[Federal Register Volume 81, Number 37 (Thursday, February 25, 2016)]
[Proposed Rules]
[Pages 9391-9395]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-03894]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R05-OAR-2015-0315; FRL-9942-73-Region 5]


Air Plan Approval; Indiana; Removal of Stage II Gasoline Vapor 
Recovery Requirements

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency (EPA) is proposing to 
approve, as a revision to the State Implementation Plan (SIP), a 
submittal by the Indiana Department of Environmental Management (IDEM) 
on April 27, 2015 and September 10, 2015. The submittal concerns the 
state's Stage II vapor recovery (Stage II) program for Clark and Floyd 
counties in southern Indiana as part of the Louisville, Kentucky ozone 
nonattainment area, and Lake and Porter counties in northwest Indiana 
as part of the Chicago ozone nonattainment area. The submittal removes 
Stage II requirements from both nonattainment areas, as a component of 
the Indiana ozone SIP. The submittal also includes a demonstration 
under the Clean Air Act (CAA) that addresses emission impacts 
associated with the removal of the Stage II program.

DATES: Comments must be received on or before March 28, 2016.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R05-
OAR-2015-0315 at http://www.regulations.gov or via email to 
[email protected]. For comments submitted at Regulations.gov, 
follow the online instructions for submitting comments. Once submitted, 
comments cannot be edited or removed from Regulations.gov. For either 
manner of submission, EPA may publish any comment received to its 
public docket. Do not submit electronically any information you 
consider to be Confidential Business Information (CBI) or other 
information whose disclosure is restricted by statute. Multimedia 
submissions (audio, video, etc.) must be accompanied by a written 
comment. The written comment is considered the official comment and 
should include discussion of all points you wish to make. EPA will 
generally not consider comments or comment contents located outside of 
the primary submission (i.e. on the web, cloud, or other file sharing 
system). For additional submission methods, please contact the person

[[Page 9392]]

identified in the FOR FURTHER INFORMATION CONTACT section. For the full 
EPA public comment policy, information about CBI or multimedia 
submissions, and general guidance on making effective comments, please 
visit http://www2.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT: Francisco J. Acevedo, Mobile Source 
Program Manager, Control Strategies Section, Air Programs Branch (AR-
18J), Environmental Protection Agency, Region 5, 77 West Jackson 
Boulevard, Chicago, Illinois 60604, (312) 886-6061, 
[email protected].

SUPPLEMENTARY INFORMATION: Throughout this document whenever ``we,'' 
``us,'' or ``our'' is used, we mean EPA. This supplementary information 
section is arranged as follows:

I. Background
II. What changes have been made to the Indiana Stage II Vapor 
Recovery Program?
III. What is EPA's analysis of the state's submittal?
IV. What action is EPA proposing to take?
V. Incorporation by Reference
VI. Statutory and Executive Order Reviews

I. Background

    Stage II and onboard refueling vapor recovery (ORVR) are two types 
of emission control systems that capture fuel vapors from vehicle gas 
tanks during refueling. Stage II systems are specifically installed at 
gasoline dispensing facilities (GDF) and capture the refueling fuel 
vapors at the gasoline pump nozzle. The system carries the vapors back 
to the underground storage tank at the GDF to prevent the vapors from 
escaping to the atmosphere. ORVR systems are carbon canisters installed 
directly on automobiles to capture the fuel vapors evacuated from the 
gasoline tank before they reach the nozzle. The fuel vapors captured in 
the carbon canisters are then combusted in the engine when the 
automobile is in operation.
    Both Stage II and ORVR were required by the 1990 Amendments to the 
CAA under sections 182(b)(3) and 202(a)(6), respectively. In some 
areas, Stage II has been in place for over 25 years. It was not, 
however, widely implemented by the states until the early to mid-1990s 
as a result of the CAA requirements for ``moderate,'' ``serious,'' 
``severe,'' and ``extreme'' ozone nonattainment areas, classified under 
section 181 of the CAA, and for states in the Northeast Ozone Transport 
Region (OTR) under section 184(b)(2) of the CAA.
    Under section 202(a)(6) of the CAA, Congress required EPA to 
promulgate regulations for ORVR for light-duty vehicles (passenger 
cars). EPA adopted these requirements in 1994, at which point moderate 
ozone nonattainment areas were no longer subject to the section 
182(b)(3) Stage II requirement. See 59 FR 16262 (April 6, 1994). 
However, some moderate areas retained Stage II requirements to provide 
a control method to comply with rate-of-progress emission reduction 
targets. ORVR equipment has been phased in for new passenger vehicles 
beginning with model year 1998, and starting in 2001 for light-duty 
trucks and most heavy-duty gasoline-powered vehicles. ORVR equipment 
has been installed on nearly all new gasoline-powered light-duty 
vehicles, light-duty trucks and heavy-duty vehicles since 2006. During 
the phase-in of ORVR controls, Stage II has provided volatile organic 
compound (VOC) reductions in ozone nonattainment areas and certain 
attainment areas of the OTR. Under section 202(a)(6) of the CAA, 
Congress recognized that ORVR and Stage II could eventually become 
largely redundant technologies, and provided authority to the EPA to 
allow states to remove Stage II from their SIPs after EPA finds that 
ORVR is in widespread use. On May 16, 2012, EPA determined that ORVR 
was in widespread nationwide use for control of gasoline emissions 
during refueling of vehicles at GDFs (77 FR 28772).
    In 2012, more than 75 percent of gasoline refueling nationwide 
occurred with ORVR-equipped vehicles, so Stage II programs have become 
largely redundant control systems and Stage II systems achieve an ever 
declining emissions benefit as more ORVR-equipped vehicles continue to 
enter the on-road motor vehicle fleet.\1\
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    \1\ In areas where certain types of vacuum-assist Stage II 
systems are used, the differences in operational design 
characteristics between ORVR and some configurations of these Stage 
II systems result in the reduction of overall control system 
efficiency compared to what could have been achieved relative to the 
individual control efficiencies of either ORVR or Stage II emissions 
from the vehicle fuel tank.
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    On that date, EPA also exercised its authority under section 
202(a)(6) of the CAA to waive certain Federal statutory requirements 
for Stage II at GDFs. This decision exempted all new ozone 
nonattainment areas classified serious or above from the requirement to 
adopt Stage II control programs. Similarly, any state currently 
implementing Stage II programs was authorized to submit SIP revisions 
that, once approved by EPA, would allow for the phase-out of Stage II 
control systems.
    To assist states in the development of SIP revisions to remove 
Stage II requirements from their SIPs, EPA issued its ``Guidance on 
Removing Stage II Gasoline Vapor Control Programs from State 
Implementation Plans and Assessing Comparable Measures'' (EPA-457/B-12-
001) on August 7, 2012. In that document, EPA provided both technical 
and policy recommendations to states and local areas on how to develop 
and submit and approvable SIP revision seeking to phase out an existing 
Stage II program.

II. What changes have been made to the Indiana Stage II Vapor Recovery 
Program?

    Indiana originally submitted a SIP revision request to EPA on 
February 25, 1994, to satisfy the requirements of section 182(b)(3) of 
the CAA. The submission applied to Clark and Floyd counties Indiana as 
part of the Louisville, Kentucky ozone nonattainment area and Lake and 
Porter counties Indian as part of the Chicago ozone nonattainment area. 
EPA fully approved Indiana's Stage II program on April 28, 1994 (59 FR 
10111), including the program's legal authority and administrative 
requirements found in Section 8-4-6 of Title 326 of the Indiana 
Administrative Code (326 IAC).
    In January 2013, IDEM issued a Nonrule Policy Document, Air-036 
(NPD), addressing EPA's May 16, 2012 determination. In the NPD, IDEM 
stated that it would not enforce the requirements for Stage II at new 
and modified GDFs in Clark, Floyd, Lake and Porter counties. At the 
same time Indiana also initiated a rulemaking process to revise its SIP 
to remove Stage II requirements for all facilities in Clark, Floyd, 
Lake and Porter counties. As part of that process, Indiana completed a 
state-specific analysis following EPA's recommended methodology. In 
that analysis, Indiana concluded that, during calendar year 2016, ORVR 
would be in widespread use in Indiana and that there would no remaining 
emissions reduction benefit from Stage II requirements beyond the 
benefits from ORVR.
    On April 27, 2015 and September 10, 2015, IDEM submitted rules as 
SIP revision requests of amendments to 326 IAC 8-4-6 and 326 IAC 8-4-1. 
These amendments would remove Stage II requirements from the Indiana 
ozone SIP and allow GDFs currently implementing Stage II in the four 
program counties to decommission their systems. To support the removal 
of the Stage II requirements, the revised rules included copies of 326 
IAC 8-4-1 and 326 IAC 8-4-6, as published in the Indiana Register on 
March 4, 2015; a summary of state-specific calculations

[[Page 9393]]

based on EPA guidance used to calculate program benefits and 
demonstrate widespread use of ORVR in Indiana; and a section 110(l) 
demonstration that includes offset emission documentation that 
addresses the 2013-2015 period, when Stage II requirements were waived 
in Indiana but widespread use of ORVR had not yet occurred.

III. What is EPA's analysis of the state's submittal?

    Revisions to SIP-approved control measures must meet the 
requirements of section 110(l) of the CAA in order to be approved by 
EPA. Section 110(l) states:
    ``The Administrator shall not approve a revision of a plan if the 
revision would interfere with any applicable requirement concerning 
attainment and reasonable further progress (as defined in section 171), 
or any other applicable requirement of this Act.''
    EPA evaluates each section 110(l) non-interference demonstration on 
a case-by-case basis considering the circumstances of each SIP 
revision. EPA interprets section 110(l) to apply to all requirements of 
the CAA and to all areas of the country, whether attainment, 
nonattainment, unclassifiable, or maintenance for one or more of the 
six criteria pollutants. EPA also interprets section 110(l) to require 
a demonstration addressing all criteria pollutants whose emissions and/
or ambient concentrations may change as a result of the SIP revision. 
The degree of analysis focused on any particular national ambient air 
quality standards (NAAQS) in a non-interference demonstration varies 
depending on the nature of the emissions associated with the proposed 
SIP revision.
    In the absence of an attainment demonstration, to demonstrate no 
interference with any applicable NAAQS or requirement of the CAA under 
section 110(l), EPA believes it is appropriate to allow states to 
substitute equivalent emissions reductions to compensate for any change 
to a SIP-approved program, as long as actual emissions in the air are 
not increased. ``Equivalent'' emissions reductions mean reductions 
which are equal to or greater than those reductions achieved by the 
control measure approved in the SIP. To show that compensating 
emissions reductions are equivalent, modeling or adequate justification 
must be provided. The compensating, equivalent reductions must 
represent actual, new emissions reductions achieved in a 
contemporaneous time frame to the change of the existing SIP control 
measure, in order to preserve the status quo level of emissions in the 
air. In addition to being contemporaneous, the equivalent emissions 
reductions must also be permanent, enforceable, quantifiable, and 
surplus to be approved into the SIP.
    The implementation of the Stage II program in Indiana has resulted 
in reductions of VOC emissions. VOCs contribute to the formation of 
ground-level ozone. Thus the potential increase in VOC needs to be 
offset with equivalent (or greater) emissions reductions from another 
control measure in order to demonstrate non-interference with the 8-
hour ozone NAAQS. The Indiana Stage II SIP revision includes a 110(l) 
demonstration for both areas that uses equivalent emissions reductions 
to compensate for emission reduction losses between 2013 and 2015 
resulting from the removal of Stage II systems at a number of GDFs 
before ORVR is in widespread use as allowed by Indiana's NPD. IDEM has 
calculated that by 2016, ORVR will be in widespread use in both areas 
and the absence of the Indiana Stage II program after 2016 would not 
result in a net VOC emissions increase compared to the continued 
utilization of this emissions control technology. The emission 
reduction losses resulting from removing Stage II before 2016 are 
transitional and relatively small since ORVR-equipped vehicles will 
continue to phase into the fleet over the coming years. IDEM's 
calculation indicates a maximum potential loss of 0.02317 tons per 
summer day (tpsd) in Lake and Porter counties and 0.00408 tpsd in Clark 
and Floyd counties from 2013 through 2015.
    For Lake and Porter Counties, IDEM is proposing the use of VOC 
emission reductions associated with the shutdown of the State Line 
Energy Generating Plant (State Line Energy) formerly located in Lake 
County, Indiana to offset the 0.02317 tpsd increase in those counties. 
State Line ceased operations in March 31, 2012 and its operating permit 
has been revoked. The expiration and revocation of this source's permit 
enables the state to use the VOC emission credits associated with this 
facility for other purposes under the SIP and makes such credits 
permanent and enforceable. Using the last three full years of 
operations (2009-2011) State Line Energy averaged 0.215 tpsd of VOC of 
emissions offsets. Table 1 shows the increase of emissions associated 
with the removal of Stage II systems at facilities in Lake and Porter 
counties, as well as offset emissions associated with State Line 
Energy. In the table, the number of facilities removing Stage II 
equipment for 2013 represents the actual number of facilities that 
sought an exemption from implementing the Stage II requirements. For 
2014 and 2015, the number of facilities removing Stage II equipment is 
a conservative estimate.\2\
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    \2\ The actual number of facilities expected to remove Stage II 
equipment during this timeframe believed to be less, thus resulting 
in lower emissions increase.

                                Table 1--Lake and Porter Counties Offset Analysis
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                                                                                   State Line
                                    Number of       Emissions       Emissions    Energy offsets
                                   facilities      factor VOC     increase VOC    VOC tons/avg.   Offset greater
              Year               removing Stage  tons/ facility/    tons/avg.      summer day    than  increase?
                                       II          avg. summer     summer day    (avg. of 2009-
                                                       day                            2011)
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2013...........................               6     0.000944006     0.005664035           0.215  Yes.
2014...........................              12     0.000654335     0.007852014           0.215  Yes.
2015...........................              24     0.000402349     0.009656365           0.215  Yes.
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    As illustrated in Table 1, and documented in Indiana's SIP 
revision, for Lake and Porter counties, for each year prior to the 
widespread use of ORVR in Indiana (2016), the VOC emissions increase 
associated with the removal of Stage II systems is more than offset by 
the VOC emission reductions

[[Page 9394]]

attributed to the permanent closure of the State Line Energy facility.
    For Clark and Floyd counties, IDEM is proposing the use of offsets 
generated by the Architectural and Industrial Maintenance (AIM) 
coatings rule adopted by Indiana at 326 IAC 8-14. Indiana's AIM 
coatings rule goes above and beyond the Federal AIM rule by adopting a 
rule that is similar to the Ozone Transport Commission (OTC) model 
rule. According to a 2006 Lake Michigan Air Directors Consortium 
(LADCO) white paper, the OTC model rule provides a 31% to 48.4% 
(depending on the AIM coatings category) reduction in VOC emissions 
compared to uncontrolled 2002 base case emissions while the Federal AIM 
rule alone only provides a 20% reduction compared to base case.
    The Indiana AIM rule was approved into the SIP on August 30, 2012 
(77 FR 52606). Indiana was not required to adopt an AIM coatings rule 
but did so as a multi-state effort to help reduce ozone levels at the 
regional level. Indiana did not adopt the AIM rule to comply with any 
Indiana SIP planning requirements and has not taken credit for it in 
air quality plans, nor has it been included in maintenance year 
horizons or rate of further progress (RFP) inventories. Therefore, 
these SIP approved AIM limits can be used as offsets for other 
purposes, such as this SIP revision. Offsets of 0.234 tpsd of VOC are 
available based on calculations derived using the 2011 National 
Emissions Inventory data. Table 2 shows the increase of VOC emission 
associated with the removal of Stage II systems at facilities in Clark 
and Floyd between 2013 and 2015, as well as offset emissions associated 
with AIM coatings. In the table, the number of facilities removing 
Stage II equipment for 2013 represents the actual number of facilities 
that have sought an exemption from implementing the Stage II 
requirements. For 2014 and 2015, the number of facilities removing 
Stage II equipment is a conservative estimate.

                                Table 2--Clark and Floyd Counties Offset Analysis
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                                                                                  AIM Coatings
                                    Number of       Emissions       Emissions      offsets VOC
                                   facilities      factor VOC     increase VOC      tons/avg.     Offset greater
              Year               removing Stage  tons/ facility/    tons/avg.      summer day    than  increase?
                                       II          avg. summer     summer day    (avg. of 2009-
                                                       day                            2011)
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2013...........................               0     0.000659923     0.0                   0.292  Yes.
2014...........................               4     0.000457424     0.001829695           0.292  Yes.
2015...........................               8     0.000281269     0.002250149           0.292  Yes.
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    As illustrated in Table 2, and documented in Indiana's SIP 
revision, for Clark and Floyd counties, for each year prior to the 
widespread use of ORVR in Indiana (2016), the VOC emissions increase 
associated with the removal of Stage II systems is more than offset by 
the VOC emission reductions attributed to reductions in AIM coatings 
emissions. For both the Clark and Floyd counties and Lake and Porter 
counties analyses, Indiana is requesting to use only the portion of the 
emissions offsets necessary to offset the emissions increase due to the 
removal of Stage II systems before Indiana's 2016 widespread use 
timeframe. Indiana retains the right to utilize any remaining emissions 
offsets in the future.
    Based on the use of permanent, enforceable, contemporaneous, 
surplus emissions reductions achieved through the shutdown of the 
previously permitted State Line Energy facility in Lake and Porter 
counties and the offsets from VOC reductions in AIM coatings emissions 
in Clark and Floyd counties, EPA believes that the removal of the 
Indiana Stage II program does not interfere with southeast Indiana's 
ability to demonstrate compliance with the 8-hour ozone NAAQS.
    EPA also examined whether the removal of Stage II program 
requirements in both areas will interfere with attainment of other air 
quality standards. Lake and Porter counties are designated attainment 
for all standards other than ozone, including sulfur dioxide and 
nitrogen dioxide. Clark and Floyd counties are designated attainment 
for all standards other than ozone and particulate matter.\3\ EPA has 
no reason to believe that the removal of the Stage II program in 
Indiana will cause the areas to become nonattainment for any of these 
pollutants. In addition, EPA believes that removing the Stage II 
program requirements in Indiana will not interfere with the areas' 
ability to meet any other CAA requirement.
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    \3\ Clark and Floyd counties are currently designated 
nonattainment for the 1997 Annual fine particulate matter 
(PM2.5) standard. While VOC is one of the precursors for 
particulate matter (NAAQS) formation, studies have indicated that in 
the southeast which includes the Louisville, KY ozone nonattainment 
area, emissions of direct PM2.5 and the precursor sulfur 
oxides are more significant to ambient summertime PM2.5 
concentrations than emissions of nitrogen oxides and anthropogenic 
VOC. See. E.g., Journal of Environmental Engineering--Quantifying 
the sources of ozone, fine particulate matter, and regional haze in 
the Southeastern United States (June 24, 2009), available at: http://www.journals.elsevier.com/journal-ofenvironmental-management. 
Currently, Clark and Floyd counties are no designated nonattainment 
for any of the other criteria pollutants (i.e. sulfur dioxide, 
nitrogen dioxide, lead or carbon monoxide) and those pollutants are 
not affected by the removal of Stage II requirements.
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    Based on the above discussion and the state's section 110(l) 
demonstration, EPA believes that removal of the Stage II program will 
not interfere with attainment or maintenance of any of the NAAQS in 
both the Chicago and Louisville, Kentucky ozone nonattainment areas and 
would not interfere with any other applicable requirement of the CAA, 
and thus, are approvable under CAA section 110(l).

IV. What action is EPA proposing to take?

    EPA is proposing to approve, as a revision to the Indiana ozone 
SIP, regulations submitted by IDEM on April 27, 2015 and September 10, 
2015. EPA finds that the revisions will not interfere with any 
applicable CAA requirement.

V. Incorporation by Reference

    In this rulemaking, EPA is proposing to include in a final EPA rule 
regulatory text that includes incorporation by reference. In accordance 
with requirements of 1 CFR 51.5, EPA is proposing to incorporate by 
reference Indiana rules 326 IAC 8-4-1 ``Applicability'' and 326 IAC 8-
4-6 ``Gasoline dispensing facilities'', effective March 5, 2015. EPA 
has made, and will continue to make, these documents generally 
available through www.regulations.gov and/or at the appropriate EPA 
office (see the ADDRESSES section of this preamble for more 
information).

[[Page 9395]]

VI. Statutory and Executive Order Reviews

    Under the CAA, the Administrator is required to approve a SIP 
submission that complies with the provisions of the CAA 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 CAA. Accordingly, this 
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 action:
     Is not a significant regulatory action subject to review 
by the Office of Management and Budget under Executive Orders 12866 (58 
FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
     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 CAA; and
     Does not provide EPA with the discretionary authority to 
address, as appropriate, disproportionate human health or environmental 
effects, using practicable and legally permissible methods, under 
Executive Order 12898 (59 FR 7629, February 16, 1994).

In addition, the SIP is not approved to apply on any Indian reservation 
land or in any other area where EPA or an Indian tribe has demonstrated 
that a tribe has jurisdiction. In those areas of Indian country, the 
rule does not have tribal implications and will not impose substantial 
direct costs on tribal governments or preempt tribal law as specified 
by Executive Order 13175 (65 FR 67249, November 9, 2000).

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by 
reference, Intergovernmental relations, Nitrogen oxides, Ozone, 
Volatile organic compounds.

    Dated: February 11, 2016.
Robert A. Kaplan,
Acting Regional Administrator, Region 5.
[FR Doc. 2016-03894 Filed 2-24-16; 8:45 am]
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