help 
interpret portions of the regulations that may be ambiguous or complex.
    (n) Comment: Several commenters (MSCC letter, document # IV.A-19, 
comment # 88; State letter, document # IV.A-23, pp. 17, 18; Goetz 
letter, document # IV.A-18, exhibit D, pp. 19, 22) asserted that 
contrary to EPA's statements, EPA has not consistently read the 
language of the rule to require that a source meet the NSPS as a 
condition of obtaining above-formula stack height credit. According to 
these commenters, EPA did not alert the state or MSCC to such reading 
before MSCC performed fluid modeling or during the Montana contested 
case proceeding; this, in spite of the fact that the record is clear 
that DEQ modeler/meteorologist John Coefield was in continual contact 
with EPA's meteorologist on these issues. The commenters asserted that 
EPA's meteorologist was not aware of this interpretation until after 
the State approved MSCC's demonstration. The commenters claimed that in 
fact, EPA's input during the process indicated that the State was using 
the correct approach in determining GEP formula height and the 
resulting SIP emission limit.
    Response: The commenters are correct that the Region's 
meteorologist was unaware of this requirement until after he spoke to 
staff from another Region. However, upon learning of this, we informed 
the State. This was in May of 1996, before the State adopted emission 
limits for MSCC. We had several discussions of this issue with the 
State after our initial call in May 1996. See Record of Adoption, 
transcript of August 8, 1996 Board Hearing, testimony of Mark Simonich, 
pp. 24-28, document # II.C-3. We faxed a letter to the State describing 
our position on this issue on July 18, 1996, before MSCC or Montana 
signed the MSCC stipulation. See document # II.C-5. MSCC signed the 
stipulation on July 22, 1996 and the MDEQ did not sign the stipulation 
until after that. See document # IV.A-17, MSCC Exhibit 132, letter from 
Mark Simonich to Mary Westwood dated August 2, 1996, with August 1, 
1996 memorandum from Mark Simonich to Montana Board of Environmental 
Review attached.
    Although our meteorologist consulted with the DEQ modeler/
meteorologist regarding the conduct of the fluid modeling 
demonstration, it is an exaggeration to say he was in continual contact 
with the DEQ modeler/meteorologist. It is important to note that we 
were not a party to the contested case hearing, and that our 
meteorologist was providing input from home regarding the modeling at a 
time in late 1995 when EPA was shut down as a result of the budget 
standoff between President Clinton and Congress. Thus, in providing his 
input, our meteorologist often did not have access to the advice of 
legal counsel and EPA Headquarters personnel. Our meteorologist was 
providing his best advice to the DEQ modeler/meteorologist under 
difficult circumstances.
    In addition, the focus of MSCC's contractor's efforts in late 1995 
and early 1996 was the design of a wind tunnel study, not final SIP 
emission limits. Consequently, our meteorologist's focus, and the focus 
of his discussions with the DEQ modeler/meteorologist, was the design 
and execution of the wind tunnel study, not final SIP emission limits. 
See memorandum of Kevin Golden, document # IV.C-71. This is reflected 
in the January 31, 1996 and March 15, 1996 letters from Richard Long to 
Jeff Chaffee cited by one of the commenters (document #'s II.F-19 and 
20). These letters focused on our concerns with the manner in which 
MSCC's contractor had performed fluid modeling, not on ultimate 
emission limits. It is also important to remember that MSCC did not 
start out seeking above-formula stack height credit, but only agreed to 
conduct above-formula modeling relatively late in the process. Even 
then, and despite our and the State's warnings that within-formula 
demonstrations would not be accepted, MSCC continued to pursue within-
formula modeling demonstrations. This was an evolving process, and 
statements we may have made regarding relying on GEP stack height 
credit generally to set SIP limits--for example, based on de minimis or 
formula stack height credit--have no bearing on the matter before us.
    Ultimately, whether we alerted MSCC or the State before MSCC's 
contractors began their wind tunnel study for above-formula stack 
height credit that NSPS or BART would have to be met in fact, is 
irrelevant to the real issue: what the statute and our regulations 
require. It also does not change the fact that EPA as a regulatory 
agency has since the inception of the stack height regulations read the 
regulations to require that the NSPS be met as an ongoing limit as a 
condition of obtaining above-formula stack height credit. The fact that 
we did not also reiterate our longstanding interpretation before the 
conduct of the wind tunnel study does not form a basis for us to ignore 
the requirements of our regulations in evaluating the SIP.
    Furthermore, we believe the State has an independent obligation to 
evaluate applicable regulatory requirements. As the State admits, this 
was not the first time this issue had arisen in the State. (State 
comment, document # IV.A-23, page 18, footnote 18.) As noted in our 
TSD, we informed the State of our reading of the stack height 
regulations in 1991, while commenting on an earlier SIP effort for the 
East Helena area. We believe it would have been prudent and appropriate 
for the State to review information in its files relative to that stack 
height analysis, and to pass on relevant information to MSCC.
    (o) Comment: One commenter (Goetz letter, document # IV.A-18, 
exhibit D, pp. 19, 20) stated that in written comments on the State's 
protocol for conducting the fluid modeling demonstration, EPA did not 
indicate that the NSPS would be the applicable emission limit; nor did 
EPA express incredulity that MSCC would spend money on such a study 
when the result would be a significantly lower emission limit than MSCC 
would be subject to without conducting a study.
    Response: The commenter is correct that Mr. Long's January 31, 1996 
letter to the State (document # II.F-19) did not speak to the issue of 
the NSPS as the applicable emission limit. As we note above, the scope 
of this letter was limited to the conduct of the fluid modeling 
demonstration, and thus, it is not surprising that it did not address 
ultimate SIP emission limits. At that point in time, EPA personnel were 
not focusing on ultimate emission limits and had not specifically 
considered or researched the rule's requirements regarding ultimate 
emission limits for sources seeking above-formula stack height credit. 
We have acknowledged that our meteorologist, whose expertise is 
modeling and meteorology, was not initially aware that the rule 
requires that the NSPS be met as an ultimate limit in above-formula 
circumstances. If he had been, he may have questioned MSCC's course of 
action. However, none of this changes the requirements of the 
regulations, and we believe we have a duty to disapprove the SIP 
because MSCC's limits are not consistent with the stack height 
regulations.
    (p) Comment: One commenter (Goetz letter, document # IV.A-18, 
exhibit D, pp. 26-27) stated that EPA Region VIII plainly misled both 
DEQ and MSCC on the NSPS limit issue and they have scrambled, since the 
summer of 1996, to shore up their position by dredging up whatever 
documentation they can find to support a claimed ``long-standing'' 
interpretation of the rule. The commenter complained that as of July

[[Page 22215]]

1996, EPA had only provided two documents to the State on EPA's NSPS 
limit position. The commenter asserted that all the other documents now 
cited by EPA were not provided to the State or MSCC on a timely basis, 
and EPA's position was not made known at a time when it would have been 
useful in the SIP process.
    Response: We certainly did not intend to mislead the State and MSCC 
in any way. It is clear from the record that we informed the State that 
it was mis-applying the stack height regulations before the State 
adopted SIP limits for MSCC. The State, with MSCC's concurrence, made a 
conscious decision to ignore our input.
    We believe the commenter mis-portrays our communications with the 
State on this matter between May and July 1996. As noted in the July 
16, 1996 letter from Jim Madden to James Goetz that commenter cites 
(document # IV.A-18, MSCC Exhibit 156), EPA had provided detailed 
citations to relevant preamble language. This is the same preamble 
language we rely on now. As to the number of documents we provided to 
the State as of July 1996, or subsequently, we think this is irrelevant 
to our action in this matter. The fundamental issue is whether the SIP 
meets the requirements of the CAA and our regulations. It is our 
judgment that MSCC's emission limits, based on stack height credit of 
97.5 meters, do not meet these requirements for the reasons stated in 
our proposal and elsewhere throughout this document. The State has had 
plenty of time to correct the problems with the SIP since we first 
informed them of the problems with MSCC's stack height credit, but has 
chosen not to do so.
    (q) Comment: One commenter (Goetz letter, document # IV.A-18, 
exhibit D, p. 26) stated that many of the documents in support of EPA's 
claimed long-standing interpretation of the NSPS emission rate issue 
are less than clear regarding the specific issue in question and the 
weight to be accorded these sources is questionable. The commenter 
noted that one of the documents is a letter to a particular law firm 
not involved in the present issue.
    Response: We believe the documents cited are clear and indicate 
that we have held the NSPS emission limit position since the inception 
of the stack height regulations, and have continued to follow it 
subsequently. The letter to the law firm that the commenter demeans was 
an April 20, 1989 letter from Gerald A. Emison, an EPA Headquarters 
official at the time, to John Proctor, who represented Pennsylvania 
Electric Company (see document # II.A-7). That letter addressed the 
very same issue that we are dealing with in this matter--whether the 
NSPS must be met as an emission limit by sources seeking above-formula 
stack height credit.
    (r) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment # 88) stated that EPA points to the use of the term ``allowable 
emission rate'' in the regulation, but notes that the regulation does 
not use the term ``enforceable emission rate'' or ``emission 
limitation,'' even though these are terms within EPA's ``lexicon.''
    Response: The commenter is correct that we did not use these 
alternative terms in the regulation. We do not believe this changes the 
meaning of ``allowable emission rate.'' The Clean Air Act itself 
defines ``emission limitation'' to include ``a requirement established 
by the State or the Administrator which limits the [* * *] rate [* * *] 
of emissions of air pollutants on a continuous basis[.]'' (See section 
302(k) of the Act.)
    (s) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment # 88; MSCC letter, document # IV.A-20, comment # 2.P) stated 
that fluid modeling was available to ExxonMobil, without NSPS applying, 
and Conoco received GEP stack height credit above 65 meters without 
having to conduct fluid modeling. The commenter claimed that NSPS is 
not applied to any other source in this airshed by this SIP revision, 
but instead it is only applied to new sources as intended. The 
commenter stated that MSCC's treatment is inequitable, unreasonable, 
and inconsistent with the statute and rule.
    Response: The NSPS did not apply to ExxonMobil's FCC CO-boiler 
stack because ExxonMobil performed fluid modeling to obtain credit for 
a within-formula stack height credit and not above-formula stack height 
credit. Likewise, the NSPS did not apply to Conoco because Conoco was 
not seeking above-formula stack height credit. Conoco received approval 
of their GEP formula height stack on June 7, 1989 (54 FR 24334). The 
actual stack height is 82.3 meters and the formula height is 75.7 
meters. In the Billings/Laurel SO2 SIP, the MDEQ initially modeled 
Conoco's stack at the 82.3 meters. However, in a letter to the MDEQ 
dated December 15, 1994, we indicated that the State needed to justify 
using the higher stack height (see document # IV.C-17). On April 14, 
1995, the State sent a letter to the Billings SO2 Parties indicating 
that there was a revision in the Dispersion Modeling Scenario (see 
document # IV.C-39). Among other things, the letter indicates that the 
new compliance demonstration will use the 75.7 meters stack height 
credit for Conoco. Subsequent modeling done by the State has used the 
75.7 meters stack height credit at Conoco. MSCC may avoid application 
of the NSPS in this SIP by accepting GEP stack height credit of 65 
meters. MSCC will only be subject to an NSPS limit if it insists on 
above-formula stack height credit. This result follows from our stack 
height regulations, and we do not believe it is inequitable.
    (t) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment # 41) indicated that MSCC has been treated inequitably compared 
to ExxonMobil, that ExxonMobil was allowed to make a fluid modeling 
demonstration to demonstrate within formula GEP height, that formula 
height was calculated based on a rounded nearby structure that is 
taller than it is wide, but that GEP credit was really based on the 
Billings Generation Inc. (BGI) structure that creates downwash at 
MSCC.\26\ According to the commenter, this BGI structure is further 
from ExxonMobil than it is from MSCC. The commenter asserted that 
because ExxonMobil was able to conduct a within formula determination, 
it is not being required to meet an NSPS limit like MSCC, and this is 
unfair. Another commenter (CPP letter, document # IV.A-18, exhibit A, 
p. 7 and Attachment I) made essentially the same comment.
---------------------------------------------------------------------------

    \26\ BGI is now the Yellowstone Energy Limited Partnership 
(YELP).
---------------------------------------------------------------------------

    Response: We do not believe MSCC has been treated inequitably or 
unfairly. ExxonMobil properly calculated a formula height of 76.7 
meters and then demonstrated the validity of that formula height 
through a fluid modeling demonstration. For ExxonMobil, the formula 
height of 76.7 meters was calculated considering four solid components 
imbedded in a lattice framework. The four imbedded components are the 
elevator (3.2 m by 5 m by 49.2 m), the regenerator (7.6 m in diameter 
and 30 m high), the reactor (6.1 m in diameter and 53.4 m high) and the 
fractionator (3.2 m in diameter and 45.3 m high). The calculated stack 
height was based on the four structures, which are within 5L of the 
stack in question, and not the lattice framework, and was determined by 
using our Building Profile Input Program (BPIP) software. (See document 
# II.F-2.)
    The formula used to determine the formula stack height is Hg = H + 
1.5 L, where Hg is the good engineering practice stack height measured 
from the ground elevation at the base of the stack, H is the height of 
nearby structure(s)

[[Page 22216]]

measured from the ground-level elevation at the base of the stack, and 
L is the lesser dimension, height or projected width, of nearby 
structures. In the BPIP modeling for ExxonMobil, H was determined to be 
45.29 m and L was determined to be 20.95 m. In other words, the 
structures together were taller than they were wide, but their 
projected width was significantly greater than MSCC's stack support 
structure and their height was significantly less. These structures 
were not a stack or TV or radio transmission tower, which our GEP 
Guideline states should not be considered in GEP stack height 
determinations. ``Guideline for Determination of Good Engineering 
Practice Stack Height (Technical Support Document for the Stack Height 
Regulations (Revised),'' June 1985, EPA-450/4-80-023R, at p. 7 
(document # II.A-12). In addition, these structures were not part of 
the stack for which formula height was being determined. MSCC's 
situation is different--the stack support structure cannot be used to 
calculate formula height.
    In ExxonMobil's case, we believe formula height was properly 
calculated, and because ExxonMobil was only seeking stack height credit 
equivalent to formula height, ExxonMobil was permitted to make a fluid 
modeling demonstration under 40 CFR 51.100(kk)(2) rather than 
subsection (kk)(1). Under subsection (kk)(2), a source is only required 
to use its SIP limit (or if there is none, its actual emissions rate) 
in fluid modeling, and is not required to meet an NSPS limit as is the 
case for sources seeking above-formula stack height credit under 
subsection (kk)(1). Because MSCC was seeking above-formula stack height 
credit, subsection (kk)(1) applied.
    In addition, in a fluid modeling demonstration, our rules allow 
consideration of structures up to one-half mile from the stack, even if 
one-half mile is not nearby for purposes of calculating formula height. 
40 CFR 51.100(jj)(2). Thus, it is irrelevant that the formula height 
calculation for ExxonMobil was not based on the BGI structure, but that 
the fluid modeling modeled the BGI structure.
    In our view, any differences in treatment of ExxonMobil and MSCC 
result from the proper application of our stack height regulations. 
Under our regulations, there is no question that physical layout plays 
a role in formula and GEP determinations. The layout of the ExxonMobil 
facility allowed ExxonMobil to calculate formula height based on the 
four structures contained within the lattice; these structures were 
within 5L of the stack. At MSCC, there were no structures within 5L of 
the stack on which MSCC could calculate formula height greater than 65 
meters. This difference, which seems inequitable to the commenters, is 
inherent in the rule. We understand that downwash effects present at 
4.9L do not magically disappear at 5L, but this is the line EPA drew in 
the stack height regulations, and the regulations were upheld by United 
States Court of Appeals for the D.C. Circuit. To the extent the comment 
goes to the validity of the stack height regulations, we do not believe 
the comment is timely or relevant to this rulemaking.
    (u) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment # 24) stated that two existing sources in Billings erecting 
stacks after 1977 were granted credit for stacks without a precondition 
that NSPS controls be installed. According to the commenter, both 
credits were based on tall thin structures, albeit not as tall and thin 
as MSCC's structure.
    Response: The commenter has not provided sufficient information for 
us to completely respond to the comment. If the commenter is referring 
to ExxonMobil and Conoco, see our responses to the above comments. If 
the commenter is referring to Cenex, we note that Cenex was required to 
raise some stacks as a result of the 1977 Stipulation. However, none of 
Cenex's stacks are above 65 meters and the NSPS ``precondition'' would 
not apply. In fact, except for MSCC, the only other sources in the 
Billings/Laurel SIP where the stack height credit in the modeling is 
greater than 65 meters are Conoco's boiler stack at 75.7 meters (see 
discussion above), ExxonMobil's FCC CO-boiler stack at 76.7 meters (see 
discussion above), and Montana Power's stack at 106.7 meters. Montana 
Power's GEP stack height credit was approved on June 6, 1989 (54 FR 
24334). The June 6, 1989 Federal Register notice indicates that Montana 
Power's stack height credit was grandfathered. None of these stacks are 
subject to the NSPS precondition requirement.
    (v) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment # 89) asked why any existing source already automatically 
eligible for a more lenient-than-NSPS short term and annual limitation 
at 65 meters would accept an NSPS limit on its pre-NSPS facility as a 
pre-condition of receiving credit for GEP above 65 meters. In a similar 
vein, another commenter (Goetz letter, document # IV.A-18, exhibit D, 
p. 25) stated that it would not make sense for a source to expend the 
resources of a fluid modeling demonstration to justify above-formula 
stack height credit if the source must meet the NSPS as an operating 
limit. These commenters claimed that under EPA's reading, the rule has 
no utility. According to these commenters, although EPA argues that 
conditions other than downwash may be controlling in dispersion 
modeling to set emission limitations, EPA's argument is sophistry. The 
commenters asserted that EPA has pointed to no real-world example of 
where this rule has proved useful in such a situation. One of the 
commenters asked EPA to provide documentation of specific cases where 
the above-formula stack height rule has been used in a case that fits 
this category. In addition, the commenter claimed that documents EPA 
cited in its proposal and TSD do not support the proposition that 
conditions other than downwash may be more controlling in some cases.
    Response: First, we would not expect an existing source with an 
emission limit more lenient than the NSPS at a 65 meter stack height 
credit to seek above-formula stack height credit. In fact, we 
explicitly recognized this in the preamble to the stack height 
regulations:

    In the event that a source believes that downwash will continue 
to result in excessive concentrations when the source emission rate 
is consistent with NSPS requirements, additional stack height credit 
may be justified through fluid modeling at that emission rate.
    A source, of course, always remains free to accept the emission 
rate that is associated with a formula height stack rather than 
relying on a demonstration under the conditions described here.'' 50 
FR 27898, July 8, 1985.

By the same token, sources have no absolute entitlement to above-
formula stack height credit. As stated before, the premise behind the 
above-formula provisions of the stack height regulations was that 
above-formula stack height credit would be granted rarely and with 
utmost caution. The D.C. Circuit recognized this as legitimate, and the 
NSPS requirement, as interpreted by EPA, effects this goal. The 
commenter believes MSCC has somehow been wronged because we have not 
interpreted our regulations to make it easier for MSCC to obtain above-
formula stack height credit.
    Second, we believe there are conditions under which a source would 
want to seek above-formula stack height credit even though it would 
have to meet the NSPS as an operating limit. As noted by the commenter, 
we mentioned one such possibility in our proposal--where conditions 
other than downwash may be controlling in dispersion modeling. Another 
example may be when a source would have to meet an

[[Page 22217]]

emission limit lower than the NSPS using within-formula stack height 
credit. Although we have not researched whether this situation has 
actually arisen ``in the real world,'' we think the commenter's concern 
on this point is irrelevant. The stack height regulations were not 
intended to encourage sources to seek above-formula stack height credit 
or to make it easy for them to obtain such credit. 50 FR 27898, July 8, 
1985.
    In addition, the commenter ignores the possibility that a source 
could demonstrate the infeasibility of meeting the NSPS limit and 
justify a higher, alternative limit. See 40 CFR 51.100(kk)(1). Again, a 
source might want to do this if it would have to reduce emissions below 
this alternative limit based on within-formula stack height credit.
    Regarding the documents cited in our proposal for the proposition 
that conditions other than downwash may be more controlling, we have 
discovered that there are two different versions of the Guideline for 
Determination of Good Engineering Practice Stack Height. In the version 
we included in our rulemaking docket, the relevant item in Table 3.1 is 
Item G. In the version submitted by the commenter, the relevant item in 
Table 3.1 is Item F. In either case, Footnote 3 to the relevant Item 
states, ``Where some other meteorological condition is more controlling 
than downwash, adjust the emission rate to avoid a violation of a NAAQS 
or available PSD increment.'' We note that the commenter cites to Item 
F on the prior page of his comments.
    Language from the discussion of above-formula stack height credit 
in the preamble to the stack height regulations also touches on the 
possibility that conditions other than downwash may be controlling:

    An additional theoretical complication is presented when an 
absolute concentration is used where meteorological conditions other 
than downwash result in the highest predicted ground-level 
concentrations in the ambient air. In such cases, a source that has 
established GEP at particular height, assuming a given emission 
rate, may predict a NAAQS violation at that stack height and 
emission rate under some other condition, e.g., atmospheric 
stability Class ``A'.'' 50 FR 27899, col. 1.

    (w) Comment: One commenter (Goetz letter, document # IV.A-18, 
exhibit D, p. 19) stated that it is obvious that MSCC would not have 
undergone the considerable expense of more wind tunnel modeling if it 
had known the NSPS would be imposed as an actual emission limit because 
the NSPS standard was a mere fraction of the emission limit already 
proposed by DEQ for a 65 meter de minimis stack.
    Response: Although MSCC may well have chosen not to conduct 
additional wind tunnel modeling, it is also possible MSCC may have 
pursued additional wind tunnel modeling because, even if we had at that 
point informed MSCC that the NSPS would be the applicable emission 
limit, MSCC may have chosen to ignore, or, as MSCC has in fact chosen 
to do, contest our position. As we have noted elsewhere in this 
document, MSCC proceeded with other stack height theories even after 
MSCC was aware that we would reject those theories. In any event, this 
comment is not relevant to the central issue, which is whether the 
stack height regulations require that the NSPS or BART emission rate 
serve as a cap on SIP limits in above-formula situations.
    (x) Comment: One commenter (MSCC letter, document # IV.A-19, p. 3; 
MSCC letter, document # IV.A-20, comment # 1.M) stated that MSCC could 
not feasibly install controls to achieve an NSPS level of control, and 
cites to an expert's opinion regarding the subject.
    Response: We are not forcing MSCC to seek above-formula stack 
height credit. The requirement to at least meet the NSPS is a byproduct 
of MSCC's decision to seek above-formula stack height credit. If MSCC 
accepted the regulatory 65 meter credit, it could have emissions limits 
significantly less stringent than the NSPS.
    In addition, our regulations provide an opportunity for the State/
source to make a showing that the source cannot achieve an NSPS level 
of control. We offered the State and MSCC the opportunity to 
demonstrate infeasibility, but MSCC did not do so (see document #'s 
II.C-12 and IV.C-40). MSCC seemed unwilling to make the attempt without 
some assurance that the attempt would be successful (see document # 
IV.C-41 and document # IV.A-17, MSCC Exhibit 19). The State did not set 
an alternative BART limit based on an infeasibility showing by MSCC, 
and therefore, this issue is not properly before us in this action. The 
commenter's mere assertion of infeasibility does not provide a basis 
for us to disregard the requirements of the stack height regulations. 
We note that MSCC installed a SuperClaus unit in late 1998 despite its 
claims that it was not ``economically practical or feasible'' to do so 
(see document # IV.C-42 and document # IV.A-17, MSCC Exhibit 126, 
Direct Testimony of Larry Zink, ``In the Matter of the Application of 
the DEQ for Revision of the Montana State Air Quality Control of SO2 
Emissions in the Billings/Laurel Area * * *'', December 5, 1995, pp. 
27, 36.)
    (y) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment # 98) stated that EPA uses the term ``alternative rate'' 
interchangeably with ``allowable emissions rate,'' and the commenter 
implied that this somehow undercuts EPA's reading of ``allowable 
emissions rate'' as meaning a rate that a source would have to meet and 
not just assume for purposes of a fluid modeling demonstration.
    Response: The regulation says the allowable emissions rate shall be 
the NSPS unless a source demonstrates that the NSPS is infeasible, in 
which case an alternative emission rate shall be established. Both 
phrases, at root, use the term ``emission rate.'' We believe it is 
reasonable to read this to mean that such alternative emission rate 
would become the allowable emissions rate for purposes of the preceding 
sentence in the regulation.
    (z) Comment: One commenter stated (MSCC letter, document # IV.A-19, 
comment # 100; MSCC letter, document # IV.A-20, 2nd comment #'s 5.A, B, 
C, D, F, and G) that MSCC is a well-controlled source, citing to the 
SO2 reductions MSCC has achieved for many years in the area.
    Response: We are aware that MSCC removes sulfur compounds from 
ExxonMobil's effluent stream. However, to the extent the commenter is 
referring to ``well-controlled'' as a term of art in the preamble to 
our stack height regulation, this term refers to an NSPS limit or a 
BART alternative limit. To date, neither the State nor MSCC has been 
willing to adopt the NSPS as a limit for MSCC. If the commenter is 
using the term more generally, it is not relevant to our review of the 
SIP. Our obligation under the CAA is to ensure that the requirements of 
the CAA and our regulations are met. MSCC may or may not be ``well-
controlled'' in the generic sense, but MSCC's main stack limits have 
not been set in accordance with our stack height regulations, and 
certain other aspects of the SIP, which pertain to MSCC and other 
sources, are deficient under the CAA and our regulations. It is 
entirely possible the State could fix the SIP problems without imposing 
additional emission reductions on MSCC. For purposes of a SIP, the 
State chooses how to allocate the emissions reduction burden among 
sources, not EPA. We review the State's choices to ensure that the SIP 
meets the requirements of the CAA.
    (aa) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment # 94) stated that the stack height regulations impose less 
stringent

[[Page 22218]]

requirements for PSD sources attempting to justify above-formula stack 
height credit through fluid modeling than they impose on existing 
sources doing so. In the commenter's view, this seems odd since PSD 
sources are increasing emissions in an area. The commenter found it 
difficult to understand this apparent contradiction, particularly since 
EPA appears to believe reducing emissions is the principal and 
overriding purpose of section 123 of the CAA. The commenter appeared to 
suggest that the NSPS rate prescription in 40 CFR 51.100(kk)(1) only 
applies to PSD sources. The commenter thought it is unlikely that NSPS 
forms an upper bound for PSD sources, but instead is an acceptable rate 
for a fluid modeling demonstration, regardless of more stringent 
requirements applicable to the source. The commenter wondered whether 
MSCC is subject to the PSD program.
    Response: First, the commenter mischaracterizes our interpretation 
of section 123 of the CAA. The principal purpose of section 123 is to 
prevent sources from using excessive stack height as a means to meet 
the NAAQS. In any given SIP, sources may be able to justify higher 
stack height credit and thereby increase emissions or keep emissions 
the same. This is highly situation-dependent. Clearly Congress did not 
want to allow use of stack height greater than GEP at the expense of 
emissions controls.
    Second, although the commenter may find this distinction odd, it 
does not change the regulatory requirements that apply to non-PSD 
sources. The commenter's recourse if it wished to challenge the 
distinction between non-PSD and PSD sources was to seek review of the 
original regulations within 60 days of promulgation. It may not 
challenge the regulations now.
    Third, PSD sources that are being considered in SIP development are 
likely to be existing sources that happen to be subject to a PSD 
permit, not necessarily a new or modified source adding emissions to an 
area. Also, stringent modeling requirements apply to new or modified 
PSD sources to ensure that they do not interfere with attainment or 
maintenance of the NAAQS.
    The practical implications of the distinction between non-PSD and 
PSD sources are probably insignificant because PSD sources are 
necessarily meeting Best Available Control Technology (BACT) limits 
that, by definition, are at least as stringent as the NSPS. See 40 CFR 
51.166(b)(12). Thus, although the fluid modeling requirements for PSD 
sources appear to be less stringent, the control requirements 
applicable to PSD sources are generally more stringent than those that 
apply to non-PSD sources, and such sources have already undergone 
stringent modeling requirements to receive their permits.
    Regarding EPA's selection of the NSPS for above-formula 
demonstrations and the fact that this does not really comprise an upper 
bound for PSD sources, EPA selected a single level for all sources 
seeking above-formula stack height credit. PSD sources are already 
well-controlled; there was no need to establish some lesser cap on 
emissions.
    To our knowledge, MSCC does not have a PSD permit, and thus, is not 
currently a PSD source. Additionally, our action on the SIP is not 
meant to imply any sort of applicability determination under the PSD 
program (Title I, part C of the Act) with respect to MSCC.
    (bb) Comment: One commenter (Goetz letter, document # IV.A-18, 
exhibit D, p. 23) stated that MSCC adopts and incorporates as part of 
its comments the analysis contained in a memo by DEQ attorney Jim 
Madden to Mark Simonich dated August 1, 1999 (sic, should be 1996) 
(attachment to document # II.C-9).
    Response: We have thoroughly analyzed and responded to the analysis 
contained in Mr. Madden's memo in our TSD, at pages 58-67, and in this 
document.
2. Issues Related to Best Available Retrofit Technology (BART)
    We received a number of comments regarding an alternative BART 
limit for above-formula stack height demonstrations. Although we 
discussed with the State and MSCC the provision of our regulations that 
allows sources the opportunity to show that an NSPS limit is infeasible 
and then to develop an alternative BART limit, MSCC did not attempt to 
make the requisite showings. Consequently, the State did not approve an 
alternative BART limit for MSCC, and no alternative BART limit has been 
submitted to us for approval. Therefore, we believe the majority of 
comments regarding an alternative BART limit are irrelevant to our 
action. Nevertheless, we are responding to the comments regarding BART. 
Nothing in the comments has caused us to change our position regarding 
disapproval of MSCC's stack height credit.
    (a) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment # 22, 99, 103; MSCC letter, document # IV.A-20, comment # 1.I) 
stated that EPA's arguments regarding BART and feasibility studies are 
spurious and hypocritical. The commenter suggested that EPA has 
inadequately defined BART and that therefore the opportunity to 
demonstrate the infeasibility of meeting the NSPS limit and establish 
an alternative BART limit amounts to impermissibly vague regulation. 
The commenter asserted that no successful BART or feasibility analysis 
has ever been done regarding implementation of stack height rules. The 
commenter alluded to a BART analysis for another source that EPA 
rejected. The commenter complained that the BART guidelines are 
guidance and not regulations and that they are not authorized under 
section 123 of the Act.
    Response: Since the State did not adopt an alternative limit for 
MSCC, based on an infeasibility showing, the commenter's arguments 
regarding BART and our application of the regulations are irrelevant to 
our action on the SIP before us. In addition, to the extent the 
commenter is objecting to an alleged flaw in the stack height 
regulations, the objection could only be raised in a challenge to the 
stack height regulations and is irrelevant to our action. Nevertheless, 
we are responding to the comment.
    We disagree with the commenter. We believe the BART guidelines 
adequately define criteria and a process for determining the 
feasibility of employing particular control technology or meeting 
particular emission limits. These guidelines are similar to guidelines 
for establishing BACT for a new source or source modification, 
guidelines that have been used successfully on many occasions to 
establish emission limits in the PSD program. Whether or not the BART 
guidelines have been used successfully in the stack height context does 
not mean the guidelines are inadequate or overly vague. It is true that 
the State and EPA retain discretion to review and approve a source 
demonstration regarding feasibility and BART, but this is true in the 
PSD context and other contexts as well. Certainly our discretion is 
limited by applicable standards under the Administrative Procedure Act.
    Contrary to the commenter's assertion, we did provide information 
regarding BART and infeasibility showings (see document #'s II.C-12 and 
IV.C-40). It seems the commenter expected us to propose an alternative 
BART limit for MSCC. However, the regulations make clear that in the 
first instance the source must demonstrate that it cannot meet the NSPS 
limit. MSCC did not attempt to make such a showing.

[[Page 22219]]

    (b) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment # 24; MSCC letter, document # IV.A-20, comment # 1.I) stated 
that SIP time frames, and threatened sanctions, preclude the use of 
alternative limits for above-formula sources. The commenter stated that 
because of this, the NRDC v. Thomas court should review its decision.
    Response: We believe that a source and state could develop an 
alternative emission limit in the time frame for SIP development. In 
any event, we believe this comment goes to the validity of the stack 
height regulations themselves, and is neither timely nor relevant to 
our action on the SIP before us. We note that MSCC and the State had 
more than ample time to conduct an infeasibility analysis in this case. 
We informed the State of our position regarding the NSPS and the stack 
height regulations in May of 1996, and subsequently invited MSCC and 
the State to make an infeasibility showing. MSCC had over three years 
in which to make such a showing before we finally proposed our action 
on the SIP in July of 1999.
    (c) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment #'s 24, 25) stated that section 123 requires EPA to promulgate 
regulations defining GEP and that EPA cannot define the parameters for 
a feasibility analysis through guidance or staff pronouncements. The 
commenter went on to say that if section 123 of the Act grants power to 
EPA employees to define GEP or feasibility analyses outside of 
regulations, it is so broad a delegation of power as to deny reasonable 
due process.
    Response: The commenter is asserting a harm to MSCC that is purely 
speculative. MSCC did not attempt to perform an infeasibility analysis, 
the State did not adopt an alternative (to NSPS) limit for MSCC, and 
the State did not submit such a limit to us for approval as part of the 
SIP. The commenter assumes there was insufficient time to make the 
necessary showing and analysis and assumes that we would have acted 
arbitrarily and capriciously if the State had submitted an alternative 
limit for MSCC. The commenter is raising an issue that is unripe for 
review and has no relevance to our action on the SIP before us. Also, 
the commenter ignores the fact that in the preamble to our stack height 
regulations, we stated that we would rely on our BART guidelines in 
reviewing any rebuttals to the NSPS and alternative limits (see 50 FR 
27898), and that NRDC challenged our intent to rely on the BART 
guidelines. The D.C. Circuit held that the BART guidelines did not 
represent final agency action subject to review and dismissed NRDC's 
challenge (NRDC v. Thomas, 838 F.2d 1224, 1241, fn. 14 (D.C. Cir. 
1988)), but the Court upheld our regulations.
    (d) Comment: One commenter (MSCC letter, document # IV.A-19, p. 2) 
asserted that it is MSCCs ``situation, not merely its position'' that 
application of additional control technology is infeasible to achieve 
short term limits more restrictive than the current plan provides. The 
commenter stated that MSCC lacks the land and resources to further 
control SO2. The commenter stated that it has invested substantial 
resources in reliance on the State's plan and findings.
    Response: We are not permitted to consider economic or feasibility 
questions in evaluating the adequacy of a SIP. Union Electric v. EPA, 
427 U.S. 246, 265--266 (1976). To the extent the commenter is 
suggesting MSCC should be allowed to use an alternative limit under our 
stack height regulations, MSCC has not demonstrated, and the State has 
not found, that MSCC cannot meet an NSPS limit. These are prerequisites 
before an alternative limit may be established. See 40 CFR 
51.100(kk)(1). In fact, despite being offered the opportunity (see 
document # II.C-12), MSCC did not attempt to make an infeasibility 
showing.
    We also note that when MSCC contested the State-proposed emission 
limit based on 65-meter stack height credit, MSCC claimed it was not 
``economically practical or feasible'' to install an additional Claus 
unit; yet, MSCC has since installed an additional Claus unit. Document 
# IV.A-17, MSCC Exhibit 126, Direct Testimony of Larry Zink, ``In the 
Matter of the Application of the DEQ for Revision of the Montana State 
Air Quality Control of SO2 Emissions in the Billings/Laurel Area * * 
*'', December 5, 1995, pp. 27, 36.
    (e) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment # 101) asked a number of questions about the Asarco stack 
height situation in Montana and the outcome of any BART analysis for 
Asarco, and asked EPA to define the terms ``well-controlled'' and 
``infeasibility.''
    Response: The comment is more in the nature of a set of 
interrogatories than a comment. We are responding to comments but are 
not obligated to respond to interrogatories in conducting this 
rulemaking action. In any event, we believe the questions posed are not 
relevant to this rulemaking action, particularly since MSCC chose not 
to try to make an infeasibility showing and establish an alternative 
emission limit for the MSCC stack. However, Asarco did not perform a 
BART analysis but instead assumed a de minimis stack height credit of 
65 meters for the blast furnace stack in the attainment demonstration. 
We approved the 65 meter stack height credit for the blast furnace 
stack on January 27, 1995 (60 FR 5313).
3. Issues Related to the Montana Ambient Air Quality Standard (MAAQS)
    Montana approved a stack height credit of 97.5 meters for MSCC's 
100-meter stack based on a fluid modeling demonstration that MSCC's 
contractor (CPP) performed. Assuming an NSPS rate of emissions from the 
100-meter stack, and adding in background concentrations, the 
particular demonstration the State approved showed an exceedance of the 
annual Montana Ambient Air Quality Standard (MAAQS) for SO2 (52 
micrograms per cubic meter), but not of the annual NAAQS for SO2 (80 
micrograms per cubic meter). As we explained in our proposed 
disapproval and TSD, our regulations require a fluid modeling 
demonstration under 40 CFR 51.100(kk)(1) to show an exceedance of the 
NAAQS. An exceedance of the MAAQS is not sufficient. We received 
numerous comments on this issue and have considered them. Nothing in 
the comments has caused us to change our position on this issue.
    (a) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment # 95) stated that the use of the MAAQS is not logically 
inconsistent for the fluid modeling determination. The commenter argued 
that the State applied more stringent modeling requirements than were 
warranted.
    Response: We continue to believe our interpretation, that the 
benchmark for fluid modeling must be the NAAQS, is reasonable and 
should be maintained. In the alternative, if a benchmark like the MAAQS 
is going to be used to justify higher stack height credit in a 
federally enforceable SIP, then the State must consistently apply the 
MAAQS in that SIP. This is not the case with the Billings/Laurel SO2 
SIP; the SIP is not intended or designed to achieve the MAAQS. The 
State cannot selectively choose to apply the MAAQS for inflating stack 
height credit, thereby increasing atmospheric loading and dispersion 
downwind, but not apply the more stringent ambient standard in setting 
SIP emission limits. Either the MAAQS are a health-based standard for 
SIP purposes or they are not.
    We are not sure what the commenter is referring to when he claims 
that the State imposed more stringent modeling

[[Page 22220]]

requirements than it had to, but we believe that this claim does not 
resolve the issue related to the MAAQS or undermine our interpretation.
    (b) Comment: Several commenters (MSCC letter, document # IV.A-19, 
comment # 95; State letter, document # IV.A-23, p. 15; Goetz letter, 
document # IV.A-18, exhibit D, p. 27; CPP letter, document # IV.A-18, 
exhibit A, p. 6) stated that EPA's rules define excess concentrations 
in terms of an impact on ``an ambient air quality standard,'' not a 
``national standard'' or ``national ambient air quality standard.'' 
According to the commenters, the term ambient air quality standard 
clearly includes the MAAQS. The commenters asserted that because the 
rule is clear, it is not necessary to resort to the preamble to 
interpret it. The commenters claimed that even if one examines the 
preamble, the preamble supports the interpretation that ``ambient air 
quality standard'' includes the MAAQS. Furthermore, the commenters 
stated that if EPA had wanted to limit a fluid modeling demonstration 
to the NAAQS, it knew how to do so. One of the commenters (MSCC) 
asserted that neither the statute nor EPA regulations specify the 
NAAQS. Finally, the commenters argue that EPA recognized in a 1990 
memorandum that the express language of the rules is not limited to the 
NAAQS, and that, on a case-by-case basis a more stringent state 
standard could be used.
    Response: Given that ``ambient air quality standard'' is not a 
defined term in the regulations, we think it is entirely appropriate to 
consult the preamble and other documents. The preamble to the 
regulations clearly indicates that ``ambient air quality standard'', as 
used in 40 CFR 51.100(kk)(1), was intended to mean a NAAQS. For 
example, we stated the following in the preamble to the final 
regulations:

    For these reasons, we are requiring sources seeking credit for 
stacks above formula height and credit for any stack height 
justified by terrain effects to show by field studies or fluid 
modeling that this height is needed to avoid a 40-percent increase 
in concentrations due to downwash and that such an increase would 
result in exceedance of air quality standards or applicable PSD 
increments. This will restrict stack height credit in this context 
to cases where the downwash avoided is specified by regulation or by 
act of Congress as possessing health or welfare significance. (50 FR 
27898, July 8, 1985, emphasis added.)

    When we promulgated the regulation, we were not contemplating state 
air quality standards. In fact, the preamble specifically mentions the 
NAAQS in many places without any reference to possible alternative 
state ambient standards. The following quotes are informative:

    The EPA's reliance on exceedances, rather than violations of the 
NAAQS and PSD increments, is deliberate. (50 FR 27898.)
    Since a source can only get stack height credit to the extent 
that it is needed to avoid a PSD increment or NAAQS exceedance, * * 
* (50 FR 27898)
    [T]he second way to justify raising a stack is to demonstrate by 
fluid modeling or field study an increase in concentrations due to 
downwash that is at least 40-percent in excess of concentrations in 
the absence of such downwash and in excess of the applicable NAAQS 
or PSD increments. (50 FR 27899)

    Likewise, our response to comments document for the stack height 
regulation states that it would not be appropriate to use a 
concentration below the NAAQS ``as a precaution to avoid health and 
welfare effects,'' because doing so would not be responsive to the 
health and welfare concerns articulated by the Sierra Club court 
(Sierra Club v. EPA, 719 F.2d 436 (D.C. Cir. 1983). Response to 
Comments on the November 9, 1984, Proposed Stack Height Rules, prepared 
July 1985 by EPA's Office of Air Quality Planning and Standards, at 36 
(document # II.A-8).
    The preamble to our proposed stack height regulation is also on 
point. The term ``ambient air quality standard'' was used in the 
proposed regulations exactly as it is used in the final regulations. 
The preamble to the proposal describes the requirements as follows:

    The proposed regulation requires that the downwash, wakes, or 
eddy effects induced by nearby structures or terrain features 
results in an increase in ground-level pollutant concentrations 
that: (a) Causes or contributes to an exceedance of a NAAQS or 
applicable PSD increment; * * *
    Because the NAAQS represent pollutant concentrations which the 
Agency has previously determined to result in adverse health and 
welfare effects, the inclusion of the exceedance of a NAAQS in the 
definition of ``excessive concentrations'' provides a 
straightforward response to the court's directive. (49 FR 44881, 
November 9, 1984)

    It is clear that we interpreted ambient air quality standard to 
mean NAAQS. This is how the United States Court of Appeals for the D.C. 
Circuit understood the regulations (see NRDC v. Thomas, 838 F.2d 1224, 
1240 (D.C. Cir. 1988)) and this interpretation is supported by other 
documents as well. The 1990 memo (document # II.F-13) referenced by one 
commenter (State) states that EPA interprets ``ambient air quality 
standard'' to mean national ambient air quality standard. To the extent 
the memo allowed for consideration of some other benchmark on a case-
by-case basis, we believe that the State has not made an adequate 
showing that use of the MAAQS in this case is justified or would result 
in more stringent requirements than our regulations impose. In fact, 
just the opposite would be the case.
    We also note that the March 4, 1991 letter to which we attached the 
1990 memo stated our conclusion that Asarco's field studies had not 
demonstrated that stack height above GEP formula height was justified. 
Among the reasons we gave for reaching this conclusion was that the 
studies had not shown an exceedance of the 3-hour national ambient air 
quality standards for SO2. (March 4, 1991 letter from Irwin L. 
Dickstein to Jeffrey T. Chaffee (document # II.F-14), emphasis added.) 
Also, in our September 16, 1994 letter from Douglas Skie to Jeffrey 
Chaffee regarding ExxonMobil's GEP stack height credit (document # 
IV.A-17, MSCC Exhibit 123) we stated that the definition of ``excessive 
concentrations'' required an exceedance of the applicable NAAQS.
    We also find it striking that more than one of the commenters, in 
objecting to other aspects of our stack height analysis, rely on EPA 
documents that clearly contemplate use of the NAAQS in fluid modeling 
demonstrations. For example, one commenter (Goetz, document # IV.A-18, 
exhibit D, pp. 24--26) cites extensively from our Guideline for 
Determination of Good Engineering Practice Stack Height (Technical 
Support Document for the Stack Height Regulations), which, in Table 
3.1, item F, clearly indicates that excessive concentration is to be 
judged against the NAAQS. The State (document # IV.A-23, p. 20, 
footnote 19) refers to an October 6, 1988 letter from Marcia Mulkey, 
EPA Region III, to John Proctor, attorney for Pennsylvania Electric 
Company (document # IV.C-65), which indicates our stack height 
regulations require an analysis of whether downwash causes an 
exceedance of an applicable NAAQS. These commenters never mention these 
references to the need to use the NAAQS.
    It is true that the statute does not specify the NAAQS in referring 
to excessive concentrations. However, this is irrelevant because 
Congress did not define excessive concentrations at all and instead 
left it to EPA to promulgate regulations to address issues related to 
stack height demonstrations.
    The State and other commenters have merely assumed that the phrase 
``ambient air quality standard'' encompasses a state-adopted ambient 
air quality standard. However, they offer

[[Page 22221]]

no compelling reason that their interpretation of our regulation is 
reasonable. On the other hand, we have a compelling reason that our 
longstanding interpretation of the phrase is reasonable--namely, that 
our interpretation will effectuate Congressional purpose, as 
interpreted by the courts and by EPA. Our interpretation is entitled to 
deference.
    (c) Comment: More than one commenter (MSCC letter, document # IV.A-
19, #'s 18, 95; MSCC letter, document # IV.A-20, # 1.B; State letter, 
document # IV.A-23, p. 15) stated that EPA has already approved into 
the SIP Montana's stack height regulations, which are essentially 
equivalent to those of the federal government, and which allow the 
MAAQS to be used in fluid modeling demonstrations. The commenters 
claimed that if EPA had intended that the NAAQS must be used in place 
of the MAAQS in a fluid modeling demonstration, EPA would have 
disapproved the part of Montana's rules that cross-reference the MAAQS. 
Furthermore, the commenters asserted that EPA has delegated the 
authority for such determinations to the state of Montana.
    Response: First, we do not believe we are bound by the terms of the 
Montana stack height regulations in reviewing the Billings/Laurel SIP. 
Instead, we believe we have an independent obligation to ensure that 
the Billings/Laurel SIP meets the requirements of section 123 of the 
Act and our stack height regulations, regardless of the terms of the 
stack height regulations in the State SIP. The Court of Appeals for the 
D.C. Circuit said as much in Sierra Club v. EPA, 719 F.2d 436, 469 
(D.C. Cir. 1983):

    Moreover, we see no place for such state regulations in EPA's 
own final regulations. The regulations are detailed and precise and 
do not mention alternative means of compliance from which the states 
may pick and choose.

    As we noted in our proposal, we believe our regulations intended 
``ambient air quality standard'' to refer to the NAAQS. The preamble 
makes this evident. Also, the application of the MAAQS in a fluid 
modeling demonstration makes it easier for a source to demonstrate 
excessive concentrations, as defined in our stack height regulations, 
and thus justify an above-formula stack height credit. Clearly, we did 
not intend such a result, particularly where, as in this case, the SIP 
revision has not even been designed to attain the substitute ambient 
standard (the MAAQS).
    No commenter has pointed to any limits or plan that is designed to 
achieve the MAAQS, and in reading the State's regulations, we have 
found no requirement for a plan. Instead, it is not clear how the MAAQS 
are enforced by the State.
    Assuming for the sake of argument that we are bound by the Montana 
SIP stack height regulations, we do not think those regulations stand 
for the proposition argued by the commenters. Following our 
promulgation of our July 8, 1985 stack height regulations, we approved 
Montana's stack height regulations (16.8.1204 through 16.8.1206, ARM, 
effective June 13, 1986) as part of the SIP on June 7, 1989 (see 40 CFR 
52.1370(c)(18), 54 FR 24334). That version of the Montana regulations 
cross-references ``an ambient air quality standard as provided in 
subchapter 8.'' See document # IV.C-45. Subchapter 8 was not submitted 
as part of the SIP. When we approved Montana's stack height regulations 
in 1989, subchapter 8 exempted the Billings/Laurel area from the MAAQS. 
See document # IV.C-70.\27\ This is because in 1987, the Montana 
legislature enacted the ``Hannah Bill,'' which directed the Montana 
Board of Health and Environmental Sciences to amend subchapter 8 to 
exempt Billings/Laurel sources from the SO2 MAAQS. See document # IV.C-
67. Following this directive, the Board of Health and Environmental 
Sciences revised subchapter 8 of the air quality regulations, effective 
August 28, 1987. See document # IV.C-70. Thus, when we approved the 
Montana stack height regulations, only the SO2 NAAQS applied in the 
Billings/Laurel area.
---------------------------------------------------------------------------

    \27\ Subchapter 8 described this exemption in a rather oblique 
fashion, by indicating that persons causing or contributing to 
exceedances of the MAAQS during 1985 would only need to meet the 
NAAQS for SO2, not the MAAQS. See document # IV.C-70. This language 
was specifically designed for the Billings/Laurel area, which 
exceeded the MAAQS for SO2 in 1985. See Montana 1986 Network Review, 
document # IV.C-68.
---------------------------------------------------------------------------

    Given that the NAAQS applied in the Billings/Laurel area as a 
matter of State law at the time we approved the Montana stack height 
regulations, we believe it is reasonable to interpret the federally-
approved Montana stack height regulations as requiring the use of the 
NAAQS in fluid modeling demonstrations. At the very least, the 
applicable ambient air quality standard has been a moving target under 
Montana law. As recently as 1997, the State air quality regulations 
continued to exempt the Billings/Laurel area from the MAAQS. See 
document # IV.C-77. This exemption was in effect when MSCC conducted 
fluid modeling in 1995 and 1996, and when the State adopted SIP limits 
for MSCC in the summer of 1996. The State did not remove the Hannah 
exemption from its regulations until September 1997. See document # 
IV.C-77.
    According to the State, subchapter 2 is the present successor to 
subchapter 8. See State letter, document # IV.A-23, p. 15. As the State 
notes in its comments, subchapter 2 not only contains the MAAQS, but 
also incorporates the NAAQS by reference. State letter, document # 
IV.A-23, p. 16, footnote 16. The NAAQS are clearly within the 
definition of an ``ambient air quality standard'' as used in the 
State's current stack height regulation. See document # IV.C-64, 
section 17.8.201(2). Even if this version of the State regulation could 
be considered to govern this situation, under its own regulation, the 
State has a choice of ambient standards to apply. The State, in its 
comments, offers no basis to choose the MAAQS over the NAAQS for 
purposes of making a fluid modeling demonstration. We believe it is 
rational and necessary to choose the NAAQS when establishing stack 
height credit for purposes of setting a limit to achieve the NAAQS. The 
State has offered no rational basis for selecting the MAAQS for this 
purpose, and under our reading of the relevant laws, and the purposes 
behind section 123 of the CAA, it was inappropriate for the State to 
select the MAAQS. This merely made it easier for MSCC to demonstrate an 
``excessive concentration'' and higher stack height credit.
    In response to the comment claiming delegation, we have not 
``delegated'' to Montana sole discretion to determine GEP stack height. 
We are required to independently determine whether this SIP revision 
meets the requirements of section 123 of the CAA, independent of any 
determination made by the State. See sections 110(k)(3) and 123 of the 
Act.
    (d) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment # 48; MSCC letter, document # IV.A-20, comment # 1.C) stated 
that EPA's objections to use of the MAAQS in MSCC's fluid modeling 
demonstration are spurious. The commenter asserted that lack of federal 
enforceability does not make the MAAQS irrelevant in a fluid modeling 
demonstration, any more so than a nuisance demonstration by a state 
need be based on a federally enforceable ``nuisance'' concentration as 
provided in another part of the rule.
    Response: Taken to its logical conclusion, the commenter's argument 
would mean it would be acceptable for a state to establish an ambient 
standard of zero for purposes of fluid modeling demonstrations, that 
would be unenforceable through the SIP. Such a

[[Page 22222]]

zero standard would make the ambient air quality standard portion of 
the rule meaningless, leaving only the 40% standard for fluid modeling 
demonstrations. This is clearly not acceptable, as the Sierra Club 
court held in requiring that EPA revise the rule using a health-based 
requirement for fluid modeling demonstrations. See Sierra Club v. EPA, 
719 F.2d 436, 446-450 (D.C. Cir. 1983). We believe our interpretation 
of the rule is reasonable--at the very least, the ambient air quality 
standard must be cognizable under the SIP. Otherwise, states will be 
able to circumvent the purposes of the rule--to prevent states from 
achieving local compliance with the NAAQS at the expense of downwind 
states and to prohibit inappropriate use of dispersion instead of 
emissions control.
    The commenter's attempt to analogize a nuisance showing under 40 
CFR 51.100(kk)(2) fails because (kk)(2) applies to within formula 
demonstrations, for which EPA consciously selected a less rigorous 
standard. In order to preserve Congressional and EPA intent regarding 
the granting of above-formula stack height credit, the ambient air 
quality standard referred to in 40 CFR 51.100(kk)(1) must at least be 
federally cognizable through the SIP.
    (e) Comment: Several commenters (MSCC letter, document # IV.A-19, 
comment #s 48, 93; Goetz letter, document # IV.A-18, exhibit D, pp. 21, 
27, 28) stated that EPA's modeler advised the State that use of the 
MAAQS would be acceptable in the fluid modeling demonstration. 
According to one of the commenters (Goetz), in a telephone conversation 
with Dr. Petersen in the Spring of 1996, EPA's modeler indicated that 
EPA was going to agree with the State's recommendation that a MAAQS 
exceedance demonstration is sufficient and that the regulation 
``clearly says an exceedance of an ambient standard which MAAQS is.'' 
Another commenter (CPP letter, document # IV.A-18, exhibit A, p. 6) 
made essentially the same claim. Mr. Goetz asserted that EPA's 
objection to use of the MAAQS is trivial, something EPA's modeler 
recognized.
    Response: Although EPA's modeler \28\ may have at one time 
indicated that the use of the MAAQS would probably be acceptable, the 
official EPA position is that use of the MAAQS is not consistent with 
the stack height regulations. Our other responses in this document 
explain why the use of the MAAQS is not appropriate. We note that we 
had raised the issue of using the MAAQS in a March 15, 1996 letter 
(document # II.F-20) to the State that Mr. Goetz cites for other 
purposes. Our modeler did not indicate that the issue was trivial, and 
we do not believe our objection to the use of the MAAQS is trivial.
---------------------------------------------------------------------------

    \28\ Elsewhere we and some of the commenters also refer to EPA's 
or the Region's meteorologist. Our modeler and meteorologist are the 
same person.
---------------------------------------------------------------------------

    (f) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment #'s 93, 95) argued that the MAAQS are cognizable under federal 
law and that EPA's position regarding the MAAQS makes no sense given 
that fluid modeling demonstrations can justify above-formula credit 
based on an exceedance of the PSD increment which is much smaller than 
the NAAQS or MAAQS. According to the commenter, the rules do not 
contain the restrictions EPA asserted, and section 123 of the Act makes 
no mention of ambient standard.
    Response: For the reasons discussed elsewhere in this document, we 
do not agree that the MAAQS are ``cognizable'' under federal law. We 
have no mechanism to ensure the MAAQS will be met. Regarding the use of 
the PSD increment in fluid modeling, this is only available to sources 
that are subject to PSD (see 40 CFR 51.100(kk)(1); Response to Comments 
on the November 9, 1984 Proposed Stack Height Rules, July 1985, at pp. 
32, 38, document # II.A-8), and, thus, that have already installed 
BACT. Thus, these sources have already been controlled to at least NSPS 
levels, and usually well beyond. See 40 CFR 51.166(b)(12). In addition, 
unlike the MAAQS, PSD increments are federally enforceable standards 
that are addressed in SIPs. It is irrelevant that section 123 does not 
mention ``ambient standard;'' our regulations do use the term.
    (g) Comment: One commenter (State letter, document # IV.A-23, p. 
16) stated that EPA did not adopt rules that required use of the NAAQS 
in the fluid modeling demonstration, or disapprove a provision in the 
Montana SIP that allowed use of the MAAQS, because to do so would be 
contrary to section 116 of the CAA, which expressly recognizes that 
states may adopt and enforce standards, such as the MAAQS, that are 
more stringent than federal standards.
    Response: First, as explained in response to a prior comment, we 
did adopt a rule that requires the use of the NAAQS in a fluid modeling 
demonstration. Second, there is nothing in section 116 that would 
prevent EPA from doing so or that would prevent EPA from disapproving a 
provision in a SIP that allows use of a lower air quality standard in a 
fluid modeling demonstration. Section 116 reserves to states the right 
to generally adopt requirements more stringent than federally required, 
except in certain pre-empted areas. See Union Electric Co. v. EPA, 427 
U.S. 246, 263--264 (1976). The State's use of the MAAQS to artificially 
inflate GEP stack height credit without concomitantly regulating for 
the MAAQS in the SIP renders the Billings/Laurel SIP less stringent 
than federally required.
    Our establishment of the NAAQS as the fluid modeling benchmark has 
no effect on the ability of a State to establish a lower State ambient 
air quality standard to provide a greater margin of protection to its 
citizens. Our establishment of the NAAQS as the benchmark for fluid 
modeling, may have the effect, in certain instances, of restricting the 
degree to which dispersion using stack height can be counted for 
purposes of showing compliance with the national ambient air quality 
standards. Thus, the issue here is the extent to which dispersion may 
be relied on to show compliance with national standards, not whether 
Montana can impose more stringent requirements on its sources to meet a 
more stringent Montana standard. There is nothing in section 116 that 
says Montana or any other state is entitled to rely on greater 
dispersion to meet the NAAQS, and Montana's use of the MAAQS in this 
case to justify greater use of dispersion renders the SIP less 
stringent, not more. Montana's use of the MAAQS would allow MSCC to 
have a higher SIP limit, not a lower one. If the NAAQS were used, MSCC 
would have a lower stack height credit. Section 116 does not support 
the commenters' argument.
    (h) Comment: One commenter (State letter, document # IV.A-23, p. 
17) stated that EPA's criticism of the State's use of the MAAQS in the 
fluid modeling demonstration arises from EPA's lack of understanding of 
the MAAQS. The commenter asserted that the State has responsibility to 
protect both the NAAQS and the MAAQS; the NAAQS are enforced through an 
implementation plan, but the MAAQS are enforced directly, based on 
ambient monitoring. According to the commenter, if EPA's argument were 
followed to its logical conclusion, Montana would be forced to either 
abandon its MAAQS or impose two GEP determinations upon a source 
seeking above formula credit, separately based on the NAAQS and the 
MAAQS.
    Response: The comment makes clear that stack height credit has no 
relevance to the MAAQS whatsoever. As the comment notes, the MAAQS are 
enforced directly, based on ambient monitoring. Of necessity, the full

[[Page 22223]]

dispersive effect of a stack's height is taken into account with 
ambient monitoring. A monitor does not adjust the concentrations it 
reads based on too much stack height credit. Stack height credit only 
has relevance to developing limits in an implementation plan, and, as 
Montana admits in its comment, no implementation plan is developed for 
the MAAQS. Thus, our position would not force Montana to abandon the 
MAAQS and would not force Montana to perform two GEP determinations.
    If Montana were to develop a state-only plan for the MAAQS, it is 
conceivable that Montana would have to perform two GEP determinations--
one for the federally enforceable SIP for the NAAQS, one for the state-
only plan for the MAAQS. We do not believe this would impose a 
significant hardship on the State or sources. Many states have state-
only requirements for sources that they choose not to include in the 
federally enforceable SIP. Certainly, our position would not force 
Montana to abandon the MAAQS.
    (i) Comment: One commenter (MSCC letter, document # IV.A-20, 
comment # 1.D) believed that EPA's objections regarding the use of the 
MAAQS in the fluid modeling demonstration and with respect to other 
aspects of the State's GEP stack height determination are too late.
    Response: We have both the legal authority and obligation to 
determine whether the SIP meets the requirements of the Act and our 
regulations. At the time we propose action on a SIP submission, it is 
clearly not ``too late'' to raise objections regarding the SIP, even if 
we did not raise these objections at an earlier date. We are not 
``estopped'' from taking action consistent with the Act and 
regulations.
4. Issues Related to the Support Structure
    We received many comments, primarily from MSCC and its consultants, 
related to MSCC's stack support structure. There are two fundamental 
issues related to the support structure--first, whether we must approve 
GEP stack height credit for MSCC's SRU 100-meter stack based on the 
application of the formula to the stack support structure, either by 
accepting the formula calculation outright or by accepting a within-
formula fluid modeling demonstration to verify formula height based on 
the support structure, and second, whether we are justified in 
disapproving MSCC's SRU 100-meter stack emission limits because MSCC 
modeled downwash from the stack support structure in conducting its 
wind tunnel study.
    We think the first issue is irrelevant to our action. This is 
because the State rejected the application of the formula to the stack 
support structure. Thus, the State did not submit a SIP limit for MSCC 
based on a formula height determination, or a within-formula fluid 
modeling demonstration. Our obligation under the Act is to evaluate the 
SIP the State has submitted to us, not GEP theories an individual 
source has proposed but the State has rejected. Nonetheless, we respond 
to the comments on the first issue and explain why we believe the stack 
support structure may not be used to calculate formula height.
    The second issue is relevant to our action because the fluid 
modeling demonstration that the State ultimately approved modeled 
downwash from the stack support structure. We respond to comments on 
this issue and explain why we think it was inappropriate to model such 
downwash under section 123 of the Act and our regulations. This error 
forms one basis for our disapproval of MSCC's limits.
    (a) Comment: Several commenters (MSCC letter, document # IV.A-19, 
comment #'s 27, 30, 38; MSCC letter, document # IV.A-20, comment #'s 
1.D, 1.E, 2.B, 2.C, and 2.U; Goetz letter, document # IV.A-18, exhibit 
D, pp. 33--34; CPP letter, document # IV.A-18, exhibit A, p. 5 and 
Attachment I) stated that EPA has wrongly concluded that the MSCC stack 
support structure should not be treated as a nearby structure for 
purposes of determining formula height. The commenters claimed that 
nothing in the stack height regulations supports the State's and EPA's 
argument that the support structure is not within the definition of 
``nearby,'' and that in reaching such conclusion, EPA ignored the plain 
language of the regulations. The commenters also asserted that the 
stack height regulations do not exclude any types of structures for 
determining formula height. One of the commenters (MSCC) noted that EPA 
eliminated nearby terrain from consideration and could have done the 
same for specific structures if it had wanted to. The commenter 
contended that even if the support structure were a stack, it would 
still be a structure, and should still be considered in formula 
determinations and fluid modeling demonstrations. The commenter claimed 
that the rule does not draw a distinction between structures that are 
stacks and other structures, and that if it had drawn such a 
distinction, it would reasonably have been challenged as contrary to 
the explicit language in section 123, which requires that nearby 
structures, terrain and the source itself be considered in determining 
GEP. The commenter claimed that EPA cannot now put forward an 
interpretation that is not embodied in the rule. One of the commenters 
(MSCC) argued that section 123 contemplates consideration of downwash 
caused by the source itself. The commenter claimed it would be absurd 
to conclude that this would exclude the stack at a source but no other 
structures.
    Response: We do not dispute that the support structure is within 
the distance that 40 CFR 51.100(jj) defines as ``nearby'' with respect 
to separate structures. However, we cannot allow the support structure 
to be used to calculate formula height because it is not separate from 
the stack; it is part of the stack. Sources are not free under section 
123 to justify greater stack height credit by relying on the height of 
an existing stack or building a taller stack. Congress recognized the 
distinction between a source and its stack when it provided in section 
123 of the Act that formula height could not exceed two and a half 
times the height of the source. It is self-evident that Congress did 
not mean to include the stack as part of the source for applying the 
``2.5H'' formula. The D.C. Circuit acknowledged this in Sierra Club v. 
EPA:

    While the statute generally left the determination of GEP stack 
height to regulations to be promulgated by the EPA Administrator, it 
set an upper limit of two-and-one-half times the height of the 
stack's source.''

719 F.2d 436, 442 (D.C. Cir. 1983).
    If the commenters' logic were applied, a source could continually 
justify a higher and higher stack height credit, up to the moon if it 
wished, by simply building a taller stack. This result would completely 
undercut section 123 of the Act, which uses the formula to establish a 
presumptive limit on stack height credit.
    In addition, the very use of the term ``nearby'' in the regulations 
indicates a structure separate from the stack. Furthermore, the stack 
height regulations do not define the term ``structure'' and there is no 
statement in the regulations that says any and every manmade feature 
must be considered in calculating formula height. For example, we 
believe it would be inappropriate to calculate formula height based on 
a flagpole, even though it might be separate from the stack and some 
would argue it is a structure. As we discuss more fully below, we 
specifically indicated in the Technical Support Document for the stack 
height

[[Page 22224]]

regulations that stacks and radio or TV transmission towers should not 
be considered in GEP stack height determinations. (See ``Guideline for 
Determination of Good Engineering Practice Stack Height (Technical 
Support Document For the Stack Height Regulations)'' (document # II.A-
12) at p. 7). Absent a specific regulatory definition of the term 
``structure,'' we believe we have the discretion and the obligation to 
interpret our regulations so as to effectuate the language of the 
statute and the intent of Congress. We believe our interpretation is 
entitled to deference, and believe the commenters' interpretation would 
do severe damage to the statutory framework.
    (b) Comment: One commenter (CPP letter, document # IV.A-18, exhibit 
A, Attachment I) asserted that the State and EPA incorrectly concluded 
that the stack support structure could not be used to calculate GEP 
formula height. The commenter stated that mathematically, there is no 
reason the stack support structure cannot be used for calculating GEP 
formula height, since it has both height and width, and a formula can 
be calculated for any structure with height and width.
    Response: We are well aware that structures, like the MSCC stack, 
have height and width dimensions and that the variables in the GEP 
formula are height and width. We understand that it is possible to plug 
the height and width of the stack support structure into the GEP 
formula to reach a mathematical result. But, based on our legal 
interpretation of section 123 of the Act and our regulations, we do not 
believe this mathematical result is supportable; as explained in 
response to the previous comment, stack dimensions may not be used to 
calculate GEP formula height. The support structure is merely part of 
the MSCC stack.
    (c) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment #'s 29, 30; MSCC letter, document # IV.A-20, comment # 2.E) 
stated that the stack support structure is part of the source, not the 
stack. The commenter asserted that EPA's suggestion that the structure 
is a stack or part of a stack is both incorrect and spurious. The 
commenter also asserted that by definition under 40 CFR 51.100, the 
support structure is not a stack, ``which is a vent or conduit for 
emissions.'' The commenter claimed that the support structure simply 
supports several items of equipment that are themselves, like the 
structure, part of the source. Another commenter (Goetz letter, 
document # IV.A-18, exhibit D, p. 35) also claimed that the definition 
of stack does not support the argument of EPA and the State that the 
cylindrical support structure is a stack itself.
    Response: We disagree with the commenter's characterization of the 
support structure; we believe it must be considered part of the stack. 
As one commenter notes, the State and EPA are in agreement on this 
point. We believe that the agencies' view that the support structure is 
part of the stack is well-supported by evidence in the record, in 
particular, MSCC's own photographs of the stack (document # IV.A-17, 
MSCC Exhibit 119). These photographs show that the support structure 
and flue are nearly the same diameter and rise together for most of the 
height of the stack. In fact, they rise together for some 310 feet--
more than a football field--before the flue emerges for a final 18 
feet. See June 27, 1994 EPA letter, document # II.F-15; Goetz letter, 
document # IV.A-18, exhibit D, pp. 33-34. Therefore, the support 
structure cannot be considered a nearby structure for formula purposes 
or fluid modeling purposes. By analogy, a power plant with a stack 
consisting of an inner stack lining constructed of brick and an outer 
stack chimney constructed of concrete would not be allowed to calculate 
formula stack height based on the outer chimney, nor would the power 
plant be allowed to model downwash from the outer chimney in a fluid 
modeling demonstration. There is no reason MSCC's outer metal support 
structure should be treated any differently than the outer concrete 
chimney at a power plant. Both structures are part of the stack, even 
though both may support other equipment.
    For the purposes of accuracy, we'd like to point out that 40 CFR 
51.100 does not define stack as ``a vent or conduit for emissions.'' 
Instead 40 CFR 51.100(ff) defines stack as ``any point in a source 
designed to emit solids, liquids, or gases into the air, including a 
pipe or duct but not including flares.'' We believe this definition 
encompasses the entire MSCC stack structure, which includes the support 
structure.
    The commenter's assertion that ``the structure simply supports 
several items of equipment that are themselves, like the structure, 
part of the source,'' seems a bit misleading. The commenter fails to 
mention that MSCC itself calls the structure the ``support structure'' 
or the ``stack support'', and that the main structure the support 
structure supports is the flue. See, e.g., ``Rebuttal Testimony of 
Larry Zink, Vice President of Montana Sulphur & Chemical Company,'' 
document # IV.A-17, MSCC Exhibit 127, at p. 24.
    (d) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment # 38; MSCC letter, document # IV.A-20, p. 5, footnote 6) 
objected to the fact that EPA rejects the use of the support structure 
as a basis for calculating formula height on the basis that this would 
allow the stack to justify itself. The commenter stated that this 
concept or phrase is not found in the rules, statute, or legislative 
history. The commenter suggested that EPA's ``speculations'' regarding 
a stack justifying itself appear irrelevant to the concept of GEP and 
the goals of the CAA as a whole and section 123 in particular. 
According to the commenter, the use in the preamble of the phrase 
``stack justifying itself'' only relates to the emission rate to be 
used in fluid modeling demonstrations, and even there, EPA's arguments 
are specious. The commenter also suggested that EPA's response to its 
concern about circularity in the stack height regulations was an 
improper adoption at the last minute of the NSPS emission rate, and 
that EPA could have avoided the possibility of a new stack justifying 
itself by adopting an emission rate based on existing stack height or 
the de minimis stack height.
    In asserting that the stack is part of the source, not separate 
from the source, the commenter included various statements regarding 
Congress' intent and suggested that EPA included many terms and 
requirements in its stack height regulation that are not included in 
the statute.
    Response: Much of this comment appears to be saying that EPA went 
beyond the statute when it promulgated the 1985 stack height 
regulations and made questionable decisions. We believe such comments 
are not timely and are not directly relevant to this action. As we have 
explained elsewhere, the validity of the stack height regulations may 
not be challenged in this action.
    As to the remainder of the comment, we agree that neither section 
123 of the Act nor the stack height regulations state, ``a stack may 
not be used to justify itself in formula calculations,'' but the 
validity of our position on this matter is evident from the language of 
section 123 itself and the language and structure of our regulations. 
As we have explained in response to a prior comment, section 123 treats 
the stack as distinct from the source for purposes of calculating GEP 
height. Under section 123, GEP height may not exceed two and a half 
times the height of the source. For obvious reasons, Congress did not 
say GEP stack height may not exceed two and half times the height of 
the stack, because this would render the formula meaningless. Yet, this 
is essentially

[[Page 22225]]

what the commenter is advocating. Also, the very use of the term 
``nearby'' in the regulations indicates a structure separate from the 
stack. In this instance, we believe the regulations must be interpreted 
in a way to effectuate the overarching purpose of section 123, which is 
to restrict the unnecessary use of dispersion through tall stacks in 
lieu of emission controls; we believe our interpretation is reasonable 
and entitled to deference.
    Contrary to the commenter's assertion, we are not ``speculating'' 
about a stack justifying itself. MSCC is asserting in this action that 
part of the stack should be plugged into the formula or should be 
modeled in the fluid modeling demonstration.
    Also, we are not relying on preamble language related to a stack 
justifying itself or circularity to reach our conclusion; we are 
relying on section 123 itself and the language and structure of the 
regulations. The circularity we are concerned about here is not related 
to emission rates used in a fluid modeling demonstration; we are 
concerned with the circularity that arises from MSCC's attempt to 
justify GEP stack height credit for a new 100-meter stack based on a 
component of that very stack.
    (e) Comment: One commenter (Goetz letter, document # IV.A-18, 
exhibit D, pp. 36-37) stated that it is disingenuous for EPA to argue 
that MSCC's logic is circular since the CAA and its implementing 
regulations are circular and the NRDC v. Thomas court approved of some 
circularity in the stack height regulations.
    Response: We do not believe the court's holding on the differing 
requirements for within-formula and above-formula stack height 
demonstrations is particularly relevant to this issue. If it is 
relevant, then, for the reasons we have already given, using the 
support structure to calculate formula height is most certainly an 
impermissible form of circularity.
    (f) Comment: One commenter (Goetz letter, document # IV.A-18, 
exhibit D, pp. 36-40) stated that the preamble to the 1981 stack height 
regulations dispels EPA's ``intent'' argument (that MSCC's use of the 
stack support structure to calculate formula height would violate 
Congress' intent in passing section 123 of the Act), because it 
indicated a lack of concern about sources manipulating structure size 
or placement solely for the purpose of increasing their stack height 
credits, and retained the definition of ``nearby.'' In addition, the 
commenter claimed that in indicating Congress intended to favor 
emission reductions over tall stacks, EPA mischaracterizes Congress' 
intent; Congress endorsed the historic practice of using stacks to 
protect health from downwash-induced pollution. Another commenter (MSCC 
letter, document # IV.A-20, comment # 2.U; MSCC letter, document # 
IV.A-19, comment # 92) stated that EPA's position regarding the support 
structure is illogical because of the numerous other scenarios that 
could occur whereby a source could increase formula height through its 
own construction or have it increased through others' construction of 
nearby sources. The commenter pointed out that construction of a new 
source and its stack could occur simultaneously and that this would not 
disqualify the source from being used to determine formula height. 
Thus, in the commenter's view, EPA's complaint that MSCC's new stack 
was not necessary as a result of some preexisting structure has no 
merit.
    Response: We agree that in the 1981 preamble and relevant EPA 
guidance we have taken the position that formula height may be 
recalculated based on the siting of new nearby structures. We do not 
believe the preamble or guidance language addresses or contemplates the 
situation involved here. This situation is distinct because the support 
structure is merely a component of the stack structure.
    We agree that some types of manipulation could occur, involving 
location of structures that could impact formula calculations. Normally 
we would not look behind the motivation for locating structures. As we 
explained in the 1981 preamble language cited by one of the commenters 
(Goetz at pp. 37-38; 46 FR 49819, October 7, 1981), we believed at that 
time that sources would not normally manipulate source construction 
parameters because it would be prohibitively costly to do so. We also 
agree that the simultaneous construction of a source and its stack 
would not invalidate a formula height calculation for the stack based 
on the source dimensions. However, as we noted in the same 1981 
preamble language cited by the commenter, new source construction would 
normally be subject to stringent technology-based limits under NSPS or 
new source review permitting, and thus, a source owner would have 
little motivation to manipulate structure sizes and locations. The same 
logic does not apply to MSCC's stack; MSCC was not building a new 
source with its stack, MSCC was merely building a new stack.
    We are not saying that MSCC manipulated the design of the stack 
with the goal of increasing stack height credit; we are not familiar 
with the specific design considerations that went into designing and 
building the stack. However, because of the circumstances, this really 
is not relevant. What is relevant is that there was no existing or new 
nearby structure distinct from the stack at the time MSCC constructed 
the stack that justified increasing the formula height of MSCC's stack. 
We believe we have a valid statutory and regulatory basis to 
distinguish between structures that are distinct from a stack and those 
that are part of the stack; otherwise, section 123 of the Act and our 
regulations would be rendered meaningless. As we have described in 
response to other comments, our position is not just based on our 
interpretation of Congress' intent, but on the language and structure 
of section 123 and our regulations.
    In any event, we do not believe we have mischaracterized Congress' 
intent. Congress intended to strike a balance between the use of stacks 
to disperse emissions and the use of control technology to limit 
emissions. The use of the support structure to calculate formula height 
would clearly disrupt the balance Congress was trying to achieve 
because any source could justify greater stack height credit by merely 
building a new stack.
    (g) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment # 37) stated that EPA's arguments regarding MSCC's stack appear 
to suggest that MSCC built or designed the structure to create 
downwash. The commenter asserted that MSCC did not build or design the 
structure to create downwash or circumvent the stack height regulations 
and described many reasons why MSCC built the stack in the manner and 
at the time it did.
    Response: As a preliminary matter, we do not believe this comment 
goes to the validity of our action. However, we offer the following 
response. In our proposal, we did not intend to suggest that MSCC built 
or designed the stack to create downwash. As noted above, we are not 
familiar with the specific design considerations that went into 
designing and building the stack. However, we are concerned that 
allowing one source to model downwash from a stack support structure 
might encourage other sources to design support structures that 
increase downwash. Most importantly, we do not accept the proposition 
that the stack support structure is a nearby structure under the Act 
and our regulations.
    (h) Comment: One commenter (MSCC letter, document # IV.A-20, 
comment # 2.V) stated that the notion that the support structure is 
part of the stack itself is not a meaningful distinction. According to 
the commenter, there is nothing in the rule that would allow a

[[Page 22226]]

reader to determine at what point structures become part of the stack 
itself as opposed to not part of the stack. The commenter claimed that 
if this position were valid, the rule would be void for lack of clarity 
as well as for lack of notice. The commenter asserted that these merely 
functional issues are not relevant to determining downwash or excessive 
concentrations; if a structure exists and it is nearby its contribution 
to downwash is as real as any other structure regardless of function. 
The commenter argued that the only purpose of this interpretation is to 
deny MSCC credit above 65 meters, not serve the Act.
    Response: As we explain in response to prior comments, we believe 
it is necessary to distinguish between the stack and the source in 
order to effectuate section 123 of the Act and our stack height 
regulations. Otherwise, there is no meaningful limit on GEP stack 
height credit. We do not believe it is particularly difficult in most 
cases to distinguish the stack from the source. In MSCC's case, we have 
already indicated why we believe it is evident that the support 
structure and the flue form an integrated stack structure. We note that 
it is necessary to determine the location and extent of the stack for 
purposes of determining whether a structure is nearby under 40 CFR 
51.100(jj), and under that section we would be unwilling to accept the 
proposition that there is no distinction between the source and the 
stack.
    We do not believe the stack height regulations are void for lack of 
clarity or notice. We do not believe any reasonable person reading the 
stack height regulations would have understood them to allow a source 
to increase formula height merely by building a new stack. In any 
event, we do not believe the clarity of the stack height regulations or 
validity of the notice for those regulations may be challenged in this 
action.
    The fact that the stack may create downwash is not a reason to 
conclude that the stack dimensions should be used to calculate formula 
height. We believe it is reasonably clear from the regulations that 
nearby structures means structures other than the stack.
    We believe very strongly that our interpretations serve the 
purposes of the Act. We are not going to this effort merely to deny 
MSCC stack height credit greater than 65 meters.
    (i) Comment: Several commenters (MSCC letter, document # IV.A-19, 
comment #'s 27, 38; MSCC letter, document # IV.A-20, comment # 2.I; 
Goetz letter, document # IV.A-18, exhibit D, p. 34-35; CPP letter, 
document # IV.A-18, exhibit A, p. 5 and Attachment I) contended their 
arguments, that the support structure may be used to justify GEP stack 
height credit through application of the formula or fluid modeling, are 
supported by EPA's Guideline for Determination of Good Engineering 
Practice Stack Height (Technical Support Document for the Stack Height 
Regulations). The commenters claimed that EPA's guidance indicates that 
tall thin structures may be used to calculate formula height and EPA's 
approvals here and elsewhere have involved calculating formula height 
from structures that are taller than they are wide.
    Response: Contrary to the commenters' assertion, our ``Guideline 
for Determination of Good Engineering Practice Stack Height (Technical 
Support Document For the Stack Height Regulations)'' (document # II.A-
12) does not support the commenters' position. The Guideline 
specifically states that ``structures such as stacks and radio or TV 
transmission towers should not be considered in GEP stack height 
determinations.'' (See Guideline at p. 7.) Later references to oddly 
shaped structures and the need to use fluid modeling demonstrations do 
not include stacks or radio and transmission towers. Thus, it is not 
just that the support structure is part of the stack; it is also the 
fact that it is very tall and thin that precludes its use in 
determining formula height. Although commenters claim that the rule 
does not exclude any nearby structures from consideration in 
determining formula height, it is clear from the technical support 
document for the stack height regulations that we intended to exclude 
some structures.
    We agree that, as a rule, formula height may be calculated based on 
structures that are taller than they are wide. (However, as already 
indicated, our interpretation is that this does not extend to 
structures like stacks and radio or TV transmission towers.) We also 
agree that formula height may be calculated based on enclosed 
structures within a lattice. This does not change our opinion that the 
formula may not be applied to the MSCC stack support structure.
    (j) Comment: One commenter (Goetz letter, document # IV.A-18, 
exhibit D, p. 35) stated that NRDC v. Thomas, 838 F.2d 1224, 1239 (D.C. 
Cir. 1988), supported his contention that the support structure is a 
nearby structure and is subject to modeling under EPA's stack height 
regulations.
    Response: The commenter cites language from the opinion that merely 
notes that the stack height regulations provide for fluid modeling 
demonstrations for sources with porous structures or buildings whose 
shapes are aerodynamically smoother than the simple structures on which 
the formulae were based. The language cited, and the provisions of 40 
CFR 51.100(kk)(3), are not relevant to this issue. As we have already 
discussed, the support structure may not be used to calculate formula 
height for two reasons--the support structure is part of the stack to 
which the formula may not be applied, and the support structure is a 
very tall thin structure to which the formula may not be applied. Thus, 
it does not matter that the support structure is a cylinder; the 
support structure does not fit within the umbrella of 40 CFR 
51.100(kk)(3).
    (k) Comment: Several commenters (MSCC letter, document # IV.A-19, 
comment # 38; MSCC letter, document # IV.A-20, comment #'s 2.B, 2.C, 
2.R, 2.U; Goetz letter, document # IV.A-18, exhibit D, p. 36; CPP 
letter, document # IV.A-18, exhibit A, p. 5 and Attachment I) stated 
that EPA's remedy to address structures that might not lead to accurate 
formula height determinations, was to allow for or require fluid 
modeling demonstrations. One commenter (MSCC) stated that even if a 
source built a stack with the intent of creating excessive formula 
height, the source would have no assurance that a fluid modeling 
demonstration would justify the height as GEP. The same commenter 
stated that, having established fluid modeling as the test where the 
formula is questioned, EPA cannot argue that the rules or the Act 
require it to disapprove formula height actually demonstrated by fluid 
modeling.
    Response: We have already explained why the stack support structure 
may not be used to calculate the formula. The potential safeguard that 
an agency might insist on fluid modeling to challenge the formula 
height credit does not render the initial proposition acceptable. 
Neither Congress nor EPA intended a stack or part of the stack to be 
eligible for consideration in determining formula height. In addition, 
we note that a fluid modeling demonstration to justify formula height 
is not a cure for applying the formula to a stack or a structure that 
is not nearby. This is because the criteria for fluid modeling for 
within-formula stack height credit are not as stringent as the criteria 
for above-formula stacks. See 40 CFR 51.100(kk)(2) and (kk)(3) versus 
subsection (kk)(1). Put another way, the commenters' approach would 
turn every fluid modeling demonstration into a within-formula 
demonstration, which is

[[Page 22227]]

clearly not what we intended. We also note that these comments ignore 
the statement in the Technical Support Document for our stack height 
regulations that structures like stacks and radio or TV transmission 
towers should not be considered in GEP stack height determinations.
    (l) Comment: One commenter (MSCC letter, document # IV.A-20, 
comment # 2.R) stated that because EPA has argued the Act does not 
require it to impose control-first, EPA should conclude that it need 
not disapprove the use of tall thin structures or even stacks in 
calculating formula heights because the rules and the Act do not 
require it do so.
    Response: We do not understand the logic of this comment. We 
believe our interpretation of the Act and the regulations is reasonable 
and best effectuates the purpose behind section 123. Among other 
things, we do not believe section 123 allows formula calculations to be 
based on the stack; as explained above, section 123 clearly 
differentiates between the source and the source's stack. We believe 
the commenter's interpretation is unreasonable and would undermine 
section 123 and our regulations. We do not believe we have the 
discretion to interpret the Act and our regulations in the manner that 
the commenter suggests; to the extent we have the discretion to 
interpret the Act differently--and to revise our stack heights 
regulations accordingly--we have not done so to date.
    (m) Comment: Several commenters (MSCC letter, document # IV.A-19, 
comment #'s 27, 29, and 90; MSCC letter, document # IV.A-20, comment 
#'s 1.E, 2.H; Goetz letter, document # IV.A-18, exhibit D, pp. 12, 33-
34, 36; CPP letter, document # IV.A-18, exhibit A, p. 5) stated that 
EPA changed its position on the validity of considering the support 
structure in determining formula height and the need to evaluate the 
effect of the support structure for purposes of fluid modeling. One 
commenter (MSCC) claims that EPA misguided the State and MSCC in the 
design of the protocol for the modeling and that the State and MSCC 
should not suffer for EPA's change of heart which has no technically 
sound basis. This commenter stated that EPA admits that it did not 
inform DEQ that the support structure should not be removed in model 
runs measuring downwash before the modeling was conducted. The 
commenter claimed EPA said it was acceptable to remove the support 
structure while the protocol was being written in the fall of 1995. One 
commenter (Goetz) stated that EPA's initial response to MSCC's formula 
height calculation was reasonable. According to the commenter, EPA 
called for verification of the formula height calculation based on the 
stack support structure, and EPA has discretion to require such a 
verification. This commenter also claimed that, in a letter to the 
State, EPA indicated that the support structure could be considered a 
nearby structure.
    Response: The commenters mis-represent EPA's position regarding the 
stack support structure. In our June 27, 1994 letter from Marshall 
Payne and Douglas Skie to Jeffrey Chaffee (document # II.F-15), we 
unequivocally stated that the formula could not be applied to the MSCC 
stack. Although this letter appeared to indicate that fluid modeling of 
the support structure could be used to determine GEP credit, at least 
three later letters to the State superseded the June 27, 1994 letter on 
this point. See our TSD at p. 56; letters dated January 31, 1996, March 
15, 1996, and July 18, 1996, document #'s II.F-19, II.F-20, and II.C-
5.)
    We agree that we did not inform the State in the fall of 1995 that 
the support structure could not be modeled. However, MSCC and DEQ had 
ample time to re-run the modeling based on our position and chose not 
to do so.
    We do not agree that our initial response to MSCC's formula height 
calculation (contained in our June 27, 1994 letter, document # II.F-15) 
was reasonable. It is contrary to section 123 of the Act and our stack 
height regulations to consider part of the stack in calculating formula 
height and in performing a wind tunnel study.
    (n) Comment: One commenter (CPP letter, document # IV.A-18, exhibit 
A, p. 5) asserted that EPA has questioned the use of the formula for 
the support structure and required that wind tunnel modeling be 
conducted to validate the use of the formula above 65 meters in this 
case. Therefore, according to the commenter, wind tunnel tests must be 
conducted with and without the support structure present. The commenter 
refered to his chronology of events to support his assertion that EPA 
required wind tunnel modeling to validate formula height. The commenter 
cited EPA guidance and regulations as support for his assertion.
    Response: The commenter references a July 27, 1994 letter from 
Douglas Skie to Jeffrey Chaffee, but we believe the commenter meant the 
June 27, 1994 letter from Marshall Payne and Douglas Skie to Jeffrey 
Chaffee (document # II.F-15). The commenter indicates that this letter 
said it was acceptable to calculate GEP formula stack height based on 
application of the formula to the stack support structure. This is 
inaccurate; see our response to the previous comment. Also, as noted in 
response to the previous comment, although the June 27, 1994 letter 
appeared to indicate that fluid modeling of the support structure could 
be used to determine GEP credit, later letters to the State said 
otherwise. Despite our admonitions on this matter, the commenter and 
MSCC have continued to assert that their within-formula wind tunnel 
demonstrations are valid. The commenter also does not mention the fact 
that the State did not approve these within-formula stack height 
demonstrations. As we have indicated, we believe this fact renders 
these demonstrations irrelevant.
    The EPA document references cited by the commenter do not support 
CPP's approach. The commenter's entire argument rests on the premise 
that formula height may be calculated based on the stack support 
structure, and that the commenter merely performed wind tunnel tests to 
validate formula height. Elsewhere in this document we have described 
in detail why the stack support structure may not be used to calculate 
formula height. If, as we interpret section 123 of the Act and our 
stack height regulations, the stack support structure may not be relied 
on to calculate formula height of 98.15 meters, then the commenter has 
no valid basis to ``verify'' a formula height of 98.15 meters. As we 
have stated, 40 CFR 51.100(kk)(3) is not applicable to MSCC's stack 
height determination.
    (o) Comment: One commenter (CPP letter, document # IV.A-18, exhibit 
A, Attachment I) stated that EPA's objection to the modeling of the 
effect of the stack support structure is contrary to all prior 
practice. The commenter indicated that CPP has conducted well over 20 
GEP stack height evaluations using fluid modeling, most of which have 
been approved by EPA, and in every case, CPP has considered the effect 
of all nearby structures on downwash. According to the commenter, 
``requiring the exclusion of any particular real structure that the 
source believes may be contributing to downwash is improper since it 
may affect the final result and lead to an improperly low GEP credit.'' 
The commenter suggested that it is particularly improper when guidance 
and the agency indicated downwash from the support structure should be 
modeled. The commenter also stated that no purpose would be served by 
re-running the test with the structure ``in'' in both cases because 
agency guidance indicates the effects of such a tall thin structure are 
very small.

[[Page 22228]]

    Response: We agree with the commenter that downwash from all nearby 
structures should be modeled in a fluid modeling demonstration. 
However, as discussed elsewhere, we do not think a component of the 
stack--in this case, the stack support structure--may be considered a 
nearby structure under the Act or our regulations. The commenter has 
not suggested that his past practice has included conducting fluid 
model runs with the stack ``in'' and ``out''--i.e., that he has modeled 
downwash created by the stack itself. Nor has he cited to any 
particular experience that involved modeling a stack support structure. 
We disagree with the commenter that the criterion for determining 
whether a particular structure should be excluded from fluid modeling 
is whether the source believes the structure may be contributing to 
downwash. For example, it would be inappropriate to model downwash from 
a structure that is more than half a mile from the stack. See 40 CFR 
51.100(jj)(2). As we have noted with respect to other comments, this 
commenter on the one hand seems to be suggesting that not considering 
downwash from the support structure might lead to improperly low GEP 
credit, but on the other hand that any downwash from the support 
structure is very, very small and that EPA is being unreasonable in 
saying the wind tunnel tests should have been re-run. Any other issues 
raised in this comment are addressed in our responses to other 
comments.
    (p) Comment: One commenter (Goetz letter, document # IV.A-18, 
exhibit D, p. 12) stated that MSCC's contractor properly ran EPA's own 
Building Profile Input Program, and carefully followed the statute's 
and rule's stack height formula, to determine a formula height of 98.15 
meters for MSCC's stack. According to the commenter, this formula 
height was based on the dimensions of the stack support structure.
    Response: A computer program is merely a computer program; someone 
using it could input any structure dimensions they want and the program 
would spit out a result. For example, one could input the dimensions of 
a structure more than 5L from the stack, which is not permitted by our 
regulations. Use of a computer program does not guarantee a valid 
formula height calculation or compliance with the statute and the 
regulations.
    (q) Comment: One commenter (MSCC letter, document # IV.A-20, 
comment # 2.J) stated that EPA's own computer program used for 
estimating downwash parameters for inclusion in dispersion models 
excludes no large structure based on its height to width ratio or 
shape. The commenter asserted that two stacks adjacent to each other 
may be used as downwash influences on each other.
    Response: We have interpreted the statute and regulations that 
apply to GEP stack height determinations, and believe they prohibit the 
use of the stack or part of the stack to calculate GEP stack height 
credit, either through application of the formula or through fluid 
modeling. Our rules and guidance for dispersion modeling may be 
different, but we do not think this has relevance to our interpretation 
of section 123 of the Act and the stack height regulations. Presumably, 
dispersion modeling would not exclude a structure more distant than a 
half mile either, as long as the structure is within the modeling 
domain, but this does not mean that such structure should be considered 
nearby for purposes of determining GEP stack height credit.
    (r) Comment: One commenter (Goetz letter, document # IV.A-18, 
exhibit D, pp. 20--21, 28) quoted from a phone summary prepared by Dr. 
Petersen, MSCC's consultant for the fluid modeling study, in which Dr. 
Petersen reported on a conversation he had with John Coefield, the 
State's modeler, on March 28, 1996. According to Dr. Petersen, Mr. 
Coefield indicated that although EPA had raised concerns regarding the 
treatment of the stack support structure in the fluid modeling, EPA did 
not feel this was a major concern because they felt the structure has a 
minor effect anyhow. In addition, the commenter asserted that EPA's 
objection to use of the support structure is trivial, and that not one 
expert, including EPA's meteorologist, believed that the support 
structure in or out will make any difference. Therefore, the commenter 
argued that EPA should not use this as a justification to disapprove 
the SIP. The commenter quoted from another phone summary prepared by 
MSCC's consultant as support for this notion. Another commenter (MSCC 
letter, document # IV.A-19, comment # 90) characterized our concern as 
a minor technical objection.
    Response: Our official communications with the State on this 
subject make clear that the treatment of the stack support structure 
was not a minor concern. We took the trouble to mention our concern in 
three different letters, something we would not have done if this was 
merely a minor concern. (See letters dated January 31, 1996, March 15, 
1996, and July 18, 1996, document #'s II.F-19, II.F-20, and II.C-5.) 
Even Dr. Petersen's notes reflect our meteorologist's belief that 
additional testing would be necessary. (See document # IV.A-18, MSCC 
Exhibit 144.)
    Whether the effect of the support structure on downwash is trivial 
or not can be shown through a properly conducted fluid modeling 
demonstration. We believe it is reasonable to insist that the 
demonstration be properly performed, and this means not modeling 
downwash from the support structure that is part of the stack.
    We note that one of the commenters (Goetz, document # IV.A-18, 
exhibit D, pp. 28, 34-35) argues that the effect of the support 
structure is trivial in the fluid model demonstration, but should be 
considered in calculating formula height. The commenter asserts that 
our Guideline recognizes that even a lattice structure may cause 
downwash and suggests that the support structure is more likely to be a 
source of downwash because it is an ``enclosed'' structure. It appears 
that the commenter's positions regarding potential downwash from the 
support structure are inconsistent--the commenter argues that the 
downwash impact of the support structure is trivial when commenting on 
our objection to the use of the support structure in the wind tunnel 
study, but then argues the same downwash impact is important when 
arguing that the support structure should be used to calculate formula 
height. We do not know the extent of the downwash impact of the support 
structure, but our position is consistent--the support structure should 
not be used to calculate formula height, and its downwash impacts 
should not be considered in a wind tunnel study. The basis for our 
position is the same in both cases--the stack cannot be used to justify 
itself.
    We also note that MSCC has been insistent that it has a right to 
model downwash from the support structure, and Larry Zink of MSCC 
offered the following testimony in the State hearing:

    Yes, we did contract to have the structure built. It's there. 
It's real. It causes downwash.

and

    When the YELP buildings more fully line up with MSCC's stack and 
the wind, this effect becomes larger as it synergizes with the 
effects of the support structure, etc.

    See ``Rebuttal Testimony of Larry Zink, Vice President of Montana 
Sulphur & Chemical Company,'' document # IV.A-17, MSCC Exhibit 127, at 
pp. 16, 24. In addition, Larry Zink of MSCC wrote the following in an 
August 10, 1994 letter to Jeffrey Chaffee of the State:


[[Page 22229]]


    ``Common sense'' also certainly does not support the idea that a 
thin structure, even an ``aerodynamic'' one, does not generate 
substantial and lasting ``downwash,'' ``eddies'' or ``wakes.'' To 
the contrary, we know that long and ``thin'' structures, such as 
slow-moving aircraft wings, can generate sufficient downwash 
turbulence and vortices to slam a distant * * *, following, powered 
aircraft to the ground from hundreds of meters in the air. ``Common 
sense'' tells us, therefore, that it is probable that a far larger, 
less aerodynamic, ground-mounted structure will also produce 
significant and lasting downwash, wakes, vortices, and eddies 
capable of entraining drifting gases and bringing them prematurely 
to ground.

    See cited letter, at pp. 12, 13, part of document # II.B-10. It is 
difficult to understand how MSCC and its consultants can now 
characterize our concern that MSCC improperly modeled downwash from the 
support structure as a minor technical objection or trivial. The only 
way to properly resolve this issue is to re-do fluid modeling including 
the support structure in all model runs--that is, not model downwash 
created by the stack support structure. Again, this is because the 
stack support structure is part of the stack.
    (s) Comment: One commenter (State letter, document # IV.A-23, p. 
11, footnote 10, p. 15, footnote 15) agreed with EPA that the stack 
support structure should not be considered a ``nearby structure'' for 
purposes of the fluid modeling demonstration. However, the commenter 
asserted that the impact of evaluating the support structure as a 
nearby structure is small. Specifically, the commenter stated, ``the 
State's analysis indicated that the FMD (fluid modeling demonstration) 
results would not be significantly affected by MSCC's approach, and the 
State concluded that requiring MSCC to conduct another demonstration 
was not justified.''
    Response: It is significant that the commenter is the State, which 
is admitting that the fluid modeling demonstration was not conducted 
entirely properly. It appears that the State is advancing a de minimis 
theory of error, but despite its claims that the impact of the error is 
insignificant, the State provides no support for its assertion that the 
fluid modeling demonstration would not have changed if MSCC had 
properly treated the support structure in the fluid modeling 
demonstration.
    (t) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment # 29) stated that either the support structure is a nearby 
structure, in which case it should be used to calculate formula height, 
or it is not, in which case its inclusion or removal from the fluid 
model is obviously irrelevant.
    Response: We have already explained our position that the support 
structure is not a nearby structure. The commenter's suggestion that if 
the support structure is not a nearby structure, it is irrelevant 
whether it is included or removed from the fluid model, defies logic. 
MSCC has attempted to use the support structure to justify greater GEP 
stack height credit, despite the fact that it is not a structure that 
may be used for this purpose.
    (u) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment # 31) stated that EPA's treatment of the support structure as 
part of the stack somehow violates the provision that the Administrator 
cannot prohibit the construction or operation of a stack of any height 
by a source.
    Response: MSCC remains free to keep its 100-meter stack or build a 
taller stack if it wishes. Nothing we are doing in this rulemaking 
restricts the actual stack height at MSCC.
5. Issues Related to Other Demonstrations
    MSCC and its consultants performed various analyses and asserted 
various theories in an attempt to justify 100 meter, or near-100 meter, 
stack height credit for MSCC's SRU 100-meter stack. The State only 
approved one of MSCC's stack height demonstrations, for 97.5 meters of 
credit based on above-formula fluid modeling. We have already described 
our basis for concluding that the State-approved stack height credit of 
97.5 meters is not valid under the Act and our regulations. Regarding 
MSCC's other bases for claiming 100 meter or near-100 meter stack 
height credit, we took the position that because the State had not 
adopted any of these other bases in determining stack height credit for 
the SRU 100-meter stack, these other bases were not before us as part 
of this SIP action, and were not relevant to our proposal. Some of 
these other bases rely on formula credit for the stack support 
structure, which we address in greater detail in the previous section.
    We received numerous comments regarding our position regarding 
these other bases, mostly from MSCC and its consultants arguing that 
these other bases are valid and that we should consider them. Although 
we believe these comments are irrelevant to our action, we respond to 
them here. Nothing in the comments has caused us to change our position 
regarding our disapproval of MSCC's stack height credit.
    (a) Comment: One commenter (MSCC letter, document # IV.A-19, #'s 
17, 19, 38, 115; MSCC letter, document # IV.A-20, # 1.A) stated that 
EPA's proposed disapproval of stack height credit for MSCC violates the 
definition of GEP provided in EPA's own rules, which allegedly do not 
permit EPA to overrule a State's GEP determination unless the result 
would be a higher GEP height. The commenter asserted that EPA delegated 
to the states unilateral decisionmaking authority regarding GEP 
determinations, but also asserted that EPA may approve a fluid modeling 
based GEP determination if the state does not. In any event, in the 
commenter's view a state may not disapprove an EPA determination and 
EPA may not disapprove a state determination; the exception is in the 
event that one regulatory body approves a higher GEP stack height 
credit, in which case this higher credit would prevail. The commenter 
suggested that new formal federal rule making or new federal 
legislation would be needed to change this scheme.
    Response: We do not read our regulations to provide carte blanche 
to states to make GEP determinations that are inconsistent with the 
requirements of Clean Air Act section 123 and our stack height 
regulations. We are not bound to accept the greatest of several GEP 
heights where that greatest value is not valid under our regulations. 
The commenter's position would lead to absurd results: a state could 
ignore our regulations in establishing stack height credit, and EPA and 
the public would have no recourse. We believe Congress empowered us to 
make sure SIP limits are set consistently with the Act's requirements. 
Section 110(k)(3) of the Act indicates we can approve the plan if it 
meets all of the applicable requirements of the Act and disapprove 
parts of the plan if it does not. Also, section 110(l) of the Act 
indicates we shall not approve a revision of a plan if the revision 
will interfere with any provisions of the Act. Also, there is nothing 
in the regulations that suggests our review is a one-way ratchet as the 
commenter suggests--that we may only disapprove a state's GEP stack 
height credit determination if doing so would result in a higher GEP 
stack height.
    (b) Comment: One commenter (MSCC letter, document # IV.A-19, p. 2, 
and comment #s 28, 35, and 116; MSCC letter, document # IV.A-20, 
comment #s 1.F, 1.K, and 2) stated that, in addition to the fluid 
modeling approved by the State, MSCC also submitted fluid modeling 
demonstrations based on formula height and performed in accordance with 
our own rules and guidance. The commenter urged EPA to consider these 
demonstrations or

[[Page 22230]]

justifications that allegedly support GEP stack height above 65 meters 
for MSCC's main stack. The commenter said that these demonstrations 
confirm that GEP is greater than the height credited by the State. The 
commenter said that EPA's sole basis for ignoring these other 
demonstrations is that the State did not consider them. The commenter 
claimed that this is not true, that the State received these 
demonstrations and that they should be part of the record. The 
commenter seemed to acknowledge that the State did not base its SIP 
decisions on these alternative demonstrations, and claimed that the 
State misapplied the stack height rules in rejecting these alternative 
demonstrations. The commenter claimed that EPA is guilty of 
circumventing its own rules in not applying or accepting these 
alternative stack height demonstrations that the State rejected. The 
commenter asserted that EPA has the discretion to approve these 
alternative demonstrations. The commenter argued that if EPA does not 
have the authority to approve higher GEP based on alternative 
demonstrations, then EPA lacks the authority to overturn the State's 
approved determination. The commenter suggested that EPA is only 
interested in ``unreasonably preventing one small source in Montana 
from obtaining the GEP credit'' to which it is clearly entitled.
    Response: We take the SIP as it is submitted to us. The State 
rejected MSCC's alternative demonstrations. See our TSD at p. 53. 
Therefore, we do not believe those alternative demonstrations are 
before us for consideration as part of the submitted SIP, and we do not 
believe the CAA requires us to consider alleged justifications for SIP 
limits that the State has not adopted or put forward. Also, we do not 
believe the presence or absence of authority to consider alternative 
demonstrations the State did not endorse has any bearing on our 
authority to disapprove emission limits for MSCC that rely on an 
improper GEP demonstration. We have clear authority to implement 
section 123 of the Act and our stack height regulations and to 
disapprove SIP submittals that do not meet the requirements of section 
123 of the Act and our stack height regulations.
    Even if it would be appropriate for us to substitute an alternative 
justification for one put forward by the State, we could not adopt the 
position taken by the commenter because that position is inconsistent 
with our regulations. We have no vendetta against MSCC as the commenter 
suggests. We would very much like to resolve this dispute regarding 
stack height credit, but are not willing to do so in a way that is 
inconsistent with section 123 of the Act and our stack height 
regulations. We have a responsibility to properly apply the stack 
height regulations. We believe that the State properly concluded that 
the buildings MSCC asserted were nearby for purposes of determining 
formula height were in fact not within the distance defined as nearby 
by our regulations. Because MSCC could not rely on these buildings or 
the stack support structure to determine formula height, MSCC's only 
way to justify stack height credit greater than 65 meters was to 
perform above-formula fluid modeling pursuant to 40 CFR 51.100(kk)(1).
    (c) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment # 87) stated that the State did not reject other GEP stack 
height theories asserted by MSCC, but instead rendered them moot by 
entering into a settlement with MSCC over GEP stack height credit based 
on a fluid modeling demonstration. According to the commenter, MSCC 
reserved all arguments regarding its other demonstrations, as well as 
regarding the prior determination of GEP being 100 meters. The 
commenter asserted that EPA must consider these other arguments and the 
prior determination, and must substitute its judgment for the State's 
if EPA finds any of the alternative theories acceptable.
    Response: State staff rejected other GEP stack height theories 
asserted by MSCC, and the MBER did not adopt any of MSCC's other 
theories. Thus, the State did not forward other stack height 
determinations to us for consideration, and, as discussed above, we do 
not believe it is necessary or appropriate for us to consider or adopt 
an interpretation that MSCC did not persuade the State to submit to 
EPA. States submit SIPs for EPA approval, not sources. Our duty under 
the CAA is to consider the SIP the State has submitted, not an 
alternative SIP that one company or individual proposes, but that has 
no legitimacy under State law.
    Assuming for the moment we have some duty to evaluate alternative 
demonstrations that the State has not adopted, we find MSCC's 
alternative demonstrations unconvincing. The bases for our findings are 
described herein and in the letters cited in our TSD, at page 53. These 
letters are contained in the docket for this action.
    (d) Comment: One commenter (MSCC letter, document # IV.A-20, 
comment # 2.T) stated that EPA has inadequately explained the legal and 
technical basis for its refusal to consider or approve the alternative 
demonstrations, when they clearly demonstrate that GEP is at least 97.5 
meters.
    Response: We believe our proposal and this notice adequately 
explain the basis for our refusal to consider or approve the 
alternative demonstrations. We note that the commenter and the attorney 
for MSCC make inconsistent arguments: on the one hand they argue that 
we may not interfere with the primacy of the State in establishing 
emission limits for the seven sources in the Billings/Laurel area and 
on the other hand argue that we should consider ``alternative 
demonstrations'' that the State did not approve or use to establish 
MSCC's emission limits. We are acting on the SIP the State submitted to 
us, since only the State has the authority to submit a SIP. In any 
event, we explain in detail why we would reject MSCC's alternative 
demonstrations if they were before us.
    (e) Comment: Another commenter (CPP letter, document # IV.A-18, 
exhibit A, p. 7) asserted that EPA should approve at least one of the 
five demonstrations CPP performed on behalf of MSCC, and that a single 
demonstration is sufficient. This commenter appeared to believe it is 
important that all five methods showed similar results to the GEP stack 
height credit approved by the State.
    Response: For the reasons already stated, we do not believe 
alternative demonstrations are before us for consideration. In any 
event, as explained in response to other comments, we do not believe 
the other demonstrations performed by CPP on MSCC's behalf are valid. 
We believe it is irrelevant that all five methods showed similar 
results to the GEP stack height credit approved by the State. CPP may 
have run the wind tunnel tests consistently; this does not mean the 
demonstrations are legally valid.
    (f) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment # 40; MSCC letter, document # IV.A-20, comment # 2.K) stated 
that EPA should consider a fluid modeling demonstration to demonstrate 
the validity of formula height for MSCC. The commenter appeared to be 
arguing that EPA could either consider the BGI building and ExxonMobil 
tank farm to be nearby for purposes of calculating formula height, or 
could consider the support structure to be a nearby structure for 
purposes of calculating formula height. In either case, according to 
the commenter, MSCC has performed fluid modeling that has verified the 
validity of formula height. The commenter referred to EPA's definition 
of ``nearby'' for purposes of formula determinations as a ``rule of 
thumb.''

[[Page 22231]]

Similar comments are contained in CPP's comments (CPP letter, document 
# IV.A-18, exhibit A, Attachment I).
    Response: MSCC believes it should be able to avail itself of the 
provisions of 40 CFR 51.100(kk)(2) for verifying formula stack height 
credit. Unlike 40 CFR 51.100(kk)(1), subsection (kk)(2) does not 
require that a source meet an NSPS or alternative limit, but instead 
allows the source to use the emission rate specified by the applicable 
SIP. In MSCC's case, the applicable SIP emission rate is higher and 
makes it easier to justify a higher stack height credit. In addition, 
MSCC would not be bound to meet an NSPS limit on an ongoing basis.
    As a preliminary matter, we note that the State did not adopt this 
approach in determining GEP stack height for MSCC. Thus, as noted 
previously, we do not believe this basis is before us for 
consideration.
    Furthermore, to qualify to use the provisions of subsection 
(kk)(2), MSCC must be seeking a within formula increase. It is not, and 
therefore, cannot avail itself of subsection (kk)(2). First, our 
definition of ``nearby'' is not a ``rule of thumb.'' We are not free to 
consider sources ``nearby'' that fall outside the 5L distance defined 
as nearby by the regulations. Therefore, the BGI building and 
ExxonMobil tank farm dimensions cannot be plugged into the formula to 
determine formula height. Second, as already discussed at length, we do 
not consider the stack support structure to be a nearby structure. 
Thus, it cannot be plugged into the formula to determine formula 
height.
    The further suggestion by CPP that, ``by definition,'' the formula 
does not adequately represent the downwash created by the BGI 
structure, and therefore, it is appropriate to ``verify'' the formula 
with a wind tunnel test under subsection (kk)(3), represents a complete 
mis-reading of the stack height regulations. The stack height 
regulations make perfectly clear that formula height may only be 
calculated based on structures that are within a distance of 5L of the 
stack, where L is the lesser of the height or width of the structure. 
See 40 CFR 51.100(jj)(1). If a structure is not within 5L of the stack, 
it may not be used to calculate formula height of the stack, and there 
is no formula height derived from such structure that can be verified 
under subsection (kk)(3) or (kk)(2). It is irrelevant that a distance 
greater than 5L may be considered ``nearby'' for purposes of a fluid 
modeling demonstration under 40 CFR 51.100(jj)(2). This fact does not 
validate the use of a within-formula fluid modeling demonstration. 
Contrary to the commenter's assertion, we are not interpreting the 
subsection (jj)(1) definition of ``nearby'' (for determining formula 
height) so as to override the subsection (jj)(2) definition of nearby 
(for fluid modeling). We are giving each independent effect as they are 
written. It is the commenter who is interpreting subsection (jj)(2) as 
trumping subsection (jj)(1), and in so doing, is ignoring the fact that 
our regulations require a different type of fluid modeling study to 
justify above-formula stack height credit. Our ``simplistic 
interpretation,'' which the commenter derides, is the law on this 
point.
    (g) Comment: One commenter (CPP letter, document # IV.A-18, exhibit 
A, Attachment I), relying on language from the preamble to the stack 
height regulations to the effect that the formula may not adequately 
represent all structures, argued that this necessarily means 40 CFR 
51.100(kk)(3) should be used to define the parameters of a fluid 
modeling study whenever there may be a question about the application 
of the formula in a given situation. The commenter asserted that the 
stack height regulations must be interpreted consistent with their 
intent, and part of this intent is to ensure that a ``stack is built 
and credited tall enough to avoid this adverse downwash effect.''
    Response: We disagree with the commenter. As we have stated 
elsewhere, subsections (kk)(2) and (kk)(3) of 40 CFR 51.100 only apply 
to within-formula fluid modeling demonstrations. They are used to 
determine whether a source should receive full credit for a formula 
height determination. As a starting point, a formula height must first 
be calculated in accordance with 40 CFR 51.100(ii)(2), and this formula 
height then becomes the upper bound for any fluid modeling 
demonstration under subsection (kk)(2) or (kk)(3). In our view, a 
formula height that is not calculated in accordance with 40 CFR 
51.100(ii)(2) is not a formula height at all; in this situation, there 
is no formula height to be verified and one never reaches fluid 
modeling under subsection (kk)(2) or (kk)(3). As we describe in detail 
elsewhere, we do not believe formula height for MSCC's stack under 40 
CFR 51.100(ii)(2) may be calculated based on the BGI structure or the 
stack support structure. Neither is a nearby structure under 40 CFR 
51.100(jj)(1). It is only when the accuracy of the formula for a nearby 
structure is questioned that subsection (kk)(2) or (kk)(3) apply. We 
describe elsewhere when each applies.
    The commenter mis-reads the intent of the stack height regulations. 
The stack height regulations are intended to ensure that inappropriate 
dispersion is not used in lieu of emissions controls. Generally 
speaking, the regulations restrict stack height credit to the minimum 
needed to avoid excessive concentrations. And, the regulations do not 
require or ensure that stacks of any particular height be built. After 
all, dispersion is only one means to address ground level 
concentrations of pollutants. Thus, we do not believe granting greater 
stack height credit is a goal of the regulations, and we do not believe 
the commenter's interpretation of our regulations is consistent with 
the intent of the regulations or the Act.
    (h) Comment: One commenter (CPP letter, document # IV.A-18, exhibit 
A, Attachment I) stated his understanding that EPA waives the 
demonstration requirement under 40 CFR 51.100(kk)(2) for existing 
sources where new structures have been built after the original stack 
was designed (referring to the BGI structure, the stack support 
structure, tankage and buildings) that may reasonably be expected to 
produce additional downwash effects.
    Response: Our policy provides that it will generally be reasonable 
for a source seeking credit for additional stack height to recalculate 
its good engineering practice formula height due to the siting of a 
new, nearby structure, without the need to justify the increase through 
fluid modeling under subsection (kk)(2). See June 29, 1992 memorandum 
for John Calcagni entitled ``Credit for Stack Height Increases Due to 
the Siting of New, Nearby Structures,'' document # IV.C-76. As we 
already indicated, we do not consider either the BGI structure or the 
stack support structure to be nearby structures as defined in our 
regulations. Thus, they may not be used to calculate formula height, 
and within formula fluid modeling demonstrations are not appropriate. 
We are not sure what tanks and buildings the commenter is referring to, 
but to our knowledge, neither MSCC nor the State have calculated a 
formula height for MSCC greater than 65 meters based on tanks or other 
buildings.
    (i) Comment: One commenter (CPP letter, document # IV.A-18, exhibit 
A, Attachment I) stated that this is one of the most extensively 
evaluated GEP stack heights he is aware of in his professional career, 
which spans over 20 years.
    Response: We do not doubt the amount of effort CPP put into their 
evaluation. However, we strongly disagree with the commenter's 
interpretation of the stack height regulations. Under current 
conditions, we cannot approve stack height credit

[[Page 22232]]

for MSCC greater than 65 meters. The commenter's hypothetical about one 
stack A outside 5L and another stack B within 5L receiving different 
stack height credit is not convincing. Again, this is a result of the 
way the stack height regulations are written. If stack A is only built 
to 65 meters, and is modeled at 65 meters in an attainment 
demonstration, the assertion that NAAQS exceedances are likely to occur 
due to downwash ``fictitiously ignored'' is inaccurate. The modeling 
for the attainment demonstration using the actual height of the stack 
should ensure that NAAQS exceedances due to downwash or any other 
condition do not occur. If Stack A is built to 100 meters but only 
receives credit for 65 meters, dispersion modeling of the 65 meter 
stack height credit will, in a sense, over-predict the impact of Stack 
A emissions, and Stack A will have to control emissions as if it were a 
65 meter stack. However, this is exactly what the stack height 
regulations require if 65 meter credit is all that's warranted under 
the regulations.
    (j) Comment: One commenter (MSCC letter, document # IV.A-20, 
comment # 2.D) stated that BGI should be considered a nearby structure 
for determining formula height for the MSCC stack. The commenter 
claimed that guidance assumptions artificially restrict the height 
calculations for the BGI structure; that the true height of the BGI 
structure is much taller than the artificially restricted height 
calculations. According to the commenter, using the true height of the 
BGI structure in the 5L formula specified in the regulations would make 
the BGI structure nearby for purposes of determining formula height.
    Response: The State rejected MSCC's arguments that BGI is a nearby 
structure for purposes of determining formula height. Because the State 
did not adopt MSCC's position in calculating GEP stack height credit 
for MSCC, we do not believe this proposition is before us in this 
rulemaking. Assuming for the sake of argument that we need to consider 
this alternative theory, MSCC has not provided information to support 
its assertion that the BGI is within 5L of the MSCC stack. Our 
information indicates that BGI is not within 5L of the MSCC stack.
    (k) Comment: One commenter (Goetz letter, document # IV.A-18, 
exhibit D, pp. 31, 32) stated that MSCC's nuisance studies support a 
formula stack of 98.15 meters.
    Response: The State did not approve GEP stack height credit for 
MSCC based on MSCC's nuisance studies. Because the State did not adopt 
this position in calculating GEP stack height credit for MSCC, we do 
not believe this proposition is before us in this rulemaking. However, 
assuming for the sake of argument that we have an obligation to 
consider this potential justification, we disagree with the commenter. 
Section 51.100(kk)(2) only applies for sources raising stacks below 
formula height up to formula height. The commenter assumes formula 
height is 98.15 meters. However, this is based on the stack support 
structure. As explained in our proposal and elsewhere in this document, 
the stack support structure may not be used to calculate formula height 
because it is part of the stack itself. Furthermore, under section 
51.100(kk)(2), MSCC could only increase its stack height credit to the 
formula height calculated based on nearby structures that existed as of 
the time the nuisance was present--in other words, before the stack was 
raised.\29\ See 50 FR 27899, 27901. In MSCC's case, this was less than 
the de minimis height of 65 meters, so a nuisance showing would provide 
no benefit. We have previously indicated that MSCC may receive credit 
for stack height up to 65 meters without a demonstration.
---------------------------------------------------------------------------

    \29\ MSSCC claimed that its pre-existing 30 meter stack resulted 
in a nuisance and asserted that the drastic reduction in citizen 
complaints after the erection of the 100-meter stack demonstrated 
the existence of a nuisance before the 100-meter stack was erected. 
see Goetz letter, document # IV.A-18, exhibit D, at p. 32.
---------------------------------------------------------------------------

    (l) Comment: Two commenters (CPP letter, document # IV.A-18, 
exhibit A, p. 5 and Attachment I; Goetz letter, document # IV.A-18, 
exhibit D, pp. 13--15) stated that 40 CFR 51.100(kk)(3) is the most 
appropriate method for determining GEP stack height credit for MSCC's 
SRU 100-meter stack and it does not require any presumed rate of 
emissions. One of the commenters (Goetz) asserted that Dr. Petersen's 
(MSCC's consultant) wind tunnel study verified GEP stack height at 
98.15 meters under subsection (kk)(3) and that neither EPA nor the 
State had conducted a wind tunnel study to refute Dr. Petersen's 
findings.
    Response: As an initial matter, we do not believe this comment is 
relevant to our action because the State did not adopt or approve the 
within-formula approach. Nevertheless, we respond to the comment. Once 
again, the stack support structure may not be used to establish formula 
height, and thus, of necessity, for any heights above 65 meters, MSCC 
is seeking above-formula stack height credit. Because MSCC is seeking 
above-formula stack height credit, subsection kk(3) is not applicable. 
See 50 FR 27900--27901, July 8, 1985. Even if MSCC were seeking within-
formula stack height credit, subsection (kk)(3) would not apply to 
MSCC's fluid modeling demonstration because subsection (kk)(2) applies 
when a source seeks credit after October 11, 1983 for increasing 
existing stack height. Id. at 27899--27901; NRDC v. Thomas, 838 F.2d 
1224, 1239--1240. MSCC had an existing stack before October 11, 1983, 
and is seeking credit after October 11, 1983 for increasing the 
existing stack height. The provisions of 40 CFR 51.100(kk)(3) only 
apply to new construction. 50 FR 27900--27901; NRDC v. Thomas, 838 F.2d 
1224, 1239--1240, 1247. Thus, the categories under subsection (kk) are 
mutually exclusive and hierarchical. It becomes progressively easier to 
justify stack height credit as one moves from subsection (kk)(1) to 
subsection (kk)(3). If subsection (kk)(1) applies, a source may not use 
subsection (kk)(2) or subsection (kk)(3). If subsection (kk)(2) 
applies, a source may not use subsection (kk)(3).
    Therefore, Dr. Petersen's wind tunnel study did not properly verify 
GEP stack height at 98.15 meters based on subsection (kk)(3), and there 
was no need for EPA or the State to conduct a wind tunnel study to 
refute Dr. Petersen's findings. Legally, those findings are not 
supportable.
    (m) Comment: One commenter (CPP letter, document # IV.A-18, exhibit 
A, Attachment I) stated that ``[i]t has been argued that any height can 
be justified as GEP based on the 40% test, but as those knowledgeable 
in the field know, this is not true.'' The commenter suggested that 
subsection (kk)(3)'s requirement for a showing of a 40% increase in 
downwash in the wind tunnel test will constrain the amount of stack 
height credit that will be granted to a rounded structure like a stack.
    Response: We are not sure the commenter is suggesting this, but we 
want to clarify that we have not taken the position that any height can 
be justified in the wind tunnel based on the 40% test of excessive 
concentrations. We recognize that the 40% test will act as a constraint 
on GEP stack height credit in certain situations, depending on the 
dimensions of nearby structures and wind conditions. This should be 
distinguished from our position regarding the use of stack dimensions 
to calculate GEP formula height. Because formula height equals one 
times the height of the structure plus one and a half times the lesser 
of the height or width of the structure, application of the formula to 
stack dimensions will always result in

[[Page 22233]]

formula height slightly higher than the stack. We reiterate that 
application of the formula in this manner amounts to a stack justifying 
itself.
    As indicated in response to the previous comment, because we do not 
believe the GEP formula may be applied to the stack support structure 
in the first instance, we do not believe MSCC may avail itself of the 
provisions of subsection (kk)(3) or (kk)(2) of 40 CFR 51.100, which are 
clearly less stringent than the requirements of 40 CFR 51.100(kk)(1).
    (n) Comment: One commenter (CPP letter, document # IV.A-18, exhibit 
A, p. 5) stated that MSCC's contractor and others have conducted a 
number of GEP stack height demonstrations in complex terrain where a 
GEP stack height significantly taller than formula height has been 
justified. The commenter cited four examples and concludes that above 
formula stack heights are not rare.
    Response: The import of this comment is not clear to us. If the 
commenter is suggesting that Congress's intent--that above-formula 
stack height credit should be rarely granted--has not been achieved in 
practice, we do not think this is relevant. It does not change 
Congress' intent. Furthermore, four sources, among all the possible 
sources within the United States, is not very many. To the extent the 
commenter is suggesting MSCC's contractor has expertise from other 
cases in conducting above-formula demonstrations, that does not alter 
our reading of the statute and the regulations, and our view that 
MSCC's various stack height demonstrations are not supportable.
    (o) Comment: One commenter (Goetz letter, document # IV.A-18, 
exhibit D, pp. 29--31) stated that EPA must evaluate MSCC's air 
dispersion study, which allegedly demonstrated excessive 
concentrations. According to the commenter, EPA's rejection (for both 
ExxonMobil and MSCC) of dispersion modeling for purposes of showing 
excessive concentrations is arbitrary and in violation of its modeling 
guidelines. The commenter quoted from EPA's guidelines.
    Response: The State did not approve GEP stack height credit for 
MSCC based on MSCC's air dispersion study. Because the State did not 
adopt this position in calculating GEP stack height credit for MSCC, we 
do not believe this proposition is relevant to our action. However, 
assuming for the sake of argument that we have an obligation to 
consider this potential justification, we disagree with the commenter. 
The stack height regulations are clear--GEP stack height is defined as 
the greater of (1) 65 meters, (2) formula height, or (3) ``the height 
demonstrated by a fluid model or a field study * * *'' 40 CFR 
51.100(ii). The regulation does not allow for disperson modeling 
demonstrations of downwash.
    Furthermore, the commenter misinterprets our modeling guideline at 
40 CFR part 51, appendix W, section 7.2.5. Section 7.2.5(a) of appendix 
W clearly indicates that GEP stack height is defined elsewhere and that 
other documents should be followed for determining GEP stack height 
credit. Section 7.2.5(b) of appendix W must be read in conjunction with 
the remainder of appendix W (section (a) of the Preface to appendix W 
is instructive) to understand its application. Section 7.2.5(b) does 
not indicate that dispersion modeling may be used to determine downwash 
under our stack height regulations; instead, it indicates that 
dispersion modeling may be used to calculate cavity and wake effects 
for stacks under formula height when a State or EPA is evaluating air 
quality impacts and the adequacy of a control strategy in a SIP 
revision. This is a different purpose, and, as we noted in our 
September 16, 1994 letter from Douglas Skie to Jeffrey Chaffee 
(document #IV.A-17, MSCC Exhibit 123), the dispersion model (ISC) is 
based on assumptions regarding the existence of downwash for stacks 
less than formula height that are not appropriate for a fluid modeling 
demonstration.
    (p) Comment: One commenter (Goetz letter, document #IV.A-18, 
exhibit D, p. 17) stated that EPA's position, that it need not review 
the issue of whether MSCC is entitled to formula height of 98.15 meters 
because this was not a basis for the approval request submitted by 
Montana, is wrong. The commenter cited Bethlehem Steel Corp. v. U.S. 
EPA, 782 F.2d 645, 651-652 (7th Cir. 1986). MSCC's alternative 
demonstrations must be addressed.
    Response: We disagree with the commenter. As we have already 
discussed, we do not believe we are obligated to review stack height 
demonstrations the State has not endorsed and submitted to us for 
approval. We also do not believe the case the commenter has cited 
stands for the proposition that we must review theories the State has 
not endorsed and submitted to us. In the portion of Bethlehem Steel 
Corp. that the commenter cites, EPA disapproved a State regulation that 
the State had submitted for approval into the SIP, and the Court held 
that EPA's disapproval was reviewable. Unlike in Bethlehem Steel Corp., 
MSCC's alternative demonstrations were neither adopted by the State nor 
submitted to us for approval. In the event that a Court decides we are 
obligated to consider MSCC's alternative demonstrations, we have 
considered all comments related to MSCC's other theories and have 
provided our reasons for rejecting those theories.
    (r) Comment: Two commenters (MSCC letter, document #IV.A-19, 
comment #49; Goetz letter, document #IV.A-18, exhibit D, p. 18, 
footnote 9, p. 28) stated that the CPP/Bison fluid modeling analysis 
performed for MSCC showed a NAAQS exceedance.
    Response: The State did not approve GEP stack height credit for 
MSCC based on the claimed NAAQS exceedance. Because the State did not 
adopt this position in calculating GEP stack height credit for MSCC, we 
do not believe this proposition is relevant to our action on the SIP 
before us. However, assuming for the sake of argument that we have an 
obligation to consider this potential justification, we disagree with 
the commenter. The demonstration that purportedly showed a NAAQS 
exceedance was improperly performed. MSCC's contractor used fluid 
modeling to predict ambient concentrations from background sources when 
evaluating whether MSCC and background sources would cause an 
exceedance of the NAAQS. However, fluid modeling has limited predictive 
abilities when applied to background sources for this purpose. We first 
raised this as an issue in our March 15, 1996 letter from Richard Long, 
EPA, to Jeffrey Chaffee, Montana DEQ (document #II.F-20.) The fluid 
modeling application simulated downwash at the MSCC facility based on a 
narrow set of meteorological conditions that would tend to maximize 
downwash effects. This was necessary to determine whether the stack 
height regulations' downwash threshold of 40% was met. Other sources, 
including nearby background sources, have maximum impacts that may 
occur under different meteorological conditions that the fluid model 
cannot accurately simulate. To determine the impacts of these sources 
on ambient concentrations for all meteorological conditions, the full 
five years of Billings sequential hourly meteorological data must be 
input to the appropriate EPA dispersion model (ISC). MSCC's contractor 
failed to follow State and EPA guidance on this issue. Consequently, 
prior to State adoption of the SIP revision, State staff performed a 
reanalysis of MSCC's contractor's results using appropriate dispersion 
models. That reanalysis only showed a MAAQS exceedance, not a NAAQS 
exceedance. See March 1, 1996 memorandum from John Coefield to

[[Page 22234]]

Files, document #IV.A-18, MSCC Exhibit 141; March 15, 1996 letter from 
Richard Long to Jeff Chaffee, document #II.F-20.
6. Miscellaneous Issues
    We received various other comments regarding MSCC's stack height 
credit. We have considered the comments and nothing in them has caused 
us to change our position regarding MSCC's stack height credit and 
emissions limitations.
    (a) Comment: One commenter (MSCC letter, document #IV.A-19, comment 
#26) stated that EPA has a policy of simply delaying and not granting 
stack height credit, without regard to its own rules or the intent of 
the Clean Air Act. According to the commenter, ``EPA has had access to 
these studies since 1996, and opportunity to participate in their 
design.''
    Response: We do not have a policy of simply delaying and not 
granting stack height credit. We have approved stack height credit for 
many sources. We believe we are correctly applying our rules and the 
Clean Air Act to MSCC. We believe the commenter is referring to MSCC's 
consultants' stack height studies when the commenter refers to ``these 
studies.'' We had an opportunity to comment on these consultants'' 
analyses and raised many concerns that MSCC and/or the consultants have 
not heeded. Since May of 1996, we have indicated that MSCC would have 
to meet the NSPS as an ongoing limit in the SIP to qualify for above-
formula stack height credit.
    (b) Comment: One commenter (MSCC letter, document #IV.A-19, comment 
#42) stated that EPA's position appears to deny a level playing field 
to potential future MSCC fluid modeling because new, lower SIP limits 
at other sources will make MSCC's ability to remodel even more 
problematic. The commenter noted that such demonstrations are based in 
part on the level of background emissions.
    Response: We do not believe this comment is relevant to our action 
on the SIP before us. We have not considered the appropriate approach 
for determining background for future fluid modeling demonstrations 
that MSCC may or may never conduct.
    (c) Comment: One commenter (MSCC letter, document #IV.A-19, comment 
#83) stated that Montana complied with 40 CFR 51.118 in that it set 
limits based on GEP stack height credit for MSCC, and that the SIP 
limits were not affected by any stack height exceeding GEP.
    Response: We disagree that the stack height used for MSCC in 
dispersion modeling to set SIP limits represents GEP. We have fully 
explained our reasoning in our proposal and in this document. We have 
considered all comments on this issue, but do not believe they warrant 
a change in our position.
    (d) Comment: One commenter (MSCC letter, document #IV.A-19, comment 
#84; MSCC letter, document #IV.A-20, comment #1.G) stated that 
Congress' alleged concern with downwind areas is not factually correct 
and is not germane to this action. The commenter claimed that section 
123 of the Act refers to no such concern. The commenter claimed that 
123 explicitly seeks to allow and encourage stack heights that are at 
least GEP in height and to prohibit interference with stacks by the 
agency, by allowing credit up to such height. The commenter asserted 
that EPA's own rules and preamble dismiss the potential impacts of 
sources like MSCC that are under 5,000 tons per year on downwind areas 
as insignificant. The commenter suggested that EPA is using 
interpretation to selectively enforce an alleged congressional goal, 
and that it is highly inappropriate to do so in this case because there 
is no credible evidence that MSCC's relatively small emissions will 
negatively impact distant downwind areas. The commenter also seemed to 
be suggesting that it is absurd to apply this restrictive 
interpretation to MSCC when the only impact is on MSCC's short-term 
emissions (daily, 3 hour), which will not impact downwind areas, while 
its annual emission limit remains the same, and the NAAQS will be 
protected, regardless of whether stack height credit is 97.5 meters or 
65 meters.
    Response: The commenter's interpretation is inconsistent with the 
language and structure of section 123 of the Act, the legislative 
history of section 123, holdings of the D.C. Circuit, and EPA's 
statements in the preamble to the stack height regulations. Section 123 
makes clear that a state may not consider stack height exceeding GEP in 
setting SIP emission limits. Thus, the commenter's assertion that 
Congress wanted to encourage stack heights at least GEP in height is 
inaccurate. Congress wanted to allow for stack heights up to GEP to be 
considered in setting SIP limits, but not beyond. This was clearly 
Congress' means of pushing sources to install controls rather than use 
greater-than-GEP stacks to meet SIP requirements. One of the reasons 
Congress did so was out of concern for downwind transport of pollutants 
and general loading of pollutants to the atmosphere. H.R.Rep. No. 294, 
95th Cong., 1st Sess. 83--86 (1977). If Congress wanted to encourage 
stack heights at least GEP in height, it could have given states and 
the Administrator the authority to encourage stacks at least GEP in 
height. Congress did not do so.
    The commenter is correct that we concluded in our preamble to the 
final regulations that the combined impact of sources under 5,000 tons 
per year was de minimis for certain specified purposes. 50 FR 27904, 
July 8, 1985. Based on this conclusion, we promulgated a final 
regulation that exempted from the definition of certain dispersion 
techniques, sources with allowable emissions less than 5,000 tons per 
year. However, this exemption does not apply to use of stack height 
above GEP in setting SIP emission limits. The rule is clear on its 
face, and the preamble does not provide a different interpretation of 
the rule language.
    The commenter's claim that we are applying the regulation and 
interpretation of congressional intent selectively to MSCC is not 
accurate. We are applying a consistent interpretation of the 
regulation, which is supported by the congressional intent underlying 
section 123 of the Act, to MSCC and other sources. The potential 
downwind impact and impact on atmospheric loadings from MSCC may not be 
as great as from a large eastern power plant, but the principle is the 
same. A source's limits in a SIP cannot be set based on stack height 
that exceeds GEP.
    EPA established a de minimis stack height credit of 65 meters, 
which is the only ``exemption'' that applies for purposes of stack 
height credit. MSCC has chosen not to take advantage of this exemption, 
and because MSCC is seeking above-formula height, it is subject to all 
of the restrictions that apply to above-formula demonstrations, for all 
sources.
    (e) Comment: One commenter (MSCC letter, document #IV.A-20, comment 
# 1.H) stated that the 1990 amendments to the Act exempted sources like 
MSCC from the acid rain program and EPA's proposed disapproval of 
MSCC's stack height credit is thus unnecessary to achieve any acid rain 
goal.
    Response: The fact that MSCC may not be subject to the acid rain 
provisions of the Act has no relevance to whether MSCC's stack is 
subject to the stack height regulations. The focus of section 123 and 
the focus of the acid rain program may be different even if some of 
their overarching goals are the same. Congress did not repeal section 
123 when it enacted the acid rain program.
    (f) Comment: One commenter (MSCC letter, document #IV.A-19, comment 
# 85) stated that EPA is not accurate in the TSD, page 52, when it 
states that Congress limited the height that may be credited to stacks 
in dispersion modeling used to demonstrate

[[Page 22235]]

attainment and maintenance of the NAAQS. The commenter indicated that 
section 123 makes no mention of dispersion modeling.
    Response: The commenter is correct that section 123 does not 
specifically mention dispersion modeling. However, dispersion modeling 
is clearly one means of setting SIP emission limits, a means that we 
have the discretion to require under section 110(a)(2)(K) of the CAA 
and that we have required under our SIP regulations, at 40 CFR 51.112. 
It is difficult to imagine how section 123 restrictions would be 
implemented without some form of modeling, something the D.C. Circuit 
clearly recognized. See Sierra Club v. EPA, 719 F.2d 436, 441 (D.C. 
Cir. 1983). Contrary to the commenter's assertion, we are not 
attempting to interpret our regulations to specifically deny MSCC stack 
height credit.
    (g) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment #s 34, 97) stated that EPA did not intervene in the State 
contested case hearing regarding MSCC's limits, did not present 
evidence at the Board hearing adopting the State's findings, and did 
not meet with MSCC directly until after the Board had acted. The 
commenter asserted that EPA's only recourse if it disagreed with the 
State's determination of GEP or approval of the fluid modeling 
demonstration was to challenge the Montana Board's adoption of the 
stipulation for MSCC in state court.
    Response: The CAA grants us an approval role for SIPs. We have an 
obligation to evaluate the SIP against CAA and regulatory requirements 
pursuant to federal procedural requirements contained in the 
Administrative Procedure Act. There is no requirement that we pursue 
our objections through state administrative or judicial procedures. 
And, we are not required to rubber stamp a stack height determination 
made by a state.
    Notwithstanding the foregoing, we were very involved in providing 
input to the State regarding these issues throughout the development of 
the SIP. The State and MSCC chose to disregard our input on stack 
height issues. We would have been happy to meet with MSCC at any time 
during the process, but did not want to interfere with the State's 
process. We did meet with MSCC and the State at critical junctures 
regarding the SIP.
    (h) Comment: One commenter (MSCC letter, document # IV.A-19, # 36) 
stated that even if EPA had authority under the CAA to disapprove 
credit granted by a state, EPA should have the burden of proof to show 
that the state erred grossly and substantively in its findings and 
interpretation of the rules defining the GEP demonstration that the 
state approved, and that the State's error caused or is likely to cause 
substantial harm.
    Response: Our responsibility is to ensure that the SIP meets the 
Act's requirements. There is no burden of proof or gross error standard 
that applies to our review of the SIP, and we need not find any 
causation of substantial harm other than the simple failure of the SIP 
to meet CAA requirements. As mentioned above, section 110(k)(3) of the 
Act indicates we can approve the plan if it meets all of the applicable 
requirements of the Act and disapprove parts of the plan if it does 
not. Also, section 110(l) of the Act indicates we shall not approve a 
revision of a plan if the revision will interfere with any provisions 
of the Act.
    (i) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment # 102; MSCC letter, document # IV.A-20, comment # 8) complained 
that EPA did not quote legislative history of 123 more in its proposed 
rulemaking, and stated his suspicion that the language EPA did quote 
``is the comment of one legislator talking about the prior EPA guidance 
(before section 123).'' The commenter asserted that the cited language 
is not credible as to the intent of Congress as a whole. The commenter 
also stated that the court's reading into section 123 the admonition 
that credit above formula height should be granted only with ``utmost 
caution'' is not supported in any explicit way by the CAA text.
    Response: We did not feel it was necessary to quote further from 
section 123's legislative history. We have referred to language from 
the legislative history that the D.C. Circuit found persuasive in two 
different cases challenging the stack height regulations and that we 
relied on in promulgating the stack height regulations. See NRDC v. 
Thomas, 838 F.2d 1224, 1242;1 Sierra Club v. EPA, 719 F.2d 436, 450; 50 
FR 27898. The language, that above-formula stack height credit would 
``be highly infrequent and that the latitude given the Administrator to 
allow full credit for such stack height (would) be exercised with 
circumspection and utmost caution in those rare circumstances proven to 
justify its use,'' appears in the House committee report for the 1977 
amendments to the Clean Air Act. H.R.Rep. No. 294, 95th Cong., 1st 
Sess., p. 93.
    We do not believe it's relevant that section 123 does not 
explicitly include the admonition from the legislative history. As 
noted above, this language has been critical in the promulgation and 
proper interpretation of the stack height regulations.
    (j) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment # 104) stated that MSCC is not in a position to trade for 
emissions from other entities, and wants to know who it would trade 
with.
    Response: This is one potential option a source may employ to 
comply with the stack height regulations. We are not in a position to 
evaluate the commenter's assertions regarding feasibility of obtaining 
emissions credits from another source. Often, a source might be willing 
to trade emission credits in exchange for compensation.
    (k) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment # 105) stated that MSCC cannot accept the option of stack 
height credit of 65 meters, the lowest defined by law. According to the 
commenter, MSCC can hardly embrace this since it built its stack in 
full expectation that the government would honor its agreement that a 
100-meter stack was good engineering height if built.
    Response: MSCC need not accept a 65 meter stack height credit if it 
can make a demonstration for a higher stack height credit in accordance 
with regulatory requirements. We are not sure what government the 
commenter is referring to. In any event, it is well-settled under 
applicable case law that any 100 meter stack height credit the State 
may have granted MSCC in 1977 was not grandfathered when we issued our 
1985 stack height regulations. See NRDC v. Thomas, 838 F.2d 1224, 1249. 
Thus, MSCC's complaint is with the stack height regulations, which may 
not be challenged in this action.
    (l) Comment: One commenter (Goetz letter, document # IV.A-18, 
exhibit D, p. 60) stated that a 1977 stipulation between the State and 
MSCC establishes a 100 meter stack height as good engineering design. 
The commenter noted that EPA approved this stipulation as part of the 
SIP and reads a June 29, 1993 letter from EPA to the State to mean that 
MSCC's 100-meter stack height credit should be preserved. In the 
commenter's view, the July 1985 stack height regulations did not 
overturn MSCC's 1977 stack height credit. The commenter also argued 
that ``the Government,'' in this case the State, should be forced to 
keep its ``word.'' The commenter suggested that it would be equitable 
to force the State to abide by its 1977 agreement and for the EPA to 
cease to interfere. Another commenter (MSCC letter, document # IV.A-19, 
comment # 37) stated that EPA gave guidance before and while the

[[Page 22236]]

stack was being built that credit once lawfully given is normally 
retained.
    Response: See our response to the previous comment. MSCC's 1977 
stack height credit was not grandfathered under our 1985 stack height 
regulations because MSCC did not build the 100 meter stack before the 
trigger dates in the regulations. MSCC documents show that stack 
construction did not begin until November 1993. See document # IV.A-17, 
MSCC Exhibit 37. Thus, the 1985 stack height regulations did overturn 
MSCC's 1977 stack height credit. In fact, the D.C. Circuit said the 
following on this subject:

    A second preliminary issue is whether the regulations, which say 
nothing explicit on the subject, actually invalidate the prior 
approvals. We believe they do.

NRDC v. Thomas, 838 F.2d 1224, 1249, emphasis added. Under the 
circumstances, it would not be equitable to grandfather MSCC's 1977 
stack height credit now. We cannot ignore the requirements of our 
regulations in acting on the Billings SIP.
    The commenters mischaracterize our communications on this issue. In 
our June 29, 1993 letter to the State, we clearly stated that the 1977 
stack height credit could only be preserved if it had not been 
overturned by the 1985 stack height regulations:

    Therefore, before EPA would accept that 100 meters is the GEP 
height, documentation would need to be provided which demonstrates 
that the 100 meters credit was legitimately given and was not later 
overturned by the July 8, 1985 rules.

    See letter from Douglas Skie to Jeffrey Chaffee, document # IV.C-
43. Since the 1985 stack height regulations overturned MSCC's prior 
stack height credit, the credit was not preserved.
    In any event, the State did not adopt the position that the 1977 
stack height credit was grandfathered, and thus, we do not believe this 
issue is relevant to our action.
    (m) Comment: One commenter (MSCC letter, document # IV.A-19, 
comment # 106) stated that EPA has not offered options in a form that 
MSCC could understand.
    Response: We believe the options are understandable.
    (n) Comment: One commenter (State letter, document # IV.A-23, p. 
21) requested that EPA include in the record all briefs filed in NRDC 
v. Thomas, No. 85-1488 and Consolidated Cases and all briefs filed in 
the Ohio Power case, Nos. 86-1331 and 86-1362.
    Response: We will include all briefs from these cases that we 
considered.
    (o) Comment: One commenter (State letter, document # IV.A-23, p. 
11) stated that the State provided its legal analysis of the stack 
height issue to EPA, but EPA did not provide its legal analysis to the 
State until EPA developed its technical support document for this 
action.
    Response: This comment is irrelevant to the adequacy of the SIP. 
However, we made our legal position known in the Spring and Summer of 
1996 and provided various documents to Jim Madden, the State's 
attorney, that supported our position on the stack height issue (see 
document #IV.C-44).
    (p) Comment: One commenter (State letter, document # IV.A-23, p. 
11) stated that under the State's interpretation of EPA's rules, the 
NAAQS are protected. According to the commenter, even if EPA were to 
prevail in its interpretation of the stack height rules, it is unlikely 
that any additional emissions controls will be required at MSCC. 
Another commenter (MSCC letter, document # IV.A-19, #s 52, 53) stated 
essentially the same thing and added that MSCC's operation at lower 
rates will not improve modeled NAAQS compliance. This commenter also 
suggested that our denial of stack height credit to MSCC will only 
serve to transfer emission rights to some other source in some future 
re-apportionment of the airshed.
    Response: The standard for approval or disapproval of stack height 
credit is not based on whether an area can demonstrate attainment or 
maintenance. We have made clear that it is possible to protect the 
NAAQS through dispersion as well as through emission control. This is 
something the courts have also recognized. See NRDC v. Thomas, 838 F.2d 
1224, 1230-1231. However, in enacting section 123 of the CAA, Congress 
sought to limit the degree to which dispersion could be used to attain 
and maintain the NAAQS, and, pursuant to Congress' directive, we have 
promulgated regulations to limit the use of stack height to meet SIP 
requirements. These regulations have been upheld by the D.C. Circuit 
and we are applying our regulations to the Billings SIP.
    The extent of emission reductions that would result at MSCC through 
application of our interpretation of the stack height regulations might 
not be that significant. (Under our interpretation, MSCC would have to 
accept a de minimis 65 meter stack height credit. It is only when 
above-formula stack height credit is granted that the source must meet 
NSPS or BART.) We believe MSCC's 3 hour and 24 hour limits would 
probably have to be reduced, but MSCC's annual limit would probably 
remain the same. The fact that MSCC's limits would not change that 
much, however, is not a reason for us to ignore the requirements of our 
regulations. Furthermore, one of the reasons MSCC could meet a lower 3 
hour and 24 hour limit is because it has recently installed additional 
control equipment. We understand MSCC did this for business purposes 
and not necessarily to meet State-imposed SIP limits. However, it 
appears that the recently-installed Super Claus unit might help the 
State and MSCC meet the requirements of the stack height regulations 
without the need for above-formula stack height credit at MSCC.
    The assertion of emission rights in the airshed is something we 
address more fully elsewhere in this document. However, in the first 
instance, we believe the assertion regarding transfer of emission 
rights is irrelevant. If such a transfer occurs through the correct 
application of section 123 of the Act and our stack height regulations, 
then this is merely a result of the structure of the statute and the 
stack height regulations, and the commenter may not challenge either in 
this action. Second, a particular allocation of emissions among sources 
within an airshed is not a goal of the stack height regulations. 
Instead, the goal is to ensure that unsanctioned dispersion is not used 
to set emissions limitations for sources generally. To the extent 
unsanctioned dispersion is avoided, emissions limitations within an 
airshed generally will be lower. However, for any area modeling 
attainment, the emissions limitations for each individual source may 
vary significantly. In this case, if the ultimate result for MSCC is 
the de minimis 65 meter stack height credit that we think is valid, it 
is likely that a lower 3-hour emission limit at MSCC will be necessary, 
as discussed above. We do not believe any other source would be able to 
increase its emissions limitations as a result, because any dispersion 
modeling for attainment would be required to model MSCC's stack at 65 
meters.
    (q) Comment: One commenter (Goetz letter, document # IV.A-18, 
exhibit D, pp. 6, 7) stated that MSCC would have to make expensive 
changes to meet short-term limits based on a 65 meter stack height 
credit, and that these changes would result in only marginal reductions 
in sulfur dioxide. The commenter intimated that this could affect 
MSCC's ability to survive.
    Response: In evaluating a SIP, our obligation is to determine 
whether the SIP meets the requirements of the Clean Air Act and our 
regulations. Essentially, the commenter is saying we should ignore 
applicable requirements because applying them would impose an

[[Page 22237]]

economic burden on MSCC. We are not permitted to do this in taking 
action on a SIP submission. See Union Electric Company v. EPA, 96 S.Ct. 
2518 (1976). Furthermore, our disapproval of MSCC's emission limits and 
stack height credit will not force MSCC to immediately meet an emission 
limit based on a 65 meter stack height credit; we are not substituting 
our emission limits for MSCC as part of this action. Also, please see 
our response to the previous comment.
    (r) Comment: One commenter (Goetz letter, document # IV.A-18, 
exhibit D, p. 8) stated that from the point of view of fundamental 
fairness and environmental protection, EPA should take a reasonable 
attitude toward GEP credit for MSCC's existing 100-meter stack. The 
commenter noted that MSCC is forced to have greater emission controls 
for pound of sulfur than ExxonMobil and other sources because MSCC has 
less natural buoyancy flux or plume rise. The commenter asserted that 
greater stack height credit should be approved as a substitute for 
MSCC's lack of natural plume rise.
    Response: We believe our fundamental obligation is to implement the 
requirements of section 123 of the Act and our regulations. In this 
case, the emission limits the State has established for MSCC are too 
high because they are based on invalid stack height credit. The State 
could have addressed MSCC's concerns with its plume rise by imposing 
greater controls on other sources, but chose not to.
    (s) Comment: One commenter (Goetz letter, document # IV.A-18, 
exhibit D, p. 10) stated that EPA's stack height regulations are two 
pages in length and that one would think the regulations ``could be 
applied rationally and with dispatch.'' The commenter asserted that, 
instead, EPA and the State have shifted positions numerous times on 
various points, apparently having great difficulty interpreting their 
own rule. Among other things, the commenter cited from testimony of the 
State's meteorologist, John Coefield, indicating that he considered the 
stack height regulations to be very complicated.
    Response: We have responded to most of these assertions elsewhere 
in this document. However, we agree with the commenter and the State's 
meteorologist that the stack height regulations, despite their brevity, 
are quite complicated. This is an additional reason we believe our 
official interpretation of our stack height regulations, which has been 
consistent since the stack height regulations were promulgated, is 
entitled to deference.
    (t) Comment: One commenter (MSCC letter, document # IV.A-19, # 13), 
while arguing that we subjected MSCC to ex post facto laws, indicated 
that we changed position regarding the requirements of the stack height 
regulations during the development of the SIP and MSCC's attempts to 
demonstrate GEP stack height. The commenter gave the following examples 
regarding stack height: ``Redefinition of GEP following 1977; prior to 
its 1996 demonstration (regarding structure for formula height); 
following its 1996 demonstration; following its 1996 approval by the 
State of that demonstration; 1990 CAA imposition of deadlines for SIPS 
while not readjusting the GEP rules to accommodate those time frames; * 
* * decrees that `you cannot use formula height' because we will not 
apply it; hence you cannot get credit for your stack even though if we 
did allow you to use formula height your demonstration works.''
    Response: As to the assertion that we acted unconstitutionally, we 
respond to this comment in another section. To the extent the commenter 
is also suggesting that we are estopped from disapproving the stack 
height credit for MSCC because EPA personnel allegedly provided 
preliminary comments that were not consistent with our current 
position, we believe the commenter is mistaken. We believe we have an 
ultimate obligation, in taking a final action on a SIP, to apply our 
regulations and the CAA correctly, and that it is inappropriate to 
ignore legal requirements even where inconsistent advice may have been 
given during SIP development. We also believe that any inaccurate 
statements were promptly corrected, and that MSCC and the State had 
ample time to correct any problems in MSCC's fluid modeling 
demonstration and emission limits. MSCC and the State have been aware 
of our official position for over five years. This same estoppel issue 
was raised in NRDC v. Thomas, except that in that case, unlike this 
one, we had actually approved a fluid modeling demonstration and GEP 
stack height credit. Despite this fact, the Court upheld the stack 
height regulations' requirement that the sources perform new 
demonstrations, based on the new regulations. The position we are 
taking regarding stack height requirements is not new. It has been 
apparent since we promulgated the 1985 stack height regulations, which 
obviously pre-date MSCC's construction of its 100-meter stack.
    (u) Comment: One commenter (Goetz letter, document # IV.A-18, 
exhibit D, pp. 10, 13) stated that MSCC has incurred unnecessary 
expenditures because EPA and the State have been vague and equivocal in 
interpreting the stack height regulations. The commenter stated that 
EPA and DEQ have shifted positions numerous times on various points, 
and have had great difficulty interpreting the stack height 
regulations. For example, the commenter complained that the State was 
uncertain what type of modeling would be required to verify formula 
height. According to the commenter, the State initially said dispersion 
modeling could be used and then changed its mind when EPA said fluid 
modeling would be necessary. The commenter claims this is an example of 
agency flip-flopping which resulted in a waste of time and money for 
MSCC.
    Response: Although we have corrected some of our positions during 
this process, it is not apparent that we have caused MSCC to incur 
expenditures that it would not have otherwise incurred. For example, 
MSCC conducted dispersion modeling to show downwash despite being aware 
that we had rejected use of dispersion modeling to justify stack height 
credit. See document # IV.A-17, MSCC Exhibit 124, Direct Testimony of 
Harold W. Robbins, December 5, 1995, p. 16. Likewise, MSCC has shown no 
reluctance to continue pursuing theories to justify greater stack 
height credit that have been rejected by EPA and/or the State. 
Furthermore, whether MSCC incurred expenditures it otherwise would not 
have is not relevant to our decision in this action. Our duty is to 
apply the Clean Air Act and relevant regulations correctly in this 
action. See our response to the previous comment.
    We believe the portion of the comment that relates to the conduct 
of a within formula stack height demonstration is doubly irrelevant to 
our action because the State did not agree with or adopt MSCC's formula 
height calculation. Therefore, the SIP is not based on this theory. As 
to the substance of the comment, the regulation is explicit that fluid 
modeling or a field study are necessary, something we have discussed at 
length in response to a previous comment. Thus, it is not clear why 
MSCC's contractor thought this approach (dispersion modeling) would be 
acceptable.
    (v) Comment: One commenter (MSCC letter, document # IV.A-20, 
comment # 1.L) stated that EPA itself has argued in its preamble in 
apologizing for various defects found in its own rules and formula that 
the effect of a few percent difference in determined GEP cannot have a 
substantial effect on emissions or substantially defeat any legitimate

[[Page 22238]]

legislative intent. The commenter asserted, however, that these small 
differences can be of critical importance to MSCC in meeting short-term 
limits.
    Response: We do not know the preamble language the commenter is 
referring to. However, it appears the commenter is suggesting we ignore 
the requirements of the stack height regulations because the effects 
are likely to be insignificant at some larger level, but are 
significant for MSCC. We do not think we may ignore the requirements of 
section 123 of the Act and our stack height regulations.
    (w) Comment: One commenter (MSCC letter, document # IV.A-20, 
comment # 2.L) stated that, given that EPA could have participated in 
the State's contested case hearing and rebutted MSCC's demonstrations, 
it is difficult to understand EPA's contention that MSCC's and 
Montana's objections are untimely.
    Response: As we have stated elsewhere, we are not required to 
participate in the State's administrative proceedings related to SIP 
adoption. In our proposal, we indicated that MSCC's and the State's 
objections were untimely to the extent they questioned the validity of 
the stack height regulations themselves, which were adopted in 1985 and 
which were challenged and upheld in the United States Court of Appeals 
for the D.C. Circuit. MSCC has the opportunity in this action to 
challenge our application of the stack height regulations.
    (x) Comment: One commenter (MSCC letter, document # IV.A-20, 
comment # 2.O) stated that EPA runs no substantial risk to any 
legitimate policy or goal of the Clean Air Act by approving MSCC's 
stack height credit.
    Response: We respectfully disagree with the commenter. More 
importantly, we cannot approve MSCC's emission limits because they are 
inconsistent with the requirements of section 123 of the Act and our 
stack height regulations.
    (y) Comment: One commenter (MSCC letter, document # IV.A-20, 2nd 
comment #'s 8.C and D) stated that a hearing was held on MSCC's stack 
height credit and no one objected. The commenter claimed that in fact, 
EPA recommended at the hearing that the State approve the SIP revision 
containing the approved demonstration and stack height credit for MSCC 
and forward it to EPA.
    Response: We recommended that the State approve the SIP revision 
and forward it to us based on prior meetings and discussions with the 
State that indicated the State and MSCC were unwilling to change their 
position on the stack height issue. Under the circumstances the State 
and EPA agreed that rather than spend more time trying to resolve this 
issue, the State should adopt the entire SIP revision and forward it to 
us for review ``as a whole.'' See transcript of August 9, 1996 State 
hearing, testimony of John Wardell, pp. 36-38, document # II.C-3. All 
parties were well aware that we did not agree with the stack height 
credit for MSCC. It is irrelevant whether anyone objected to MSCC's 
stack height credit at the State hearing. We have an ultimate 
responsibility to ensure that the SIP is consistent with the Act and 
our regulations.
    (z) Comment: One commenter (MSCC letter, document # IV.A-20, 2nd 
comment # 8.I) stated that EPA has stated that states may use EPA's 
fluid modeling guidelines as guidelines and that states have the 
freedom to impose more or less stringent requirements on fluid modeling 
demonstrations that the state approves. The commenter claimed that 
Montana had the freedom to impose less stringent requirements in this 
case.
    Response: We are not sure what the commenter is referring to. Our 
guidelines do not allow states to ignore the requirements of the Act or 
regulations.
    (aa) Comment: One commenter (MSCC letter, document # IV.A-20, 
comment # 10) stated that it is strained to argue that Congress did not 
allow the agency latitude in rulemaking to accommodate any factor other 
than downwash in its GEP rule while arguing that Congress authorized or 
required NSPS requirements for existing sources seeking increased stack 
height credit. The commenter claimed that section 123 of the Act only 
enumerates the requirement that a demonstration be made prior to public 
hearing. The commenter stated that it is also strained to argue that 
Congress intended to void contract law for determinations already made 
by the states just because Congress specifically exempted certain 
classes of sources based on the age of their stacks.
    Response: Although we do not completely understand the comment, we 
do not believe our position is ``strained.'' As we have explained 
elsewhere, our position stems from the regulations, the preamble to the 
regulations, the statute, relevant case law, and numerous other 
documents.
    (bb) Comment: One commenter (ExxonMobil letter, document # IV.A-28, 
Attachment 1, pp. 1, 2) stated that EPA should approve the stack height 
demonstration and emissions limitations for MSCC because these form the 
cornerstone of the attainment demonstration and have successfully 
undergone substantial technical peer review. The commenter also noted 
that the State continues to believe it has made the right 
interpretation.
    Response: As fully described elsewhere in this document, our 
proposal, and our TSD, we do not believe it would be appropriate to 
approve MSCC's emissions limitations because they are based on stack 
height credit that is not valid under the Act and our regulations. We 
strongly disagree with the State's interpretation. We are not sure what 
``peer review'' the commenter is referring to, but we believe this is 
irrelevant. We are not prepared to approve emissions limitations based 
on stack height credit that is not consistent with the Act and our 
regulations.
    (cc) Comment: One commenter (CPP letter, document # IV.A-18, 
exhibit A, pp. 1--4) provided his chronology of events related to 
MSCC's efforts to demonstrate GEP stack height for MSCC's 100-meter 
stack.
    Response: We do not view this chronology as a comment. Therefore, 
we are not providing a specific response. However, any issues related 
to this chronology have been raised in specific comments on our action 
and are addressed in our responses to those comments.
    (dd) Comment: Three commenters (McGarity letter, document # IV.B-1, 
p. 2; Zaidlicz letter, document # IV.A-30, p. 2; Yellowstone Valley 
Citizens Council letter, document # IV.A-29, p. 2) stated their support 
for EPA's proposal to disapprove the 97.5 meter stack height credit for 
MSCC.
    Response: We acknowledge the support and are finalizing our 
disapproval of the emissions limitations for MSCC's 100-meter stack.

VI. Administrative Requirements

A. Executive Order 12866

    The Office of Management and Budget (OMB) has exempted this 
regulatory action from Executive Order 12866, entitled ``Regulatory 
Planning and Review.''

C. Executive Order 13045

    Protection of Children from Environmental Health Risks and Safety 
Risks (62 FR 19885, April 23, 1997), applies to any rule that: (1) is 
determined to be ``economically significant'' as defined under 
Executive Order 12866, and (2) concerns an environmental health or 
safety risk that EPA has reason to believe may have a disproportionate 
effect on children. If the regulatory action meets both criteria, the 
Agency must evaluate the environmental health or safety effects of

[[Page 22239]]

the planned rule on children, and explain why the planned regulation is 
preferable to other potentially effective and reasonably feasible 
alternatives considered by the Agency.
    This rule is not subject to Executive Order 13045 because it does 
not involve decisions intended to mitigate environmental health or 
safety risks.

D. Executive Order 13132

    Federalism (64 FR 43255, August 10, 1999) revokes and replaces 
Executive Orders 12612 (Federalism) and 12875 (Enhancing the 
Intergovernmental Partnership). Executive Order 13132 requires EPA to 
develop an accountable process to ensure ``meaningful and timely input 
by State and local officials in the development of regulatory policies 
that have federalism implications.'' ``Policies that have federalism 
implications'' is defined in the Executive Order to include regulations 
that 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.'' Under Executive Order 13132, EPA may not issue a 
regulation that has federalism implications, that imposes substantial 
direct compliance costs, and that is not required by statute, unless 
the Federal government provides the funds necessary to pay the direct 
compliance costs incurred by State and local governments, or EPA 
consults with State and local officials early in the process of 
developing the proposed regulation. EPA also may not issue a regulation 
that has federalism implications and that preempts State law unless the 
Agency consults with State and local officials early in the process of 
developing the proposed regulation.
    This rule will not 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, because it 
merely partially or limitedly approves or disapproves 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. Thus, the requirements of section 6 of the Executive Order do 
not apply to this rule.

E. Executive Order 13175

    Executive Order 13175, entitled ``Consultation and Coordination 
with Indian Tribal Governments'' (65 FR 67249, November 6, 2000), 
requires EPA to develop an accountable process to ensure ``meaningful 
and timely input by tribal officials in the development of regulatory 
policies that have tribal implications.'' This final rule does not have 
tribal implications, as specified in Executive Order 13175. It will not 
have substantial direct effects on tribal governments, 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. This action does not involve or impose 
any requirements that affect Indian Tribes. Thus, Executive Order 13175 
does not apply to this rule.

F. Executive Order 13211

    This rule is not subject to Executive Order 13211, ``Actions 
Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use'' (66 FR 28355, May 22, 2001) because it is not a 
significant regulatory action under Executive Order 12866.

G. Regulatory Flexibility

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to conduct a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements unless the agency certifies 
that the rule will not have a significant economic impact on a 
substantial number of small entities. Small entities include small 
businesses, small not-for-profit enterprises, and small governmental 
jurisdictions.
    The partial and limited approval portions of this rule will not 
have a significant impact on a substantial number of small entities 
because SIP approvals under section 110 and subchapter I, part D of the 
Clean Air Act do not create any new requirements but simply approve 
requirements that the State is already imposing. Moreover, due to the 
nature of the Federal-State relationship under the Clean Air Act, 
preparation of flexibility analysis would constitute Federal inquiry 
into the economic reasonableness of state action. The Clean Air Act 
forbids EPA to base its actions concerning SIPs on such grounds. Union 
Electric Co., v. U.S. EPA, 427 U.S. 246, 255-66 (1976); 42 U.S.C. 
7410(a)(2).
    Moreover, EPA's partial and limited disapproval rule will not have 
a significant impact on a substantial number of small entities because 
the partial and limited disapproval action affects only seven 
industrial sources of air pollution in Billings/Laurel, Montana: Cenex 
Harvest Cooperatives, Conoco, Inc., ExxonMobil Company, USA, Montana 
Power Company, Montana Sulphur & Chemical Company, and Yellowstone 
Energy Limited Partnership. Only a limited number of sources are 
impacted by this action. Furthermore, as explained in this action, the 
submission does not meet the requirements of the Clean Air Act and EPA 
cannot approve the submission. The partial and limited disapproval will 
not affect any existing State requirements applicable to the entities. 
Federal disapproval of a State submittal does not affect its State 
enforceability. Therefore, I certify that this action will not have a 
significant economic impact on a substantial number of small entities.

H. Unfunded Mandates

    Under sections 202 of the Unfunded Mandates Reform Act of 1995 
(``Unfunded Mandates Act''), signed into law on March 22, 1995, EPA 
must prepare a budgetary impact statement to accompany any proposed or 
final rule that includes a Federal mandate that may result in estimated 
costs to State, local, or tribal governments in the aggregate; or to 
the private sector, of $100 million or more. Under section 205, EPA 
must select the most cost-effective and least burdensome alternative 
that achieves the objectives of the rule and is consistent with 
statutory requirements. Section 203 requires EPA to establish a plan 
for informing and advising any small governments that may be 
significantly or uniquely impacted by the rule.
    EPA has determined that the approval and disapproval actions 
promulgated do not include a Federal mandate that may result in 
estimated costs of $100 million or more to either State, local, or 
tribal governments in the aggregate, or to the private sector. This 
Federal action partially and limitedly approves and disapproves pre-
existing requirements under State or local law, and imposes no new 
requirements. Accordingly, no additional costs to State, local, or 
tribal governments, or to the private sector, result from this action.

I. Submission to Congress and the Comptroller General

    The Congressional Review Act, 5 U.S.C. section 801 et seq., as 
added by the Small Business Regulatory Enforcement Fairness Act of 
1996, generally provides that before a rule may take effect, the agency 
promulgating the rule must submit a rule report, which includes a copy 
of the rule, to each House of the Congress and to the Comptroller 
General of the United States. Section 804, however, exempts from 
section 801 the following

[[Page 22240]]

types of rules: rules of particular applicability; rules relating to 
agency management or personnel; and rules of agency organization, 
procedure, or practice that do not substantially affect the rights or 
obligations of non-agency parties. 5 U.S.C. section 804(3). EPA is not 
required to submit a rule report regarding this action under section 
801 because this is a rule of particular applicability.

J. National Technology Transfer and Advancement Act

    Section 12 of the National Technology Transfer and Advancement Act 
(NTTAA) of 1995 requires Federal agencies to evaluate existing 
technical standards when developing a new regulation. To comply with 
NTTAA, EPA must consider and use ``voluntary consensus standards'' 
(VCS) if available and applicable when developing programs and policies 
unless doing so would be inconsistent with applicable law or otherwise 
impractical.
    The EPA believes that VCS are inapplicable to this action. Today's 
action does not require the public to perform activities conducive to 
the use of VCS.

K. Petitions for Judicial Review

    Under section 307(b)(1) of the Clean Air Act, petitions for 
judicial review of this action must be filed in the United States Court 
of Appeals for the appropriate circuit by July 1, 2002. Filing a 
petition for reconsideration by the Administrator of this final rule 
does not affect the finality of this rule for the purposes of judicial 
review nor does it extend the time within which a petition for judicial 
review may be filed, and shall not postpone the effectiveness of such 
rule or action. This action may not be challenged later in proceedings 
to enforce its requirements. (See section 307(b)(2).)

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by 
reference, Intergovernmental relations, Reporting and recordkeeping 
requirements, Sulfur oxides.

    Dated: March 26, 2002.
Jack W. McGraw,
Acting Regional Administrator, Region 8.

    40 CFR Part 52 is amended to read as follows:

PART 52--[AMENDED]

    1. The authority citation for Part 52 continues to read as follows:

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

Subpart BB--Montana

    2. Section 52.1370 is amended by adding paragraph (c)(46) to read 
as follows:


Sec. 52.1370  Identification of plan.

* * * * *
    (c) * * *
    (46) The Governor of Montana submitted sulfur dioxide SIP revisions 
for Billings/Laurel on September 6, 1995, August 27, 1996, April 2, 
1997 and July 29, 1998. On March 24, 1999, the Governor submitted a 
commitment to revise the SIP.
    (i) Incorporation by Reference.
    (A) Board Order issued on June 12, 1998, by the Montana Board of 
Environmental Review adopting and incorporating the stipulation of the 
Montana Department of Environmental Quality and Cenex Harvest 
Cooperatives, including the stipulation and exhibit A and attachments 
to exhibit A, except for the following:
    (1) Paragraph 20 of the stipulation;
    (2) Section 3(A)(1)(d) of exhibit A;
    (3) The following phrase from section 3(B)(2) of exhibit A: 
``except that those sour water stripper overheads may be burned in the 
main crude heater (and exhausted through the main crude heater stack) 
or in the flare during periods when the FCC CO boiler is unable to burn 
the sour water stripper overheads from the ``old'' SWS, provided that 
such periods do not exceed 55 days per calendar year and 65 days for 
any two consecutive calendar years.'';
    (4) Section 4(B) of exhibit A;
    (5) Section 4(D) of exhibit A; and
    (6) Method #6A of attachment #2 of exhibit A.
    (B) Board Order issued on June 12, 1998, by the Montana Board of 
Environmental Review adopting and incorporating the stipulation of the 
Montana Department of Environmental Quality and Conoco, Inc., including 
the stipulation and exhibit A and attachments to exhibit A, except for 
paragraph 20 of the stipulation.
    (C) Board Order issued on June 12, 1998, by the Montana Board of 
Environmental Review adopting and incorporating the stipulation of the 
Montana Department of Environmental Quality and Exxon Company, USA, 
including the stipulation and exhibit A and attachments to exhibit A, 
except for the following:
    (1) Paragraphs 1 and 22 of the stipulation;
    (2) Section 2(A)(11)(d) of exhibit A;
    (3) Sections 3(A)(1) and (2) of exhibit A;
    (4) Sections 3(B)(1), (2) and (3) of exhibit A;
    (5) The following phrase from section 3(E)(4) of exhibit A: 
``except that the sour water stripper overheads may be burned in the F-
1 Crude Furnace (and exhausted through the F-2 Crude/Vacuum Heater 
stack) or in the flare during periods when the FCC CO Boiler is unable 
to burn the sour water stripper overheads, provided that: (a) such 
periods do not exceed 55 days per calendar year and 65 days for any two 
consecutive calendar years, and (b) during such periods the sour water 
stripper system is operating in a two tower configuration.'';
    (6) Sections 4(B), (C), and (E) of exhibit A;
    (7) Section 6(B)(3) of exhibit A; and
    (8) method #6A of attachment #2 of exhibit A.
    (D) Board Order issued on June 12, 1998, by the Montana Board of 
Environmental Review adopting and incorporating the stipulation of the 
Montana Department of Environmental Quality and Montana Power Company, 
including the stipulation and exhibit A and attachments to exhibit A, 
except for paragraph 20 of the stipulation.
    (E) Board Order issued on June 12, 1998, by the Montana Board of 
Environmental Review adopting and incorporating the stipulation of the 
Montana Department of Environmental Quality and Montana Sulphur & 
Chemical Company, including the stipulation and exhibit A and 
attachments to the exhibit A, except for paragraphs 1, 2 and 22 of the 
stipulation, and sections 3(A)(1)(a) and (b), 3(A)(3), 3(A)(4) and 
6(B)(3) of exhibit A. (EPA is approving section 3(A)(2) of exhibit A 
for the limited purpose of strengthening the SIP. In 40 CFR 
52.1384(d)(2), we are also disapproving section 3(A)(2) of exhibit A 
because section 3(A)(2) does not fully meet requirements of the Clean 
Air Act.)
    (F) Board Order issued on June 12, 1998, by the Montana Board of 
Environmental Review adopting and incorporating the stipulation of the 
Montana Department of Environmental Quality and Western Sugar Company, 
including the stipulation and exhibit A and attachments to exhibit A, 
except for paragraph 20 of the stipulation.
    (G) Board Order issued on June 12, 1998, by the Montana Board of 
Environmental Review adopting and incorporating the stipulation of the 
Montana Department of Environmental Quality and Yellowstone Energy 
Limited Partnership, including the stipulation and exhibit A and 
attachments to exhibit A, except for paragraph 20 of the stipulation 
and section 3(A)(1) through (3) of exhibit A.
    (ii) Additional material.

[[Page 22241]]

    (A) All portions of the September 6, 1995 Billings/Laurel SO2 SIP 
submittal other than the board orders, stipulations, exhibit A's and 
attachments to exhibit A's.
    (B) All portions of the August 27, 1996 Billings/Laurel SO2 SIP 
submittal other than the board orders, stipulations, exhibit A's and 
attachments to exhibit A's.
    (C) All portions of the April 2, 1997 Billings/Laurel SO2 SIP 
submittal other than the board orders, stipulations, exhibit A's and 
attachments to exhibit A's.
    (D) All portions of the July 29, 1998 Billings/Laurel SO2 SIP 
submittal, other than the following: The board orders, stipulations, 
exhibit A's and attachments to exhibit A's, and any other documents or 
provisions mentioned in paragraph (c)(46)(i) of this section.
    (E) April 28, 1997 letter from Mark Simonich, Director, Montana 
Department of Environmental Quality, to Richard R. Long, Director, Air 
Program, EPA Region VIII.
    (F) January 30, 1998 letter from Mark Simonich, Director, Montana 
Department of Environmental Quality, to Richard R. Long, Director, Air 
Program, EPA Region VIII.
    (G) August 11, 1998 letter from Mark Simonich, Director, Montana 
Department of Environmental Quality, to Kerrigan G. Clough, Assistant 
Regional Administrator, EPA Region VIII.
    (H) September 3, 1998 letter from Mark Simonich, Director, Montana 
Department of Environmental Quality, to Richard R. Long, Director, Air 
Program, EPA Region VIII.
    (I) March 24, 1999 commitment letter from Marc Racicot, Governor of 
Montana, to William Yellowtail, EPA Regional Administrator.
    (J) May 20, 1999 letter from Mark Simonich, Director, Montana 
Department of Environmental Quality, to Richard R. Long, Director, Air 
and Radiation Program, EPA Region VIII.
* * * * *

    3. In Sec. 52.1384, add paragraph (d) to read as follows:


Sec. 52.1384  Emission control regulations.

* * * * *
    (d) In Sec. 52.1370(c)(46), we approved portions of the Billings/
Laurel Sulfur Dioxide SIP and incorporated by reference several 
documents. This paragraph identifies those portions of the Billings/
Laurel SO2 SIP that have been disapproved.
    (1) In Sec. 52.1370(c)(46)(i)(A) through (G), certain provisions of 
the documents incorporated by reference were excluded. The following 
provisions that were excluded by Sec. 52.1370(c)(46)(i)(A) through (G) 
are disapproved. We cannot approve these provisions because they do not 
conform to the requirements of the Clean Air Act:
    (i) The following paragraph and portions of sections of the 
stipulation and exhibit A between the Montana Department of 
Environmental Quality and Cenex Harvest Cooperatives adopted by Board 
Order issued on June 12, 1998, by the Montana Board of Environmental 
Review:
    (A) Paragraph 20 of the stipulation;
    (B) The following phrase from section 3(B)(2) of exhibit A: ``or in 
the flare''; and
    (C) The following phrases in section 4(D) of exhibit A: ``or in the 
flare'' and ``or the flare.''
    (ii) Paragraph 20 of the stipulation between the Montana Department 
of Environmental Quality and Conoco, Inc., adopted by Board Order 
issued on June 12, 1998, by the Montana Board of Environmental Review.
    (iii) The following paragraphs and portions of sections of the 
stipulation and exhibit A between the Montana Department of 
Environmental Quality and Exxon Company, USA, adopted by Board Order 
issued on June 12, 1998, by the Montana Board of Environmental Review:
    (A) Paragraphs 1 and 22 of the stipulation;
    (B) The following phrase of section 3(E)(4) of exhibit A: ``or in 
the flare''; and
    (C) The following phrases of section 4(E) of exhibit A: ``or in the 
flare'' and ``or the flare.''
    (iv) Paragraph 20 of the stipulation between the Montana Department 
of Environmental Quality and Montana Power Company, adopted by Board 
Order issued on June 12, 1998, by Montana Board of Environmental 
Review.
    (v) The following paragraphs and sections of the stipulation and 
exhibit A between the Montana Department of Environmental Quality and 
Montana Sulphur & Chemical Company, adopted by Board Order issued on 
June 12, 1998, by the Montana Board of Environmental Review: paragraphs 
1, 2 and 22 of the stipulation; sections 3(A)(1)(a) and (b), 3(A)(3), 
and 3(A)(4) of exhibit A.
    (vi) Paragraph 20 of the stipulation between the Montana Department 
of Environmental Quality and Western Sugar Company, adopted by Board 
Order issued on June 12, 1998, by the Montana Board of Environmental 
Review.
    (vii) Paragraph 20 of the stipulation between the Montana 
Department of Environmental Quality and Yellowstone Energy Limited 
Partnership, adopted by Board Order issued on June 12, 1998, by the 
Montana Board of Environmental Review.
    (2) Section (3)(A)(2) of exhibit A of the stipulation between the 
Montana Department of Environmental Quality and Montana Sulphur & 
Chemical Company, adopted by Board Order issued on June 12, 1998, by 
the Montana Board of Environmental Review, which section 3(A)(2) we 
approved for the limited purpose of strengthening the SIP, is hereby 
disapproved. This limited disapproval does not prevent EPA, citizens, 
or the State from enforcing section 3(A)(2).

[FR Doc. 02-10332 Filed 5-1-02; 8:45 am]
BILLING CODE 6560-50-P