[Federal Register Volume 76, Number 234 (Tuesday, December 6, 2011)]
[Proposed Rules]
[Pages 76112-76115]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-31183]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R09-OAR-2011-0881; FRL-9499-3]


Approval and Promulgation of Implementation Plans, State of 
California, San Joaquin Valley Unified Air Pollution Control District, 
New Source Review

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing to approve revisions to the San Joaquin 
Valley Air Pollution Control District portion of the California State 
Implementation Plan (SIP) submitted by the California Air Resources 
Board. These revisions concern pre-construction review of new and 
modified stationary sources (``new source review'' or NSR) within the 
District. The revisions are intended to remedy deficiencies we 
identified when granting limited approval and limited disapproval to 
the rules in 2010, and to add NSR requirements for new major sources of 
fine particulate matter (PM2.5) and major modifications at 
existing major PM2.5 sources as required by the Clean Air 
Act. We are taking comments on this proposal and plan to follow with a 
final action.

DATES: Any comments must arrive by January 5, 2012.

ADDRESSES: Submit comments, identified by docket number EPA-R09-

[[Page 76113]]

OAR-2011-0881, by one of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the on-line instructions.
     Email: [email protected].
     Mail or deliver: Gerardo Rios (Air-3), U.S. Environmental 
Protection Agency Region IX, 75 Hawthorne Street, San Francisco, CA 
94105.
    Instructions: All comments will be included in the public docket 
without change and may be made available online at http://www.regulations.gov, including any personal information provided, 
unless the comment includes Confidential Business Information (CBI) or 
other information whose disclosure is restricted by statute. 
Information that you consider CBI or otherwise protected should be 
clearly identified as such and should not be submitted through http://www.regulations.gov or email. http://www.regulations.gov is an 
``anonymous access'' system, and EPA will not know your identity or 
contact information unless you provide it in the body of your comment. 
If you send email directly to EPA, your email address will be 
automatically captured and included as part of the public comment. If 
EPA cannot read your comment due to technical difficulties and cannot 
contact you for clarification, EPA may not be able to consider your 
comment.
    Docket: The index to the docket for this action is available 
electronically at http://www.regulations.gov and in hard copy at EPA 
Region IX, 75 Hawthorne Street, San Francisco, California. While all 
documents in the docket are listed in the index, some information may 
be publicly available only at the hard copy location (e.g., copyrighted 
material), and some may not be publicly available in either location 
(e.g., CBI). To inspect the hard copy materials, please schedule an 
appointment during normal business hours with the contact listed in the 
FOR FURTHER INFORMATION CONTACT section below.

FOR FURTHER INFORMATION CONTACT: Laura Yannayon, Permits Office (AIR-
3), U.S. Environmental Protection Agency, Region IX, (415) 972-3534, 
[email protected].

SUPPLEMENTARY INFORMATION: Throughout this document, ``we,'' ``us'' and 
``our'' refer to EPA.

Table of Contents

I. Regulatory Context
II. The State's Submittals of Revised District Rules
    A. What rules did the State submit?
    B. Are there other versions of these rules?
    C. What are the purposes for revisions to these rules?
III. EPA's Evaluation and Action on the Revised Rules
    A. How is EPA evaluating the rules?
    B. Do the rules meet the evaluation criteria?
    C. Public comment and final action.
IV. Statutory and Executive Order Reviews

I. Regulatory Context

    On May 11, 2010 (75 FR 26102), we finalized a limited approval and 
limited disapproval of San Joaquin Valley Unified Air Pollution Control 
District (``SJVUAPCD'' or ``District'') Rules 2020 (Exemptions) and 
2201 (New and Modified Stationary Source Review Rule), which were 
submitted to EPA by the California Air Resources Board (CARB) to 
satisfy certain applicable requirements under the Clean Air Act (CAA or 
``Act''). These rules strengthened the SIP, but contained deficiencies 
in enforceability that prevented full approval. Both rules contained 
references to California Health and Safety Code (CH&SC) under 
circumstances where the State law has not been submitted to EPA for 
approval into the SIP and thereby unacceptably ambiguous.
    In our May 11, 2010 final rule, we explained that the District 
could remedy these deficiencies by replacing the references to the 
CH&SC with an unambiguous description of the agricultural sources 
covered by the permitting exemption in Rule 2020 and the applicability 
of the offset requirement to agricultural sources in Rule 2201, or by 
submitting the State law provisions as a SIP revision. See 75 FR at 
26106 (May 11, 2010). EPA is now proposing action on CARB's submittal 
of new versions of Rules 2020 and 2201, which the District amended to 
resolve the deficiencies we identified in our May 11, 2010 final rule.
    In a separate interim final action, published in the Rules section 
in today's Federal Register, we are deferring sanctions that would 
otherwise apply to the SJVUAPCD based on EPA's May 11, 2010 limited 
approval and limited disapproval action on previous versions of 
District Rules 2020 and 2201.
    In addition to addressing these deficiencies, we are also proposing 
to approve revisions to Rule 2201 that address the 1997 
p.m.2.5 standard. These revisions ensure that new major 
sources of PM2.5, and major modifications at existing major 
PM2.5 sources, will undergo pre-construction review that 
requires permit applicants to apply Lowest Achievable Emission Rate 
(LAER) and provide emission offsets.

II. The State's Submittals of Revised District Rules

A. What rules did the State submit?

    Table 1 lists the rules on which we are proposing action with the 
dates that they were revised by the District and submitted to EPA by 
CARB.

                                            TABLE 1--SUBMITTED RULES
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            Local agency             Rule            Rule title              Amended        Submitted
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SJVUAPCD...........................            2020  Exemptions.................         8/18/11         9/28/11
SJVUAPCD...........................            2201  New and Modified Stationary         4/21/11        05/19/11
                                                      Source Review Rule.
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    On October 25, 2011, we found that the submittal of District Rule 
2020 and Rule 2201 met the completeness criteria in 40 CFR part 51, 
appendix V, which must be met before formal EPA review.

B. Are there other versions of these rules?

    As discussed above, we approved versions of Rule 2020 and Rule 2201 
into the SIP on May 11, 2010 (75 FR 26102). The amended versions of 
Rule 2020, adopted by the District on August 18, 2011 and submitted to 
us by CARB on September 28, 2011, and of Rule 2201, adopted by the 
District on April 21, 2011 and submitted to us by CARB on May 19, 2011, 
are the only revisions to the rule that the District has adopted since 
our 2010 limited approval.

C. What are the purposes for revisions to these rules?

    Section 110(a) of the CAA requires states to submit regulations 
that control volatile organic compounds, nitrogen oxides, particulate 
matter, and other air pollutants which harm human health and the 
environment. Permitting rules were developed as part of the local air 
district's programs to control these pollutants.

[[Page 76114]]

    The purpose of District Rule 2020 (``Exemptions'') is to specify 
emission units that are not required to obtain an Authority to 
Construct or Permit to Operate. Rule 2020 also specifies the 
recordkeeping requirements to verify such exemptions and outlines the 
compliance schedule for emission units that lose the exemption.
    The purpose of District Rule 2201 (``New and Modified Stationary 
Source Review Rule'') is to provide for the review of new and modified 
stationary sources of air pollution and to provide mechanisms including 
control technology requirements and emission trade-offs by which 
Authorities to Construct such sources may be granted, without 
interfering with the attainment or maintenance of ambient air quality 
standards. District Rule 2201 is also intended to provide for no net 
increase in emissions above specified thresholds from new and modified 
stationary sources of all nonattainment pollutants and their 
precursors.

III. EPA's Evaluation and Action on the Revised Rules

A. How is EPA evaluating the rules?

    The rules that are the subject of this proposed action amend rules 
on which EPA has previously taken limited approval and limited 
disapproval action. EPA previously took limited approval/limited 
disapproval action on the rules because, while they met most of the 
statutory and regulatory requirements for SIPs regarding minor NSR, 
major nonattainment NSR, and enforceability of permit conditions, they 
also contained certain unacceptably ambiguous provisions which 
prevented full approval. Therefore, we have focused our review on the 
changes in the rules that the District adopted to remedy the 
deficiencies that we identified as well as those that the District has 
newly introduced into the rules.
    The relevant statutory provisions for our review of the submitted 
rules include CAA sections 110(a), 110(l), 172(c)(5) and 40 CFR 51.160-
165. Section 110(a) requires that SIP rules be enforceable, while 
section 110(l) precludes EPA approval of SIP revisions that would 
interfere with any applicable requirement concerning attainment and 
reasonable further progress or any other applicable requirement of the 
Act. Section 172(c)(5) requires SIPs with nonattainment areas to 
require permits for the construction and operation of new or modified 
major stationary sources in accordance with section 173, which 
establishes, among other requirements, a control technology requirement 
of ``lowest achievable emission rate'' (LAER) and an emissions offset 
requirement for such new or modified stationary sources.
    Title 40, part 51, section 165 of title 40 of the Code of Federal 
Regulations (40 CFR 51.165) establishes more specific requirements for 
NSR SIPs to satisfy the requirements of sections 172(c)(5) and 173. 
With respect to PM2.5 and its precursors, those 
requirements, among others, include a new ``major source'' threshold of 
100 tons per year, ``major modification'' thresholds of 10 tons per 
year (direct PM2.5) or 40 tons per year for precursors 
NOX and SO2, and an offset ratio of at least 1:1. 
See 73 FR 28321 (May 16, 2008).

B. Do the rules meet the evaluation criteria?

    EPA found Rule 2020 deficient because the permitting exemption for 
agricultural sources relied on a cross-reference to CH&SC Section 
42301.16, which is not approved in the SIP and allows permitting 
authorities to expand the universe of exempted sources if certain 
findings are made in a public hearing, which would change the permit 
exemption threshold without requiring SIP approval. To address this 
deficiency, the District revised Rule 2020 by replacing the statutory 
reference to CH&SC section 42301.16 with a clear description of the 
sources covered by the exemption.
    In addition to resolving the deficiency, the District also added an 
exemption for wind machines, and a definition of ``wind machine,'' to 
Rule 2020. A wind machine consists of a large fan mounted on a tower 
and powered by an internal combustion engine and used only on the 
coldest winter nights to provide frost protection for certain type of 
crops (like citrus) when temperatures are forecast to drop below 
28[deg] F. Annual usage varies naturally with the frequency and 
duration of cold spells in the San Joaquin Valley during any given 
winter; however, the District estimates average annual use of any given 
wind machine at 35 hours per year. Emissions per unit vary depending 
upon the size of the engine used to power the fans and the fuel used to 
power the engine, among other factors, but can reasonably be estimated 
at approximately 15 pounds per day of NOX.\1\
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    \1\ Most engines are fired on propane, although some are fired 
on diesel. Some engines are electric, and have no emissions. Based 
on a NOX emission factor for uncontrolled propane and use 
of a 100-horsepower engine at 65% load from 8 p.m. to 7 a.m.: 100 hp 
x 10 g NOX/bhp-hr x 0.65 x 11 hours/day/454 g/lb = 15.8 
pounds per day per unit.
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    We recognize that, when the applicable frost warnings occur, the 
number of wind machines that operate all night long in certain parts of 
the valley can number in the thousands, and that NOX 
emissions during those particular nights are not necessarily 
insignificant from the standpoint of PM10 and 
PM2.5 formation, particularly in the San Joaquin Valley. 
Nonetheless, we conclude that the permitting exemption for the wind 
machines is acceptable because wind machines are not subject to any 
prohibitory District rule,\2\ because no controls would approach any 
reasonable threshold of cost-effectiveness given the very limited use 
of the machines and the low emissions per unit, and because neither the 
EPA-approved San Joaquin Valley PM10 maintenance plan nor 
the EPA-approved PM2.5 attainment plan relies on emissions 
reductions from this particular episodic source of emissions.
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    \2\ See District Rule 4702 (``Internal Combustion Engines--Phase 
2''), most recently approved by EPA at 73 FR 1819 (January 10, 
2008).
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    EPA found Rule 2201 deficient because the offset exemption for 
minor agricultural sources was ambiguous because it relied on a cross-
reference to the CH&SC, rather than explicitly delineating the 
exemption within the rule itself. The District remedied this deficiency 
by replacing the CH&SC references with a clear description of the 
applicability of the offset requirement to agricultural sources.
    The District also added requirements to Rule 2201 to address the 
1997 p.m.2.5 standard. We have reviewed the PM2.5 
provisions of the rule, including permitting thresholds, Best Available 
Control Technology (which in California is the same as Federal LAER), 
and emission offset requirements (including ratios based on distance 
from the new or modified emission unit), and found that they satisfy 
the CAA requirements for NSR for new and modified major stationary 
sources of PM2.5.\3\
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    \3\ While we believe that the District is appropriately 
accounting for condensable particulate matter in regulating 
PM2.5 from stationary sources, we recommend that District 
rules be amended to be explicit regarding the inclusion of the 
condensable portion of particulate matter in the definition of 
PM2.5. See 40 CFR 165(a)(1)(xxxvii)(D). For example, the 
District should amend the definition of ``PM2.5'' in Rule 
2201, as has been done for the definition of ``PM10'' in 
Rule 2201 to refer to Rule 1020 (``Definitions''), and then add a 
definition of ``PM2.5'' in Rule 1020, as has been done 
for ``PM10,'' that refers to applicable state and federal 
test methods. Lastly, corresponding changes should also then be made 
to section 5.0 (``Test Methods'') in District Rule 1081 (``Source 
Sampling'') for PM2.5 in a similar manner as the District 
has already done for PM10.
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    CAA section 110(l) precludes EPA from approving SIP revisions that 
would interfere with any applicable

[[Page 76115]]

requirement concerning attainment and reasonable further progress (RFP) 
or any other applicable requirement of the Act. EPA has evaluated 
amended Rules 2020 and 2201 and concluded that they would not interfere 
with attainment and RFP for any of the NAAQS, and would not interfere 
with any other applicable requirement of the Act. First, amended Rule 
2201 does not relax the SIP in any aspect; rather, the amended rule 
strengthens the SIP by applying NSR requirements to new or modified 
major sources of PM2.5. Second, while amended Rule 2020 
contains a new exemption for wind machines, this exemption would not 
lead to an increase in emissions because, as explained above, wind 
machines would not be subject to any particular controls under the NSR 
rule even if no such exemption were in effect because no control device 
would be considered cost-effective. Lastly, as noted above, neither the 
EPA-approved San Joaquin Valley PM10 maintenance plan nor 
the EPA-approved PM2.5 attainment plan relies on emissions 
reductions from this particular episodic source of emissions. Thus, we 
find the SIP revisions acceptable under CAA section 110(l).
    EPA's technical support document (TSD) for this rulemaking has more 
information about these rules, including our evaluation and 
recommendation to approve them into the SIP.

C. Public Comment and Final Action

    Because EPA believes the submitted rules fulfill all relevant 
requirements, we are proposing to fully approve them as revisions to 
the SIP pursuant to section 110(k)(3) of the Act. Specifically, we are 
proposing to approve SJVUAPCD Rule 2020 (``Exemptions''), as amended by 
the District on August 18, 2011 and submitted by CARB on September 28, 
2011; and SJVUAPCD Rule 2201 (``New and Modified Stationary Source 
Review Rule''), as amended by the District on April 21, 2011 and 
submitted by CARB on May 19, 2011, as revisions to the California SIP. 
In so doing, we conclude that the District has remedied deficiencies 
that EPA had identified in previous versions of the rules and that 
other changes made by the District to the rules meet the applicable NSR 
requirements of the Act and our regulations.
    We will accept comments from the public on this proposal for the 
next 30 days. Unless we receive convincing new information during the 
comment period, we intend to publish a final approval action that will 
incorporate these rule(s) into the federally enforceable SIP.

IV. Statutory and Executive Order Reviews

    Under the Clean Air Act, the Administrator is required to approve a 
SIP submission that complies with the provisions of the Act and 
applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). 
Thus, in reviewing SIP submissions, EPA's role is to approve State 
choices, provided that they meet the criteria of the Clean Air Act. 
Accordingly, this proposed action merely approves State law as meeting 
Federal requirements and does not impose additional requirements beyond 
those imposed by State law. For that reason, this proposed action:
     Is not a ``significant regulatory action'' subject to 
review by the Office of Management and Budget under Executive Order 
12866 (58 FR 51735, October 4, 1993);
     Does not impose an information collection burden under the 
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Is certified as not having a significant economic impact 
on a substantial number of small entities under the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.);
     Does not contain any unfunded mandate or significantly or 
uniquely affect small governments, as described in the Unfunded 
Mandates Reform Act of 1995 (Pub. L. 104-4);
     Does not have Federalism implications as specified in 
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Is not an economically significant regulatory action based 
on health or safety risks subject to Executive Order 13045 (62 FR 
19885, April 23, 1997);
     Is not a significant regulatory action subject to 
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of Section 12(d) of the 
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 
note) because application of those requirements would be inconsistent 
with the Clean Air Act; and
     Does not provide EPA with the discretionary authority to 
address disproportionate human health or environmental effects with 
practical, appropriate, and legally permissible methods under Executive 
Order 12898 (59 FR 7629, February 16, 1994).
    In addition, this proposed rule does not have tribal implications 
as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), 
because the SIP is not approved to apply in Indian country located in 
the State, and EPA notes that it will not impose substantial direct 
costs on tribal governments or preempt tribal law.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by 
reference, Intergovernmental relations, Ozone, Particulate matter, 
Reporting and recordkeeping requirements.

    Dated: November 22, 2011.
Jared Blumenfeld,
Regional Administrator, Region IX.
[FR Doc. 2011-31183 Filed 12-5-11; 8:45 am]
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