[Federal Register Volume 75, Number 202 (Wednesday, October 20, 2010)]
[Rules and Regulations]
[Pages 64864-64907]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-25132]



[[Page 64863]]

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Part III





Environmental Protection Agency





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40 CFR Parts 51 and 52



Prevention of Significant Deterioration (PSD) for Particulate Matter 
Less Than 2.5 Micrometers (PM2.5)--Increments, Significant 
Impact Levels (SILs) and Significant Monitoring Concentration (SMC); 
Final Rule

  Federal Register / Vol. 75 , No. 202 / Wednesday, October 20, 2010 / 
Rules and Regulations  

[[Page 64864]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 51 and 52

[EPA-HQ-OAR-2006-0605; FRL-9210-9]
RIN 2060-AO24


Prevention of Significant Deterioration (PSD) for Particulate 
Matter Less Than 2.5 Micrometers (PM2.5)--Increments, 
Significant Impact Levels (SILs) and Significant Monitoring 
Concentration (SMC)

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The EPA is amending the requirements for particulate matter 
less than 2.5 micrometers (PM2.5) under the Prevention of 
Significant Deterioration (PSD) program by adding maximum allowable 
increases in ambient pollutant concentrations (``increments'') and two 
screening tools, known as the Significant Impact Levels (SILs) and a 
Significant Monitoring Concentration (SMC) for PM2.5. The 
SILs for PM2.5 are also being added to two other New Source 
Review (NSR) rules that regulate the construction and modification of 
any major stationary source locating in an attainment or unclassifiable 
area, where the source's emissions may cause or contribute to a 
violation of the national ambient air quality standards (NAAQS).

DATES: This final rule is effective on December 20, 2010.

ADDRESSES: The EPA has established a docket for this action under 
Docket ID No. EPA-HQ-OAR-2006-0605. All documents in the docket are 
listed on the http://www.regulations.gov Web Site. Although listed in 
the index, some information may not be publicly available, e.g., 
Confidential Business Information (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 through http://www.regulations.gov or in hard copy at the Air Docket, EPA/DC, EPA 
West, Room 3334, 1301 Constitution Avenue, Northwest, Washington, DC. 
The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday 
through Friday, excluding legal holidays. The telephone number for the 
Public Reading Room is (202) 566-1744, and the telephone number for the 
Air Docket is (202) 566-1742.

FOR FURTHER INFORMATION CONTACT: Mr. Dan deRoeck, Air Quality Policy 
Division, Office of Air Quality Planning and Standards (C504-03), U.S. 
Environmental Protection Agency, Research Triangle Park, North Carolina 
27711, telephone number: (919) 541-5593, facsimile number: (919) 541-
5509, e-mail address: [email protected].

SUPPLEMENTARY INFORMATION: The information in this Supplementary 
Information section of this preamble is organized as follows:

I. General Information
    A. Does this action apply to me?
    B. Where can I get a copy of this document and other related 
information?
II. Purpose
III. Overview of Final PM2.5 PSD Regulations
    A. Increments
    B. Significant Impact Levels
    C. Significant Monitoring Concentration
IV. Background
    A. PSD Program
    B. History of Particulate Matter (PM) NAAQS
    1. Total Suspended Particulate (TSP) and PM10 NAAQS
    2. PM2.5 NAAQS
    3. Revised PM2.5 and PM10 NAAQS
    C. Implementation of NSR for PM2.5
    D. Increments Under the PSD Program
    E. Historical Approaches for Developing Increments
    1. Congressional Enactment of Increments for PM and 
SO2
    2. EPA's Promulgation of Increments for NO2 and 
PM10
    a. Increments for NO2 Using the ``Contingent Safe 
Harbor'' Approach Under Section 166(a) of the Act
    b. Increments for PM10 Using ``Equivalent 
Substitution'' Approach Under Section 166(f) of the Act
V. Final Action on PM2.5 Increments
    A. Decision To Establish PM2.5 Increments Using 
``Contingent Safe Harbor Approach'' Under Section 166(a)
    B. Rationale for the Applicability of Section 166(a)
    C. EPA's Interpretation of the Requirements Under Sections 
166(a)-(d) of the Act
    1. Regulations as a Whole Should Fulfill Statutory Requirements
    2. Contingent Safe Harbor Approach
    3. The Statutory Factors Applicable Under Section 166(c)
    4. Balancing the Factors Applicable Under Section 166(c)
    5. Authority for States To Adopt Alternatives to Increments
    D. Framework for Pollutant-Specific PSD Regulations for 
PM2.5
    1. Increment System
    2. Area Classifications
    3. Permitting Procedures
    4. AQRV Review by Federal Land Manager (FLM) and Reviewing 
Authority
    5. Additional Impacts Analysis
    6. Installation of BACT
    E. Final PM2.5 Increments
    1. Identification of Safe Harbor Increments
    2. Data Used by EPA for the Evaluation of the Safe Harbor 
Increments for PM2.5
    3. Scope of Effects Considered
    4. Evaluation of the Health and Welfare Effects of 
PM2.5
    a. Health Effects
    b. Welfare Effects
    5. Fundamental Elements of Increments
    6. Evaluation of the Safe Harbor Increments
    7. Compliance Determinations for the PM2.5 Increments
    a. Modeling Compliance With PM2.5 Increments
    b. Condensable PM
    c. PM2.5 Precursors
    F. Final Action on Trigger and Baseline Dates for 
PM2.5 Increments
    G. Definition of ``Baseline Area'' for PM2.5
    H. No Final Action With Respect to the Proposed Revocation of 
PM10 Annual Increments
    I. Other Comments on Increments
VI. Final Action on PM2.5 SILs
    A. EPA's Determination on SILs for PM2.5
    B. Response to Comments Concerning the SILs
    1. Legal Basis for SILs
    2. Levels of the SILs
    a. Class I SILs
    b. Class II and III SILs
    3. Relationship Between SILs and AQRVs
    4. Form of the SILs
    5. SILs for Other Pollutants
VII. Final Action on the PM2.5 SMC
    A. EPA's Determination on the PM2.5 SMC
    B. Response to Comments Concerning the SMC
    1. Legal Issues
    2. Level of the SMC
    C. Correction of Cross Reference in PSD Ambient Monitoring 
Requirements
VIII. Dates Associated With Implementation of the Final Rule
    A. Effective Date of the Final Rule
    1. State PSD Programs
    2. Federal PSD Program
    B. Transition Period
    C. SILs and SMC for PM2.5
IX. Other Regulatory Changes
X. Statutory and Executive Order Reviews
    A. Executive Order 12866--Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132--Federalism
    F. Executive Order 13175--Consultation and Coordination With 
Indian Tribal Governments
    G. Executive Order 13045--Protection of Children From 
Environmental Health and Safety Risks
    H. Executive Order 13211--Actions That Significantly Affect 
Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act
    J. Executive Order 12898--Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations
    K. Congressional Review Act
XI. Judicial Review
XII. Statutory Authority


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I. General Information

A. Does this action apply to me?

    Entities affected by this rule include sources in all industry 
groups. The majority of sources potentially affected are expected to be 
in the following groups:

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                  Industry group                                              NAICS \a\
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Electric services.................................  221111, 221112, 221113, 221119, 221121, 221122
Petroleum refining................................  32411
Industrial inorganic chemicals....................  325181, 32512, 325131, 325182, 211112, 325998, 331311,
                                                     325188
Industrial organic chemicals......................  32511, 325132, 325192, 325188, 325193, 32512, 325199
Miscellaneous chemical products...................  32552, 32592, 32591, 325182, 32551
Natural gas liquids...............................  211112
Natural gas transport.............................  48621, 22121
Pulp and paper mills..............................  32211, 322121, 322122, 32213
Paper mills.......................................  322121, 322122
Automobile manufacturing..........................  336111, 336112, 336712, 336211, 336992, 336322, 336312,
                                                     33633, 33634, 33635, 336399, 336212, 336213
Pharmaceuticals...................................  325411, 325412, 325413, 325414
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\a\ North American Industry Classification System.

    Entities affected by this rule also include State and local 
permitting authorities, and tribal authorities that implement these 
regulations.

B. Where can I get a copy of this document and other related 
information?

    In addition to being available in the docket, an electronic copy of 
this final rule will also be available on the World Wide Web. Following 
signature by the EPA Administrator, a copy of this final rule will be 
posted in the regulations and standards section of our NSR home page 
located at http://www.epa.gov/nsr.

II. Purpose

    The purpose of this rulemaking is to finalize certain program 
provisions under the regulations to prevent significant deterioration 
of air quality due to emissions of PM2.5 (i.e., under the 
PM2.5 PSD regulations). This final rule supplements the 
final implementation rule for PM2.5, known as the Clean Air 
Fine Particle Implementation Rule (CAFPIR) that we promulgated on April 
25, 2007 (72 FR 20586), and the PM2.5 NSR Implementation 
Rule that we promulgated on May 16, 2008 (73 FR 28321). Together, these 
three rules encompass the elements necessary for implementation of a 
PM2.5 program in any area. This final rule is important 
because it establishes increments, SILs, and an SMC for 
PM2.5 to facilitate ambient air quality monitoring and 
modeling under the PSD regulations for areas designated attainment or 
unclassifiable for PM2.5.

III. Overview of Final PM2.5 PSD Regulations

A. Increments

    This rulemaking establishes increments for PM2.5 
pursuant to the legal authority contained in section 166(a) of the 
Clean Air Act (CAA or Act) for pollutants for which NAAQS are 
promulgated after 1977. The final PM2.5 increments were 
identified as Option 1 in the 2007 Notice of Proposed Rulemaking (NPRM) 
for this action, and are as follows:

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                                                                 NAAQS            Increments ([mu]g/m\3\)
                      Averaging period                          ([mu]g/   --------------------------------------
                                                                 m\3\)       Class I      Class II    Class III
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Annual......................................................           15            1            4            8
24-hour.....................................................           35            2            9           18
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    As discussed in more detail in sections V.F and VIII, the 
increments for PM2.5 will become applicable on October 20, 
2011 in order to comply with section 166(b) of the Act (providing that 
regulations under section 166(a) ``shall become effective one year 
after the date of promulgation'').
    This final rule does not revoke the annual increments for 
particulate matter less than 10 micrometers (PM10) as 
proposed under Option 1 in the 2007 NPRM. Thus, we are retaining the 
24-hour and annual PM10 increments in addition to adding 
PM2.5 increments. This outcome is discussed in greater 
detail in section V.H of this preamble.

B. Significant Impact Levels

    This rule establishes SILs for PM2.5 for evaluating the 
impact a proposed new source or modification may have on the NAAQS and 
PSD increments for PM2.5. The SILs for PM2.5 were 
developed by scaling the existing PM10 SILs using a 
PM2.5-to-PM10 NAAQS ratio. The final SILs were 
identified as Option 3 in the 2007 NPRM, and are as follows:

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------------------------------------------------------------------------
                                             SILs ([mu]g/m\3\)
         Averaging period         --------------------------------------
                                     Class I      Class II    Class III
------------------------------------------------------------------------
Annual...........................         0.06          0.3          0.3
24-hour..........................         0.07          1.2          1.2
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    These values will be added to the State implementation plan (SIP) 
provisions for PSD at 40 CFR 51.166 (as an optional screening tool) and 
the Federal PSD program at 40 CFR 52.21, as well as under the 
preconstruction review permit requirements at 40 CFR 51.165(b) and part 
51, Appendix S. See a more detailed discussion of the SILs, as well as 
the relevant comments and our responses to them, in section VI of this 
preamble. The SILs for PM2.5 are incorporated into the 
Federal PSD program as well as into the regulations for State-
implemented PSD programs, although they are regarded as optional for 
State programs. The effective date for implementing the SILs under the 
Federal PSD program is the effective date of this final rule. See 
section VIII of this preamble for further discussion of the effective 
date.

C. Significant Monitoring Concentration

    This final rule establishes the SMC for PM2.5 as 4 
[mu]g/m\3\ PM2.5 (24-hour average). This value has been 
developed pursuant to proposed Option 1; however, it should be noted 
that the value being established in this final rule is lower than the 
proposed value of 10 [mu]g/m\3\ that was originally developed under 
Option 1. A more detailed discussion of the proposed SMC is presented 
in section VII of this preamble, describing the rationale for altering 
the proposed SMC, and the relevant comments on the proposed SMC and our 
responses to them. The SMC for PM2.5 is incorporated into 
the Federal PSD program as well as into the regulations for State-
implemented PSD programs, although they are regarded as optional for 
State programs. As with the SILs for PM2.5, the effective 
date for implementing the SMC under the Federal PSD program is the 
effective date of this final rule. See section VIII of this preamble 
for further discussion of the effective date.

IV. Background

A. PSD Program

    The NSR provisions of the Act are a combination of air quality 
planning and air pollution control technology program requirements for 
new and modified stationary sources of air pollution. In brief, section 
109 of the Act requires us to promulgate primary NAAQS to protect 
public health and secondary NAAQS to protect public welfare. Once we 
have set these standards, states must develop, adopt, and submit to us 
for approval SIPs that contain emission limitations and other control 
measures to attain and maintain the NAAQS and to meet the other 
requirements of section 110(a) of the Act. Part C of title I of the Act 
contains the requirements for a component of the major NSR program 
known as the PSD program. This program sets forth procedures for the 
preconstruction review and permitting of new and modified major 
stationary sources of air pollution locating in areas meeting the NAAQS 
(``attainment'' areas) and areas for which there is insufficient 
information to classify an area as either attainment or nonattainment 
(``unclassifiable'' areas). Most states have SIP-approved 
preconstruction permit (major NSR) programs. The Federal PSD program at 
40 CFR 52.21 applies in some states that lack a SIP-approved permit 
program, and in Indian country.\1\ The applicability of the PSD program 
to a major stationary source must be determined in advance of 
construction and is a pollutant-specific determination. Once a major 
source is determined to be subject to the PSD program (PSD source), 
among other requirements, it must undertake a series of analyses to 
demonstrate that it will use the best available control technology 
(BACT) and will not cause or contribute to a violation of any NAAQS or 
increment. For the latter demonstration, the PSD regulations generally 
require sources to submit for review and approval a source impact 
analysis and an air quality analysis.
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    \1\ We have delegated our authority to some states to implement 
the Federal PSD program. The EPA remains the reviewing authority in 
non-delegated states lacking SIP-approved programs and in Indian 
country.
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    The source impact analysis is primarily a modeling analysis 
designed to show that the allowable emissions increase from the 
proposed project, in conjunction with other emissions increases from 
existing sources, will not result in a violation of either the NAAQS or 
increments. In cases where the source's emissions may adversely affect 
an area classified as a Class I area, additional review is conducted to 
protect the increments and special attributes of such an area defined 
as ``air quality related values'' (AQRVs).
    The air quality analysis must assess the ambient air quality in the 
area that the proposed project would affect. For this analysis, the 
owner or operator of the proposed project must submit as part of a 
complete permit application air quality monitoring data that represent 
the air quality in the area affected by the proposed source for the 1-
year period preceding receipt of the application. Where data may 
already exist to represent existing air quality, it may be used by the 
applicant; otherwise, the source owner or operator is responsible for 
the installation and operation of monitors to collect the necessary 
data.
    Historically, EPA has allowed the use of several types of screening 
tools to facilitate implementation of the preconstruction review 
process to reduce the permit applicant's burden and streamline the 
permitting process for de minimis circumstances. These tools include a 
significant emissions rate (SER), SILs, and a SMC. The SER, defined in 
tons per year (tpy) for each regulated pollutant, is used to determine 
whether the emissions increase from any proposed source or modification 
can be excluded from review on the grounds that the increase of any 
particular pollutant is de minimis. An emission increase for a 
particular pollutant that is greater than the SER defined in the NSR 
regulations for that pollutant is considered to be a significant 
increase.
    The SIL, expressed as an ambient pollutant concentration 
(micrograms per cubic meter ([mu]g/m \3\)), is used to determine 
whether the ambient impact of a particular pollutant (once it is 
determined to be emitted in significant amounts) is significant enough 
to warrant a complete source impact analysis involving modeling the 
collective impacts of the proposed project and emissions from other 
existing sources.
    The PSD regulations generally require each PSD applicant to collect 
1 year of continuous air quality monitoring data for any pollutant 
determined to be subject to preconstruction review as part of complete 
PSD permit application. Using the SMC as a screening tool, expressed as 
an ambient pollutant concentration ([mu]g/m\3\), sources may be able to 
demonstrate that the modeled air

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quality impact of emissions from the new source or modification, or the 
existing air quality level in the area where the source would 
construct, is less than the SMC, i.e., de minimis, and may be allowed 
to forego the preconstruction monitoring requirement for a particular 
pollutant at the discretion of the reviewing authority.\2\ See 40 CFR 
51.166(i)(5) and 52.21(i)(5).
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    \2\ The basic monitoring exemption provision is part of the 
original monitoring requirements adopted in the 1980 PSD rulemaking. 
45 FR 52676, 52710, August 7, 1980.
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    When the reviewing authority reaches a preliminary decision to 
authorize construction of a proposed major new source or major 
modification, it must provide notice of the preliminary decision and an 
opportunity for comment by the general public, industry, and other 
persons that may be affected by the emissions of the proposed major 
source or major modification. After considering these comments, the 
reviewing authority may issue a final determination on the construction 
permit in accordance with the PSD regulations.

B. History of Particulate Matter (PM) NAAQS

1. Total Suspended Particulate (TSP) and PM10 NAAQS
    The EPA initially established NAAQS for PM in 1971, measured by the 
TSP indicator. Based on the size of the particles collected by the 
``high-volume sampler,'' which at that time was the reference method 
for determining ambient concentrations, TSP included all PM up to a 
nominal size of 25 to 45 micrometers. We established both annual and 
24-hour NAAQS for TSP.
    On July 1, 1987, we revised the NAAQS for PM and changed the 
indicator from TSP to PM10; the latter indicator includes 
particles with a mean aerodynamic diameter less than or equal to 10 
micrometers. The PM10 particles are the subset of inhalable 
particles small enough to penetrate to the thoracic region (including 
the tracheobronchial and alveolar regions) of the respiratory tract 
(referred to as thoracic particles). We established annual and 24-hour 
NAAQS for PM10, and revoked the NAAQS for TSP. (52 FR 
24634).
2. PM2.5 NAAQS
    On July 18, 1997, we again revised the NAAQS for PM in several 
respects. While we determined that the NAAQS should continue to focus 
on particles less than or equal to 10 micrometers in diameter, we also 
determined that the fine and coarse fractions of PM10 should 
be considered separately. We established new annual and 24-hour NAAQS 
using PM2.5 (referring to particles with a nominal mean 
aerodynamic diameter less than or equal to 2.5 micrometers) as the 
indicator for fine particles. The 1997 NAAQS rule also modified the 
PM10 NAAQS for the purpose of regulating the coarse fraction 
of PM10 (referred to as thoracic coarse particles or coarse-
fraction particles; generally including particles with a nominal mean 
aerodynamic diameter greater than 2.5 micrometers and less than or 
equal to 10 micrometers, or PM10-2.5); however, this part of 
the rulemaking was vacated during subsequent litigation, leaving the 
pre-existing 1987 PM10 NAAQS in place (62 FR 38652).
3. Revised PM2.5 and PM10 NAAQS
    On October 17, 2006, we promulgated revisions to the NAAQS for 
PM2.5 and PM10 with an effective date of December 
18, 2006 (71 FR 61144). We lowered the 24-hour NAAQS for 
PM2.5 from 65 [micro]g/m\3\ to 35 [micro]g/m\3\, and 
retained the existing annual PM2.5 NAAQS of 15 [micro]g/
m\3\. In addition, we retained the existing PM10 24-hour 
NAAQS of 150 [micro]g/m\3\, and revoked the annual PM10 
NAAQS (set at 50 [micro]g/m\3\).

C. Implementation of NSR for PM2.5

    After we established new annual and 24-hour NAAQS based on 
PM2.5 as the indicator for fine particles in July 1997, we 
issued a guidance document titled ``Interim Implementation for the New 
Source Review Requirements for PM2.5,'' John S. Seitz, 
Director, Office of Air Quality Planning and Standards, EPA, October 
23, 1997. As noted in that guidance, section 165 of the Act implies 
that certain PSD requirements become effective for a new NAAQS upon the 
effective date of the NAAQS. Section 165(a)(1) of the Act provides that 
no new or modified major source may be constructed without a PSD permit 
that meets all of the section 165(a) requirements with respect to the 
regulated pollutant. Moreover, section 165(a)(3) provides that the 
emissions from any such source may not cause or contribute to a 
violation of any increment or NAAQS. Also, section 165(a)(4) requires 
BACT for each pollutant subject to PSD regulation. The 1997 guidance 
stated that sources would be allowed to use implementation of a 
PM10 program as a surrogate for meeting PM2.5 NSR 
requirements until certain difficulties were resolved. These 
difficulties included the lack of necessary tools to calculate the 
emissions of PM2.5 and related precursors, the lack of 
adequate modeling techniques to project ambient impacts, and the lack 
of PM2.5 monitoring sites.
    On April 5, 2005, we issued a guidance document entitled 
``Implementation of New Source Review Requirements in PM-2.5 
Nonattainment Areas,'' Stephen D. Page, Director, Office of Air Quality 
Planning and Standards, EPA. This memorandum provided guidance on the 
implementation of the nonattainment major NSR provisions in 
PM2.5 nonattainment areas in the interim period between the 
effective date of the PM2.5 NAAQS designations (April 5, 
2005) and when we promulgate regulations to implement nonattainment 
major NSR for the PM2.5 NAAQS. In addition to affirming the 
continued use of the John S. Seitz guidance memo in PM2.5 
attainment areas, this memo recommended that, until we promulgated the 
PM2.5 major NSR regulations, states should use a 
PM10 nonattainment major NSR program as a surrogate to 
address the requirements of nonattainment major NSR for the 
PM2.5 NAAQS.
    On November 1, 2005, we proposed a rule to implement the 
PM2.5 NAAQS, including proposed revisions to the NSR 
program. For those states with EPA-approved PSD programs, we proposed 
to continue the 1997 NSR guidance to use PM10 as a surrogate 
for PM2.5, but only during the SIP development period. We 
also indicated in that proposal that we would be developing increments, 
SILs, and an SMC in a separate rulemaking, i.e., this final rule. Since 
there was an interim surrogate NSR program in place, i.e., the 
PM10 Surrogate Policy, EPA decided to first promulgate the 
non-NSR part of the implementation rule (including attainment 
demonstrations, designations, control measures, etc.). This rule was 
promulgated as the CAFPIR on April 25, 2007 (72 FR 20586).
    The NSR part of the implementation rule was issued separately as a 
final rule on May 16, 2008 (73 FR 28321), and included sets of NSR 
regulations for both attainment (PSD) and nonattainment areas 
(nonattainment NSR) for PM2.5. In the May 16, 2008 rule we 
added one of the important screening tools--the SER--for 
PM2.5. The SER for PM2.5 is defined as an 
emissions rate of 10 tpy for direct PM2.5 emissions. We also 
listed sulfur dioxide (SO2) and nitrogen oxides 
(NOX) as precursors of ambient PM2.5 and defined 
``significant'' as 40 tpy or more of either precursor pollutant. States 
were allowed up to 3 years from the date of publication in the Federal 
Register to

[[Page 64868]]

revise their SIPs and submit their revised NSR programs to EPA for 
approval.

D. Increments Under the PSD Program

    Under section 165(a)(3) of the Act, a PSD permit applicant must 
demonstrate that emissions from the proposed construction and operation 
of a facility ``will not cause, or contribute to, air pollution in 
excess of any (A) maximum allowable increase or maximum allowable 
concentration for any pollutant * * *.'' The ``maximum allowable 
increase'' of an air pollutant that is allowed to occur above the 
applicable baseline concentration for that pollutant is known as the 
PSD increment. By establishing the maximum allowable level of ambient 
pollutant concentration increase in a particular area, an increment 
defines ``significant deterioration'' of air quality in that area.
    For PSD baseline purposes, a baseline area for a particular 
pollutant emitted from a source includes the attainment or 
unclassifiable area in which the source is located, as well as any 
other attainment or unclassifiable area in which the source's emissions 
of that pollutant are projected (by air quality modeling) to result in 
a significant ambient pollutant increase. See, e.g., 40 CFR 
52.21(b)(15)(i). Once the baseline area is established, subsequent PSD 
sources locating in that area need to consider that a portion of the 
available increment may have already been consumed by previous 
emissions increases.
    In general, the submittal date of the first complete PSD permit 
application in a particular area is the operative ``baseline date.'' 
\3\ On or before the date of the first complete PSD application, 
emissions generally are considered to be part of the baseline 
concentration, except for certain emissions from major stationary 
sources, as explained in the following discussion of baseline dates. 
Most emissions increases that occur after the baseline date will be 
counted toward the amount of increment consumed. Similarly, emissions 
decreases after the baseline date restore or expand the amount of 
increment that is available.
---------------------------------------------------------------------------

    \3\ Baseline dates are pollutant specific. That is, a complete 
PSD application establishes the baseline date only for those 
regulated NSR pollutants that are projected to be emitted in 
significant amounts (as defined in the regulations) by the 
applicant's new source or modification. Thus, an area may have 
different baseline dates for different pollutants.
---------------------------------------------------------------------------

    In practice, three dates related to the PSD baseline concept are 
important in understanding how to calculate the amount of increment 
consumed-- (1) Trigger date; (2) major source baseline date; and (3) 
minor source baseline date. The first relevant date is the trigger 
date. The trigger date, as the name implies, triggers the overall 
increment consumption process nationwide. Specifically, this is a fixed 
date, which must occur before the minor source baseline date can be 
established for the pollutant-specific increment in a particular 
attainment area. See, 40 CFR 51.166(b)(14)(ii) and 52.21(b)(14)(ii). 
For PM (regulated as TSP) and SO2, Congress defined the 
applicable trigger date as August 7, 1977--the date of the 1977 
amendments to the Act when the original statutory increments were 
established by Congress. For nitrogen dioxide (NO2), we 
selected the trigger date as February 8, 1988--the date on which we 
proposed increments for NO2. See 53 FR 40656, 40658; October 
17, 1988. In this final rule, as described later, we are establishing a 
separate trigger date for purposes of implementing the PM2.5 
increments. See section V.F of this preamble for additional discussion 
of the trigger date for PM2.5.
    The two remaining dates--``minor source baseline date'' and ``major 
source baseline date''--as described later, are necessary to properly 
account for the emissions that are to be counted toward the amount of 
increment consumed following the national trigger date, in accordance 
with the statutory definition of ``baseline concentration'' in section 
169(4) of the Act. The statutory definition provides that the baseline 
concentration of a pollutant for a particular baseline area is 
generally the air quality at the time of the first application for a 
PSD permit in the area. Consequently, any increases in actual emissions 
occurring after that date (with some possible exceptions that we will 
discuss later) would be considered to consume the applicable PSD 
increment. However, the statutory definition in section 169(4) also 
provides that ``[e]missions of sulfur oxides and particulate matter 
from any major emitting facility on which construction commenced after 
January 6, 1975, shall not be included in the baseline and shall be 
counted in pollutant concentrations established under this part.''
    To make this distinction between the date when emissions resulting 
from the construction at a major stationary source consume the 
increment and the date when emissions changes in general (i.e., from 
both major and minor sources) begin to consume the increment, we 
established the terms ``major source baseline date'' and ``minor source 
baseline date,'' respectively. See 40 CFR 51.166(b)(14) and 
52.21(b)(14). Accordingly, the ``major source baseline date,'' which 
precedes the trigger date, is the date after which actual emissions 
increases associated with construction at any major stationary source 
consume the PSD increment. In accordance with the statutory definition 
of ``baseline concentration,'' the PSD regulations define a fixed date 
to represent the major source baseline date for each pollutant for 
which an increment exists. Congress defined the major source baseline 
date for the statutory increments for PM and SO2 as January 
6, 1975. For the NO2 increments, which we promulgated in 
1988 under our authority to establish an increment system under section 
166(a) of the Act, the major source baseline date we selected was 
February 8, 1988--the date on which we proposed increments for 
NO2. 53 FR 40656. In both instances, the major source 
baseline date for the individual increments was set as a date which 
preceded the date on which the regulations pertaining to those 
increments were issued. In this final rule, as described later, we are 
establishing a separate major source baseline date for implementing the 
PM2.5 increments. See section V.F of this preamble for 
further discussion of the major source baseline date for 
PM2.5.
    The ``minor source baseline date'' is the earliest date after the 
trigger date on which a source or modification submits the first 
complete application for a PSD permit in a particular area. After the 
minor source baseline date, any increase in actual emissions (from both 
major and minor sources) consumes the PSD increment for that area.
    Once the minor source baseline date is established, the new 
emissions increase from that major source consumes a portion of the 
increment in that area, as do any subsequent actual emissions increases 
that occur from any new or existing source in the area. When the 
maximum pollutant concentration increase defined by the increment has 
been reached, additional PSD permits cannot be issued until sufficient 
amounts of the increment are ``freed up'' via emissions reductions that 
may occur voluntarily, (e.g., via source shutdowns) or by mandatory 
control requirements imposed by the reviewing authority. Moreover, the 
air quality in a region cannot deteriorate to a level in excess of the 
applicable NAAQS, even if all the increment in the area has not been 
consumed. Therefore, new or modified sources located in areas where the 
air pollutant concentrations are near the level allowed by the NAAQS 
may not have full use of the amount of

[[Page 64869]]

pollutant concentration increase allowed by the increment.
    Under EPA guidance, the actual increment analysis that a proposed 
new or modified source undergoing PSD review must complete depends on 
the area impacted by the source's new emissions. We have provided 
approved air quality models and guidelines for sources to use to 
project the air quality impact of each pollutant (over each averaging 
period) for which an increment analysis must be done.\4\ In addition, 
we established SILs for each pollutant under the permit requirements 
applicable to new and modified major stationary sources locating in 
attainment areas that would cause or contribute to a violation of any 
NAAQS. See 40 CFR 51.165(b) and part 51, Appendix S, section III.A. 
These SILs have also been used for implementing the PSD program to 
identify levels below which the source's modeled impact of a particular 
pollutant is regarded as de minimis. In this final rule, we are 
establishing SILs (24-hour and annual) for PM2.5 that are 
being added to the aforementioned regulations containing SILs for other 
pollutants, as well as to the PSD regulations in 40 CFR 51.166 and 
52.21. See further discussion of the SILs for PM2.5 in 
section VI of this preamble.
---------------------------------------------------------------------------

    \4\ See EPA's ``Guideline on Air Quality Models'' at 40 CFR part 
51, Appendix W.
---------------------------------------------------------------------------

    In the event that a source's modeled impacts of a particular 
pollutant are below the applicable SIL at all ambient air locations 
modeled, i.e., de minimis everywhere, EPA's policy for PSD provides 
that no further modeling analysis is required for that pollutant. Our 
longstanding policy under the PSD program is that when a preliminary 
screening analysis based on the SIL is sufficient to demonstrate that 
the source's emissions throughout the area modeled will not cause or 
contribute to a violation of the increment, there is no need for a 
comprehensive source impact analysis involving a cumulative evaluation 
of the emissions from the proposed source and other sources affecting 
the area.
    Within the impact area of a source subject to PSD, that is, the 
area within which the proposed project's emissions increase does have a 
significant impact, increment consumption is calculated using the 
source's proposed emissions increase, along with other actual emissions 
increases or decreases of the particular pollutant from any sources in 
the area, which have occurred since the minor source baseline date 
established for that area. In addition, the emissions increases or 
decreases from any major source that has commenced construction since 
the major source baseline date (which precedes the minor source 
baseline date) will consume or expand increment. Thus, an emissions 
inventory of sources whose emissions, in whole or in part, of a 
particular pollutant consume or expand the available increment in the 
area must be compiled. The inventory of increment-consuming emissions 
includes not only sources located directly in the impact area, but 
sources outside the impact area that affect the air quality for the 
particular pollutant within the impact area.
    The inventory of increment-consuming emissions includes emissions 
from increment-affecting sources at two separate time periods--the 
baseline date and the current period of time. For each source that was 
in existence on the relevant baseline date (major source or minor 
source), the inventory includes the source's actual emissions on the 
baseline date and its current actual emissions. The change in emissions 
over these time periods represents the emissions that consume increment 
(or, if emissions have gone down, expand the available increment). For 
sources constructed since the relevant baseline date, all their current 
actual emissions consume increment and are included in the inventory.
    When the inventory of increment-consuming emissions has been 
compiled, computer modeling is used to determine the change in ambient 
concentration that will result from these emissions when combined with 
the proposed emissions increase from the new major source or major 
modification that is undergoing PSD review. The modeling has generally 
been guided by the ``Guideline on Air Quality Models'' (40 CFR part 51, 
Appendix W), which includes provisions on air quality models and the 
meteorological data input into these models. The model output 
(expressed as a change in concentration) for each relevant averaging 
period is then compared to the corresponding allowable PSD increment.

E. Historical Approaches for Developing Increments

1. Congressional Enactment of Increments for PM and SO2
    Congress established the first increments defining significant 
deterioration of air quality in the 1977 Amendments to the Act. These 
amendments, among other things, added part C to title I, setting out 
the requirements for PSD. In section 163, Congress included numerical 
increments for PM and SO2 for Class I, II, and III areas.
    The three area classes are part of the increment system originally 
established by Congress. Congress designated Class I areas (including 
certain national parks and wilderness areas) as areas of special 
national concern, where the need to prevent deterioration of air 
quality is the greatest. Consequently, the allowable level of 
incremental change is the smallest relative to the other area classes, 
i.e., most stringent, in Class I areas. The increments of Class II 
areas are larger than those of Class I areas and allow for a moderate 
degree of emissions growth. For future redesignation purposes, Congress 
defined a ``Class III'' classification to allow the redesignation of 
any existing Class II area for which a State may desire to promote a 
higher level of industrial development (and emissions growth). Thus, 
Class III areas are allowed to have the greatest amount of pollutant 
increase of the three area classes while still achieving the NAAQS. To 
date, there have been no redesignations made to establish a Class III 
area.
    In establishing these PSD increments, Congress used the then-
existing NAAQS for those pollutants as the benchmark for determining 
what constitutes ``significant deterioration.'' Congress established 
the increments for PM as a percentage of the then-existing PM NAAQS. At 
the time the Act was amended in 1977, the NAAQS for PM were expressed 
in terms of ambient concentrations of TSP. Thus, EPA interpreted the 
statutory increments for PM using the same ambient TSP ``indicator.''
2. EPA's Promulgation of Increments for NO2 and 
PM10
    Congress also provided authority for EPA to promulgate additional 
increments and to update the original PM increments created by statute. 
The EPA has promulgated two regulations pursuant to this authority.
a. Increments for NO2 Using the ``Contingent Safe Harbor'' 
Approach Under Section 166(a) of the Act
    Based on section 166(a) of the Act, on October 17, 1988, EPA 
promulgated increments for NO2 to prevent significant 
deterioration of air quality due to emissions of NOX (53 FR 
40656). The EPA based these increments on percentages of the NAAQS in 
the same way that Congress derived the statutory increments for PM and 
SO2. Those NO2 increments were challenged in 1988 
by the Environmental Defense Fund (EDF) when EDF filed suit in the U.S. 
Court of

[[Page 64870]]

Appeals for the District of Columbia Circuit against the Administrator 
(Environmental Defense Fund, Inc. v. Reilly, No. 88-1882). The EDF 
successfully argued that we failed to sufficiently consider certain 
provisions in section 166 of the Act. The court remanded the case to 
EPA ``to develop an interpretation of section 166 that considers both 
subsections (c) and (d), and if necessary to take new evidence and 
modify the regulations.'' See Environmental Defense Fund v. EPA, 898 
F.2d 183, 190 (D.C. Cir. 1990) (EDF v. EPA). Section 166(c) of the Act 
requires the PSD regulations to, among other things, meet the goals and 
purposes set forth in sections 101 and 160 of the Act. Section 166(d) 
requires these regulations be at least as effective as the increments 
established for PM (in the form of TSP) and SO2 in section 
163 of the Act. The court considered the NO2 increment 
values determined using the percentage-of-NAAQS approach as ``safe 
harbor'' increments which met the requirements of section 166(d) of the 
Act. However, the court also determined that EPA's reliance on such 
increment levels was contingent upon our completing the analyses 
required under section 166(c), which provided that the final increment 
values must address the goals of sections 101 and 160 of the Act to 
protect public health and welfare, parks, and AQRVs \5\ and to insure 
economic growth.
---------------------------------------------------------------------------

    \5\ The term ``air quality related values'' is not defined in 
the Act, but the legislative history provides language saying that 
``The term `air quality related values' of Federal lands designated 
as Class I includes the fundamental purposes for which such lands 
have been established and preserved by the Congress and the 
responsible Federal agency. For example, under the 1916 Organic Act 
to establish the National Park Service (16 U.S.C. 1), the purpose of 
such national park lands `is to conserve the scenery and the natural 
and historic objects and the wildlife therein and to provide for the 
enjoyment of the same in such manner and by such means as will leave 
them unimpaired for the enjoyment of future generations.' '' S. Rep. 
No. 95-127 at 36 (1977).
---------------------------------------------------------------------------

    In response to the court's decision, we proposed rulemaking on 
increments for NO2 on February 23, 2005 (70 FR 8880) and 
finalized the rule on October 12, 2005 (70 FR 59582). In the final 
rule, we established our policy on how to interpret and apply the 
requirements of sections 166(c) and (d) of the Act. In accordance with 
the court ruling, we conducted further analyses (considering the health 
and welfare effects of NOX) and concluded that the existing 
NO2 increments were adequate to fulfill the requirements of 
section 166(c). See 70 FR 59586 for our detailed analysis of how 
pollutant regulations satisfy the requirements of section 166 of the 
Act. Hence, we retained the existing NO2 increments along 
with other parts of the existing framework of pollutant-specific 
NO2 increment regulations. We also amended the PSD 
regulations under 40 CFR 51.166 to make it clear that states may seek 
EPA approval of SIPs that utilize a different approach than EPA used to 
establish these NO2 increments. To receive our approval of 
an alternative program, a State must demonstrate that its program 
satisfies the requirements of sections 166(c) and 166(d) of the Act and 
prevents significant deterioration of air quality from emissions of 
NOX.\6\
---------------------------------------------------------------------------

    \6\ Under the 2005 NOX regulation, states can adopt 
measures other than increments as long as they can demonstrate that 
the measures selected comply with the same criteria and goals of 
sections 166(c) and (d) of the Act that must be met for increments.
---------------------------------------------------------------------------

b. Increments for PM10 Using ``Equivalent Substitution'' 
Approach Under Section 166(f) of the Act
    On October 5, 1989, we proposed PM10 increments. See 54 
FR 41218. Although section 163 did not expressly define the existing 
statutory increments for PM in terms of a specific indicator, EPA 
reasoned that Congress' knowledge that TSP was the indicator for the PM 
NAAQS, and that the TSP standards were the starting point for the 
increments levels when the increments were established in 1977, meant 
that TSP was also the appropriate measure for the PM increments in 
section 163. As a consequence, EPA believed that the statutory PM 
increments could not simply be administratively redefined as 
PM10 increments, retaining the same numerical values, 
following the revision of the PM NAAQS. Rather, we stated our belief 
that with the promulgation of the PM10 NAAQS, EPA had both 
the responsibility and the authority under sections 166 and 301 of the 
Act to promulgate new increments for PM to be measured in terms of 
PM10. We further concluded that promulgating PM10 
increments to replace, rather than supplement, the statutory TSP 
increments under section 163 represented the most sensible approach for 
preventing significant deterioration with respect to PM. See 54 FR 
41220-41221.
    We promulgated PM10 increments to replace the then-
existing TSP increments on June 3, 1993 (58 FR 31622). In the interim 
between proposal and promulgation, Congress enacted the 1990 CAA 
Amendments. As part of these amendments, Congress amended section 166 
to add a new section 166(f). This section specifically authorized EPA 
to substitute PM10 increments for the existing section 163 
PM increments based on TSP, provided that the substituted increments 
are ``of equal stringency in effect'' as the section 163 increments.
    Thus, we were able to replace the TSP increments under section 163 
of the Act using PM10 increments based directly on the newly 
enacted authority under section 166(f) of the Act. In the 
PM10 rule, we maintained the existing baseline dates and 
baseline areas for PM that had been previously established using the 
TSP indicator. Also, as proposed, we promulgated PM10 
increments based on an approach we called the ``equivalent to statutory 
increments'' approach. Under this approach, we used the original TSP 
increments as a benchmark for calculating the PM10 
increments, thereby retaining roughly the same limitations on future 
deterioration of air quality as was allowed under the TSP increments.
    In using this approach, we considered the historical consumption of 
TSP increment by a sample population of permitted PSD sources, and then 
determined the PM10 increments for each area classification 
and averaging time that would provide approximately the same percentage 
of PM10 increment consumption, on average, by the same 
population of sources. Then, all future calculations of increment 
consumption after the PM10 implementation date would be 
based on PM10 emissions. See 58 FR 31622 and 31625.

V. Final Action on PM2.5 Increments

    In this section of the preamble, we will summarize the 
considerations that went into our proposed action and describe the 
final action being taken regarding new regulations for preventing 
significant deterioration of PM2.5 air quality--including 
PM2.5 increments (sections V.A through V.E, baseline dates 
and other permit requirements for PM2.5 (section V.F), 
baseline areas for PM2.5 (section V.G), and PM10 
increments (section V.H).

A. Decision To Establish PM2.5 Increments Using ``Contingent 
Safe Harbor Approach'' Under Section 166(a)

    The EPA's 2007 NPRM contained three options for developing 
numerical PM2.5 increments. Option 1 used the authority of 
section 166(a) of the Act to establish increments for PM2.5 
as a new pollutant for which NAAQS were established after August 7, 
1977, and established 24-hour and annual PM2.5 increments 
(Class I, II, and III) based on the ``contingent safe harbor'' 
approach. Options 2 and 3 used the contingent safe harbor approach 
under section 166(a) to only develop 24-hour PM2.5 
increments (Class I, II, and III), while using the ``equivalent 
substitution''

[[Page 64871]]

approach under section 166(f) of the Act to develop annual 
PM2.5 increments. Each of these options is discussed in 
detail in the 2007 NPRM. 72 FR 54123-54138. In addition, significant 
comments on each of the three options, and our responses to them, are 
provided in this section V of this preamble.
    In this final rule, after considering the available information and 
comments from interested parties, EPA has decided to select Option 1 
and establish increments for PM2.5 using the ``contingent 
safe harbor'' approach in accordance with the authority provided in 
section 166(a) of the Act.
    This final rule establishes increments for PM2.5 at the 
following levels:

----------------------------------------------------------------------------------------------------------------
                                                                 NAAQS           Increments ([micro]g/m\3\)
                      Averaging period                         ([micro]g/ --------------------------------------
                                                                 m\3\)       Class I      Class II    Class III
----------------------------------------------------------------------------------------------------------------
Annual......................................................           15            1            4            8
24-hour.....................................................           35            2            9           18
----------------------------------------------------------------------------------------------------------------

B. Rationale for the Applicability of Section 166(a)

    In the 2007 NPRM, we expressed our belief that it is permissible to 
interpret section 166(a) to apply to PM2.5. Section 166(a) 
requires EPA to develop regulations to prevent the significant 
deterioration of air quality due to emissions of certain named 
pollutants, and to develop such regulations for any pollutants for 
which NAAQS are subsequently promulgated. Although EPA has generally 
characterized the NAAQS for PM2.5 as a NAAQS for a new 
indicator of PM, EPA did not replace the PM10 NAAQS with the 
NAAQS for PM2.5 when the latter NAAQS were promulgated in 
1997. Rather, EPA retained the annual and 24-hour PM10 NAAQS 
(retaining PM10 as an indicator of coarse particulate 
matter), and established new annual and 24-hour NAAQS for 
PM2.5 as if PM2.5 was a new pollutant, even 
though EPA had already developed air quality criteria for PM generally. 
Thus, for purposes of section 166(a), the promulgation of a NAAQS for 
PM2.5 established a NAAQS for an additional pollutant after 
1977.
    Nine commenters supported our proposed Option 1, although only 
three of these explicitly expressed support for the use of section 
166(a) authority to promulgate PM2.5 increments. Ten other 
commenters specifically opposed the use of section 166(a) authority 
and/or supported the use of section 166(f) authority (on which the 
annual increments under Options 2A and 2B were based).
    One of the commenters who explicitly agreed with our proposed use 
of section 166(a) authority stated that it is the only option that is 
legally available. This commenter asserted that section 166(a) plainly 
applies to PM2.5 because PM2.5 is a pollutant for 
which NAAQS were promulgated after August 7, 1977. This commenter held 
that EPA's rulemaking duty under section 166(a) is not confined to 
``new pollutants,'' but is triggered by post-1977 NAAQS promulgations, 
regardless of whether for new or previously regulated pollutants. On 
the other hand, this commenter noted that by its terms, section 166(f) 
is limited to authorizing the adoption of PM10 increments as 
a substitute for the statutory TSP increments and does not provide for 
substitution of PM2.5 increments for TSP or PM10 
increments.
    The opposing commenters did not believe that section 166(a) 
provides a legal basis for EPA to promulgate PM2.5 
increments. One of these commenters stated that section 166(a) can only 
be used for a new pollutant, and PM2.5 is not a new 
pollutant.
    Another commenter who opposed the use of section 166(a) authority 
argued that nothing in section 166(a) of the Act can be interpreted to 
allow it to be used as the basis of increments when EPA revises an 
existing NAAQS. The commenter explained that, on its face, section 
166(a) can only be interpreted to apply to pollutants other than PM and 
SO2 since increments for these pollutants were enacted by 
Congress in section 163 of the Act. The commenter added that it can be 
argued that Congress intended to have section 166(a) apply to the four 
other pollutants specifically listed there.
    This commenter found unpersuasive our argument that we are not 
``substituting'' increments (as section 166(f) requires for 
PM10) but rather adding PM2.5 increments to the 
existing PM10 increments, and that only section 166(a) 
allows such an approach (72 FR 54121). The commenter asserted that if 
EPA had defined a coarse fraction to the particulate matter standards, 
then that fraction, together with the PM2.5 standards, would 
form the set of ``substituted'' new standards for the existing 
PM10 standards, and, thus, the increments.
    The commenter also disagreed with EPA's argument that it can treat 
PM2.5 as a new pollutant under section 166(a) of the Act 
since it has been demonstrated that sub-PM2.5 particles have 
distinctly different health and welfare effects than the other forms of 
PM (i.e., coarse or PM10). The commenter indicated that just 
as EPA replaced the TSP standards by PM10 as a better 
indicator of health effects, ongoing research has led to establishment 
of the PM2.5 standards as a better indicator of certain 
health effects, and it is the natural outcome of such research that has 
enabled EPA to separate the effect of total particulate matter into two 
fractions with distinct effects. The commenter added that given that 
the definition of particulate matter includes a vast conglomeration of 
solids and liquids, the finding of differing effects should not come as 
a surprise. The commenter explained that as is the case of different 
pollutants having similar effects that are, nonetheless, treated as 
separate pollutants, the same concept should apply to a range or 
fraction of particulate matter found to have different effects in 
establishing it as another indicator and not a different pollutant.
    The commenter did not disagree with the specific numerical 
increments proposed by EPA under Option 1, but did have concerns with 
the potential consequences of the section 166(a) approach. The 
commenter's primary concern was the proposal to allow states to 
substitute other measures in the place of uniform national increments 
for PM2.5. (This is discussed further in section V.C.5 of 
this preamble.) Another commenter also expressed this concern.
    Another commenter who opposed the section 166(a) approach believes 
that the legal and congressional history regarding the establishment of 
PM increments shows that Congress added section 166(f) to the Act based 
on the conviction that without it, EPA had no authority to revise the 
PM increments for PM10 (citing and quoting from S. Rep. No. 
228, 101st Cong., 2nd Sess. 75 (1990), reprinted in 1990 U.S.C.C.A.N. 
3385, 3461). The commenter concluded that EPA did not have authority in 
1987 under section 166(a) to adopt PM10 increments, and does 
not have authority now under section 166(a) to adopt PM2.5 
increments.
    We read section 166(a) to authorize EPA to promulgate pollutant-
specific PSD regulations meeting the

[[Page 64872]]

requirements of sections 166(c) and 166(d) for any pollutant for which 
EPA promulgates a NAAQS after 1977. Most of the pollutants identified 
in section 166(a) (NOX, photochemical oxidants, carbon 
monoxide) are pollutants for which EPA had established NAAQS in 1977 
when Congress adopted section 166 of the Act. There was no need for 
Congress to list other criteria pollutants, SO2 and PM, in 
section 166(a) because Congress had already established increments for 
these pollutants in section 163 of the Act. In addition to requiring 
regulations for the enumerated pollutants, we conclude that under 
section 166 of the Act Congress intended to authorize EPA to establish 
additional pollutant-specific PSD regulations, potentially containing 
increments, for any additional pollutants for which EPA promulgated a 
NAAQS under section 109 of the Act. Furthermore, because the Act refers 
to pollutants for which EPA promulgates NAAQS after 1977, and does not 
use the phrase ``additional pollutants,'' section 166(a) provides 
authority for EPA to promulgate new increments after revising an 
existing NAAQS (including NAAQS first promulgated before 1977), when we 
find that such action is appropriate.
    Moreover, any new increments developed pursuant to section 166(a) 
have no effect on existing increments, as there is no indication 
therein that an existing increment should be revoked or replaced when 
additional increments are promulgated. This was the situation following 
the promulgation of new NAAQS for PM in 1987 when EPA replaced the old 
NAAQS based on TSP with new ones based on PM10. Had Congress 
not added new section 166(f) in 1990, increments for PM10 
could have been developed pursuant to section 166(a) of the Act, but 
such increments would have had no effect on the original statutory 
increments for PM (based on TSP). Consequently, seeing no basis for 
retaining the original increments, Congress added section 166(f) which 
explicitly provides for the replacement of the existing increments with 
PM10 increments.
    One commenter asserted that if EPA establishes increments for 
PM2.5 under the authority of section 166(a) on the basis 
that PM2.5 is a new pollutant, then it must also establish 
PM10 increments under section 166(a) because (according to 
the commenter's analysis) PM10 is also a new pollutant. In 
the same analysis, the commenter concluded that EPA must adopt new 
measures to prevent significant deterioration from coarse PM based on 
section 166(a).
    In this final rule, EPA is not setting or amending any increments 
for PM10 or otherwise taking action with respect to 
PM10 increments. The preexisting annual and 24-hour 
increments for PM10 are being retained. See section V.H. 
Similarly, EPA is not taking any action with respect to coarse PM in 
this rule. For these reasons, the commenter's arguments on what 
authority must be used to set increments for PM10 and/or 
coarse PM, and that EPA has some obligation to take action with respect 
to coarse PM, are not on point for this rule. Thus, no substantive 
response to this comment is needed. Nevertheless, as mentioned earlier, 
Congress provided explicit authority under section 166(f) of the Act to 
address increments for PM10, because it intended for such 
increments to be substitute increments for the original statutory 
increments for PM measured as TSP. Thus, the PM10 increments 
legally supersede the original statutory increments for PM. Had the 
PM10 increments been developed under section 166(a), which 
prior to the 1990 Act Amendments was the only authority available for 
developing new increments, then the original statutory PM increments 
would have remained in effect in addition to the PM10 
increments.
    One commenter expressed general objections to EPA's legal rationale 
for the PM2.5 increments proposal, asserting that we failed 
to expressly state and support our legal authority for the 
PM2.5 increments, offering two possible sources of authority 
(``contingent safe harbor,'' ``equivalent substitution,'' or possibly a 
combination of the two) but never stating our legal position with 
clarity. The commenter agreed with EPA's assessment that the 
PM2.5 increments should and must fulfill the legal 
requirements of the Act (72 FR 54121), and added that it is the 
government's burden of proof to establish its legal authority for 
action. The commenter stated that it would be arbitrary and capricious 
to promulgate these regulations for which EPA has not stated legal 
authority.
    We do not disagree that the 2007 NPRM described two different legal 
authorities for the two different options for establishing increments, 
but we disagree that these discussions did not clearly present the 
alternative legal bases that the Agency was considering for taking 
action in this rule. In particular, we clearly described our legal 
authority for developing the 24-hour and annual PM2.5 
increments under section 166(a) of the Act, which is the basis on which 
we are taking final action in this rule.\7\ First, we expressly stated 
that Option 1 was based on the statutory authority of section 166(a) of 
the Act. See 72 FR 54123 (Under the first option, ``we would use the 
authority of section 166(a) of the Act to develop new increments for 
PM2.5''). Second, we provided a discussion of this authority 
both in general (see 72 FR 54118-54119 and 54120-54123), and how it 
would be applied to establish increments for PM2.5 (see 72 
FR 54119-120 and 54123-136).
---------------------------------------------------------------------------

    \7\ We also believe that we sufficiently described how section 
166(f) might provide alternative authority for establishing 
increments for PM2.5 (see, e.g., 72 FR 54120-54121), but 
will not address that in detail here because the increments in this 
rule are not based on section 166(f) authority.
---------------------------------------------------------------------------

    We now believe that section 166(a) provides the most 
straightforward approach for developing increments for a pollutant or 
pollutant indicator for which no increments have yet been established. 
Our position is also consistent with the comments we received which 
supported the delay in implementation of the PM2.5 
increments, opposed the potential for two sets of definitions for 
``major source baseline date'' and ``trigger date'' for the 
PM2.5 increment system, and highlighted the complexities 
involved with having to establish and maintain two sets of emissions 
inventories for the 24-hour and annual PM2.5 increments. 
(See further description of relevant comments in section VIII of this 
section.)

C. EPA's Interpretation of the Requirements Under Sections 166(a)-(d) 
of the Act

    In section 166(a) of the Act, Congress directed EPA to develop 
pollutant-specific regulations to prevent significant deterioration of 
air quality. Congress further specified that such regulations meet 
specific requirements set forth in sections 166(c) and 166(d) of the 
Act. We stated in the 2007 NPRM that because we believed that section 
166(a) could be applied to the development of increments for 
PM2.5, we would follow the interpretation of sections 
166(a)-(d) that the Agency adopted in its most recent NO2 
increments rule. 70 FR 59582, October 12, 2005. That particular 
interpretation and application was upheld in Environmental Defense v. 
EPA, 489 F.3d 1320 (D.C. Cir. 2007).
    The EPA's interpretation of these provisions is grounded on five 
principles and conclusions. First, we read section 166 of the Act to 
direct EPA to conduct a holistic analysis that considers how a complete 
system of regulations will collectively satisfy the

[[Page 64873]]

applicable criteria, rather than evaluating one individual part of a 
regulatory scheme in isolation. Second, we use a ``contingent safe 
harbor'' approach which calls for EPA to first determine an increment 
that is at least as effective as the increments in section 163 of the 
Act, as required under section 166(d) and then to conduct further 
analysis to determine if additional measures are necessary to fulfill 
the requirements of section 166(c). Third, we interpret section 166(c) 
of the Act to identify eight statutory factors that EPA must apply when 
promulgating pollutant-specific regulations to prevent significant 
deterioration of air quality. Fourth, where these factors are at odds 
with each other, we interpret the statute to require EPA to use its 
judgment to balance the conflicting factors. Fifth, we recognize that 
the requirements of section 166 may be satisfied by adopting other 
measures besides an increment and that EPA may allow states to 
demonstrate that alternatives to increments contained in a SIP meet the 
requirements of sections 166(c) and 166(d). Below is a brief discussion 
of each of these five principles and conclusions. A more detailed 
description of each of these is contained in the 2007 NPRM at 72 FR 
54121-54123.
1. Regulations as a Whole Should Fulfill Statutory Requirements
    Section 166(a) of the Act directs EPA to develop pollutant-specific 
regulations to prevent the significant deterioration of air quality. 
Sections 166(c) and 166(d) provide detail on the contents of those 
regulations, but do not necessarily require the same type of increment 
system Congress created in section 163 of the Act. The EPA interprets 
section 166 to require that the entire system of PSD regulations (the 
framework and details, as described in section V.D of this preamble) 
for a particular pollutant must, as a whole, satisfy the criteria in 
sections 166(c) and 166(d) of the Act.
2. Contingent Safe Harbor Approach
    Section 166(c) of the Act describes the kinds of measures to be 
contained in the regulations to prevent significant deterioration of 
air quality called for in section 166(a) and specifies that these 
regulations are to ``fulfill the goals and purposes'' set forth in 
sections 160 and 101 of the Act. Section 166(d) of the Act directs EPA 
to ``fulfill such goals and purposes'' by providing ``specific measures 
at least as effective as the increments established in section 163 * * 
*.'' Thus, EPA reads section 166(d) to require that the Agency identify 
``safe harbor'' pollutant-specific PSD regulations adopted under 
section 166.
    The EPA reads section 166(c) to require that the Agency conduct 
further review to determine whether, based on the criteria in section 
166(c), EPA's pollutant-specific PSD regulations under section 166 
should contain measures that are different from the ``safe harbor'' 
identified under section 166(d). The EPA construes section 166(d) to 
require that the measures be ``at least as effective'' as the statutory 
increments set forth in section 163.
    To apply the ``contingent safe harbor'' approach for 
PM2.5, we first identified ``safe harbor'' increments for 
each area classification (Class I, II, or III), using: (1) Equivalent 
percentages of the NAAQS as the percentages used for developing the 
statutory increments; (2) the same pollutant as the NAAQS, i.e., 
PM2.5, and (3) the same time (averaging) periods as were 
used for the PM2.5 NAAQS. We concluded that this approach 
would ensure that the increments would be ``at least as effective as 
the increments established in section 163,'' as required by section 
166(d). Second, EPA conducted further review to determine whether the 
``safe harbor'' increments, in conjunction with existing elements of 
the PSD program or additional measures proposed under section 166 to 
augment the increments, sufficiently fulfill the criteria in subsection 
(c) of section 166.
    In this review, we weighed and balanced the criteria set forth in 
subsection (c) (and, as provided in subsection (c), the incorporated 
goals and purposes of the Act in section 101 and the PSD program in 
section 160) to determine whether additional measures might be needed 
to satisfy the criteria in subsection (c). See section V.E.6 of this 
preamble for further discussion of our evaluation, comments on the 
evaluation, and our response to them.
3. The Statutory Factors Applicable Under Section 166(c)
    The EPA interprets section 166(c) of the Act to establish eight 
factors to be considered in the development of PSD regulations for the 
pollutants covered by this provision. These eight factors included the 
three criteria stated in section 166(c) and the five goals and purposes 
identified in section 160 of the Act (which, as noted below, also cover 
the goals and purposes set forth in section 101). The three stated 
criteria in section 166(c) indicate that PSD regulations for specific 
pollutants should provide: (1) Specific numerical measures for 
evaluating permit applications; (2) a framework for stimulating 
improved control technology, and (3) protection of air quality values. 
The five goals and purposes in section 160 are incorporated into the 
analysis by virtue of the fourth criterion in section 166(c), which 
directs that EPA's pollutant-specific PSD regulations ``fulfill the 
goals and purposes'' set forth in sections 160 and 101 of the Act. We 
construed the term ``fulfill the goals and purposes,'' as used in 
section 166(c), to mean that EPA should apply the goals and purposes 
listed in section 160 as factors applicable to pollutant-specific PSD 
regulations established under section 166. The Agency's view is that 
PSD measures that satisfy the specific goals and purposes of section 
160 also satisfy the more general purposes and goals identified in 
section 101 of the Act. See 72 FR 54122.
    One commenter disagreed with our interpretation that the goals and 
purposes of section 160 also satisfy all of those in section 101. This 
commenter asserted that although there is some overlap between the two 
sections, they are not identical. As an example, the commenter noted 
that section 101 expressly states that a primary goal of the Act is to 
promote pollution prevention--a goal not stated in section 160. The 
commenter asserted that, although the proposed increments would limit 
some pollution increases, there was no provision in the proposal that 
would require or promote pollution prevention.
    We disagree with the commenter and continue to believe that 
measures that satisfy the specific goals and purposes of section 160 
also satisfy the more general purposes and goals identified in section 
101 of the Act. As we stated in the 2005 NO2 increment 
rulemaking, the overall goals and purposes of the Act listed in 
sections 101(b) and 101(c) are general goals regarding protecting and 
enhancing the nation's air resources and controlling and preventing 
pollution. Because these broad goals are given more specific meaning in 
section 160, EPA does not believe it is necessary to consider them in 
detail when evaluating whether PSD regulations satisfy the criteria in 
section 166(c). 70 FR 59587 FN 3.
    Regarding pollution prevention specifically, we believe that this 
general goal is encompassed in, and given more specific meaning by, 
sections 160(1), 160(2), and 160(4) of the Act. These sections spell 
out the specific purposes under the PSD program for the general section 
101 goals of controlling and preventing pollution. We believe that any 
requirement to limit or reduce emissions serves to promote pollution 
prevention, which is often the most cost

[[Page 64874]]

effective means of lowering pollutant emissions.
    In addition to citing the purposes set out in section 160, section 
166(c) includes the criterion that pollutant-specific PSD regulations 
should provide a framework for stimulating improved control technology. 
As discussed subsequently in sections V.D.1 and V.D.6 of this preamble, 
we believe that this criterion is fulfilled by the system of increments 
for PM2.5 and by the requirement for PSD permittees to apply 
BACT to minimize PM2.5 emissions. In stimulating improved 
control technology generally, these elements of the PSD program also 
promote pollution prevention. As noted previously, pollution prevention 
is often the most cost effective means of control, particularly for new 
sources and new process lines at existing sources. In addition, because 
BACT is a case-by-case determination that considers cost and collateral 
environmental impacts, pollution prevention, where technically 
feasible, often fairs well in BACT analyses because it is typically 
free from the negative environmental impacts that result from the use 
of add-on air pollution control devices.
4. Balancing the Factors Applicable Under Section 166(c)
    While the eight factors in section 166(c) are generally 
complementary, there are circumstances where some of the objectives may 
be in conflict with each other. In these situations, some degree of 
balance or accommodation is inherent in the requirement to establish 
regulations that satisfy all of these factors. As first discussed in 
our 2005 NO2 increments rulemaking (70 FR 59582 at 59587), 
we believe this balancing test derives primarily from the third goal 
and purpose set forth in section 160: To insure economic growth 
consistent with the preservation of existing clean air resources. A 
more detailed discussion of how the balancing of factors should be 
interpreted is contained in the 2007 NPRM at 72 FR 54122-54123.
    One commenter claimed that EPA ``incorrectly and repeatedly 
asserts'' that a goal of section 160 of the Act is to insure economic 
growth. The commenter claimed that neither section 160 nor section 101 
of the Act uses language to support a goal of promoting or maximizing 
opportunities for economic growth. Instead, the commenter asserted that 
both sections state only that any growth that does occur must be 
consistent with protection of air quality. The commenter concluded that 
``EPA's notion that the need to satisfy the other requirements of 
Section 166 and other goals and purposes in Sections 101 and 160 can 
never preclude additional emissions from economic growth unlawfully 
elevates such growth over all other statutory factors.''
    The language in section 160(3) provides that one of the purposes of 
the PSD program is ``to insure that economic growth will occur in a 
manner consistent with the preservation of existing clean air 
resources.'' The commenter suggests that this language can only be read 
as if the statutory phrase ``economic growth'' actually said ``any 
economic growth that does occur'' such that section 160(3) says ``to 
insure that any economic growth that does occur will occur in a manner 
consistent with the preservation of existing clean air resources.'' We 
disagree; the phrasing used by Congress is ``to insure that economic 
growth will occur.'' Thus, we believe the plain language of the statute 
supports EPA's reading that section 160(3) requires a balancing of the 
goals of (1) economic growth and (2) preservation of existing clean air 
resources. At a minimum, if the language were to be considered 
ambiguous enough to allow the commenter's reading, then the Agency's 
interpretation is also a reasonable reading of the statutory language.
5. Authority for States To Adopt Alternatives to Increments
    While section 166 of the Act authorizes EPA to promulgate 
increments for pollutants listed under section 166(a), we have also 
interpreted the section to allow states to employ approaches other than 
increments to prevent significant deterioration of air quality, so long 
as such an approach otherwise meets the requirements of sections 166(c) 
and 166(d). This interpretation was explained in the 2005 
NO2 increment rulemaking (70 FR 59611-59612), in which we 
amended the PSD regulations at 40 CFR 51.166 by adding new paragraph 
(c)(2) to codify this statutory authority. Under the existing provision 
in 40 CFR 51.166(c)(2), states may seek EPA approval of SIPs that use 
an alternative approach to increments if the State can demonstrate that 
the alternative program satisfies the requirements of sections 166(c) 
and 166(d). However, the current language at paragraph (c)(2) states 
the authority for states to adopt alternative measures only with 
respect to increments for NO2. To clarify our interpretation 
that the authority to adopt alternative measures covers any pollutant 
listed in section 166(a), we are revising 40 CFR 51.166(c)(2) to make 
it inclusive to all applicable pollutants rather than just 
NO2.
    Two commenters supported our proposal to revise paragraph (c)(2) to 
include PM2.5, while four State/local agency commenters 
expressed opposition. An environmental commenter agreed that the Act 
allows for other approaches, but believes that such approaches must be 
in addition to the national increments. Specifically, this commenter 
stated that ``although EPA can provide for states to adopt approaches 
in addition to increments in order to fulfill the statutory purposes, 
the agency must make clear that states cannot adopt approaches that are 
less protective that the national increments.'' This commenter further 
stated that ``to the extent that EPA is suggesting that it can allow 
states to adopt PSD programs that do not include the minimum Federal 
increments, that position is contrary to the statute.''
    As in the 2005 NO2 increment rulemaking, we are 
codifying the basic principle that states can seek to use alternative 
measures without defining any specific type of alternative program that 
would be approved or otherwise creating standards beyond the 
requirements of sections 166(c) and 166(d). Instead, we plan to make 
determinations on a case-by-case basis when a State submits a specific 
alternative approach for EPA to approve as part of a SIP. In making 
those determinations, we will address the specific alternative measures 
as states propose them to the Agency in light of the requirements of 
sections 166(c) and 166(d), including whether the alternative program 
is ``at least as effective as the increments established in section 
163,'' as required in section 166(d).
    The four State/local agency commenters opposing the revision to 40 
CFR 51.166(c)(2) expressed the importance of using uniform national 
increments for PM2.5. One commenter argued that a nationally 
inconsistent approach to PM2.5 in attainment areas could 
result in a patchwork of State PSD regulations--and the exact kinds of 
economic repercussions that Congress wished to avoid. The same 
commenter argued that varying increment-equivalent measures could also 
result in an uneven playing field for industry and could exacerbate 
difficulties between states experiencing transport problems.
    Another opposing commenter was concerned that allowing states to 
adopt alternatives to increments would likely lead to a ``mish-mash'' 
of State approaches which defeats the intention of Congress that there 
be uniformity in PSD rules to avoid economic

[[Page 64875]]

dissimilarities from State to State that could allow interstate 
competition for industry based upon which State offers the best (least 
expensive) environmental compliance regulations. Another commenter 
objected to allowing the use of alternatives to increments by stating 
that such alternative allowances undermine the desired national 
consistency, and EPA has failed to even identify any Act programs which 
would benefit from this approach.
    While we acknowledge the potential problems identified by the 
commenters associated with allowing states to adopt alternative 
approaches to the numerical increments that we are establishing, we 
also note that section 166(d) expressly gives EPA some latitude in 
promulgating regulations that will be at least as effective as the 
increments in section 163, by stating that such regulations ``may 
contain air quality increments, emission density requirements, or other 
measures.'' Thus, EPA is authorized to provide that states may consider 
alternatives to the increments established in this rule. That said, the 
statutory authority is not a blank check for states to do as they 
please, but enables states to consider options that may provide a 
meaningful way for them to manage their air resources within the 
framework allowed by the statutory PSD requirements.

D. Framework for Pollutant-Specific PSD Regulations for PM2.5

    In the 2007 NPRM, we proposed to apply the same basic framework for 
pollutant-specific PSD regulations for PM2.5 that we used in 
our 2005 NO2 increments regulations. Specifically, we 
proposed adopting an increment and area classification system for 
PM2.5 and applying the statutory AQRV review process to 
PM2.5 as well. We also indicated that while some of the 
factors applicable under section 166(c) are fulfilled by using this 
type of framework for pollutant-specific PSD regulations under section 
166(a) of the Act, this framework of regulations also needs to satisfy 
the other applicable factors. Thus, the details of our regulations 
(such as the characteristics of the increments themselves) are 
important, and we evaluated the effectiveness of the framework in 
conjunction with more detailed elements of our regulations. As 
discussed in the following subsections, we believe our obligations 
under section 166(c) of the Act are satisfied when the PSD regulations 
collectively satisfy the factors applicable under 166(c) of the Act.
1. Increment System
    An increment-based program satisfies the requirements under 166(c) 
to provide ``specific numerical measures against which permit 
applications may be evaluated.'' An increment is the maximum allowable 
level of ambient pollutant concentration increase that is allowed to 
occur above the applicable baseline concentration in a particular area. 
As such, an increment defines ``significant deterioration.'' 
Establishing an increment system for PM2.5 will fulfill two 
of the factors applicable under section 166(c): (1) Providing specific 
numerical measures to evaluate permit applications, and (2) stimulating 
improved control technology.
    First, under section 165(a)(3) of the Act, a permit applicant must 
demonstrate that emissions from the proposed construction and operation 
of a facility ``will not cause, or contribute to, air pollution in 
excess of any (A) maximum allowable increase or maximum allowable 
concentration for any pollutant * * *.'' Once the baseline date 
associated with the application for the first new major stationary 
source or major modification in an area is established, the new 
emissions from that source consume a portion of the increment in that 
area, as do any subsequent emissions increases that occur from any 
source in the area. When the maximum pollutant concentration increase 
defined by the increment has been reached, additional PSD permits 
cannot be issued until sufficient amounts of the increment are ``freed 
up'' via emissions reductions that may be required by the reviewing 
authority. Thus, an increment is a quantitative value that establishes 
a ``maximum allowable increase'' for a particular pollutant. It 
functions, therefore, as a specific numerical measure that can be used 
to evaluate whether an applicant's proposed project will cause or 
contribute to air pollution in excess of allowable levels.
    Increments also satisfy the second factor in section 166(c) by 
providing ``a framework for stimulating improved control technology.'' 
Increments establish an incentive to apply improved control 
technologies in order to avoid violating the increment and to ``free 
up'' available increment to promote continued economic growth. These 
control technologies may become the basis of BACT determinations 
elsewhere, as the technologies become more commonplace and the costs 
tend to decline.
    One commenter stated that, although increments may encourage the 
use of existing control technologies, EPA has not cited any evidence 
that increments actually stimulate the development of improved 
technologies. Moreover, the commenter asserted that even if increments 
provide the incentive asserted by EPA, any encouragement of improved 
control technology is wholly incidental and hardly amounts to a 
``framework'' whose purpose is to stimulate such technology.
    We continue to believe that the total program, encompassing 
increments and BACT, does provide an appropriate framework to stimulate 
BACT in such a way that it is not simply ``wholly incidental,'' as the 
commenter claims. The fact that economic growth in an area must occur 
within a defined amount of allowable air quality deterioration should 
logically lead to the application of improved pollution control 
technology as the amount of deterioration increases, and should not be 
regarded as an incidental consequence. As stated in the 2007 NPRM, 
Congress envisioned that the increments they originally established 
would serve as an incentive: ``The incremental ceiling should serve as 
an incentive to technology, as a potential source may wish to push the 
frontiers of technology in a particular case to obtain greater 
productive capacity with the limits of the increments.'' S. Rep. 95-127 
at 18, 30 (3 LH at 1392, 1404). We, too, believe that as the available 
increment in an area becomes smaller, and as states try to preserve 
some of the remaining increments for future growth, it will be 
necessary to require sources to install more stringent controls in that 
area. Such levels of control ultimately must be considered in 
subsequent BACT evaluations in other PSD areas throughout the country. 
Admittedly, the increasing stringency of control technologies over 
time, as observed in EPA's BACT/Lowest Achievable Emission Rate (LAER) 
Clearinghouse, supports but cannot in itself conclusively demonstrate 
that the PSD program has already stimulated development of improved 
control technology; there are undoubtedly a number of factors that 
could cause such trends. Nevertheless, even the need to require a more 
stringent BACT determination in only a few PSD areas (due to dwindling 
increment availability) necessitates consideration of that level of 
control for all other PSD sources wherever they may decide to locate. 
In any event, while the commenter generally questions the effectiveness 
of the increments as an incentive for tightening BACT, they provided no 
evidence that more stringent BACT is not related to the

[[Page 64876]]

increment system established as an integral part of the PSD program.
2. Area Classifications
    In this final rule, EPA is establishing the same three-tiered area 
classification system for PM2.5 that is applicable to the 
increments for NO2 and other pollutants under the PSD 
program and the Act. Accordingly, areas that are currently Class I for 
other pollutants will also be Class I for PM2.5 and all 
other areas will be Class II for PM2.5 unless we redesignate 
the area based on a request by a State or tribe pursuant to the process 
in section 164 of the Act and EPA's regulations at 40 CFR 51.166(g) and 
52.21(g).
    As explained earlier in section IV.E.1, Class I areas are areas 
where very clean air is most desirable. In contrast, Class III areas 
are designed as those areas in which a State wishes to permit the 
highest relative level of industrial development, and thus allow the 
largest incremental increase in pollution. Areas that are not 
especially sensitive and where states have not provided for a higher 
level of industrial growth are classified as Class II. When Congress 
established this three-tiered scheme for SO2 and PM, it 
intended that Class II areas be subject to an increment that allows 
``moderately large increases over existing pollution.'' H.R. Rep. 95-
294, 4 LH at 2609.
    Establishing increments at different levels for each of the three 
area classifications helps to fulfill two of the factors applicable 
under section 166(c) of the Act. First, establishing the smallest 
increments in Class I areas helps fulfill EPA's obligation to establish 
regulations that ``preserve, protect, and enhance the air quality'' in 
parks and special areas. Class I areas are primarily the kinds of parks 
and special areas covered by section 160(2) of the Act. Second, by 
providing for two additional area classifications with increment levels 
that are higher but still protective, the area classification system 
helps satisfy the goal in section 160(3) of the Act that EPA ``insure 
that economic growth will occur in a manner consistent with 
preservation of clean air resources.'' In those areas where clean air 
resources may not require as much protection, more growth is allowed. 
By employing an intermediate level (Class II areas) and higher level 
(Class III areas), this classification scheme helps ensure that growth 
can occur where it is needed (Class III areas) without putting as much 
pressure on existing clean air resources in other areas where some 
growth is still desired (Class II areas).
    By requesting that EPA redesignate an existing Class II area to 
Class III, states may accommodate economic growth and air quality in 
areas where the Class II increment is too small to allow the siting of 
new or modified sources. The procedures specified by the Act for such a 
redesignation require a commitment by the State government to create 
such an area, extensive public review, local government participation 
in the SIP area redesignation process, and a finding that the 
redesignation will not result in the applicable increment being 
exceeded in a nearby Class I or Class II area. See sections 164(a) and 
(b) of the Act. (No State has yet requested a Class III redesignation.) 
The EPA believes that the three-tiered classification system has 
allowed for economic growth, consistent with the preservation of clean 
air resources.
    However, an area classification system alone may not completely 
satisfy the factors applicable under section 166(c) of the Act. The 
increment that is employed for each class of area is also relevant to 
an evaluation of whether the area classification system achieves the 
goals of the PSD program. We briefly discuss the characteristics of 
increments in section V.E.5.
    One commenter took issue with our assessment of the two factors 
that we believe a classification system helps to fulfill. As discussed 
previously in section V.C.4, the commenter asserted that EPA has 
unlawfully interpreted section 160(3) of the Act to elevate economic 
growth over all other statutory factors. As explained in greater detail 
in section V.C.4, we disagree that our interpretation elevates economic 
growth over other factors, and believe that the plain language of the 
statute supports EPA's reading that section 160(3) requires a balancing 
of the goals of (1) economic growth and (2) preservation of existing 
clean air resources.
    The commenter also stated that EPA has failed to demonstrate that 
the classification system and safe harbor increments, in combination 
with the other elements of the regulatory framework, will ``preserve, 
protect, and enhance the air quality'' in parks and special areas as 
required under section 160(2) of the Act. These comments and our 
response to them are found in section V.E.6 of this preamble where we 
discuss our evaluation of the safe harbor increments.
3. Permitting Procedures
    Two of the factors applicable under section 166(c) are fulfilled by 
the case-by-case permit review procedures that are built into our 
existing PSD regulations. The framework of our existing PSD regulations 
employs the preconstruction permitting system and procedures required 
under section 165 of the Act. These requirements are generally 
reflected in 40 CFR 51.166 and 52.21 of EPA's PSD regulations. These 
permitting and review procedures, which apply to construction of new 
major sources and to major modifications, fulfill the goals set forth 
in sections 160(4) and 160(5) of the Act. These goals require that PSD 
programs in one State not interfere with the PSD programs in other 
states and that PSD programs assure that any decision to permit 
increased air pollution is made after careful evaluation and public 
participation in the decision-making process. For the same reasons 
discussed in our proposal for the pollutant-specific NO2 
increments regulations (70 FR 8896, February 23, 2005), we believe 
these factors are also fulfilled for PM2.5 by employing the 
permit review procedures.
4. AQRV Review by Federal Land Manager and Reviewing Authority
    In this final rule, we apply the existing requirements to evaluate 
impacts on AQRVs in Class I areas (see existing 40 CFR 51.166(p) and 
52.21(p)) to PM2.5. The existing requirements for an AQRV 
review, which Congress applied to SO2 and TSP, provide 
Federal land managers (FLMs) with the responsibility to review source 
impacts on site-specific AQRVs in Class I areas and to bring any 
alleged adverse impacts to the attention of the reviewing authority. 
Under an increment approach, we consider this review to be an 
additional measure that helps satisfy the factors in sections 166(c) 
and 160(2) which require EPA's pollutant-specific PSD regulations to 
protect (1) air quality values, and (2) parks and other special areas, 
respectively.
    Two State/local agency commenters supported our proposal to apply 
the requirements to evaluate impacts on AQRV in Class I areas to 
PM2.5 review. However, one commenter indicated that FLM 
review does not and cannot assure the prevention of all significant 
PM2.5-related deterioration because it applies only to the 
construction or modification of very large stationary sources (e.g., 
factories and power plants) affecting Class I areas. This commenter 
pointed out that Class I areas do not include Bureau of Land Management 
wilderness and wilderness study areas (encompassing more than 15 
million acres), 341 of the nation's 390 national park units (only 49 
national parks are Class I), and many U.S. Forest Service lands 
(including a number of wilderness areas). The commenter added that FLM

[[Page 64877]]

review does not help to fulfill section 160(2)'s goal of preserving and 
protecting air quality in ``other areas of special national or regional 
natural, recreational, scenic, or historic value,'' such as State and 
local parks, wildlife refuges, recreation areas, lakes, and historic 
areas, none of which are Class I areas. In addition, the commenter 
noted that FLM review does not apply to emissions increases from 
sources of PM2.5 and precursor pollution other than major 
stationary sources, such as motor vehicles and non-major industrial 
sources (which are sources that emit substantial amounts of 
PM2.5 and precursors). Alabama Power v. Costle, 636 F.2d 
323, 362 (D.C. Cir. 1979) (Alabama Power) (expressly recognizing that 
``[s]ignificant deterioration may occur due to increased emissions from 
unregulated minor sources.'').
    The commenter also asserted that FLM review is of limited reach 
even where it does apply. Under the current PSD regulations, a State 
must consider an FLM's objections and must justify its decision in 
writing when it disagrees with those objections, but the State can 
still issue a PSD permit over those objections unless emissions are 
predicted to cause an exceedance of the applicable increment. The 
commenter believes that, given these limitations, EPA cannot plausibly 
claim that the existing provision for FLM review ensures the 
preservation, protection, and enhancement of air quality for parks and 
natural areas throughout the nation as required by section 160(2) of 
the Act.
    In our rulemakings addressing PSD for NOX, EPA extended 
the AQRV review procedures set forth in 40 CFR 51.166(p) and 52.21(p) 
to cover NO2. These AQRV review procedures were established 
based on section 165(d) of the Act, and they were originally applied 
only in the context of the statutory increments for PM and 
SO2. However, because they also address many of the factors 
applicable under section 166(c) of the Act, EPA also applied them to 
NOX through regulation. In this final rule, we are amending 
the existing PSD regulations to extend, as proposed, the AQRV review 
procedures to include PM2.5 by explicitly including 
PM2.5 in the regulatory text that now simply references 
``particulate matter.'' See new 40 CFR 51.166(p)(4) and 52.21(p)(5).
    Section 165(d) creates a scheme in which the FLM and reviewing 
authority must review the impacts of a proposed new or modified 
source's emissions on AQRVs. The Act assigns to the FLM an 
``affirmative responsibility'' to protect the AQRVs in Class I areas. 
This is in notable contrast to the reviewing authority's responsibility 
for protecting the increments--including Class I increments. The FLM 
may object to or concur in the issuance of a PSD permit based on the 
impact, or lack thereof, that new emissions may have on any affected 
AQRV that the FLM has identified and for which information is available 
to the general public. If the proposed source's emissions are shown not 
to cause or contribute to a violation of a Class I increment, the FLM 
may still prevent issuance of the permit by demonstrating to the 
satisfaction of the reviewing authority that the source or modification 
will have an adverse impact on AQRVs. Section 165(d)(2)(C). On the 
other hand, if the proposed source is shown to cause or contribute to a 
violation of a Class I increment, the reviewing authority (State or 
EPA) shall not issue the permit unless the owner or operator 
demonstrates to the satisfaction of the FLM that there will be no 
adverse impact on AQRVs.\8\ Thus, the showing of compliance with the 
increment determines whether the FLM or the permit applicant has the 
burden of satisfactorily demonstrating whether or not the proposed 
source's emissions would have an adverse impact on AQRVs.\9\ In any 
event, the FLM plays an important and material role by raising these 
issues for consideration by the reviewing authority, which in the 
majority of cases will be the State.
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    \8\ Even if such a waiver of the Class I increment is allowed 
upon a finding of no adverse impact, the source must comply with 
such emissions limitations as may be necessary to ensure that 
alternative increments specified in the rules for SO2 or 
PM are not exceeded. The alternative increments are generally at the 
level of the Class II increments, with the lone exception being a 
more restrictive 3-hour increment for SO2. Section 
165(d)(2)(C)(iv). The EPA made this provision applicable to the PSD 
provisions for NOX at the level of the NO2 
Class II increment (53 FR 3704; 53 FR 40656) and substituted the 
PM10 Class II increments for the statutory alternative PM 
increments, which were based on TSP (58 FR 31622). This final rule 
expands this provision to include the PM2.5 Class II 
increments as well. See 40 CFR 51.166(p)(4) and 52.21(p)(5).
    \9\ In response to concerns that Class I increment would hinder 
growth in areas surrounding the Class I area, Congress established 
Class I increments as a means of determining where the burden of 
proof should lie for a demonstration of adverse effects on AQRVs. 
See Senate Debate, June 8, 1977 (3 LH at 725).
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    Extending the AQRV review procedures of the PSD regulations to 
PM2.5 helps to provide protection with respect to potential 
adverse effects from PM2.5 for parks and special areas 
(which are generally the Class I areas subject to this review) not 
afforded by the increment system alone. As discussed later, we believe 
the factors applicable under section 166(c) of the Act can be fulfilled 
when the review of AQRVs is applied in conjunction with increments and 
other aspects of our PSD regulations. In those cases where the 
increment is not violated and the reviewing authority agrees that a 
proposed project will adversely affect AQRVs, the parks and other 
special areas will be protected by denying issuance of the permit or by 
requiring the applicant to modify the project to alleviate the adverse 
impact.
    We read the legislative history to show that Congress intended the 
AQRV review provisions of section 165(d) to provide a special layer of 
protection, beyond that provided by increments. The Senate committee 
report stated the following:

    A second test of protection is provided in specified Federal 
land areas (Class I areas), such as national parks and wilderness 
areas; these areas are also subjected to a review process based on 
the effect of pollution on the area's air quality related values.''

S. Rep. 95-127, at 17, 4 LH at 1401.

    As we stated in the NO2 increment rule, we believe the 
term ``air quality values'' should be given the same meaning as ``air 
quality related values.'' Legislative history indicates that the term 
``air quality value'' was used interchangeably with the term ``air 
quality related value'' (AQRV) regarding Class I lands.\10\
---------------------------------------------------------------------------

    \10\ See S. Rep. 95-127, at 12, reprinted at 3 LH at 1386, 1410 
(describing the goal of protecting ``air quality values'' in 
``Federal lands--such as national parks and wilderness areas and 
international parks,'' and in the next paragraph and subsequent text 
using the term ``air quality related values'' to describe the same 
goal); id. at 35, 36 (``The bill charges the Federal land manager 
and the supervisor with a positive role to protect air quality 
values associated with the land areas under the jurisdiction of the 
[FLM]'' and then describing the statutory term as ``air quality 
related values''). H.R. Report 95-564 at 532 (describing duty of 
Administrator to consider ``air quality values'' of the tribal and 
State lands in resolving an appeal of a tribal or State 
redesignation, which is described in the final bill as ``air quality 
related values'').
---------------------------------------------------------------------------

    The commenter is correct that the FLM (or AQRV) review applies only 
to Class I areas, and not to other ``special'' areas such as the 
numerous State and local parks and some other areas that could be seen 
as being covered by the protective purposes of section 160(2) of the 
Act. This level of coverage by FLM review to protect AQRVs was 
established by Congress when it enacted the PSD program, including the 
purposes set out in section 160(2). Thus, we conclude that Congress 
believed that the special areas not designated as Class I areas were 
properly addressed by the other elements of the PSD program. As 
discussed further in the next section, one such element is the 
requirement for sources to conduct an ``additional impacts analysis,'' 
which includes an

[[Page 64878]]

analysis of the impacts on visibility, soils, and vegetation of the 
proposed source and associated growth, regardless of the classification 
of the area impacted by the source. Note also that states have the 
option under the Act of designating additional areas as Class I areas 
and providing for AQRV review for these State Class I areas if they 
believe that there are areas within their borders that merit such 
protection.
    The commenter is not correct in saying that the review to protect 
AQRVs does not apply to emissions increases from sources other than 
major stationary sources. While it is generally true that a major 
stationary source may trigger the analysis as part of the required PSD 
review for new major stationary sources and major modifications where 
such source's emissions increase may affect a Class I area, the review 
itself includes the impacts on an AQRV of other emissions in the area, 
including emissions from non-major sources. In addition, states may 
adopt requirements in their State implementation plans to require 
certain minor sources seeking a permit to undergo an AQRV analysis if 
they choose to do so.
    We agree with the commenter that the AQRV review has certain 
limitations in that a State can, under some circumstances, issue a PSD 
permit over the objection of the FLM. Here again, Congress enabled this 
outcome when it provided that a permit would not be issued when the FLM 
demonstrates ``to the satisfaction of the State'' that the source will 
have an adverse impact on AQRVs in a Class I area. Section 
165(d)(2)(C)(ii). We read this provision to reflect Congress's judgment 
on the appropriate balance between State and FLM discretion in the 
reach of AQRV review. That said, when a reviewing authority declines to 
follow a determination of adverse impact by the FLM, the reviewing 
authority is expected to provide a rational basis for doing so, and a 
reviewing authority's rejection of an FLM's finding may not be 
arbitrary and capricious. As stated by EPA's Environmental Appeals 
Board in In the Matter of: Hadson Power 14--Buena Vista, 4 E.A.D. 258, 
1992 WL 345661 (October 5, 1992)(in Section II.A):

    States do not have unfettered discretion to reject an FLM's 
adverse impact determination. If a State determines that an FLM has 
not satisfactorily demonstrated an adverse impact on AQRVs from the 
proposed facility, the State must provide a ``rational basis'' for 
such a conclusion, ``given the FLMs' affirmative responsibility and 
expertise regarding the Class I areas within their jurisdiction.'' 
50 FR 28549, July 12, 1985. Arbitrary and capricious rejections of 
adverse impact determinations are not sustainable. (citations 
omitted).

    In sum, the commenter correctly enumerated some of the limitations 
of the AQRV review under the Act. However, such review is only one 
element of the full PSD program, which must be evaluated against the 
statutory requirements in their entirety. We continue to believe, as 
previously stated, that under an increment approach, FLM review for 
AQRV impacts is an additional measure that helps satisfy the factors in 
sections 166(c) and 160(2) of the Act (which require EPA's pollutant-
specific PSD regulations to protect (1) air quality values, and (2) 
parks and other special areas, respectively) in balance with the other 
statutory factors. We add that the AQRV review requirements of the 
existing regulations mirror these requirements in the Act, which 
reflect Congress' judgment of how AQRV review should properly be used 
to promote the purposes of the program as set out in section 160 of the 
Act.
5. Additional Impacts Analysis
    The ``additional impacts analysis'' requirements set forth in our 
part 51 and 52 PSD regulations also help fulfill the criteria and goals 
and purposes in sections 166(c) and 160. The additional impacts 
analysis involves a case-by-case review of potential harm to 
visibility, soils, and vegetation in Class II and III areas that could 
occur from the construction or modification of a PSD source.
    Sections 51.166(o)(1) and 52.21(o)(1) of the PSD regulations 
require that a permit provide the following analysis:

An analysis of the impairment to visibility, soils and vegetation 
that would occur as a result of the source or modification and 
general commercial, residential, industrial and other growth 
associated with the source or modification. The owner or operator 
need not provide an analysis of the impact on vegetation having no 
significant commercial or recreational value.

    This requirement was based on section 165(e)(3)(B) of the Act, 
which provides that EPA establish regulations that require ``an 
analysis of the ambient air quality, climate and meteorology, terrain, 
soils and vegetation, and visibility at the site of the proposed major 
emitting facility and in the area potentially affected by emissions 
from such facility * * *.''
    As mentioned in the previous section, one commenter argued that the 
provisions for protection of Class I areas are of no help in fulfilling 
the goal set forth in section 160(2) of the Act to preserve and protect 
air quality in the countless ``other areas of special national or 
regional natural, recreational, scenic, or historic value'' such as 
State and local parks, wildlife refuges, recreation areas, lakes and 
historic areas, none of which were originally defined by Congress as 
Class I areas.
    We acknowledge that the special provisions for protecting Class I 
areas are not applicable for protecting areas that are not designated 
as ``Class I.'' However, we believe that the ``additional impacts 
analysis'' provisions are especially helpful for satisfying the 
requirements of section 166(c) in Class II and Class III areas, 
including the types of areas described by the commenter, that are not 
Class I areas but are worthy of special protection beyond what might be 
provided by the NAAQS and increments. 40 CFR 51.166(o) and 52.21(o). 
These areas are not subject to the special AQRV review that applies 
only in Class I areas. While the additional impacts analysis is not as 
intensive a review as the AQRV analysis required in Class I areas, the 
requirement to consider impairments to visibility, soils, and 
vegetation through the additional impacts analysis contributes to 
satisfying the factors applicable under section 166(c) of the Act in 
all areas, including Class II and Class III areas.
6. Installation of BACT
    The requirement that new sources and modified sources subject to 
PSD apply BACT is an additional measure that helps to satisfy the 
factors in sections 166(c), 160(1), and 160(2) of the Act. This 
requirement, based on section 165(a)(4) of the Act, is already included 
in EPA's PSD regulations for all pollutants generally and thus, in the 
2007 NPRM we considered it to be a part of the regulatory framework for 
the Agency's pollutant-specific regulations for PM2.5. 40 
CFR 51.166(j) and 52.21(j). Our existing regulations define ``best 
available control technology'' as ``an emission limitation * * * based 
on the maximum degree of reduction for each pollutant subject to 
regulation under the Act * * * which the Administrator, on a case-by-
case basis, taking into account energy, environmental, and economic 
impacts and other costs, determines is achievable for such source 
through application of production processes or available methods, 
systems, and techniques * * *.'' 40 CFR 51.166(b)(12) and 52.21(b)(12). 
This pollutant control technology requirement, in practice, has 
required significant reductions in the pollutant emissions increases 
from new and modified sources while also stimulating the on-going 
improvement of control

[[Page 64879]]

technology. The control of PM2.5 emissions through the 
application of BACT helps to protect air quality values, public health 
and welfare, and parks and other special areas.

E. Final PM2.5 Increments

    Based on our evaluation of the effects of PM2.5 and a 
balancing of the criteria in section 166(c) of the Act (and the 
incorporated goals and purposes of the Act contained in section 101 and 
the statutory PSD program in section 160 of the Act), EPA has concluded 
that the ``safe harbor'' increments for PM2.5 (which satisfy 
section 166(d) of the Act) are sufficient to fulfill the criteria in 
section 166(c) when combined with the other measures described earlier 
that we apply to PM2.5. Since several of the eight factors 
applicable under section 166(c) are satisfied by adopting the framework 
and other measures described earlier, our development of these 
increments for PM2.5 was guided by the four remaining 
factors that may not be fully satisfied by the framework and other 
measures: (1) Protecting AQRVs; (2) protecting the public health and 
welfare from reasonably-anticipated adverse effects; (3) protecting the 
air quality in parks and special areas, and (4) insuring economic 
growth.\11\ In accordance with the ``contingent safe harbor'' approach, 
to determine the specific characteristics of the proposed increments, 
we first established safe harbor increments representing the level of 
effectiveness necessary to satisfy the ``at least as effective as'' 
requirement in section 166(d) of the Act and then conducted further 
analysis to determine if additional measures are necessary to fulfill 
the requirements of section 166(c).
---------------------------------------------------------------------------

    \11\ We have paraphrased these factors here and in other 
sections to facilitate the explanation of our reasoning. However, we 
recognize, as we did in our regulation for NOX, that the 
statutory language is broader than the shorthand we use here for 
convenience.
---------------------------------------------------------------------------

1. Identification of Safe Harbor Increments
    Using the percentage-of-NAAQS approach under proposed Option 1, as 
explained in section V.C.2 of this preamble, we derived the following 
safe harbor increments for PM2.5:

----------------------------------------------------------------------------------------------------------------
                                                                 NAAQS           Increments ([micro]g/m\3\)
                      Averaging period                         ([micro]g/ --------------------------------------
                                                                 m\3\)       Class I      Class II    Class III
----------------------------------------------------------------------------------------------------------------
Annual......................................................           15            1            4            8
24-hour.....................................................           35            2            9           18
----------------------------------------------------------------------------------------------------------------

    The table shows PM2.5 NAAQS levels (primary and 
secondary NAAQS) at 15 [micro]g/m\3\ for the annual averaging time and 
35 [micro]g/m\3\ for the 24-hour averaging time. See 40 CFR 50.7. From 
these NAAQS levels, we calculated the safe harbor increments based on 
the same percentages that were used by Congress to establish the 
original PM increments (measured as TSP) in section 163 of the Act, 
i.e., 6.6 percent of the NAAQS for Class I areas, 25 percent of the 
NAAQS for Class II areas, and 50 percent of the NAAQS for Class III 
areas. We have concluded that increments with these characteristics are 
sufficient to satisfy the requirement in section 166(d) that we adopt 
increments (or other PSD regulations) that are ``at least as effective 
as'' the increments established in section 163 of the Act. See EDF v. 
EPA, 898 F.2d at 188, 190.
    Nine commenters supported proposed Option 1, either explicitly or 
implicitly supporting our method of calculating the safe harbor 
increments used to develop increments for PM2.5. One of 
these commenters, while agreeing with the safe harbor increment 
approach under Option 1, disagreed with our analysis of the adequacy of 
the safe harbor increments, as discussed in other sections of this 
preamble. One commenter who opposed Option 1 (based on the belief that 
section 166(a) of the Act is not the appropriate basis for 
PM2.5 increments) nevertheless supported the percentage-of-
NAAQS approach for developing PM2.5 increments under the 
statutory authority at section 166(f).
    A commenter who opposed our proposal to calculate increments using 
percentages of the NAAQS argued that this approach for setting the 
PM2.5 increments is not scientifically supported. This 
commenter indicated that basing the PM2.5 increments on the 
same percentage of the NAAQS that were used to set PM10 
increments based on the TSP NAAQS ignores the relationship between 
PM10 and PM2.5 emissions, which may be much 
different than the relationship between TSP and PM10 
emissions. The commenter argued that, because the ratio of 
PM2.5 to PM10 emissions is 0.8, it appears that 
using the percentages proposed by EPA would indirectly restrict 
PM10/TSP emissions and air quality impacts to proportionally 
lower levels than the PM10 increments in order to avoid 
exceeding the PM2.5 increments. The commenter conceded that 
using the 0.8 factor to set PM2.5 increments may seem too 
high, but asserted that using the safe harbor approach would set 
increments for PM2.5 that are too low.
    We conclude that the commenter is mistaken in saying that the 
PM2.5 increments use the same percentage of the NAAQS that 
were used to set the PM10 NAAQS. We adopted the 
PM10 increments using the ``equivalent substitution'' 
approach set forth under section 166(f) of the Act. Under that 
approach, rather than calculating the PM10 increments as 
specific percentages of the PM10 NAAQS (using the same 
percentages that Congress used for setting the statutory increments for 
PM and SO2), EPA determined the levels of the 
PM10 increments that could represent an equivalent amount of 
increment consumed, as if the TSP increments were still in effect. See 
58 FR 31622, June 3, 1993, at 31626-31627. Nevertheless, the commenter 
is correct that, in cases where the ratio of PM2.5 to 
PM10 emissions is 0.8 for an individual source, the source 
may have to reduce its PM10 emissions more than would 
otherwise be necessary to meet the PM10 increments in order 
to control its PM2.5 emissions sufficiently to meet the safe 
harbor PM2.5 increments.\12\ This is because the safe harbor 
PM2.5 increments are less than 80 percent of the 
PM10 increments. For example, the Class II 24-hour 
PM2.5 safe harbor increment (9 [micro]g/m\3\) is only 30 
percent of the corresponding PM10 increment (30 [micro]g/
m\3\).
---------------------------------------------------------------------------

    \12\ Note that the PM10 increment may still be more 
limiting in areas where much of that increment has already been 
consumed.
---------------------------------------------------------------------------

    The underlying reason that the safe harbor PM2.5 
increments are so much less than the PM10 increments is that 
the PM2.5 NAAQS are much less than the PM10 
NAAQS.\13\ This is the result of the evolution in our knowledge about 
the health and welfare effects of PM, in particular the effects of the 
fine PM

[[Page 64880]]

represented by PM2.5. We believe that it is fitting for 
PM2.5 increments to reflect our greater knowledge about 
PM2.5 effects (as embodied in the NAAQS), rather than to 
simply maintain the control level required by the PM10 
increments as suggested by the commenter. If this results in 
PM2.5 increments that are more limiting than PM10 
increments, we believe that this outcome is appropriate in light of our 
statutory requirement to prevent significant deterioration of air 
quality as it relates to PM2.5.
---------------------------------------------------------------------------

    \13\ The 24-hour PM2.5 NAAQS (35 [micro]g/m\3\) is 
about 23 percent of the 24-hour PM10 NAAQS (150 [micro]g/
m\3\).
---------------------------------------------------------------------------

2. Data Used by EPA for the Evaluation of the Safe Harbor Increments 
for PM2.5
    We evaluated whether measures other than the safe harbor increments 
are necessary by analyzing primarily the scientific and technical 
information on the health and welfare effects of PM2.5 
contained in the June 2005 OAQPS Staff Paper which accompanied the last 
full review of the PM NAAQS completed in 2006.\14\
---------------------------------------------------------------------------

    \14\ The review completed in 2006 updated the previous review, 
which began in 1994 and resulted in revised standards for PM in 
1997.
---------------------------------------------------------------------------

    Section 166(a) of the Act provides that EPA establish pollutant-
specific PSD regulations, such as increments, after the establishment 
of a NAAQS for the applicable pollutants. The Act provides that EPA 
will promulgate new PSD regulations under section 166, including new 
increments if appropriate, within 2 years from the promulgation of any 
NAAQS after 1977. Within that time frame, the health and welfare 
information used for the setting of the NAAQS would also be ``current'' 
for purposes of establishing pollutant-specific PSD regulations. We 
believe this timing reflects congressional intent that EPA consider the 
same body of information concerning a pollutant's health and welfare 
effects when it promulgates the NAAQS and subsequent PSD increments (or 
other measures) defining significant air quality deterioration for the 
same pollutant. However, when we used that same information as the 
basis for our proposed pollutant-specific PSD regulations, we evaluated 
that information under the legal criteria in section 166 of the Act 
rather than the criteria in section 109 applicable to the promulgation 
of NAAQS. See EDF v. EPA, 898 F.2d at 190.
    At the time of our proposal of PM2.5 increments, we had 
just completed a review of the PM2.5 NAAQS. Thus, the 
information used in the NAAQS review was current and timely for 
purposes of establishing pollutant-specific PSD regulations for 
PM2.5. On October 17, 2006, based primarily on considerable 
new data on the air quality and human health effects for 
PM2.5 directly, EPA revised the primary and secondary NAAQS 
to provide increased protection of public health and welfare by 
retaining the level of the annual standard and tightening the level of 
the 24-hour standard from 65 to 35 [mu]g/m\3\ while retaining the 24-
hour PM10 NAAQS and revoking the annual PM10 
NAAQS. The information contained in both the 2004 Criteria Document and 
2005 Staff Paper that was used for the latest review of the PM NAAQS 
was also considered for the purpose of evaluating the PM2.5 
increments that we have established in this final rule.
    The 2004 Criteria Document and 2005 Staff Paper are the products of 
a rigorous process that is followed to validate and interpret the 
available scientific and technical information, and provided the basis 
for recommending the PM2.5 NAAQS. In accordance with the 
Act, the NAAQS process begins with the development of ``air quality 
criteria'' under section 108 for air pollutants that ``may reasonably 
be anticipated to endanger public health or welfare'' and that come 
from ``numerous or diverse'' sources. Section 108(a)(1). For each NAAQS 
review, the Administrator must appoint ``an independent scientific 
review committee composed of seven members of the National Academy of 
Sciences, one physician, and one person representing State air 
pollution control agencies,'' known as the Clean Air Scientific 
Advisory Committee (CASAC). Section 109(d)(2)(A). The CASAC is charged 
with recommending revisions to the criteria document and NAAQS, and 
advising the Administrator on several issues, including areas in which 
additional knowledge is required to appraise the adequacy and basis of 
existing, new, or revised NAAQS. Section 109(d)(2)(B),(C).
    ``Air quality criteria'' must reflect the latest scientific 
knowledge on ``all identifiable effects on public health or welfare'' 
that may result from a pollutant presence in the ambient air. Section 
108(a)(2). The scientific assessments constituting air quality criteria 
generally take the form of a ``criteria document,'' a rigorous review 
of all pertinent scientific studies and related information. The EPA 
also develops a ``staff paper'' to ``bridge the gap'' between the 
scientific review and the judgments the Administrator must make to set 
standards. See Natural Resources Defense Council v. EPA (``NRDC ''), 
902 F.2d 962, 967 (D.C. Cir. 1990). Both documents undergo extensive 
scientific peer review as well as public notice and comment. See, e.g., 
62 FR 386542.
3. Scope of Effects Considered
    The effects of ambient PM2.5 concentrations may include 
effects from secondarily-formed PM2.5. Thus, when we 
analyzed the data in this rulemaking, we evaluated the health and 
welfare effects of both direct PM2.5 and secondarily-formed 
PM2.5 that may result from the transformation of other 
pollutants such as SO2 and NOX. This was 
consistent with the approach we described for addressing these effects 
in the review of our pollutant-specific NO2 increments 
regulations. 70 FR 59590.
4. Evaluation of the Health and Welfare Effects of PM2.5
    Airborne PM is not a specific chemical entity, but rather is a 
mixture of liquid and solid particles from different sources and of 
different sizes, compositions, and properties. Particle size 
distributions show that atmospheric particles exist in two classes: 
Fine particles and coarse particles. The indicator for fine particles 
is PM2.5, which represents that population of particles that 
is mostly less than 2.5 micrometers in size. The indicator for thoracic 
coarse particles is ``PM10-2.5,'' which represents particles 
sized between 2.5 and 10 micrometers. In the last two reviews of the PM 
NAAQS, EPA concluded that these two indicators, because of their 
different sources, composition, and formation processes, should be 
treated as separate subclasses of PM pollution for purposes of setting 
ambient air quality standards.
    Fine PM is derived directly from combustion material that has 
volatilized and then condensed to form primary PM or from precursor 
gases, such as SO2 and NOX, reacting in the 
atmosphere to form secondary PM. Major components of fine particles are 
sulfates, strong acid, ammonium nitrate, organic compounds, trace 
elements (including metals), elemental carbon, and water. Primary and 
secondary fine particles have long lifetimes in the atmosphere (days to 
weeks) and travel long distances (hundreds to thousands of kilometers). 
They tend to be uniformly distributed over urban areas and larger 
regions, especially in the eastern United States. As a result, they are 
not easily traced back to their individual sources.
a. Health Effects
    The EPA reported important progress since the last PM NAAQS review 
in advancing our understanding of potential mechanisms by which ambient 
PM2.5, alone and in combination with other pollutants, is 
causally linked to a

[[Page 64881]]

number of key health effects. The more extensive and stronger body of 
evidence used by EPA to study the health effects of PM2.5 in 
our latest review identified a broader range of effects than those 
previously documented, involving premature mortality and indices of 
morbidity (including respiratory hospital admissions and emergency room 
visits, school absences, work loss days, restricted activity days, 
effects on lung function and symptoms, morphological changes, and 
altered host defense mechanisms) associated with both long-term and 
short-term exposure to PM2.5. A more detailed discussion of 
the health effects associated with PM2.5 is contained in the 
2007 NPRM. 72 FR 54127-54128. In addition, an overview of the 
scientific and technical evidence considered in the 2004 Criteria 
Document and 2005 Staff Paper can be found in our proposed rule for 
revising the NAAQS for PM (71 FR 2619, January 17, 2006).
b. Welfare Effects
    Ambient PM alone, and in combination with other pollutants, can 
have a variety of effects on public welfare. While visibility 
impairment is the most noticeable effect of fine particles present in 
the atmosphere, both fine and coarse particles can have other 
significant welfare-related effects, including effects on vegetation 
and ecosystems, materials (e.g., soiling and corrosion), and climate 
change processes.
    In reaching our decision in 2006 to revise the suite of PM 
secondary standards, EPA factored in several key conclusions from the 
scientific and technical information contained in the 2004 Criteria 
Document and 2005 Staff Paper. These conclusions included the 
following: (1) PM-related visibility impairment is principally related 
to fine particle levels, and most directly related to instantaneous 
levels of visual air quality associated with short-term averaging 
periods; (2) PM2.5 concentrations can be used as a general 
surrogate for visibility impairment in urban areas; (3) any secondary 
NAAQS for visibility protection should be considered in conjunction 
with the regional haze program as a means of achieving appropriate 
levels of protection against PM-related visibility impairment in urban, 
non-urban, and Class I areas nationwide; (4) the available evidence is 
not sufficient to support distinct secondary standards for fine or 
coarse particles for any non-visibility related welfare effects; and 
(5) the secondary standards should be considered in conjunction with 
protection afforded by other programs intended to address various 
aspects of air pollution effects on ecosystems and vegetation, such as 
the acid deposition program and other regional approaches to reducing 
pollutants linked to nitrate or acidic deposition.
    In this rulemaking, EPA has reviewed the scientific and technical 
information concerning welfare related effects considered in the 2004 
Criteria Document and 2005 Staff Paper to determine whether there is 
any basis for modifying the safe harbor increments developed for 
PM2.5 to satisfy the criteria under sections 166(c) and 160 
of the Act. Our review included information on visibility impairment, 
and effects on vegetation and other ecosystem components, materials and 
soiling, and climate changes. A detailed discussion of the various 
welfare effects we considered for evaluating the safe harbor increments 
for PM2.5 is contained in the 2007 NPRM. 72 FR 54128-54133.
5. Fundamental Elements of Increments
    As we have previously noted, under the model established in the Act 
and prior EPA regulations, the function of an increment is not like 
that of the NAAQS in that an increment is not intended to set a uniform 
ambient pollutant concentration ``ceiling'' across the United States. 
See 70 FR 59600. Instead, while both increments and NAAQS generally 
serve to limit ambient air pollution levels, increments are designed to 
allow a uniform amount of pollutant concentration increase for each 
area in the United States having a particular classification, i.e., 
Class I, II, or III. The amount of the allowable increase is measured 
against a baseline air quality level that is typically different for 
each particular area.\15\ Because the baseline air quality level varies 
from one location to another, and is not established for a particular 
area until a source proposing to construct in that area submits a 
complete PSD permit application, it is not possible to determine what 
the maximum ambient pollutant concentration attainable will be for a 
given area (to be used to determine the protection afforded by an 
increment against potential adverse environmental effects) until the 
specific baseline air quality level is known.
---------------------------------------------------------------------------

    \15\ It should be noted, however, that an increment does not 
allow air pollution levels in an area to increase beyond the ambient 
concentration of a pollutant that would exceed the level allowed by 
the NAAQS.
---------------------------------------------------------------------------

    For the reasons described in our NO2 increments rule, 
our objective is to establish uniform increments, consistent with the 
increments for SO2 and PM originally established by 
Congress, that allow the same level of deterioration for each area of 
the country having the same classification. 70 FR 59601. It is 
important to understand that increments are not intended to reduce 
ambient concentrations of an air pollutant below existing baseline 
levels in each area, but rather to define a level of allowable increase 
in pollutant concentrations above baseline levels, and to identify the 
level at which ``significant'' deterioration occurs for each area, in 
accordance with its specific classification. 70 FR 59600.
6. Evaluation of the Safe Harbor Increments
    As indicated earlier (in section V.E.2 of this preamble), mindful 
of the considerations made about the fundamental characteristics of the 
increments, we reviewed the scientific and technical evidence available 
for the 2005 review of the NAAQS for PM in order to determine whether, 
and to what extent, the ``safe harbor'' increments might need to be 
modified in order to protect air quality values, health and welfare, 
and parks while insuring economic growth consistent with the 
preservation of clean air resources in accordance with sections 166(c) 
and 160 of the Act. As we did in our evaluation of the safe harbor 
NO2 increments (70 FR 59603-59606), we relied on an approach 
that evaluates how protective the safe harbor PM2.5 
increments are by comparing the marginal pollutant concentration 
increases allowed by the safe harbor increment levels against the 
pollutant concentrations at which various environmental responses 
occur.
    We analyzed the available evidence from both a quantitative and 
qualitative perspective to reach a decision about whether we should 
modify the contingent safe harbor PM2.5 increments and 
whether we have sufficient information to select a specific alternative 
level, averaging time, or pollutant indicator for the increments. As a 
result of our analysis, we proposed to conclude that it was not 
necessary to modify the safe harbor increments to protect human health, 
address non-visibility welfare effects, or further protect visibility. 
This analysis is described in detail in the 2007 NPRM.
    After considering the comments on our evaluation of the safe harbor 
increments and the conclusions we reached in the 2007 NPRM (summarized 
in the following paragraphs), we continue to believe that the safe 
harbor increments for PM2.5 (which satisfy section 166(d) of 
the Act) are sufficient to fulfill the criteria in section 166(c) of 
the Act (and the incorporated goals and purposes of the Act in section 
101 and the PSD program in section 160) when

[[Page 64882]]

combined with the other measures described earlier that we apply to 
PM2.5. Consequently, this final rule establishes the 
PM2.5 increments at the level of the proposed safe harbor 
increments.
    An environmental group submitted extensive comments arguing that 
the PM2.5 safe harbor increments are not sufficient to meet 
the Act's requirements for PSD and that our analysis was inadequate, 
and two other commenters submitted more narrowly targeted comments in 
this area. A summary of the major comments, along with our responses, 
follows. A more detailed treatment of the comments can be found in the 
Response to Comments document for this rulemaking, which is available 
in the rulemaking docket.\16\
---------------------------------------------------------------------------

    \16\ Docket No. EPA-HQ-OAR-2006-0605 can be accessed on line at 
http://www.regulations.gov.
---------------------------------------------------------------------------

    The environmental group commenter stated that EPA has not complied 
with section 166(c) of the Act because the Agency has not made a 
finding or demonstrated that the PM2.5 PSD rules will (as 
required by section 160(2) of the Act) preserve, protect, and enhance 
the air quality in parks and special areas. The commenter asserted that 
EPA offered only vague assertions that the proposed increments would 
``satisfy'' the statutory factors and that they, along with other 
programs, would ``help'' to fulfill the statutory purposes. The 
commenter went on to argue that EPA sought to excuse its failure to 
show fulfillment of the statutory purposes by asserting that it cannot 
develop a uniform, quantitative, dose-response relationship between 
fine particle levels and certain ecosystem impacts (citing 72 FR 
54134), but that, even if true, such a claim does not excuse the agency 
from satisfying its statutory duty under section 166(c).
    We conclude that the 2007 NPRM demonstrated that the safe harbor 
increments, in combination with the other aspects of the regulatory 
framework, fulfill the statutory requirements despite the scientific 
uncertainties. We reiterate that finding today. The fact that we did 
not, in the 2007 NPRM, explicitly state this as a finding does not 
diminish the demonstration made there and reiterated in this preamble.
    The environmental group commenter believes that the relationship 
between PM2.5 and adverse effects can be quantified to a 
greater extent than stated by EPA. Regarding acid rain and other 
adverse ecological impacts, the commenter asserted that critical loads 
can be established as a way of quantifying and limiting the 
PM2.5 contribution to degradation, and noted that critical 
loads are now used by authorities in Europe, have been endorsed by 
leading North American scientists, and have been used by Federal land 
management agencies. To comply with section 166(c), the commenter 
believes that EPA must establish a mechanism to supplement the 
nationally uniform increments with additional measures, including a 
requirement to establish area-specific critical loads or equally 
protective limits, where necessary to protect and enhance air quality 
in specific parks and natural areas.
    With regard to the critical load concept, we agree conceptually 
with the commenter that critical loads could be used to supplement the 
existing increments, especially as a means of protecting the known 
sensitive ecosystems within Class I areas. While we disagree that the 
critical loads concept can be used as an effective replacement to 
increments for limiting air quality degradation, we believe that the 
concept offers considerable promise in helping to protect sensitive 
receptors in specific Class I areas. However, we do not believe that it 
would be appropriate at this time to establish a requirement for area-
specific critical loads under the PSD program. In our 2005 PSD rule for 
NO2 increments, we indicated that states could propose using 
information on critical loads as part of their approach for managing 
air quality in their individual SIP-approved PSD programs, but 
sufficient information was not yet available for EPA to incorporate the 
use of critical loads into the national PSD program. See 70 FR 59613.
    The concept of critical loads is useful for estimating how much 
pollution a particular ecosystem can experience on a prolonged basis 
without showing adverse effects. In addition to addressing the 
opportunity for using critical loads under its NO2 increment 
rule, EPA has addressed the concept of critical loads in the last 
review of the PM NAAQS and currently in the secondary NO2/
SO2 NAAQS review.\17\ To date in the United States, critical 
loads have had their primary application in the area of atmospheric 
deposition of sulfur (S) and nitrogen (N). In the last review of the PM 
NAAQS, EPA found that ambient PM was contributing to the total load of 
pollutants entering the U.S. ecosystem annually. However, the review 
also concluded that there were ``insufficient data for the vast 
majority of U.S. ecosystems that differentiate the PM contribution to 
total N [nitrate] or S [sulfate] deposition to allow for practical 
application of this approach as a basis for developing national 
standards to protect sensitive U.S. ecosystems from adverse effects 
related to PM deposition.'' The 2005 Staff Paper for the PM NAAQS, in 
reaching this conclusion, addressed various important factors, 
including (1) the lack of a long-term, historic database of annual 
speciated PM deposition rates to establish relationships between PM 
deposition and ecosystem responses; (2) uncertainty in predicting the 
amount of PM deposited to sensitive receptors from measured 
concentrations of PM in the ambient air; and (3) the unique nature of 
each ecosystem and the current inability to extrapolate with confidence 
any effect from one ecosystem to another. The 2005 Staff Paper 
recommended that EPA give serious attention to the critical load 
concept and recommended the collection of data from a ``greater variety 
of ecosystems over longer time scales to determine how ecosystems 
respond to different loading rates over time.'' 2005 Staff Paper at 
page 7-19.
---------------------------------------------------------------------------

    \17\ In the 2005 OAQPS Staff Paper reviewing the NAAQS for PM, 
EPA cited the following accepted definition of ``critical load'': 
``quantitative estimate of an exposure to one or more pollutants 
below which significant harmful effects on specified sensitive 
elements of the environment do not occur according to present 
knowledge.'' See page 6-45.
---------------------------------------------------------------------------

    The review of the secondary NAAQS for NOX and sulfur 
oxides (SOX), which is currently underway, is evaluating 
ecological effects due to the atmospheric deposition of NOX 
and SOX. The two main targeted effects are acidification and 
nutrient enrichment in both aquatic and terrestrial ecosystems. This 
review is attempting to use critical loads to evaluate the impact of 
current depositional loads and alternative loads in several case study 
areas. However, as mentioned earlier, the estimation of ecosystem 
critical loads expressed in terms of PM requires long-term ecosystem-
level data on speciated PM deposition rates for which an adequate 
database is currently lacking for most sites in the United States.
    The environmental group commenter also asserted that the safe 
harbor increments would allow PM2.5 air quality to 
deteriorate to the level of the NAAQS in many locations. According to 
the commenter's analysis, at 55 percent of the locations with 
PM2.5 monitors that were not already exceeding the 
PM2.5 NAAQS, 24-hour PM2.5 concentrations would 
be allowed to increase up to the level of the NAAQS. In addition, the 
analysis showed that for 84 percent of locations not already exceeding 
the NAAQS, the 24-hour PM2.5 concentrations would be allowed 
to increase to a level of 30 [mu]g/

[[Page 64883]]

m\3\ or more. The commenter believes that allowing such levels would 
not be protective of public health, given that we stated in the 2007 
NPRM that we had previously found that PM2.5 concentrations 
less than a range of 30-35 [mu]g/m\3\ (24-hour average) were protective 
of public health (citing 72 FR 54128).
    The environmental group commenter's analysis showed similar results 
for the proposed annual PM2.5 increments. The commenter 
asserted that PM2.5 concentrations would be allowed to 
increase up to the level of the annual NAAQS in 55 percent of the 
locations that are currently in attainment, and that 87 percent of 
these sites would be allowed PM2.5 concentrations of 12 
[mu]g/m\3\ or higher. Again, the commenter believes that allowing 
annual concentrations at or above 12 [mu]g/m\3\ would not be protective 
of public health, based on our statement in the 2007 NPRM that we had 
previously found that PM2.5 concentrations less than a range 
of 12-15 [mu]g/m\3\ (annual average) were protective of public health 
(citing 72 FR 54128).
    We do not believe that increments must be set at levels that ensure 
that the full amount of increment will be available in all locations. 
The statutory provisions in the PSD program have always been clear that 
a source must demonstrate that it will comply with both the NAAQS and 
increments for any pollutant. Consistent with congressional intent, the 
PSD program does not allow a source to violate the NAAQS just because 
its emissions will not cause the increments to be exceeded. If the 
increments were to be developed in such a way that all areas, taking 
into account current ambient air quality status, would be able to 
utilize the full amount of increment, then the increment levels would 
have to be unnecessarily stringent in areas that are substantially 
cleaner than levels allowed by the NAAQS.
    Congress recognized that all areas of the country might not be able 
to utilize the full amount of increment when they provided provisions 
within the Act requiring that both the NAAQS and increments must 
continue to be met at all times. In areas where the full amount of 
increment is not available due to levels of pollution approaching the 
NAAQS, states may need to require emissions reductions at existing 
sources to accommodate the desired amount of economic growth. Hence, we 
do not believe it is reasonable to unduly restrict economic growth in 
cleaner areas by setting more restrictive increments to help maintain 
air quality levels below the NAAQS in areas which are currently only 
marginally attainment.
    In addition, we disagree with the commenter's assertion that the 
increments will not protect public health. In setting the 
PM2.5 NAAQS at 35 [mu]g/m\3\ (24-hour) and 15 [mu]g/m\3\ 
(annual), EPA concluded that these levels protect public health with an 
adequate margin of safety. Regardless of the level at which the 
increments are set, no source is permitted to cause the NAAQS to be 
exceeded. That is, as noted previously, the upper bound on the 
permissible concentration of PM2.5 is determined by the 
increment or the NAAQS, whichever is more restrictive in each 
particular case. Thus, the entire framework of the PM2.5 
regulations, including the safe harbor increments, is protective of 
public health. In asserting otherwise, the commenter has misconstrued 
our statements in this regard.
    In the 2007 NPRM section on the health effects of PM2.5 
(72 FR 54127-54128), we discussed the fact that we considered setting 
the 24-hour NAAQS in the range of 30 to 35 [mu]g/m\3\ and the annual 
NAAQS in the range of 12 to 15 [mu]g/m\3\. However, we concluded in 
setting the NAAQS that 35 [mu]g/m\3\ (24-hour) and 15 [mu]g/m\3\ 
(annual) are protective of public health with an adequate margin of 
safety. We did not say, nor do we believe, that PM2.5 
concentrations must be below 30 [mu]g/m\3\ (24-hour average) or 12 
[mu]g/m\3\ (annual average) to protect public health.
    The environmental group commenter believes that there is a 
quantifiable relationship between visibility impairment and 
PM2.5 levels, citing the 2007 NPRM discussion (72 FR 54135) 
as well as the most recent Criteria Document and Staff Paper for 
PM2.5. The commenter pointed out that in the 2007 NPRM (72 
FR 54135), EPA observed that the proposed Class II short-term safe 
harbor increment of 9 [mu]g/m\3\, if combined with the estimated daily 
background levels in most areas (i.e., 10 [mu]g/m\3\), would be below 
the minimum values recommended in the 2005 Staff Paper for the 
secondary short-term standard for PM2.5 (which was 20 [mu]g/
m\3\). Rather than supporting the adequacy of 9 [mu]g/m\3\ as an 
increment level to protect visibility, the commenter believes that this 
shows that the safe harbor increment is inadequate because consumption 
of an increment of 9 [mu]g/m\3\ combined with background levels alone 
would cause an area to reach within 1 [mu]g/m\3\ of the staff-
recommended value of 20 [mu]g/m\3\. The commenter added that most areas 
would have PM2.5 pollution from motor vehicles and 
stationary sources in concentrations substantially greater than 
background levels, easily placing these areas above 20 [mu]g/m\3\ 
(citing the 2005 Staff Paper at 2-77).
    The environmental group commenter went on to assert that the safe 
harbor PM2.5 increments will not be sufficient to protect 
visibility in parks and other natural areas. In the 2007 NPRM, we 
stated that a 24-hour average PM2.5 concentration of 20 
[mu]g/m\3\ correlates to a visual range of approximately 25 to 35 
kilometers. 72 FR 54129. The commenter asserted that this visual range 
distance falls far short of what the National Park Service considers to 
be good visibility for national parks, adding that the National Park 
Service has stated that visibility used to be 90 miles (145 km) on 
average in eastern parks, and 140 miles (225 km), on average in western 
parks.\18\ The commenter stated that the safe harbor increments would 
allow parks and other natural areas to experience PM2.5 
pollution that is correlated with a 25-35 km visual range.
---------------------------------------------------------------------------

    \18\ The commenter cited http://www.nps.gov/shen/naturescience/visibility_and_haze.htm for historic visibility in national parks.
---------------------------------------------------------------------------

    The visibility impairment issue is more complex than suggested by 
the environmental group commenter. In addition to predicting what the 
maximum ambient change in air quality is for a particular area, a 
visibility impairment assessment considers such things as the 
frequency, magnitude, and duration of visibility impacts in order to 
conclude that an adverse impact will occur.
    In addition, the environmental group commenter misconstrued the 
illustration we included in the 2007 NPRM. We noted that the lowest 
level we considered as a secondary PM2.5 NAAQS was 20 [mu]g/
m\3\, which was considered to address visibility issues in urban areas. 
We also noted that in most areas, the estimated 98th percentile of 
daily background concentrations is less than 10 [mu]g/m\3\. In adding 
the Class II safe harbor increment (9 [mu]g/m\3\) to the 98th 
percentile of background levels, we were simply showing that even in 
the worst case, the combination of the safe harbor increment and 
background PM2.5 would not exceed the most stringent level 
we considered for the secondary PM2.5 NAAQS. The commenter 
presented this rough, worst-case calculation as if it represented the 
typical situation that would result from the safe harbor increments. In 
addition, the environmental group commenter's statements do not apply 
to parks and special areas that are classified as Class

[[Page 64884]]

I areas because the safe harbor increments for such areas are much 
lower.
    Another commenter stated that the proposed 24-hour Class I 
increment (2 [mu]g/m\3\) would not be protective of AQRVs, particularly 
visibility. This commenter noted that the National Park Service uses a 
5 percent change in light extinction from estimated natural conditions 
as the threshold for ``adverse impacts'' to Class I visibility. The 
commenter indicated that depending on the constituents of the ambient 
PM2.5 and the humidity, a concentration of 2 [mu]g/m\3\ in a 
typical Class I area would result in a change in light extinction 
ranging from 13 to 80 percent in the Western United States and from 8 
to 50 percent in the Eastern United States and, therefore, would likely 
constitute ``adverse impacts'' to Class I visibility. While 
acknowledging that the FLM may still determine that the visibility in 
the Class I area is adversely affected by an increase in concentration 
that is less than the increment, this commenter pointed out that we 
stated in the 2007 NPRM that ``generally speaking an increment should 
not be so large that it routinely results in substantially more 
pollution in Class I areas than is generally acceptable under the AQRV 
approach'' (citing 72 FR 54135). The commenter concluded that the 
proposed 24-hour PM2.5 increment does not meet this test and 
recommended that EPA set a lower PM2.5 24-hour increment.
    This commenter appears to have identified a worst-case scenario in 
terms of increment concentrations, and although we agree with the 
visibility impacts related to those concentrations discussed in the 
comment, we do not believe the proposed increment level compromises the 
protection of visibility or other AQRVs. Although the ``AQRV test'' 
uses 5 percent light extinction as a screening threshold, the 
determination of adverse impact is made on a case-by-case basis taking 
into account the geographic extent, intensity, duration, frequency, and 
time of visibility impairment and how these factors correlate with 
visitation to the Class I area. The suggestion that the 5 percent 
threshold is routinely exceeded by PSD sources or that an absolute 
worst-case scenario is occurring to the geographic extent, intensity, 
duration, and frequency that would warrant an adverse impact 
determination is unsupported, especially considering the relatively few 
adverse impact determinations that have been made in the past. It is, 
however, important to note that the AQRV analysis is independent of the 
PSD increment analysis; whether or not the increment is projected to be 
exceeded does not determine the need for an AQRV analysis. The 
determination that a facility does or does not cause an adverse impact 
on a Class I area is not solely contingent upon the PSD increment, so 
we do not believe that lowering the proposed increment is necessarily 
more protective of the AQRV.
    With respect to these two commenters' concerns about visibility 
protection, we continue to believe that the increments cannot be 
expected to be the sole means of protecting various welfare concerns. 
In the 2007 NPRM, we stated that ``visibility protection in Class I 
areas is more adequately provided by the AQRV process.'' Congress 
defined AQRVs to specifically include visibility and left it for the 
FLMs to define other special attributes of Class I areas that warranted 
special protection. We also noted that Congress has established several 
visibility programs that target emissions reductions to achieve desired 
visibility benefits. See 72 FR 54135. Collectively, these protective 
programs, along with the totality of the PSD program, offer an 
effective means of addressing unique local problems that cannot be 
addressed solely by uniform national increments.
    However, the environmental group commenter asserted that these 
other programs will not fulfill the statutory purposes. As discussed 
previously in sections V.D.4 and 5, the commenter does not believe that 
FLM review in the AQRV process and the air quality impacts analysis 
required by section 165(a) of the Act are adequate. We disagree; see 
sections V.D.4 and 5 for more detail on the comments and our responses.
    The environmental group commenter also noted that we cited the 
regional haze program as a justification for adopting less protective 
PSD rules (referring to 72 FR 54135), but the commenter pointed out 
that the haze program applies only to Class I areas and does not apply 
at all to the majority of the nation, which is Class II. The commenter 
further noted that we stated in the 2007 NPRM that ``some State and 
local governments have also developed programs to improve visual air 
quality in specific urban areas'' (citing 72 FR 54135), and pointed out 
that we gave no specific information on such programs, nor any 
information about the visibility protection that they provide beyond 
that provided by the proposed increments. The commenter asked that we 
identify the specific State and local programs, and that we specify how 
much visibility protection such programs are providing.
    The commenter is correct that the regional haze program directly 
addresses only Class I areas. As we have discussed before, these are 
the areas that Congress defined as deserving of the most protection 
under PSD, including the visibility protection provisions in subpart 2 
of title I, part C of the Act, which is the statutory basis for the 
regional haze program. While Class I areas are the target for the 
regional haze program, we believe that many areas of the nation will 
receive collateral visibility benefits from this program. As emissions 
of the pollutants that cause regional haze are reduced, many areas in 
the paths of transport will benefit. In addition, as discussed 
previously in section V.D.5 of this preamble, PSD applicants must 
prepare an analysis of ``other impacts,'' including visibility impacts, 
in areas other than Class I areas.
    Regarding State and local visibility programs, in the 2005 Staff 
Paper EPA described several existing programs to improve visual air 
quality in urban areas. These programs were located in Denver, CO; 
Phoenix, AZ; and Lake Tahoe, CA. Also, the states of California and 
Vermont have each established standards to protect visibility. See the 
2005 Staff Paper, pages 6-17 through 6-23.
    The environmental group commenter cited the 2007 NPRM (72 FR 54135) 
where we said that the use of ``distinct PM increments for visibility 
protection is not the most effective means of addressing the visibility 
problem.'' The commenter believes that this claim is based on false 
premises, including the idea (discussed previously) that other programs 
effectively protect visibility nationwide, and the idea that the only 
option is a ``distinct'' PM increment for visibility protection. As to 
the latter, the commenter stated that EPA can strengthen the safe 
harbor increment to ensure visibility protection and need not adopt a 
separate ``visibility'' increment. In addition, the commenter asserted 
that EPA has ignored the statutory mandate that the PSD rules fulfill 
the statutory goals and purposes, and that we cannot shirk that 
statutory duty merely because we claim some other type of action would 
be ``more effective.''
    We continue to believe that Class I area visibility protection 
under the PSD program is appropriately addressed via the AQRV process. 
As mentioned previously, Congress explicitly included ``visibility'' as 
an AQRV for which FLMs would have an affirmative responsibility to 
protect in Class I areas under their jurisdictions. Where the FLM 
successfully demonstrates that there

[[Page 64885]]

would be an adverse impact on the AQRV (e.g., visibility), a State 
cannot issue a PSD permit, even when the source's emissions do not 
violate the PM2.5 increments. In addition, we continue to 
believe that the analysis of other impacts, including visibility, in 
non-Class I areas is the appropriate means of addressing visibility 
protection in these areas, as envisioned by Congress when it enacted 
the PSD provisions of the Act.
    As a result, we do not believe it is necessary to create a distinct 
increment (e.g., with a different averaging period) or to lower the 
safe harbor increments to protect visibility in urban, non-urban, or 
Class I areas across the United States. We reach this conclusion in 
proper consideration of the other, more direct approaches being used to 
address visibility problems in the United States. The primary such 
approach, the regional haze program, is within the PSD framework for 
PM2.5. Note that part C of title I of the Act, ``Prevention 
of Significant Deterioration of Air Quality,'' includes subpart 2, 
which is the statutory basis for the regional haze program. Regarding 
our consideration of other State and local visibility protection 
measures that are outside the PSD framework, we do not believe it is 
reasonable to disregard these area-specific measures that focus on the 
preferences of individual communities where a uniform national 
increment for visibility protection generally cannot.
    The environmental group commenter also stated that the proposed PSD 
rules fail to ensure fulfillment of the ``enhancement goal'' set out in 
the Act. The commenter noted that section 101(a) states as the Act's 
first purpose: ``to protect and enhance the quality of the Nation's air 
resources,'' while section 160(2) states that the purpose of the PSD 
program is to ``preserve, protect, and enhance'' air quality in parks 
and other special areas. The commenter asserted that the proposed rule 
did not address these enhancement requirements or explain how the 
proposed increments would fulfill those requirements.
    This same issue was raised in the 2005 PSD rule affirming the 
NO2 increments. At that time we expressed our belief that 
the goal to enhance air quality in national parks and wilderness areas 
is implemented through the regional haze program while the PSD program 
focuses on preserving and protecting air quality in these areas. 
However, when a PSD increment violation is identified, we agree that 
EPA may require a State to revise its SIP to correct the violation. See 
40 CFR 51.166(a)(3). Otherwise, we do not interpret these PSD 
provisions to authorize us to direct states in their SIPs to achieve 
reductions in emissions from existing sources for PSD purposes.
    We recognized at that time, and continue to believe, that the 
growth management goals of PSD may also be fulfilled when the states 
adopt controls on existing sources that would reduce emissions and 
allow growth from new sources and major modifications to existing 
sources without causing significant deterioration. Under the increment 
approach, we have interpreted the PSD rules to allow states to require 
reductions from existing sources in order to expand the allowable 
increments and, thereby, allow for more growth under the PSD program. 
However, we have never required states to do so because, in the absence 
of an increment violation, we do not believe section 166 and other 
provisions in part C of title I of the Act give us the legal authority 
to mandate such reductions for PSD purposes.
    Another commenter stated that the PM2.5 increments 
should be twice the recommended levels because scientific studies do 
not support the need for such low levels for protection of health and 
welfare. The commenter believes that increments at the proposed levels 
would jeopardize the goal of providing opportunities for economic 
growth. The commenter expressed concern over EPA's use of epidemiologic 
studies and questioned the ability of such studies to provide a 
reliable evaluation of health risks. The commenter claimed that 
epidemiologic studies are capable of finding association between a 
substance or exposure and a health effect but rarely capable of 
determining if there is causation, while toxicological studies using 
randomized trials are specifically designed to determine causation. The 
commenter added that other factors providing evidence for causation 
include dose-response relationships, consistency, and repeatability of 
studies, which the commenter said are not present in the studies cited 
by EPA. The commenter specifically referred to two studies, 
acknowledged by EPA to show no evidence of a dose-response relationship 
gradient between PM2.5 and specific health related effects.
    We disagree with the commenter's recommendation that the increments 
should be twice the proposed (and final) levels. The scientific studies 
to which the commenter referred pertain to studies that EPA used to 
determine the health-based NAAQS for PM2.5, and we do not 
believe it is relevant to this rule to respond to comments related to 
the setting of the NAAQS. The NAAQS are designed to protect public 
health and welfare; increments then are intended to insure that air 
quality in clean areas is not allowed to deteriorate significantly, and 
the PSD regulations insure that any such deterioration does not lead to 
air pollution levels that exceed the levels defined by the NAAQS.
    As discussed previously, we are finalizing this rulemaking using 
the safe harbor approach under section 166(a) of the Act. Using this 
approach, we calculated the ``safe harbor'' increments as percentages 
of the NAAQS comparable to the percentages that Congress used to 
establish the original statutory increments for PM and SO2. 
These values represent the level of effectiveness necessary to satisfy 
section 166(d) of the Act, and could be tightened if necessary based on 
further analysis to determine if additional measures are necessary to 
fulfill the requirements of section 166(c) of the Act. Thus, under this 
approach and on this record, we do not conclude that it is appropriate 
to finalize increments at levels any less stringent than the safe 
harbor increments, as the commenter recommends.
7. Compliance Determinations for the PM2.5 Increments
a. Modeling Compliance With PM2.5 Increments
    Section 163(a) of the Act provides that ``In the case of any 
maximum allowable increase * * * for a pollutant based on 
concentrations permitted under the national ambient air quality 
standards for any period other than an annual period, such regulations 
shall permit such maximum allowable increase to be exceeded during one 
such period per year [emphasis added].'' Accordingly, the existing PSD 
rules allow one exceedance per year of each short-term increment 
defined by the rules. See 40 CFR 51.166(c) and 52.21(c). With the 
addition of the PM2.5 increments to the list of maximum 
allowable concentrations in the PSD rules, the existing provision 
allowing one exceedance per year applies equally to the 24-hour 
PM2.5 increments as well. Thus, when modeling increment 
compliance, the highest value of the second-highest modeled increase in 
estimated PM2.5 concentrations at each model receptor for 
the 24-hour averaging time should be less than or equal to the maximum 
allowable increase for PM2.5. For the annual increments, the 
modeled annual averages should not exceed the annual maximum allowable 
increase for PM2.5. See EPA's ``Guideline on Air Quality 
Models'' at 40 CFR part 51 appendix W, section 10.2.3.3.

[[Page 64886]]

    We did not expressly state in the 2007 NPRM the implications of 
adding PM2.5 increments to the existing list of increments 
in 40 CFR 51.166(c) and 52.21(c) of the PSD regulations. Nevertheless, 
it should have been clear at the time that, in the absence of 
alternative language for PM2.5, the existing provision 
allowing one exceedance for the short-term increments would apply to 
the increments for PM2.5 along with the increments already 
listed. We did not receive any comments either supporting or opposing 
these methods for determining compliance with the PM2.5 
increments.
    We recognize that the above approach for determining compliance 
with the 24-hour PM2.5 increments differs from the approach 
contained in guidance that we provided in a March 23, 2010 memo titled 
``Modeling Procedures for Demonstrating Compliance with 
PM2.5 NAAQS,'' which sets forth a procedure designed to 
demonstrate compliance with a statistically based standard that is met 
when the 98th percentile 24-hour concentration is less than or equal to 
35 ug/m3. A similar dichotomy exists for the 24-hour 
PM10 increments and NAAQS, where compliance with the 24-hour 
PM10 NAAQS is based on an expected exceedance form of the 
standard.
b. Condensable PM
    Initially, the EPA will not require PSD applicants under the 
Federal PSD program to consider condensable PM in emissions 
calculations to determine whether a proposed project is subject to the 
PSD requirements. In addition, we will not require the condensable 
portion to be considered in the required PM2.5 air quality 
analyses. In our May 2008 PM2.5 NSR Implementation Rule, we 
announced that we would not require that states address condensable PM 
in establishing enforceable emissions limits for either PM10 
or PM2.5 in NSR permits until the completion of a transition 
period. Further, we indicated that the transition period would end 
January 1, 2011 unless EPA advanced the date through the rulemaking 
process. We also indicated that such rulemaking would involve the 
assessment and possible revision of test methods for measuring 
condensable emissions and taking comment on an earlier closing date for 
the transition period in the NSR program if we are on track to meet our 
expectations to complete the test methods rule much earlier than 
January 1, 2011.\19\ In addition, states that have developed the 
necessary tools are not precluded from acting to include condensable PM 
emissions in NSR permit actions prior to the end of the transition 
period, especially if it is required in an applicable SIP. See 73 FR 
28334-28336.
---------------------------------------------------------------------------

    \19\ We proposed test methods for measuring PM10 and 
PM2.5, including condensable PM emissions, from 
stationary sources on March 25, 2009 (74 FR 12970). In the same 
notice, we sought comments on whether to end the NSR transition 
period for condensable PM earlier than January 1, 2011. We 
anticipate publication of a final rule announcing our decision on 
the NSR transition period in July 2010.
---------------------------------------------------------------------------

c. PM2.5 Precursors
    In the 2007 NPRM, we proposed to add SILs for PM2.5 to 
the PSD regulations at 40 CFR 51.166 and 52.21. (The SILs are described 
more fully in section VI of this preamble.) Accompanying these SILs, we 
proposed to add a new paragraph to the regulations explaining that the 
requirements for a source impact analysis for PM2.5 would be 
considered to be satisfied, without further air quality modeling, if it 
were to be shown that the increase in direct PM2.5 emissions 
from the source or modification will cause air quality impacts less 
than the prescribed SILs for PM2.5. The reasoning at the 
time was that state-of-the-art modeling would not be available to 
adequately account for secondary PM2.5 impacts resulting 
from emissions of precursors of PM2.5, e.g., SO2 
and NOX. Nevertheless, the existing PSD rules currently 
define potential precursors of PM2.5. Based on the proposed 
language, the required compliance demonstration for the 
PM2.5 NAAQS and the PM2.5 increments (when 
promulgated) would be limited by regulation to an analysis of direct 
PM2.5 emissions, and would not include consideration of 
emissions of PM2.5 precursors for comparing the modeled 
source impacts to the prescribed SILs for PM2.5.
    The impacts of PM2.5 precursors on ambient 
concentrations of PM2.5 cannot be determined from the 
dispersion models that EPA has currently approved for modeling 
individual PSD sources. Such models are not designed to consider 
chemical transformations that occur in the atmosphere after the 
precursor emissions have been released from the source. Consideration 
of these transformations is necessary to be able to add precursor 
impacts into the total modeled ambient PM2.5 concentrations 
for comparison to the SILs for PM2.5.
    The technical tools needed to complete a comprehensive analysis of 
all emissions that contribute to ambient concentrations of 
PM2.5 are only in the developmental stage; nevertheless, we 
believe that it would be inappropriate to restrict the regulatory 
language in such a way that future regulatory amendments would be 
required to enable the inclusion of precursor impacts in the 
PM2.5 analysis as the necessary technical tools become 
available. Estimating techniques are being developed that will be able 
to be applied to the PM2.5 analysis in the near future, 
which could not be required if the regulatory language precluded them. 
We acknowledge the concerns that have been expressed by some commenters 
about the shortcomings of not considering the impacts of 
PM2.5 precursors under the PM2.5 air quality 
analyses. Accordingly, we believe that the new provision for applying 
the SILs for PM2.5 to the required analyses for the NAAQS 
and increments should not be self-limiting by specifying the use of 
only direct PM2.5 emissions. Instead, the new provision 
contained in this final rule provides that the test will be based on 
whether ``the emissions increase * * * would cause * * * air quality 
impacts less than [the PM2.5 SILs].'' See new 40 CFR 
51.166(k)(2) and 52.21(k)(2). We believe that it would be more 
effective to rely on interim policy and guidance as appropriate to help 
determine the best methods available to make the required assessment of 
source impacts on ambient PM2.5 resulting from any 
emissions.

F. Final Action on Trigger and Baseline Dates for PM2.5 Increments

    In the 2007 NPRM, we proposed as part of Option 1 to require the 
implementation of the PM2.5 increment system (annual and 24-
hour increments) with new baseline areas, baseline dates, and trigger 
date. Specifically, we proposed that the major source baseline date and 
trigger date, both fixed dates, would be defined as the effective date 
of the final rule and would reflect a date 1 year from the date of 
promulgation, in accordance with section 166(b) of the Act. In 
contrast, under Option 2 (both 2A and 2B), we proposed to establish new 
baseline dates for the 24-hour PM2.5 increments, but to 
retain the existing baseline areas and dates for the annual 
PM2.5 increments because the annual increments would be 
equivalent substitutes for the existing annual PM10 
increments.
    In light of the then-current and expected trends in 
PM2.5 concentrations, our judgment was that starting with 
new baseline dates on or after the effective date of this rule would 
make the PSD increments for PM2.5 more protective. We 
proposed that any emissions reductions occurring prior to the effective 
date of this rule would lower

[[Page 64887]]

the baseline concentration rather than be used for expanding the 
PM2.5 increment. If a retroactive baseline date were to 
apply, emissions reductions occurring prior to the effective date of 
this rule would serve to expand the available increments, enabling more 
new pollution than would otherwise be allowed to occur.
    We also expressed our belief that starting with different baseline 
dates to implement increments for PM2.5 would be appropriate 
because Option 1 treats PM2.5 essentially as a ``new'' 
pollutant for purposes of PSD and section 166 of the Act. We continue 
to believe that establishing a new baseline also overcomes significant 
implementation concerns that would otherwise exist if the existing PM 
baseline were maintained. In particular, if we were to require sources 
and reviewing authorities to conduct PM2.5 increment 
analyses based on the minor source baseline dates previously 
established years or even decades ago under the TSP or PM10 
program, they would have to attempt to recreate the PM2.5 
emissions inventory as of the minor source baseline date in order to 
determine the baseline PM2.5 concentration for the area. For 
early minor source baseline dates in particular (e.g., 1976 in some 
areas of the United States), establishing the emissions inventory for 
PM2.5 would be extremely difficult, cumbersome, and 
potentially inaccurate because historic emissions inventories did not 
include PM2.5 emissions. For all of these reasons, we 
proposed Option 1 as our preferred option and requested comment on this 
contingent safe harbor approach for annual and 24-hour PM2.5 
increments under Option 1.
    Under Option 1, we proposed that the PM2.5 increments 
would be subjected to a 1-year delay consistent with the procedures 
under section 166(b) of the Act, which provides in general that these 
rules ``shall become effective one year after the date of 
promulgation.'' Alternatively, we sought comment on a 60-day delay as 
part of our proposal under Option 1. In the proposal we requested 
comment on the argument that, while the Act includes a 1-year 
implementation delay for new increments, the same provision calls for 
EPA to promulgate new increments within 2 years of the promulgation of 
the NAAQS. Given that these PM2.5 increments are being 
promulgated more than 2 years after promulgation of the NAAQS, we 
expressed our belief that the overall congressional intent reflected in 
section 166 of the Act could possibly be met by setting the effective 
date of the PM2.5 increments earlier than the ``one year 
after the date of promulgation'' provided in section 166(b) of the Act.
    Twelve commenters supported our proposal under Option 1 to 
establish new trigger and baseline dates for PM2.5, 
regardless of the particular increment option that they otherwise 
supported. These commenters generally saw new dates as being the best 
approach because of various problems that would result from retaining 
existing trigger and baseline dates. Some commenters claimed that it 
would be technically difficult to try to reconstruct old inventories to 
determine the amount of PM2.5 emitted by sources in the 
past.
    One commenter stated that establishing PM2.5 increment 
inventories using existing PM10 baseline dates would be 
``extremely difficult, cumbersome, and necessarily inaccurate and 
unreliable as historic emissions did not speciate PM2.5 
emissions.'' A State/local agency commenter said that it would be 
``virtually impossible for States to calculate the PM2.5 
component of previously consumed PM10 increments because 
data on the fine and coarse fractions of source emissions are largely 
unavailable.''
    Yet another commenter claimed that ``resurrecting PM2.5 
inventories based on the PM10 baseline dates would be 
insurmountable.'' Similar comments were echoed by several commenters 
who supported the use of legal authority set forth in section 166(f) 
(``equivalent substitution'' approach) for developing the numerical 
values for the PM2.5 increments. One of these commenters 
stated that he did not ``believe the establishment of new baseline 
dates for PM2.5 would abandon past cases of increment 
consumption for PM10, because the 24-hour PM10 
increments would still be in effect * * *.''
    One commenter suggested that ``EPA establish the trigger date as of 
the date when it officially established the non-attainment and 
attainment areas for PM2.5; that is, April 5, 2005.'' The 
commenter explained that this approach is consistent with the PSD 
regulations from their inception and partially mitigates EPA's delays 
in implementing the PSD program for PM2.5. The commenter 
believes ``that States should be required to use the baseline areas 
previously established for their PSD program, unless the process for 
redefining these areas strictly follow procedures in the PSD 
regulations and EPA policy.'' The commenter claimed, ``this will 
minimize any inconsistent applications of the regulations for 
PM2.5.''
    One commenter noted that our proposed PM2.5 increments 
were very low and ``facilities may find themselves immediately out of 
compliance with the PM2.5 increments upon promulgation of 
the rule, based on a January 1975 or 1977 baseline date.''
    One commenter indicated that the historic TSP/PM10 
baseline dates should be retained. This commenter favored the 
equivalent substitution approach under section 166(f) and, consistent 
with that approach, retention of the existing baseline dates.
    Having considered all the comments, we believe that the most 
reasonable approach for addressing the relevant dates associated with 
the PM2.5 increments is to start anew with the baseline date 
concept. As already mentioned, the commenters have identified 
difficulties that would occur if the PM2.5 emissions 
inventory for increment analyses had to be created for an earlier 
period of time, and the existence of these difficulties supports the 
approach under Option 1 to establish new dates for implementing the 
PM2.5 increments. Also, these new baseline dates for 
PM2.5 increments will not undo the current protection 
provided by the existing increments for PM because we are not revoking 
the 24-hour or annual PM10 increments under this new rule. 
Accordingly, this final rule establishes independent PM2.5 
increments using a ``trigger date'' and ``major source baseline date'' 
that are separate from the dates defined for the PM10 
increments. Consequently, new minor source baseline dates and the 
corresponding baseline areas will be used for the annual and 24-hour 
PM2.5 increments, and will be established when a source 
applies for a PSD permit any time on or after the new trigger date for 
PM2.5. (See also the discussion about changes to the 
definition of ``baseline area'' in section V.G of this preamble.)
    The ``major source baseline date'' for PM2.5 is being 
set as October 20, 2010--the date of publication of this final rule. 
The setting of this date differs from previous major source baseline 
dates which were set as the date of publication of the proposed rule, 
but is similar to the major source baseline date set for the other 
increments in that the date precedes the effective date for 
implementing the increments, and thereby requires that certain major 
source emissions increases that occur before the trigger date 
retroactively count toward the amount of increment consumed.
    The ``trigger date'' is being set at October 20, 2011, which is 1 
year after the date of promulgation of this final rule. We are using 
this approach to define the date on which the PM2.5 
increments become effective as 1 year

[[Page 64888]]

from the date of publication, consistent with the 1-year delay required 
under section 166(b) of the Act. This date for the ``trigger date'' 
separates the applicability date of the PM2.5 increments 
from the effective date of this final rule in general, but also ensures 
that the ``minor source baseline date'' for PM2.5 for any 
particular PM2.5 attainment or unclassifiable area cannot be 
established until after the increments become effective in this final 
rule. The implementation of these dates as part of the PM2.5 
increment system is discussed in greater detail in section VIII of this 
preamble.
    We recognize that some may still have a concern about our decision 
to set the major source baseline date as the date of publication of 
this final rule in light of the fact that the PM2.5 NAAQS 
have been in place since 1997; however, we believe that the selection 
of possible earlier dates would require states to retroactively 
establish PM2.5 emissions inventories for increment analyses 
during a period when sources were generally not required to conduct 
PM2.5 air quality analyses. Hence, given the lack of 
information, and considering the technical difficulties in doing so, we 
do not believe that it would be appropriate to require states and 
sources to retroactively account for PM2.5 increment 
consumption by setting the major source baseline date at an earlier 
date than the date we have selected.

G. Definition of ``Baseline Area'' for PM2.5

    No changes were proposed with respect to the definition of 
``baseline area'' for PM2.5 increments. One commenter, 
however, noted that fact in claiming that we did not adequately account 
for significant impacts of PM2.5 for purposes of defining 
the ``baseline area'' for the PM2.5 increments. Under the 
existing regulations, the establishment of a baseline area for any PSD 
increment results from the submittal of the first complete PSD 
application, and is based on both the location of the proposed source 
and the impact of the source's emissions on the area. In accordance 
with the definition, the attainment or unclassifiable area in which the 
proposed source would construct is always part of the baseline area in 
which the minor source baseline date is established and the increment 
analysis is conducted. In addition, the definition provides that any 
surrounding attainment or unclassifiable area in which the proposed 
source's impact is greater than 1 [mu]g/m\3\, annual average, would 
also become part of the baseline area, assuming the area had not 
already been established as a baseline area by a previous application 
for a PSD permit. See 40 CFR 51.166(b)(15) and 52.21(b)(15).
    As explained in the preamble for the 1980 PSD regulations, EPA 
selected an impact of 1 [mu]g/m\3\, annual average, for the definition 
of ``baseline area'' because that value was considered the level of 
significance for both SO2 and PM when the definition was 
originally established.\20\ There was no mandate at that time that a 1 
[mu]g/m\3\ impact be used to determine the baseline area for increments 
for other pollutants; however, the use of a 1 [mu]g/m\3\ impact in the 
definition of ``baseline area'' was not changed when EPA developed 
increments for NO2 in 1988 because EPA also defined 
``significant'' for NO2 using the same annual average 
concentration of 1 [mu]g/m\3\. The EPA has determined, however, that 
``significant'' for PM2.5 ambient impacts should be 
considered to occur at a lower concentration than 1 [mu]g/m\3\. 
Elsewhere in this preamble, we have indicated that the SIL for 
PM2.5 in this final rule is 0.3 [mu]g/m\3\, annual average. 
Consequently, although no change to the definition of ``baseline area'' 
was proposed in this rule, we believe it is necessary and appropriate 
to define in this final rule a level of significance of 0.3 [mu]g/m\3\, 
annual average, for establishing a new baseline area for purposes of 
PM2.5 increments. See revised 40 CFR 51.166(b)(15)(i) and 
52.21(b)(15)(i).
---------------------------------------------------------------------------

    \20\ ``A source will be considered to impact an area if it has 
an impact of 1 [mu]g/m\3\ or more of SO2 or PM on an 
annual basis. This figure has been selected because it corresponds 
to levels of significance used in previous Agency determinations for 
SO2 and PM. 45 FR 52716.
---------------------------------------------------------------------------

    Had we established the SIL at 1 [mu]g/m\3\, annual average, as 
proposed under Option 1 for SILs, then the definition of ``baseline 
area'' would not need to be revised. However, the revised definition in 
this final rule is consistent with our decision to establish a SIL of 
0.3 [mu]g/m\3\, annual average, for PM2.5. We consider this 
action to be a logical outgrowth of our decision to establish a SIL for 
PM2.5 and the comment concerning the effect of that action 
on the definition of ``baseline area.'' Thus, we believe that our 
failure to initially propose this change to the definition of 
``baseline area,'' based on the possibility of selecting Option 3 for 
defining the SIL for PM2.5, does not warrant a reproposal.

H. No Final Action With Respect to the Proposed Revocation of PM10 
Annual Increments

    In the 2007 NPRM, we proposed to either revoke or replace the 
annual increments (Class I, II, and III) for PM10 to conform 
to the earlier revocation of the annual PM10 NAAQS. We 
proposed to revoke the annual increments, based on the same technical 
evidence that led us to revoke the annual PM10 NAAQS, if we 
decided to use Option 1 for adopting PM2.5 increments, and 
discussed our authority and rationale for doing so. 72 FR 54136.
    As an alternative, under Options 2A and 2B we proposed to replace 
the existing annual PM10 increments with equivalent 
substitute PM2.5 increments using the authority under 
section 166(f) of the Act. After further analysis and consideration of 
the comments on this issue, we have decided not to take any final 
action on our proposal to revoke the existing increments for 
PM10 as part of this rulemaking. The effect of not taking 
final action with respect to the PM10 annual increments is 
to leave those increments in place and unchanged.
    Three commenters agreed with EPA's proposal to ``adopt the 24-hour 
and annual PM2.5 increments and to revoke the annual 
PM10 increments.'' One commenter stated, ``counting and 
tracking increment is confusing enough without adding the confusion of 
potentially overlapping PM standards.'' The commenter noted that the 
``cleanest approach is to establish a single new PM2.5 
increment and work from there.'' The commenter suggested that EPA first 
``develop a coarse fraction increment, once EPA establishes coarse PM 
NAAQS.'' The commenter added that the removal of the PM10 
annual increment is supported by the removal of the ``health based 
standard for annual PM10.''
    One of the commenters agreed, ``it makes no sense for EPA's 
regulations to contain an annual increment for PM10 even 
though an annual PM10 NAAQS no longer exists.'' The 
commenter added, ``EPA is without authority under Section 166(f) to 
retain the PM10 annual increment if it adopts a 
PM2.5 annual increment.'' This commenter explained, ``EPA is 
compelled by law to eliminate the PM10 annual increment.''
    We agree with this commenter that section 166(f) is a 
``substitution'' approach; however, as we stated in our 2007 NPRM, we 
expressed some concern about using section 166(f) to substitute 
PM2.5 increments for PM10 increments. In fact, 
some commenters challenged our authority under section 166(f) to 
replace the PM10 increments. In our response to the 
following comments, we address the legal issues that we believe prevent 
us from simply revoking the PM10 increments.

[[Page 64889]]

    One environmental commenter claimed, ``the agency has no authority 
to repeal an existing PM10 increment without at the same 
time restoring the corresponding TSP increment.'' The commenter noted, 
``Congress established the TSP increments by statute and gave EPA no 
authority to revoke them,'' and ``instead, Congress gave EPA only 
limited authority to substitute PM10 increments for TSP 
increments under the conditions specified in Section 166(f).'' The 
commenter explained, ``EPA cannot revoke the annual PM10 
increments, either by ``replacing'' them with PM2.5 
increments or otherwise, unless EPA at the same time restores the 
annual TSP increment.'' The commenter noted, ``retention of the 
PM10 annual increment is also entirely compatible with the 
statutory purposes, notwithstanding EPA's revocation of the annual 
PM10 NAAQS.'' The commenter further noted the following 
examples/evidence that retention of the annual PM10 
increments is important to achieving the goals of the Act's PSD 
provisions:
     ``While EPA attributes the visibility impairing impacts of 
PM pollution primarily to elevated short term fine particle 
concentrations, EPA recognizes that PM10 plays a significant 
role in the other welfare related impacts of PM pollution.'' 72 FR 
54136.
     ``EPA also states that the most significant PM-related 
ecosystem-level effects result from long term cumulative deposition * * 
* that exceeds the natural buffering or storage capacity of the 
ecosystem and/or affects the nutrient status of the ecosystem.'' 72 FR 
54131.
    Five State/local agency commenters opposed the revocation of 
PM10 annual increments ``until EPA makes a determination on 
a PM-coarse NAAQS'' and/or ``establishes equivalent increments for PM-
coarse.'' One of these commenters added, ``it is prudent to maintain 
the PM10 increments until EPA makes a determination on the 
health and environmental effects of the coarse fraction of PM.'' The 
commenter claimed that, ``if EPA retains the annual PM10 
increments'' ``then the determination of PM2.5 increments 
can complement the continuation of PM10 increment 
determinations without any discontinuities or unwanted degradation 
concerns.''
    Another one of these commenters stated, ``the basis for dismissing 
the annual PM10 NAAQS by the substitution of fine particle 
NAAQS to address certain health and welfare effects does not provide a 
basis for dismissing a PSD increment which is meant to stop significant 
degradation of air quality.'' The commenter noted, ``as refinements are 
made to estimation of fine particle emissions or in instances where 
these are deemed not to be a major component of particulate emissions, 
the PM10 annual increment could prevent long term 
deterioration of air quality associated with the coarse component.''
    One State/local agency commenter noted, ``EPA also proposes to 
replace the PM10 annual increment with the corresponding 
PM2.5 increment under the Section 166(f) options 2A and 2B 
as well, but does not provide a substantive basis for such an action.'' 
The commenter does ``not see the tension noted by EPA between Sections 
166(a) and (f) with respect to reaching a holistic solution if EPA 
views PM2.5 as a new indicator of PM, as we believe it 
can.'' The commenter explained, ``under this approach, if EPA 
determines that coarse particle levels are necessary to protect the 
public from certain exposures not addressed by PM2.5, then 
it will be appropriate for EPA to define complementary increments for 
coarse particulates as another indicator of PM.'' The commenter also 
asserted that the 24-hour increments for PM2.5 must be based 
on section 166(f) authority, but believes that the PM2.5 
increment need not replace the PM10 increment for this 
averaging period.
    One commenter requested that EPA ``keep the PM10 PSD 
program (especially the increments) in place until the full 
PM2.5 program is adopted and in place.''
    One commenter ``does not support revoking the annual 
PM10 increments,'' because the commenter feels that ``there 
are too many uncertainties regarding PM2.5.'' The commenter 
provided the following example: ``The program has been dragging for 
years, analytical methods are not formulated, the NSR part of the 
implementation rule has not issued, condensables are not yet included, 
and the impact of precursors has not been definitively explored.'' The 
commenter explained that ``under these conditions, nothing concerning 
PM10 should be revoked until the reasons for doing so are 
clearly understood and the overall impact on ensuring clean air and the 
public health and welfare have been fully explored.'' The commenter 
suggested, ``PM10 increments and NAAQS should remain in 
effect until these issues have been resolved to the satisfaction of the 
Administrator.'' This commenter believed that Options 2A and 2B must be 
based entirely on section 166(f) of the Act, but that the presence of 
increments for both PM10 and PM2.5 can be 
supported under this section because the two sets of increments 
complement each other. The commenter indicated that the problem will be 
resolved when sufficient data are available to revoke the 
PM10 NAAQS and increments and/or PM10 is replaced 
by PM10-2.5.
    One State/local agency association commenter recommended that ``EPA 
can and should continue both the 24-hour and annual average 
PM10 PSD increment program until PM10-2.5 
standards are promulgated.'' The commenter explained that ``EPA has the 
discretion to accomplish this under CAA Sec.  166(f)'' and ``at a 
minimum, the agency should continue the 24-hour PM10 
increments in conjunction with the continuation of the 24-hour 
PM10 NAAQS.''
    As stated previously, in this rule we are taking no final action on 
our proposal to revoke the annual PM10 increments even 
though the annual PM10 NAAQS has been revoked. Based on 
comments and our own legal analysis of the PM10 increments, 
we have concluded that there is a strong legal basis for not revoking 
the annual increments at this time. The PM10 increments were 
promulgated on June 3, 1993 (58 FR 31622) as replacement increments for 
the then existing statutory increments for PM measured as TSP. The fact 
that EPA promulgated the PM10 increments as ``equivalent'' 
replacements for the TSP increments under the authority of section 
166(f) of the Act is important in that EPA does not have authority to 
simply remove the TSP increments that were explicitly defined within 
the PSD program requirements in the Act. Accordingly, we believe that 
the annual TSP increments would be restored by default should we decide 
to revoke the annual PM10 increments as proposed. However, 
even if the original annual TSP increments were not restored, there is 
no basis for automatically revoking the annual PM10 
increments simply because we have revoked the annual PM10 
NAAQS, because annual increments are not contingent upon the existence 
of annual NAAQS. This is clear from the court's decision in the earlier 
NO2 increment litigation stating that increments for a 
particular pollutant do not necessarily need to match the averaging 
periods that have been established for NAAQS for the same pollutant. 
EDF v. EPA, at 189-190 (``* * * the `goals and purposes' of the PSD 
program, set forth in Sec.  160, are not identical to the criteria on 
which the ambient standards are based.'').

I. Other Comments on Increments

    Ten commenters (including State/local agencies and industry 
commenters) supported section 166(f) of the Act as the basis for 
PM2.5 increments. These commenters typically

[[Page 64890]]

voiced the belief that when Congress enacted section 166(f), it 
authorized EPA to update PM increments when another indicator was 
defined, and that section 166(f) allows EPA to continue do so as long 
as these increments are of equal stringency to the prior increments. 
Some of these commenters believe that section 166(f) is the only 
legitimate approach under the Act, while others indicated simply that 
it is preferable to section 166(a). Some of the commenters believe that 
section 166(f) authority can be used to add PM2.5 increments 
to the existing PM10 increments. Others believe that 
PM2.5 increments finalized under section 166(f) must fully 
replace the existing PM10 increments, and recommended doing 
so.
    For the reasons discussed previously in this preamble, EPA has 
decided to finalize the PM2.5 increments under the authority 
of section 166(a) of the Act. With respect to the potential creation of 
PM2.5 increments under section 166(f) (as discussed in the 
2007 NPRM at 72 FR 54120-54121), we have not reached any final 
conclusion as to whether that approach is authorized by the statute, 
but believe that such an approach raises significant legal issues. 
Because the Agency is not relying on section 166(f) in this rulemaking, 
we do not address these issues in this preamble, though some additional 
discussion is included in the Response to Comments document for this 
rule.
    One industry association that supported the Option 1 approach based 
on section 166(a) authority also acknowledged that EPA is authorized to 
use the Option 2 approach based on section 166(f) authority. An 
industry commenter indicated that 2007 NPRM's arguments regarding the 
alternative legal authorities under section 166(a) and (f) were not 
compelling; the commenter recommended setting the PM2.5 
increments at the levels proposed as Option 2B because they would have 
the lowest economic impact.
    As noted previously, we have decided to finalize Option 1 based on 
section 166(a) authority because we believe that provision provides the 
clearest statutory authority for purposes of developing increments 
based on PM2.5. We would point out, however, that any 
conclusion as to which option would yield increments that ``have the 
lowest economic impact'' must include a consideration of not only the 
levels of the increments but also the associated baseline dates that 
define when emissions changes must be considered to affect the amount 
of increment consumed. Under Options 2 and 3, the PM2.5 
increments would be regarded as replacement increments for the 
PM10 increments and, as such, would include amounts of 
increment (based upon the PM2.5 component) already consumed 
under the existing PM10 increment system. Thus, portions of 
the substitute PM2.5 increments could have already been 
consumed by previous PSD sources that emit PM. If, in fact, a portion 
of the PM2.5 increments had already been consumed by the 
prior PM10 increment consumption process, than there would 
be a basis to conclude that less additional economic growth would be 
allowed under a set of replacement PM2.5 increments as 
compared to PM2.5 increments based on separate, independent 
baseline dates.
    One industry commenter suggested that EPA develop geographic area-
specific increments (and SILs and SMCs) that take local conditions into 
account. The commenter pointed out that PM2.5 levels in PSD 
areas proximate to international borders may be elevated by sources 
outside the legal and practical control of the United States and State 
authorities. The commenter also noted that PM2.5 levels may 
be elevated by natural conditions, such as drought, fires, geologic 
formations (sandy or fine-grained surface features), high winds, etc., 
leading to excessively dusty ambient conditions over which the local 
area has no control. The commenter indicated that local area baselines 
must reflect these PM emissions, though they are not reflected in the 
local area's emissions inventory. The commenter urged EPA not to 
penalize such PSD areas by imposing uniform national PSD increments (or 
SILs or SMCs) where the conditions of concern are not capable of 
control.
    As previously discussed, this final rule establishes an area 
classification system with prescribed, uniform PM2.5 
increments for each class. We do not believe that it is necessary to 
develop different increments (or SILs or SMC) for different areas of 
the country. Emissions from natural conditions such as those described 
by the commenter would not consume increment due to their natural and 
temporary nature. In addition, if a State wishes to disregard new 
emissions from sources outside the United States, the State's PSD 
program may provide that such emissions do not consume increment (see 
40 CFR 51.166(f)(1)(iv)).

VI. Final Action on PM2.5 SILs

A. EPA's Determination on SILs for PM2.5

    It is EPA's longstanding policy to allow the use of the SILs as de 
minimis thresholds under the NSR programs at 40 CFR 51.165(b) and part 
51, Appendix S, to determine whether the predicted ambient impact 
resulting from the emissions increase at a proposed major new 
stationary source or modification is considered to cause or contribute 
to a violation of the NAAQS. We have also allowed the SILs under the 
PSD program to determine: (1) When a proposed source's ambient impacts 
warrant a comprehensive (cumulative) source impact analysis; (2) the 
size of the impact area within which the air quality analysis is 
completed, and (3) whether the emissions increase from a proposed new 
major stationary source or major modification is considered to cause or 
contribute to a violation of any NAAQS.
    We proposed three separate options for setting SILs for 
PM2.5. The first option relied upon the same approach we 
proposed for PM10 in the 1996 NSR Reform proposal. This set 
included Class I SILs set at 4 percent of the Class I PM2.5 
increments. For class II and III areas, we proposed to codify the SIL 
values that already existed for PM10, i.e., 1.0 [mu]g/m\3\ 
(annual) and 5.0 [mu]g/m\3\ (24-hour). Options 2 and 3 relied on 
scaling the PM10 SILs, as codified in 40 CFR 51.165(b), by a 
particular ratio. Specifically, for Option 2, the multiplier was the 
emissions ratio of PM2.5 to PM10 for point 
sources in the 1999 NEI; for Option 3 the multiplier was the ratio of 
the PM2.5 NAAQS to the PM10 NAAQS. The resulting 
SILs were proposed as follows:

----------------------------------------------------------------------------------------------------------------
                                                                         Proposed SILs ([mu]g/m\3\)
                                                           -----------------------------------------------------
                          Option                                 Class I          Class II          Class III
                                                           -----------------------------------------------------
                                                             Annual   24-hr    Annual   24-hr    Annual   24-hr
----------------------------------------------------------------------------------------------------------------
1.........................................................     0.04     0.08      1.0      5.0      1.0      5.0
2.........................................................     0.16     0.24      0.8      4.0      0.8      4.0
3.........................................................     0.06     0.07      0.3      1.2      0.3      1.2
----------------------------------------------------------------------------------------------------------------


[[Page 64891]]

    We have decided to finalize the PM2.5 SILs proposed 
under Option 3. As explained earlier, these values will be used in the 
Federal PSD preconstruction review process consistent with our 
proposal. See 72 FR 54138-41 and 54143.
    States are not required to adopt SILs in their NSR or PSD programs; 
the analyses for PM2.5 required by each applicable 
regulation can be carried out without using a SIL.\21\ Therefore, we do 
not intend for any specific deadlines to apply under the regulations at 
40 CFR 51.165(b), 51.166, or part 51, Appendix S for states to submit 
SILs for PM2.5, should they choose to do so, as part of 
their revisions to incorporate the final rules for PM2.5 
into SIPs. Nonetheless, we believe that the availability of SILs as a 
screening tool greatly improves PSD program implementation by 
streamlining the permit process and reducing labor hours necessary to 
submit and review a complete permit application where the projected 
impact of the proposed source is de minimis in the relevant area. For 
these reasons, we are including the PM2.5 SILs in the 
Federal PSD regulations at 40 CFR 52.21 to screen proposed projects 
concerning the need for a cumulative source impact analysis for 
PM2.5.
---------------------------------------------------------------------------

    \21\ We note that, under the 2007 NPRM, we proposed that the 
SILs for PM2.5 would not be treated as a minimum program 
element for State PSD programs; however, the proposed regulatory 
language at 40 CFR 51.166(k)(2) incorrectly stated the ``the plan 
shall provide that,'' which would indicate that the use of the SILs 
for PM2.5 was required in the State plan. This final rule 
corrects this error.
---------------------------------------------------------------------------

B. Response to Comments Concerning the SILs

    The primary purpose of the SILs is to identify a level of ambient 
impact that is sufficiently low relative to the NAAQS or increments 
that such impact can be considered trivial or de minimis. Hence, the 
EPA considers a source whose individual impact falls below a SIL to 
have a de minimis impact on air quality concentrations that already 
exist. Accordingly, a source that demonstrates that the projected 
ambient impact of its proposed emissions increase does not exceed the 
SIL for that pollutant at a location where a NAAQS or increment 
violation occurs is not considered to cause or contribute to that 
violation. In the same way, a source with a proposed emissions increase 
of a particular pollutant that will have a significant impact at some 
locations is not required to model at distances beyond the point where 
the impact of its proposed emissions is below the SILs for that 
pollutant. When a proposed source's impact by itself is not considered 
to be ``significant,'' EPA has long maintained that any further effort 
on the part of the applicant to complete a cumulative source impact 
analysis involving other source impacts would only yield information of 
trivial or no value with respect to the required evaluation of the 
proposed source or modification.
    While some commenters opposed all of the proposed options for 
PM2.5 SILs, most commenters generally supported the use of a 
SIL as a screening tool for PM2.5 air quality analyses. 
Commenters who supported one of the proposed options for the SILs were 
divided as to their support of a particular approach for selecting the 
SIL value, with each option receiving some support. Commenters also 
tended to agree that the SILs should not be used for determining 
significant impacts on AQRVs in Class I areas.
    Those commenters supporting the concept of the SILs, yet opposing 
all proposed options, believed that all options yielded SILs that were 
too low. Another commenter, an environmental group, presented extensive 
legal and policy arguments against the SILs concept in general. Some of 
the significant comments and our responses to them are addressed 
herein, while others are covered in the Response to Comments document 
which we have placed in the docket for this rulemaking.
1. Legal Basis for SILs
    One commenter opposed all three proposed options on both legal and 
policy grounds claiming that EPA has no legal authority to promulgate 
SILs and that the de minimis doctrine endorsed by the court does not 
apply to increment analyses, where Congress has expressly directed that 
the letter of the law applies in all circumstances, as it has in this 
case. (The commenter's policy concerns about SILs are discussed later 
in this section of this preamble.) The commenter stated that ``Congress 
codified increments in section 163 of the Act, directing that SIPs 
contain measures assuring that the increments shall not be exceeded.'' 
According to the commenter, ``The Act plainly provides that no major 
source may be constructed unless it meets this requirement, and may not 
contribute to an exceedance `for any pollutant in any area.' '' The 
commenter further stated that ``the de minimis doctrine is inapplicable 
because it applies only where the regulations will yield a gain that is 
demonstrably trivial or zero.''
    We disagree with this commenter's claim that there is no legal 
basis for SILs. As stated in the 2007 NPRM, the concept of a SIL is 
grounded on the de minimis principles described by the court in Alabama 
Power at 323, 360. In this case reviewing EPA's 1978 PSD regulations, 
the court recognized that ``there is likely a basis for an implication 
of de minimis authority to provide exemption when the burdens of 
regulation yield a gain of trivial or no value.'' Alabama Power at 360. 
See the 2007 NPRM for more on how we have applied the de minimis 
principle in the past. See also, Sur Contra La Contaminacion v. EPA, 
202 F.3d 443, 448-49 (1st Cir. 2000) (upholding EPA's use of SILs to 
allow permit applicant to avoid full impact analysis.)
2. Levels of the SILs
    Several commenters opposed all three proposed options on the 
grounds that all yielded levels of SILs that are too low. One of these 
commenters argued that the proposed SILs ``imply a level of monitoring 
and modeling sophistication that is currently absent in our regulatory 
scheme.'' This commenter recommended that EPA ``rethink the level of 
the proposed SILs and select concentrations less likely to be within 
the level of error inherent in current monitoring and modeling 
methods.''
    We disagree with these commenters' concerns about all the proposed 
SILs being too low. While we did not select the Option 1 levels, the 
Class II and III SILs for PM2.5 under that option were the 
same ambient concentration levels that are used for the SILs for the 
other criteria pollutants under 40 CFR 51.165(b), and those existing 
SILs values are associated with NAAQS that are considerably higher than 
the NAAQS for PM2.5. Clearly, it would have been 
inappropriate to select Class II and III SILs for PM2.5 that 
represent relatively higher values than the existing SIL values for 
other pollutants in light of the more stringent NAAQS levels that exist 
for PM2.5. We also disagree that the SILs should be 
consistent with current monitoring capabilities for PM2.5. 
The SILs are a screening tool used in comparison with modeled 
predictions--not monitored concentrations--of PM2.5. 
Monitoring accuracy is not a relevant concern in predicting with air 
quality dispersion models the concentrations of a pollutant that a 
source will cause if its construction and operation are allowed to 
occur.
    Two commenters expressed concern about national de minimis values. 
One stated that ``the idea that a single national number can define 
`trivial' is flawed, given that even very small impact can be of great 
significance in an area that is close to an increment or NAAQS.'' The 
other commenter

[[Page 64892]]

recommended that EPA ``develop geographic area-specific * * * levels 
that take local conditions into account.'' This commenter reasoned that 
some PSD areas ``should not be `penalized' by a single, national PSD 
increment, significant impact levels and significant monitoring level, 
where the conditions of concern are not capable of control.''
    With regard to the first of these commenters, our longstanding 
policy has been that when a source has a de minimis impact on an 
existing air quality problem, that source should not necessarily be 
required to bear the burden of addressing its small contribution to a 
problem caused primarily by other sources. However, notwithstanding the 
existence of a SIL, permitting authorities should determine when it may 
be appropriate to conclude that even a de minimis impact will ``cause 
or contribute'' to an air quality problem and to seek remedial action 
from the proposed new source or modification.
    We do not agree with the second of these comments concerning the 
development of regional SILs based on a concern that some amounts of 
PM2.5 in a particular area are ``not capable of control.'' 
The PM2.5 SILs define a threshold level for determining 
whether a predicted ambient impact by a proposed major stationary 
source or major modification of PM2.5 needs to undergo a 
more thorough analysis of the PM2.5 NAAQS or increments. 
This value is not directly affected by the total amounts of 
PM2.5 that may exist in an area or by what causes the 
existing PM2.5 concentrations, rather by the impact of a 
single source relative to the levels of the NAAQS and increments that 
must be protected. Therefore, we do not see why the SILs should be 
influenced by the geographic area of concern, or how different levels 
of SILs for the same pollutant and averaging period would be necessary.
    With regard to the commenters that supported at least one of the 
proposed SILs options, they generally did not prefer the entire suite 
of SILs (Class I, II, and III SILs) from a single option, but instead 
supported parts of different options, primarily divided by drawing a 
distinction between the Class I SILs and the SILs for Class II and III 
areas. Consistent with the way that commenters addressed the Class I, 
II, and III SILs, we will address the comments separately herein as 
well.
a. Class I SILs
    Support and opposition for the proposed PM2.5 SILs for 
Class I areas was fairly evenly divided. The PM2.5 SILs for 
Class I areas proposed under Option 2 received the support of some 
commenters, but also received an equal amount of opposition. Option 1, 
which yielded the lowest (most restrictive) values for the Class I area 
SILs for PM2.5 (annual and 24-hour averages), was supported 
by some commenters, including a Federal agency that serves as a FLM for 
Federal Class I areas under the PSD program, but was equally opposed. 
Finally, comments supporting the Class I SILs proposed under Option 3 
(from which we derived the values included in the final rules) were 
matched by comments that opposed the Class I SILs under Option 3.
    One commenter opposing the Option 3 SILs for Class I areas said 
that the values ``appear to be unrealistically low and, if selected, 
would point to the need for EPA to conduct an economic impact 
analysis.'' We disagree that adopting the Option 3 SILs for Class I 
areas (and Class II and III areas) will result in economic impacts 
significant enough to warrant an economic impact analysis. Under the 
Paperwork Reduction Act, EPA is required to analyze, and receive 
approval from the Office of Management and Budget (OMB) for, the 
recordkeeping and reporting burden imposed by its regulations (referred 
to as the ``Information Collection Request'' or ``ICR'' for the 
regulation). For the PSD program, this includes the burden associated 
with the entire permitting process, including any required modeling 
analyses. In our analysis for this rulemaking, we have concluded that 
the number of PSD permits issued annually will be unchanged (at an 
estimated 274 per year), while the total burden across all PSD permit 
applicants of adding PM2.5 analyses will increase by a total 
of approximately 29,000 hours per year at a cost of approximately $2.8 
million per year. This total annual impact on industry is a small 
fraction of the threshold ($100 million per year) that is considered 
``significant'' under Executive Order 12866 (Regulatory Planning and 
Review) and the Unfunded Mandates Reform Act. See sections X.B and X.D 
of this preamble for more on the Paperwork Reduction Act and the 
Unfunded Mandates Reform Act, respectively. Our analysis of the 
recordkeeping and reporting burden of this rulemaking can be found in 
the docket for this ICR.\22\
---------------------------------------------------------------------------

    \22\ See ``Information Collection Request (ICR) for the 
Prevention of Significant Deterioration for PM2.5-
Increments, Significant Impact Levels and Significant Monitoring 
Concentration,'' Docket No. EPA-HQ-OAR-2007-0628.
---------------------------------------------------------------------------

    Another commenter stated that the use of a NAAQS-based ratio under 
Option 3 for the proposed SILs does not ``translate back to the 
emissions point level when comparing PM10 and 
PM2.5.'' This commenter continued, ``this is an invalid 
method of proceeding because EPA has not shown that there is a 
correlation between the NAAQS and direct PM2.5 since there 
is no accounting for precursors and EPA does not have a quantifiable 
sense of the portion of PM2.5 that is condensable for 
various industries.''
    We disagree with the commenter's concern that the use of NAAQS-
based ratios is an invalid method for developing the PM2.5 
SILs. The purpose of using the NAAQS ratio with the PM10 
SILs to develop PM2.5 SILs is to establish values that have 
a comparable relationship between ambient concentrations of 
PM10 and PM2.5 and their respective NAAQS levels. 
Whether a particular ambient concentration of PM2.5 results 
from direct PM2.5 emissions or from precursor emissions is 
not relevant to this particular approach. The PM2.5 SILs in 
this final rule are intended to be compared to the ambient 
concentrations of PM2.5 that are predicted by modeling the 
emissions of a proposed new project. Ambient concentrations of 
PM2.5 can be the result of direct PM2.5 
emissions, which may include condensable particulate matter, as well as 
precursor emissions, e.g., SO2 and NOX.
    We note that the 2007 NPRM included proposed regulatory language 
providing that demonstrations of whether the air quality impact of a 
major new source or modification would be less than the 
PM2.5 SILs be based on direct PM2.5 emissions 
from the proposed project. The intent of this was to recognize the 
technical limitations associated with modeling precursor emissions to 
predict ambient PM2.5 impacts. However, in this final rule 
we have removed that limitation by removing the reference to ``direct'' 
PM2.5 emissions.
    One commenter, who did not support any of the proposed SILs 
options, was especially critical of the Class I SILs for 
PM2.5 under Option 1, stating that multiplying the proposed 
PM2.5 increment by 4 percent is without legal or practical 
merit. The commenter stated that just because ``4 percent may have been 
a reasonable multiplier to use in establishing a significant emission 
rate threshold does not mean that the multiplier should be used for a 
completely different regulatory purpose.'' The commenter added that if 
the PM2.5 SILs for Class I areas under Option 1 were 
codified, emissions from even the most well-controlled coal-fired 
electric generating station located as far away as 300 km from a Class 
I area could well exceed the threshold.

[[Page 64893]]

    In contrast, the Federal agency commenter supporting the 
PM2.5 SILs for Class I areas under Option 1 explained that 
they analyzed the effectiveness of the three sets of proposed SILs by 
modeling four different coal-fired power plant scenarios using an EPA-
approved long-range transport model. The modeled plants included a 
large 1,500 megawatt (MW) facility, a moderate-sized 500 MW facility, 
and two medium 800 MW facilities. Based on this modeling analysis, the 
commenter concluded that the proposed levels of the Class I 24-hour 
SILs based on Option 1 and Option 3 are ``more appropriately protective 
of the proposed Class I PM2.5 increment and impacts to 
visibility than the level obtained under Option 2.'' This commenter 
supported the consistency of using 4 percent of the Class I increments 
that was used by EPA in proposing Class I SILs for SO2, 
NOX, and PM10 in 1996.
    We chose the Class I SILs under Option 3 because we believe that 
this option yields the most appropriate combination of SILs for all 
area classifications. Whether a particular source will have a 
significant impact on an area is determined to some extent by the 
amount of its emissions, but also by other factors such as the height 
of release, pollutant transport distance, terrain features, and 
meteorological factors. Thus, we did not select SILs values to address 
a certain size source or the degree of control of that source, but the 
ambient impact of that source relative to the NAAQS and increments that 
will result from the source's emissions. While the annual Class I SIL 
under Option 3 represents a level that is somewhat greater than 4 
percent of the PM2.5 annual increment for Class I areas, it 
is sufficiently close (as derived from a ratio of the PM2.5 
NAAQS to the PM10 NAAQS) so as to provide a reasonable 
threshold for defining de minimis for purposes of conducting a Class I 
increment analysis. We had proposed the use of 4 percent of the 
existing Class I increments to develop SILs for pollutants in the 1996 
NSR Reform proposal; however, that particular component of the proposal 
was never finalized. See 61 FR 38250 beginning at 38291. We will 
further discuss our rationale for selecting the SILs under Option 3 in 
the discussion which follows for the Class II and III SILs.
b. Class II and III SILs
    While many commenters tended to favor Option 2 with regard to the 
proposed Class I increments, they tended clearly to support Option 1 
for defining Class II and III SILs for PM2.5. These 
particular SILs for PM2.5 were proposed so as to be equal to 
the existing Class II and III SILs for the existing pollutants. In all, 
six commenters supported Option 1. One of these commenters stated that 
Option 1 SILs for Class II and III areas are ``sufficiently stringent 
and fully consistent with the de minimis justification for SILs.'' The 
commenter added that ``when conducting an air quality impact analysis * 
* * most applicants assume all coarse PM10 to be 
PM2.5.'' The commenter claimed that this assumption is 
conservative and ``overestimates the amount of fine particles being 
emitted and renders the effective SIL thresholds for PM2.5 
lower than those written into the regulations.''
    We strongly disagree that the SILs proposed under Option 1 as 
applied to PM2.5 are sufficiently stringent. The application 
of such values as SILs for PM2.5 would result in ambient 
concentrations of PM2.5 that consume a much larger portion 
of both the PM2.5 NAAQS and increments than either of the 
other two options proposed for PM2.5 in light of the 
correspondingly more stringent levels of the PM2.5 NAAQS and 
increments than those for the other pollutants. We believe that of the 
3 options proposed, the PM2.5 SILs based on Option 3 
represent values that are more closely aligned percentage-wise with the 
SILs that have been or are being used for other forms of PM when 
compared to their respective NAAQS and increments.
    We also disagree with the commenter's suggestion that the 
development of the SILs for PM2.5, or any other pollutant, 
should in any way be influenced by the possibility that some sources 
may use conservative techniques for estimating a source's emissions 
rate. Such conservative techniques may be needed to the extent that 
technical issues associated with the determination of PM2.5 
emissions are identified, and can certainly be used at any time as a 
simplified methodology for estimating PM2.5 emissions. But 
when such an overly conservative approach fails to yield de minimis 
results, the source may find it necessary to rely upon more accurate 
techniques for determining the amount of PM2.5 that the 
source will emit.
    Finally, one commenter, objecting to all of the proposed SILs, 
stated that EPA must assure that SILs are truly de minimis and must 
also include limitations on the use of SILs as necessary to prevent air 
quality from significantly deteriorating. We acknowledge that we did 
not conduct any new modeling or other types of analyses of the proposed 
SILs in order to explicitly show that the final PM2.5 SILs 
values in this final rule are de minimis. Instead, we have relied on 
past actions regarding the setting of de minimis levels to illustrate 
that the PM2.5 values selected via Option 3 represent values 
that are as stringent as the previous levels that have been established 
to define de minimis for PM10 and TSP. See 45 FR 52706-708 
(using modeling and representative data).
    Using the 24-hour and annual NAAQS ratios of PM2.5 to 
PM10, and multiplying them by the corresponding existing 
PM10 SILs, we conclude that the PM2.5 SILs define 
de minimis for the PM2.5 NAAQS in the same way as the 
PM10 SILs do for PM10 NAAQS. Using the increments 
as a basis for comparison provides further support for our conclusion. 
The annual and 24-hour PM2.5 SILs represent about 7.5 and 13 
percent of the annual and 24-hour PM2.5 increments, 
respectively. By comparison, the annual and 24-hour PM10 
SILs represent about 5 and 17 percent of the annual and 24-hour 
PM10 increments, respectively. We believe the 
PM2.5 SILs fall into a comparable relative range with the 
PM10 SILs and can be considered de minimis.
    In EPA's 1980 final rule for PSD, EPA adopted SERs for the 
pollutants then subject to regulation under the PSD requirements. The 
SER adopted for PM (then measured as TSP) was 25 tpy, which represented 
an emissions rate for which EPA modeled impacts that represented about 
4 percent of the TSP 24-hour NAAQS and about 28 percent of the 24-hour 
TSP increment. Thus, EPA considered it acceptable under the de minimis 
assessment for PM that a source of particulate matter capable of 
consuming around 28 percent of the applicable 24-hour TSP increment 
could be exempted from the requirements to complete a comprehensive 
source impact analysis for the PM NAAQS and increments. 45 FR 52708.
    In looking at the amount of increment that could be consumed by a 
source that is ultimately exempted from having to complete a 
comprehensive modeling analysis, it should be pointed out that the 
maximum modeled concentration typically occurs in a relatively limited 
area, as compared to the entire modeling domain. In particular, for the 
short-term averaging periods, such as the 24-hour averaging period, 
modeled concentrations across the modeled area generally show that 
ground level impacts are reduced significantly from the peak value as 
the pollutant travels a relatively short distance from the source, so 
that the peak modeled

[[Page 64894]]

concentrations represent the source's impact at only a relatively few 
receptors within the modeled area. In addition, it is important to note 
that the temporal and spatial conditions which lead to a maximum impact 
by one source are seldom the same for other sources, such that maximum 
impacts of individual sources do not typically occur at the same 
location or at the same time.
    Thus, in an area where several sources can demonstrate that their 
modeled impacts are de minimis, it generally should not be assumed that 
their individual maximum (albeit de minimis) impacts on the increment 
are additive. For example, four sources with de minimis 
PM2.5 impacts, each consuming 12 percent of the 24-hour 
PM2.5 increment, would not necessarily consume 48% of the 
24-hour increment. Increment consumption is determined by the 
cumulative impact of source emissions on each individual receptor or 
modeling point in the area of impact within the baseline area defined 
for the affected PSD sources.
    The preamble for the 1980 final rule for PSD included a description 
of a modeling analysis that EPA conducted to illustrate that a number 
of major sources each making a de minimis emissions increase for 
SO2 could locate in an area (in that case, the Dayton area) 
and not cause a violation of either the applicable SO2 
increment or NAAQS. In that particular case, the modeling indicated 
that the maximum aggregate increment consumption for 37 sources 
emitting 40 tpy of SO2 (the de minimis emissions rate for 
SO2) would have a cumulative impact at any location of less 
than 1.5 [mu]g/m\3\ on a 24-hour basis--well below the NAAQS and 
increments for SO2. 45 FR 52708.
    With regard to the commenter's recommendation that we place 
limitations on the use of SILs, we earlier provided an example of when 
it might be appropriate to require a modified source to mitigate its 
contribution to a violation of a NAAQS or increment even when the 
predicted ambient impact of the proposed emissions increase would 
result in what is normally considered to be de minimis. In addition, we 
have historically cautioned states that the use of a SIL may not be 
appropriate when a substantial portion of any NAAQS or increment is 
known to be consumed. We have indicated elsewhere in this preamble that 
states are not required to adopt the SILs for PM2.5 in this 
final rule. At their discretion they may choose not to rely on SILs to 
screen applicants or they may establish more stringent values.
    Finally, it should be noted that while a source having only de 
minimis impacts may not be required to complete a comprehensive source 
impact analysis, the emissions from such sources are still considered 
to consume increment and would be counted as part of the next increment 
analysis required to be completed by a PSD applicant in that same area, 
or by the State under a periodic increment review.
3. Relationship Between SILs and AQRVs
    While commenters generally supported EPA's position that the SILs 
should not be used in any way to determine effects of emissions 
increases on the AQRVs in a Class I area, two commenters urged that the 
de minimis concentration be used for analyzing Class I area impacts 
under certain circumstances. That is, they believed that the SILs 
should be used to determine the need for a Class I area air quality 
analysis when an FLM has not identified a specific AQRV related to the 
pollutant under evaluation or obtained ambient monitoring data to 
confirm that predicted concentrations from air dispersion models are 
representative of actual AQRV impacts in the Class I area. The 
commenters claimed that without this flexibility, applicants would be 
required to conduct complex and extensive Class I air dispersion 
modeling without any clear objective, and regulatory agencies would 
have to review the modeling with limited information to determine if 
the emissions could cause an ``adverse'' impact or if potentially 
costly controls should be required.
    These commenters appear to be suggesting that an FLM may needlessly 
call for an analysis of a particular Class I area, involving ``complex 
and extensive Class I area dispersion modeling'' despite the fact that 
no AQRV has been identified for that Class I area. We agree that a 
Class I analysis in the absence of any known AQRVs would be unnecessary 
because any demonstration of an adverse impact must be made with 
respect to a pollutant adversely affecting an AQRV. We believe, 
however, that such analyses would be avoided under the procedures set 
forth in section 165(d)(2)(C) of the Act which require that a notice be 
filed alleging that a proposed source may cause or contribute to 
adverse effects, and identifying the adverse impact. Insofar as the FLM 
must also demonstrate ``to the satisfaction of the State that emissions 
from such facility will have an adverse impact on the air quality 
related values,'' it would be difficult to require the source to 
undertake any kind of detailed analysis in the absence of an AQRV on 
which such adverse impacts must be demonstrated. Thus, we have 
concluded that it is not necessary to use the SILs as a safeguard 
against unnecessary Class I area analyses. Instead, we believe that the 
need for a Class I analysis, other than the required analysis of the 
NAAQS and Class I increments (for both of which the SILs are intended 
to be used), should be based on the potential for adverse effects on an 
AQRV that the FLM has identified and believes could be affected by a 
pollutant that would be emitted by the proposed project.
4. Form of the SILs
    One commenter stated that ``the Proposal does not indicate how the 
proposed PM2.5 SILs are to be interpreted.'' This commenter 
believed that ``the form of the SILs should be consistent with the form 
of the PM2.5 NAAQS'' adding that ``the current 
PM2.5 NAAQS requires that compliance with the 24-hour and 
annual standards be determined using 3-year averaging.'' Specifically, 
``The annual standard is calculated based upon the 3-year average of 
annual mean PM2.5 concentrations, and the 24-hour standard 
is based on the 3-year average of the 98th percentile (or highest-8th 
high value) of 24-hour concentrations.''
    In a March 23, 2010 EPA memorandum titled ``Modeling Procedures for 
Demonstrating Compliance with PM2.5 NAAQS,'' we provided 
guidance for using the SILs in conjunction with the 24-hour and annual 
PM2.5 NAAQS, which takes into account the statistical form 
of the NAAQS. Following promulgation of the PM2.5 increments 
in this final rule, we intend to provide guidance for interpreting the 
SILs for their use with the 24-hour and annual PM2.5 
increments as well.
5. SILs for Other Pollutants
    In proposing Option 1, we noted that many who commented on the 1996 
NSR Reform proposal supported this approach and believed that the 
proposed PM10 SIL values would serve as appropriate de 
minimis values. In fact, we are aware that many states have been using 
these proposed SILs for PM10 as screening tools since 1996 
or earlier.
    Regarding the proposed Class I SILs under Option 1, we expressed 
our belief that where a proposed source consumes less than 4 percent of 
the Class I increment, the source's impact is sufficiently low so as 
not to warrant requiring the source to carry out a detailed analysis of 
the combined effects of the proposed source and all other increment-
consuming emissions in the

[[Page 64895]]

area. 72 FR 54140. We previously used a similar rationale to establish 
the SERs for PSD applicability purposes, concluding in part that 
emissions rates that resulted in ambient impacts less than 4 percent of 
the 24-hour standards for PM and SO2 were sufficiently small 
so as to be considered de minimis. 45 FR 52707-8.
    The original SIL values of 1.0 and 5.0 [mu]g/m\3\ for TSP and 
PM10 were interpreted by EPA as representing the minimum 
amount of ambient impact that is significant. This formed the basis for 
the proposed Option 1 PM2.5 SIL values of 1.0 and 5.0 [mu]g/
m\3\ for the annual and 24-hour averaging periods for Class II and III 
areas.
    The SILs currently appear in EPA's regulations at 40 CFR 51.165(b). 
That particular NSR regulation provides that states must include a 
preconstruction review permit program for any new major stationary 
source or major modification that proposes to locate in an attainment 
or unclassifiable area and would cause or contribute to a violation of 
the NAAQS. These values, added to 40 CFR 51.165(b) on July 1, 1987, 
have previously been referred to as ``significant ambient impact 
concentrations'' and are used to enable a source to determine whether 
its emissions would cause or contribute to a NAAQS violation at ``any 
locality that does not or would not meet the applicable national 
standard.'' 52 FR 24672, April 2, 1985, at 24688.
    In 1985, when EPA proposed to add ``significant ambient impact 
levels'' for PM10, we also indicated that for PSD purposes 
the requirements under section 51.165(b) \23\ ``would be applied to all 
applicable PSD requirements.'' The EPA has since applied these values 
in other analogous circumstances under the PSD program. Based on EPA 
interpretations and guidance, SILs have also been widely used in the 
PSD program as a screening tool for determining when a new major source 
or major modification that wishes to locate in an attainment or 
unclassifiable area must conduct a more extensive air quality analysis 
to demonstrate that it will not cause or contribute to a violation of 
the NAAQS or PSD increment in the attainment or unclassifiable area. 
The SILs are also used to define the extent of the Significant Impact 
Area where, using air dispersion models and ambient monitoring data, a 
cumulative source impact analysis accounting for emissions changes from 
affected sources is performed.\24\ See the 2007 NPRM for additional 
information on the history of EPA's guidance related to SILs (72 FR 
54138-39).
---------------------------------------------------------------------------

    \23\ In 1985, the requirements now contained in 40 CFR 51.165(b) 
were contained in 40 CFR 51.18(k), which was later part of a major 
restructuring of the part 51 SIP requirements.
    \24\ In the case of a NAAQS compliance analysis, all sources in 
the area are considered to contribute to the air quality levels; for 
increments, however, ``all'' refers only to those sources whose 
emissions, in whole or in part, consume PSD increment for a 
particular pollutant.
---------------------------------------------------------------------------

    In the 1996 NSR Reform proposal, we proposed to add the SILs for 
PM10 and other pollutants already contained in 40 CFR 
51.165(b)(2) directly into the PSD regulations at 40 CFR 51.166 and 
52.21. Because the SILs in 40 CFR 51.165(b) did not include thresholds 
for Class I areas, we proposed to set Class I SILs at the level of 4 
percent of the respective Class I increments. Thus, for 
PM10, the proposed Class I SILs were 0.2 [mu]g/m\3\ (annual) 
and 0.3 [mu]g/m\3\ (24-hour), and the proposed Class II and III SILs 
were 1.0 [micro]g/m\3\ (annual) and 5.0 [mu]g/m\3\ (24-hour). The EPA 
has not yet taken final action on the 1996 proposal on SILs for 
pollutants other than PM2.5; therefore, we rely upon our 
longstanding policy to use those values, as codified in 40 CFR 
51.165(b)(2), for PSD permitting.

VII. Final Action on the PM2.5 SMC

A. EPA's Determination on the PM2.5 SMC

    As with the increments and SILs for PM2.5, we proposed 
three different options for establishing an SMC for PM2.5. 
The first option, referred to as the ``lowest detectable 
concentration'' approach, relied on the method we used in 1980 to 
develop the SMCs for the pollutants then subject to PSD. This 
particular method focused on development of the SMC value based on the 
current capability of providing a meaningful measure of the pollutants. 
See relevant discussion later in this section and at 45 FR 52710. 
Options 2 and 3, called the ``PM2.5 to PM10 
emissions ratio'' and the ``PM2.5 to PM10 NAAQS 
ratio,'' respectively, used the SMC for PM10 as the base for 
multiplying the emissions and NAAQS ratios to derive an SMC for 
PM2.5. See 72 FR 54141. The three proposed options yielded 
the following numerical levels for the SMC:
     Option 1: 10 [mu]g/m\3\, (24-hour average);
     Option 2: 8.0 [mu]g/m\3\ (24-hour average); and
     Option 3: 2.3 [mu]g/m\3\ (24-hour average).
    We are taking final action on the SMC for PM2.5 using 
the ``lowest detectable concentration'' approach (Option 1). However, 
we have determined that the SMC value that is calculated under this 
methodology is lower than the proposed value of 10 [micro]g/m\3\ to 
reflect ``current capability'' with respect to the measurement and 
collection of ambient PM2.5 concentrations. The result of 
such revised calculation is that the SMC value in this final rule is 
different from (more stringent than) the proposed level. The revised 
value is 4 [micro]g/m\3\ (24-hour average). Our basis for the revised 
calculation and the resulting lower value is described in greater 
detail later in this section.
    The EPA and its delegated reviewing authorities will use the 
PM2.5 SMC to determine when it may be appropriate to exempt 
a proposed new major stationary source or major modification from the 
ambient monitoring data requirements under the PSD rules. Similarly, 
states with EPA-approved PSD programs that adopt the SMC for 
PM2.5 may use the SMC, once it is part of an approved SIP, 
to determine when it may be appropriate to exempt a particular major 
stationary source or major modification from the monitoring 
requirements under their State PSD programs (see 40 CFR 51.166(i)(5)).

B. Response to Comments Concerning the SMC

1. Legal Issues
    Under the Act and EPA regulations, an applicant for a PSD permit is 
required to gather preconstruction monitoring data in certain 
circumstances. Section 165(a)(7) of the Act calls for ``such monitoring 
as may be necessary to determine the effect which emissions from any 
such facility may have, or is having, on air quality in any areas which 
may be affected by emissions from such source.'' In addition, section 
165(e) of the Act requires an analysis of the air quality in areas 
affected by a proposed major facility or major modification and calls 
for gathering 1 year of monitoring data unless the reviewing authority 
determines that a complete and adequate analysis may be accomplished in 
a shorter period. These requirements are codified in EPA's PSD 
regulations at 40 CFR 51.166(m) and 52.21(m).
    In 1980, EPA adopted regulations that included pollutant-specific 
SMCs as a screening tool for sources to determine whether they should 
conduct site-specific preconstruction ambient monitoring.\25\ We 
explained our

[[Page 64896]]

position that it was appropriate to exempt sources from preconstruction 
monitoring requirements for a pollutant if the source could demonstrate 
that its ambient air impact was less than a value known as the 
Significant Monitoring Concentration or SMC. At the time the SMCs were 
adopted, EPA described them as ``air quality concentration de minimis 
level[s] for each pollutant [that were available] for the purpose of 
providing a possible exemption from monitoring requirements.'' 45 FR 
52676, 52707 (August 7, 1980). The EPA explained that it believed there 
was ``little to be gained from preconstruction monitoring'' where a 
source could show that its projected impact of a pollutant within the 
affected area was below the de minimis concentration for that 
pollutant. 45 FR at 52710.
---------------------------------------------------------------------------

    \25\ The provision for the monitoring exemption was originally 
promulgated at 40 CFR 51.24(i)(8) and 52.21(i)(8); it should be 
noted, however, that this provision is now found at 40 CFR 
51.166(i)(5) and 52.21(i)(5).
---------------------------------------------------------------------------

    One commenter opposed our proposed establishment of any SMC for 
PM2.5, claiming that SMCs in general are contrary to the 
Act. The commenter stated that ``in Section 165(e) Congress mandated a 
full year of continuous air quality monitoring for each major source 
subject to the PSD program.'' With this in mind, the commenter 
indicated that there are no exceptions, other than the limited 
statutory provisions, discussed above, which allow for less than a 
year's worth of monitoring based on a determination that a complete and 
adequate analysis of such purposes may be accomplished in a shorter 
period. The commenter then argued that ``the allowance for a `shorter 
period' hardly amounts to authority to waive monitoring entirely, which 
is what EPA's SMC proposal would do.''
    As with the SMCs adopted by EPA in 1980, the SMCs that we proposed 
for PM2.5 are supported by the de minimis doctrine set forth 
in the Alabama Power opinion. Like the other pollutants for which EPA 
has promulgated SMCs, EPA believes there is little to be gained from 
preconstruction monitoring of PM2.5 concentrations that 
cannot be accurately measured.
    Therefore, in developing the three proposed options for an SMC, EPA 
sought to use methods that would identify levels representing a de 
minimis or insignificant impact on PM2.5 ambient air quality 
that makes the collection of additional monitoring data extraneous.
2. Level of the SMC
    As indicated earlier, the SMC for PM2.5 in this final 
rule is 4 [mu]g/m\3\, 24-hour average. This value may be used by 
permitting authorities to determine when they may exempt a proposed 
major stationary source or major modification for PM2.5 from 
the air quality monitoring requirements for PM2.5 under 40 
CFR 51.166. The EPA and its delegated State/local programs will also 
use this new value under the Federal PSD program at 40 CFR 52.21.
    We proposed three options for developing the SMC for 
PM2.5; each option yielded a different concentration value. 
In choosing between the three options, EPA proposed to select the 
option that reflected the degree of ambient impact on PM2.5 
concentrations that could be considered truly de minimis and used to 
justify exempting a source from the requirement to gather 1 year of 
ambient monitoring data for PM2.5. Ultimately, we have 
selected the ``lowest detectable concentration'' approach (Option 1) 
that relies directly upon ambient monitoring measurement sensitivity 
and precision. That is, if either the predicted source impact or 
estimated existing air quality in an area is below a concentration that 
can be accurately measured, then it would not be reasonable to require 
a source to attempt to collect such ambient data.
    In 1980, EPA determined the SMCs based on the then current 
capability of providing a meaningful measure of ambient pollutant 
concentrations. The EPA promulgated values that represented five times 
the lowest detectable concentration in ambient air that could be 
measured by the instruments available for monitoring the pollutants. 45 
FR 52710. The factor of ``five'' took into account the measurement 
errors associated with the monitoring of these low pollutant levels or 
small incremental changes in concentration. These measurement errors 
were said to arise from various sources, such as sample collection, 
analytical measurement, calibration, and interferences. See May 20, 
1980 EPA memorandum from Rehme, K. A., to Warren Peters, contained in 
the docket for this rulemaking. Accordingly, in the 2007 NPRM for 
PM2.5, we voiced our belief that this was a reasonable 
approach, since it was also used for PM10 and TSP. 72 FR 
54141.
    Eight commenters expressed support for the SMC based on Option 1, 
albeit at the higher level as originally proposed. In some cases, it is 
not clear whether these commenters supported the particular approach 
(i.e., an SMC linked to the lowest detectable level) or the fact that 
the calculated value was simply the highest value of the values 
proposed under the three options. Clearly, some of the commenters 
indicated their support for the approach because it is consistent with 
the approach used for setting the original SMCs in 1980. Two commenters 
opposed Option 1 because it resulted in an SMC value that was too high. 
These latter commenters noted that the SMC derived via Option 1 (10 
[micro]g/m\3\, 24-hour average) was greater than the proposed 24-hour 
PM2.5 increment for Class II areas and argued that such an 
outcome is inappropriate. We believe that this important concern is 
adequately addressed by the level of the SMC for PM2.5 that 
is established in this rulemaking.
    Several commenters supported the levels derived from either Option 
2 or Option 3, but were concerned that the justification for choosing 
either of these values would need to be further explained. Some of 
these commenters were specifically concerned about the use of a 0.8 
PM2.5-to-PM10 emissions ratio which, they argued, 
relied on inventory data that did not adequately address all sources 
that would likely affect ambient concentrations of PM2.5 in 
an area.
    We conclude that Option 1 is the appropriate option for defining 
the SMC for PM2.5. The ability to accurately measure ambient 
PM2.5 concentrations is not related to a ratio of 
PM2.5 to PM10 either directly in terms of 
emissions or as expressed by the respective NAAQS, which were used to 
define the SMC for PM2.5 under Options 2 and 3, 
respectively. Our original concern was that, while Option 1 linked the 
SMC directly to the concept of a minimum detectable concentration (in 
order to identify de minimis monitoring circumstances), the value 
originally derived from that approach in the 2007 NPRM was high in 
relationship to the concentrations of PM2.5 defined by the 
existing NAAQS and increments for PM2.5.
    In considering the use of Option 1 for developing the SMC in the 
final rules, however, we recognized after publication of the proposed 
rule that it was necessary to re-examine the assumptions that we relied 
upon in 1980 to develop the numerical values for the original SMCs so 
that we could most accurately reflect current monitoring techniques for 
PM2.5. Our re-examination for this final rule utilized the 
most current information concerning the physical capabilities of the 
PM2.5 Federal Reference Method Samplers, and addresses 
uncertainties introduced to the measurement of PM2.5 due to 
variability in the mechanical performance of the PM2.5 
samplers and the micro-gravimetric analytical balances that weigh 
filter samples.
    The minimum detection limit (MDL) of 2 [micro]g/m\3\, originally 
used in 1980 for the SMC for PM and promulgated for PM2.5 in 
1997 (see 40 CFR part 50, Appendix L, section 3.1), has been

[[Page 64897]]

reaffirmed by 9 years of field blank data collected by EPA through the 
PM2.5 Performance Evaluation Program. However, we found that 
new data exist to ``indicate a conservative estimate of the aggregate 
uncertainty factor is no greater that `2' at the concentration equal to 
the MDL of 2 [micro]g/m\3\.'' \26\ Accordingly, the lowering of the 
uncertainty factor from ``five'' to ``two'' under Option 1 yields an 
SMC of 4 [micro]g/m\3\ PM2.5, 24-hour average, rather than 
the proposed concentration of 10 [micro]g/m\3\.
---------------------------------------------------------------------------

    \26\ This information is contained in a March 12, 2009 internal 
EPA memorandum from Dennis Crumpler to Raj Rao, titled ``PSD 
Monitoring De Minimis Concentration for PM2.5,'' which 
has been placed in the docket for this rulemaking.
---------------------------------------------------------------------------

    We conclude that the modified level of 4 [micro]g/m\3\ 
PM2.5, 24-hour average, for the SMC under Option 1, based 
upon a more current understanding of monitoring precision for PM, 
especially fine PM, addresses commenter support for the use of a method 
that is consistent with the way other SMCs were developed and most 
directly reflects monitoring capability for the pollutant of concern, 
while at the same time responding to the concern of other commenters 
that a value in the lower range of proposed SMC values is most 
reasonable considering the levels of the NAAQS and increments for 
PM2.5.

C. Correction of Cross Reference in PSD Ambient Monitoring Requirements

    In the 2007 NPRM, we proposed to take final action to correct a 
cross reference contained in paragraph (i) of the part 51 and 52 PSD 
regulations. Specifically, at the time of the proposal, paragraphs (ii) 
and (iii) in 40 CFR 51.166(i)(5), and paragraph (ii) in 40 CFR 
52.21(i)(5), each referred to concentrations listed in paragraph 
(i)(8)(i) of both regulations. However, there is no paragraph (i)(8)(i) 
in existing 40 CFR 51.166, and no concentration values are contained in 
existing section (i)(8)(i) of 40 CFR 52.21. The cross reference in 
these provisions was intended to reference the SMCs in paragraph 
(i)(5)(i) of the two PSD regulations, but EPA failed to make this 
change when the paragraphs were renumbered in an earlier rulemaking. We 
did not receive any comments concerning this proposed corrective 
action. We made the necessary correction as part of the May 16, 2008 
final PM2.5 NSR Implementation Rule (see 73 FR 28348 and 
28349); therefore it is not necessary to take any further action in 
this final rule with regard to the proposed correction.

VIII. Dates Associated With Implementation of the Final Rule

    This section describes the key dates that we have established for 
implementing the final rule. In the 2007 NPRM, we indicated that 
different dates appeared to be appropriate for implementing the 
PM2.5 increments, each date depending on the legal authority 
that we relied upon to promulgate it. We described and took comment on 
some alternative effective dates for increments, as well. In addition, 
we discussed and took comment on potential implementation dates for the 
SILs and SMC components of the proposed rule, which we indicated were 
not subject to the same statutory considerations as the increments.
    We received a number of comments on the different proposed dates. 
We carefully considered these comments in selecting the dates described 
below for the final rule. Some of the significant comments and our 
responses to those comments are provided below. The remaining comments 
and our responses are contained in the Response to Comments document 
included in the docket for this rulemaking.

A. Effective Date of the Final Rule

    In the 2007 NPRM, we took comment on the effective date of the 
final rule by presenting the different options available for 
implementing the PM2.5 increments. Under Option 1 for 
developing the increments, we stated that section 166(b) of the Act 
specifies that increments promulgated pursuant to section 166(a) are to 
become effective 1 year following their promulgation. In contrast, 
there is no such 1-year delay or any other date prescribed for 
increments promulgated in accordance with section 166(f) of the Act, 
upon which we based Options 2 and 3 for the annual PM2.5 
increments. Thus, increments promulgated under Option 1, which relies 
on the procedural provisions of section 166(b) of the Act, would 
normally be subject to a 1-year delay in implementation, while 
increments promulgated under either Option 2 or 3, relying on section 
166(f) of the Act, could follow a 30- or 60-day effective date, typical 
of the effective date for most new rules in general. In either case, 
our consideration of the effective date for the PM2.5 
increments assumed that the selected date would also be the effective 
date of the final rule.
    In the 2007 NPRM, we took comment on some alternative approaches to 
establishing the effective date for PM2.5 increments. 
Specifically, while proposing a 1-year effective date under Option 1, 
we requested comment on whether we could promulgate these increments 
under section 166(a) of the Act with an effective date of only 60 days. 
See 72 FR 54142.
    Nine commenters supported our proposal to establish the effective 
date of the part 51 and 52 PSD regulations for PM2.5 as 1 
year from the date of publication. Alternatively, two commenters 
encouraged us to apply the 60-day effective date, while three other 
commenters supported other effective dates, as described in this 
section.
    Seven industry and industry association commenters supported our 
proposal to make the final rule for PM2.5 increments 
effective 1 year after promulgation. Most of these commenters cited the 
additional time necessary to develop the needed PM2.5 
inventories needed for implementation of the PM2.5 PSD 
program. Two of the commenters urged EPA to allow State programs 
sufficient time to adopt increments, particularly if condensable 
particulate matter is included in the increment and its analysis. These 
commenters stated that the Federal rule should not be effective for 1 
year. (They also stated that states should have 3 years for the 
associated SIP revisions.) These same commenters added that this delay 
would provide time for sources that have permits in the pipeline or are 
just about to submit an application to be able to complete the 
permitting process without undue delay. One of the commenters 
specifically voiced support for Option 1 for the effective date of the 
final rule (1 year) and Option 2B for the period granted for SIP 
revisions (3 years). This commenter also explained that this additional 
time may give the Agency time to promulgate better measurement methods 
for sources of condensable particulate matter.
    Another of these commenters noted that, at the time of the 
proposal, the NSR portion of the CAFPIR had not yet been promulgated, 
and that states would need time to incorporate that rule as well as the 
requirements of the proposal into their SIPs. This commenter added that 
making the PM2.5 increments effective before states and 
sources have had a reasonable opportunity to begin, let alone complete, 
the SIP process for the two related rulemakings would unnecessarily 
complicate an already-complex regulatory process.
    In contrast, the two commenters supporting the shorter effective 
date encouraged us to apply the 60-day period for the effective date 
under whatever option is finalized. One of these commenters urged us to 
take measures to expedite the

[[Page 64898]]

implementation of the PM2.5 final rule and suggested that we 
choose the shortest of the proposed effective dates which are allowed 
under any of the applicable regulations. This commenter indicated that 
in light of the excessive delay in the implementation of the 
PM2.5 PSD program since the NAAQS were promulgated, the 60-
day effective date should be applied under EPA's preferred option.
    In light of our decision to promulgate PM2.5 increments 
under the authority of section 166(a) of the Act (proposed Option 1), 
we are faced with the decision as to how to most effectively implement 
the long-awaited PM2.5 increments, recognizing that the Act 
provides for a 1-year implementation delay. We have concluded that it 
is most appropriate to follow the plain language of the Act which calls 
for a 1-year effective date for implementing increments developed under 
section 166(a) of the Act. We agree with the commenters who suggested 
that a shortened implementation delay was desirable because of the 
substantial delay in the promulgation of measures to prevent 
significant air quality deterioration with respect to PM2.5. 
Nevertheless, we believe it would be inappropriate in this action to 
disregard the statutory language which plainly calls for a 1-year 
delay. Accordingly, we are setting the effective date of the 
PM2.5 increments at 1 year from the date of promulgation of 
this final rule, consistent with the 1-year delay required under 
section 166(b) of the Act. We are doing this by setting the ``trigger 
date'' for PM2.5 as October 20, 2011. See new 40 CFR 
51.166(b)(14)(i)(c) and (ii)(c), and new 40 CFR 52.21(b)(14)(i)(c) and 
(ii)(c). At the same time, we are establishing an effective date for 
the other provisions, i.e., the SILs and SMC for PM2.5, in 
this final rule as December 20, 2010. This will enable the 
implementation of these key elements of this rule under the Federal PSD 
program as soon as possible.
1. State PSD Programs
    In this final rule, we are establishing the final PM2.5 
increments as minimum program elements for all State PSD programs. 
Accordingly, states must submit for EPA's approval revised SIPs that 
incorporate the final PM2.5 increments or alternative 
measures that can be demonstrated to EPA's satisfaction to provide an 
equivalent level of protection as the PM2.5 increments. In 
accordance with section 166(b) of the Act, we are requiring states to 
submit revised implementation plans to EPA for approval within 21 
months of promulgation, that is, by July 20, 2012. Section 166(b) also 
specifies that we must approve or disapprove these revisions within 25 
months of promulgation (4 months from the statutory deadline for SIP 
submittal). We regard these statutory deadlines as maximum allowed 
timeframes for action. Moreover, we do not believe that the Act 
restricts our ability to approve SIP revisions requested by a State at 
any time before these deadlines. In this final rule, we are amending 
the regulatory provisions at 40 CFR 51.166(a)(6)(i) to articulate the 
deadline set forth by the statute for the SIP submittals involving the 
PM2.5 increments pursuant to section 166(a) of the Act.
    It is very unlikely that states will be able to revise their SIPs 
and submit them to EPA for approval prior to the applicability date of 
the PM2.5 increments in this final rule, which is October 
20, 2011. Therefore, there is likely to be a period of time after 
October 20, 2010 when State laws will not require PSD applicants 
otherwise subject to PSD for PM2.5 to complete an increment 
analysis for the PM2.5 increments, even though the 
PM2.5 increments, major source baseline date, and trigger 
date have been established as a result of this final rule. Similarly, 
it is not clear whether states will have the authority to consider such 
applicants as having triggered the minor source baseline date during 
this interim period before their revised PSD rules containing the 
PM2.5 increments and relevant baseline dates become 
effective.
    The EPA does not intend to prescribe the implementation timeline 
for State programs; rather, each State will need to determine how 
increment consumption and the setting of the minor source baseline date 
for PM2.5 will occur under its own PSD program. 
Nevertheless, regardless of when a State begins to require 
PM2.5 increment analyses and how it chooses to set the 
PM2.5 minor source baseline date, the emissions from sources 
subject to PSD for PM2.5 on which construction commenced 
after October 20, 2010 (the major source baseline date) will consume 
PM2.5 increment and must be included in increment analyses 
occurring after the minor source baseline date is established for an 
area under the State's revised PSD program.
2. Federal PSD Program
    The Federal PSD regulations under 40 CFR 52.21 apply where states 
do not have approved PSD programs and in Indian lands. In such cases, 
either EPA implements the PSD program or the State will implement it 
under authority granted by EPA through a delegation agreement.
    We proposed to begin implementing the Federal PSD program for 
PM2.5 on the effective date of the final rule, i.e., either 
1 year from the date of publication in the Federal Register or 60 days 
from date of publication, if we developed the PM2.5 
increments pursuant to proposed Option 1. Alternatively, we requested 
comment on whether we should delay implementation of the Federal PSD 
program until 25 months after promulgation, which is the latest date by 
which EPA is required to approve State SIP revisions. This is the same 
approach we took in 1988 to implement the then new NO2 
increments. See 53 FR 40658. We did not propose the 24-month delay for 
the PM2.5 increments because of the significant delay that 
has already occurred between the time we promulgated the 
PM2.5 NAAQS and the time the PM2.5 increment 
rulemaking would be finalized. However, we sought comment on this 
alternative approach because we recognized that it might not be 
equitable to begin implementation of the new program requirements in 
those few areas where the Federal program applies before the majority 
of states are required to implement the program.
    Two commenters urged EPA to hold off implementation of State 
programs administered under the Federal PSD program in order to provide 
a uniform and consistent national approach. One State agency supported 
implementing the Federal PSD program with a delayed effective date of 1 
year after the effective date of the final rule instead of 60 days.
    We have decided to begin implementing the revised Federal PSD 
program as set out previously in our introductory discussion of this 
issue in section VIII.A. That is, the revised regulations at 40 CFR 
52.21 will become effective in 60 days, on December 20, 2010. This will 
allow EPA or the delegated State agency to begin using the SILs and SMC 
for PM2.5 on that date, as described in section VIII.C of 
this preamble. However, the date established in the regulations for the 
trigger date will ensure that the PM2.5 increments do not 
become effective for 1 year, consistent with section 166(b) of the Act, 
and that the minor source baseline date cannot be established until the 
PM2.5 increments become effective. However, PSD sources 
subject to PM2.5 that receive their PSD permit after the 
date of publication of this final rule will be considered to consume 
PM2.5 increments by virtue of the fact that they will 
commence construction after the major source baseline date for 
PM2.5, which is the date of publication of this final rule.

[[Page 64899]]

    Thus, sources in an area subject to the Federal PSD program for 
PM2.5 will be able to use the SILs and SMC as screening 
tools for the required PM2.5 NAAQS compliance demonstration, 
but in most cases will not be required to submit a PM2.5 
increment analysis as part of a complete PSD permit application for a 
Federal PSD permit unless the application is submitted on or after 
October 20, 2011. On or after that date, when an applicant submits a 
complete PSD permit application that is required to address 
PM2.5 under the Federal PSD program, that first application 
will establish the minor source baseline date for PM2.5 in 
the applicable attainment or unclassifiable area.
    As with the State PSD program requirements, prior to the 
establishment of the minor source baseline date in an area, emissions 
increases from minor sources in the area will be counted toward the 
baseline concentration, rather than to the PM2.5 increment. 
As described earlier, the emissions from major stationary sources that 
commence construction after the major source baseline date, regardless 
of the date on which their PSD application is submitted, must be 
counted toward consumption of the PM2.5 increments. While 
these sources will not be required to submit an increment analysis for 
PM2.5 as part of their complete application as long as they 
receive their PSD permit before the trigger date for PM2.5 
(see discussion that follows in section VIII.B), the emissions 
increases resulting from the permitting of these sources ultimately 
must be counted toward the PM2.5 increments when the first 
PSD permit application submitted after the trigger date establishes the 
minor source baseline date for the area of concern, and in all 
subsequent PM2.5 increment analyses for that area.

B. Transition Period

    In the 2007 NPRM, we proposed a transition period to clarify when 
PSD permit applications must contain an increment analysis 
demonstrating compliance with the PM2.5 increments following 
the date the PM2.5 increments become effective in any State 
or Federal PSD program. Specifically, we proposed to establish a 
grandfathering provision to allow complete applications submitted 
before the increment effective date, but for which the permit had not 
yet been issued by the effective date, to continue being processed 
using the PM10 Surrogate Policy to satisfy the requirement 
to demonstrate compliance with the new PM2.5 requirements. 
The grandfathering provision for PM2.5 was originally 
proposed in the 2007 NPRM at 40 CFR 51.166(i)(10) and 40 CFR 
52.21(i)(11) for State and Federal PSD programs, respectively. See 72 
FR 54149 and 54154.
    Three commenters supported the proposed grandfathering provision 
for sources that submitted a complete application before the effective 
date of the applicable PSD rules. Another commenter felt that it was 
reasonable to allow states a choice between using PM10 or 
PM2.5 increments during a transition period including SIP 
approval, where applicable.
    During the time since the proposal of this rule in 2007, we have 
reconsidered the need for the proposed transition period in the Federal 
PSD program to effectively implement the PM2.5 increments. 
In light of the importance of preventing significant deterioration of 
PM2.5 air quality and the amount of time that has passed 
since the initial promulgation of the PM2.5 NAAQS, we do not 
believe that further delay is warranted. We expect that most permits 
issued after October 20, 2011 will be from sources that submitted their 
PSD applications after the major source baseline date for 
PM2.5, which is defined as the date of publication of this 
final rule, so that they will be increment-consuming sources. 
Therefore, when these sources apply for their PSD permits, they will 
have had significant advance notice of when the PM2.5 
increments will become effective, i.e., 1 year from the date of 
publication of this final rule. The review and permitting of permit 
applications submitted prior to the publication date of this final rule 
should generally be completed prior to the effective date of 
PM2.5 increments and thus effectively have a transition 
period of 1 year to complete processing.
    Thus, we are requiring each source that receives its PSD permit 
after the effective date of the PM2.5 increments, regardless 
of when the application was submitted, to provide a demonstration that 
the source's proposed emissions increase, along with other increment-
consuming emissions, will not cause or contribute to a violation of the 
PM2.5 increments.
    Under this final rule, sources applying for a PSD permit under the 
Federal PSD program after the major source baseline date for 
PM2.5 (i.e., after the date of publication of this final 
rule), but before the PM2.5 increments become effective 
(i.e., the date 1 year after publication of this final rule), will be 
considered to consume PM2.5 increment. While EPA will not 
require any such source to include a PM2.5 increment 
analysis as part of its initial PSD application, an increment analysis 
ultimately will be required before the permit may be issued if the date 
of issuance will occur after the trigger date, when the 
PM2.5 increments become effective under the Federal PSD 
program.
    Finally, for the same reasons that we are not adopting the proposed 
transition period that would have exempted PSD applicants with pending 
permit applications from demonstrating compliance with the 
PM2.5 increment requirements under the Federal PSD program, 
we have decided not to provide an option for states to apply a 
transition period under 40 CFR 51.166. We believe it is appropriate for 
all increment-consuming sources subject to PM2.5 to 
demonstrate compliance with the PM2.5 increments when the 
required permit is issued after the PM2.5 increments become 
effective in the State's PSD regulations.

C. SILs and SMC for PM2.5

    In the 2007 NPRM, we explained our position that SILs and SMCs are 
not minimum required elements of an approvable SIP. While these de 
minimis values are widely considered to be useful components for 
implementing the PSD program, they are not absolutely necessary for the 
states to implement their PSD programs. That is, states can satisfy the 
statutory requirements for a PSD program by requiring each PSD 
applicant to submit air quality monitoring data and to conduct a 
comprehensive air quality impacts analysis for PM2.5 without 
using de minimis thresholds to exempt certain sources from such 
requirements. Because the de minimis values for PM2.5 (and 
other pollutants) are not mandatory elements, we proposed not to 
establish specific deadlines for submitting revisions to incorporate 
the specific values for PM2.5 into SIPs.
    One State/local commenter agreed that the SILs and SMCs should not 
be a required element of the PSD SIP. Another State/local commenter 
agreed with our proposal, but stated that EPA has the authority to 
include SILs and SMCs as minimum program requirements per the opinion 
set forth in Alabama Power. This commenter added that the EPA 
Environmental Appeals Board has affirmed EPA's interpretation of the 
Act to allow EPA to evaluate the significance of a source's impact when 
determining whether the source's emissions would ``cause or 
contribute'' to a NAAQS or increments violation under section 165(a)(3) 
of the Act.
    Two commenters disagreed with our proposed position and argued that 
SILs and SMCs should be mandatory elements of a State PSD program. One

[[Page 64900]]

of these commenters argued that the requirement to model without the 
use of screening models with SILs and SMCs is so unreasonable that EPA 
must require that states adopt the SILs and SMCs to meet the Purpose 
clause of the Act, which requires a balancing of environmental and 
economic considerations. The other opposing commenter stated that the 
increments, SILs, and SMCs need to be adopted as a single regulatory 
approach because the SILs and SMCs define when additional work is 
needed to ensure that PSD requirements, such as maintaining adequate 
increment, are met. This commenter added that there is no reason for 
sources to be placed in the position of conducting expensive modeling 
that can delay a project when it is unnecessary from an air quality 
perspective.
    We agree that the SILs and SMCs used as de minimis thresholds for 
the various pollutants are useful tools that enable permitting 
authorities and PSD applicants to screen out ``insignificant'' 
activities; however, the fact remains that these values are not 
required by the Act as part of an approvable SIP program. We believe 
that most states are likely to adopt the SILs and SMCs because of the 
useful purpose they serve regardless of our position that the values 
are not mandatory. Alternatively, states may develop more stringent 
values if they desire to do so. In any case, states are not under any 
SIP-related deadline for revising their PSD programs to add these 
screening tools.
    Using the SILs for PM2.5, when a proposed major new 
source or major modification of PM2.5 predicts (via air 
quality modeling) an impact less than the PM2.5 de minimis 
value, the proposed source or modification is not considered to have a 
significant air quality impact and would not need to complete a 
cumulative impact analysis involving an analysis of other sources in 
the area. Also, a source with a de minimis ambient impact would not be 
considered to cause or contribute to a violation of either the 
PM2.5 NAAQS or increments.
    The PM2.5 SILs will become effective under the Federal 
PSD program on the effective date of this final rule, that is, on 
December 20, 2010, when either EPA, or a State acting under a 
delegation of EPA's authority, implements the revised PSD permitting 
requirements for PM2.5 pursuant to 40 CFR 52.21. The SILs 
will be for use initially with the compliance demonstration for the 
PM2.5 NAAQS, and later for the PM2.5 increment 
analysis, under the Federal PSD program. We emphasize, however, that 
the PM2.5 SILs are not intended to be used as part of the 
determination of adverse impacts on AQRVs for PM2.5 in Class 
I areas.
    Similarly, we intend to use the PM2.5 SMC (4 [mu]g/
m3, 24-hour average) as a screening tool in the Federal PSD 
permit program beginning on December 20, 2010. Accordingly, when either 
the modeled PM2.5 impact of, or the existing ambient air 
quality within the area of, the proposed new major source or major 
modification is less than the PM2.5 SMC, the reviewing 
authority may exempt the source or modification from the monitoring 
data requirements for PM2.5 under 40 CFR 52.21(m).

IX. Other Regulatory Changes

    The Act provides that the PSD regulations apply to areas designated 
as ``attainment'' or ``unclassifiable'' as defined by the Act. When the 
original regulations were written, the Act provisions for designating 
areas as either ``attainment'' or ``unclassifiable'' were contained in 
sections 107(d)(1)(D) and (E), respectively. In 1990, Congress revised 
section 107 and changed the relevant paragraphs defining ``attainment'' 
and ``unclassifiable'' areas to sections 107(d)(1)(A)(ii) and (iii), 
respectively. In accordance with these statutory changes, we are 
correcting the references to the statutory classifications contained in 
the existing PSD rules to match the revised paragraphs in the Act. See 
revised 40 CFR 51.166(b)(14)(iii)(a) and (15)(i) and (ii), and 40 CFR 
52.21(b)(14)(iii)(a) and (15)(i) and (ii).
    In adding the SILs for PM2.5 in this final rule, we 
restructured paragraph (k) (``Source impact analysis'') in the existing 
PSD regulations at 40 CFR 51.166 and 52.21. Under the restructuring of 
paragraph (k), old paragraph (k)(2) is now paragraph (k)(1)(ii). To 
accommodate this restructuring change, we are also revising 
grandfathering provisions that are contained in existing paragraphs 
(i)(8) and (i)(9) at 40 CFR 51.166, and paragraphs (i)(9) and (i)(10) 
at 40 CFR 52.21, which contained references to requirements contained 
in paragraph (k)(2). As revised, the grandfathering provisions now 
reference new paragraph (k)(1)(ii).

X. Statutory and Executive Order Reviews

A. Executive Order 12866--Regulatory Planning and Review

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), this 
action is a ``significant regulatory action'' because it raises novel 
legal or policy issues arising out of legal mandates, the President's 
priorities, or the principle set forth in the Executive Order. 
Accordingly, EPA submitted this action to OMB for review under 
Executive Order 12866 and any changes made in response to OMB 
recommendations have been documented in the docket for this action.

B. Paperwork Reduction Act

    The information collection requirements in this rule have been 
submitted for approval to the OMB under the Paperwork Reduction Act, 44 
U.S.C. 3501 et seq. The information collection requirements are not 
enforceable until OMB approves them.
    Pursuant to title I, part C, of the Act, the PSD program requires 
the owner or operator to obtain a permit prior to either constructing a 
new major stationary source of air pollutants or making a major 
modification to an existing major stationary source. The information 
collection for sources under PSD results from the requirement for 
owners or operators to submit applications for NSR permits. In some 
cases, sources must conduct preconstruction monitoring to determine the 
existing ambient air quality. For reviewing authorities, the 
information collection results from the requirement to process permit 
applications and issue permits, and to transmit associated information 
to EPA. The EPA oversees the PSD program, and the information collected 
by sources and reviewing authorities is used to ensure that the program 
is properly implemented.
    The final rule will increase the PSD permitting burden for owners 
and operators of major stationary sources of PM2.5 emissions 
by adding PM2.5 increments to the list of existing 
increments for which air quality impact analyses must be carried out to 
track the amount of increment consumed by the proposed source and other 
sources in the area. Over the 3-year period covered by the ICR, we 
estimate an average annual burden totaling about 29,000 hours and $2.8 
million for all industry entities that will be affected by the final 
rule. For the same reasons, we also expect the final rule (when fully 
implemented) to increase burden for the State and local authorities 
reviewing PSD permit applications. In addition, there will be 
additional burden for State and local agencies to revise their SIPs to 
incorporate the proposed changes. Over the 3-year period covered by the 
ICR, we estimate that the average annual burden for all State and local 
reviewing authorities will total about 7,500 hours and $581,000. Burden 
is defined at 5 CFR 1320.3(b).

[[Page 64901]]

    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations in 40 CFR are listed in 40 CFR part 9. When this ICR is 
approved by OMB, the Agency will publish a technical amendment to 40 
CFR part 9 in the Federal Register to display the OMB control number 
for the approved information collection requirements contained in this 
final rule.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to prepare a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements under the Administrative 
Procedure Act or any other statute unless the Agency certifies that the 
rule will not have a significant economic impact on a substantial 
number of small entities. Small entities include small businesses, 
small organizations, and small governmental jurisdictions.
    For purposes of assessing the impacts of this rule on small 
entities, ``small entity'' is defined as: (1) A small business as 
defined by the Small Business Administration's regulations at 13 CFR 
121.201; (2) a small governmental jurisdiction that is a government of 
a city, county, town, school district or special district with a 
population of less than 50,000; and (3) a small organization that is 
any not-for-profit enterprise which is independently owned and operated 
and is not dominant in its field.
    After considering the economic impacts of this final rule on small 
entities, I certify that this action will not have a significant 
economic impact on a substantial number of small entities. This final 
rule will not impose any requirements on small entities because small 
entities are not subject to the requirements of this rule.

D. Unfunded Mandates Reform Act

    This action contains no Federal mandates under the provisions of 
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 
1531-1538 for State, local, or tribal governments or the private 
sector. The action imposes no enforceable duty on any State, local or 
tribal governments or the private sector. The final rules adds only a 
relatively small number of new requirements to the existing permit 
requirements already in place under the PSD program, since states are 
currently implementing a PM10 surrogate program pursuant to 
EPA guidance. Thus, this action is not subject to the requirements of 
sections 202 or 205 of UMRA.
    This rule is also not subject to the requirements of section 203 of 
UMRA because it contains no regulatory requirements that might 
significantly or uniquely affect small governments. The final rule 
applies only to new major stationary sources and to major modifications 
at existing major stationary sources.

E. Executive Order 13132--Federalism

    This final rule does not have federalism implications. It will not 
have substantial direct effects on the states, on the relationship 
between the national government and the states, or on the distribution 
of power and responsibilities among the various levels of government, 
as specified in Executive Order 13132. The final rule makes relatively 
minor changes to the established PSD program, simply making it possible 
for states to implement PSD for PM2.5 instead of relying on 
PM10 as a surrogate. Thus, Executive Order 13132 does not 
apply to this rule. In the spirit of Executive Order 13132, and 
consistent with EPA policy to promote communications between EPA and 
State and local governments, EPA specifically solicited comment on the 
proposed rule from State and local officials.

F. Executive Order 13175--Consultation and Coordination With Indian 
Tribal Governments

    This action does not have tribal implications, as specified in 
Executive Order 13175 (65 FR 67249, November 9, 2000). The final rule 
provides the elements to implement a PM2.5 PSD program in 
attainment areas. The Act provides for states to develop plans to 
regulate emissions of air pollutants within their jurisdictions. The 
Tribal Air Rule (TAR) under the Act gives tribes the opportunity to 
develop and implement Act programs to attain and maintain the 
PM2.5 NAAQS, but leaves to the discretion of the tribes the 
decision of whether to develop these programs and which programs, or 
appropriate elements of a program, they will adopt. Thus, Executive 
Order 13175 does not apply to this action.
    The EPA did reach out to national tribal organizations in 2006 to 
provide a forum for tribal professionals to provide input to the 
rulemaking. However, not much participation or input was received.

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

    This action is not subject to Executive Order 13045 (62 FR 19885, 
April 23, 1997) because it is not economically significant as defined 
in Executive Order 12866, and because the Agency does not believe the 
environmental health or safety risks addressed by this action present a 
disproportionate risk to children. One of the basic requirements of the 
PSD program is that new and modified major sources must demonstrate 
that any new emissions do not cause or contribute to air quality in 
violation of the NAAQS.

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

    This action is not a ``significant energy action'' as defined in 
Executive Order 13211 (66 FR 28355, May 22, 2001) because it is not 
likely to have a significant adverse effect on the supply, 
distribution, or use of energy. Further, we have concluded that this 
rule is not likely to have any adverse energy effects.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (NTTAA), Public Law 104-113, 12(d) (15 U.S.C. 272 note) 
directs EPA to use voluntary consensus standards in its regulatory 
activities unless to do so would be inconsistent with applicable law or 
otherwise impractical. Voluntary consensus standards are technical 
standards (e.g., materials specifications, test methods, sampling 
procedures, and business practices) that are developed or adopted by 
voluntary consensus standards bodies. The NTTAA directs EPA to provide 
Congress, through OMB, explanations when the Agency decides not to use 
available and applicable voluntary consensus standards.
    This action does not involve technical standards. Therefore, EPA 
did not consider the use of any voluntary consensus standards.

J. Executive Order 12898--Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations

    Executive Order 12898 (59 FR 7629, Feb. 16, 1994) establishes 
Federal executive policy on environmental justice. Its main provision 
directs Federal agencies, to the greatest extent practicable and 
permitted by law, to make environmental justice part of their mission 
by identifying and addressing,

[[Page 64902]]

as appropriate, disproportionately high and adverse human health or 
environmental effects of their programs, policies, and activities on 
minority populations and low-income populations in the United States.
    The EPA has determined that this final rule will not have 
disproportionately high and adverse human health or environmental 
effects on minority or low-income populations because it does not 
affect the level of protection provided to human health or the 
environment. This final rule will provide regulatory certainty for 
implementing the preconstruction NSR permitting program for 
PM2.5. However, the requirements are similar to the existing 
requirements of the PM10 program and hence do not impact the 
human health or environmental effects.

K. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, which includes a copy of the rule, 
to each House of the Congress and to the Comptroller General of the 
United States. The EPA will submit a report containing this rule and 
other required information to the U.S. Senate, the U.S. House of 
Representatives, and the Comptroller General of the United States prior 
to publication of the rule in the Federal Register. A major rule cannot 
take effect until 60 days after it is published in the Federal 
Register. This action is not a ``major rule'' as defined by 5 U.S.C. 
804(2). Nevertheless, this rule needs to be reviewed for the 
PM2.5 increments being promulgated herein so that they can 
be scrutinized by Congress as intended under section 166(b) of the Act. 
Even though the PM2.5 increments will not become applicable 
for 1 year, the final rule will become effective 60 days from the date 
of publication, that is, on December 20, 2010, for the screening tools 
(SILs and SMC) being established in this rule.

XI. Judicial Review

    Under section 307(b)(1) of the Act, petitions for judicial review 
of this action must be filed in the United States Court of Appeals for 
the District of Columbia Circuit by December 20, 2010. Any such 
judicial review is limited to only those objections that are raised 
with reasonable specificity in timely comments. Filing a petition for 
reconsideration by the Administrator of this final rule does not affect 
the finality of this rule for the purposes of judicial review nor does 
it extend the time within which a petition for judicial review may be 
filed, and shall not postpone the effectiveness of such rule or action. 
Under section 307(b)(2) of the Act, the requirements of this final 
action may not be challenged later in civil or criminal proceedings 
brought by us to enforce these requirements.

XII. Statutory Authority

    The statutory authority for this final action is provided by 
sections 101, 160, 163, 165, 166, 301, and 307(d) of the Act as amended 
(42 U.S.C. 7401, 7470, 7473, 7475, 7476, 7601, and 7607(d)).

List of Subjects

40 CFR Part 51

    Administrative practices and procedures, Air pollution control, 
Environmental protection, Intergovernmental relations.

40 CFR Part 52

    Administrative practices and procedures, Air pollution control, 
Environmental protection, Intergovernmental relations.

    Dated: September 30, 2010.
Lisa P. Jackson,
Administrator.

0
For the reasons set out in the preamble, title 40, chapter I of the 
Code of Federal Regulations is amended as follows:

PART 51--[AMENDED]

0
1. The authority citation for part 51 continues to read as follows:

    Authority:  23 U.S.C. 101; 42 U.S.C. 7401-7671q.

Subpart I--[Amended]

0
2. Section 51.165 is amended by revising the table in paragraph (b)(2) 
to read as follows:


Sec.  51.165  Permit requirements.

* * * * *
    (b) * * *
    (2) * * *

----------------------------------------------------------------------------------------------------------------
                                                                     Averaging time (hours)
          Pollutant                 Annual     -----------------------------------------------------------------
                                                       24               8                3               1
----------------------------------------------------------------------------------------------------------------
SO2..........................  1.0 [mu]g/m3     5 [mu]g/m3       ...............  25 [mu]g/m3
PM10.........................  1.0 [mu]g/m3     5 [mu]g/m3       ...............  ...............
PM2.5........................  0.3 [mu]g/m3     1.2 [mu]g/m3     ...............  ...............
NO2..........................  1.0 [mu]g/m3
CO...........................  ...............  ...............  0.5 mg/m3        ...............  2 mg/m3
----------------------------------------------------------------------------------------------------------------

* * * * *
0
3. Section 51.166 is amended as follows:
0
a. By revising paragraph (a)(6)(i);
0
b. By revising paragraph (b)(14)(i)(a);
0
c. By removing the period at the end of paragraph (b)(14)(i)(b) and 
adding ``; and'' in its place;
0
d. By adding paragraph (b)(14)(i)(c);
0
e. By revising paragraph (b)(14)(ii)(a);
0
f. By removing the period at the end of paragraph (b)(14)(ii)(b) and 
adding ``; and'' in its place;
0
g. By adding paragraph (b)(14)(ii)(c);
0
h. By revising paragraph (b)(14)(iii)(a);
0
i. By revising paragraph (b)(15)(i) and paragraph (b)(15)(ii) 
introductory text;
0
j. By revising the table in paragraph (c)(1);
0
k. By revising paragraph (c)(2);
0
l. By revising paragraph (i)(5)(i)(c);
0
m. By redesignating existing paragraphs (i)(5)(i)(d) through (j) as 
paragraphs (i)(5)(i)(e) through (k);
0
n. By adding new paragraph (i)(5)(i)(d);
0
o. By removing ``(k)(2)'' from paragraph (i)(8) and adding 
``(k)(1)(ii)'' in its place;
0
p. By removing in two places ``(k)(2)'' from paragraph (i)(9) and 
adding ``(k)(1)(ii)'' in those places;
0
q. By revising paragraph (k);
0
r. By removing the words ``particulate matter'' in the last sentence of 
paragraph (p)(4) introductory text and adding in their place 
``PM2.5, PM10''; and
0
s. By revising the table in paragraph (p)(4).


Sec.  51.166  Prevention of significant deterioration of air quality.

    (a) * * *
    (6) * * *

[[Page 64903]]

    (i) Any State required to revise its implementation plan by reason 
of an amendment to this section, with the exception of amendments to 
add new maximum allowable increases or other measures pursuant to 
section 166(a) of the Act, shall adopt and submit such plan revision to 
the Administrator for approval no later than 3 years after such 
amendment is published in the Federal Register. With regard to a 
revision to an implementation plan by reason of an amendment to 
paragraph (c) of this section to add maximum allowable increases or 
other measures, the State shall submit such plan revision to the 
Administrator for approval within 21 months after such amendment is 
published in the Federal Register.
* * * * *
    (b) * * *
    (14)(i) * * *
    (a) In the case of PM10 and sulfur dioxide, January 6, 
1975;
* * * * *
    (c) In the case of PM2.5, October 20, 2010.
    (ii) * * *
    (a) In the case of PM10 and sulfur dioxide, August 7, 
1977;
* * * * *
    (c) In the case of PM2.5, October 20, 2011.
    (iii) * * *
    (a) The area in which the proposed source or modification would 
construct is designated as attainment or unclassifiable under section 
107(d)(1)(A)(ii) or (iii) of the Act for the pollutant on the date of 
its complete application under 40 CFR 52.21 or under regulations 
approved pursuant to 40 CFR 51.166; and
* * * * *
    (15)(i) Baseline area means any intrastate area (and every part 
thereof) designated as attainment or unclassifiable under section 
107(d)(1)(A)(ii) or (iii) of the Act in which the major source or major 
modification establishing the minor source baseline date would 
construct or would have an air quality impact for the pollutant for 
which the baseline date is established, as follows: Equal to or greater 
than 1 [micro]g/m\3\ (annual average) for SO2, 
NO2, or PM10; or equal or greater than 0.3 
[micro]g/m\3\ (annual average) for PM2.5.
    (ii) Area redesignations under section 107(d)(1)(A)(ii) or (iii) of 
the Act cannot intersect or be smaller than the area of impact of any 
major stationary source or major modification which:
* * * * *
    (c) * * *
    (1) * * *

------------------------------------------------------------------------
                                                              Maximum
                                                             allowable
                                                             increase
                        Pollutant                           (micrograms
                                                             per cubic
                                                              meter)
------------------------------------------------------------------------
                              Class I Area
------------------------------------------------------------------------
PM2.5:
    Annual arithmetic mean..............................               1
    24-hr maximum.......................................               2
PM10:
    Annual arithmetic mean..............................               4
    24-hr maximum.......................................               8
Sulfur dioxide:
    Annual arithmetic mean..............................               2
    24-hr maximum.......................................               5
    3-hr maximum........................................              25
Nitrogen dioxide:
    Annual arithmetic mean..............................             2.5
------------------------------------------------------------------------
                              Class II Area
------------------------------------------------------------------------
PM2.5:
    Annual arithmetic mean..............................               4
    24-hr maximum.......................................               9
PM10:
    Annual arithmetic mean..............................              17
    24-hr maximum.......................................              30
Sulfur dioxide:
    Annual arithmetic mean..............................              20
    24-hr maximum.......................................              91
    3-hr maximum........................................             512
Nitrogen dioxide:
    Annual arithmetic mean..............................              25
------------------------------------------------------------------------
                             Class III Area
------------------------------------------------------------------------
PM2.5:
    Annual arithmetic mean..............................               8
    24-hr maximum.......................................              18
PM10:
    Annual arithmetic mean..............................              34
    24-hr maximum.......................................              60
Sulfur dioxide:
    Annual arithmetic mean..............................              40
    24-hr maximum.......................................             182
    3-hr maximum........................................             700
Nitrogen dioxide:

[[Page 64904]]

 
    Annual arithmetic mean..............................              50
------------------------------------------------------------------------

* * * * *
    (2) Where the State can demonstrate that it has alternative 
measures in its plan other than maximum allowable increases as defined 
under paragraph (c)(1) of this section, that satisfy the requirements 
in sections 166(c) and 166(d) of the Clean Air Act for a regulated NSR 
pollutant for which the Administrator has established maximum allowable 
increases pursuant to section 166(a) of the Act, the requirements for 
maximum allowable increases for that pollutant under paragraph (c)(1) 
of this section shall not apply upon approval of the plan by the 
Administrator. The following regulated NSR pollutants are eligible for 
such treatment:
    (i) Nitrogen dioxide.
    (ii) PM2.5.
* * * * *
    (i) * * *
    (5) * * *
    (i) * * *
    (c) PM2.5-4 [mu]g/m\3\, 24-hour average;
    (d) PM10-10 [mu]g/m\3\, 24-hour average;
* * * * *
    (k) Source impact analysis--(1) Required demonstration. The plan 
shall provide that the owner or operator of the proposed source or 
modification shall demonstrate that allowable emission increases from 
the proposed source or modification, in conjunction with all other 
applicable emissions increases or reduction (including secondary 
emissions), would not cause or contribute to air pollution in violation 
of:
    (i) Any national ambient air quality standard in any air quality 
control region; or
    (ii) Any applicable maximum allowable increase over the baseline 
concentration in any area.
    (2) Significant impact levels. The plan may provide that, for 
purposes of PM2.5, the demonstration required in paragraph 
(k)(1) of this section is deemed to have been made if the emissions 
increase from the new stationary source alone or from the modification 
alone would cause, in all areas, air quality impacts less than the 
following amounts:

----------------------------------------------------------------------------------------------------------------
            Pollutant                Averaging time        Class I area       Class II area      Class III area
----------------------------------------------------------------------------------------------------------------
PM2.5...........................  Annual.............  0.06 [mu]g/m\3\      0.3 [mu]g/m\3\     0.3 [mu]g/m\3\
                                  24-hour............  0.07 [mu]g/m\3\      1.2 [mu]g/m\3\     1.2 [mu]g/m\3\
----------------------------------------------------------------------------------------------------------------

* * * * *
    (p) * * *
    (4) * * *

------------------------------------------------------------------------
                                                              Maximum
                                                             allowable
                                                             increase
                        Pollutant                           (micrograms
                                                             per cubic
                                                              meter)
------------------------------------------------------------------------
PM2.5:
    Annual arithmetic mean..............................               4
    24-hr maximum.......................................               9
PM10:
    Annual arithmetic mean..............................              17
    24-hr maximum.......................................              30
Sulfur dioxide:
    Annual arithmetic mean..............................              20
    24-hr maximum.......................................              91
    3-hr maximum........................................             325
Nitrogen dioxide:
    Annual arithmetic mean..............................              25
------------------------------------------------------------------------

* * * * *

0
4. Appendix S to part 51 is amended by revising the table in section 
III.A to read as follows:

Appendix S to Part 51--Emission Offset Interpretative Ruling

* * * * *
    III. * * *
    A. * * *

----------------------------------------------------------------------------------------------------------------
                                                                     Averaging time (hours)
          Pollutant                 Annual     -----------------------------------------------------------------
                                                       24               8               3               1
----------------------------------------------------------------------------------------------------------------
SO2..........................  1.0 [mu]g/m\3\   5 [mu]g/m\3\     ...............  25 [mu]g/m\3\
PM10.........................  1.0 [mu]g/m\3\   5 [mu]g/m\3\     ...............  .............  ...............

[[Page 64905]]

 
PM2.5........................  0.3 [mu]g/m\3\   1.2 [mu]g/m\3\   ...............  .............  ...............
NO2..........................  1.0 [mu]g/m\3\   ...............  ...............  .............  ...............
CO...........................  ...............  ...............  0.5 mg/m\3\      .............  2 mg/m\3\
----------------------------------------------------------------------------------------------------------------

* * * * *

PART 52--[AMENDED]

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

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

Subpart A--[Amended]

0
2. Section 52.21 is amended as follows:
0
a. By revising paragraph (b)(14)(i)(a);
0
b. By removing the period at the end of paragraph (b)(14)(i)(b) and 
adding ``; and'' in its place;
0
c. By adding paragraph (b)(14)(i)(c);
0
d. By revising paragraph (b)(14)(ii)(a);
0
e. By removing the period at the end of paragraph (b)(14)(ii)(b) and 
adding ``; and'' in its place;
0
f. By adding paragraph (b)(14)(ii)(c);
0
g. By revising paragraph (b)(14)(iii)(a);
0
h. By revising paragraph (b)(15)(i) and paragraph (b)(15)(ii) 
introductory text;
0
i. By revising the table in paragraph (c);
0
j. By revising paragraph (i)(5)(i);
0
k. By removing ``(k)(2)'' from paragraph (i)(9) and adding 
``(k)(1)(ii)'' in its place;
0
l. By removing in two places ``(k)(2)'' from paragraph (i)(10) and 
adding ``(k)(1)(ii)'' in those places;
0
m. By revising paragraph (k);
0
n. By removing the words ``particulate matter'' in the last sentence of 
paragraph (p)(5) introductory text and adding in their place 
``PM2.5, PM10''; and
0
o. By revising the table in paragraph (p)(5).


Sec.  52.21  Prevention of significant deterioration of air quality.

* * * * *
    (b) * * *
    (14)(i) * * *
    (a) In the case of PM10 and sulfur dioxide, January 6, 
1975;
* * * * *
    (c) In the case of PM2.5, October 20, 2010.
    (ii) * * *
    (a) In the case of PM10 and sulfur dioxide, August 7, 
1977;
* * * * *
    (c) In the case of PM2.5, October 20, 2011.
    (iii) * * *
    (a) The area in which the proposed source or modification would 
construct is designated as attainment or unclassifiable under section 
107(d)(1)(A)(ii) or (iii) of the Act for the pollutant on the date of 
its complete application under 40 CFR 52.21 or under regulations 
approved pursuant to 40 CFR 51.166; and
* * * * *
    (15)(i) Baseline area means any intrastate area (and every part 
thereof) designated as attainment or unclassifiable under section 
107(d)(1)(A)(ii) or (iii) of the Act in which the major source or major 
modification establishing the minor source baseline date would 
construct or would have an air quality impact for the pollutant for 
which the baseline date is established, as follows: equal to or greater 
than 1 [micro]g/m\3\ (annual average) for SO2, 
NO2, or PM10; or equal or greater than 0.3 
[micro]g/m\3\ (annual average) for PM2.5.
    (ii) Area redesignations under section 107(d)(1)(A)(ii) or (iii) of 
the Act cannot intersect or be smaller than the area of impact of any 
major stationary source or major modification which:
* * * * *
    (c) * * *

------------------------------------------------------------------------
                                                              Maximum
                                                             allowable
                                                             increase
                        Pollutant                           (micrograms
                                                             per cubic
                                                              meter)
------------------------------------------------------------------------
                              Class I Area
------------------------------------------------------------------------
PM2.5:
    Annual arithmetic mean..............................               1
    24-hr maximum.......................................               2
PM10:
    Annual arithmetic mean..............................               4
    24-hr maximum.......................................               8
Sulfur dioxide:
    Annual arithmetic mean..............................               2
    24-hr maximum.......................................               5
    3-hr maximum........................................              25
Nitrogen dioxide:
    Annual arithmetic mean..............................             2.5
------------------------------------------------------------------------
                              Class II Area
------------------------------------------------------------------------
PM2.5:
    Annual arithmetic mean..............................               4
    24-hr maximum.......................................               9
PM10:
    Annual arithmetic mean..............................              17
    24-hr maximum.......................................              30
Sulfur dioxide:
    Annual arithmetic mean..............................              20

[[Page 64906]]

 
    24-hr maximum.......................................              91
    3-hr maximum........................................             512
Nitrogen dioxide:
    Annual arithmetic mean..............................              25
------------------------------------------------------------------------
                             Class III Area
------------------------------------------------------------------------
PM2.5:
    Annual arithmetic mean..............................               8
    24-hr maximum.......................................              18
PM10:
    Annual arithmetic mean..............................              34
    24-hr maximum.......................................              60
Sulfur dioxide:
    Annual arithmetic mean..............................              40
    24-hr maximum.......................................             182
    3-hr maximum........................................             700
Nitrogen dioxide:
    Annual arithmetic mean..............................              50
------------------------------------------------------------------------

* * * * *
    (i) * * *
    (5) * * *
    (i) The emissions increase of the pollutant from the new source or 
the net emissions increase of the pollutant from the modification would 
cause, in any area, air quality impacts less than the following 
amounts:
    (a) Carbon monoxide--575 [mu]g/m\3\, 8-hour average;
    (b) Nitrogen dioxide--14 [mu]g/m\3\, annual average;
    (c) PM2.5--4 [mu]g/m\3\, 24-hour average;
    (d) PM10--10 [mu]g/m\3\, 24-hour average;
    (e) Sulfur dioxide--13 [mu]g/m\3\, 24-hour average;
    (f) Ozone;
    (g) Lead--0.1 [mu]g/m\3\, 3-month average;
    (h) Fluorides--0.25 [mu]g/m\3\, 24-hour average;
    (i) Total reduced sulfur--10 [mu]g/m\3\, 1-hour average;
    (j) Hydrogen sulfide--0.2 [mu]g/m\3\, 1-hour average;
    (k) Reduced sulfur compounds-- 10 [mu]g/m\3\, 1-hour average; or

    Note to paragraph (c)(50)(i)(f):
     No de minimis air quality level is provided for ozone. However, 
any net emissions increase of 100 tons per year or more of volatile 
organic compounds or nitrogen oxides subject to PSD would be 
required to perform an ambient impact analysis, including the 
gathering of ambient air quality data.

* * * * *
    (k) Source impact analysis--(1) Required demonstration. The owner 
or operator of the proposed source or modification shall demonstrate 
that allowable emission increases from the proposed source or 
modification, in conjunction with all other applicable emissions 
increases or reductions (including secondary emissions), would not 
cause or contribute to air pollution in violation of:
    (i) Any national ambient air quality standard in any air quality 
control region; or
    (ii) Any applicable maximum allowable increase over the baseline 
concentration in any area.
    (2) Significant impact levels. For purposes of PM2.5, 
the demonstration required in paragraph (k)(1) of this section is 
deemed to have been made if the emissions increase from the new 
stationary source alone or from the modification alone would cause, in 
all areas, air quality impacts less than the following amounts:

----------------------------------------------------------------------------------------------------------------
           Pollutant               Averaging time        Class I area       Class II area       Class III area
----------------------------------------------------------------------------------------------------------------
PM2.5..........................  Annual............  0.06 [mu]g/m\3\      0.3 [mu]g/m\3\     0.3 [mu]g/m\3\
                                 24-hour...........  0.07 [mu]g/m\3\      1.2 [mu]g/m\3\     1.2 [mu]g/m\3\
----------------------------------------------------------------------------------------------------------------

* * * * *
    (p) * * *

[[Page 64907]]

    (5) * * *

------------------------------------------------------------------------
                                                              Maximum
                                                             allowable
                                                             increase
                        Pollutant                           (micrograms
                                                             per cubic
                                                              meter)
------------------------------------------------------------------------
PM2.5:
    Annual arithmetic mean..............................               4
    24-hr maximum.......................................               9
PM10:
    Annual arithmetic mean..............................              17
    24-hr maximum.......................................              30
Sulfur dioxide:
    Annual arithmetic mean..............................              20
    24-hr maximum.......................................              91
    3-hr maximum........................................             325
Nitrogen dioxide:
    Annual arithmetic mean..............................              25
------------------------------------------------------------------------

* * * * *
[FR Doc. 2010-25132 Filed 10-19-10; 8:45 am]
BILLING CODE 6560-50-P