[Federal Register Volume 70, Number 192 (Wednesday, October 5, 2005)]
[Proposed Rules]
[Pages 58119-58138]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-19994]



[[Page 58119]]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[R06-OAR-2005-TX-0018; FRL-7980-6]


Approval and Promulgation of Air Quality Implementation Plans; 
Texas; Revisions to the Ozone Attainment Plan for the Houston/
Galveston/Brazoria Nonattainment Area

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing to approve revisions to the State 
Implementation Plan (SIP) for the State of Texas as it applies to the 
Houston/Galveston/Brazoria (HGB) Ozone nonattainment area. These plan 
revisions result from more recent information on ozone formation in the 
Houston/Galveston area indicating that a combination of controls on 
oxides of Nitrogen (NOX) and highly reactive volatile 
organic compounds (HRVOCs) should be more effective in reducing ozone 
than the measures in the previously approved plan which relied almost 
exclusively on control of NOX. Approval of these revisions 
will incorporate these changes into the federally approved SIP.

DATES: Comments must be received on or before November 4, 2005.

ADDRESSES: Submit your comments, identified by Regional Material in 
EDocket (RME) ID No. R06-OAR-2005-TX-0018, by one of the following 
methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the on-line instructions for submitting comments.
     Agency Web site: http://docket.epa.gov/rmepub/ Regional 
Material in EDocket (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.
     U.S. EPA Region 6 ``Contact Us'' Web site: http://epa.gov/region6/r6coment.htm Please click on ``6PD'' (Multimedia) and select 
``Air'' before submitting comments.
     E-mail: Mr. Thomas Diggs at [email protected]. Please 
also cc the person listed in the FOR FURTHER INFORMATION CONTACT 
section below.
     Fax: Mr. Thomas Diggs, Chief, Air Planning Section (6PD-
L), at fax number 214-665-7263.
     Mail: Mr. Thomas Diggs, Chief, Air Planning Section (6PD-
L), Environmental Protection Agency, 1445 Ross Avenue, Suite 1200, 
Dallas, Texas 75202-2733.
     Hand or Courier Delivery: Mr. Thomas Diggs, Chief, Air 
Planning Section (6PD-L), Environmental Protection Agency, 1445 Ross 
Avenue, Suite 1200, Dallas, Texas 75202-2733. Such deliveries are 
accepted only between the hours of 8 am and 4 pm weekdays except for 
legal holidays. Special arrangements should be made for deliveries of 
boxed information.
    Instructions: Direct your comments to Regional Material in EDocket 
(RME) ID No. R06-OAR-2005-ST-0018. EPA's policy is that all comments 
received will be included in the public file 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 the disclosure of which is restricted by statute. Do not 
submit information through Regional Material in EDocket (RME), 
regulations.gov, or e-mail if you believe that it is CBI or otherwise 
protected from disclosure. The EPA RME website and the Federal 
regulations.gov 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 file 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 
Regional Material in EDocket (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 the official file which is 
available at the Air Planning Section (6PD-L), Environmental Protection 
Agency, 1445 Ross Avenue, Suite 700, Dallas, Texas 75202-2733. The file 
will be made available by appointment for public inspection in the 
Region 6 FOIA Review Room between the hours of 8:30 am and 4:30 pm 
weekdays except for legal holidays. Contact the person listed in the 
FOR FURTHER INFORMATION CONTACT paragraph below or Mr. Bill Deese at 
(214) 665-7253 to make an appointment. If possible, please make the 
appointment at least two working days in advance of your visit. There 
will be a 15 cent per page fee for making photocopies of documents. On 
the day of the visit, please check in at the EPA Region 6 reception 
area at 1445 Ross Avenue, Suite 700, Dallas, Texas.
    The State submittal is also available for public inspection at the 
State Air Agency listed below during official business hours by 
appointment: Texas Commission on Environmental Quality, Office of Air 
Quality, 12124 Park 35 Circle, Austin, Texas 78753.

FOR FURTHER INFORMATION CONTACT: Guy R. Donaldson, Air Planning Section 
(6PD-L), Environmental Protection Agency, Region 6, 1445 Ross Avenue, 
Suite 700, Dallas, Texas 75202-2733, telephone (214) 665-7242 fax 
number 214-665-7263; e-mail address [email protected].

SUPPLEMENTARY INFORMATION: Throughout this document wherever ``we,'' 
``us,'' or ``our'' is used, we mean the EPA.

Table of Contents

I. Background
    A. What Are the Actions Being Proposed Here?
    B. Why Control Ozone?
    C. What Does the Currently Approved SIP for HGB Contain?
    D. What Revisions to State Implementation Plan Are Being 
Considered Here?
    E. What General Criteria Must These Revisions Meet To Be 
Approvable?
II. Evaluation
    A. One Hour Attainment Demonstration
    1. What Modeling Approaches Were Used for This Attainment 
Demonstration?
    2. What Is a Photochemical Grid Model?
    3. What Episode Did Texas Choose To Model?
    4. How Well Did the Model perform?
    5. What Did the Results of Modeling Routine Emissions Show?
    6. What Did the Results of the Emission Event Modeling Show?
    7. How Did Texas Handle Questions About Emission Estimates?
    8. What Actions Are Being Taken To Improve Emissions Estimates 
of HRVOCs?
    9. What About Estimates of Less-Reactive VOC Emissions?

[[Page 58120]]

    10. What Additional Evidence Did Texas Provide?
    11. Is the One-Hour Attainment Demonstration Approvable?
    B. New Control Measures
    1. What Are the New Control Measures in these SIP revisions?
    2. What Are the Annual Cap and Short-Term Limit on HRVOC 
Emissions?
    3. How Are Annual Cap and Short-Term Limits Related?
    4. Can Reductions in Less-Reactive VOCs Be Made Instead of 
Reductions in HRVOCs?
    5. What Estimates of Flare Efficiency Are Made in the SIP 
Revision?
    6. How Has the Texas Leak Detection and Repair Program Been 
Strengthened?
    7. How Have the Benefits of the Leak Detection and Repair 
Program Been Projected?
    8. What Are the Requirements for Portable Gasoline Containers?
    C. Revised Control Measures
    1. What Control Measures Have Been Revised or Repealed?
    D. Reasonably Available Control Measures
    1. What Are the RACM Requirements?
    2. How Has Texas Insured With This Plan Revision That all RACM 
are Being Implemented?
    E. Section 110(l) Analysis
    1. What Does Section 110(l) Require?
    2. How Has Texas Shown These Revisions Do Not Interfere With 
Attainment of the 8-Hour Standard?
    3. What About Possible Interference With the 1-Hour Ozone 
Standard?
    4. How Has Texas Shown These Revisions do not Interfere With 
Rate of Progress?
    5. Do These Revisions Interfere With Attainment of other 
Standards Besides Ozone?
    6. Do the Revisions Interfere With any Other Applicable 
Requirements of the Act?
    F. Enforceable Commitments
    1. What Is an Enforceable Commitment?
    2. What Were the Enforceable Commitments in the 2001 Approved 
SIP and Have They Been Fulfilled?
    G. Motor Vehicle Emissions Budgets
    1. What Is a Motor Vehicle Emissions Budget and Why Is it 
Important?
    2. What Are the Motor Vehicle Emissions Budgets Being Proposed 
for Approval?
III. Statutory and Executive Order Reviews

I. Background

A. What Are the Actions Being Proposed Here?

    EPA is proposing to approve the following revisions to the approved 
1-hour ozone attainment plan for the HGB area:
     TCEQ's revised demonstration, submitted December 2004, 
that the 1-hour ozone standard will be achieved in 2007.
     The revised motor vehicle emissions budgets associated 
with the revised attainment demonstration.
     TCEQ's revised demonstration that all reasonably available 
control measures have been adopted for the HGB area.
     Revisions to satisfy the enforceable commitments contained 
in the previously approved SIP (November 2001, 66 FR 57160). With 
respect to its original enforceable commitment to reduce NOX 
emissions, TCEQ has instead substituted reductions in HRVOCs for a 
portion of these NOX reductions and shown that the HRVOC 
reductions are as effective in reducing ozone levels.
     Revisions to the industrial NOX rules submitted 
January 2003, which included several miscellaneous changes and the 
reduction in stringency from a nominal 90% to 80% control.
     Revisions to the Texas Inspection and Maintenance (I/M) 
rules that drop three counties from the I/M program. In addition, 
several miscellaneous changes are proposed for approval.
     Repeal of the vehicle idling rule.
     Repeal of the Small Spark Engine Operating Restrictions.
     Revisions to the Speed Limit Strategy.
     Revisions to the voluntary mobile emissions program 
(VMEP).
    To replace the above measures being repealed or relaxed, Texas has 
adopted the following new control measures:
     Annual Cap on HRVOC emissions.
     Hourly (short-term) limit on HRVOC emissions.
     Improved requirements for HRVOC fugitive emissions.
     Requirements for Portable Gasoline containers.

Separately, EPA has proposed or is proposing to approve the newly 
adopted measures. Comments on the proposed approval of the new control 
measures should be directed to these separate Federal Register actions. 
The actions addressed in this rulemaking in conjunction with the new 
HRVOC rules, if approved, will provide for timely attainment as 
demonstrated through the modeling analysis. In addition, Texas has 
shown that these revisions will not interfere with any applicable 
requirement concerning attainment and reasonable further progress, or 
any other applicable requirement of this Act. (Section 110(l) 
demonstration).

B. Why Control Ozone?

    Inhaling even low levels of ozone can trigger a variety of health 
problems including chest pains, coughing, nausea, throat irritation, 
and congestion. It can also worsen bronchitis and asthma and reduce 
lung capacity. EPA has established National Ambient Air Quality 
Standards (NAAQS) for ozone. The standard of 0.12 ppm averaged over a 
1-hour period was adopted in 1979. In July 1997, EPA adopted a revised 
standard of 0.08 ppm averaged over an 8-hour period. In the Phase I 
Implementation Rule (April 30, 2005, 69 FR 23951) for the 8-hour 
standard, EPA provided for revocation of the 1-hour standard for most 
areas including HGB on June 15, 2005. Also, EPA established anti-
backsliding provisions to insure that areas maintain the progress 
expected under the requirements of the 1-hour standard as areas 
transition to developing programs to meet the 8-hour standard.

C. What Does the Currently Approved SIP for HGB Contain?

    On November 14, 2001, EPA approved the 1-hour ozone attainment plan 
for the HGB nonattainment area. This plan relied primarily on 
reductions in emissions of NOX to project attainment. The 
plan included a wide variety of controls on NOX emissions 
including an approximately 90% reduction in industrial NOX 
emissions, vehicle inspection and maintenance in eight counties, and 
the Texas Emission Reduction Program (TERP). The plan, however, did not 
contain sufficient adopted control measures as needed to demonstrate 
attainment. Because the State had adopted NOX measures more 
stringent than any where else in the country and was unable to identify 
specific NOX measures by which to achieve all of the needed 
emission reductions, the State included an enforceable commitment to 
adopt rules to achieve the 56 tpd of additional emission reductions 
which were necessary to demonstrate attainment. The additional measures 
were to be adopted in two phases; measures to achieve 25% of the needed 
reductions were to be adopted by December 2002 with measures to achieve 
the remaining emission reductions to be adopted by May 2004. In 
addition, Texas committed to perform a mid-course review, evaluating 
the modeling, inventory data and other tools and assumptions used to 
develop the plan and make adjustments to the plan to provide for timely 
and cost effective attainment. If, based on the mid-course review, more 
or fewer NOX reductions were necessary, Texas committed to 
provide the revised analysis to EPA for review.
    Texas, however, was sued in State court on its plan for the Houston 
area. The litigants alleged that the controls on industrial 
NOX emissions of approximately 90% would not be effective 
and that instead the State should be controlling releases of HRVOCs. 
Texas entered into a settlement agreement with the litigants whereby 
one facet of the mid-course

[[Page 58121]]

review was accelerated to determine if the point source NOX 
controls could be relaxed and replaced with controls on HRVOCs. This 
study and any consequent rule changes were to be completed by December 
2002.

D. What Revisions to the State Implementation Plan Are Being Considered 
Here?

    The following submissions which impact the HGB attainment plan are 
being considered :
    January 28, 2003: This submission responded to the State's 
settlement agreement to provide an accelerated evaluation of whether 
the industrial NOX controls could be relaxed and controls on 
HRVOCs could be substituted. Based on the study, the commission adopted 
relaxed controls on NOX emissions from industrial sources 
and new controls on HRVOCs. Texas also adopted a number of minor 
revisions to the general VOC rules. Finally, the State also provided a 
demonstration that TERP emission reductions would be sufficient to 
achieve the 25% of the NOX reductions needed to demonstrate 
attainment (i.e., about 14 tpd).
    October 16, 2003: This submission delayed compliance for the I/M 
program in Chambers, Liberty and Waller Counties. (RME R06-OAR-2005-TX-
0035)
    October 6, 2004: This submission repealed the I/M program in 
Chambers, Liberty and Waller Counties.(RME R06-OAR-2005-TX-0035)
    November 16, 2004: This submission repealed a ban on morning 
operations of lawn service contractors.
    December 17, 2004: This submission was submitted to meet the 
State's commitment to provide a mid-course review SIP. Based on the 
updated analysis, the State further tightened controls on HRVOCs in 
Harris county and revised or repealed a number of NOX 
control measures including, the vehicle idling prohibition (Docket R06-
OAR-2005-TX-0013), the speed limit strategy, the voluntary mobile 
emissions program (VMEP) and the commitment to achieve NOX 
reductions reductions beyond the initial 25% provided in January 2003 
(i.e., revoked the State's commitment to achieve 42 tpd of the 
NOX reductions that were included in the enforceable 
commitment as part of the prior attainment demonstration).

E. What General Criteria Must These Revisions Meet To Be Approvable?

    To be approved, the revisions to the attainment demonstration must 
meet several requirements. First, the State submission must demonstrate 
that the revised plan, as a whole, will result in attainment of the 1-
hour as expeditiously as practicable but no later than 2007. This is 
necessary, even though the 1-hour standard was revoked on June 15, 
2005, because the approved SIP commits the State to adopt 56 tons/day 
of additional NOX reductions unless, based on the mid-course 
review analysis, the area can show attainment of the 1-hour standard by 
2007 with a different mix of emission reductions.\1\ In Section II.A. 
we discuss TCEQ's revised 1-hour attainment demonstration. Second, the 
measures in the revised control strategy must meet the requirements for 
being creditable under the Clean Air Act and must be permanent, 
surplus, quantifiable and enforceable and achieve the necessary amount 
of reductions. The new and revised measures are discussed in Section 
II.B. and II.C. Some of these control measures have been or are being 
reviewed in separately proposed rules. Before the revisions to the 
attainment plan can be finally approved, all of the control measures 
relied on in the attainment plan must also be approved. Third, the 
State must show that the revised control strategy includes all 
reasonably available control measures (RACM). This showing is discussed 
in Section II.D. Fourth, the State must show, as required by section 
110(l) of the Clean Air Act, that the revisions to the plan will not 
interfere with attainment or reasonable further progress or any other 
applicable requirement of the Act. Compliance with 110(l) is discussed 
in Section II.E. Finally, the State must show that it has met all of 
the enforceable commitments contained in the approved SIP. (Instead of 
meeting the enforceable commitment to achieve the remaining 42 tpd 
NOX reductions, the State has adopted controls on HRVOCs and 
submitted modeling to demonstrate that the 42 tons/day of 
NOX reductions is not necessary for the HGB area to attain 
by November 2007.) Enforceable commitments are discussed in Section 
II.F.

II. Evaluation

A. One Hour Attainment Demonstration

1. What Modeling Approaches Were Used for This Attainment 
Demonstration?
    As required by the Clean Air Act, Texas has used photochemical grid 
modeling in its demonstration that the control strategy for the HGB 
area will achieve attainment by 2007. Also, as allowed under EPA 
policy, TCEQ has introduced other evidence, referred to as weight of 
evidence, to supplement the modeling analysis. The modeling provided in 
the mid-course review SIP revision builds on modeling performed for the 
January 2003 SIP revision which TCEQ submitted in support of reducing 
the stringency of the industrial NOX rules and adopting 
measures for the control of HRVOCs.
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    \1\ In addition, EPA has retained the 1-hour attainment 
demonstration requirement as an applicable requirement under the 
Phase I rules antibacksliding provisions. See 40 CFR 51.900(f).
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    The SIP revision actually relies on two sets of modeling analyses. 
First, the SIP relies on modeling performed by the TCEQ that is 
intended to simulate the routine emissions that occur in the HGB area 
and determine the level of routine emissions that can be allowed in the 
area to provide for attainment. Second, the SIP relies on modeling that 
was provided through a collaborative effort (known as project H13) of 
the Houston Advanced Research Center, the TCEQ, the University of Texas 
and the University of North Carolina. The project H13 report was 
entitled, ``Variable Industrial VOC Emissions and Their Impact on Ozone 
Formation in the Houston Galveston Area,'' April 16, 2004. This second 
modeling effort was used to estimate the impact of non-routine emission 
events on ozone levels. This two pronged approach is consistent with 
observations that indicate that Houston's air quality problems stem 
from the combination of two phenomena, normal routine emissions and 
large non-routine releases of HRVOC emissions. For a more complete 
description of the modeling procedures and EPA's evaluation of these 
procedures, see the Technical Support Document (TSD) in the Docket for 
this action (RO6-OAR-2005-TX-0018).
2. What Is a Photochemical Grid Model?
    Photochemical grid models are the state-of-the-art method for 
predicting the effectiveness of control strategies in reducing ozone 
levels. The model uses a three-dimensional grid to represent conditions 
in the area of interest. In this case, TCEQ has developed a grid system 
that stretches from beyond Austin to the west, to Georgia to the east, 
to Nebraska to the north and into the Gulf of Mexico to the south. The 
model uses nested grid cells of 36 km on the outer portions, 12 km in 
east Texas and portions of nearby States and a 4 kilometer grid cell 
covering the HGB and Beaumont Port Arthur (BPA) areas. For more 
information on the modeling domain, please see the TSD. The model 
simulates the movement of air and emissions into and out of the three-
dimensional grid cells (advection and

[[Page 58122]]

dispersion); mixes pollutants upward and downward among layers; injects 
new emissions from sources such as point, area, mobile (both on-road 
and nonroad), and biogenic into each cell; and uses chemical reaction 
equations to calculate ozone concentrations based on the concentration 
of ozone precursors and incoming solar radiation within each cell.
    Air quality planners choose an historical episode of high ozone 
levels to apply the model. Running the model requires large amounts of 
data inputs regarding the emissions and meteorological conditions 
during an episode. Modeling to duplicate conditions during an 
historical episode is referred to as the base case modeling and is used 
to verify that the model system can predict the historical ozone levels 
with an acceptable degree of accuracy. If the model can predict the 
ozone levels in the base case, it can then be used to project the 
response of future ozone levels to proposed emission control 
strategies.
3. What Episode Did Texas Choose To Model?
    Texas chose an historical episode, August 19-September 6, 2000, 
that encompassed the time period of the Texas Air Quality Study (TxAQS) 
2000. During this study, researchers from around the country 
participated in an intensive study of ozone formation in the HGB area, 
collecting additional meteorological and chemical data. This study has 
provided a wealth of information to test the assumptions in the model. 
EPA believes that the extended episode from August 19-September 6, 
2000, is an acceptable episode for development of the 1-hour attainment 
plan. It encompasses 13 exceedance days and contains a variety of 
meteorological conditions which resulted in high concentrations of 
ozone in the area as measured on both a 1-hour and 8-hour basis.
4. How Well did the Model Perform?
    Model performance is a term used to describe how well the model 
predicts the ozone levels in an historical episode. As models have to 
make numerous simplifying assumptions and the system being modeled is 
very complex, model predictions will never be perfect. EPA has 
developed various diagnostic, statistical and graphical analyses that 
TCEQ has performed to evaluate the model's performance and determine if 
the model is working adequately to test control strategies. For a 
subset of days, August 25, 26, 29, 30, 31, September 1-4 and 6, TCEQ 
deemed the model's performance adequate for control strategy 
development to address routine emissions. EPA agrees that the overall 
model performance is adequate but notes that the model tends to under-
predict on high days and over-predict on low days raising some 
uncertainty in the control strategy modeling. At least part of the 
under prediction has been attributed to non-routine emissions not 
captured in the modeling. This is discussed further in the section on 
alternative design values. It is also worth noting that, to achieve 
adequate performance, TCEQ adjusted the amount of HRVOC emissions in 
the model above the reported emission inventory values based on ambient 
measurements which demonstrated that reported HRVOC emissions were 
underestimated. This adjustment is discussed in more detail in later 
sections.
5. What Did the Results of the Modeling of Routine Emissions Show?
    The results of modeling the revised control strategy are shown in 
Table 1.

----------------------------------------------------------------------------------------------------------------
                                                                                                  Modeled peak
                       Episode day                           Measured peak      Modeled peak      (future case
                                                                                 (base case)          \2\)
----------------------------------------------------------------------------------------------------------------
August 25................................................              194               156.5             121.6
August 26................................................              140               149.4             113.6
August 29................................................              146.7             151.2             113.6
August 30................................................              200.5             137.2             122.5
August 31................................................              175.5             173.0             147.6
September 1..............................................              163.7             136.7             119.5
September 2..............................................              125.5             152.7             128.6
September 3..............................................              127.2             139.3             115.0
September 4..............................................              145.0             158.0             125.2
September 6..............................................              156.0             152.9             125.1
----------------------------------------------------------------------------------------------------------------

    Table 1 shows that on all of the days except August 31, the modeled 
control strategy was predicted to bring the area under or very near the 
one-hour standard of 125 ppb. The modeling, however, incorporates only 
routine emissions in the future case and reported non-routine emissions 
in the base case. As will be discussed in more detail in later 
sections, TCEQ believes that large non-routine emission events not 
included in the modeling also contribute to high ozone levels in the 
HGB area. These non-routine emission events explain, in part, the 
model's under-prediction on several days such as August 25th, 30th, and 
September 1st.
---------------------------------------------------------------------------

    \2\ These values also do not include the impact of wildfires as 
discussed in the WOE section.
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    As discussed in the weight of evidence section regarding 
alternative design values, the TCEQ believes that without the influence 
of emission events, an alternative design value of 144 ppb can be 
estimated. If 144 ppb is a reasonable representation of the area's 
ozone levels due to routine emissions, then the modeling results in 
Table 1 indicate sufficient reductions in ozone levels due to routine 
events. In addition to the modeling results and the alternative design 
value approach which is explained later in this notice, TCEQ has 
presented other evidence to demonstrate that attainment will be 
reached. These additional demonstrations are included in the weight of 
evidence section.
    To address the part of the ozone levels due to non-routine 
emissions, TCEQ established a short term limit of 1200 lb/hr on 
emissions of HRVOCs. The development of this limit is discussed in the 
next section on emission event modeling. The purpose of this limit is 
to reduce the frequency of non-routine emission events sufficiently so 
that emission events impacting peak ozone levels will be reduced in 
frequency to less than 1 event per year and thus will not impact 
attainment of the 1-hour standard.
    We recognize that there is considerable uncertainty regarding the 
impact of emission events on peak ozone. As we discuss in the next 
section on emission event modeling, the project H13 study seems to 
indicate a smaller impact of emission events on peak ozone levels than 
the alternative design value approach. The projected smaller

[[Page 58123]]

impact could stem from the following reasons. First, the H13 study 
looked at the impact of emission releases after the institution of 
NOX controls, whereas the alternative design value analysis 
performed by TCEQ is based on historic data before the institution of 
controls. Thus, the impact of emission events in the past is likely to 
be larger than events in the future when there is less NOX 
with which to react. Second, the frequency of events was based only on 
detected and reported events. Past monitoring and reporting techniques 
may not have detected all events. The improved HRVOC reporting rules 
should help address this possible problem. Finally, project H13's 
assumptions regarding the frequency of events looked only at events 
occurring at the most sensitive times and location. Larger events 
occurring at slightly less sensitive times and locations could also be 
impacting peak ozone. On the other hand, it is likely that the 
alternative design value approach overstates the impact of emission 
events. Some of the rapid rises in monitored ozone that are filtered 
out in the alternative design value approach could be caused by narrow 
continuous plumes of ozone sweeping across a monitor as winds shift 
direction. Weighing the available information, EPA believes that the 
occurrence of emission events in the HGB area that are not included in 
the model contribute at least in part to the model's under prediction 
of some measured ozone levels. The short-term limit will address these 
non-routine emission events. In addition, the controls on routine 
emissions will provide the reductions in the ozone due to routine 
emissions necessary to reach attainment. In addition, Texas has 
considered other weight of evidence information indicating there will 
be more improvement in air quality than can be expected demonstrated by 
the modeling of routine emissions.
6. What Did the Results of the Emission Event Modeling Show?
    Traditionally ozone control plans have been based on the assumption 
that emissions for an area do not change significantly from day to day 
and differences in pollution levels are caused by changes in the 
meteorological conditions between days. This assumption has been 
reexamined for the Houston area because of the number of non-routine 
emissions that are reported in the Houston area from the refining and 
petrochemical industry.
    The project H13 report, ``Variable Industrial VOC Emissions and 
Their Impact on Ozone Formation in the Houston Galveston Area,'' April 
16, 2004, looked at the potential impact of emission releases in the 
area. It determined, by examining the TCEQ emission events data base 
and records of emissions from sources with monitors on flares and 
cooling towers, that ``variability in HRVOC emissions from point 
sources is significant and due to both variability in continuous 
emissions and discrete emission events.'' The area wide variability had 
the following characteristics:2-3 times per month HRVOC emissions 
variability > 10,000 lbs/hour,2-3 times per month HRVOC emissions 
variability 5,000-10,000 lbs/hour, daily HRVOC emissions variability > 
100 lbs/hour.
    Based on the above findings, the researchers then examined the 
impact that emissions variability could have on peak ozone levels by 
modeling the impact of emission events of various sizes at various 
locations and times. It was determined that an event of 1,000 lbs in 
the most sensitive area and during the most sensitive time could have a 
1-2 ppb impact on the peak ozone level within the fine grid modeling 
domain. Larger events would have correspondingly larger impacts on 
ozone levels. A 10,000 lb release at the most sensitive place could 
have a 10-20 ppb impact on ozone levels.
    The study, based on assumptions regarding the frequency of ozone 
conducive weather conditions, the time window most sensitive to 
releases and the location of most sensitive releases, presented the 
results of a Monte Carlo simulation to estimate the probability and 
expected magnitude of emission events that would impact peak ozone 
levels. The report states that if no actions were taken to reduce 
emissions variability, an air quality plan should anticipate that at 
least one event per year of 1,000 lbs would happen at the right time 
and the right place to impact peak ozone. Based on this finding, TCEQ 
adopted a short-term limit on HRVOC emissions designed to reduce the 
magnitude and frequency of emissions events. This is not to say that a 
1-2 ppb increase in ozone is not significant, but that with the short 
term limit, the occurrence of non-routine events at the times and 
places to impact peak ozone will be diminished sufficiently as not to 
impact attainment with the 1-hour ozone standard. Because facilities 
would be expected to take action to avoid events of 1,200 lbs/hr, the 
frequency of such events in the future will be lower than in the past 
and therefore less than 1 event per year impacting peak ozone should be 
expected. As discussed, some non-routine emissions, in the past, may 
not have been detected or reported in which case the actual frequency 
of events impacting peak ozone levels may be higher than projected in 
project H13, which as discussed previously, would help explain the 
under-prediction in the routine modeling. The improved monitoring 
requirements in chapter 115 should serve to prevent undetected HRVOC 
releases in the future and the specter of enforcement will cause 
facilities to take measures to prevent emission events. This is further 
discussed in the section on the short term and long term cap.
7. How Did Texas Handle Questions About Emission Estimates?
    TCEQ has followed acceptable procedures for the development of the 
base case inventory, following or building upon EPA guidance. Despite 
these efforts, one of the findings of the TexAQS 2000 study was that 
observed concentrations of certain compounds, especially light olefins 
such as ethylene and propylene, were much larger than represented in 
the reported emission inventory. This conclusion has been reviewed and 
documented in numerous scientific journals. For more information on 
these studies see the TSD.
    Emissions of these compounds principally come from the 
petrochemical industry. While it is clear that the reported emissions 
are too low, the ambient data does not show, however, which types of 
facilities and equipment are the source of the underestimated 
emissions. Various methods have been attempted to estimate the actual 
emissions of VOCs in the HGB area based on the available ambient 
measurements. TCEQ decided to use data from aircraft flights which 
indicated NOX emissions were similar to VOC emissions when 
considered on a molar basis. Therefore, TCEQ adjusted the molar 
emission rate of HRVOC emissions at each facility to match the 
NOX emission rate. This adjustment is more fully described 
in Chapter 3 of the SIP revision. The adjustment had the effect of 
substantially increasing the level of HRVOC emissions in the modeled 
emissions inventory. Prior to adjusting the inventory, the model did 
not perform well. Model performance was improved after the adjustment. 
The adjusted inventory became the basis for achieving acceptable model 
performance and for the control strategy development.
    Clearly, this type of across-the-board adjustment of emissions is 
not the preferable way to estimate emissions and makes control strategy 
targeting and development difficult. Unfortunately, using established 
methods for estimating source emissions has been

[[Page 58124]]

demonstrated to be inaccurate. As support for their adjustment 
approach, TCEQ points out the amount of emissions added to the 
inventory is corroborated by a study conducted by Environ ATop Down 
Evaluation of the Houston Emissions Inventory Using Inverse Modeling'' 
(Yarwood et al., 2003) which indicated that approximately the right 
amount of reactivity had been added to the model and that further 
adjustment was not warranted under the then-current model formulation.
    EPA believes that the approach Texas has taken to estimate the 
inventory of HRVOCs is acceptable given the information that is 
available. This conclusion is supported by the available aircraft data 
and Environ inverse modeling study. Clearly, this is an area that 
should be improved as the State develops future SIP revisions.
8. What Actions Are Being Taken To Improve the Emissions Estimates of 
HRVOCs?
    It was the consensus at a conference of emissions inventory experts 
held in Clear Lake, Texas in 2001, that the errors in the inventory 
were most likely from errors in the estimates of emissions from cooling 
towers, flares, fugitive emissions and start-up, shutdown and 
malfunction events. Texas has moved forward to improve the inventory of 
HRVOCs in all of these areas by requiring monitoring of cooling towers, 
flares, pressure relief devices and process vents in HRVOC service. 
This source monitoring, which will be in place by the end of 2006, 
should dramatically reduce the amount of error in the HRVOC inventory 
by more directly measuring both continuous emissions and emissions 
events. In addition, for all VOCs, Texas is now requiring that 
correlation equations be used for the estimation of fugitive emissions. 
This will reduce the amount of error in fugitive emission estimates.
9. What About Estimates of Less-Reactive VOC Emissions?
    Texas elected to adjust the reported emission rates of only HRVOCs. 
Other less-reactive chemicals are also released from flares, cooling 
towers, fugitive sources and during start up/shutdown and malfunction 
events and traditional emissions estimation techniques for less-
reactive VOCs are the same as those for HRVOC. Thus, it is reasonable 
to suspect that these chemicals are also under-represented in the 
inventory. If these chemicals are under-represented in the inventory, 
the degree of underestimation may be less than for HRVOCs. One reason 
is that the processes that emit HRVOCs, such as ethylene plants, are 
often under very high pressures and this may increase the degree of 
underestimation more than would occur for emissions in lower pressure 
processes as one would expect leaks under higher pressures would tend 
to release a greater mass of emissions than lower pressure leaks. Also, 
many less-reactive VOCs are much lower in volatility than the HRVOCs 
which could also serve to reduce the amount of emissions 
underestimation.
    There is some evidence from ambient measurements that the less-
reactive chemicals are underestimated in the emission inventory, but 
there are not yet the number of peer reviewed studies regarding these 
other VOCs that exist for HRVOCs making determination of appropriate 
adjustment factors problematic. Therefore, Texas chose not to adjust 
the reported inventory for the less-reactiveVOCs for the attainment 
demonstration modeling because of the lack of information regarding the 
appropriate level of emissions. TCEQ did conduct a study of ambient 
data, referred to in the SIP revision, indicating that emissions might 
be underestimated by a factor of 4.8. Based on this study, Texas 
performed a sensitivity run with the model to evaluate the impact 
potential errors in less-reactive VOC emissions might have on projected 
attainment. This sensitivity analysis indicated that the addition of 
less-reactive VOCs using a factor of 4.8 could have an impact of 2-29 
ppb on the peak ozone depending on the day. The performance of the 
model, however, was slightly worsened by the addition of the less-
reactive VOCs indicating that possibly too much reactivity had been 
added. Other analyses performed by the University of North Carolina 
(Role of Modeling Assumptions in Mid-Course Review, HARC 12.2004.8HRB, 
2005) adjusting only fugitive emissions of less-reactive VOCs by lower 
factors indicated no more than a 0.5 ppb increase in ozone levels. The 
main differences between the analyses were the assumptions regarding 
the amount of additional less-reactive VOCs and the amount of HRVOCs in 
the model.
    EPA is proposing to accept the attainment demonstration based on 
TCEQ's approach to less reactive VOCs, because of the uncertainty on 
what adjustments might be appropriate and what impact those adjustments 
might have on the model. We understand that TCEQ is continuing to 
evaluate ambient data to determine what adjustments to the inventory 
might be appropriate. Texas has also undertaken a stakeholder process 
to identify additional ways to improve the emissions inventory. This 
stakeholder process will be vital to the improvement of future SIP 
revisions. EPA expects that future SIPs revisions will be based on 
improved emissions inventories of both less-reactive VOCs and HRVOCs. 
We note that the move to require the correlation equations for the 
estimation of less-reactive VOC will serve to improve the estimate of 
fugitive emissions. Improvements to the emission estimates for cooling 
towers and flares in less reactive VOC service should also be 
considered. Roles should also be found for emerging remote sensing 
technologies that have been shown to detect leaks from sources which 
have not been traditionally considered such as barge hatches and 
fittings on floating roof storage tanks.
10. What Additional Evidence Did Texas Provide?
    The EPA's 1996 guidance entitled ``Guidance on Use of Modeled 
Results to Demonstrate Attainment of the Ozone NAAQS'' allows for the 
use of alternative analyses, called weight-of-evidence (WOE), to 
provide additional evidence that the proposed control strategy, 
although not modeling attainment, is nonetheless expected to achieve 
attainment by the attainment date. More specifically, the intent of 
this guidance was to be cognizant of the ozone NAAQS, which allows for 
the occurrence of some exceedances and to consider potential 
uncertainty in the modeling system. Thus, even though the specific 
control strategy modeling may predict some areas to be above the NAAQS, 
this does not necessarily mean that with the implementation of the 
control strategy, monitored attainment will not be achieved. As with 
other predictive tools, there are inherent uncertainties associated 
with modeling and its results. For example, there are uncertainties in 
the meteorological and emissions inputs and in the methodology used to 
assess the severity of an exceedance at individual sites. The EPA's 
guidance recognizes these limitations, and provides a means for 
considering other evidence to help assess whether attainment of the 
NAAQS is likely.
    Since the future control case modeling in the Texas SIP revision 
predicts some areas still exceeding the ozone NAAQS, the TCEQ elected 
to supplement the control strategy modeling with WOE analyses. Texas 
submitted the following analysis as WOE: August 31st rare meteorology; 
additional reductions that were not modeled; comprehensive ozone 
metrics and ambient trends; alternative design value and addressing 
short-term excursions; and unusual wildfire

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activity. Each of these is discussed below.

August 31st Rare Meteorology

    A combination of unusual meteorological conditions, extremely high 
temperatures and winds from the west, occurred on August 31, 2005. The 
record high temperatures recorded during the August 30-September 5, 
2000 period, with several days of maximum temperature >=104[deg]F 
(40[deg]C), have occurred in this geographic area only once before in 
the previous 57 years. On August 31st, the Houston Intercontinental 
Airport observed its highest temperature ever recorded in the month of 
August. High temperatures throughout the region led to higher than 
normal estimated biogenic emissions as the calculation of biogenic 
emissions is a strong function of temperature. Texas calculated that 
biogenic emissions within the HGB area were approximately 400 tons/day 
higher on August 31st than on August 25th which had more moderate 
temperatures. The elevated biogenic emissions in rural areas west of 
Houston were also high and, because of somewhat atypical winds from the 
west, available for transport into HGB. Texas used the source 
apportionment tool (OSAT) to analyze the contributing emissions to high 
ozone. The OSAT tool indicated that on the 31st, 78 ppb of the peak 
ozone could be attributed to biogenics as compared to 24 ppb that could 
be attributed to biogenics on the 25th. Other days of the episode also 
had high temperatures but only when combined with the west winds did 
the unusual impact of biogenics result. Texas points out that winds 
from the west are not typical of the days that have high ozone in 
Houston which usually occur on days with a flow reversal due to the 
land sea breeze effect.
    EPA agrees that the meteorological conditions on August 31st, which 
combined record high temperatures and winds from the west, were not 
typical of the conditions that lead to high ozone in the HGB area. The 
higher than normal biogenic emissions and winds from the west appear to 
have caused the 31st to be a day that did not respond well to the 
adopted control strategy which is weighted toward control of point 
sources that are predominant in eastern Harris County. This strategy 
has been effective in reducing ozone levels on other days of the 
episode. On the 31st, it appears much of the elevated ozone resulted 
from the increased biogenic emissions mixing with the NOX 
emissions present in the western portion of the HGB area. In this 
portion of the area, NOX emissions are primarily from on- 
and off-road mobile sources. To control ozone levels on days with 
routine conditions similar to August 31st would require substantial 
additional controls on mobile and area sources beyond the levels in the 
current strategy. But because the conditions on the 31st are atypical, 
we believe the HGB area can attain and a shift in strategy is not 
warranted.
    EPA's rules at 40 CFR 50, Appendix I permit the Regional 
Administrator to exclude values caused by stratospheric ozone intrusion 
or natural events in determining whether a NAAQS has been exceeded or 
violated. Additionally, EPA's long-standing policy and guidance on the 
handling of air quality data affected by exceptional or natural events 
permits special consideration to be given to recorded air quality 
measurements that are affected by unusual events under certain 
circumstances. See, e.g., ``Guidance on the Identification and Use of 
Air Quality Data Affected by Exceptional Events (July 1986)''. However, 
this guidance and other guidance distinguish between those types of 
events which directly produce emissions of a pollutant or its 
precursors and meteorological conditions that may affect concentrations 
of a pollutant emitted by sources. In particular, EPA guidance provides 
that no consideration is given in determining whether the NAAQS are 
exceeded or violated for such things as inversions, stagnation of air 
masses, high temperatures or lack of rainfall. This language has 
recently been codified in an amendment to section 319 of the Clean Air 
Act by P.L. 109-59 [SAFETEA]. However, a reasonable distinction may be 
drawn between the determination of whether NAAQS are exceeded or 
violated during times when such meteorological conditions exist and the 
meteorological and emissions data sets used in prospective 
demonstrations of attainment. In the latter, our policy has been for 
States to examine the typical conditions that lead to high ozone when 
modeling to determine whether their control strategies are sufficient 
to provide for attainment and maintenance of NAAQS. (U.S. EPA, (1996), 
``Guidance on Use of Modeled Results to Demonstrate Attainment of the 
Ozone NAAQS'', EPA-454/B-95-007.) In this case, the combination of 
conditions on the 31st are not typical and, in fact are quite rare. 
Therefore, EPA does not believe a shift in control strategy is 
warranted to address the unusual conditions on August 31st that are 
expected to occur so infrequently as to be unlikely to impact the 
area's ability to attain the NAAQS.

Additional Reductions Not Modeled

    The TCEQ believes potential additional emissions reductions will 
take place as a result of programs which have been and will be 
implemented in the HGB area but which are not reflected in the 
modeling. These reductions are not included in the modeling because, at 
present, these reductions are not quantifiable. Emission reductions 
that were not included in the model should improve the probability of 
HGB achieving attainment of the ozone NAAQS. First, as industries 
improve their monitoring capabilities and reduce their HRVOC emissions, 
the TCEQ anticipates collateral reductions of other VOCs that are 
present in HRVOC streams. For instance, the TCEQ developed regulations 
requiring owner/operator of flares in HRVOC service to install flow-
meters and comply with maximum tip velocity and minimum heat content 
requirements to ensure proper combustion by the flare. The tip velocity 
and heat content requirements apply at all times, not only when the 
flare is combusting HRVOC streams. Because many of these flares are 
also used for non-HRVOC streams, the regulations will often result in a 
reduction of less-reactive VOCs as well. Similarly, TCEQ has improved 
the leak detection and repair program for streams with more than 5% 
HRVOC content. When leaks from streams containing both HRVOCs and less 
reactive VOCs are repaired, other less-reactive VOCs will also be 
reduced. EPA agrees that these collateral reductions are likely to 
occur, but we believe the potential benefit of these unmodeled emission 
reductions has been partially lost because TCEQ allows emission 
reductions of less-reactive VOCs to offset small increases in HRVOCs 
using the Maximum Incremental Reactivity (MIR) scale (see Section 
II.B.4.). It is likely that some of the benefit will be realized 
because we do not expect that many companies will implement the 
additional monitoring of less reactive VOCs that would be necessary to 
establish baselines necessary to participate in the trading program. 
Also, under the TCEQ rules, less reactive fugitive emissions reductions 
cannot be credited toward HRVOC increases so collateral reductions in 
fugitive emissions should be fully realized. Another issue is the 
uncertainty in the less-reactive VOC inventory. As discussed in the 
section on emissions inventory uncertainty, it may be that less-
reactive VOCs are under-represented in the base case

[[Page 58126]]

inventory. Because of uncertainty about the inventory, these collateral 
reductions may not serve to reduce VOC emissions below what was assumed 
in the model. These collateral reductions will serve to reduce the 
degree of any potential under-representation in the inventory and thus 
reduce this area of uncertainty in the attainment demonstration.
    A second program that should result in additional reductions is the 
Environmental Monitoring Response System (EMRS). The TCEQ and the HRVOC 
regulated community have expanded the real-time ambient monitoring 
network of specific VOCs in the HGB area. A primary goal of EMRS is to 
prevent HRVOC emissions from creating situations that may lead to high 
levels of ozone. The near real time monitoring and response built into 
the program, which is further described in the TSD, will provide rapid 
feed back that should help identify and quickly correct the releases 
that can lead to high levels of ozones. EPA believes this added 
scrutiny of ambient VOC levels will result in improved overall program 
effectiveness, and could identify previously unknown sources of 
emissions that could be controlled to further reduce emissions.
    The TCEQ believes that additional reductions will also be achieved 
through its public web-based access to an emission event database 
incorporating lower reportable quantities of VOCs beyond just the 
HRVOCs of most concern. This database puts facility performance 
regarding unauthorized emission releases at the public's fingertips. As 
public awareness of the number and amount of these releases increases, 
industry is expected to respond in a manner similar to its response to 
the Toxics Release Inventory program which has resulted in large 
reductions in Toxic emissions. EPA agrees awareness and documentation 
of these events should prompt industry to begin to evaluate the causes 
of these events and institute an enhanced program to ensure that the 
potential of an event is significantly minimized.
    Texas believes the projected emissions for electric generating 
units outside the nonattainment area are probably too high. The current 
HGB SIP attainment demonstration modeling only excludes from the future 
case emissions projections for units that have formally indicated an 
intent to cease operation or that will be retired/reduced under agreed 
orders. The future projected case modeling inventory may include 
sources that will in fact be retired in (and/or prior to) 2007 as 
newer, more cost effective plants come online as Texas utilities 
continue the transition to a fully deregulated market. If this occurs, 
additional reductions could result which are not accounted for in the 
current SIP because the newer facilities would have lower emission 
rates. EPA agrees that deregulation will encourage the retirement of 
less efficient plants. Some of the benefit of this process may already 
be incorporated in the projections because Texas has projected newly 
permitted units will operate at 75% capacity in its projection of 
future emissions for electric utility emissions. It may be that newly 
permitted plants operate closer to full capacity as less efficient 
plants are curtailed or retired such that overall projected emission 
levels do not decrease as much. Some reductions should still occur 
because the newer plants will be cleaner than the older plants. A 
factor that weighs toward the projections of future emissions outside 
the nonattainment being too low is the findings of a report on 
emissions from offshore facilities too recent to be included in the SIP 
which indicates that projected emissions from these facilities may be 
significantly higher than what was modeled. Considering these factors 
together, EPA believes that NOX emissions outside the 
nonattainment area are slightly if at all less than projected and 
provide little additional evidence the area will attain.
    Texas also believes that NOX emission projections inside 
the nonattainment area are overestimated. Inside the eight county 
nonattainment area, the Mass Emissions Cap and Trade (MECT) program for 
NOX applies. For sources with permits in hand when the first 
cap allocations were established but which had not yet operated, TCEQ 
issued allowances based on the allowable emissions in the permit (so 
called ``allowable allowances''). Allowable allowances are those 
allocated to sources based on permits issued prior to the initiation of 
the MECT program, but not in operation for sufficient time to establish 
a baseline. During the interim period, until a baseline is established, 
sources operate complying with the ``allowable allowances.'' Then, 
based on the actual emissions during the baseline period, the State 
grants ``actual allowances.'' Because typically these facilities are 
not operating at their full allowable rates, but significantly below 
those values, a source will get fewer ``actual allowances'' than the 
``allowable allowances'' it was granted based on the permit. Therefore, 
as these newly permitted facilities establish baselines from which to 
grant ``actual'' allowances, the NOX cap in the HGB will 
decrease overall. The TCEQ examined the 2002 and 2003 permit database 
and found that only 33 to 39 percent of the allowable allowances for 
permitted facilities were used. The modeling was based on the 
``allowable allowances'' because it was not possible to predict how 
much lower the actual allowances will be than allowable allowances. The 
number of allowable allowances is not insignificant. The TCEQ registry 
currently carries 18,658 allowable allowances for 2007 which could 
translate into a potential additional NOX emissions 
reduction beyond what was modeled of up to 31 tpd if current trends for 
the conversion of allowable allowances to actual allowances continue. 
EPA agrees that as allowable allowances are converted to actual 
allowances, actual emissions will be less than the emissions that were 
modeled which should result in greater improvement in air quality than 
projected in the model.
    In summary, EPA believes that TCEQ has provided sufficient evidence 
that NOX emission levels will be lower than those projected 
in the model and thus, air quality improvements should be better than 
predicted by the model. We also believe the reductions that will occur 
due to collateral VOC reductions and brought about by the EMRS system 
and emission events data base will reduce the uncertainty in the model 
due to uncertainty in the VOC inventory.

Comprehensive Ozone Metrics And Ambient Trends

    Based on the ambient data, the 1-hour ozone design values for the 
HGB area have decreased significantly from 260 ppb in 1982 to 175 ppb 
in 2003. Texas used this initial data to estimate a trend that 
demonstrated that attainment of the 1-hour standard would be reached 
sometime after 2020. The area's design value dropped significantly 
during the 1980s, then flattened out during the 1990s, hovering around 
200 ppb. Design values recently have resumed their downward trend and 
are at the lowest values seen in at least the last twenty years. EPA 
notes that the 2004 design value has further decreased to 169 ppb. The 
current trend may be partly due to meteorological conditions in recent 
years, but it is almost certainly accelerated by emission reductions 
made since the 2000 SIP revision. If the design value continues to drop 
at a rate comparable to that seen in the most recent five-year period, 
then attainment would occur sometime around 2010. But the amount of 
emissions reductions is expected to increase each year until 2007 as a 
result of rules adopted in the

[[Page 58127]]

2000 SIP revision and in this SIP revision. Consequently, the design 
values are expected to decrease more rapidly as 2007 approaches. This 
simplistic analysis alone by no means proves the area will attain the 
standard by 2007, but EPA agrees the recent design value trends are 
consistent with reaching attainment by 2007.

Alternative Design Value And Addressing Short-Term Excursions

    As discussed previously, the attainment strategy is based on a two 
pronged approach, control of routine emissions and a short-term limit 
to control emission events. The TCEQ believes the traditional modeling 
does not replicate ozone produced by the sudden sharp increases in 
HRVOC emissions that can occur in the HGB area due to non-routine 
emission releases. TCEQ argues that this technical deficiency provides 
an explanation for why the model's peak simulated ozone concentrations 
were all below the HGB area's design value in 2000. The actual design 
value calculated for the years 1999-2001 was 182 ppb, while base case 
simulated peak ozone concentrations were below 160 ppb on every day but 
August 31st. The TCEQ believes that the influence from short-term 
releases should be removed from the area's design value to determine 
the design value based on routine emissions. This alternative design 
value theoretically will more closely correspond to the routine urban 
ozone formation captured by the model. To remove the influence of 
short-term releases, TCEQ applied Blanchard's technique (Statistical 
Characterization of Transient High Ozone Events Interim Report; 
December 21, 2001) to the 1999-2001 AIRS data. This technique uses a 
threshold of a 40 ppb rise in ozone concentration in 1 hour to 
distinguish between sudden rises in ozone from the more typical case 
where ozone increases more gradually. Removing all days with identified 
sudden ozone concentration increases (SOCI), an alternate design value 
of 144 ppb was calculated by TCEQ. The base case includes seven days 
with modeled peak ozone greater than 144 ppb, so the modeled peaks, in 
fact, correspond well with the (non-SOCI) design value and in fact the 
model may be over-predicting the ozone resulting from routine 
emissions. If the model is over-predicting the ozone due to routine 
emissions in the base case, then it is likely the model is over-
predicting the ozone due to routine emissions in the future case 
projections providing additional evidence that the control strategy 
will sufficiently reduce the ozone from routine emissions.
    EPA considers the alternative design value approach one tool in 
evaluating the possible impact of non-routine emission releases, 
particularly releases of HRVOCs on the design value. By removing the 
days that have rapid ozone formation and therefore are possibly the 
result of large releases, it is possible to get a sense of the 
potential impact of large emission releases on the design value. We are 
not convinced, as yet, that all occasions where ozone rises by 40 ppb 
from one hour to the next are caused by releases. Some of these events 
could be caused by continuous plumes of ozone sweeping across a monitor 
as winds shift direction. Wind shifts are a common occurrence in the 
HGB area and are likely responsible for some of these SOCI events. The 
TCEQ analysis also did not screen out widespread exceedences unlikely 
to be the result of a non-routine event. Still, we agree that emission 
events do impact the design value to a degree that is difficult to 
quantify. Therefore, we agree that considering the alternative non-SOCI 
design value provides additional evidence that the future design value 
will reach the standard in the future case as Texas has developed a 
strategy to control both routine and event emissions, thus reducing 
both contributions to the design value.
    Wildfire Activity: In 2000, there was an unusually large amount of 
wildfire activity in Southeast Texas due to drought conditions and 
extreme temperatures in the August-September time frame. This is 
documented in Section 3.7.2 of the SIP that shows that more than 5 
times as many acres burned in 2000 as in any of the other years between 
1999 and 2003. It is not expected the number and scope of fires modeled 
in the current SIP attainment demonstration modeling would be 
reasonably expected in future years. A sensitivity analysis was 
conducted to quantify the impact of wildfires on the future year ozone 
level in the HGB indicating wildfire activity does have an impact on 
the HGB future ozone levels (i.e., 0.1 ppb to 1.7. ppb). EPA agrees 
that the amount of wildfire activity was unusual in 2000 and should not 
generally be expected in most years. Therefore, we agree that this is 
additional evidence that indicates improved probability that the area 
will attain in future years because the projected modeled emissions are 
higher due to wildfires than should generally be encountered in future 
years.
11. Is the One-Hour Attainment Demonstration Approvable?
    EPA believes that the combination of photochemical modeling and 
other evidence (WOE) indicates that the revised control strategy will 
bring the area into attainment. This demonstration is based on new 
information not available at the time the currently approved SIP was 
developed and represents a significant improvement over past efforts to 
model Houston. Specific improvements include:
     Improved representation of Houston's complex meteorology.
     Recognition of the importance of HRVOCs.
     Recognition that HRVOCs are underestimated in the 
emissions inventory.
     Recognition of the potential impact of emissions 
variability on ozone levels.
    EPA believes that the modeling projects significant improvement due 
to reductions in routine emissions. EPA believes TCEQ has shown through 
the modeling of routine emissions that the portion of the ozone due to 
routine emissions will be sufficiently reduced. The modeling of routine 
emissions does not predict attainment on all days. The circumstances 
that led to the very high exceedance on August 31, have been shown to 
be unusual and thus EPA concludes the 31st should not be used to drive 
the control strategy. On other days of the episode, ozone levels have 
been shown to be reduced to below or just slightly above the standard. 
The wildfires that occurred during the episode also are a rare event 
occurring because of the high temperatures and drought conditions. 
Removing the influence of wildfires from the modeling brings all of the 
days with the exception of August 31 within 3.8 ppb of the standard. 
Texas has provided evidence that additional emission reductions will 
occur of both VOC and NOX. EPA particularly believes the 
expected additional NOX reductions will provide additional 
ozone benefit that could offset the small amount the modeling of 
routine emissions shows the area to be above the standard. The 
additional reductions in VOC expected from collateral reductions due to 
the HRVOC rules and due to the implementation of the EMRS system and 
the event reporting data base should at least partially mitigate any 
errors in the non-HRVOC inventory used for the attainment modeling.
    The model's under-prediction of high ozone levels using routine 
emissions have been examined by TCEQ. TCEQ has proposed that two 
phenomena (routine and non-routine emissions) drive the HGB design 
value and that it is appropriate to estimate an alternative design 
value that does not include the effects of non-routine emissions. If

[[Page 58128]]

TCEQ's estimated alternative design value (144 ppb) is an accurate 
representation of the design value due to routine emissions, then the 
control strategy modeling should reduce ozone levels due to routine 
emissions below the ozone standard. TCEQ addresses the non-routine 
emissions with the short-term limit that is expected to reduce the 
contribution to the HGB area's ozone level due to non-routine emissions 
such that non-routine emissions should not occur frequently enough at 
sensitive locations and times to impact the area's attainment of the 1-
hour standard. As discussed in the TSD, the alternative design value 
probably overestimates, to some degree, the impact of short-term 
releases but still provides evidence that the current strategy to 
reduce routine emissions should be successful in addressing that 
portion of the 1-hour problem due to routine emissions and supports 
TCEQ's two pronged approach to achieving attainment of the 1-hour 
standard.
    Finally, EPA believes the evaluation of ambient data trends 
indicates that the area is on a track that is consistent with achieving 
attainment of the one-hour standard by 2007.

B. New Control Measures

1. What Are the New Control Measures in These SIP revisions?
    TCEQ has adopted the following new control measures since the 
previously approved SIP revision:
     Annual Cap on HRVOC emissions
     Hourly (short-term) limit on HRVOC emissions
     Improved requirements for HRVOC fugitive emissions
     Requirements for Portable Gasoline containers
2. What Are the Annual Cap and Short-term Limit on HRVOC emissions?
    As discussed in Section II.A.1, Texas relied primarily on two sets 
of modeling in developing its control strategy. One set of modeling, 
performed by TCEQ, is largely a traditional model formulation that 
examines the routinely variable emissions which occur in the HGB area. 
Through this modeling, TCEQ established that NOX emissions 
would not have to be reduced as much as previously planned and routine 
emissions of highly-reactive VOC emissions would have to be reduced. 
Through the second set of modeling, examining the impact of large non-
routine releases of HRVOCs, it was established that the frequency and 
magnitude of large non-routine releases of HRVOCs should also be 
reduced.
    To reduce the routine emissions of highly-reactive VOCs, Texas 
adopted an HRVOC emissions cap-and-trade (HECT) program. This program 
establishes an annual cap on emissions of ethylene, propylene, 
butadiene and butenes from cooling tower heat exchange systems, flares, 
and vent gas streams in Harris County. The rules establishing the cap-
and-trade system are contained in 30 TAC Chapter 101, Subchapter H, 
Division 6. The rules establishing the monitoring and record keeping 
necessary to determine compliance with the HECT are contained in 30 TAC 
, Chapter 115, Subchapter H. EPA has reviewed the monitoring rules and 
proposed approval of the Chapter 115 rules. (See E-Docket R6-OAR-2005-
TX-0014 ) EPA is reviewing the HECT program rules with respect to EPA's 
Economic Incentive Program guidance and a separate proposed rule is 
being developed. (See E-Docket R06-OAR-2005-TX-016) Because the 
emission reductions achieved by the HECT program are relied on in the 
attainment demonstration, EPA cannot finalize an approval of the 
attainment demonstration unless or until the HECT program and the 
Chapter 115 rules have been approved. In this document, we discuss how 
the controls on HRVOCs have been modeled and support the attainment 
demonstration.
    In projecting the HRVOC emissions that would occur after the HECT 
annual cap was implemented, TCEQ included a 5 percent safety factor in 
the attainment demonstration modeling. In other words, rather than 
model the levels established by the cap, Texas included 5 percent 
additional emissions of HRVOCs in the model. This safety factor was 
necessary because of the uncertainty that is introduced into the 
modeling by using an annual cap to achieve a short-term standard such 
as the National Ambient Air Quality Standard for ozone. On any given 
day more sources could be operating above their annual average 
emissions than below their annual average emissions. The 5 percent 
safety margin provides some room to account for this day-to-day 
variation in routine emissions.
    As discussed previously, a large number of scenarios were simulated 
in the Project H13 work, examining the impact of releases of various 
sizes, times and locations. This study demonstrated that releases at 
the worst-case place and time of 1000 lb/hour could have a 1-2ppb 
impact on peak ambient ozone levels. To minimize frequency of these 
events, TCEQ established an hourly limit on emissions from process 
vents, flares, cooling towers and pressure relief devices. The hourly 
limit on emissions is 1200 lbs/hour and is established at Sec. Sec.  
115.722 and 115.761.
3. How Are the Annual Cap and the Short-Term Limit Related?
    Texas has included features in the rules defining the interaction 
between the annual cap and short-term limit that are unique to the 
HECT. Typically, all emissions during the year would be counted toward 
compliance with an annual cap. In establishing a cap-and-trade system 
for the petrochemical industry in the HGB area, TCEQ felt it necessary 
to consider the possibility of major upsets. TCEQ believed that non-
routine emissions from process upsets, while likely to occur, are not 
predictable and therefore could make management of emissions under an 
annual cap difficult. Therefore, TCEQ established in its rule that 
emissions above the 1200 lb/hr short-term limit are not counted toward 
compliance with the annual cap but rather expected to be controlled by 
the short term limit. TCEQ was particularly concerned about the 
potential situation where a single large release could force a smaller 
source to shut down for the remainder of the year because its 
allowances had been exhausted.
    Although EPA agrees that a forced shutdown of smaller sources is 
possible, it believes that many upsets can be avoided by a source 
through the development and implementation of operation and maintenance 
plans that address start-up, shutdown and malfunction of process 
equipment and application of good air pollution control practices such 
as required by 40 CFR 60.18(d). EPA notes that application of the 
aforementioned procedures would significantly reduce the emissions 
associated with such start-up, shutdown and malfunction events and 
could avoid a the need for a forced shutdown. In addition, planning and 
management of emissions by the source including participation in the 
credit market should also avoid a forced shutdown while ensuring 
compliance with the annual cap.
    Emissions above the short-term limit would still be subject to 
enforcement as a violation of the short-term limit, but only 1200 lbs 
would be reported for compliance with the annual cap during those hours 
where emissions exceed 1200 lbs. It is our expectation that the root 
cause of the conditions giving rise to the emissions above the short-
term cap will be identified and corrected. Moreover, the source is 
still required to use good air pollution control practices consistent 
with the applicable NSPS (40 CFR 60.11(d)) and MACT standards or

[[Page 58129]]

other applicable Federal or State programs.
    The structure of the Texas HECT program, which does not require 
emissions above the short-term limit to be counted against the long-
term cap, is a significant departure from past practices for cap-and-
trade programs such as the Title IV Acid Rain program and the Houston 
NOX cap-and-trade programs. EPA's Economic Incentive Program 
guidance regarding mass emissions cap-and-trade programs indicates that 
all sources in the program should account for all of their emissions. 
See section 7.4 of the EIP Guidance. We believe, in this instance, the 
approach of not counting emissions above the short-term limit toward 
the annual cap has both advantages and disadvantages as discussed 
below. We are inviting comment on approving a program with this 
structure, as we remain concerned about excess emissions resulting from 
poor operation and/or poor maintenance.
    We believe the structure of the TCEQ HECT rule has the advantage 
that it establishes a clear procedure for how emissions during non-
routine events will be handled. For every hour during a large emissions 
event, the source will include 1200 lbs toward meeting its annual cap. 
This will avoid disputes about the validity of data during large 
emission events, when monitoring may be less reliable. The rule clearly 
defines the procedures to be followed during an emission event. Sources 
will have no choice but to ensure that at the end of the compliance 
period they have sufficient allowances to cover all of the emissions up 
to the 1200 lb limit, or else face deductions from their compliance 
account and other potential penalties. In addition, emissions above 
that level would be subject to enforcement under the short term limit.
    On the other hand, the structure of the rule has the disadvantage 
that some of the incentive to prevent large releases is lost by 
excluding emissions above the short-term limit from the annual cap. In 
addition, some of the incentive for reducing the size of large events, 
when they occur, may also be lost. With the annual cap-and-trade 
program's exclusion of emissions above the hourly (short-term) limit, 
it is probable that fewer violations of the annual cap will occur than 
if the exclusion had not been provided. For sources that would have 
violated the annual cap if emissions above the short-term limit were 
considered, it may be harder to promote systemic changes at those 
sources to reduce overall emissions.
    Having looked at the advantages and disadvantages, we are proposing 
approval of the program. We are proposing approval because, even though 
it provides an exclusion for non-routine emissions above short-term 
limit from the annual cap, it provides new enforceable limits that are 
an improvement on the status quo, and we believe the annual cap in 
conjunction with the short term limit will achieve the goals of the 
attainment demonstration as indicated by the modeling analysis. The 
annual cap should result in the necessary reductions in routine 
emissions and the short-term cap should result in the necessary 
reduction in the amount and frequency of non-routine emission events. 
We note that the program rules require TCEQ to audit the HECT program 
every three years, and facilities have to provide compliance reports 
annually, so it will be readily apparent if the goals of the rules are 
being achieved.
    We believe the program will achieve the necessary reductions in 
routine emissions because the size of the short-term limit is such that 
only truly non-routine emissions will not be counted toward the annual 
cap. Based on evaluation of the emission rates that were modeled in the 
January 2003 SIP, the 1200 lb/hour limit is expected to be about ten 
times larger than the average hourly emission rate at the largest 
sources of HRVOCs. This order of magnitude difference between the 
short-term limit and the average annual hourly emissions ensures that 
sources will not routinely operate near or above the short-term limit, 
thus achieving the goal of reducing routine emissions.
    Also, while the structure of the HRVOC rules anticipates that 
emission events will not be completely eliminated, EPA believes that it 
provides sufficient disincentives that sources will reduce the 
frequency and magnitude of large emissions events such that emission 
events would not be expected to frequently impact peak ozone levels. 
The Project H13 report estimated from historic information that it is 
probable that at least one event will occur annually at a time and 
location to impact peak ozone. This indicates that while emission 
events are frequent in the Houston area, emission releases at the place 
and time that impact peak ozone do not occur nearly as frequently. As 
noted elsewhere, it is possible that events are more frequent than 
found in the project H13 report as past monitoring practices may not 
have detected all releases.
    It is necessary to reduce the frequency of emission events so that 
emission events do not interfere with attainment of the 1-hour NAAQS, 
which only allows an average of one exceedence per year. Based on the 
study, we believe the hourly emission limit will achieve this goal. 
After the institution of the short term limit, EPA expects that 
emissions events impacting peak ozone levels will be reduced in 
frequency to fewer than one per year. The frequency of emission events 
will be reduced as facilities take actions to prevent violations of the 
short term limit such as adding additional flare gas recovery capacity 
so more releases can be captured and routed back to the process. 
Sources that fail to take appropriate actions and which violate the 
short term limit will be subject to enforcement. While events may occur 
that impact ozone levels at other locations than where the peak ozone 
level occurs, these events, because they are occurring in areas with 
lower ozone levels, would not be expected to impact attainment of the 
1-hour NAAQS.
    Again, EPA recognizes that the approach of providing this partial 
exclusion for emissions above the short-term cap is a departure from 
practices in other cap and trade programs such as the acid rain program 
and our guidance. We currently believe this approach is only warranted 
in consideration of the Houston area's unique situation that combines 
an extensive petrochemical complex and the availability of the 
extensive data and analysis that were generated by the intensive ozone 
study, TxAQS 2000 and in conjunction with a short-term limit. 
Consideration of this novel approach is warranted in order to balance 
the need to reduce both routine and upset emissions of HRVOC, but also 
recognizes that large upset emissions may never be completely 
eliminated in the petrochemical industry. Because of the uniqueness of 
this approach, however, we invite comment on our proposed approval of 
this facet of the Texas plan.
4. Can Reductions in Less-reactive VOCs Be Made Instead of Reductions 
in HRVOCs?
    One feature of the Texas rules for capping HRVOCs is that sources 
can make reductions in other less-reactive VOCs to generate allowances 
for the HRVOC cap. The VOC reductions are used to generate emission 
reduction credits (ERCs), in accordance with the Emission Credit 
Banking and Trading Program, referred to as the ERC rule, established 
at 30 TAC Chapter 101, Subchapter H, Division 1. These ERCs can then be 
converted to allowances under the HECT program. The amount of 
allowances is determined based on the ratio of the reactivity for the 
speciated VOCs being reduced to the

[[Page 58130]]

reactivity of an HRVOC. Reactivity values are obtained from the Maximum 
Incremental Reactivity Scale (MIR), California Code of Regulations, 
Title 17, Chapter 1, Section 94700, concerning MIR values for 
Compounds. The amount of allowances that can be generated is limited to 
5% of a facility's cap. To generate less-reactive VOC emission 
reduction credits, sources must meet the same monitoring requirements 
for the less-reactive VOC streams that are required for HRVOCs streams.
    As mentioned earlier, EPA is evaluating the HECT rule in a separate 
Federal Register notice being developed concurrently. In addition, EPA 
is evaluating TCEQ's ERC rule in a separate Federal Register also being 
developed concurrently. (See E-dockets R06-OAR-2005-TX-0016 and R06-
OAR-2005-TX-0006). Since this attainment demonstration depends on the 
reductions achieved by the HECT program, we cannot approve the 
attainment demonstration unless the HECT rules are first approved. 
Also, the conversion of ERCs to HECT allowances will not be approved 
until the underlying ERC rules are approved.
    Below we describe the impact of the conversion of allowances based 
on the MIR scale on the attainment demonstration. EPA has generally 
classed VOCs into two groups: reactive and non-reactive. All reactive 
VOCs have traditionally been treated equally for regulatory purposes. 
The findings of the TxAQS study, indicate that reactivity of certain 
chemicals and their prevalence in the HGB area are causing a 
disproportionate impact on ozone levels in the area. Thus, these HRVOCs 
were targeted for control. Texas is making an allowance for a small 
increase in HRVOCs (up to 5%) above the new emissions levels to be 
offset with larger reductions in less-reactive VOCs. Modeling 
sensitivity analyses were performed by the University of Texas and 
documented in a report, titled ``Survey of Technological and Other 
Measures to Control HRVOC Event Emissions.'' In this report, trades of 
less-reactive VOCs much larger than would be allowed with the 5% cap 
were considered. In the sensitivity runs, the impacts ranged from a 2.1 
ppb increase to a 3 ppb decrease in the peak ozone, depending on the 
episode day and the assumptions made about the less-reactive chemical 
that was reduced. The researchers looked at the impact of adding 
between 15 and 33 tpd of HRVOC to the model while removing the 
requisite amount of less reactive VOCs. Under the rule, capping trades 
at a 5% increase in highly reactive VOCs, an increase of less than 2 
tpd of HRVOCs would be all that could be allowed. Therefore, the impact 
of the actual program will be quite small.
    We believe that the generation of HRVOC allowances of up to 5% of a 
sources annual cap using reductions in less-reactive VOCs will not 
interfere with the area's ability to attain the NAAQS. We are proposing 
approval because the impact on the attainment demonstration will be 
very small. In addition, for sources that participate in the program, 
it will have the advantage of implementing additional source monitoring 
on less-reactive VOCs. Our proposed approval does not represent a 
general endorsement of the use of the MIR scale for use in SIPs. In 
this instance, with the aforementioned technical support, we believe 
this is an acceptable approach which is consistent with EPA's recently 
issued ``Interim Guidance on the Control of Volatile Organic Compounds 
in Ozone State Implementation Plans'' (August 25, 2005). EPA will 
continue investigating how best to incorporate reactivity in the 
regulation of VOCs.
5. What Estimates of Flare Efficiency Are Made in the SIP Revision?
    For purposes of estimating emissions for compliance with the Cap, 
the TCEQ rule requires companies to assume that properly operated 
flares achieve 99% destruction efficiency for C2 and C3 hydrocarbons 
and 98% destruction efficiency for all other hydrocarbons. To insure 
these destruction efficiencies are achieved, the TCEQ rules require 
sources to monitor continuously to demonstrate compliance with the 
operating parameters of 40 CFR 60.18. Sources not operating in 
compliance with 60.18 are subject to enforcement. In addition, during 
periods when a flare operates outside the parameters of 60.18, 
companies are to assume 93% destruction efficiency. EPA has proposed 
approval of these rules. (See E-Docket R6-OAR-2005-TX-0014 ) The 
assumptions regarding destruction efficiency impact the projected 
emissions in the model. TCEQ has provided the justification for these 
assumptions in Appendix L of the SIP. TCEQ relies on data from flare 
studies initiated by EPA in the early 1980's that indicate that a 
properly operated flare should achieve destruction efficiencies of 98%. 
(Flare Efficiency Study, July 1983, PB83-261644, Evaluation of 
Efficiency of Industrial Flares: Test Results, May, 1984, PB84-199371) 
These studies provided the basis for the development of 40 CFR 60.18. 
Texas used the data from these studies on ethylene and propylene to 
estimate that for these chemicals destruction efficiencies of 99% 
should be achieved by a properly operated flare.
    Emission estimates from flares will always be a source of 
uncertainty because emissions from flares cannot be directly measured 
with today's technology. EPA is proposing to accept the estimates used 
for flare destruction efficiency for use in the attainment 
demonstration because the estimates are based on the best information 
available. We, however, remain concerned about the uncertainty created 
in the attainment demonstration by having a significant source of 
emissions which cannot be directly measured.
    We note that some operating parameters for flares such as steam and 
air assist ratios are not covered specifically by 40 CFR 60.18 but some 
studies have indicated these parameters can impact flare efficiency. 
Because of the prevalence of flares in the HGB area, we believe Texas 
should strongly consider, for both flares in HRVOC service and general 
VOC service, requirements for monitoring steam and air assist ratios to 
insure that operators maintain these parameters, not covered by 40 CFR 
60.18, in a range to insure optimum combustion. We also encourage TCEQ 
to pursue new technology such as the Fourier Transform Infrared 
Spectrophotometer which would eventually allow the direct measurement 
of destruction efficiency in the field.
6. How has the Texas Leak Detection and Repair Program Been 
Strengthened?
    For a number of years, TCEQ has implemented a leak detection and 
repair program as part of its program to control VOCs. When TCEQ 
determined that additional reductions of HRVOCs were needed, they 
established a number of new requirements for leak detection and repair 
of components in HRVOC service. The changes include, among other 
things, the following improvements:
     Inclusion of connectors in the program.
     Inclusion of other non-traditional potential leak sources 
such as heat exchanger heads and man-way covers.
     Elimination of allowances for skipping leak detection 
periods for valves.
     Requirements for third party audits to help insure that 
effective leak surveys and repairs are conducted.
     Requirements that ``extraordinary'' efforts be used to 
repair valves before putting them on the delay of repair list.
    For a full discussion of the improvements to the program, see the 
Technical Support Document for this action. We have proposed approval 
of

[[Page 58131]]

these changes. (See E-Docket R6-OAR-2005-TX-0014 )
7. How Have the Benefits of the Leak Detection and Repair Program Been 
Projected?
    The nature of fugitive emissions introduces a great deal of 
uncertainty in estimating fugitive emission rates. Much of this 
uncertainty is unavoidable given the impossibility of estimating 
emissions from each leaking component. In this SIP revision, TCEQ has 
increased the amount of modeled HRVOC emissions above reported levels 
based on ambient measurements as described previously. As part of this 
adjustment, fugitive emissions were also increased above reported 
levels. Below we explain why this increase in the modeled emissions to 
match ambient measures may have been necessary because of possible 
problems with assumptions regarding control efficiency and rule 
effectiveness for fugitive emissions that were made in the State's 
emissions inventory. EPA also believes these past practices are being 
improved to reduce the uncertainty of future estimates.
    Control Efficiency: Past TCEQ emission inventory practices allowed 
companies the option of using average Synthetic Organic Chemical 
Manufacturing Industry emission factors in combination with estimated 
control efficiencies to estimate emissions. Since this approach does 
not employ the data on the number of leaking components or the 
concentrations of leaks, it potentially misjudges emissions. The 
control efficiencies TCEQ has allowed sources to assume are higher than 
EPA has projected for similar control programs. For example, in past 
estimates for a similar program to the Texas program, EPA had estimated 
a 92% control efficiency, where Texas has allowed sources to assume a 
97% control efficiency. See the TSD for a more complete discussion. The 
adjustment to the inventory based on ambient measurements could account 
for discrepancies in assumed control efficiencies.
    Rule Effectiveness: Rule effectiveness is a concept that tries to 
account for difference between reported emissions and actual emissions. 
Sources generally assume ideal program implementation in reporting 
emissions when actual program implementation may be less than ideal. In 
the case of fugitive emissions, a 100% rule effectiveness would assume 
that facilities are completely accurate in their component counts and 
detect and repair all of the leaking components. Clearly, in practice, 
100% effectiveness is only a goal that can be strived for. Again, the 
adjustment to the emissions inventory based on ambient measurement is 
necessary, in part, due to rule effectiveness issues.
    It is EPA's understanding that, prior to adjusting the inventory, 
TCEQ assumed a rule effectiveness of 100% for sources that participated 
in its special inventory.\3\ Because of the number of sources in the 
special inventory, it is believed that the rule effectiveness is nearly 
100%. EPA's National Enforcement Investigations Center has performed 
leak surveys at refineries and has generally found more leaking 
equipment than estimated by facilities. Surveys at 17 refineries across 
the country found on average that facilities found 1.7% of their 
components to be leaking. Where as the NEIC surveys found on average 5% 
leaking components. Emissions based on the NEIC surveys were 2.4 times 
as high as the emission estimates based on the facility surveys.
---------------------------------------------------------------------------

    \3\ The special inventory was developed by asking the largest 
facilities in the HGB area to provide daily emission estimates for 
the time period of the TxAQS 2000 study.
---------------------------------------------------------------------------

    Taken together, the control efficiency and rule effectiveness 
determine the overall program effectiveness. TCEQ's addition of imputed 
emissions based on actual ambient measurements is one way to account 
for the program effectiveness issues described above and other 
potential problems such as leaks from non-traditional components such 
as heat exchanger bonnets and man-way covers.
    The changes to the program will make strides to address these 
issues. First, TCEQ has expanded the leak detection and repair program 
to include connectors and non-traditional components. This will 
increase the probability that leaks from unsurveyed equipment will be 
detected and repaired. Second, TCEQ is requiring, starting with the 
2004 inventory, that all sources use correlation equations instead of 
assuming a control efficiency. Correlation equations are the most 
sophisticated approach to estimating emissions, short of bagging 
studies on each valve. As a result, future emission estimates will be 
based on the actual leaks found. In addition, the institution of third 
party audits should improve the performance of leak survey technicians 
so that more leaks are detected and repaired. Finally, more valves will 
be repaired as companies are required to employ ``extraordinary 
efforts'' to repair a leaking valve before allowing the repair to be 
delayed until the next shutdown. New technologies for repair, coming 
under the heading of ``extraordinary efforts'' should greatly reduce 
the number of valves that go unrepaired.
    In summary, EPA believes that part of the reason it was necessary 
to adjust the base inventory to increase the emissions above reported 
levels based on ambient measurements, was to account for problems in 
assumptions for control efficiency, rule effectiveness and leaks from 
non-traditional components. The changes to the program will address 
each of these areas. EPA believes that the combination of the 
improvements to the program and the institution of third party audits 
can result in the projected 64% reduction in emissions. The addition of 
new components to the program and the requirement for extraordinary 
repair effort will improve the control efficiency. The requirement for 
third party audits and other changes will improve the rule 
effectiveness. EPA's policy on credit for rule effectiveness 
improvements requires that States commit to perform a study to 
determine if the rule effectiveness improvements are in practice 
realized. In response to comments on this issue, TCEQ has committed to 
conducting a rule effectiveness study based on the third party audit 
program after the program has progressed and data is available. EPA 
notes the first third party audits will be completed December 31, 2005. 
EPA would expect a rule effectiveness study summarizing the results of 
the first third party audits could be completed during the 2006 
calender year. Using the rule effectiveness study and the results of 
the improved emission inventory estimates based on correlation 
equations, Texas will be able to determine if the emissions targets 
that have been modeled have been reached. In addition, this data will 
be useful in developing the 8-hour attainment plan.
    EPA is proposing to approve the emission reductions that have been 
projected for the improved leak detection and repair rules. Our 
approval is based on the improvements to the fugitive rule and Texas' 
commitment to perform a rule effectiveness study and use improved 
emission inventory techniques to estimate future emissions to confirm 
the effectiveness of the program.
8. What Are the Requirements for Portable Gasoline Containers?
    TCEQ has adopted standards for portable fuel containers sold in the 
State which provide requirements to prevent leaks and spills. EPA has 
approved the TCEQ rules on February 10, 2005 (70 FR 7041). TCEQ has 
projected 2.9 tons/day

[[Page 58132]]

of emission reductions. We are proposing approval of the modeling with 
the inclusion of these projected emission reductions.

C. Revised Control Measures

1. What Control Measures Have Been Revised or Repealed?
    Texas has revised a number of control strategies that were included 
in the approved State Implementation Plan. A description of the 
revisions follows.
    Industrial NOX Controls: Texas revised its NOX rules to 
relax the controls from a nominal 90% control to 80% control. Both the 
90% level of control and the 80% level of control are far more 
stringent than the levels of control EPA previously approved as meeting 
the NOX RACT requirements of Section 182 (65 FR 53172, 
September 1, 2000). Therefore, the 90% level of control is a 
discretionary control measure as considered in the Phase 1 rules 
because the 90% level of control was not mandated by Subpart 2 of the 
Clean Air Act but was chosen as necessary for the area to demonstrate 
attainment of the 1-hour standard. Discretionary measures are not 
subject to the antibacksliding provisions of the Phase 1 rule, but any 
revisions of such measures are subject to Section 110(l) of the Act. In 
Section II.E., we discuss the revised plan's compliance with Section 
110(l) of the Act. In Section II.B., we discuss why we believe, taken 
together with other changes, the plan continues to demonstrate 
attainment of the 1-hour standard. In section II.D., we explain why we 
believe this measure is not necessary to meet the Act's RACM 
requirement. For the above reasons, we are proposing approval of the 
revisions to the TCEQ Chapter 117 rules reducing the stringency from a 
nominal 90% control to a nominal 80% control.
    In addition to a change in stringency of the rules, TCEQ made a 
number of less significant changes that are discussed in appendix 1 of 
the TSD. These changes include the repeal of outdated sections, rule 
clarifications, stylistic changes in response to Texas Register 
guidelines, minor changes to monitoring requirements, corrections to 
cross references and improved recordkeeping requirements for 
consistency with Title V requirements. We are also proposing approval 
of these less substantive changes.
    Vehicle Inspection and Maintenance Program in Three Rural Counties: 
TCEQ has dropped the requirement for I/M in Waller, Liberty and 
Chambers Counties. These counties are not included in the urbanized 
area and are therefore not required by Subpart 2 of the Act to 
implement an I/M program. Therefore, I/M in these three counties is a 
discretionary measure that is not subject to the antibacksliding 
provisions of the Phase 1 rule, but any revisions to the SIP approved 
I/M requirements must comply with section 110(l) of the Act. In Section 
II.E., we discuss the revised plan's compliance with Section 110(l) of 
the Act. In Section II.B we discuss why we believe, taken together with 
other changes, the plan continues to demonstrate attainment of the 1-
hour standard. In section II.D., we explain why we believe this measure 
is not necessary for the area to meet the Act's RACM requirement. 
Therefore, EPA is proposing to approve the repeal of the I/M program 
for these three counties.
    The TCEQ also made a number of nonsubstantive changes to the I/M 
program that are discussed in Appendix 2 of the TSD. These changes were 
corrections to cross references and stylistic changes. We are also 
proposing approval of these additional nonsubstantive changes.
    Removal of Small, Spark-Ignition Engine Operating Restrictions: 
TCEQ has dropped this requirement which would have prohibited 
commercial lawn services from operating during the morning hours. This 
measure is not required by Subpart 2 of the Clean Air Act. Therefore, 
it is a discretionary measure that is not subject to the 
antibacksliding provisions of the Phase 1 rule, but any revision to the 
approved SIP must comply with section 110(l) of the Act. In Section 
II.E., we discuss the plan's compliance with Section 110(l) of the Act. 
In Section II.B., we discuss why we believe, taken together with other 
changes in the plan, the revised plan continues to demonstrate 
attainment of the 1-hour standard. In section II.D., we explain why we 
believe this measure is not necessary to meet the Act's RACM 
requirement. Therefore, EPA is proposing approval of this change.
    Speed Limit Strategy from a 55 mph Maximum Speed Limit to a 5 Mile 
Reduction in Speed Limits from Previous Levels: The Texas legislature 
repealed TCEQ's authority to implement speed limits for environmental 
purposes. Texas Department of Transportation had already reduced speeds 
in the HGB area by 5 mph from 70 mph to 65 mph and from 65 to 60. These 
reductions in speed limits of 5 mph remain in place, but the reductions 
that would have been achieved by reducing speed limits on all roads 
further to 55 mph will not be achieved. Calculated using Mobile 6, the 
reductions from this measure are much smaller than as calculated under 
Mobile 5 in the previous SIP. This measure is not required by Subpart 2 
of the Clean Air Act. Therefore, it is a discretionary measure that is 
not subject to the antibacksliding provisions of the Phase 1 rule, but 
any revision to the approved SIP must comply with section 110(l) of the 
Act. In Section II.E., we discuss the plan's compliance with Section 
110(l) of the Act. In Section II.B., we discuss why we believe, taken 
together with other changes in the plan, the revised plan continues to 
demonstrate attainment of the 1-hour standard. In section II.D., we 
explain why we believe this measure is not needed to meet the Act's 
RACM requirement. For the above reasons, EPA is proposing approval of 
this revision of the State's plan.
    Removal of the Vehicle Idling Restriction: This measure that would 
have prohibited prolonged idling of heavy duty diesel vehicles has been 
repealed. This measure is not required by Subpart 2 of the Clean Air 
Act. Therefore, it is a discretionary measure which is not subject to 
the antibacksliding provisions of the Phase 1 rules, but any revision 
to the approved SIP must comply with section 110(l) of the Act. In 
Section II.E., we discuss the plan's compliance with Section 110(l) of 
the Act. In Section II.B., we discuss why we believe, taken together 
with other changes in the plan, the revised plan continues to 
demonstrate attainment of the 1-hour standard. In section II.D., we 
explain why we believe this measure is not necessary to meet the Act's 
RACM requirement. For the above reasons, we are proposing approval of 
this change.
    Revision to Delay the Compliance Date for Gas Fired Water Heaters 
and Small Boilers: This rule is not being repealed, but its compliance 
date has been delayed from December 31, 2004 to January 1, 2007. This 
rule requires new water heaters sold in Texas to achieve lower 
NOX emission rates. A delay in the compliance date results 
in reduced emission reductions because there is less time for old water 
heaters to be replaced with new water heaters through normal turnover. 
Texas has accounted for these lost reductions in its attainment 
modeling. This measure is not required by Subpart 2 of the Clean Air 
Act. Therefore, it is a discretionary measure that is not subject to 
the antibacksliding provisions of the Phase 1 rule, but any revision to 
the approved SIP must comply with section 110(l) of the Act. In Section 
II.E., we discuss the plan's compliance with Section 110(l) of the Act. 
In Section II.B., we discuss why we believe, taken together with other 
changes in the plan, the revised plan continues to demonstrate 
attainment of the 1-hour standard. In section II.D., we explain why we 
believe earlier

[[Page 58133]]

implementation of this measure is not necessary to meet the Act's RACM 
requirement.
    We are not proposing approval of this change to the rules for 
control of water heaters at this time. It is a Statewide rule and the 
changes to the rule impact other areas of the State and we have not yet 
analyzed the above issues in areas of the State other than Houston. We 
note only that the changes to the water heater rules do not impact the 
approvability of the Houston mid-course review SIP revision.
    Revisions to the Voluntary Measures: Texas has revised the 
voluntary mobile emissions program (VMEP) portion of the State 
Implementation Plan. This portion of the plan, which was approved in 
2001, was projected to achieve 23 tpd of emission reduction through 
various voluntary and often innovative measures. Experience and the 
recalculation of the benefits with Mobile 6 has resulted in a much 
lower expectation for the program which now is expected to only achieve 
10.6 tpd of emission reductions. The details of changes to the program 
are contained in appendix O of the SIP. These measures are not required 
by Subpart 2 of the Clean Air Act and therefore, are discretionary 
measures that are not subject to the antibacksliding rules provisions 
of Phase 1 rule, but revisions to the approved 1-hour SIP must comply 
with section 110(l) of the Act. In Section II.E., we discuss the plan's 
compliance with Section 110(l) of the Act. In Section II.B., we discuss 
why we believe, taken together with other changes in the plan, the 
revised plan continues to demonstrate attainment of the 1-hour 
standard. In section II.D, we explain why we believe these measures are 
not necessary for the area to meet the Act's RACM requirement. For the 
above reasons, EPA is proposing approval of the revisions to the VMEP 
measures.

D. Reasonably Available Control Measures

1. What Are the RACM Requirements?
    Section 172(c)(1) of the Clean Air Act requires that each 
nonattainment plan provide for the implementation of all reasonably 
available control measures as expeditiously as practicable (including 
such reductions in emissions from existing sources in the area as may 
be obtained through the adoption, at a minimum of reasonably available 
control technology) and shall provide for attainment of the national 
primary ambient air quality standards. EPA has provided guidance 
interpreting section 172(c)(1) of the Act. See 57 FR 13498, 13560, 
April 16, 1992. In that guidance, EPA indicates that potentially 
available control measures, which would not advance the attainment date 
for an area or contribute to reasonable further progress, would not be 
considered RACM under the Act. EPA's guidance also indicates that 
States should consider all potentially available measures to determine 
whether they are reasonably available for implementation in the area 
including whether or not they would advance attainment. Further, the 
guidance calls for states to indicate in their SIP submissions whether 
measures considered are reasonably available or not, and if so the 
measures must be adopted as RACM. Finally, the guidance indicates that 
States could reject potential RACM measures either because they would 
not advance the attainment date or would cause substantial widespread 
and long-term adverse impacts or for various reasons related to local 
conditions. See ``Guidance on Reasonably Available Control Measures 
(RACM) Requirement and Attainment Demonstration Submissions for Ozone 
Nonattainment Areas,'' John Seitz, Director, Office of Air Quality 
Planning and Standards, November 30, 1999.
2. How Has Texas Insured With This Plan Revision That All RACM Are 
Being Implemented?
    In EPA's November 14, 2001 notice approving the plan for the HGB 
nonattainment area, EPA approved the analysis showing the plan was 
implementing all Reasonably Available Control Measures. The 
NOX reduction requirements of that plan were so substantial 
no additional RACM measures could be identified in time for adoption as 
a part of that plan and the State had to make an enforceable commitment 
to adopt additional NOX measures which were expected to be 
feasible in the near future. Now, based on the findings of the mid-
course review, Texas has determined that the NOX reductions 
necessary for attainment, while still substantial, are not as great and 
that control of HRVOCs is a more effective way of reducing ozone. In 
section II.A. of this notice, we discuss how EPA found that the revised 
plan for HGB will achieve attainment of the 1-hour standard, based on 
the controls that will be in place by the beginning of the ozone season 
of 2007. Both NOX and HRVOC controls, necessary for 
attainment, will be fully implemented the last year of the strategy. In 
the last year of the strategy, the point source controls alone will 
achieve an estimated 39 tpd of NOX reductions (based on 
review of the TCEQ's Mass Cap-and-Trade Registry). Reductions in on- 
and off-road emissions will also occur. Therefore, to advance 
attainment, additional reductions on the order of 39 tpd would have to 
be achieved before the ozone season of 2006. In Section 5.4 of the 
State Implementation Plan, Texas explains why even with the repeal and 
revision of the measures described in Section II.C., Texas believes the 
RACM requirement is still being met. What follows is a summary of EPA's 
evaluation of each of the revisions.
    Industrial NOX Controls: TCEQ has relaxed the NOX rules 
for a number of NOX point source categories. The original 
controls achieved a nominal 90% reduction in point source emissions, 
with some categories reducing more than 90% and some less than 90%. The 
new rules, being considered here today, achieve a nominal 80% control. 
It is a convenient short hand to refer to the control levels as 90% or 
80% even though this does not accurately state the level of reduction 
for individual source categories. TCEQ has argued that the 90% controls 
would not advance attainment because the current 80% control levels are 
scheduled to be implemented in 2007 and it would not be reasonable to 
expect that a more stringent 90% control could be implemented faster to 
advance attainment. EPA previously agreed that the most expeditious 
schedule for the 90% controls would be by 2007. EPA continues to 
believe that to be the case so that implementation of 90% controls 
would not advance attainment and therefore is not RACM. Even at the 80% 
control level, the TCEQ rules are still similar in stringency to the 
control levels implemented in California which have generally been 
considered the most stringent in the country. (See the Technical 
Support Document for more information)
    Repeal of the I/M Program in 3 Rural Counties: Texas has chosen to 
reduce the scope of its I/M program from eight counties to five 
counties. The three counties that are being dropped are Chambers, 
Liberty and Waller Counties. These are the most rural counties in the 
nonattainment area. The program was scheduled to be implemented in 
2005. Using Mobile6, Texas has estimated that the program would achieve 
0.87 tpd of emission reductions which is a smaller reduction estimate 
than the Mobile 5 estimate included in the 2000 SIP and is less than 
.2% of the projected emissions for the area in 2007. Because of the 
small amount of emission reductions, implementation of I/M in these 
three counties would not be

[[Page 58134]]

expected to advance attainment. Thus, EPA proposes that implementation 
of I/M in these three counties is not required to meet the RACM 
requirement.
    Removal of Small Spark Operating Restrictions: This measure would 
prohibit lawn and garden service contractors for operation in the 
morning hours from 6 a.m. to 10 a.m.--a time during which emissions 
have been found to contribute most significantly to ozone production. 
This measure was due to be implemented in 2005. Texas decided that 
attainment could be reached without the implementation of this measure. 
The measure was estimated to achieve the equivalent of 7.7 tons/day of 
NOX emission reductions. As such, its implementation would 
not advance the attainment date. Therefore, EPA believes the morning 
lawn service ban should not be considered a reasonably available 
control measure for the HGB area.
    Speed Limit Strategy: The approved SIP provides for the speed 
limits in the eight county area to be reduced to 55 mph. Later, TCEQ 
decided to delay the implementation of the 55 mph until 2005, but would 
implement speed limits that are 5 mph lower than the previous speed 
limits, lowering 70 mph speed limits to 65 mph and 65 mph limits to 60 
mph starting in 2001. In the 2004 SIP revision, TCEQ decided to make 
permanent the interim limits and forgo lowering the speed limits to 55 
mph. Based on Mobile 6, lowering speeds all the way to 55 mph would be 
expected to reduce emissions 2-3 tons/day. This is a lower estimate of 
emission reductions than predicted by Mobile 5 in the 2000 SIP 
revision. This small amount of emission reduction would not advance 
attainment in the Houston area and therefore this measure is not 
considered RACM.
    Vehicle Idling Restriction: Texas is dropping a rule that prohibits 
idling of heavy duty vehicles for more than five minutes in the Houston 
area. The measure was estimated to reduce NOX emissions by 
0.48 tpd. Texas decide that attainment could be reached without the 
implementation of this measure. This small amount of emission reduction 
would not advance attainment for the area and therefore should not be 
considered RACM.
    Delay in Compliance for the Water Heater Rule: In this case, TCEQ 
still intends to implement the rule, but has delayed compliance until 
2007. Since the adoption of the current rule, two American National 
Standards Institute (ANSI) standards (the flammable vapor ignition 
resistance standard and the lint, dirt, and oil standard); the United 
States Department of Energy (DOE) energy efficiency standard; and the 
EPA insulation foam ban have been implemented. The ANSI lint, dirt, and 
oil standard and the flammable vapor ignition resistance standard were 
effective on July 1, 2003, and were established for gas-fired water 
heater safety reasons. The DOE energy efficiency standard was effective 
on January 20, 2004. The EPA foam ban was effective on January 1, 2003, 
and affects gas-fired water heaters, as water heater manufacturers have 
historically used hydrochlorofluorocarbon as a blowing agent for 
creating foam insulation. The implementation of these standards has 
delayed the progression of the water heater technology and design. 
Therefore, a design that meets the 10 ng/J emission limit in the Texas 
rule will not be available for sale in the market by the January 1, 
2005.
    Because the new federal standards affect the design of new water 
heaters and have made it impractical for the industry to meet Texas's 
NOX limits for water heaters in a timely manner, EPA agrees 
that this measure is being implemented as expeditiously as is 
technically practicable. In other words, earlier implementation is not 
technically practicable and therefore, since it would be infeasible, it 
would not advance attainment and would not be RACM.

E. Section 110(l) Analysis

1. What Does Section 110(l) Require?
    Section 110(l) of the Clean Air Act says:
    ``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 of 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.''
2. How Has Texas Shown These Revisions Do Not Interfere With Attainment 
of the 8-hour Standard?
    Texas must consider whether the new strategy which relies on fewer 
reductions of NOX and more reductions of VOC will interfere 
with attainment or reasonable further progress or any other applicable 
requirement under the Act. A strict interpretation of this requirement 
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. As discussed above, Texas 
has completed a revised attainment demonstration with respect to the 1-
hour standard. Attainment demonstrations for the 8-hour standard are 
not due for several years. EPA recognizes that prior to the time areas 
are required to submit full attainment demonstrations for the 8-hour 
ozone standard, this strict interpretation could prevent any changes to 
the 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 standard, it is unknown what suite of control measures a 
State will choose to adopt for a given area to attain that standard. 
For example, different mixes of NOX or VOC and industrial or 
mobile source controls may result in attainment. During this period, to 
demonstrate no interference with the 8-hour NAAQS, EPA believes it is 
appropriate to allow States to substitute equivalent emission 
reductions to compensate for the control measures being removed from 
the approved SIP. EPA believes preservation of the status quo air 
quality during the time new attainment demonstrations are being 
developed will prevent interference with the States' obligations to 
develop timely attainment demonstrations and to attain as expeditiously 
as practicable.
    ``Equivalent'' emission reductions mean reductions which result in 
equal or greater air quality benefit than those reductions being 
removed. To show the compensating emission reductions are equivalent, 
modeling or adequate justification must be provided (EPA Memorandum 
from John Calcagni, Director Air Quality Management Division, to the 
Air Directors in EPA Regions 1-10, September 4, 1992). The compensating 
emission reductions must represent actual, new emission reductions 
achieved in a contemporaneous time frame in order to preserve the 
status quo. In addition, the emission reductions must be permanent, 
quantifiable, and surplus to be approved into the SIP.
    As discussed previously, Texas has chosen to substitute actual, 
reductions of HRVOCs for some of the NOX reductions in the 
approved SIP. This approach is evaluated below with respect section 
110(l) and the criteria described above.
    Contemporaneous: While contemporaneous is not defined in the Clean 
Air Act, a reasonable interpretation is that the compensating control 
measures be implemented within one year of the time frame for the

[[Page 58135]]

control measure being replaced. In this case, the new control measures 
being used as substitutes are being implemented in virtually the same 
time frames as the measures being replaced. The new measures have the 
following compliance dates: tighter controls on HRVOC fugitive 
emissions--March 31, 2004, HRVOC cap-monitoring 2005, full cap 
compliance 2006, gas can rule-2007. The measures being replaced, which 
are listed in section II.D., with the exception of the vehicle idling 
ban, all had compliance dates in the approved SIP of 2005 or later. In 
particular the largest emission reduction change by far, the difference 
between 90% and 80% control on NOX, was not scheduled to be 
put in place until 2007. It is worth noting that reductions that would 
have been achieved by controls adopted to meet the enforceable 
commitment to reduce NOX did not have a specified compliance 
date. The commitment only provided that the measures would be adopted 
by May 2004 and compliance would be achieved as expeditiously as 
possible but no later than the beginning of the ozone season in 2007. 
Therefore, it can be assumed the emission reductions from the 
NOX enforceable commitments, had they been implemented, 
would not have occurred before the 2005-2006 time frame, a time frame 
similar to that for the measures to control HRVOCs which Texas has 
adopted as a substitute. With regard to the vehicle idling 
restrictions, the compliance date for this rule was May of 2001. It was 
projected to achieve 0.48 tpd of emission reductions. It was 
discontinued effective December 23, 2004. The improved HRVOC fugitive 
controls which began implementation in March of 2004, more than offset 
the small reductions lost by the discontinuation of the motor vehicle 
idling program after December 23, 2004.
    Equivalent: To demonstrate that the emission reductions were 
equivalent, the TCEQ used the photochemical model to demonstrate that 
the total collection of strategies in the current SIP revision is 
equivalent or better in 8-hour ozone reduction effectiveness as 
compared with the total collection of strategies in the SIP that was 
approved in 2001 including the reductions that would have occurred due 
to measures to meet the enforceable commitments. Several 8-hour ozone 
metrics were calculated. The results indicated that the revised SIP is 
slightly more effective in reducing 8-hour ozone than the previously 
approved SIP in both average relative reduction factor (0.931 vs. 
0.940) and in average future design value (107 vs 108 ppb). Although 
some monitoring stations fare slightly worse under the new control 
strategy, others fare slightly better. In addition, for both peak 8-
hour ozone concentration and exposure metrics, the benefits of the new 
strategy exceed those of the old on every day except September 6, where 
the old strategy is slightly better. Considering, the modeled predicted 
area of exceedance, however, the comparison is less clear-cut. The 
older strategy shows more of a benefit on six of ten days and the new 
strategy shows a greater benefit on three days. Both strategies 
indicate the same benefit on one day. In summary, EPA believes that the 
new strategy and the old strategy are approximately equivalent in eight 
hour ozone benefit, with the new strategy slightly more effective in 
reducing the peak ozone values and the old strategy slightly more 
effective in reducing the predicted area of exceedence. Taking all of 
the metrics into consideration and recognizing the uncertainties in the 
modeling, we believe that Texas has demonstrated that the new strategy 
is equivalent to the old strategy in 8-hour ozone benefit.
    Permanent: The emission reductions from the HRVOC rules are 
permanent as sources will have to maintain compliance with new measures 
indefinitely.
    Enforceable: EPA is reviewing the enforceability of the substitute 
measures in separate rules. The Gas Can Rule was approved on February 
10, 2005, 70 FR 7041. EPA has proposed approval of the fugitive 
emission controls and improved monitoring requirements for HRVOCs on 
April 7, 2005, 70 FR 17640 . Finally, concurrent with this Federal 
Register notice EPA is proposing approval of the HECT program. In each 
of these rulemakings, EPA will evaluate whether the substitute rules 
are enforceable, considering such issues as whether the rules have 
adequate test methods, monitoring requirements, record keeping 
requirements and whether the State has adequate enforcement authority 
to ensure the limits are achieved. As discussed elsewhere, the 
revisions to the attainment plan including the NOX rule 
repeals and revisions that reduce the projected amount on 
NOX emission reductions cannot be approved unless final 
approval of the substitute rules is completed. If approved, these 
substitute rules will be federally enforceable and enforceable by the 
public through citizen suit.
    In summary, we believe the substitute measures result in equivalent 
8-hour benefit and that the new measures are contemporaneous, 
enforceable and permanent. Therefore, we believe approval of these 
revisions to the approved SIP will not interfere with attainment of the 
8-hour standard.
3. What About Possible Interference With the 1-Hour Ozone Standard?
    The 1-hour standard was revoked on June 15, 2005 for the HGB area. 
The approved SIP, however, committed the State to adopt control 
measures of 56 tpd, unless the State could show that these 
NOX reductions were not needed for attainment of the 1-hour 
standard. We have discussed, in Section II.A., EPA's evaluation of the 
revised 1-hour attainment demonstration and are proposing approval of 
that strategy as demonstrating attainment of the 1-hour standard.
4. How Has Texas Shown These Revisions Do Not Interfere With Rate of 
Progress?
    Texas submitted, and EPA has approved, revisions to the rate of 
progress plan (February 14, 2005 70 FR 7407) based on the revised 
strategy. These revisions will ensure that 1-hour ROP is met for each 
3-year period out to the 1-hour attainment date. (See the Federal 
Register cited above for further explanation of the approved ROP 
demonstration.)
5. Do These Revisions Interfere With Attainment of Other Standards 
Besides Ozone?
    The HGB area currently meets all other National Ambient Air Quality 
Standards besides ozone. The plan revisions being considered would not 
be expected to impact compliance with the CO, SO2 or lead 
NAAQs as these pollutants are not affected by these rules.
    The revisions to the NOX rules do affect emissions of 
NO2 and thus could potentially impact attainment with the 
NO2 standard. The HGB area, however, meets the 
NO2 standard at today's level of NO2 emissions 
and the revised plan will still reduce NO2 emissions 
considerably from today's levels and thus will not interfere with 
maintenance of the NO2 standard.
    Similarly, the HGB area currently meets the NAAQS for PM fine. 
NOX and VOCs are precursors to the formation of PM fine. The 
revised plan will result in additional NOX and VOC 
reductions beyond today's levels. Therefore, the revised plan will not 
interfere with the continued attainment of the PM fine standard.

[[Page 58136]]

6. Do the Revisions Interfere With Any Other Applicable Requirements of 
the Act?
    Section 110(l) applies to all requirements of the Act. Below are 
requirements potentially affected by TCEQ's rule change and a brief 
discussion of EPA's analysis.
    Reasonably Available Control Technology (RACT) requirements: EPA 
has previously approved the NOX and VOC rules in the HGB 
area as meeting the Act's RACT requirements. The revised NOX 
rules remain substantially more stringent than the previously approved 
RACT requirements. The new HRVOC rules build on the previously approved 
RACT requirements. In addition, these revisions do not impact the major 
sources applicability cutoffs. Therefore, these revisions do not 
interfere with the implementation of RACT.
    Inspection and maintenance programs (I/M): This revision drops 
three counties from the I/M program. These counties are not included in 
the urbanized area as defined by the Census Bureau. Thus, I/M is not 
required to be implemented in these counties and thus these revisions 
do not interfere with meeting the I/M requirements of the Act.
    Air Toxics: There are no federal ambient standards for air toxics 
and these rules do not impact compliance with any federal MACT 
standards so these rule revisions do not interfere with compliance with 
any air toxics standards. We note that air toxic levels of butadiene 
and formaldehyde are expected to decrease as a result of the revised 
plan. Butadiene emissions are directly regulated by the new HRVOC 
rules. Formaldehyde is formed from ethylene in the photochemical 
reactions leading to ozone.

F. Enforceable Commitments

1. What Is an Enforceable Commitment?
    An enforceable commitment is a written commitment that is approved 
into the SIP that is enforceable against the State. In the SIP approved 
in November 2001, there were enforceable commitments to achieve 
additional NOX reductions and enforceable commitments to 
incorporate the latest information into the SIP.
    To be enforceable, commitments must be approved as part of the SIP 
and, therefore, the State must have given notice and taken comment on 
the commitment, held a public hearing and submitted it as a SIP 
revision. The commitments must be specific as to the state agency's 
future plans for adoption of specified control measures. The dates for 
implementation of, or compliance with, the future to-be-adopted 
specified control measures must be included in the commitments and be 
as expeditious as practicable. If the State does not follow through 
with the commitment, EPA can find that the State failed to implement 
the SIP. Further, the public can seek enforcement of the obligations 
under Section 304(a) of the CAA.
2. What Were the Enforceable Commitments in the 2001 Approved SIP and 
Have They Been Fulfilled?
    In the approved SIP, there are a number of enforceable commitments. 
In this section we evaluate whether these enforceable commitments have 
been met. The State made the following commitments which were approved 
in the November 2001 Federal Register.
     To perform a mid-course review (including evaluation of 
all modeling, inventory data, and other tools and assumptions used to 
develop this attainment demonstration) and to submit a mid-course 
review SIP revision, with recommended mid-course corrective actions, to 
the EPA by May 1, 2004.
    Discussion: Texas provided the mid-course review in the December 
2004 submission. It included new modeling with new more recent episodes 
based on the Texas 2000 study. Virtually all of the inputs to the model 
were updated and improved, making the 2004 SIP the best modeling ever 
performed for the Houston area. Additionally, the State submitted 
control measures that, based on the demonstration, will result in 
attainment of the 1-hour standard as expeditiously as practicable. 
Therefore, EPA believes the commitment for a mid course review has been 
satisfied.
     To perform new mobile source modeling for the HG area, 
using MOBILE6, EPA's on-road mobile emissions factor computer model, 
within 24 months of the model's release.
    Discussion: The midcourse review modeling employed MOBILE6 for the 
on-road mobile source inputs satisfying this commitment.
     If a transportation conformity analysis is to be performed 
between 12 months and 24 months after the MOBILE6 release, 
transportation conformity will not be determined until Texas submits an 
MVEB which is developed using MOBILE6 and which we find adequate.
    Discussion: This commitment was not applicable because 
transportation conformity was not performed during the time period.
     To adopt rules that achieve at least the additional 56 tpd 
of NOX emission reductions that are needed for the area to 
show attainment of the 1-hour ozone standard.
    See below.
     To adopt measures to achieve 25% of the needed additional 
reductions (56 tpd) and submit those adopted measures to EPA as a SIP 
revision by December 2002.
    Discussion: This commitment required TCEQ to find measures to 
achieve an additional 14 tons/day of NOX emission reductions 
and to submit adopted control measures by December 2002. In the January 
28, 2003 submission, TCEQ provided the demonstration that the TERP 
program meets EPA's requirements as an economic incentive program and 
will achieve the required 14 tons/day of emissions reductions. EPA has 
approved the TERP program in a separate Federal Register action which 
discusses how the TERP program meets the EIP requirements (August 19, 
2005, 70 FR 48647 ). Through the attainment year of 2007, 38.8 tons/day 
of emission reductions are projected for the TERP program based on a 
$5,000/ton cost effectiveness. The total obligation for emission 
reductions from TERP is 32.9 tpd. TERP originally replaced two 
measures: a morning construction ban (6.7 tpd NOX 
equivalent) and accelerated introduction of Tier II/III equipment 12.2 
tpd). After allocating 18.9 tpd from TERP to replace these two 
measures, the program still is projected to produce an additional 19.9 
tpd of reductions which is sufficient to provide the additional 14 tpd 
of emissions reductions needed to meet the enforceable commitment. 
Thus, EPA believes the enforceable commitment to achieve 25% of the 56 
tpd of NOX reductions has been satisfied.
    We note two developments with the program. The average cost 
effectiveness of TERP projects, to date, is $5500/ton and the Texas 
legislature moved to cut some of the funding for the program in the 
last session. TCEQ may have to shift some of the TERP funding from 
other areas such as Corpus Christi or Victoria, which currently meet 
the 8-hour ozone standard to the HGB area to insure that the emission 
reduction targets are met.
     To adopt measures for the remaining needed additional 
reductions and submit these adopted measures to EPA as a SIP revision 
by May 1, 2004.
    Discussion: Texas determined that these additional NOX 
reductions would not be necessary for the area to attain. Instead, as 
discussed elsewhere in this document, TCEQ has instead adopted and has 
begun implementing a strategy to reduce emissions of HRVOCs. EPA 
believes that the new strategy will attain the one-hour standard. This 
is further

[[Page 58137]]

discussed in Section II.B. regarding the review of the attainment 
demonstration and Section II.E regarding whether section 110(l) of the 
Act has been met.
     That the rules will be adopted as expeditiously as 
practicable and the compliance dates will be expeditious.
    Discussion: TCEQ adopted its measures for the control of HRVOC 
first in 2002 and has revised them three times since then. The 
compliance dates in the rules are based on the need to develop 
monitoring plans, quality assurance/quality control programs, install 
the monitors, and develop control plans based on the monitoring 
results. EPA believes that the implementation of these new measures is 
as expeditious as practicable.
     That the State would concurrently revise the Motor Vehicle 
Emissions Budgets (MVEBs) and submit them as a revision to the 
attainment SIP if additional control measures reduce on-road motor 
vehicle emissions. Texas stated that measures which could limit future 
highway construction, such as growth restrictions, may not be included.
    Discussion: Texas has revised the mobile source budget to account 
for TERP reductions and other adjustments to the mobile source 
emissions estimates.
    Summary: Based on the above analysis, we propose that TCEQ has 
satisfied the requirements of the enforceable commitments contained in 
the approved HGB SIP.

G. Motor Vehicle Emissions Budgets

1. What Is a Motor Vehicle Emissions Budget and Why Is It Important?
    The MVEB is the level of total allowable on-road emissions 
established by a control strategy implementation plan or maintenance 
plan. In this case, the MVEB establishes the maximum level of on-road 
emissions that can be produced in 2007, when considered with emissions 
from all other sources, which demonstrate attainment of the NAAQS. It 
is important because the MVEB is used to determine the conformity of 
transportation plans and programs to the SIP, as described by section 
176(c)(2)(A) of the Act.
2. What Are the Motor Vehicle Emissions Budgets Being Proposed for 
Approval?
    The MVEBs established by this plan and that the EPA is proposing to 
approve are contained in Table 2. The development of the MVEBs are 
discussed in section 3.5 of the SIP and reviewed in the TSD. We are 
proposing approval because we find the MVEB to be consistent with the 
attainment plan.

     Table 2.--2007 Attainment Year Motor Vehicle Emissions Budgets
                             [Tons per day]
------------------------------------------------------------------------
                           Pollutant                              2007
------------------------------------------------------------------------
VOC...........................................................     89.99
NOX...........................................................    186.13
------------------------------------------------------------------------

III. General Information

A. Tips for Preparing Your Comments

    When submitting comments, remember to:
    1. Identify the rulemaking by File ID number and other identifying 
information (subject heading, Federal Register date and page number).
    2. Follow directions--The agency may ask you to respond to specific 
questions or organize comments by referencing a Code of Federal 
Regulations (CFR) part or section number.
    3. Explain why you agree or disagree; suggest alternatives and 
substitute language for your requested changes.
    4. Describe any assumptions and provide any technical information 
and/or data that you used.
    5. If you estimate potential costs or burdens, explain how you 
arrived at your estimate in sufficient detail to allow for it to be 
reproduced.
    6. Provide specific examples to illustrate your concerns, and 
suggest alternatives.
    7. Explain your views as clearly as possible, avoiding the use of 
profanity or personal threats.
    8. Make sure to submit your comments by the comment period deadline 
identified.

B. Submitting Confidential Business Information (CBI)

    Do not submit this information to EPA through regulations.gov or e-
mail. Clearly mark the part or all of the information that you claim to 
be CBI. For CBI information in a disk or CD ROM that you mail to EPA, 
mark the outside of the disk or CD ROM as CBI and then identify 
electronically within the disk or CD ROM the specific information that 
is claimed as CBI). In addition to one complete version of the comment 
that includes information claimed as CBI, a copy of the comment that 
does not contain the information claimed as CBI must be submitted for 
inclusion in the official file. Information so marked will not be 
disclosed except in accordance with procedures set forth in 40 CFR part 
2.

IV. 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

[[Page 58138]]

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, 
Incorporation by reference, Intergovernmental relations, Nitrogen 
dioxide, Ozone, Particulate matter, Reporting and recordkeeping 
requirements, Volatile organic compounds.

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

    Dated: September 27, 2005.
Richard Greene,
Regional Administrator, Region 6.
[FR Doc. 05-19994 Filed 10-4-05; 8:45 am]
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