[Federal Register Volume 67, Number 189 (Monday, September 30, 2002)]
[Rules and Regulations]
[Pages 61260-61270]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-24637]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[LA-61-3-7565a; FRL-7384-7]


Approval of Revisions to the Louisiana Department of 
Environmental Quality Title 33 Environmental Quality Part III; Air 
Chapter 5; Permit Procedures, 504; Nonattainment New Source Review 
Procedures

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The EPA is approving revisions to the State of Louisiana's 
State Implementation Plan (SIP). The revisions concern the 
nonattainment New Source Review (NSR) procedures for the five-parish 
Baton Rouge ozone nonattainment area. The revisions include increases 
to the minimum offset ratios for new major stationary sources and major 
modifications at major stationary sources in nonattainment areas. The 
minimum offset ratios were increased for classifications of serious and 
severe ozone nonattainment. The revisions also allow an increase in 
volatile organic compound (VOC) emissions to be offset by a decrease in 
emissions of nitrogen oxides (NOX) if the net result is a 
decrease in ozone levels. The revisions require that if NOX 
emissions decreases are used for VOC emissions increases, the permit 
for which the offsets are required must have been issued on or before 
November 15, 2005, and must meet additional requirements to ensure a 
net air quality benefit.
    Major stationary sources that plan to build or modify in a 
nonattainment area must obtain these emissions offsets as a condition 
of permit approval. Emissions offsets are reductions in actual 
emissions from existing sources in the vicinity of the proposed new 
source. The EPA proposed approval of these SIP revisions on July 23, 
2002 (67 FR 48090). The EPA approves the use of these revisions as a 
component of the Louisiana plan to bring the Baton Rouge nonattainment 
area into compliance with the Clean Air Act (CAA or the Act). Pursuant 
to section 553(d) of the Administrative Procedure Act, EPA finds good 
cause to make this action effective immediately.

EFFECTIVE DATE: This rule will be effective on September 30, 2002.

ADDRESSES: Copies of documents relevant to this action are available 
for public inspection during normal business hours at the following 
locations. Anyone wanting to examine these documents should make an 
appointment with the appropriate office at least two working days in 
advance.

Environmental Protection Agency, Region 6, Air Permits Section (6PD-R), 
1445 Ross Avenue, Dallas, Texas 75202-2733.
Louisiana Department of Environmental Quality, Air Quality Division, 
7290 Bluebonnet Boulevard, Baton Rouge, Louisiana 70810.

FOR FURTHER INFORMATION CONTACT: Ms. Laura Stankosky of the EPA Region 
6 Air Permits Section at (214) 665-7525.

SUPPLEMENTARY INFORMATION: Throughout this document wherever ``we'', 
``us,'' or ``our'' is used, we mean the EPA. Throughout this document, 
whenever ``Baton Rouge Area'' or ``Baton Rouge Ozone Nonattainment 
Area'' is used, we mean the area which includes the parishes of 
Ascension, East Baton Rouge, Iberville, Livingston, and West Baton 
Rouge in the State of Louisiana. See 40 CFR 81.319.

I. What Action Is the EPA Taking?
II. Why Is This Action Necessary?
III. What Does This Action Do?
IV. Whom Does This Action Affect?
V. How Does the State's NSR Regulation in Chapter 5 Interact With 
the NOX Control Regulation in Chapter 22 and the Revised 
Banking Regulation in Chapter 6?
VI. What Comments Were Received on the Proposed Nonattainment NSR 
Rule, and How Has the EPA Responded?

[[Page 61261]]

VII. What Is the Scope of the EPA's Final Action?
VIII. Administrative Requirements

I. What Action Is the EPA Taking?

    The EPA is approving changes to the State of Louisiana's 
nonattainment NSR procedures for the five-parish Baton Rouge ozone 
nonattainment area. These revisions to the nonattainment NSR procedures 
are part of the changes the state is making to the SIP to address the 
CAA pollution control requirements for ozone nonattainment areas. These 
changes revise the Louisiana Administrative Code (LAC) at Part III, 
Section 504, which was previously approved by the EPA on May 31, 2001 
(66 FR 29491). NSR is a permitting program that regulates the 
construction of new major stationary sources of air pollution and major 
modifications to existing major sources. These sources are required by 
the CAA to obtain an air pollution permit before beginning 
construction.
    The revisions include increases to the minimum offset ratios for 
new major stationary sources and major modifications at major 
stationary sources in nonattainment areas. The minimum offset ratios 
were increased for classifications of serious and severe ozone 
nonattainment. The revisions will also allow an increase in VOC 
emissions to be offset by a decrease in emissions of NOX. 
Further, if NOX emissions decreases are used for VOC 
emissions increases, the permit for which the offsets are required must 
have been issued on or before November 15, 2005.
    Major stationary sources that plan to build or modify in a 
nonattainment area must obtain these emissions offsets as a condition 
of permit approval. Emissions offsets are reductions in actual 
emissions from existing sources in the vicinity of the proposed new 
source.
    Section 553(d) of the Administrative Procedure Act generally 
provides that rules may not take effect earlier than 30 days after they 
are published in the Federal Register. If, however, an Agency 
identifies a good cause, section 553(d)(3) allows a rule to take effect 
earlier, provided that the Agency publishes its reasoning in the final 
rule. EPA is making this action effective immediately because this rule 
is related to the Baton Rouge 1-hour ozone Attainment Plan and 
Transport State Implementation Plan, on which the EPA intends to take 
imminent action (see 67 FR 50391, August 2, 2002). In conjunction with 
its August 2, 2002, proposed approval of the attainment demonstration, 
EPA proposed to extend the ozone attainment date for the Baton Rouge 
area to November 15, 2005, while retaining the area's current 
classification as a serious ozone nonattainment area and to withdraw 
EPA's June 24, 2002, rulemaking determining nonattainment and 
reclassification of the BR area (67 FR 42687). The effective date of 
EPA's June 24, 2002, nonattainment determination and reclassification 
is imminent. Furthermore, making this action effective immediately does 
not impose any additional requirements, because the underlying 
regulations are already effective under state law.

II. Why Is This Action Necessary?

    The Baton Rouge area has been classified as a serious ozone 
nonattainment area (40 CFR 81.319). We received the Louisiana rule that 
we are approving in this final action on December 31, 2001, as a 
component of the Attainment Plan and Transport Demonstration 
(hereinafter, the Attainment Plan/Transport SIP) for the Baton Rouge 
area submitted by the Louisiana Department of Environmental Quality 
(LDEQ). This revision to the Attainment Plan/Transport SIP specifies 
emission reduction strategies designed to bring the Baton Rouge area 
into compliance with the ozone National Ambient Air Quality Standard 
(NAAQS). One component of the Attainment Plan/Transport SIP is the 
revised nonattainment NSR rule that has been enacted at LAC 33:III.504. 
This action is necessary to take final action on the revised rule as an 
approvable component of the Attainment Plan/Transport SIP.

III. What Does This Action Do?

    In this action, we are approving revisions to the Louisiana SIP 
that have been enacted at LAC 33:III.504, which contains the rules for 
NSR procedures that apply to nonattainment areas designated pursuant to 
Section 107 of the CAA. The LAC revisions include increases to the 
minimum offset ratios for new major stationary sources and major 
modifications to major stationary sources in the Baton Rouge area. The 
revisions also add minimum offset ratios for NOX. For a 
nonattainment area with a classification of serious for ozone, the new 
minimum offset ratio for VOCs and for NOX is 1.20 to 1 if 
Lowest Achievable Emission Rate (LAER) technology is implemented, or 
1.40 to 1 using internal offsets if LAER is not used. For a 
nonattainment area classified severe for ozone, the new minimum offset 
ratio for VOCs and for NOX is 1.30 to 1 with LAER, or 1.50 
to 1 using internal offsets without LAER. As defined by section 171 of 
the CAA, the term LAER refers to either the most stringent emission 
limit contained in the state plan of any state for the applicable 
category of sources, or the most stringent emission limitation achieved 
in practice within an industrial category.
    The revisions also allow an increase in VOC emissions to be offset 
by a decrease in emissions of NOX. The EPA defines this type 
of ``offset,'' the trading of emission reductions of one pollutant's 
precursors for emission reductions of a different precursor for that 
pollutant, as inter-precursor trading (IPT). See ``Improving Air 
Quality with Economic Incentive Programs,'' EPA-452/R-01-011 (EPA 
Office of Air and Radiation, January 2001) (hereinafter, the EIP 
Guidance). Under the revised rule, all emission reductions claimed as 
offset credit for significant net NOX increases shall be 
from decreases of NOX. NOX credits will be 
allowed to offset VOC increases, but not vice versa. All emission 
reductions claimed as offset credit for significant net VOC increases 
shall be from decreases of either NOX or VOCs, or any 
combination of NOX and VOC decreases. If NOX 
decreases are used for VOC increases, the permit for which the offsets 
are required shall have been issued on or before November 15, 2005. The 
LDEQ has identified November 15, 2005, as a ``sunset date'' after which 
no permits will be issued or modified allowing NOX credits 
to offset VOC increases. Revisions to the required offset credit ratio 
are listed in Table 1.

[[Page 61262]]



   Table 1.--Minimum Offset Ratios for New and Modified Major Stationary Sources in Ozone Nonattainment Areas
               [Major Stationary Source/Major Modification Threshold for Emissions of VOC or NOX]
----------------------------------------------------------------------------------------------------------------
                                      Major
                                   stationary    Major  modification
 Ozone non-attainment status of      source         significant Net
              area                  threshold      increase (tons/               Offset ratio minimum
                                  values (tons/         year)
                                      year)
----------------------------------------------------------------------------------------------------------------
Marginal \1\...................             100  40 (40) \2\          1.10 to 1
Moderate.......................             100  40 (40) \2\          1.15 to 1
Serious........................              50  25 \3\ (5) \4\       1.20 to 1 w/ LAER or 1.4 to 1 internal w/o
                                                                       LAER.
Severe.........................              25  25 \3\ (5) \4\       1.30 to 1 w/ LAER or 1.5 to 1 internal w/o
                                                                       LAER.
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\1\ For those parishes which are designated incomplete data or transitional nonattainment for ozone, the New
  Source Review rules for a marginal classification apply.
\2\ Consideration of the net emissions increase will be triggered for any project which would increase emissions
  by 40 tons or more per year, without regard to any project decreases.
\3\ For serious and severe ozone nonattainment areas, the increase in emissions of VOC or NOX resulting from any
  physical change or change in the method of operation of a stationary source shall be considered significant
  for purposes of determining the applicability of permit requirements, if the net emissions increase from the
  source equals or exceeds 25 tons per year of VOC or NOX.
\4\ Consideration of the net emissions increase will be triggered for any project that would increase VOC or NOX
  emissions by five tons or more per year, without regard to any project decreases, or for any project that
  would result in a 25 ton or more per year cumulative increase in emissions of VOC within the contemporaneous
  period or of NOX for a period of five years after the effective date of the rescission of the NOX waiver, and
  within the contemporaneous period thereafter.

    The Attainment Plan/Transport SIP submitted by Louisiana includes 
an enforceable commitment to perform and submit a mid-course review by 
May 1, 2004. This mid-course review would include, among other things, 
a re-evaluation of the ratio of NOX to VOC emissions 
reductions needed for attainment.

IV. Whom Does This Action Affect?

    This action applies to the construction of any new major stationary 
source or to any major modification at a major stationary source within 
the Baton Rouge area. Section 182 of the CAA defines ``major source'' 
with respect to each category of ozone nonattainment classification 
area, as shown in Table 2. Any source that emits or has the potential 
to emit 50 tons or more of VOC or NOX and is located in an 
area classified as serious is considered a major source. Any source 
that emits or has the potential to emit 25 tons or more of VOC or 
NOX and is in an area classified as severe is considered a 
major source.

            Table 2.--Definitions of Major Stationary Sources
------------------------------------------------------------------------
                                          Potential to emit  (tons/year)
                                         -------------------------------
 Attainment status of area where source                      Volatile
               is located                    Nitrogen         organic
                                           oxides (NOX)      compounds
                                                               (VOC)
------------------------------------------------------------------------
Attainment Areas........................             100             100
Nonattainment Areas:
    Marginal............................             100             100
    Moderate............................             100             100
    Serious.............................              50              50
    Severe..............................              25              25
    Extreme.............................              10              10
------------------------------------------------------------------------

    The requirements of the revised rule do not apply to NOX 
increases for any applications deemed administratively complete before 
December 20, 2001. Additionally, under the revised rule the 1.40 to 1 
VOC internal offset ratio (without LAER) for serious ozone 
nonattainment areas shall not apply to such applications. Instead, a 
1.30 to 1 internal offset ratio shall apply to VOC if LAER is not 
utilized. (With LAER, the applicable ratio is 1.20 to 1, regardless of 
application date.) Further, sources exempt from nonattainment NSR 
requirements for NOX increases will still be subject to the 
construction schedule and other provisions of the EPA's Supplemental 
Transitional Guidance. See memorandum from John Seitz, ``New Source 
Review (NSR) Program Supplemental Transitional Guidance on 
Applicability of New Part D NSR Permit Requirements'' (September 3, 
1992).

V. How Does the State's NSR Regulation in Chapter 5 Interact With the 
NOX Control Regulation in Chapter 22 and the Revised Banking 
Regulation in Chapter 6?

    The State has recently promulgated and revised the NOX 
control regulation in Chapter 22. This NOX Reasonably 
Available Control Technology (RACT) rule requires stationary sources to 
comply with a more strict emission limitation during the State's five 
month ozone season. Typically a stationary

[[Page 61263]]

source reduces emissions below the baseline to generate surplus 
emission reduction credits. Due to the revised NOX rule, the 
allowable emission limitation for a stationary source could potentially 
have two values, one for the five month ozone season and another for 
the seven month non-ozone season. For more information about the area's 
ozone seasons, see LAC III:33 Chapter 22, and the separate EPA rule-
making to be issued regarding that chapter.
    Thus, the baseline emissions for the stationary source, which are 
used to determine surplus emission reduction credits for offset 
permitting purposes, could have two different values. In order to 
accurately determine the surplus emission reduction credits (ERCs) to 
be used in the nonattainment NSR permitting, the baseline emissions and 
surplus ERCs must be determined for the two time periods. The 
NOX ERCs for any annual time period will consist of the ERCs 
for the five month ozone season and the ERCs from the seven month non-
ozone season. Offset requirements for new sources derive from Section 
173(a)(1)(A) of the Act, which concerns ``total'' emissions and does 
not address the use of emission offsets for nonattainment permitting 
over periods of less than one year. Therefore, the NOX ERCs 
to be used in all nonattainment NSR permitting under Chapter 5 must be 
determined by adding the ERCs from the ozone season and the non-ozone 
season.
    With respect to all offsets under Chapter 5 and all ERCs under 
Chapter 6, the total NOX emission increases during the ozone 
season must be offset by NOX ERCs from the ozone season. 
Non-ozone season NOX increases may be met by either ozone or 
non-ozone NOX ERCs. The annual NOX increase must 
be offset by the total combination of ozone and non-ozone season 
surplus NOX emission reduction credits.
    The stated purpose of the revised emissions banking rule in Chapter 
6 is to enable stationary sources to identify and acquire emission 
reductions for NSR purposes. The Chapter 6 rule does not establish a 
``bank'' requiring tracking by the State of sources' claimed ERCs. The 
Chapter 6 rule only establishes a bulletin board for use by source 
owners and operators. The LDEQ makes the determination whether a 
source's claimed ERCs are surplus through the Chapter 5 nonattainment 
NSR rules. The identification, certification, acquisition, 
recordkeeping and determination of ``Surplus When Used'' emission 
reduction credits must be for the ozone season and the non-ozone season 
time periods. The State indicated by letter from Mr. Dale Givens to EPA 
dated May 3, 2002, that the State would implement the rule by operating 
the Chapter 6 emissions reduction credits bulletin board in such a 
manner. EPA has received information from the State supplementing its 
May 3, 2002, letter and further supporting the State's intention to 
implement the Chapter 5 nonattainment NSR rule in a manner that 
provides for separate identification, certification, acquisition, 
recordkeeping and determination of ``Surplus When Used'' emission 
reduction credits for the ozone season and for the non-ozone season 
time periods.
    The emission offset provisions contained in the Chapter 5 
nonattainment NSR rules indicate that until November 15, 2005, offsets 
of VOC emissions may be met by surplus NOX emission 
reductions. If a VOC emission offset requirement is met by surplus 
NOX emission reductions, the reductions must be for an 
annual period (both the ozone season and non-ozone season). VOC 
emission increases during the ozone season must be offset by 
NOX emission reductions from the same ozone season. Non-
ozone season VOC increases may be met by either ozone or non-ozone 
NOX ERCs (and/or by VOC ERGs). The annual VOC increase must 
be offset by the annual (total combination ozone and non-ozone season) 
surplus NOX ERCs (and VOC ERCs).

VI. What Comments Were Received on the Proposed Nonattainment NSR Rule, 
and How Has the EPA Responded?

    We received written comments on the proposed rulemaking from seven 
parties during the public notice period that closed on August 22, 2002. 
The comments of four of the parties, the Steering Committee of the 
Baton Rouge Ozone Task Force, Louisiana Mid-Continent Oil and Gas 
Association, Louisiana Chemical Association, and the Leadership Team of 
the Baton Rouge Clean Air Coalition, support our July 23, 2002 proposed 
approval of the nonattainment NSR regulation. The LDEQ strongly 
supports the proposed EPA approval and supplied three wording 
clarifications. Louisiana Generating LLC and the Tulane Environmental 
Law Clinic (TELC) on behalf of the Louisiana Environmental Action 
Network (LEAN) submitted comments opposing the approval of the 
nonattainment NSR rule.
    Comment 1: Four commenters supported approval of the nonattainment 
NSR rule.
    Response 1: The EPA agrees. We have determined that these changes 
to the minimum offset ratios for new major stationary sources and major 
modifications at major stationary sources in the Baton Rouge Area are 
approvable. The revisions that allow an increase in VOC emissions to be 
offset by a decrease in emissions of NOX are also 
approvable.
    Comment 2: The LDEQ noted that the offset ratio for moderate 
nonattainment areas in Section III, Table I: Minimum Offset Ratios for 
New and Modified Major Stationary Sources, should be 1.15 to 1, not 
1.10 to 1.
    Response 2: We agree, and have corrected Table I in this final rule 
to reflect the correct offset ratio for moderate nonattainment areas. 
For additional clarity we have also added the footnotes contained in 
the LDEQ nonattainment NSR rule, Minimum Offset Ratios table to our 
Table 1 in this action.
    Comment 3: The LDEQ questions the inclusion of the reference to the 
memoranda from John Seitz, dated March 11, 1991, ``New Source Review 
(NSR) Program Transitional Guidance,'' and September 3, 1992, ``New 
Source Review (NSR) Program Supplemental Transitional Guidance on 
Applicability of New Part D NSR Permit Requirements.'' The commenter 
notes that since Louisiana has a program that complies with all Part D 
NSR provisions of the CAA amendments of 1990, as approved by the EPA on 
October 10, 1997 (62 FR 52951) and revisions to the section on January 
5, 1999 (64 FR 415 and May 31, 2001 (66 FR 29491), the EPA 
``Transitional Guidance'' documents would not be relevant.
    Response 3: The EPA agrees that Louisiana has a program that 
complies with all Part D NSR provisions of the CAA amendments of 1990. 
The relevance of the Seitz memoranda arises from the statement in the 
1992 Transitional Guidance that ``for purposes of determining the 
approvability of revised NSR SIP's,'' sources with applications 
complete before the date in question will be covered by the NSR rules 
in effect as of the application, provided certain conditions are met. 
See Supplemental Transitional Guidance, p. 2. (The March 11, 1991, 
Seitz Transitional Guidance memorandum is relevant to this rule only as 
it informs the 1992 memorandum; accordingly, we have removed it from 
the discussion in Part IV, above.) We included this provision to apply 
to applications deemed administratively complete prior to the December 
20, 2001, promulgation of the LDEQ's nonattainment NSR rule. Sources 
that submitted complete permit applications prior to the promulgation 
date of the new NSR permit requirements may receive final permits

[[Page 61264]]

under the previous State NSR rules, provided that the following 
conditions are met: (1) The State and the source move expeditiously 
towards final permit issuance; (2) construction begins no later than 18 
months from the date of permit issuance unless an earlier time is 
required under the applicable SIP; (3) construction is not discontinued 
for a period of 18 months or more; and (4) construction is completed 
within a reasonable time. States may not grant permit extensions beyond 
these time periods unless the permittee is required in a federally-
enforceable manner to meet the new Part D NSR provisions.
    Comment 4: The LDEQ requests that a statement in Section VIII (How 
does the State's NSR regulation in Chapter 5 interact with the 
NOX control regulation in Chapter 22 and the revised banking 
regulation in Chapter 6?) be changed from ``The State has recently 
revised the NOX control regulation in Chapter 22.'' to read: 
``The State has recently promulgated and revised the NOX 
control regulation in Chapter 22.''
    Response 4: The EPA agrees and so notes this comment.
    Comment 5: The TELC requested an extension to the public comment 
period of 30 days.
    Response 5: The EPA is under no obligation to extend the comment 
period or to accept late comments. We decided to accept comments which 
were received by our office by close-of-business on August 26, 2002. 
This time frame corresponds to the estimated travel time for first 
class mail for a letter mailed and postmarked on the last day of the 
comment period, August 22, 2002.
    Comment 6: The TELC has concerns with the emission reductions 
generated by facilities which are required to comply with 
NOX emission Reasonably Available Control Technology (RACT) 
requirements in Louisiana's revised NOX rule, which EPA 
proposed to approve on July 23, 2002 (67 FR 48095). The commenter is 
concerned that facilities which elect to implement RACT before the 
compliance date required by the rule, May 1, 2005, could be considered 
to be doing so voluntarily. And as voluntary reductions, i.e., not 
required by federal or state law, these NOX reductions could 
be deemed surplus, and therefore, eligible for use as emission offsets, 
including offsets of VOCs.
    Response 6: The EPA disagrees with the commenter's interpretation 
that facilities which elect to implement RACT before the compliance 
date required by the rule, May 1, 2005, would generate reductions 
eligible for use as emission offsets.
    Louisiana promulgated its revised NOX rules on February 
20, 2002 (Louisiana Register, Vol. 28, No. 2). On February 27, 2002, 
the State submitted to EPA the revised NOX rules for the 
Baton Rouge area and its Region of Influence. The revised 
NOX rule requires certain affected categories of 
NOX-generating facilities to achieve RACT ``as expeditiously 
as possible, but no later than May 1, 2005.'' This date takes into 
consideration the time affected categories of NOX-generating 
facilities may need to procure, calibrate and implement RACT. On July 
23, 2002, the EPA proposed approval of the SIP revisions to regulate 
emissions of NOX to meet requirements of the CAA (67 FR 
48095). Section 173(c)(2) of the Act states that reductions otherwise 
required by the Act are not creditable as offsets. Although the rule 
permits affected categories of NOX-generating facilities to 
achieve compliance with NOX RACT no later than May 1, 2005, 
the rule became effective when promulgated. Therefore, facilities 
achieving NOX RACT compliance before May 1, 2005, are 
creating emission reductions as required by law. Therefore, such 
facilities will not obtain ERCs and cannot offset VOC emissions by 
early RACT implementation. Furthermore, emissions decreased by a 
voluntary action must be permanent in order to meet the surplus ERC 
criteria. Because the rule provides for compliance no later than May 1, 
2005, reductions made before that date could not be considered 
permanent, and therefore could not be surplus.
    For the above reasons, the comment does not indicate that any 
change to the rule is required.
    Comment 7: The TELC is concerned that facilities will now be able 
to install LAER technology to control NOX emissions, ``count 
the NOX reductions as surplus, and use them to offset new 
increases in VOCs so that those new modifications can . . . escape New 
Source Review.'' The commenter is further concerned that this procedure 
will allow industry to emit greater quantities of VOCs into the air 
than currently allowed, with harmful effects on the Baton Rouge area.
    Response 7: The EPA agrees that sources that were not required to 
meet nonattainment NSR for new NOX sources during the 
NOX waiver would now be able to install LAER technology and 
count the reductions (from the level set by the new NOX RACT 
rule) as surplus and available for use as emissions offsets for a 
current new source. Such current new major stationary sources and major 
modifications at major stationary sources in the Baton Rouge area would 
be required to obtain emissions offsets at the ratios specified in 
Table 1 of this rulemaking. Under the CAA and the revised Louisiana 
rule, however, emissions offsets do not serve to allow a facility to 
avoid new source review. Instead, a facility that will exceed the 
emission thresholds in the relevant attainment category (see Table 1) 
must obtain offsets as a condition of receiving a new source review 
permit. The generation and use of such emissions credits must be 
consistent with the definition of ``Surplus Emission Reductions'' in 
LAC 33:III.605. The LDEQ's nonattainment NSR procedures also require 
that emission reductions claimed as offset credit shall be sufficient 
to ensure ``Reasonable Further Progress'' toward attainment, that 
emission offsets provide a net air quality benefit, and that the 
offsets must be federally enforceable, before commencement of 
construction of the proposed new source or major modification. Offsets 
thus are a vital part of the mechanism that ensures that new projects 
and modifications will not harm the attainment status of the area in 
question.
    The effect of each of the above scenarios would be a reduction in 
overall emissions for the Baton Rouge area, because the new sources 
would have to seek minimum offsets in excess of what the new source is 
expected to release as emissions.
    Finally, the commenter may have intended, with the reference to 
offsets used to avoid NSR, to refer to the ``netting'' analysis 
conducted under Part 504(A)(4) of the proposed rule. In this analysis, 
the net emissions increase from the construction of a new major 
stationary source or any major modification at a stationary source is 
compared to the values in Table 1 to determine whether a new source 
review must be performed. The inter-precursor trading provision of the 
revised rule, however, applies only to the use of emission offsets, not 
to the netting analysis. See LAC 33:III.504.G. (definition of major 
modification, providing that ``VOC and NOX emissions shall 
not be aggregated for the purpose of determining significant net 
emissions increase.''). LDEQ has confirmed to the EPA that this 
interpretation of the rule is correct. Accordingly, the potential harm 
the commenter cites--i.e., the use of NOX emission 
reductions to avoid new source review for new VOC emissions--cannot 
occur as a result of the revised rule.

[[Page 61265]]

    For the above reasons, the comment does not indicate that any 
change to the rule is required.
    Comment 8: The TELC charges that LDEQ has taken inconsistent 
positions regarding modeling and the effects of NOX 
reduction on attainment of the ozone NAAQS. The commenter points out 
that on January 26, 1996 (61 FR 2438), the EPA granted an exemption 
from the RACT and NSR requirements for major stationary sources of 
NOX, pursuant to section 182(f) of the CAA. This exemption 
was based on modeling submitted by LDEQ in a 1994 petition that 
demonstrated that additional NOX emission controls within 
the Baton Rouge area will not contribute to attainment of the ozone 
NAAQS for the area. On May 7, 2002 (67 FR 30638), the EPA rescinded 
that exemption based on more recent modeling conducted for the Baton 
Rouge area, submitted by LDEQ September 24, 2001, that indicates that 
control of NOX sources will help the area attain the ozone 
NAAQS. According to the commenter, this change in approach to 
NOX regulation has the effect of creating ``loopholes in the 
law.''
    Response 8: The ``loopholes'' that the commenter complains of are 
addressed elsewhere in this document (see comments and responses 6 and 
7). This response addresses only the commenter's apparent assertion 
that Louisiana's scientific approach to NOX regulation is 
unfounded. The EPA disagrees with this argument. In granting the 
NOX exemptions January 26, 1996 (61 FR 2438), the EPA 
reserved the right to reverse the approval of the exemptions if 
subsequent modeling data demonstrated an ozone attainment benefit from 
NOX emission controls. Photochemical grid modeling recently 
conducted for the Baton Rouge area SIP indicates control of 
NOX sources will help the area attain the ozone NAAQS. The 
State of Louisiana therefore requested that the EPA rescind the 
NOX exemption based on this new modeling on September 24, 
2001. In our proposed approval of the rescission of the NOX 
waiver May 7, 2002 (67 FR 30638), we stated that we believed that the 
State had adequately demonstrated that additional NOX 
reductions would contribute to attainment of ozone NAAQS. The State of 
Louisiana is not the only state that has requested that the EPA rescind 
its NOX waiver based on updated photochemical grid modeling 
information. Seven years elapsed between the LDEQ's previous modeling 
demonstration that additional NOX reductions would not 
contribute to area attainment, and the most recent modeling events 
demonstrating the Baton Rouge area to be NOX limited. 
Pollution control technology, including air modeling, is a dynamic and 
evolving field. The model used by LDEQ to support its request for 
approval of the NOX waiver was Urban Airshed Model (UAM) IV, 
which is an EPA-approved photochemical grid model. The model used by 
LDEQ to support its request for rescission of the NOX waiver 
was UAM V. This represents a significant refinement in modeling 
technology. Additionally, emission inventory tools have been improved 
during this seven year period from when the State initially requested 
the NOX waiver.
    Comment 9: The TELC states that ``inter-pollutant trading,'' 
eliminated from the revised emission reduction credits banking rule, 
and ``inter-precursor trading,'' allowed by the revised nonattainment 
NSR rule, refer to the same concept.
    Response 9: In this rulemaking, the EPA does not intend that 
``inter-pollutant trading'' and ``inter-precursor trading'' refer to 
the same concept. ``Inter-pollutant trading'' refers to the trading of 
NAAQS criteria pollutants, i.e., carbon monoxide, sulphur dioxides, 
particulate matter (less than 10 microns in diameter), and ozone. 
``Inter-precursor trading'' refers to the trading of precursor 
components of a NAAQS pollutant--in this case ozone, with precursors 
being VOCs and NOX.
    Comment 10: The TELC states that the provisions in the revised 
nonattainment NSR rule allowing IPT are illegal. The commenter 
disagrees with the EPA's position on IPT in our proposed nonattainment 
NSR notice. The commenter cites several provisions as follows to 
support their assertion.
    (1) The commenter states that section 173(c)(1) of the CAA requires 
that new or modified stationary sources offset emission increases of a 
given pollutant with reduction of the same pollutant. In addition, the 
commenter states that ``the substitution mentioned in [CAA Section] 
182(c)(2)(C) does not refer to substituting emission reductions of one 
precursor for another, but to substituting one control plan for 
another. Even then states can only substitute in accordance with EPA 
guidance required by that section.''
    (2) The commenter references the NOX Substitution 
Guidance (EPA, December 1993), stating that it makes no mention of 
allowing inter-precursor trading.
    (3) The commenter notes that the EIP Guidance, used a basis for the 
EPA's proposed approval of the nonattainment NSR rule, is not the 
guidance Congress required in section 183 of the CAA.
    (4) The commenter quotes from the February 2, 2000 (65 FR 4887), 
final rulemaking on the California SIP revision for the El Dorado 
County Air Pollution Control District, stating, ``As recently as 
February 2, 2000, EPA recognized that ``the CAA doesn't explicitly 
authorize inter-precursor,'' and that ``a strict interpretation of the 
Act would prohibit air districts from allowing this practice at all in 
NSR rules.''
    Response 10: We disagree. The inter-precursor trading provision in 
the nonattainment NSR rule, which allows an increase in VOC emissions 
to be offset by a decrease in emissions of NOX, is 
approvable.
    CAA Section 173(c)(1)--The EPA agrees that section 173(c)(1) is 
silent on the concept of inter-precursor trading (IPT). Nonetheless, 
while we do not have specific requirements for IPT that apply to all 
circumstances, we have recognized that IPT can be allowed under limited 
circumstances. Our position on IPT can be found at Appendix 16.9 in the 
EIP guidance. An economic incentive program (EIP) is a regulatory 
program that achieves an air quality objective by providing market-
based incentives or information to emission sources. For example, a 
uniform emission reduction requirement, based for instance on 
installation of a required emission control technology, does not take 
account of variations in processes, operations, and control costs 
across sources even of the same type, such as electric utilities, or 
petroleum refiners. An EIP empowers sources to find the means that are 
most suitable and most cost-effective for their particular 
circumstances, by providing flexibility in how sources meet an emission 
reduction target.
    CAA Section 182(c)(2)(B)--The relevance of Section 182(c)(2)(C) of 
the CAA is its recognition that both VOCs and NOX emissions 
combine in the atmosphere to create ozone, and that a reduction in the 
levels of NOX as well as VOCs can lower ozone levels more 
effectively than a reduction in the levels of VOCs alone under Section 
182(c)(2)(B). Although Section 182(c)(2)(C) is silent on the concept of 
IPT, it does allow a combination of NOX emission reductions 
for VOC emission reductions, stating that the resulting reduction ``in 
ozone concentrations'' must be ``at least equivalent'' to that which 
would result from 3% VOC reductions required as a demonstration of 
Reasonable Further Progress (RFP) under Section 182(c)(2)(B). This 3% 
requirement can be lessened if the SIP includes the measures that are 
achieved

[[Page 61266]]

in practice by sources in the same source category in nonattainment 
areas of the next higher ozone classification area. The LDEQ rule does 
satisfy this provision, as it requires new stationary sources to obtain 
emission offsets at the next higher ozone classification ratio.
    NOX Substitution Guidance--While we agree that the 
NOX Substitution Guidance (EPA, December 1993) is also 
silent on the issue of IPT, it does provide that the RFP reductions 
should be consistent with those needed for attainment. Further, it 
provides that the Attainment and RFP Plans should show that reductions 
of NOX consistent with those needed for attainment can be 
accepted as equivalent to what would be required for a VOC-only 
attainment. The LDEQ's current nonattainment NSR procedures also 
require that emission reduction claimed as offset credit shall be 
sufficient to ensure RFP toward attainment.
    EIP Guidance--Because this revision to the nonattainment NSR rule 
is not itself a market-based program for achieving air quality 
improvements (and is therefore not an EIP as defined by the EPA), we 
did not evaluate LAC 33:III.504 as a whole with respect to Appendix 
16.9 of the EIP Guidance. However, because the IPT guidance provided in 
the EIP document applies generally to NSR offsets, we did consider the 
LDEQ rule in light of the IPT provisions in the EIP Guidance, and 
determined that the rule is consistent with those provisions. In 
particular, Appendix 16.9 of the EIP Guidance requires that a suitable 
EIP inter-precursor trade must either reduce emissions or not increase 
emissions, and outlines six criteria for showing that IPT is 
appropriate. (Alternatively, instead of using these six criteria, it is 
permissible to conduct air quality modeling for individual ozone inter-
precursor trades to demonstrate that anticipated trades will either 
reduce emissions or not increase emissions.)
    The IPT conditions in the LDEQ rule are consistent with the 
criteria in the EIP Guidance: (1) The LDEQ has conducted an approvable 
attainment demonstration meeting the requirements of Section 110 of the 
CAA; (2) the technical justification for use of IPT is consistent with 
the approvable attainment demonstration; (3) the geographic area is 
restricted to the Baton Rouge area; (4) IPT is compliant with hazardous 
air pollutant requirements as discussed in Response 11; (5) sources are 
required to offset an increase in VOC emissions with a greater amount 
of NOX emissions; and (6) trades will not be approved where 
there will not be progress toward ozone attainment. The attainment 
demonstration modeling also supports the use of the ratio required by 
the LDEQ's rule and demonstrates that any emission offset allowed by 
the rule will have no adverse effect. Further, the Attainment Plan/
Transport SIP includes an enforceable commitment to perform and submit 
a mid-course review by May 1, 2004. This mid-course review would 
include, among other things, a re-evaluation of the ratio of 
NOX to VOC emissions reductions needed for attainment.
    The EPA does agree that the EIP guidance is not the guidance 
Congress required in section 183 of the CAA. It is the guidance for 
implementation of sections 182(g)(4)(A), 187(d), and 187(g) of the CAA. 
The guidance required in section 183 of the Act is the NOX 
Substitution Guidance (EPA, December 1993), which is discussed above.
    Final Rulemaking on the California SIP Revision for the El Dorado 
County Air Pollution Control District--IPT has received limited 
proposed approval from the EPA in the State of New Hampshire (66 FR 
9278). It has also received limited approval in several air quality 
districts in California (Bay Area, 65 FR 56284; El Dorado, 65 FR 4887; 
Sacramento Metropolitan area; San Diego County, 64 FR 42892; San 
Joaquin Valley, 65 FR 58252), and is being considered for two more (the 
South Coast area, and the Mojave Desert area). The commenter quotes 
from the Federal Register notice for the final rulemaking on the 
California SIP revision for the El Dorado County Air Pollution Control 
District (February 2, 2000 (65 FR 4887)) in support of the argument 
that the CAA does not explicitly allow IPT. The EPA agrees that the 
cited Federal Register notice contains the language quoted by the 
commenter. It is helpful, however, to include the context of the 
statement: ``Section 173(c)(1) of the CAA requires that new or modified 
stationary sources offset emission increases of a given pollutant with 
reductions of the same pollutant. Since the CAA doesn't explicitly 
authorize interprecursor trading, a strict interpretation of the Act 
would prohibit air districts from allowing this practice at all in NSR 
rules. Recent EPA policy has allowed interprecursor trading, 
particularly among ozone precursors in ozone nonattainment areas, if 
certain criteria are met. Consistent with this policy, the District has 
two possible ways to address this limited disapproval issue when it 
revises Rule 523. One way is to include rule language requiring written 
EPA concurrence for each proposed interprecursor trade. Alternatively, 
the District could produce a technical justification for various 
interprecursor offset ratios, and then revise Rule 523 to include those 
ratios. In this scenario, rule language requiring case-by-case EPA 
concurrence would not be necessary. Since the CAA does not explicitly 
authorize interprecursor trading, EPA's policy is to require Agency 
concurrence for such trades, either on a case-by-case or one time only 
basis if appropriate ratios are established by rule. With respect to 
the amount of time required for EPA to concur on a specific trade in 
the case-by-case scenario, EPA would have to make its determination 
during the comment period provided for the draft permit. This would not 
delay the permit issuance process.''
    The February 2, 2000, response thus notes two possible ways to 
address the approval of IPT: (1) Requiring written EPA concurrence for 
each proposed IPT case; and (2) produce a technical justification for 
various IPT ratios and revise the rule to include those ratios. Here, 
the state has included ratios in their revised nonattainment NSR rule 
and has submitted the technical justification for use of those ratios 
to us.
    For the above reasons, EPA finds that the use of IPT in the revised 
Louisiana rule is approvable.
    Comment 11: The TELC is concerned that approval of the use of IPT 
will overburden African American communities along the Baton Rouge 
corridor. The increase in VOC emissions from reductions in 
NOX would have severe and disparate impact on minority 
communities living close to fenceline of industries involved in such 
trades. The commenter states that many VOCs are also considered 
hazardous air pollutants (HAP). The commenter cites as basis that 
Appendix 16.9 of the EIP Guidance requires trades that involve VOCs to 
comply with the HAP framework in section 16.2 of the EIP Guidance. The 
commenter is also concerned that public must have sufficient access to 
information to ensure a meaningful opportunity for public review and 
participation.
    Response 11: EPA believes the revised NSR rule will improve air 
quality for all of the Baton Rouge area. We do not agree that the use 
of IPT will overburden African American communities along the Baton 
Rouge corridor. The Attainment Plan/Transport SIP revisions change only 
specific portions of the LDEQ regulations. The current regulations 
found at LAC 33:III.504 continue to require that emission offsets 
provide a net air quality benefit, and that the offsets must be 
federally enforceable before commencement of construction of the 
proposed new source or major

[[Page 61267]]

modification. The emission offsets must meet all applicable state 
requirements, any applicable new source performance standard in 40 CFR 
part 60, and any national emission standard for HAPs in 40 CFR part 61 
or part 63.
    Additionally, Chapter 51 of the LAC outlines ambient toxic air 
standards. Toxic air pollutants (TAPs) are a group of state-regulated 
chemicals consisting mainly of volatile organic compounds. The majority 
of TAPs are also HAPs. Major sources of TAPs are regulated under LAC 
33:III. Chapter 51, Louisiana's comprehensive toxic air pollutant 
emission control program. TAPs are categorized into three groups (Class 
I, II, or III) based on their relative toxicities. If emissions of a 
Class I or II TAP increase by an amount greater than its minimum 
emission rate, a de minimis level established for each TAP in LAC 
33:III.5112, sources of such compounds require maximum achievable 
control technology (MACT). Additionally, the impact of all TAP 
emissions must be below their respective health-based ambient air 
standards, which are also set forth in Section 5112. In this way, any 
increase in HAP emissions will be minimized and therefore, any impact 
on minority communities living close to fenceline of industries 
involved in trades of VOC increase for NOX reductions would 
also be minimized.
    The effect of IPT in minority communities is most appropriately 
taken into account during the proceedings on a particular proposed NNSR 
permit. Under Section 173(a)(5) of the Act, an ``alternative sites'' 
analysis must be conducted for each NNSR permit, which requires 
consideration of, inter alia, the ``social costs'' of the construction 
or modification, e.g., the disparate impact on minority communities. 
The Louisiana regulation implementing this requirement, LAC 
33:III.504.D.7, contains the same requirement:

    As a condition for issuing a permit to construct a major 
stationary source or major modification in a nonattainment area, the 
public record must contain an analysis * * * of alternate sites, 
sizes, production processes, and environmental control techniques 
and demonstrate that the benefits of locating the source in a 
nonattainment area significantly outweigh the environmental and 
social costs imposed.

(Emphasis added.) We believe the disparate impacts alleged by TELC will 
be addressed in individual permit proceedings, at which time factual 
information regarding the scope of the impact and the affected 
community will be available. EPA is entitled to review each Title V 
permit, and thus can object even in the absence of a citizen petition. 
We are committed to ensuring through the permit review process, the 
states standard for TAPS, which we believe are protective of human 
health and the environment.
    The EPA takes public participation in environmental protection 
issues very seriously. Regarding public participation, because any 
trade would be linked to a nonattainment new source review permit, 
public notice and the opportunity to request a public hearing on the 
proposed project would be mandatory. Further, the information in the 
LDEQ banking database, defined at LAC 33:III.605, will be available to 
the public upon request. We agree that access to information is a 
necessary prerequisite to meaningful public participation. We have 
discussed the records access issue with LDEQ. Under past practices, 
some citizens have had a problem finding all of the information 
regarding air permits. LDEQ has instituted new procedures intended to 
improve public access to records. We will continue to oversee the 
Louisiana Title V Operating Permit Program to ensure the revised public 
participation procedures are being effectively implemented according to 
the intent of the regulatory requirements, and will recommend further 
changes to the LDEQ if needed.
    Comment 12: The TELC lists three points from the EPA's July 9, 
2001, comments to LDEQ on the State's proposed nonattainment NSR 
revisions (Louisiana Register May 20, 2001). The commenter states that 
the rule does not adequately address these EPA comments to the state: 
(1) EPA noted that LDEQ had not provided the required technical basis, 
based on modeling of current emission sources, to support its 
NOX/VOC trading plan. The modeling must demonstrate that the 
program will actually reduce ambient ozone. Modeling must establish a 
trading ratio. Nothing in the public record suggests that LDEQ has done 
any of the required modeling. (2) EPA required that there be an 
``approvable and replicable procedure'' by which these trading ratios 
will be calculated in the future. LDEQ has not provided any such 
procedure. (3) EPA required that ``the program should make sure that 
any trading that occurs is consistent with the attainment 
demonstration.'' LDEQ has provided no procedures by which the 
consistency of trading with the attainment demonstration will be 
monitored, nor has it even committed to doing such monitoring. The 
commenter is concerned that the EPA proposed to approve the same 
regulation even though the rule was not revised to reflect any of its 
concerns.
    Response 12: The EPA disagrees with these assertions. Extensive 
urban airshed modeling has been conducted in support of Louisiana's 
revised SIP. The UAM provides the technical basis to support 
NOX emission credits used to offset VOC increases. The LDEQ 
conducted approximately 100 UAM V simulations to determine the emission 
control strategy direction, emission control strategy level, and 
emission control region required to demonstrate attainment. The UAM 
clearly demonstrated that NOX reductions are more effective 
than VOC reductions at reducing ambient ozone concentrations in the 
Baton Rouge area. UAM sensitivity simulations indicate that a 30% 
``across the board'' reduction in VOC emission yielded less that a 1 
part per billion decrease in the ozone peak for the three ozone 
episodes modeled. Accordingly, a reduction in one ton of NOX 
emissions was more beneficial than an equivalent reduction in VOC 
emissions. It was also for these reasons that VOC emission credits 
should not be allowed to offset NOX increases. Even though 
an ozone attainment benefit was shown with a one ton increase in VOC 
emissions for a one ton offset of NOX emissions, the LDEQ 
rule requires that the ratios specified in Table 1 (Section 504 of 
Chapter 5 of the State rule) be employed if NOX emission 
credits are used to offset VOC increases.
    We disagree that our comment in our July 9, 2001, letter to the 
LDEQ required that the State provide an approvable and replicable 
procedure by which these trading ratios will be calculated ``in the 
future.'' That is, the purpose of that comment was not to request 
procedures to calculate future trading ratios. Instead, our point was 
that Louisiana's proposed nonattainment NSR revisions did not make 
clear that the ratios in Table 1 would apply to IPT trades. The State's 
final rule published on December 20, 2001, did clarify that point. The 
urban airshed modeling conducted by the State does provide a basis for 
the use of the trading ratios in Table 1 for use in IPT trades and the 
modeling is approvable and replicable. However, the EPA does 
acknowledge that environmental conditions change over time and, 
therefore, periodic reevaluations are necessary to maintain compliance 
with the ozone NAAQS. The LDEQ also recognizes that over extended 
periods of time, the relative effectiveness of NOX and VOC 
decreases at reducing ozone levels may change. It was for that reason 
that the state established November 15, 2005, as a ``sunset date'' 
after which no permits

[[Page 61268]]

will be issued or modified allowing NOX credits to offset 
VOC increases. Further, the Attainment Plan/Transport SIP includes an 
enforceable commitment to perform and submit a mid-course review by May 
1, 2004. This mid-course review would include, among other things, a 
re-evaluation of the ratio of NOX to VOC emissions 
reductions needed for attainment.
    The EPA also believes that IPT is consistent with the attainment 
demonstration. As noted above LDEQ conducted approximately 100 UAM V 
simulations to determine the emission control strategy direction, 
emission control strategy level, and emission control region required 
to demonstrate attainment. The UAM did demonstrate that NOX 
reductions are currently more effective than VOC reductions at reducing 
ambient ozone concentrations in the Baton Rouge area. Additionally, an 
increase in VOC emissions offset by a decrease in emissions of 
NOX should be analyzed for the extent of impact from each 
pollutant involved. The LDEQ has agreed in implementing this provision 
to evaluate such trades on a case-by-case basis. See letter from Dale 
Givens, Secretary of LDEQ to Gregg Cooke, Regional Administrator, U.S. 
EPA, Region 6 (May 3, 2002). Additionally, in response to a comment 
sent by us on the proposed SIP revisions, LDEQ confirmed that further 
Urban Airshed Modeling would be required on a case-by-case basis if new 
data or evidence comes to light that indicates a NOX for VOC 
trade will not be beneficial to the environment.
    Comment 13: Louisiana Generating LLC (LaGen) commented that LDEQ's 
proposed Attainment Plan/Transport SIP revisions contain a proposed 
Control Strategy Element, Section 4.2.1 Permitting NOX 
Sources, that could result in the imposition of the equivalent of the 
nonattainment rules in an attainment area without authority of law. 
LaGen stated that the revised nonattainment NSR regulation is not 
approvable to the extent that any of the provisions of the regulation 
could be implemented to support requiring offsets of new facilities or 
major modifications in attainment parishes.
    Response 13: We disagree. As noted in its plain language, Section 
4.2.1 is not intended as new policy or guidance. We disagree with the 
commenter's interpretation that Section 4.2.1 of Louisiana's SIP 
imposes nonattainment rules in an attainment area. Section 4.2.1 
provides the State's acknowledgment of the requirements of sections 
110(j) and 165(a)(3) of the Act, which prohibit the permitting of 
emissions from the construction or operation of sources that will 
cause, or contribute to, air pollution in excess of any national 
ambient air quality standard in any air quality control region, or any 
other applicable emission standard or standard of performance under the 
Act. EPA has proposed approval of Louisiana's 1-hour ozone attainment 
demonstration SIP in a separate rulemaking, 67 FR 50391, (August 2, 
2002), and will address LaGen's comment regarding the approvability of 
the SIP when we taken final action on that rulemaking.
    The stated applicability of the LDEQ nonattainment NSR revised rule 
in section 504(A)is for the construction of any new major stationary 
source or to any major modification at a major stationary source, 
provided such source or modification will be located within a 
nonattainment area, so designated pursuant to section 107 of the CAA, 
and will emit a regulated pollutant for which it is major and for which 
the area is designated nonattainment.

VII. What Is the Scope of the EPA's Final Action?

    The EPA is approving changes to the minimum offset ratios for new 
major stationary sources and major modifications at major stationary 
sources in the Baton Rouge Area. These approved revisions also allow an 
increase in VOC emissions to be offset by a decrease in emissions of 
NOX. These changes revise LAC 33:III.504, previously 
approved by the EPA on May 31, 2001 (66 FR 29491).

VIII. Administrative Requirements

A. Executive Order 12866

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), this 
action is not a ``significant regulatory action'' and therefore is not 
subject to review by the Office of Management and Budget. For this 
reason, this action is also not subject to Executive Order 13211, 
``Actions Concerning Regulations That Significantly Affect Energy 
Supply, Distribution, or Use'' (66 FR 28355, May 22, 2001). This action 
merely approves state law as meeting Federal requirements and imposes 
no additional requirements beyond those imposed by state law. 
Accordingly, the Administrator certifies that this rule will not have a 
significant economic impact on a substantial number of small entities 
under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). Because 
this rule approves pre-existing requirements under state law and does 
not impose any additional enforceable duty beyond that required by 
state law, it does not contain any unfunded mandate or significantly or 
uniquely affect small governments, as described in the Unfunded 
Mandates Reform Act of 1995 (Public Law 104-4).

B. Executive Order 13045

    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 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 
proposed action is not subject to Executive Order 13045 because this is 
not an economically significant regulatory action as defined by 
Executive Order 12866.

C. Executive Order 13175

    On November 6, 2000, the President issued Executive Order 13175 (65 
FR 67249) entitled, ``Consultation and Coordination with Indian Tribal 
Governments.'' Executive Order 13175 took effect on January 6, 2001, 
and revokes Executive Order 13084 (Tribal Consultation) as of that 
date. This rulemaking does not affect the communities of Indian tribal 
governments. Accordingly, the requirements of Executive Order 13175 do 
not apply.

D. Executive Order 12898

    Executive Order 12898 requires that each Federal agency make 
achieving environmental justice part of its mission by identifying and 
addressing, as appropriate, disproportionately high and adverse human 
health or environmental effects of its programs, policies, and 
activities on minorities and low-income populations. The EPA believes 
that this rule should not raise environmental justice issues. The 
overall result of the program is regional reductions in ozone. Because 
this program will likely reduce local ozone levels in the air, and 
because there are additional provisions under the CAA to ensure that 
ozone levels are brought into compliance with national ambient air 
quality standards, it appears unlikely that this program would permit 
adverse affects on local populations.

[[Page 61269]]

E. Regulatory Flexibility Act

    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 Congressional Review Act, 5 U.S.C. 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. EPA will submit a report containing this rule and other 
required information to the U.S. Senate, the U.S. House of 
Representatives, and the Comptroller General of the United States 
before publication of the rule in the Federal Register. A major rule 
cannot take effect until 60 days after it is published in the Federal 
Register. This action is not a ``major rule'' as defined by 5 U.S.C. 
804(2).
    Pursuant to 5 U.S.C. 605(b), I certify that today's rule would not 
have a significant impact on a substantial number of small entities 
within the meaning of those terms for RFA purposes.

F. Unfunded Mandates Reform Act

    Under section 202 of the Unfunded Mandates Reform Act of 1995 
(UMRA), 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 annual 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 believes, as discussed above, that because this rule approves 
pre-existing requirements under state law and does not impose any 
additional enforceable duty, it does not constitute a Federal mandate, 
as defined in section 101 of the UMRA.

G. Executive Order 13132

    Executive Order 13132, entitled Federalism (64 FR 43255, August 10, 
1999) 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 action merely approves a state rule implementing a Federal 
standard, and does not alter the relationship of the distribution of 
power and responsibilities established in the CAA. Thus, the 
requirements of section 6 of the Executive Order do not apply to this 
final action.

H. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272 
note) directs EPA to use voluntary consensus standards in its 
regulatory activities unless to do so would be inconsistent with 
applicable law or otherwise impractical. Voluntary consensus standards 
are technical standards (e.g., materials specifications, test methods, 
sampling procedures, and business practices) that are developed or 
adopted by voluntary consensus standards bodies. The NTTAA directs EPA 
to provide Congress, through OMB, explanations when the Agency decides 
not to use available and applicable voluntary consensus standards.
    In reviewing SIP submissions, EPA's role is to approve state 
choices, provided that they meet the criteria of the Clean Air Act. In 
this context, in the absence of a prior existing requirement for the 
State to use voluntary consensus standards (VCS), EPA has no authority 
to disapprove a SIP submission for failure to use VCS. It would thus be 
inconsistent with applicable law for EPA, when it reviews a SIP 
submission, to use VCS in place of a SIP submission that otherwise 
satisfies the provisions of the Clean Air Act. Thus, the requirements 
of section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (15 U.S.C. 272 note) do not apply.

I. Paperwork Reduction Act

    This rule does not impose an information collection burden under 
the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 
et seq.).

J. Congressional Review Act

    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. EPA will submit a report containing this 
rule and other required information to the U.S. Senate, the U.S. House 
of Representatives, and the Comptroller General of the United States 
before publication of the rule in the Federal Register. A major rule 
cannot take effect until 60 days after it is published in the Federal 
Register. This action is not a ``major rule'' as defined by 5 U.S.C. 
section 804(2).
    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 November 29, 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, Hydrocarbons, 
Intergovernmental relations, Ozone, Nitrogen oxides, Volatile organic 
compounds, Reporting and recordkeeping requirements.


[[Page 61270]]


    Dated: September 20, 2002.
Larry Starfield,
Acting Regional Administrator, Region 6.


    Part 52, chapter I, title 40 of the Code of Federal Regulations is 
amended 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 T--Louisiana

    2. In Sec.  52.970 the table in paragraph (c) is amended by 
revising the entry for Section 504 under chapter 5 to read as follows:


Sec.  52.970  Identification of plan.

* * * * *
    (c) * * *

                             EPA Approved Louisiana Regulations in the Louisiana SIP
----------------------------------------------------------------------------------------------------------------
                                                            State approval
         State citation               Title/subject              date         EPA approval date      Comments
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
--------------------------------
                                          Chapter 5--Permit Procedures
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
--------------------------------
Section 504....................  Nonattainment New        Dec. 2001, LR       Sept. 30, 2002
                                  Source Review            27:2225.            and [FR Cite].
                                  Procedures.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------

* * * * *
[FR Doc. 02-24637 Filed 9-27-02; 8:45 am]
BILLING CODE 6560-50-U