[Federal Register Volume 68, Number 86 (Monday, May 5, 2003)]
[Rules and Regulations]
[Pages 23597-23604]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-10888]


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

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[LA-60-1-7562; FRL-7492-9]


Approval and Promulgation of Implementation Plans; Louisiana; 
Rescission of the Section 182(f) and 182(b)(1) Exemptions to the 
Nitrogen Oxides Control Requirements for the Baton Rouge Ozone 
Nonattainment Area

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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

SUMMARY: We are approving revisions to the Louisiana State 
Implementation Plan (SIP). In particular, we are finalizing our 
proposal to rescind the section 182(f) and 182(b)(1) nitrogen oxides 
(NOX) exemptions for the Baton Rouge (BR) ozone 
nonattainment area, which proposal was published on May 7, 2002 (67 FR 
30638). We are rescinding the NOX exemptions based on 
revised photochemical grid modeling recently conducted for the BR area 
SIP which indicates that control of NOX emissions will help 
the area attain the National Ambient Air Quality Standard (NAAQS) for 
ozone. The State of Louisiana requested that EPA rescind the 
NOX exemption based on this new modeling. Upon rescission of 
the NOX exemptions, the State will need to implement 
NOX controls to meet the Clean Air Act's (the Act) 
requirements for Reasonably Available Control Technology (RACT), 
Nonattainment New Source Review (NNSR), vehicle Inspection/Maintenance 
(I/M), and general and transportation conformity.
    The EPA is finalizing the proposal to rescind the NOX 
exemptions for the BR ozone nonattainment area as meeting the 
requirements of the Act.

DATES: This rule will be effective on June 4, 2003.

ADDRESSES: Copies of documents relevant to this action are available 
for public inspection during normal business hours at the following 
locations:

[[Page 23598]]

    Environmental Protection Agency, Region 6, 1445 Ross Avenue, Suite 
700, Dallas, Texas 75202-2733.
    Louisiana Department of Environmental Quality (LDEQ), 7290 
Bluebonnet Boulevard, Baton Rouge, Louisiana, 70810.
    Persons interested in examining these documents should make an 
appointment with the appropriate office at least 24 hours before the 
visiting day.

FOR FURTHER INFORMATION CONTACT: Mr. Alan Shar, Air Planning Section 
(6PD-L), EPA Region 6, 1445 Ross Avenue, Dallas, Texas 75202-2733, 
telephone (214)665-6691, and [email protected].

SUPPLEMENTARY INFORMATION:

Table of Contents:

1. What Action Are We Taking in This Document?
2. When Did the Public Comment Period for Our Proposal Expire?
3. Who Submitted Comments to Us?
4. How Do We Respond to the Submitted Written Comments?
5. Where Can I Find Background Information On the Exemptions?
6. What Areas In Louisiana Will Today's Action Affect?
7. Statutory and Executive Order Reviews:
    A. Executive Order 12866, Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132, Federalism
    F. Executive Order 13175, Coordination with Indian Tribal 
Governments
    G. Executive Order 13045, Protection of Children from 
Environmental Health Risks and Safety Risks
    H. Executive Order 13211, Actions that Significantly Affect 
Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act
    J. Congressional Review Act
    K. Petitions for Judicial Review

    Throughout this document ``we,'' ``us,'' and ``our'' means EPA.

1. What Actions Are We Taking in This Document?

    On May 7, 2002 we proposed to rescind the section 182(f) and 
182(b)(1) NOX exemptions for the BR ozone nonattainment area 
(67 FR 30638). The BR area consists of the 5 ozone nonattainment 
parishes of Ascension, East Baton Rouge, Iberville, Livingston, and 
West Baton Rouge. Photochemical grid modeling recently conducted for 
the BR area SIP indicates that control of NOX emissions will 
help the area attain the NAAQS for ozone. The State of Louisiana 
requested that EPA rescind the NOX exemption based on this 
new air modeling. In this action we are rescinding the section 182(f) 
and 182(b)(1) NOX exemptions based on the State's 
demonstration that control of NOX emissions will contribute 
to the attainment of the ozone NAAQS in the BR area. Since the reason 
for the exemptions (per section 182(f) and 182(b)(1)) was that control 
of NOX exemptions would not contribute to attainment, it 
follows that the exemptions must be rescinded. Our responses to the 
written comments received on our May 7, 2002, proposal are in section 4 
of this document.
    On July 17, 2002 (67 FR 46970) we notified the public that the 
NOX emissions budgets contained in the BR area's attainment 
demonstration SIP are adequate for transportation conformity purposes. 
These budgets are to be used for future conformity determinations in 
the BR area, and are effective as of August 1, 2002.
    On September 26, 2002 (67 FR 60594) we approved Louisiana's I/M 
program for the BR ozone nonattainment area. See Louisiana 
Administrative Code (LAC), Title 33, Chapter 14 (LAC 33:III, Chapter 
14). Louisiana's I/M program is now in effect for the BR area.
    On September 27, 2002 (67 FR 60877) we approved Louisiana's 
NOX RACT for the BR ozone nonattainment area. See LAC 
33:III, Chapter 22. The NOX RACT rules are now in effect for 
the BR area.
    On September 27, 2002 (67 FR 60871) we approved Louisiana's 
emissions reduction credits banking program for the BR area. See LAC 
33:III, Chapter 6. These rules are now in effect for the BR area.
    On September 30, 2002 (67 FR 61260) we approved Louisiana's NNSR 
procedures for the BR area. See LAC 33:III, Chapter 5. These rules are 
now in effect for the BR area.
    On October 2, 2002 (67 FR 61786) we approved Louisiana's attainment 
demonstration plan and SIP for 1-hour ozone standard within the BR 
area. This attainment demonstration plan and SIP are now in effect.
    As stated in section V of our proposal (67 FR 30639) the section 
182(f) NOX waiver exempted Federal projects from general 
conformity determinations with respect to NOX. When the 
exemption is rescinded, Federal agencies making future general 
conformity determinations for Federal projects in the BR area will be 
subject to the NOX requirements outlined in the State's 
general conformity rules. The State will not need to revise its general 
conformity rules if the section 182(f) NOX waiver is 
rescinded. See LAC 33:III, Chapter 14, Subchapter A, and 40 CFR part 
51, subpart W for more information. Existing federal projects will not 
be affected by the rescission of the sections 182(f) and 182(b)(1) 
NOX exemptions and will continue to be valid to the same 
extent as generally allowed under the rules; however, new federal 
projects will have to observe the NOX requirements outlined 
in the State's general conformity rules.
    Pursuant to the above-listed rulemaking actions concerning 
Louisiana's SIP and this final action, the State will need to implement 
the Act's NOX requirements for general conformity, 
transportation conformity, vehicle I/M, RACT, banking, and NNSR 
purposes.

2. When Did the Public Comment Period for Our Proposal Expire?

    The public comment period for our proposal (67 FR 30638) expired on 
June 7, 2002.

3. Who Submitted Comments to Us?

    We received written comments on our May 2, 2002, proposal (67 FR 
30638) from Parish of Ascension (PA), Parish of West Baton Rouge 
(PWBR), Parish of Iberville (PI), Parish of Livingston (PL), Parish of 
East Baton Rouge and City of Baton Rouge (PEB), Mc Daniel and 
Associates (MDA) on behalf of the Baton Rouge Ozone Task Force, and the 
Tulane Environmental Law Clinic (TELC) on behalf of the Louisiana 
Environmental Action Network (LEAN).

4. How Do We Respond to the Submitted Written Comments?

    Our responses to the written comments concerning the May 7, 2002 
(67 FR 30638) proposal are as follows:
    Comment #1: The PA, PWBR, PI, PL, PEB, and MDA all commented 
favorably and stated that they support our proposed rescission of the 
section 182(f) and 182(b)(1) NOX exemptions.
    Response to comment #1: We appreciate the commenters' support 
concerning our proposed action and have considered these comments in 
our final determination.
    Comment #2: LEAN expressed conditional support for the rescission 
of the section 182(f) and 182(b)(1) NOX exemptions in our 
proposal.
    Response to comment #2: We appreciate the commenters' support and 
will respond to the commenters' concerns in the following responses to 
comments.
    Comment #3: LEAN commented that the rescission should not be used 
to increase emissions of Volatile Organic Compounds (VOCs) above 
legally allowable levels.
    Response to Comment #3: The EPA agrees that the rescission of the 
NOX exemptions should not be used to increase VOC emissions 
above legally allowable levels. We addressed similar concerns in our 
approval of the

[[Page 23599]]

Louisiana attainment demonstration plan and SIP for the 1-hour ozone 
standard for the BR area (67 FR 61786) published on October 2, 2002, as 
well as in the approval of the State's NNSR procedures (67 FR 61260) 
published on September 30, 2002. In the approval of the attainment 
demonstration, we concluded that the State had adequately demonstrated 
that additional NOX reductions will contribute to the 
attainment of the ozone NAAQS, which is the basis for the approval of 
this request from the State of Louisiana that EPA rescind the 
NOX exemptions. Since the NOX exemptions were 
granted to the State of Louisiana in 1996, modeling techniques and 
emission inventory methodologies/tools have been enhanced and improved. 
We reviewed and approved the new modeling for the BR area's ozone 
attainment demonstration plan and SIP (67 FR 61786, October 2, 2002) as 
leading to attainment of the standard and to overall benefit to 
reducing ozone. This attainment demonstration plan and SIP are now in 
effect. Louisiana conducted extensive Urban Airshed Modeling (UAM) in 
support of its 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 BR 
area. The UAM sensitivity simulations indicate that a 30 percent 
``across the board'' reduction in VOC emission yielded less than a 1 
part per billion decrease in the ozone peak for the 3 ozone episodes 
modeled. Accordingly, a reduction of one ton of NOX 
emissions was more beneficial than an equivalent reduction in VOC 
emissions. On the basis of this modeling, Louisiana also determined 
that VOC emission credits should not be allowed to offset 
NOX increases.
    The BR area is currently designated as a serious ozone 
nonattainment area (40 CFR 81.319). A major stationary source in the BR 
ozone nonattainment area will need to comply the new offset ratios as a 
part of the NNSR procedures. The NNSR procedures allow an affected 
source to implement the Lowest Achievable Emission Rate (LAER). For a 
nonattainment area with a classification of serious for ozone, the 
minimum offset ratio for VOCs and for NOX is 1.20 to 1 if 
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 Act 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.
    Adoption of offset ratios like 1.2 to 1, 1.4 to 1, or 1.5 to 1 
(greater than 1 to 1), as a part of the NNSR procedures, will translate 
into the environment becoming the beneficiary of additional twenty, 
forty, or fifty percent reductions in emissions, as the case might be. 
Under Louisiana's NNSR procedures, all emission reductions claimed as 
offset credit for significant net NOX increases shall be 
from decreases of NOX. The NOX credits will be 
allowed to offset VOC increases, but not vice versa. Although 
NOX credits may be allowed to offset VOC increases, we 
believe there are several regulatory measures in place that limit the 
ability of a source to exchange increases in VOCs with NOX 
reductions. 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, in its NNSR program, 
November 15, 2005, as a ``sunset date'' after which no permits will be 
issued or modified allowing NOX credits to offset VOC 
increases. See 67 FR 61260. On September 30, 2002 (67 FR 61260) we 
approved Louisiana's NNSR program.
    Furthermore, VOC emissions are separately regulated under EPA's 
Maximum Achievable Control Technology (MACT) standards for the major 
sources of air toxics.
    Rescission of the NOX exemptions and implementation of 
additional NOX control requirements for point sources in the 
BR ozone nonattainment area will have an environmental benefit. 
Rescission of the NOX exemptions will require the State to 
implement applicable NOX provisions for: RACT, NNSR, 
banking, vehicle I/M, and general and transportation conformity. As a 
result of the rescission of the NOX exemptions, Louisiana 
will now have to meet all of the applicable NOX requirements 
of the Act. The State has already adopted and promulgated these 
applicable requirements. See section 1 of this document for a listing 
of these regulatory measures.
    Based on the above information, we support the State's request and 
are rescinding the NOX exemptions.
    Comment #4: LEAN commented that the State should not have been 
granted the exemption, that EPA mistakenly granted the exemptions to 
allow LDEQ to issue permits for emissions of NOX in amounts 
far greater than would have been legal without the exemptions, and the 
rescission will increase pollution in the area. The commenter suggests 
the NOX exemptions were unjustified.
    Response to Comment #4: We disagree with the commenter's contention 
that the NOX exemptions were mistaken or unjustified, 
although the issue is now moot in any case. We refer the commenter to 
our rulemaking approving the NOX exemptions (61 FR 2438, 
January 26, 1996, and 61 FR 7218, February 27, 1996), and response to 
comment 3 above concerning our position for granting the 
exemptions. The EPA also disagrees that the rescission will increase 
pollution in the BR area and refer the commenter to our response to 
comment 3 of this document.
    In this action, EPA is rescinding the NOX exemptions. 
Therefore, the commenter's concern about EPA's granting the exemptions 
is misplaced. Seven years have elapsed since the LDEQ's previous 
modeling demonstration which showed that additional NOX 
reductions were not needed for BR area's attainment, and the most 
recent modeling events demonstrating that control of NOX 
emissions will contribute to attainment in the BR area. The pollution 
control technology, including air modeling, is a dynamic and evolving 
field. The model used by the LDEQ to support its request for approval 
of the NOX waiver was Urban Airshed Model (UAM) IV, which 
was an EPA-approved photochemical grid model. The model used by the 
LDEQ to support its request for rescission of the NOX waiver 
is UAM V, a more recently EPA-approved photochemical Grid Model. This 
represents a significant refinement in modeling technology. In 
addition, emission inventory methodologies/tools have been improved 
during this seven year period from when the State initially requested 
the NOX exemptions. The commenter also fails to present or 
show any specific data corroborating the comment. In the absence of 
specific data or information, and for the other reasons stated above, 
we disagree with the commenter that the exemptions were mistakenly 
granted and that the

[[Page 23600]]

rescission will cause an increase in air pollution in the BR area.
    Comment #5: LEAN commented that the LDEQ's incorrect 
representations to EPA have resulted in a rescission that will lead to 
the generation of emission credits from NOX reductions that 
could be used to avoid NNSR for VOCs and to offset VOC increases.
    Response to Comment #5: The EPA disagrees with the commenter's 
characterization of the impact of the rescission of the NOX 
exemptions and Louisiana's offsets procedures. Our basis for this 
action is governed by section 182(f) and 182(b)(1) of the Act and is 
independent of any permitting procedures.
    As stated in our response to comment 3 of this document, a 
major stationary source in the BR ozone nonattainment area now will 
need to comply with the new offset ratios (1.4 to 1 or 1.2 to 1) as a 
part of the NNSR procedures. See Table 1, section III in 67 FR 61260 
(September 30, 2002). The offset ratios are greater than 1 to 1 and 
therefore will mean additional reductions in air emissions. In response 
to a similar comment EPA received during its rulemaking on Louisiana's 
revised NNSR regulations, EPA noted:

    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 [of 67 FR 61260] 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.

67 FR 61260 at 61264 (September 30, 2002).
    Furthermore, EPA has stated on several occasions that any emission 
reduction credits in Louisiana will have to be permanent, actual, 
surplus, quantifiable, and federally enforceable at the time of use as 
offsets. See 67 FR 60877 (September 27, 2002), 67 FR 60871 (September 
27, 2002), and 67 FR 61260 (September 30, 2002). For the above reasons, 
EPA disagrees with the commenter's characterization of the impact of 
this final action.
    Comment #6: LEAN commented that the LDEQ's intention is to allow 
facilities to avoid reductions in VOCs to the detriment of the health 
and welfare of residents of the BR area.
    Response to Comment #6: We disagree with the commenter. The EPA 
believes the revised NNSR rule will improve air quality for all 
residents of the BR area. We refer the commenter to our responses to 
comments 3 and 4 of this document with regard to our 
position on the NOX exemptions and related modeling issues. 
Our final action to rescind the NOX exemptions is made 
pursuant to section 182(f) and 182(b)(1) of the Act. The commenter 
fails to provide any specific data to substantiate the comment 
concerning the health and welfare of residents of the BR area as a 
result of EPA's actions regarding the NOX exemptions. 
Furthermore, the State has adopted and is implementing NOX 
control measures not previously in the Louisiana's SIP. See 67 FR 60877 
(September 27, 2002) for more information. We believe that 
implementation of these new NOX control measures will 
strengthen Louisiana SIP, provide for additional safeguards to the 
health and welfare of residents of the affected parishes, and 
contribute to bringing the BR area into attainment with the ozone 
NAAQS.
    Comment #7: LEAN commented that many or most of the facilities that 
benefitted from the NOX exemptions are located in lower 
income communities with minority populations greater than the national 
average and that many of the residents live near the fence line of 
facilities or surrounded by multiple major polluters. The commenter 
contends that increased VOC emissions resulting from emission trading 
within the nonattainment area will result in environmental injustice 
and disparate impacts.
    Response to Comment #7: The EPA disagrees that this action will 
result in environmental injustice or disparate impacts. We continue to 
encourage and support fact-finding efforts that involve local 
communities and the State of Louisiana. The EPA is committed to the 
principles of environmental justice to ensure that all Americans have 
equal access to the decision making process. We believe that the public 
process for the 1996 NOX exemption document provided 
everyone the opportunity for meaningful involvement and met all of the 
legal requirements of section 110(a) of the Act and 40 CFR part 51. We 
believe the recent revisions to the SIP will improve air quality for 
all of the BR area.
    We do not agree that the use of Inter-pollutant Trading (IPT) will 
overburden minority communities in the area. Louisiana's recent SIP 
revisions change only specific portions of the LDEQ regulations. The 
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 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 Hazardous Air Pollutants (NESHAPs) in 40 CFR part 61 or 
part 63. Furthermore, LAC 33:III, Chapter 51 (Comprehensive Toxic Air 
Pollutant Emission Control Program) established ambient toxic air 
standards. Toxic Air Pollutants (TAPs) are a group of state-regulated 
chemicals consisting mainly of VOCs. The majority of TAPs are also 
Hazardous Air Pollutants (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 must be controlled by means 
of Maximum Achievable Control Technology (MACT). Furthermore, the 
impact of all TAP emissions must be below their respective health-based 
ambient air standards, which are also

[[Page 23601]]

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 industries involved in trades of VOC increases 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.
    Analysis of impacts under existing authority and subsequent review 
by EPA under Title V of the Act (Permits), help to ensure that these 
rules will not result in disproportionately high and adverse 
environmental or human health effects on minority or low-income 
communities. As the Administrator stated in her Memorandum of August 9, 
2001, ``Environmental statutes provide many opportunities to address 
environmental risks and hazards in minority communities and/or low-
income communities.'' This includes the Act, particularly the 
``alternative sites analysis.'' Under section 173(a)(5) of the Act, an 
alternative sites analysis must be conducted for each NNSR permit, 
which requires consideration of, among other things, 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 cost imposed.

    The LDEQ is also subject to the ``IT'' requirements which were 
articulated by the Louisiana Supreme Court in a case concerning the 
decision to issue a hazardous waste permit to the IT Corporation. Save 
Ourselves, Inc. v. Louisiana Environmental Control Comm'n, 452 So. 2d 
1152 (La. 1984) (IT). Under the IT requirements, which would apply to 
NNSR offsets, LDEQ addresses whether:
    1. The potential and real adverse environmental effects of the 
proposed project have been avoided to the maximum extent possible;
    2. A cost-benefit analysis of the environment impact costs balanced 
against the social and economic benefits of the project demonstrates 
that the latter outweighs the former; and
    3. There are alternative projects or alternative sites or 
mitigating measures which would offer more protection to the 
environment than the proposed project without unduly curtailing non-
environmental benefits to the extent applicable. In the Matter of 
Rubicon, Inc., 670 So.2d 475, 483 (La. App. 1996).
    While the weighing of costs and benefits required under the IT 
decision has been interpreted as a ``rule of reasonableness,'' the IT 
Court and subsequent courts have noted that ``[t]he DEQ's role as the 
representative of the public interest does not permit it to act as an 
umpire passively calling balls and strikes for adversaries appearing 
before the Secretary; the rights of the public must receive active and 
affirmative protection at the hands of DEQ.'' Matter of American Waste 
and Pollution Control Co., 642 So.2d 1258, 1262 (La. 1994) (internal 
punctuation omitted) (quoting IT, 452 So.2d at 1157).
    In sum, we believe the disparate impacts alleged by LEAN 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. Moreover, EPA is entitled to review each 
Title V permit, and thus can object even in the absence of a citizen 
petition if a Title V permit fails to comply with applicable 
requirements of the Act or SIP. For example, in this instance 
environmental justice issues could be considered and addressed through 
section 173(a)(5), as discussed above. Thus, we may address 
environmental justice issues raised by NNSR permits as part of the 
Title V permit review process. Even where the Agency does not have 
authority to object to a Title V permit, it may consider environmental 
justice issues raised by the permit. Such a review may lead to EPA 
addressing such issues in another manner, such as investigation of 
Title VI complaints or coordination with States on appropriate 
resolutions. We are committed to ensuring compliance with the 
applicable requirements of the Act and the State's SIP through the 
permit review process, the State's standard for TAPs, which we believe 
are protective of human health and the environment. Since any trade 
would be linked to a nonattainment new source review permit, public 
notice would be mandatory and the public would have the opportunity to 
request a public hearing on the proposed project. Further, the 
information in the LDEQ banking database, defined at LAC 33:III.605, 
will be available to the public upon request. We believe that such 
opportunities do provide for effective public participation, enhance 
local communities' involvement, and address potential environmental 
justice concerns.
    The commenter makes a number of statements about the demographics 
and health of poor and minority populations in the BR area. However, 
the commenter does not provide EPA with any concrete references or 
resources to support its position. For these reasons, we disagree with 
the commenter that this final action will result in environmental 
injustice or disparate impacts.
    Comment #8: LEAN commented that delayed or incomplete 
implementation of Louisiana's hazardous air pollutant program and the 
proposed rescission of the NOX exemption are LDEQ's first 
steps toward reducing the level of public protection from a wide array 
of toxics and carcinogens which qualify as VOCs. LEAN continues by 
commenting that recission of the NOX exemption will allow 
inter-pollutant trading.
    Response to Comment #8: We refer the commenter to our response to 
comment 7 of this document.
    In addition, section 112 of the Act requires EPA to regulate 
emissions of HAPs from a published list of industrial sources referred 
to as ``source categories.'' As required under the Act, EPA has 
developed a list of source categories that must meet control technology 
requirements for these toxic air pollutants. The EPA has developed (or 
is developing) NESHAP regulations for all industries that emit one or 
more of the pollutants in significant quantities. We believe these 
efforts and the State's Chapter 51 rules have partly contributed to the 
significant reductions of VOC and toxic emissions, within the BR area, 
as presented in our response to comment 4 of this document. 
The Table of completed toxics regulations and relevant information is 
available at http://www.epa.gov/ttn/atw/mactfnl.html.
    We are taking this final action pursuant to section 182(f) and 
182(b)(1) of the Act. Although the rescission of the NOX 
exemption may have implications for permitting, we are not taking 
action on IPT in this rulemaking. Our approval of Louisiana's IPT 
program was based on a recent photochemical grid modeling conducted for 
the BR area and was a separate rulemaking. See 67 FR 61260 (September 
30, 2002).
    Comment #9: LEAN commented that LDEQ and its constituents in the 
regulated community intended to ``scam'' EPA to avoid NNSR in the BR 
area by requesting the NOX exemption, and that the State 
produced inconsistent theories, using the same modelers, about the 
cause of ozone nonattainment for approximately 8 years.

[[Page 23602]]

    Response to Comment #9: We disagree with the commenter's 
characterization of the State's request for a NOX exemption 
as a ``scam.'' We refer the commenter to our rulemaking actions on the 
NOX exemptions and our response to comment 3 of 
this document for explanation of our bases for previously granting a 
NOX exemption to Louisiana. We also refer the commenter to 
response to comment 4 of this document for an explanation of 
our position concerning the State's recently submitted air modeling.
    The modeling protocol and scenarios were developed as a result of a 
series of meetings and public involvement processes. The result of the 
recent BR area modeling (showing that control of NOX 
emissions contributes to attainment in the BR area) is consistent with 
findings for numerous nonattainment areas across the country (e.g., 
Atlanta, Washington, DC, St. Louis, and Greater Connecticut). Based on 
our review and approval of the BR area photochemical grid modeling 
underlying the State's rescission request, EPA finds the State's 
request reasonable. See October 2, 2002 (67 FR 61786).
    The commenter fails to provide any specific data to substantiate 
the concerns over presentation of the modeling theories or scenarios. 
In the absence of specific data contradicting the photochemical grid 
modeling that was recently conducted for the BR area, EPA considers the 
commenter's statement unsubstantiated, and disagrees with the 
commenter's position in this regard.
    Comment #10: LEAN commented that the State intends to use credits 
from easy reductions in unregulated NOX emissions to 
abrogate NNSR requirements for VOCs.
    Response to Comment #10: The EPA disagrees with the commenter's 
interpretation that facilities which elect to implement NOX 
RACT would generate reductions eligible for use as emission offsets and 
abrogate NNSR for VOCs. We also refer the commenter to response to 
comment 5 of this document with respect to its contention that 
the rescission will allow facilities to avoid NNSR requirements.
    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 BR 
area and its Region of Influence. We approved the revised 
NOX rules on September 27, 2002 (67 FR 60877). These 
NOX rules require 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 that affected categories of NOX-
generating facilities may need to procure, calibrate and implement 
RACT. 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 Emission Reduction Credits (ERCs) and cannot 
offset VOC emissions by early NOX RACT implementation. 
Furthermore, emissions decreased by a voluntary action must be 
permanent in order to meet the surplus ERC criteria. Because the 
NOX RACT 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.
    The State has adopted and we have approved new NOX 
control measures not previously in the Louisiana's SIP. See September 
27, 2002 (67 FR 60877). These NOX control measures meet the 
Act's requirements for RACT. See also, our July 23, 2002 (67 FR 48095), 
and July 31, 2002 (67 FR 49647) proposed rulemaking documents. The EPA 
defines RACT as the lowest emission limitation that a particular source 
can meet by applying a control technique that is reasonably available 
considering technological and economic feasibility. See 44 FR 53761, 
September 17, 1979. We believe that implementation of these 
NOX control measures will strengthen the Louisiana SIP. As 
previously noted in this document, any ERCs must be permanent, actual, 
surplus, quantifiable, and federally enforceable at the time of use as 
an offset. For these reasons, we disagree with the commenter.
    Comment #11: LEAN commented that rescission of the NOX 
exemption should not be used to create NOX ERCs or offsets 
that would not have existed if EPA had not granted the NOX 
exemption.
    Response to Comment #11: As stated previously, in our May 7, 2002 
(67 FR 30638) proposal, in granting the NOX exemption, EPA 
reserved the right to reverse the approval of the exemption if 
subsequent modeling data demonstrated an ozone attainment benefit from 
NOX emission controls. Photochemical grid modeling recently 
conducted for the BR area SIP indicates that control of NOX 
sources will contribute to the BR area's attainment of the ozone NAAQS. 
The State of Louisiana, therefore, requested that EPA rescind the 
NOX exemption based on this new modeling. We believe that 
the State has adequately demonstrated that additional NOX 
reductions will contribute to attainment of ozone NAAQS. The State of 
Louisiana is not the only state that has requested EPA to rescind its 
NOX waiver based on updated photochemical grid modeling 
information. We reiterate that any emission reduction credits in 
Louisiana will have to be permanent, actual, surplus, quantifiable, and 
federally enforceable at the time of use as offset. For practical 
purposes, to refrain from introducing additional uncertainties and 
variables, and to minimize inconsistencies, the changes (increases or 
decreases) in NOX emissions will need to adhere to 
applicable rules and regulations instead of becoming a function of an 
arbitrary and variable baseline level for NOX based on what 
such emissions would/could have been 8 years or so ago, had no 
exemptions been issued. Furthermore, upon rescission of the 
NOX exemptions, the State will be required to implement the 
applicable requirements of the Act for control of NOX 
emissions, including RACT, NNSR, vehicle I/M, banking, and general and 
transportation conformity. Rescission of the NOX exemption 
and implementation of the State's newly promulgated NOX RACT 
regulations will strengthen the existing Louisiana SIP. Therefore, we 
disagree with the commenter's position in this regard.
    This concludes our responses to the written comments we received 
concerning this rulemaking.

5. Where Can I Find Background Information on the Exemptions?

    To find information on the proposed rescission of the section 
182(f) and 182(b)(1) NOX exemptions for the BR area you can 
refer to our May 7, 2002 (67 FR 30638) publication. To find information 
on the approval of the section 182(f) and 182(b)(1) NOX 
exemptions you can refer to our January 26, 1996 (61 FR 2438), and 
February 27, 1996 (61 FR 7218) rulemakings. To find information on the 
proposed approval of the section 182(f) and 182(b)(1) NOX 
exemptions you can refer to our August 18, 1995 (60 FR 43100), and 
October 6, 1995 (60 FR 52349) rulemakings. A copy of the recently 
completed modeling, NOX controls and NNSR regulations, and 
I/M SIP revision that Louisiana submitted to EPA are available from EPA 
and LDEQ at the addresses provided above.

[[Page 23603]]

6. What Areas in Louisiana Will Today's Rulemaking Affect?

    The following table contains a list of parishes affected by today's 
rulemaking.

------------------------------------------------------------------------
              Rule provision                      Affected parishes
------------------------------------------------------------------------
Rescission of NOX Exemptions..............  Ascension, East Baton Rouge,
                                             Iberville, Livingston, and
                                             West Baton Rouge
------------------------------------------------------------------------

    If you are in one of these Louisiana parishes, you should refer to 
the Louisiana NOX rules to determine if and how today's 
action will affect you.

7. Statutory and Executive Order Reviews

A. Executive Order 12866, Regulatory Planning and Review

    Under Executive Order 12866, [58 Federal Register 51,735 (October 
4, 1993)] the Agency must determine whether the regulatory action is 
``significant'' and therefore subject to the Office of Management and 
Budget (OMB) review and the requirements of the Executive Order 12866, 
entitled ``Regulatory Planning and Review.''
    The Order defines ``significant regulatory action'' as one that is 
likely to result in a rule that may: (1) Have an annual effect on the 
economy of $100 million or more or adversely affect in a material way 
the economy, a sector of the economy, productivity, competition, jobs, 
the environment, public health or safety, or State, local, or tribal 
governments or communities; (2) create a serious inconsistency or 
otherwise interfere with an action taken or planned by another agency; 
(3) materially alter the budgetary impact of entitlements, grants, user 
fees, or loan programs or the rights and obligations of recipients 
thereof; or (4) raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    It has been determined that this rule is not a ``significant 
regulatory action'' under the terms of Executive Order 12866 and is 
therefore not subject to OMB review.

B. Paperwork Reduction Act

    Under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq., OMB must 
approve all ``collections of information'' by EPA. The Act defines 
``collection of information'' as a requirement for ``answers to * * * 
identical reporting or recordkeeping requirements imposed on ten or 
more persons * * *'' 44 U.S.C. 3502(3)(A). Because the proposed FIP 
only applies to one company, the Paperwork Reduction Act does not 
apply.

C. 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.
    For purposes of assessing the impacts of today's rule on small 
entities, small entity is defined as: (1) A small business that has 
less than 750 employees and is a major source of NOX; (2) a 
small governmental jurisdiction that is a government of a city, county, 
town, school district or special district with a population of less 
than 50,000; and (3) a small organization that is any not-for-profit 
enterprise which is independently owned and operated and is not 
dominant in its field.
    I certify that this action will not have a significant economic 
impact on a substantial number of small entities. 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.

D. Unfunded Mandates Reform Act

    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. The EPA has determined 
that the approval action promulgated does 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 approves pre-existing requirements under 
State or local law, and imposes no new requirements. Accordingly, no 
additional costs to State, local, or tribal governments, or to the 
private sector, result from this action.

E. Executive Order 13132, Federalism

    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. The 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 approves 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.

F. Executive Order 13175, Coordination With Indian Tribal Governments

    Executive Order 13175, entitled ``Consultation and Coordination 
with Indian Tribal Governments'' (65 FR 67249, November 9, 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

[[Page 23604]]

have tribal implications, as specified in Executive Order 13175. The 
emissions sources affected by today's rulemaking action are not located 
within the Indian tribal nations; therefore, this rule 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. Thus, Executive Order 13175 does not 
apply to this rule.

G. Executive Order 13045, Protection of Children From Environmental 
Health Risks and Safety Risks

    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 rule is not subject to Executive Order 13045 because it does 
not involve decisions intended to mitigate environmental health or 
safety risks.

H. Executive Order 13211, Actions That Significantly Affect Energy 
Supply, Distribution, or Use

    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.

I. 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.

J. Congressional Review Act

    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 prior 
to 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). This rule will be effective June 4, 2003.

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 7, 2003. 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, Carbon monoxide, 
Hydrocarbons, Nitrogen dioxide, Nitrogen oxides, Nonattainment, Ozone, 
Reporting and recordkeeping requirements, Volatile organic compounds.

    Dated: April 25, 2003.
Christine Todd Whitman,
Administrator.


0
Part 52, chapter I, title 40 of the Code of Federal Regulations is 
amended as follows:

PART 52--[AMENDED]

0
1. The authority citation for part 52 continues to read as follows:

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

Subpart T--Louisiana

0
2. Sec.  52.992 is amended by adding paragraph (e) to read as follows:


Sec.  52.992  Areawide nitrogen oxides (NOX) exemptions.

* * * * *
    (e) On September 24, 2001, and on December 31, 2001, the LDEQ 
requested that EPA rescind the Baton Rouge section 182(f) and 182(b)(1) 
NOX exemptions that were approved by EPA, and published in 
the Federal Register on January 26, 1996 (61 FR 2438), and February 27, 
1996 (61 FR 7218). The State based its request on photochemical grid 
modeling recently performed for the Baton Rouge State Implementation 
Plan (SIP) which indicates that controlling NOX sources will 
assist in bringing the Baton Rouge area into attainment with the 
National Ambient Air Quality Standard (NAAQS) for ozone. On May 7, 
2002, EPA proposed approval of the State's request to rescind both 
NOX exemptions. Based on our review of the State's request 
and the supporting photochemical grid modeling the NOX 
exemptions are rescinded on May 5, 2003.

[FR Doc. 03-10888 Filed 5-2-03; 8:45 am]
BILLING CODE 6560-50-P