[Federal Register Volume 81, Number 159 (Wednesday, August 17, 2016)]
[Proposed Rules]
[Pages 54780-54783]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-19538]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R04-OAR-2016-0312; FRL-9950-81-Region 4]


Air Plan Approval; Kentucky; Removal of Stage II Gasoline Vapor 
Recovery Program

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency (EPA) is proposing to 
approve changes to the Kentucky State Implementation Plan (SIP) 
submitted by the Commonwealth of Kentucky through its Energy and 
Environment Cabinet (EEC) on May 3, 2016. This SIP revision seeks to 
remove Stage II vapor control requirements for new and upgraded 
gasoline dispensing facilities in the State and allow for the 
decommissioning of existing Stage II equipment in Boone, Campbell and 
Kenton Counties in Kentucky. EPA has preliminarily determined that 
Kentucky's May 3, 2016, SIP revision is approvable because it is 
consistent with the Clean Air Act (CAA or Act).

DATES: Written comments must be received on or before September 16, 
2016.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R04-
OAR-2016-0312 at http://www.regulations.gov. Follow the online 
instructions for submitting comments. Once submitted, comments cannot 
be edited or removed from Regulations.gov. 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, 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: Kelly Sheckler, Air Regulatory

[[Page 54781]]

Management Section, Air Planning and Implementation Branch, Air, 
Pesticides and Toxics Management Division, U.S. Environmental 
Protection Agency, Region 4, 61 Forsyth Street SW., Atlanta, Georgia 
30303-8960. Ms. Sheckler's phone number is (404) 562-9222. She can also 
be reached via electronic mail at [email protected].

SUPPLEMENTARY INFORMATION:

I. Background for Federal Stage II Requirements

    Stage I vapor recovery is a type of emission control system that 
captures gasoline vapors that are released when gasoline is delivered 
to a storage tank. The vapors are returned to the tank truck as the 
storage tank is being filled with fuel, rather than released to the 
ambient air. 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 and capture the refueling 
fuel vapors at the gasoline pump nozzle. The system carries the vapors 
back to the underground storage tank at the gasoline dispensing 
facility 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.
    Under section 182(b)(3) of the CAA, each state was required to 
submit a SIP revision to implement Stage II for all ozone nonattainment 
areas classified as moderate, serious, severe, or extreme, primarily 
for the control of volatile organic compounds (VOC)--a precursor to 
ozone formation.\1\ However, section 202(a)(6) of the CAA states that 
the section 182(b)(3) Stage II requirements for moderate ozone 
nonattainment areas shall not apply after the promulgation of ORVR 
standards.\2\ ORVR standards were promulgated by EPA on April 6, 1994. 
See 59 FR 16262 and 40 CFR parts 86, 88 and 600. As a result, the CAA 
no longer requires moderate areas to impose Stage II controls under 
section 182(b)(3), and such areas were able to submit SIP revisions, in 
compliance with section 110(l) of the CAA, to remove Stage II 
requirements from their SIPs. EPA's policy memoranda related to ORVR, 
dated March 9, 1993, and June 23, 1993, provide further guidance on 
removing Stage II requirements from certain areas. The policy 
memorandum dated March 9, 1993, states that ``[w]hen onboard rules are 
promulgated, a State may withdraw its Stage II rules for moderate areas 
from the SIP (or from consideration as a SIP revision) consistent with 
its obligations under sections 182(b)(3) and 202(a)(6), so long as 
withdrawal will not interfere with any other applicable requirement of 
the Act.'' \3\
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    \1\ Section 182(b)(3) states that each State in which all or 
part of an ozone nonattainment area classified as moderate or above 
shall, with respect to that area, submit a SIP revision requiring 
owners or operators of gasoline dispensing systems to install and 
operate vapor recovery equipment at their facilities. Specifically, 
the CAA specifies that the Stage II requirements must apply to any 
facility that dispenses more than 10,000 gallons of gasoline per 
month or, in the case of an independent small business marketer 
(ISBM), as defined in section 324 of the CAA, any facility that 
dispenses more than 50,000 gallons of gasoline per month. 
Additionally, the CAA specifies the deadlines by which certain 
facilities must comply with the Stage II requirements. For 
facilities that are not owned or operated by an ISBM, these 
deadlines, calculated from the time of State adoption of the Stage 
II requirements, are: (1) 6 months for facilities for which 
construction began after November 15, 1990, (2) 1 year for 
facilities that dispense greater than 100,000 gallons of gasoline 
per month, and (3) by November 15, 1994, for all other facilities. 
For ISBMs, section 324(a) of the CAA provides the following three-
year phase-in period: (1) 33 percent of the facilities owned by an 
ISBM by the end of the first year after the regulations take effect; 
(2) 66 percent of such facilities by the end of the second year; and 
(3) 100 percent of such facilities after the third year.
    \2\ ORVR is a system employed on gasoline-powered highway motor 
vehicles to capture gasoline vapors displaced from a vehicle fuel 
tank during refueling events. These systems are required under 
section 202(a)(6) of the CAA and implementation of these 
requirements began in the 1998 model year. Currently they are used 
on all gasoline-powered passenger cars, light trucks and complete 
heavy trucks of less than 14,000 pounds GVWR. ORVR systems typically 
employ a liquid file neck seal to block vapor escape to the 
atmosphere and otherwise share many components with the vehicles' 
evaporative emission control system including the onboard diagnostic 
system sensors.
    \3\ Memorandum from John S. Seitz, Director, Office of Air 
Quality Planning and Standards, to EPA Regional Air Directors, 
Impact of the Recent Onboard Decision on Stage II Requirements in 
Moderate Areas (March 9, 1993), available at: http://www.epa.gov/ttn/naaqs/aqmguide/collection/cp2/19930309_seitz_onboard_impact_stage2_.pdf.
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    CAA section 202(a)(6) also provides discretionary authority to the 
EPA Administrator to, by rule, revise or waive the section 182(b)(3) 
Stage II requirement for serious, severe, and extreme ozone 
nonattainment areas after the Administrator determines that ORVR is in 
widespread use throughout the motor vehicle fleet. On May 16, 2012, in 
a rulemaking entitled ``Air Quality: Widespread Use for Onboard 
Refueling Vapor Recovery and Stage II Waiver,'' EPA determined that 
ORVR technology is in widespread use throughout the motor vehicle fleet 
for purposes of controlling motor vehicle refueling emissions. See 77 
FR 28772. By that action, EPA waived the requirement for states to 
implement Stage II gasoline vapor recovery systems at gasoline 
dispensing facilities in nonattainment areas classified as serious and 
above for the ozone NAAQS. Effective May 16, 2012, states implementing 
mandatory Stage II programs under section 182(b)(3) of the CAA were 
allowed to submit SIP revisions to remove this program. See 40 CFR 
51.126(b).\4\ On April 7, 2012, EPA released the guidance entitled 
``Guidance on Removing Stage II Gasoline Vapor Control Programs from 
State Implementation Plans and Assessing Comparable Measures'' for 
states to consider in preparing their SIP revisions to remove existing 
Stage II programs from state implementation plans.\5\
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    \4\ As noted above, EPA found, pursuant to CAA section 
202(a)(6), that ORVR systems are in widespread use in the motor 
vehicle fleet and waived the CAA section 182(b)(3) Stage II vapor 
recovery requirement for serious and higher ozone nonattainment 
areas on May 16, 2012. Thus, in its implementation rule for the 2008 
ozone NAAQS, EPA removed the section 182(b)(3) Stage II requirement 
from the list of applicable requirements in 40 CFR 51.1100(o). See 
80 FR 12264 for additional information.
    \5\ This guidance document is available at: http://www.epa.gov/groundlevelozone/pdfs/20120807guidance.pdf.
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II. Kentucky's Stage II Requirements for the Northern Kentucky Area

    On November 6, 1991, EPA designated and classified Boone, Campbell 
and Kenton Counties in Kentucky (hereinafter referred to as the 
``Northern Kentucky Area'' or ``Area'') as part of the seven-county 
area in and around the Cincinnati-Hamilton, OH-KY, area as a moderate 
nonattainment area for the 1-hour ozone NAAQS.\6\ See 56 FR 56694, 
56764. As mentioned above, the ``moderate'' classification triggered 
various statutory requirements for this Area, including the requirement 
pursuant to section 182(b)(3) of the CAA for the Area to require all 
owners and operators of gasoline dispensing systems to install and 
operate a system for gasoline vapor recovery of emissions from the 
fueling of motor vehicles known as ``Stage II.'' \7\
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    \6\ The other counties in this nonattainment area were Butler, 
Clermont, Hamilton and Warren Counties in Ohio. See 56 FR 56813.
    \7\ As discussed above, Stage II is a system designed to capture 
displaced vapors that emerge from inside a vehicle's fuel tank when 
gasoline is dispensed into the tank. There are two basic types of 
Stage II systems, the balance type and the vacuum assist type.
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    On February 3, 1998, the Commonwealth of Kentucky submitted a SIP 
revision to address the Stage II

[[Page 54782]]

requirements for the Northern Kentucky Area. EPA approved that SIP 
revision, containing Kentucky regulation 401 KAR 59:174--Stage II 
controls at gasoline dispensing facilities, in a notice published on 
February 8, 1999. 63 FR 67586. Northern Kentucky's Stage II rule, as 
currently incorporated into the SIP, requires that Stage II systems be 
tested and certified to meet a 95 percent emission reduction efficiency 
by using a system approved by the California Air Resources Board 
(CARB). The rule requires sources to verify proper installation and 
function of Stage II equipment through use of a liquid blockage test 
and a leak test prior to system operation and every five years or upon 
major modification of a facility (i.e., 75 percent or more equipment 
change). The Commonwealth also established an inspection program 
consistent with that described in EPA's Stage II guidance and has 
established procedures for enforcing violations of the Stage II 
requirements.
    On December 13, 1999, Kentucky submitted to EPA a request to 
redesignate the Northern Kentucky Area to attainment for the 1-hour 
ozone standard and an associated maintenance plan. The maintenance 
plan, as required under section 175A of the CAA, showed that nitrogen 
oxides and VOC emissions in the Area would remain below the 1996 
``attainment year'' levels through the greater than ten-year period 
from 1996-2010. In making these projections, Kentucky factored in the 
emissions benefit of the Area's Stage II program, thereby maintaining 
this program as an active part of its 1-hour ozone SIP. Originally, the 
redesignation request and maintenance plan were approved by EPA, 
effective July 5, 2000. See 65 FR 37879. However, the United States 
Court of Appeals for the Sixth Circuit vacated EPA's approval of this 
redesignation request and maintenance plan and remanded it back to EPA 
after the Court concluded that EPA erred in one respect pertaining only 
to the Ohio portion of the Area. On July 31, 2002, EPA reinstated the 
approval of the redesignation request and maintenance plan for 
Kentucky. See 67 FR 49600.
    Subsequently, Boone, Campbell and Kenton Counties in Kentucky (or 
portions thereof) were designated nonattainment as a part of a larger 
tri-state nonattainment area which included Kentucky, Ohio and Indiana 
counties in and around the Cincinnati area for both the 1997 8-hour 
ozone and 2008 8-hour ozone NAAQS. On August 5, 2010, the Area (i.e., 
the Kentucky portion of the tri-state Cincinnati-Hamilton Area) was 
redesignated to attainment of the 1997 8-hour ozone NAAQS. See 75 FR 
47218. The tri-state Cincinnati-Hamilton Area is attaining the 2008 8-
hour ozone NAAQS, and the Commonwealth is in the process of submitting 
a redesignation request and maintenance plan for the 2008 8-hour ozone 
NAAQS.

III. Analysis of the Commonwealth's Submittal

    On May 3, 2016, the Commonwealth of Kentucky submitted a SIP 
revision to EPA seeking modifications of the Stage II requirements in 
the Northern Kentucky Area. Specifically, it seeks the removal of the 
Stage II requirements in Kentucky regulation 401 KAR 59:174--Stage II 
Controls at gasoline dispensing facilities. These modifications would 
remove Stage II vapor control requirements for new and upgraded 
gasoline dispensing facilities in the State and allow for the 
decommissioning of existing Stage II equipment.
    EPA's primary consideration for determining the approvability of 
the Commonwealth of Kentucky's request is whether this requested action 
complies with section 110(l) of the CAA.\8\ Section 110(l) requires 
that a revision to the SIP not interfere with any applicable 
requirement concerning attainment and reasonable further progress (as 
defined in section 171), or any other applicable requirement of the 
Act. EPA evaluates each section 110(l) noninterference demonstration on 
a case-by-case basis, considering the circumstances of each SIP 
revision. EPA interprets 110(l) as applying to all NAAQS that are in 
effect, including those that have been promulgated but for which the 
EPA has not yet made designations. The degree of analysis focused on 
any particular NAAQS in a noninterference demonstration varies 
depending on the nature of the emissions associated with the proposed 
SIP revision. EPA's analysis of Kentucky's May 3, 2016, SIP revision 
pursuant to section 110(l) is provided below.
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    \8\ CAA section 193 is not relevant because Kentucky's Stage II 
rule was not included in the SIP before the 1990 CAA amendments.
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    In its May 3, 2016, SIP revision, Kentucky used EPA's guidance 
entitled ``Guidance on Removing Stage II Gasoline Vapor Control 
Programs from State Implementation Plans and Assessing Comparable 
Measures'' to conduct a series of calculations to determine the 
potential impact on air quality of removing the Stage II program.\9\ 
Kentucky's analysis focused on VOC emissions because, as mentioned 
above, Stage II requirements affect VOC emissions and because VOC are a 
precursor for ozone formation.\10\ The results of Kentucky's analysis 
are provided in the table below.
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    \9\ EPA, Guidance on Removing Stage II Gasoline Vapor Control 
Programs from State Implementation Plans and Assessing Comparable 
Measures, EPA-457/B-12-001 (Aug. 7, 2012), available at https://www.epa.gov/ozone-pollution/ozone-stage-two-vapor-recovery-rule-and-guidance. This guidance document notes that ``the potential emission 
control losses from removing Stage II VRS are transitional and 
relatively small. ORVR-equipped vehicles will continue to phase in 
to the fleet over the coming years and will exceed 80 percent of all 
highway gasoline vehicles and 85 percent of all gasoline dispensed 
during 2015. As the number of these ORVR-equipped vehicles increase, 
the control attributed to Stage II VRS will decrease even further, 
and the potential foregone Stage II VOC emission reductions are 
generally expected to be no more than one percent of the VOC 
inventory in the area.''
    \10\ Two counties in Kentucky are currently designated 
nonattainment for the 1997 Annual fine particulate matter 
(PM2.5) standard: Bullitt and Jefferson. While VOC is one 
of the precursors for particulate matter (NAAQS) formation, studies 
have indicated that, in the southeast, 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., 
Quantifying the sources of ozone, fine particulate matter, and 
regional haze in the Southeastern United States, Journal of 
Environmental Management (2009), available at: http://www.sciencedirect.com/science/article/pii/S0301479709001893.

   Table 1--VOC Emissions Difference Between Stage II VRS in Place and
                                 Removed
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                                                          VOC emissions
                         Year                            (tons per day)
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2011..................................................               N/A
2014..................................................             -0.21
2017..................................................             -0.15
2020..................................................             -0.10
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    Table 1 shows that the removal of Stage II vapor recovery systems 
in the Northern Kentucky Area starting in 2014 would have resulted and 
will result in a VOC emission decrease. If instead Stage II 
requirements are kept in place, VOC emissions will decrease by less, 
and it will less beneficial to air quality in Northern Kentucky to keep 
Stage II systems in operation.\11\
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    \11\ The emissions-reduction disbenefit associated with 
continued implementation of Stage II requirements is due to the 
incompatibility of some Stage II and ORVR systems. Compatibility 
problems can result in an increase in emissions from the underground 
storage tank (UST) vent pipe and other system fugitive emissions 
related to the refueling of ORVR vehicles with some types of vacuum 
assist-type Stage II systems. This occurs during refueling an ORVR 
vehicle when the vacuum assist system draws fresh air into the UST 
rather than an air vapor mixture from the vehicle fuel tank. Vapor 
flow from the vehicle fuel tank is blocked by the liquid seal in the 
fill pipe which forms at a level deeper in the fill pipe than can be 
reached by the end of the nozzle spout. The fresh air drawn into the 
UST enhances gasoline evaporation in the UST which increases 
pressure in the UST. Unless it is lost as a fugitive emission, any 
tank pressure in excess of the rating of the pressure/vacuum valve 
is vented to the atmosphere over the course of a day. See EPA, 
Guidance on Removing Stage II Gasoline Vapor Control Programs from 
State Implementation Plans and Assessing Comparable Measures, EPA-
457/B-12-001 (Aug. 7, 2012), available at: https://www.epa.gov/ozone-pollution/ozone-stage-two-vapor-recovery-rule-and-guidance. 
Thus, as ORVR technology is phased in, the amount of emission 
control that is gained through Stage II systems decreases.

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    The affected sources covered by Kentucky's Stage II vapor recovery 
requirements are sources of VOC. Other criteria pollutants (carbon 
monoxide, sulfur dioxide, nitrogen dioxide, particulate matter, and 
lead) are not emitted by gasoline dispensing facilities and will not be 
affected by the removal of Stage II controls.
    The proposed revisions to 401 KAR 59:174 include that gasoline 
dispensing facilities located in Boone, Campbell and Kenton Counties 
shall decommission and remove the systems no later than December 31, 
2018. Kentucky noted in its submission that the decommissioning 
procedures in the revised version of 401 KAR 59:174 follow Petroleum 
Equipment Institute (PEI) guidance, ``Recommended Practices for 
Installation and Testing of Vapor Recovery Systems at Vehicle Refueling 
Sites,'' PEI/RP300-09.
    EPA is proposing to determine that Kentucky's technical analysis is 
consistent with EPA's guidance on removing Stage II requirements from a 
SIP, including as it relates to the decommissioning and phasing out of 
the Stage II requirements for the Northern Kentucky Area. EPA is also 
making the preliminary determination that Kentucky's SIP revision is 
consistent with the CAA and with EPA's regulations related to removal 
of Stage II requirements from the SIP and that these changes will not 
interfere with any applicable requirement concerning attainment or any 
other applicable requirement of the CAA, and therefore satisfy section 
110(l).

IV. Incorporation by Reference

    In this rule, 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 Kentucky Regulation 401 KAR 59:174--Stage II controls at 
gasoline dispensing facilities, effective March 4, 2016. EPA has made, 
and will continue to make, these materials generally available through 
www.regulations.gov and/or at the EPA Region 4 office (please contact 
the person identified in the FOR FURTHER INFORMATION CONTACT section of 
this preamble for more information).

V. Proposed Action

    EPA is proposing to approve the Commonwealth of Kentucky's May 3, 
2016, SIP revision that changes Kentucky's Stage II rule, 401 KAR 
59:174, to allow for the removal of the Stage II requirement and the 
orderly decommissioning of Stage II equipment. EPA is proposing this 
approval because the Agency has made the preliminary determination that 
the Commonwealth of Kentucky's May 3, 2016, SIP revision related to the 
Commonwealth's Stage II rule is consistent with the CAA and with EPA's 
regulations and guidance.

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 Act and applicable 
federal regulations. See 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 
proposed action merely proposes to approve 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 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 as specified by 
Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it 
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, Nitrogen dioxide, Ozone, Reporting and recordkeeping 
requirements, Volatile organic compounds.

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

    Dated: August 8, 2016.
Heather McTeer Toney,
Regional Administrator, Region 4.
[FR Doc. 2016-19538 Filed 8-16-16; 8:45 am]
 BILLING CODE 6560-50-P