[Federal Register Volume 70, Number 1 (Monday, January 3, 2005)]
[Proposed Rules]
[Pages 53-60]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-28702]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[R04-OAR-2004-KY-0002-200424; FRL-7856-8]


Approval and Promulgation of Implementation Plans for Kentucky: 
Inspection and Maintenance Program Removal for Jefferson County, KY; 
Source-Specific Nitrogen Oxides Emission Rate for Kosmos Cement Kiln

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing to approve a revision to the Jefferson 
County, Kentucky portion of the Kentucky State Implementation Plan 
(SIP) which requests removal of three regulations from the active 
portion of the Kentucky SIP related to the Jefferson County inspection 
and maintenance (I/M) program. Kentucky requested in a September 22, 
2003, SIP revision that these I/M regulations be moved to the 
contingency measures section of the Kentucky portion of the Louisville 
1-Hour Ozone Maintenance Plan. EPA is also proposing to approve a 
source-specific SIP revision amending the nitrogen oxides 
(NOX) emission rate for Kosmos Cement Company's cement kiln

[[Page 54]]

as contained in a May 3, 2004, Board Order submitted on May 26, 2004, 
as a supplemental package to the September 2003 SIP revision.

DATES: Written comments must be received on or before February 2, 2005.

ADDRESSES: Submit your comments, identified by Regional Material in 
EDocket (RME) ID No. R04-OAR-2004-KY-0002, by one of the following 
methods:
    1. Federal eRulemaking Portal: http://www.regulations.gov. Follow 
the on-line instructions for submitting comments.
    2. Agency Web site: http://docket.epa.gov/rmepub/. RME, EPA's 
electronic public docket and comment system, is EPA's preferred method 
for receiving comments. Once in the system, select ``quick search,'' 
then key in the appropriate RME Docket identification number. Follow 
the on-line instructions for submitting comments.
    3. E-mail: [email protected].
    4. Fax: (404) 562-9019.
    5. Mail: ``R04-OAR-2004-KY-0002,'' Regulatory Development Section, 
Air Planning Branch, Air, Pesticides and Toxics Management Division, 
U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street, SW., 
Atlanta, Georgia 30303-8960.
    6. Hand Delivery or Courier: Deliver your comments to: Michele 
Notarianni, Regulatory Development Section, Air Planning Branch, Air, 
Pesticides and Toxics Management Division, 12th floor, U.S. 
Environmental Protection Agency, Region 4, 61 Forsyth Street, SW., 
Atlanta, Georgia 30303-8960. Such deliveries are only accepted during 
the Regional Office's normal hours of operation. The Regional Office's 
official hours of business are Monday through Friday, 8:30 to 4:30, 
excluding Federal holidays.
    Instructions: Direct your comments to RME ID No. R04-OAR-2004-KY-
0002. EPA's policy is that all comments received will be included in 
the public docket without change and may be made available online at 
http://docket.epa.gov/rmepub/, including any personal information 
provided, unless the comment includes information claimed to be 
Confidential Business Information (CBI) or other information whose 
disclosure is restricted by statute. Do not submit information that you 
consider to be CBI or otherwise protected through RME, regulations.gov, 
or e-mail. The EPA RME Web site and the Federal regulations.gov Web 
site are ``anonymous access'' systems, which means EPA will not know 
your identity or contact information unless you provide it in the body 
of your comment. If you send an e-mail comment directly to EPA without 
going through RME or regulations.gov, your e-mail address will be 
automatically captured and included as part of the comment that is 
placed in the public docket and made available on the Internet. If you 
submit an electronic comment, EPA recommends that you include your name 
and other contact information in the body of your comment and with any 
disk or CD-ROM you submit. If EPA cannot read your comment due to 
technical difficulties and cannot contact you for clarification, EPA 
may not be able to consider your comment. Electronic files should avoid 
the use of special characters, any form of encryption, and be free of 
any defects or viruses.
    Docket: All documents in the electronic docket are listed in the 
RME index at http://docket.epa.gov/rmepub/. Although listed in the 
index, some information is not publicly available, i.e., CBI or other 
information whose disclosure is restricted by statute. Certain other 
material, such as copyrighted material, is not placed on the Internet 
and will be publicly available only in hard copy form. Publicly 
available docket materials are available either electronically in RME 
or in hard copy at the Regulatory Development Section, Air Planning 
Branch, Air, Pesticides and Toxics Management Division, U.S. 
Environmental Protection Agency, Region 4, 61 Forsyth Street, SW., 
Atlanta, Georgia 30303-8960. EPA requests that if at all possible, you 
contact the person listed in the FOR FURTHER INFORMATION CONTACT 
section to schedule your inspection. The Regional Office's official 
hours of business are Monday through Friday, 8:30 to 4:30, excluding 
Federal holidays.

FOR FURTHER INFORMATION CONTACT: Michele Notarianni, Air Planning 
Branch, Air, Pesticides and Toxics Management Division, U.S. 
Environmental Protection Agency, Region 4, 61 Forsyth Street, SW., 
Atlanta, Georgia 30303-8960. Phone: (404) 562-9031. E-mail: 
[email protected].

SUPPLEMENTARY INFORMATION:

Table of Contents

I. What changes to the Kentucky SIP were submitted for EPA approval?
II. What authorities apply to moving the Jefferson County I/M 
Program to a contingency measure in the Kentucky SIP?
III. What is EPA's analysis of Kentucky's demonstration of no 
interference with the 1-Hour Ozone and Carbon Monoxide National 
Ambient Air Quality Standards (NAAQS)?
IV. What is EPA's analysis of Kentucky's demonstration of 
noninterference with the 8-Hour Ozone and Fine Particulate Matter 
NAAQS?
    A. What criteria must be met?
    B. What is EPA's analysis of whether the proposed reductions 
meet the criteria of permanent, enforceable, quantifiable, surplus, 
equivalent and contemporaneous?
    1. Permanent
    2. Enforceable
    3. Quantifiable
    4. Surplus
    5. Equivalent
    a. Selection of the year 2005 to estimate emission increases 
from closure of the VET Program.
    b. Methodology for substituting NOX for VOC to 
determine all ``NOX-equivalent'' needed to replace the 
VET Program.
    6. Contemporaneous
V. What is EPA's Proposed Action?
VI. Statutory and Executive Order Reviews

I. What Changes to the Kentucky SIP Were Submitted for EPA Approval?

    In response to a 2002 Kentucky Legislative action to terminate the 
Jefferson County I/M program effective November 1, 2003, the 
Commonwealth of Kentucky submitted a revision to the Jefferson County, 
Kentucky portion of the Kentucky SIP on September 22, 2003. This 
revision repeals three SIP-approved regulations representing the 
Jefferson County I/M program, also known as the Jefferson County 
Vehicle Emissions Testing (VET) Program. The regulations requested for 
repeal are: Regulation 8.01, ``Mobile Source Emissions Control 
Requirements,'' Regulation 8.02, ``Vehicle Emissions Testing 
Procedure,'' and Regulation 8.03, ``Commuter Vehicle Testing 
Requirements.''
    Kentucky requested in the September 22, 2003, submittal that the 
three VET Program regulations be moved from the active control measures 
portion of the SIP to the contingency measures portion of the Kentucky 
portion of the Louisville 1-Hour Ozone Maintenance Plan, which is part 
of the Kentucky SIP. The Jefferson County VET Program is a basic I/M 
program that includes on-board diagnostics (i.e., OBD) and results in 
emission reductions of NOX, volatile organic compounds 
(VOC), and carbon monoxide (CO). The VET Program began operation on 
January 2, 1984, to help meet nonattainment area requirements for the 
ozone and CO NAAQS effective at the time.
    The Kentucky portion of the Louisville Metropolitan Statistical 
Area (MSA) is comprised of the Kentucky Counties of Bullitt, Oldham, 
and Jefferson. Presently, Jefferson County,

[[Page 55]]

and portions of Bullitt and Oldham Counties, comprise the Kentucky 
portion of the Louisville 1-Hour Ozone Maintenance Area. This 
maintenance status means these counties were formerly designated 
nonattainment for the 1-hour ozone standard, are now attaining this 
standard, and have since been redesignated to attainment for the 1-hour 
ozone standard (October 23, 2001, 66 FR 53665). This area was 
previously classified as a moderate nonattainment area, thus the 
requirement for the I/M program. Jefferson County was redesignated to 
attainment for CO on April 16, 1990 (55 FR 14092). On April 30, 2004 
(69 FR 23858), EPA designated Jefferson County, Kentucky nonattainment 
for the 8-hour ozone NAAQS, effective June 15, 2004. Currently, 
Jefferson County, Kentucky is violating the PM2.5 NAAQS 
based on 2001-2003 air quality data. EPA identified Jefferson County as 
nonattainment for PM2.5 on December 17, 2004.
    As a supplemental package to the September 22, 2003, SIP revision, 
the Commonwealth of Kentucky submitted a February 20, 2004, proposed 
amendment to the Kentucky SIP in response to EPA's October 27, 2003, 
letter requesting further information. This proposed amendment 
identified for public comment potential emission reductions to 
compensate for the NOX and VOC emission increases resulting 
from removing the Jefferson County VET Program as an active control 
measure in the SIP. To demonstrate non-interference with applicable 
requirements of the Act, EPA believes that the potential, compensating 
emission reductions must be equivalent to or greater than those 
achieved with the VET Program. Concurrently, the Louisville Metro Air 
Pollution Control District (i.e., ``District'') also submitted this 
same package to EPA to solicit EPA's comments during the public comment 
period. The public hearing was held on March 31, 2004. On May 26, 2004, 
the Commonwealth of Kentucky submitted the final version of the 
supplemental information to replace the February 20, 2004, proposal. 
The May 26, 2004, final supplemental package provides the selected 
option for acquiring compensating equivalent emissions reductions from 
the Kosmos Cement Company (``Kosmos'') in Jefferson County and 
additional supporting documentation. To compensate for the closure of 
the VET Program, equivalent emissions are needed to replace an 
anticipated increase of 1.89 tons per summer day (tpsd) of VOC and 1.68 
tpsd of NOX in the year 2005.

II. What Authorities Apply to Moving the Jefferson County I/M Program 
to a Contingency Measure in the Kentucky SIP?

    Section 110(l) of the Clean Air Act (i.e., ``Act'') states:

    Each revision to an implementation plan submitted by a State 
under this Act shall be adopted by such State after reasonable 
notice and public hearing. The Administrator shall not approve a 
revision to a plan if the revision would interfere with any 
applicable requirement concerning attainment and reasonable further 
progress (as defined in section 171), or any other applicable 
requirement of this Act.

    The states' obligation to demonstrate attainment of each of the 
NAAQS is considered as ``any applicable requirement(s) concerning 
attainment.'' A demonstration is necessary to show that this revision 
will not interfere with attainment or maintenance of the NAAQS, 
including the relatively new 8-hour ozone and PM2.5 
standards, or any other requirement of the Act.
    With respect to the 1-hour ozone NAAQS, the Louisville area met the 
standard in 1999 and was redesignated to attainment for the 1-hour 
ozone standard on October 23, 2001 (66 FR 53665). As part of its 
redesignation, the area must have a plan to maintain the standard, 
called a ``maintenance plan.'' Under section 175A(a) of the Act, 
emission reduction programs in a maintenance plan for a NAAQS must be 
continued unless a demonstration is made that the future, projected 
emissions for the area, without credit for reductions due to the 
emission reduction program being removed, remain at or below the 
baseline attainment level of emissions identified in the maintenance 
plan. If such a demonstration is made, that program is eligible for 
removal from the SIP. However, section 175A(d) of the Act requires that 
available contingency measures in the maintenance plan include all 
measures in the SIP for the area before that area was redesignated to 
attainment. Since the VET Program was in the SIP prior to redesignation 
to attainment for ozone, the VET Program must be listed in the 
contingency portion of the 1-hour ozone maintenance plan as required by 
section 175A(d). Because Jefferson County was redesignated to 
attainment for CO prior to the passage of the 1990 Clean Air Act 
Amendments, which created section 175A, the maintenance plan 
requirements described above do not apply to Jefferson County for CO.
    The District was able to demonstrate continued maintenance of the 
1-hour ozone standard for the requisite timeframe without taking credit 
for reductions from the Jefferson County VET Program, as summarized in 
Section III below. This demonstration of maintenance is further 
described in the rule proposing approval of revisions to the Louisville 
1-Hour Maintenance Plan published January 5, 2004, column 1, at page 
number 69 FR 303.
    In addition, provisions in EPA's I/M rule, set forth in 40 CFR 
section 51.372(c) under the heading ``Redesignation requests,'' apply 
to the Jefferson County VET Program situation. These provisions were 
published January 5, 1995, at 60 FR 1735. The provisions indicate that 
certain areas seeking redesignation may submit only the authority for 
an I/M program rather than an implemented program in satisfaction of 
the applicable I/M requirements. Under these I/M rule provisions, a 
basic I/M area (i.e., was required to adopt a basic I/M program) which 
has been redesignated to attainment for the 1-hour ozone NAAQS can 
convert the I/M program to a contingency measure as part of the area's 
1-hour ozone maintenance plan, notwithstanding the new antibacksliding 
provisions in EPA's recent 8-hour ozone implementation rule. A basic I/
M area which is designated nonattainment for the 8-hour ozone NAAQS, 
and which is not required to have an I/M program based on its 8-hour 
ozone designation, continues to have the option to move its I/M program 
to a contingency measure as long as the 8-hour nonattainment area can 
demonstrate that doing so will not interfere with its ability to comply 
with any NAAQS or any other applicable Clean Air Act requirement 
pursuant to section 110(l) of the Act. For further details on the 
application of 8-hour ozone anti-backsliding provisions to basic I/M 
programs in 1-hour ozone maintenance areas, please refer to the May 12, 
2004, EPA Memorandum from Tom Helms, Group Leader, Ozone Policy and 
Strategies Group, Office of Air Quality Planning and Standards, and 
Leila H. Cook, Group Leader, State Measures and Conformity Group, 
Office of Transportation and Air Quality, to the Air Program Managers, 
the subject of which is ``1-Hour Ozone Maintenance Plans Containing 
Basic I/M Programs.'' A copy of this memorandum may be obtained at 
http://www.epa.gov/ttn/oarpg/t1pgm.html or on RME, EPA's electronic 
public docket and comment system at http://docket.epa.gov/rmepub/. To 
view the memorandum

[[Page 56]]

posted in the docket for this action in RME, please follow the 
instructions under number 2 of the ADDRESSES section of this document.

III. What Is EPA's Analysis of Kentucky's Demonstration of No 
Interference With the 1-Hour Ozone and CO NAAQS?

    The September 22, 2003, Kentucky SIP revision seeking removal of 
the VET Program includes an evaluation for the 1-hour ozone and the CO 
NAAQS of the potential emission impacts associated with increased 
emissions that would result from removal of the Jefferson County VET 
Program as an active control measure in the SIP. For the 1-hour ozone 
NAAQS, the submittal provides VOC and NOX emission inventory 
data for the Kentucky portion of the Louisville MSA (i.e., Jefferson 
County and portions of Bullitt and Oldham Counties) for 1999, the year 
the area met the 1-hour ozone NAAQS, and projected emission inventories 
for 2002, 2005, 2008, and 2012. The projected mobile source emission 
inventories for 2005, 2008, and 2012 do not include emission reduction 
credits from either the operation of Jefferson County's VET Program 
after 2003, or the Indiana I/M Program after 2006. As shown in Tables 1 
and 2 below, projected, total VOC and NOX emissions for 
2002, 2005, 2008, and 2012 for the Kentucky portion of the Louisville 
1-Hour Ozone Maintenance Area all fall below the emissions levels in 
1999, when the area met the 1-hour standard. These VOC and 
NOX emission totals include emissions from the point, area, 
mobile, and nonroad source categories. Thus, the area demonstrates 
continued maintenance of the 1-hour ozone NAAQS without the Jefferson 
County VET Program. These data and supporting documentation were also 
provided in the June 27, 2003, revision to the maintenance 
demonstration for the Kentucky portion of the Louisville 1-Hour Ozone 
Maintenance Plan. For additional information and EPA's rationale for 
approving this maintenance plan update, please refer to EPA's proposed 
approval of this revision published January 5, 2004 (69 FR 302).

   Table 1.--Kentucky Portion of the Louisville 1-Hour Ozone Maintenance Area Total VOC Emissions (in Tons per
   Summer Day) Without Emission Reduction Credits for VET Program After 2003 or Indiana I/M Program After 2006
----------------------------------------------------------------------------------------------------------------
                     County                          1999         2002         2005         2008         2012
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Jefferson......................................        97.29        89.76        86.01        80.74        75.36
Bullitt portion................................         4.22         3.93         3.78         3.69         3.54
Oldham portion.................................         3.58         3.28         3.13         3.03         2.91
                                                --------------
    Totals for KY portion of the area..........       105.09        96.97        92.92        87.46        81.81
1-Hour Ozone Maintenance Plan decrease from      ...........         8.12        12.17        17.63        23.28
 1999..........................................
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   Table 2.--Kentucky Portion of the Louisville 1-Hour Ozone Maintenance Area Total NOX Emissions (in Tons per
   Summer Day) Without Emission Reduction Credits for VET Program After 2003 or Indiana I/M Program After 2006
----------------------------------------------------------------------------------------------------------------
                     County                          1999         2002         2005         2008         2012
----------------------------------------------------------------------------------------------------------------
Jefferson......................................       217.71       188.24       123.21       109.23        92.82
Bullitt portion................................         3.87         3.83         3.59         3.20         2.65
Oldham portion.................................         3.30         3.26         3.06         2.78         2.34
                                                --------------
    Totals for KY portion of the Area..........       224.88       195.33       129.86       115.21        97.81
1-Hour Ozone Maintenance Plan decrease from      ...........        29.55        95.02       109.67       127.07
 1999..........................................
----------------------------------------------------------------------------------------------------------------

    The September 22, 2003, submittal also demonstrates through ``hot 
spot'' modeling that Jefferson County continues to maintain the CO 
NAAQS without any credit for the VET Program. Table 3 below shows the 
results of hot spot modeling using the CAL3QHC model for six, 
signalized intersections to determine air quality impacts from CO 
associated with traffic growth for 2008, 2012, and 2020. Using 
conservative assumptions to reflect worst case conditions, the modeling 
results show continued maintenance of the CO NAAQS through 2020. The 8-
hour CO NAAQS is nine parts per million (ppm).

             Table 3.--Jefferson County CO Hot Spot Modeling
------------------------------------------------------------------------
                                           CO emissions (in ppm)
           Intersection           --------------------------------------
                                       2008         2012         2020
------------------------------------------------------------------------
Hurstbourne Parkway and                   7.36         7.76         8.28
 Shelbyville Road................
Hurstbourne Parkway and                   6.20         6.32         6.50
 Taylorsville Road...............
Shelbyville Road and Bowling              6.20         6.52         6.90
 Boulevard.......................
Shelbyville Road and Oxmoor Lane.         6.94         7.10         7.32
Breckenridge Lane and Dutchmans           6.32         6.44         6.64
 Lane............................
Preston Highway and Outer Loop...         7.84         8.00         8.24
------------------------------------------------------------------------


[[Page 57]]

    As further support of the CO hot spot modeling, Kentucky's 
submittal provides CO emission level data for Jefferson County based on 
the use of MOBILE6 with the most recent roadway planning assumptions 
and the assumption that the VET Program is not operating after November 
1, 2003. The data in Table 4 below show a continuous decline in CO 
mobile source winter emissions from 1999 through 2020. Both the County 
CO hot spot data and the mobile emission levels show that closure of 
the VET Program will not interfere with maintenance of the CO NAAQS.

                          Table 4.--Jefferson County CO Mobile Source Winter Emissions
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             CO emissions in tons per day (tpd)                   1999         2008         2012         2020
----------------------------------------------------------------------------------------------------------------
Jefferson County CO Mobile Source Winter Emissions..........       664.66       497.34       453.89       404.12
Reduction from 1999.........................................  ...........       167.32       210.77       260.54
----------------------------------------------------------------------------------------------------------------

IV. What Is EPA's Analysis of Kentucky's Demonstration of 
Noninterference With the 8-Hour Ozone and Fine Particulate Matter 
NAAQS?

A. What Criteria Must Be Met?

    On October 27, 2003, EPA sent a letter to Kentucky affirming that 
movement of the VET Program to a contingency measure would not 
interfere with the 1-hour ozone and CO NAAQS. The letter also requested 
additional information to show that removing the VET Program as an 
active control measure from the SIP would not interfere with the new 8-
hour ozone and fine particulate matter standards. For these reasons, 
Kentucky submitted the supplemental information providing a 
demonstration that removal of the VET Program will not interfere with 
attainment of the 8-hour ozone and PM2.5 NAAQS.
    In a May 11, 2004, letter from EPA to Louisville's Assistant County 
Attorney, EPA provided its interpretation of section 110(l) of the 
Clean Air Act as guidance in relation to an area such as Jefferson 
County that does not yet have an attainment demonstration for the new 
8-hour ozone and fine particulate matter NAAQS. The May 11, 2004, 
letter notes that a strict interpretation of the requirement in section 
110(l) of the Act would allow EPA to approve a SIP revision removing a 
SIP requirement only after determining based on a completed attainment 
demonstration that it would not interfere with applicable requirements 
concerning attainment and reasonable further progress. However, EPA 
recognizes that prior to the time areas are required to submit 
attainment demonstrations for the new NAAQS, this strict interpretation 
could prevent any changes to SIP control measures. EPA does not believe 
this strict interpretation is necessary or appropriate.
    Prior to the time that attainment demonstrations are due for the 8-
hour ozone and PM2.5 standards, it is unknown what suite of 
control measures are needed for a given area to attain these standards. 
During this period, to demonstrate no interference with any applicable 
NAAQS or requirement of the Clean Air Act under section 110(l), EPA 
believes it is appropriate to allow states to substitute equivalent 
emission reductions to compensate for the control measure being moved 
from the active portion of the SIP to the contingency provisions, as 
long as actual emissions in the air are not increased. EPA concluded 
that preservation of the status quo air quality during the time new 
attainment demonstrations are being prepared will prevent interference 
with the states' obligations to develop timely attainment 
demonstrations. ``Equivalent'' emission reductions means reductions 
which are equal to or greater than those reductions achieved by the 
control measure to be removed from the active portion of the SIP. To 
show the compensating, emission reductions are equivalent, modeling or 
adequate justification must be provided. (See EPA memorandum from John 
Calcagni, Director, Air Quality Management Division, to the Air 
Directors in EPA Regions 1-10, September 4, 1992, pages 10 and 13.) As 
stated in the May 11, 2004, letter referenced earlier, the 
compensating, equivalent reductions must represent actual, new emission 
reductions achieved in a contemporaneous time frame to the termination 
of the existing SIP control measure, in order to preserve the status 
quo level of emissions in the air. In addition to being 
contemporaneous, the equivalent emissions reductions must also be 
permanent, enforceable, quantifiable, and surplus to be approved into 
the SIP.
    Likewise, the achievement of equivalent emission reductions that 
meet the above criteria will satisfy any applicable requirements of 
section 193 of the Act, the General Savings Clause, which involves 
control requirements in effect prior to November 15, 1990.

B. What Is EPA's Analysis of Whether the Proposed Reductions Meet the 
Criteria of Permanent, Enforceable, Quantifiable, Surplus, Equivalent 
and Contemporaneous?

    The May 26, 2004, supplemental package proposes for EPA approval 
compensating, equivalent emission reductions for the Jefferson County 
VET Program from the Kosmos Cement Company located in Jefferson County. 
The package provides an amended Board Order with Kosmos which reduces 
the Kosmos cement kiln's NOX emission rate currently in the 
Kentucky SIP from 6.6 down to 4.755 pounds per ton of clinker produced 
(pptcp) by the kiln, based upon a rolling 30-day average. The following 
is a description of how the emission reductions at Kosmos meet the six 
criteria of permanent, enforceable, quantifiable, surplus, 
contemporaneous, and equivalent.
    1. Permanent: The emission reductions at Kosmos are made permanent 
through the lowering of the facility's permitted NOX 
emission rate from 6.6 to 4.755 pptcp, based upon a rolling 30-day 
average. This new emission rate of 4.755 pptcp NOX is 
reflected in the Louisville Metro Air Pollution Control Board Order 
signed and effective in the District May 3, 2004. A Board Order is a 
regulatory instrument adopted by an air pollution control board which 
specifies air pollution control limits or requirements for a specific 
source or company. Approval of the SIP revision will make this order a 
portion of the federally enforceable Kentucky SIP.
    2. Enforceable: The NOX emission rate change for Kosmos 
is enforceable by the District through the May 3, 2004, Board Order 
and, upon final approval into the Kentucky SIP, will be enforceable by 
the EPA, as of the effective date of the final rulemaking.
    3. Surplus: The NOX emission reductions at Kosmos, as 
reflected in the emission rate reduction to 4.755 pptcp of 
NOX, are surplus for two reasons. The

[[Page 58]]

emission rate reduction is below what is already required in the 
Jefferson County portion of the Kentucky SIP, and the reduction is not 
from a Federal Control Measure that would occur without any State or 
local action. The new emission rate of 4.755 NOX pptcp is a 
reduction below the current, SIP-approved NOX emission rate 
requirement for Kosmos' cement kiln of 6.6 pptcp based upon a 30-day 
rolling average. This existing 6.6 pptcp rate was established to meet 
reasonably available control technology (RACT) requirements after the 
facility had made some modifications. EPA approved the 6.6 pptcp rate 
as a source-specific SIP revision to the Kentucky SIP on October 23, 
2001 (66 FR 53665). Also, the current emission rate of 6.6 
NOX pptcp for Kosmos' cement kiln matches the standard for 
cement kilns set forth in the Kentucky SIP regulation 401 KAR 51:170, 
``NOX requirements for cement kilns,'' that was established 
to meet EPA's NOX SIP Call requirements and was approved by 
EPA on April 11, 2002 (67 FR 17624). EPA's NOX SIP Call is a 
Federal Control Measure which establishes NOX reduction 
requirements for cement kilns beginning in 2004 as well as requirements 
for other source categories. EPA assumed an average 30 percent 
NOX reduction from cement kilns in states' NOX 
budgets. Kosmos' existing 6.6 pptcp limit reduces NOX by 
greater than 30 percent from projected 2007 baseline emissions. (See 
EPA's rule published April 11, 2002 at 67 FR 17624.) Thus, the new 
4.755 pptcp rate will provide reductions above and beyond those assumed 
to meet the NOX SIP Call.
    4. Quantifiable: The emission rate change for Kosmos meets the 
criterion for quantifiable as the net emissions decrease from the 
emission rate limit change may be calculated as follows.
    The change in the NOX emission rate: 6.6 pptcp (current 
SIP rate)-4.755 (proposed rate) = 1.845 pptcp. The operating rate of 
the cement kiln is 4700 tons of clinker produced per day. The reduction 
of NOX by changing the emission rate of Kosmos' cement kiln 
is: (1.845 pptcp) x (4700 tons of clinker produced per day) = 8672 
pounds per day of NOX.
    5. Contemporaneous: While ``contemporaneous'' is not explicitly 
defined in the Clean Air Act, a reasonable interpretation is to enact 
the compensating, equivalent emissions reductions in this case well 
within one year (prior to or following) the cessation of the 
substituted control measure. The emission reductions at Kosmos are 
contemporaneous to the closing of the VET Program, which ceased 
operating as of November 1, 2003. Kosmos made changes in its operating 
procedures at the cement kiln beginning in March of 2003, which 
resulted in reductions of NOX. This change occurred eight 
months prior to the closing of the VET Program. The May 26, 2004, 
submittal documents that the operating procedure changes at Kosmos 
resulted in 30-day rolling averages ranging from 2.1 to 4.1 
NOX pptcp during the April to December 2003 timeframe. 
Enacting the equivalent reductions at Kosmos prior to (rather than 
after) the cessation of the VET Program provides additional assurance 
that there is no net emissions increase to the air for any period of 
time. The District issued a May 3, 2004, Board Order making permanent 
and enforceable the lowered NOX emission rate of 4.755 
pptcp.
    6. Equivalent: To demonstrate that Kosmos' NOX emission 
reductions, as reflected in the facility's emission rate change from 
6.6 to 4.755 NOX ppctp, provide the equivalent benefit of 
the emission reductions achieved by the VET Program, the District first 
identified what emissions reductions were achieved by the VET Program 
for a particular year. The VET Program reduces emissions of VOC, 
NOX, and CO. VOC and NOX are contributors 
(``precursors'') to the formation of ground-level ozone and, to a 
lesser extent, fine particulate matter. Thus, to demonstrate equivalent 
emissions reductions for the 8-hour ozone and PM2.5 NAAQS, 
VOC and NOX need to be considered, whereas CO reductions are 
not relevant for this demonstration.
a. Selection of the Year 2005 To Estimate Emission Increases From 
Closure of the VET Program
    The District selected the year 2005 to calculate what the VOC and 
NOX emission increases will be without the VET Program 
because the District had already developed VOC and NOX 
emission projections data for that year for the Kentucky portion of the 
Louisville 1-Hour Ozone Maintenance Plan submitted to EPA on June 27, 
2003. Although the VET Program ended as of November 1, 2003, the 2003 
ozone season had already ended by that time. Thus, emission increases 
from the cessation of the VET Program would begin to affect ozone 
formation for the 2004 ozone season. Also, as described in detail in 
the next subsection below, the District demonstrated that the year 2005 
provides the greatest number of VET Program emissions that need to be 
replaced. Thus, EPA believes that analyzing emissions for 2005 is 
representative of the 2004 period when emissions from the loss of the 
VET Program would first impact the area.
    In addition to the reasons listed above, the EPA believes the year 
2005 provides a conservative estimate of the amount of VET Program 
emissions which need to be compensated for several reasons. One reason 
is due to how the MOBILE model operates. The MOBILE model estimates 
emissions from vehicles on an annual basis. The model uses either 
January or July to estimate vehicle emissions. July would be selected 
as the month to predict vehicle emissions since July falls during the 
ozone season. When the model is run for 2005, the timeframe evaluated 
is from July 2004 to June 2005. During this timeframe, no vehicles were 
tested by the VET Program and thus, higher vehicle emissions are 
predicted. Running the MOBILE model for 2004 would cover July 2003 to 
June 2004, which would capture the emission benefits from vehicles 
tested during the July 1 to October 31, 2004, timeframe, prior to 
cessation of the program. Thus, 2004 vehicle emission MOBILE6 estimates 
would be slightly lower due to credit from the four months of the VET 
Program's operation from July 1 to October 31, 2004. The higher vehicle 
emission estimates mean greater compensating, equivalent reductions are 
needed to replace the VET Program.
    Another reason that 2005 is a conservative estimate of the VET 
Program emissions which need to be replaced is that the VET Program 
ceased operation as of November 1, 2003, after the 2003 ozone season, 
which runs from March to October. Thus, the Program continued to 
provide emission reduction benefits for the 2003 ozone season. While 
the year 2004 could be used to show the increase in emissions from the 
VET Program, 2005 shows a greater increase in emissions due to 
cessation of the VET Program and thus, demands more compensating 
emissions. A likely cause for this increase is that the year 2004 still 
reflects residual emission reduction benefits due to changes to 
vehicles made within the past several years, depending on the type of 
repair done and the length of time since the repair was completed. 
These residual benefits are expected to taper off over time.
    Further support for the use of 2005 as a more conservative choice 
to estimate VET Program reductions is that the vehicle miles traveled 
(VMT) in 2005 will be slightly higher than in 2004, which yields 
greater vehicle emissions when input into the MOBILE model without the 
VET Program in operation than if the emissions were calculated using 
2004 VMT data. The MOBILE model is used to calculate the emissions from 
onroad mobile sources, e.g., cars

[[Page 59]]

and trucks. Higher vehicle emissions predicted from the MOBILE model 
require greater compensating, equivalent emission reductions to replace 
the VET Program.
b. Methodology for Substituting NOX for VOC To Determine All 
``NOX-Equivalent'' Needed To Replace the VET Program
    Due to closure of the VET Program, mobile source emissions in the 
year 2005 are predicted to increase by 1.89 tpsd of VOC and 1.68 tpsd 
of NOX. To determine the number of VOC and NOX 
emissions needing to be replaced, the District converted all the VOC 
into NOX using a ratio developed in accordance with the 
August 5, 1994, EPA memorandum, ``Clarification of Policy for Nitrogen 
Oxides (NOX) Substitution,'' from John Seitz, Director, 
Office of Air Quality Planning and Standards. This memorandum pertains 
to EPA's ``NOX Substitution Guidance'' (December 1993). The 
guidance acknowledges that controlling only VOCs may not be the most 
effective approach in all areas for attaining the ozone standard and 
allows for substitution of NOX for VOC emission reductions, 
contingent upon approval by EPA. The 1994 memorandum further clarifies 
that NOX for VOC substitution is a viable approach prior to 
completing modeling to support an area's attainment demonstration.
    To determine the amount of NOX that will provide 
equivalent ozone reduction benefits as VOC, EPA's NOX 
Substitution Guidance (December 1993) allows, on a percentage basis, 
substitution of NOX for VOC, that is a 1% reduction in VOC 
requires at least a 1% reduction of NOX. In the May 26, 
2004, supplement, the District calculated NOX/VOC ratios for 
2005, 2008, and 2012, because the District had emission inventory 
projections for these years. In contrast, the 2004 emission levels used 
for the NOX/VOC ratio were developed by interpolating 
between the 2002 and 2005 emission inventory projections after 
subtraction of 2004 NOX reductions due to NOX SIP 
call requirements. To calculate the NOX/VOC ratio for a 
given year, the total NOX emissions are divided by the total 
VOC emissions from all source categories in Jefferson County for that 
year. For example, in 2004, the total emissions from Jefferson County 
sources are estimated at 95.62 tpsd VOC and 134.36 tpsd NOX. 
The District calculated that, on a percentage basis, the projected 
ratio of NOX to VOC emissions from all source categories in 
Jefferson County for 2004 is 1.41 using predicted 2004 total emissions 
(i.e., 134.36 tpsd NOX divided by 95.62 tpsd VOC). This 
ratio means that reducing 1.41 tpsd of NOX is equivalent, in 
terms of ozone formation, to reducing 1.00 tpsd of VOC. Table 5 lists 
the ratios that the District calculated and provided to EPA.

                                            Table 5.--NOX/VOC Ratios
----------------------------------------------------------------------------------------------------------------
    Emissions from all source categories in
            Jefferson County (tpsd)                  2002         2004         2005         2008         2012
----------------------------------------------------------------------------------------------------------------
VOC............................................        96.97        95.62        92.92        87.46        81.81
NOX............................................       195.33       134.36       129.86       115.21        97.81
NOX/VOC........................................         2.01         1.41         1.40         1.32         1.20
----------------------------------------------------------------------------------------------------------------

    The District chose the 2004 NOX/VOC ratio to convert 
into NOX the projected 2005 VOC emission increases from 
closure of the VET Program because this provides the largest amount of 
emissions to substitute for the VET Program as compared to using 
NOX/VOC ratios for 2005, 2008, or 2012, with the respective 
emission projections for those years. Please refer to Table 6 below for 
a comparison of how the NOX/VOC ratios for years 2004, 2005, 
2008, and 2012 as applied to these same years (with the exception of 
2004) affect the amount of resulting NOX-equivalent to be 
replaced by converting all VOC reductions from the VET Program to 
NOX.
    As shown in Table 6 below, to calculate the amount of emission 
reductions as NOX needed to substitute for the VET Program, 
the District multiplied the 2004 NOX/VOC ratio of 1.41 by 
the 2005 VOC emissions predicted to increase from closure of the VET 
Program, i.e., 1.89 tpsd VOC, which totals 2.66 tpsd NOX. 
The 2.66 tpsd of NOX equivalent for VOC in 2005 is then 
added to the expected increase in 2005 of NOX emissions due 
to closure of the VET Program, i.e., 1.68 tpsd of NOX in 
2005, yielding the equivalent of 4.34 tpsd of NOX, or 8,671 
pounds per summer day (ppsd), which needs to be compensated by an all-
NOX control strategy substitution. As described earlier for 
the Quantifiable criterion, Kosmos' NOX reductions remove 
8,672 ppsd of NOX from the air. Therefore, based on this 
conservative equivalency analysis, the proposed NOX 
reductions from Kosmos are equivalent, in terms of reduced ozone 
formation benefits, to the VOC and NOX reductions from the 
VET Program.
    EPA believes that substituting NOX reductions from 
Kosmos for both VOC and NOX reductions from the VET Program 
continues to provide equivalent, if not better, air quality protection 
for Jefferson County due to significant contributions of VOCs from 
biogenic sources. Since both VOC and NOX are needed under 
certain conditions to create ground-level ozone, and VOCs are abundant 
in areas with many trees and other vegetation such as in Kentucky, 
further reductions of NOX limit the ability for ozone to 
form in this area. In addition, VOC and NOX, the relevant 
pollutants controlled by the VET Program, are contributing precursors 
to the formation of PM2.5 and thus, EPA concludes that these equivalent 
reductions also demonstrate non-interference with the PM2.5 NAAQS.

                        Table 6.--Total NOX-Equivalent Increase From VET Program Closure
----------------------------------------------------------------------------------------------------------------
                                                    2005w/2004      2005w/2005      2008w/2008      2012w/2012
                                                   NOX/VOC ratio   NOX/VOC ratio   NOX/VOC ratio   NOX/VOC ratio
----------------------------------------------------------------------------------------------------------------
VOC increase (tpsd).............................            1.89            1.89            1.80            1.65
VOC increase (ppsd).............................        3,780           3,780           3,600           3,300
VOC as NOX (tpsd)...............................            2.66            2.64            2.37            1.97
VOC as NOX (ppsd)...............................        5,311           5,283           4,742           3,945
NOX increase (tpsd).............................            1.68            1.68            1.87            2.13
NOX increase (ppsd).............................        3,360           3,360           3,740           4,260

[[Page 60]]

 
Total increase NOX + VOC as NOX (tpsd)..........            4.34            4.32            4.24            4.10
Total increase NOX + VOC as NOX (ppsd)..........        8,671           8,643           8,482           8,205
----------------------------------------------------------------------------------------------------------------

V. What Is EPA's Proposed Action?

    EPA is proposing to move Regulation 8.01, ``Mobile Source Emissions 
Control Requirements,'' Regulation 8.02, ``Vehicle Emissions Testing 
Procedure,'' and Regulation 8.03, ``Commuter Vehicle Testing 
Requirements,'' from the active control measure portion of the 
Jefferson County portion of the Kentucky SIP. These regulations will be 
moved to the contingency measures section of the Kentucky portion of 
the Louisville 1-Hour Ozone Maintenance Plan. EPA is also proposing to 
approve a source-specific SIP revision amending the NOX 
emission rate for Kosmos' cement kiln as adopted into the May 3, 2004, 
Board Order with the Kosmos Cement Company.

VI. Statutory and Executive Order Reviews

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), this 
proposed action is not a ``significant regulatory action'' and 
therefore is not subject to review by the Office of Management and 
Budget. 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 
proposed action merely proposes to approve state law as meeting Federal 
requirements and imposes no additional requirements beyond those 
imposed by state law. Accordingly, the Administrator certifies that 
this proposed rule will not have a significant economic impact on a 
substantial number of small entities under the Regulatory Flexibility 
Act (5 U.S.C. 601 et seq.). Because this rule proposes to approve pre-
existing requirements under state law and does not impose any 
additional enforceable duty beyond that required by state law, it does 
not contain any unfunded mandate or significantly or uniquely affect 
small governments, as described in the Unfunded Mandates Reform Act of 
1995 (Pub. L. 104-4).
    This proposed rule also does not have tribal implications because 
it will not have a substantial direct effect on one or more Indian 
tribes, on the relationship between the Federal Government and Indian 
tribes, or on the distribution of power and responsibilities between 
the Federal Government and Indian tribes, as specified by Executive 
Order 13175 (65 FR 67249, November 9, 2000). This action also does not 
have federalism implications because it does 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 (64 FR 43255, August 10, 1999). This action 
merely proposes to approve a state rule implementing a Federal 
standard, and does not alter the relationship or the distribution of 
power and responsibilities established in the Clean Air Act. This 
proposed rule also is not subject to Executive Order 13045 ``Protection 
of Children from Environmental Health Risks and Safety Risks'' (62 FR 
19885, April 23, 1997), because it is not economically significant.
    In reviewing SIP submissions, EPA's role is to approve state 
choices, provided that they meet the criteria of the Clean Air Act. In 
this context, in the absence of a prior existing requirement for the 
State to use voluntary consensus standards (VCS), EPA has no authority 
to disapprove a SIP submission for failure to use VCS. It would thus be 
inconsistent with applicable law for EPA, when it reviews a SIP 
submission, to use VCS in place of a SIP submission that otherwise 
satisfies the provisions of the Clean Air Act. Thus, the requirements 
of section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (15 U.S.C. 272 note) do not apply. This proposed rule does 
not impose an information collection burden under the provisions of the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Carbon monoxide, 
Intergovernmental relations, Nitrogen dioxide, Ozone, Particulate 
matter, Reporting and recordkeeping requirements, Volatile organic 
compounds.

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

    Dated: December 21, 2004.
J.I. Palmer Jr.,
Regional Administrator, Region 4.
[FR Doc. 04-28702 Filed 12-30-04; 8:45 am]
BILLING CODE 6560-50-P