[Federal Register Volume 82, Number 177 (Thursday, September 14, 2017)]
[Rules and Regulations]
[Pages 43176-43180]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-19454]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R09-OAR-2017-0259; FRL-9966-89-Region 9]


Approval of California Air Plan Revisions, South Coast Air 
Quality Management District

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The Environmental Protection Agency (EPA) is taking final 
action to approve revisions to the South Coast Air Quality Management 
District (SCAQMD

[[Page 43177]]

or ``District'') portion of the California State Implementation Plan 
(SIP). These revisions concern emissions of oxides of nitrogen 
(NOX) and oxides of sulfur (SOX) from facilities 
that emit four or more tons per year of NOX or 
SOX, which are regulated by SCAQMD's Regional Clean Air 
Incentives Market (RECLAIM) program. We are approving revisions to 
local rules in the SIP that regulate these emission sources under the 
Clean Air Act (CAA or the Act).

DATES: This rule is effective on October 16, 2017.

ADDRESSES: The EPA has established a docket for this action under 
Docket ID No. EPA-R09-OAR-2017-0259. All documents in the docket are 
listed on the http://www.regulations.gov Web site. Although listed in 
the index, some information is not publicly available, e.g., 
Confidential Business Information 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 through http://www.regulations.gov, or please contact the 
person identified in the FOR FURTHER INFORMATION CONTACT section for 
additional availability information.

FOR FURTHER INFORMATION CONTACT: Nicole Law, EPA Region IX, (415) 947-
4126, [email protected].

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

Table of Contents

I. Proposed Action
II. Public Comments and EPA Responses
III. Final Action
IV. Incorporation by Reference
V. Statutory and Executive Order Reviews

I. Proposed Action

    On June 6, 2017 (82 FR 25996), the EPA proposed to approve the 
following rules into the California SIP.

----------------------------------------------------------------------------------------------------------------
                                                                                     Adopted/
         Local agency                  Rule No.                 Rule title           amended/        Submitted
                                                                                      revised
----------------------------------------------------------------------------------------------------------------
SCAQMD.......................  2001....................  Applicability..........        12/04/15        03/17/17
SCAQMD.......................  2002....................  Allocations for NOX and        10/07/16        03/17/17
                                                          SOX.
SCAQMD.......................  2005....................  New Source Review for          12/04/15        03/17/17
                                                          Regional Clean Air
                                                          Incentives Market.
SCAQMD.......................  2011: Attachment C......  Requirements for               12/04/15        03/17/17
                                                          Monitoring, Reporting,
                                                          and Recordkeeping for
                                                          SOX Emissions: Quality
                                                          Assurance and Quality
                                                          Control Procedures.
SCAQMD.......................  2011: Chapter 3.........  Requirements for               12/04/15        03/17/17
                                                          Monitoring, Reporting,
                                                          and Recordkeeping for
                                                          SOX Emissions: Process
                                                          Units--Periodic
                                                          Reporting and Rule 219
                                                          Equipment.
SCAQMD.......................  2012: Attachment C......  Requirements for               12/04/15        03/17/17
                                                          Monitoring, Reporting,
                                                          and Recordkeeping for
                                                          NOX Emissions: Quality
                                                          Assurance and Quality
                                                          Control Procedures.
SCAQMD.......................  2012: Chapter 4.........  Requirements for               12/04/15        03/17/17
                                                          Monitoring, Reporting,
                                                          and Recordkeeping for
                                                          NOX Emissions: Process
                                                          Units--Periodic
                                                          Reporting and Rule 219
                                                          Equipment.
SCAQMD.......................  2011: Attachment E......  Requirements for               02/05/16        03/17/17
                                                          Monitoring, Reporting,
                                                          and Recordkeeping for
                                                          SOX Emissions:
                                                          Definitions.
SCAQMD.......................  2012: Attachment F......  Requirements for               02/05/16        03/17/17
                                                          Monitoring, Reporting,
                                                          and Recordkeeping for
                                                          NOX Emissions:
                                                          Definitions.
----------------------------------------------------------------------------------------------------------------

    We proposed to approve these rules for SIP strengthening purposes 
based on a determination that they satisfied the applicable CAA 
requirements. Our proposed action contains more information on the 
rules and our evaluation.

II. Public Comments and EPA Responses

    The EPA's proposed action provided a 30-day public comment period. 
During this period, we received one comment letter dated July 6, 2017, 
from Adriano Martinez of Earthjustice, on behalf of the Sierra Club.
    Several of Earthjustice's comments pertain to CAA requirements 
concerning reasonably available control technology (RACT). As we 
explained in our June 6, 2017 proposed rule, we are not reviewing the 
submitted rule revisions with respect to RACT requirements in this 
action.\1\ Therefore, comments pertaining to whether the RECLAIM 
program, as revised in this action, meets substantive RACT requirements 
are not germane to this action. We note that the commenter submitted 
substantially identical comments on a separate proposed rule published 
June 15, 2017, in which the EPA proposed to determine that the revised 
RECLAIM regulations satisfy CAA requirements for ozone RACT SIPs in the 
South Coast ozone nonattainment area.\2\ We intend to address 
Earthjustice's comments pertaining to RACT requirements as part of our 
final action on the separate South Coast ozone RACT SIP submission. 
Below we respond only to those comments that are germane to our June 6, 
2017 proposal to approve these revisions to the RECLAIM rules into the 
California SIP.
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    \1\ 82 FR 25996, 25998 (June 6, 2017).
    \2\ 82 FR 27451 (June 15, 2017).
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    Comment 1: Earthjustice asserts that the revised RECLAIM program 
does not properly address RECLAIM trading credits (RTCs) from 
facilities that have shut down. While acknowledging that the District 
has made some program amendments to prevent shutdown facility RTCs from 
flooding the RECLAIM market, Earthjustice claims that these amendments 
do not remedy the problem of NOX credits from facilities or 
equipment that shut down prior to 2016. As an example, Earthjustice 
highlights the California Portland Cement facility, which was one of 
the largest NOX emitters in the NOX RECLAIM 
program until it closed down its cement kilns, releasing 2.5 tons per 
day of RTCs into the RECLAIM market. According to Earthjustice, these 
RTCs were largely purchased by oil refineries, which used the RTCs to 
avoid installing selective catalytic reduction and other readily 
available NOX pollution controls. Earthjustice contends that 
the District's failure to remove these RTCs from the RECLAIM market is 
arbitrary and capricious and that, because of this deficiency, the 
NOX RECLAIM program

[[Page 43178]]

fails to satisfy both California's Best Available Retrofit Control 
Technology (BARCT) requirement and the CAA's RACT requirement.
    Response 1: We disagree with the commenter's claim that the alleged 
deficiencies preclude approval of the revised RECLAIM rules into the 
SIP. As explained in our proposed rule, we have evaluated the revised 
rules for compliance with the applicable CAA requirements for 
enforceability, new source review, SIP revisions, and economic 
incentive programs.\3\ The commenter fails to identify any specific 
issue that precludes a finding that the revised RECLAIM regulations 
satisfy these requirements.
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    \3\ 82 FR 25996, 25998 (June 6, 2017).
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    The commenter also fails to identify any statutory basis, other 
than the CAA RACT requirement, for its argument that the EPA cannot 
approve the revised RECLAIM rules. To the extent the commenter intended 
to argue that the alleged deficiencies in the revised RECLAIM program 
constitute RACT deficiencies under the CAA, those comments are outside 
the scope of this action for the reasons stated earlier in this 
preamble, and the EPA will respond to them as part of our final action 
on the SCAQMD's separate ozone RACT SIP submission. Comments regarding 
BARCT and command-and-control equivalence requirements under state law 
also are not germane to this action, as the CAA does not require the 
EPA to determine that the revised RECLAIM rules comply with state law 
BARCT requirements before approving these SIP revisions.
    As we explained in our proposed rule and related technical support 
document (TSD), the revised RECLAIM program is projected to achieve 
significant environmental benefits compared to the version that the EPA 
previously approved into the SIP.\4\ For example, under the program as 
previously approved into the SIP, available RTCs from facilities that 
permanently shut down could be sold and reintroduced back into the 
RECLAIM program for use by other facilities, thereby delaying or 
eliminating the need for those other facilities to install pollution 
control equipment.\5\ Under the revised program, the owner or operator 
of a NOX RECLAIM facility that shuts down or surrenders all 
operating permits for the facility must notify the District within 30 
days and reduce its future NOX RTC allocations after 
adjusting the RTCs in accordance with specific adjustment 
calculations.\6\ The revised RECLAIM program also lowers the 
NOX RTC allocations for larger facilities \7\ and removes 
NOX RTCs from facilities that exit the program.\8\ These 
revisions to the RECLAIM program are projected to reduce NOX 
emissions by 12 tons per day by 2023.\9\ These program revisions 
require NOX RECLAIM facilities to reduce NOX 
emissions by installing additional pollution control equipment and thus 
do not interfere with the ongoing process for ensuring that 
requirements for reasonable further progress (RFP) and attainment of 
the National Ambient Air Quality Standards are met, or interfere with 
any other CAA requirement. The revisions therefore satisfy the 
requirements for SIP revisions in CAA section 110(l). Again, we are not 
evaluating whether the revised RECLAIM rules meet RACT requirements for 
NOX in this action.
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    \4\ Id. and U.S. EPA, Region IX Air Division, ``Technical 
Support Document for EPA's Rulemaking for the California State 
Implementation Plan, South Coast Air Quality Management District 
Regional Clean Air Incentives Market Program Rules,'' May 2017 
(hereafter ``RECLAIM TSD''), at 9, 10.
    \5\ SCAQMD, Final Staff Report, Proposed Amendments to 
Regulation XX--Regional Clean Air Incentives Market, Proposed 
Amended Rule 2002--Allocations for Oxides of Nitrogen 
(NOX) and Oxides of Sulfur (SOX), October 7, 
2016 (hereafter ``2016 RECLAIM Staff Report'') at 3.
    \6\ SCAQMD Rule 2002 (as amended October 7, 2016), section (i). 
Rule 2002, as amended, provides limited exceptions from the 
requirement for shutdown facilities to surrender RTCs, e.g., for 
facilities under the same ownership. SCAQMD Rule 2002 (as amended 
October 7, 2016), section (i)(13).
    \7\ SCAQMD, Draft Final Staff Report, Proposed Amendments to 
Regulation XX Regional Clean Air Incentives Market (RECLAIM) 
NOX RECLAIM, December 4, 2015, at 5.
    \8\ SCAQMD Rule 2001 (as amended December 4, 2015), section 
(g)(2). Rule 2001, as amended, allows owners or operators of 
electric generating facilities to exit the RECLAIM program provided 
the facility meets Best Available Control Technology (BACT) or Best 
Available Retrofit Control Technology (BARCT) requirements and 
retires its NOX RTCs from the RECLAIM market. Id.
    \9\ RECLAIM TSD at 9; see also SCAQMD, Summary Minutes of the 
Board of the South Coast Air Quality Management District, December 
4, 2015, at 15.
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    Earthjustice's stated concern about ``the problem of NOX 
credits from facilities or equipment that shut down prior to 2016'' 
appears to be in reference to section (i)(1) of Rule 2002, as amended, 
which states that the requirements specified in that section are 
effective October 7, 2016, the date of their adoption by the SCAQMD. As 
the District explained in its staff report, the new shutdown provisions 
in section (i) of amended Rule 2002 will not be applied retroactively 
to facility shutdowns that occurred prior to the adoption date of the 
amended rule.\10\ We do not see a basis for disapproving Rule 2002 
because its provisions are not applied retroactively.
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    \10\ 2016 RECLAIM Staff Report at 9.
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    Comment 2: Citing section 110(a)(2)(E) of the CAA, Earthjustice 
asserts that the EPA can approve a SIP revision only if it determines 
that the provision is not inconsistent with state law. Earthjustice 
contends that the revised RECLAIM rules violate California law because 
they are not equivalent to BARCT and are not equivalent to command-and-
control regulations, as required by California's Health and Safety 
Code. Earthjustice contends that the EPA therefore cannot make the 
determination required in section 110 of the Act that the approval not 
interfere with compliance with state law.
    Response 2: We disagree with the commenter's claim that we must 
determine under CAA section 110 that a SIP revision is not inconsistent 
with state law BARCT requirements, or that the approval would not 
interfere with compliance with state law BARCT requirements, before we 
approve the revision. To approve a SIP revision, the EPA must determine 
that the SIP revision is supported by necessary assurances that the 
state or relevant local or regional agency has adequate legal authority 
under state and local law to carry out its provisions and that the 
agency is not prohibited by any provision of federal or state law from 
carrying out such SIP or portion thereof.\11\ In addition, the EPA must 
not approve any SIP revision that would interfere with any applicable 
requirement concerning attainment and RFP, or any other applicable 
requirement of the CAA.\12\
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    \11\ CAA section 110(a)(2)(E).
    \12\ CAA section 110(l).
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    Alleged inconsistency with state law is relevant to the EPA in the 
context of our SIP review if it undermines the legal authority by the 
state or relevant local or regional agency to carry out the SIP, but 
alleged interference with compliance with state law requirements 
generally is not a bar to EPA approval. The EPA evaluates compliance 
with federal law (specifically, the CAA), not state law. California Air 
Resources Board (CARB) has provided the EPA with the necessary 
assurances that the District has the legal authority to carry out the 
revised RECLAIM rules.\13\ Therefore, we find that the revised

[[Page 43179]]

RECLAIM rules satisfy the requirements of CAA section 110(a)(2)(E). We 
explained in Response 1, above, our reasons for concluding that the 
revised RECLAIM rules satisfy the requirements for SIP revisions in CAA 
section 110(l).
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    \13\ See CARB Executive Order S-17-002 (dated March 6, 2017) 
adopting the amended RECLAIM rules as a revision to the California 
SIP. The Executive Order states that the District is authorized by 
California Health and Safety Code (H&SC) section 40001 to adopt and 
enforce the rules identified in Enclosure A (i.e., the amended 
RECLAIM rules).
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    For the reasons provided in our proposed rule and explained further 
above, we conclude that the revised RECLAIM regulations satisfy the 
applicable CAA requirements for SIP revisions.

III. Final Action

    No comments were submitted that change our assessment of the 
revised RECLAIM rules as described in our proposed action. Therefore, 
under section 110(k)(3) of the Act, the EPA is fully approving these 
revised rules into the California SIP.

IV. Incorporation by Reference

    In this rule, the EPA is finalizing regulatory text that includes 
incorporation by reference. In accordance with requirements of 1 CFR 
51.5, the EPA is finalizing the incorporation by reference of the 
SCAQMD rules described in the amendments to 40 CFR part 52 set forth 
below. The EPA has made, and will continue to make, these documents 
available through www.regulations.gov and at the EPA Region IX Office 
(please contact the person identified in the FOR FURTHER INFORMATION 
CONTACT section of this preamble for more information).

V. 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, the EPA's role is to approve state 
choices, provided that they meet the criteria of the Clean Air Act. 
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 Clean Air Act; and
     does not provide the 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 the 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).
    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 action 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).
    Under section 307(b)(1) of the Clean Air Act, petitions for 
judicial review of this action must be filed in the United States Court 
of Appeals for the appropriate circuit by November 13, 2017. Filing a 
petition for reconsideration by the Administrator of this final rule 
does not affect the finality of this action 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. This action may not be challenged later in 
proceedings to enforce its requirements (see section 307(b)(2)).

List of Subjects in 40 CFR Part 52

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

    Dated: August 15, 2017.
Alexis Strauss,
Acting Regional Administrator, Region IX.

    Part 52, Chapter I, Title 40 of the Code of Federal Regulations is 
amended as follows:

PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS

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

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

Subpart F--California

0
2. Section 52.220 is amended by adding paragraphs (c)(337)(i)(C)(2) 
through (7), (c)(342)(i)(C)(5), (c)(388)(i)(A)(6), (c)(404)(i)(A)(5), 
and (c)(491) to read as follows:


Sec.  52.220  Identification of plan-in part.

* * * * *
    (c) * * *
    (337) * * *
    (i) * * *
    (C) * * *
    (2) Previously approved on August 29, 2006, in paragraph 
(c)(337)(i)(C)(1) of this section and now deleted with replacement in 
(c)(491)(i)(A)(4), Rule 2011: Attachment C, ``Requirements for 
Monitoring, Reporting, and Recordkeeping for SOX Emissions: 
Quality Assurance and Quality Control Procedures,'' amended on December 
4, 2015.
    (3) Previously approved on August 29, 2006, in paragraph 
(c)(337)(i)(C)(1) of this section and now deleted with replacement in 
(c)(491)(i)(A)(5), Rule 2011: Chapter 3, ``Requirements for Monitoring, 
Reporting, and Recordkeeping for SOX Emissions: Process 
Units--Periodic Reporting and Rule 219 Equipment,'' amended on December 
4, 2015.

[[Page 43180]]

    (4) Previously approved on August 29, 2006, in paragraph 
(c)(337)(i)(C)(1) of this section and now deleted with replacement in 
(c)(491)(i)(A)(6), Rule 2012: Attachment C, ``Requirements for 
Monitoring, Reporting, and Recordkeeping for NOX Emissions: 
Quality Assurance and Quality Control Procedures,'' amended on December 
4, 2015.
    (5) Previously approved on August 29, 2006, in paragraph 
(c)(337)(i)(C)(1) of this section and now deleted with replacement in 
(c)(491)(i)(A)(7), Rule 2012: Chapter 4, ``Requirements for Monitoring, 
Reporting, and Recordkeeping for NOX Emissions: Process 
Units--Periodic Reporting and Rule 219 Equipment,'' amended on December 
4, 2015.
    (6) Previously approved on August 29, 2006, in paragraph 
(c)(337)(i)(C)(1) of this section and now deleted with replacement in 
(c)(491)(i)(A)(8), Rule 2011: Attachment E, ``Requirements for 
Monitoring, Reporting, and Recordkeeping for SOX Emissions: 
Definitions,'' amended on February 5, 2016.
    (7) Previously approved on August 29, 2006, in paragraph 
(c)(337)(i)(C)(1) of this section and now deleted with replacement in 
(c)(491)(i)(A)(9), Rule 2012: Attachment F, ``Requirements for 
Monitoring, Reporting, and Recordkeeping for NOX Emissions: 
Definitions,'' amended on February 5, 2016.
* * * * *
    (342) * * *
    (i) * * *
    (C) * * *
    (5) Previously approved on August 29, 2006 in paragraph 
(c)(342)(i)(C)(2) of this section and now deleted with replacement in 
(c)(491)(i)(A)(1), Rule 2001, ``Applicability,'' amended on December 4, 
2015.
* * * * *
    (388) * * *
    (i) * * *
    (A) * * *
    (6) Previously approved on August 12, 2011 in paragraph 
(c)(388)(i)(A)(4) of this section and now deleted with replacement in 
(c)(491)(i)(A)(2), Rule 2002, ``Allocations for NOX & 
SOX,'' amended on October 7, 2016.
* * * * *
    (404) * * *
    (i) * * *
    (A) * * *
    (5) Previously approved on December 20, 2011 in paragraph 
(c)(404)(i)(A)(1) of this section and now deleted with replacement in 
(c)(491)(i)(A)(3), Rule 2005, ``New Source Review for Regional Clean 
Air Incentives Market,'' amended on December 4, 2015.
* * * * *
    (491) Amended regulations for the following APCDs were submitted on 
March 17, 2017 by the Governor's designee.
    (i) Incorporation by reference.
    (A) South Coast Air Quality Management District.
    (1) Rule 2001, ``Applicability,'' amended on December 4, 2015.
    (2) Rule 2002, ``Allocations for Oxides of Nitrogen 
(NOX) and Oxides of Sulfur (SOX),'' amended on 
October 7, 2016.
    (3) Rule 2005, ``New Source Review for RECLAIM,'' amended on 
December 4, 2015.
    (4) Protocol for Rule 2011: Attachment C, ``Quality Assurance and 
Quality Control Procedures,'' amended on December 4, 2015.
    (5) Protocol for Rule 2011: Chapter 3, ``Process Units--Periodic 
Reporting,'' amended on December 4, 2015.
    (6) Protocol for Rule 2012: Attachment C, ``Quality Assurance and 
Quality Control Procedures,'' amended on December 4, 2015.
    (7) Protocol for Rule 2012: Chapter 4, ``Process Units Periodic 
Reporting and Rule 219 Equipment,'' amended on December 4, 2015.
    (8) Protocol for Rule 2011: Attachment E, ``Definitions,'' amended 
on February 5, 2016.
    (9) Protocol for Rule 2012: Attachment F, ``Definitions,'' amended 
on February 5, 2016.

[FR Doc. 2017-19454 Filed 9-13-17; 8:45 am]
 BILLING CODE 6560-50-P