[Federal Register Volume 87, Number 145 (Friday, July 29, 2022)]
[Proposed Rules]
[Pages 45730-45735]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-16245]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR part 52
[EPA-R09-OAR-2022-0420; FRL-9970-01-R9]
Limited Approval and Limited Disapproval of California Air Plan
Revisions; San Joaquin Valley Air Pollution Control District;
Stationary Source Permits
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
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SUMMARY: The Environmental Protection Agency (EPA) is proposing a
limited approval and limited disapproval of revisions to the San
Joaquin Valley Air Pollution Control District (SJVAPCD or ``District'')
portion of the California State Implementation Plan (SIP). These
revisions concern volatile organic compounds (VOC), oxides of nitrogen
(NOX), particulate matter (PM) (including PM equal to or
less than 2.5 microns in diameter (PM2.5) and PM equal to or
less than 10 microns in diameter (PM10)), and their
precursors. This action addresses a revised rule governing the issuance
of permits for stationary sources, focusing on the preconstruction
review and permitting of major sources and major modifications under
part D of title I of the Clean Air Act (CAA or ``Act''). We are taking
comments on this proposal and a final action will follow.
DATES: Written comments must be received on or before August 29, 2022.
ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R09-
OAR-2022-0420 at www.regulations. For comments submitted at
Regulations.gov, follow the online instructions for submitting
comments. Once submitted, comments cannot be removed or edited from
Regulations.gov. The 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 the
disclosure of which 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. The 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 identified in
the FOR FURTHER INFORMATION CONTACT section. For the full EPA public
comment policy, information about CBI and multimedia submissions, and
general guidance on making effective comments, please visit
www.epa.gov/dockets/commenting-epa-dockets. If you need assistance in a
language other than English or if you are a person with disabilities
who needs a reasonable accommodation at no cost to you, please contact
the person identified in the FOR FURTHER INFORMATION CONTACT section.
FOR FURTHER INFORMATION CONTACT: Laura Yannayon, EPA Region IX, 75
Hawthorne St., San Francisco, CA
[[Page 45731]]
94105. By phone: (415) 972-3534, or by email at [email protected].
SUPPLEMENTARY INFORMATION: Throughout this document, the terms ``we,''
``us,'' and ``our'' refer to the EPA.
Table of Contents
I. The State's Submittal
A. What rule did the State submit?
B. Are there other versions of this rule?
C. What is the purpose of the submitted rule?
II. The EPA's Evaluation and Action
A. How is the EPA evaluating the rule?
B. Does the rule meet the evaluation criteria?
C. What are the rule deficiencies?
D. EPA Recommendations to Further Improve the Rule
E. Proposed Action and Public Comment
III. Incorporation by Reference
IV. Statutory and Executive Order Reviews
I. The State's Submittal
A. What rule did the State submit?
Table 1 lists the rule addressed by this proposal including the
date it was adopted by the District and submitted to the EPA by the
California Air Resources Board (CARB), which is the governor's designee
for California SIP submittals. This rule constitutes part of the
SJVAPCD's program for preconstruction review and permitting of new or
modified stationary sources under its jurisdiction. The rule revisions
that are the subject of this action represent an update to the
SJVAPCD's preconstruction review and permitting program and are
intended to satisfy the requirements under part D of title I of the
Act, ``nonattainment new source review (``NNSR'') as well as the
general preconstruction review requirements under section 110(a)(2)(C)
of the Act, minor new source review (``NSR'').
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\1\ The submittal was transmitted to the EPA via a letter from
CARB dated November 15, 2019.
Table 1--Submitted Rule
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Rule No. Rule title Adopted Submitted
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Rule 2201.................................. New and Modified Stationary Source 08/15/19 11/20/19 \1\
Review Rule.
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On May 7, 2020, the submittal for Rule 2201 was found to meet the
completeness criteria in 40 CFR part 51, appendix V, which must be met
before formal EPA review.\2\
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\2\ See letter dated May 7, 2020, from Elizabeth J. Adams, U.S.
EPA Region 9, to Richard Corey, CARB, regarding the November 20,
2019, submittal of District Rule 2201.
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B. Are there other versions of this rule?
Rule 2201 was previously approved into the California SIP on
September 17, 2014.\3\ If the EPA finalizes the action proposed herein,
this prior version of the rule will be replaced in the SIP by the
submitted rule identified in Table 1.
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\3\ 79 FR 55637.
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C. What is the purpose of the submitted rule?
As noted above and described in further detail below, the submitted
rule is intended to satisfy the minor NSR and NNSR requirements of
section 110(a)(2)(C) and part D of title I of the Act, and related EPA
regulations. Minor NSR requirements are generally applicable for SIPs
in all areas, while NNSR requirements apply only for areas designated
as nonattainment for one or more National Ambient Air Quality Standards
(NAAQS). The San Joaquin Valley is currently designated ``Extreme''
nonattainment for the 1997, 2008 and 2015 ozone NAAQS and ``Serious''
nonattainment for the 1997, 2006, and 2012 PM2.5 NAAQS. See
40 CFR 81.305. Therefore, the designation of San Joaquin Valley as
federal ozone and PM2.5 nonattainment areas triggered the
requirement for the District to develop and submit an NNSR program to
the EPA for approval into the California SIP.
The EPA issued a final rule on December 6, 2018, that found that
the District had failed to submit a SIP submittal addressing NNSR
requirements for PM2.5.\4\ This finding of failure to submit
triggered sanctions clocks under CAA section 179. The EPA's May 7, 2020
finding of completeness represented the EPA's determination that the
District had corrected the deficiencies related to NNSR requirements
for the 2006 and 2012 PM2.5 NAAQS that formed the basis for
the EPA's December 6, 2018 finding of failure to submit, and as a
result, the associated sanctions and running of the sanctions clocks
were permanently stopped.\5\ The EPA's Technical Support Document (TSD)
has more information about the purpose of the submitted rule.
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\4\ 83 FR 62720.
\5\ See 40 CFR 52.31(d)(5).
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II. The EPA's Evaluation and Action
A. How is the EPA evaluating the rule?
The EPA has evaluated Rule 2201 for compliance with the applicable
requirements of section 110(a)(2)(C) and part D of title I of the CAA
and the associated regulations at 40 CFR 51.160-165, consistent with
the District's classification as an Extreme ozone nonattainment area
and Serious PM2.5 nonattainment area. We have also
considered whether the rule meets the federal visibility requirements
related to state NNSR programs as described in 40 CFR 51.307.
Additionally, we have reviewed the rule for consistency with other CAA
general requirements for SIP submittals, including requirements at
section 110(a)(2) regarding rule enforceability, and requirements at
sections 110(l) and 193 for SIP revisions.
Part D and title I of the CAA and the implementing regulations at
40 CFR 51.165 contain the NNSR program requirements for major
stationary sources and major modifications for the pollutants for which
the area has been designated nonattainment. The applicable provisions
of 40 CFR 51.307 establish requirements for state NNSR programs to
provide for review of major stationary sources and major modifications
that may have an impact on visibility in any mandatory Class I Federal
area, consistent with CAA section 169A. Section 110(a)(2)(A) of the Act
requires that regulations submitted to the EPA for SIP approval must be
clear and legally enforceable. Section 110(l) of the Act prohibits the
EPA from approving SIP revisions that would interfere with any
applicable requirement concerning attainment and reasonable further
progress (RFP) or any other applicable requirement of the CAA. Section
193 of the Act prohibits the modification of a SIP-approved control
requirement in effect before November 15, 1990, in a nonattainment
area, unless the modification ensures equivalent or greater emission
reductions of the relevant pollutant(s). With respect to procedures,
CAA sections 110(a) and 110(l) require that a state conduct reasonable
notice and hearing before adopting a SIP revision.
[[Page 45732]]
B. Does the rule meet the evaluation criteria?
With the exceptions noted below, the EPA finds that Rule 2201
generally satisfies the applicable CAA and regulatory requirements for
sources subject to NNSR permit program requirements for Extreme ozone
nonattainment areas and Serious PM2.5 nonattainment areas.
Although the rule does not satisfy the related visibility requirements
in 40 CFR 51.307, the San Joaquin Valley is subject to a Federal
Implementation Plan that addresses these requirements.\6\
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\6\ 40 CFR 52.281(d).
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Rule 2201 complies with the substantive and procedural requirements
of CAA section 110(l). With respect to the procedural requirements,
based on our review of the public process documentation included with
the submitted rules, we find that the SJVAPCD has provided sufficient
evidence of public notice and opportunity for comment and public
hearings prior to submittal of this SIP revision and has satisfied
these procedural requirements under CAA section 110(l). With respect to
the substantive requirements of CAA section 110(l), we have determined
that our approval of Rule 2201 would not interfere with the area's
ability to attain or maintain the NAAQS or with any other applicable
requirements of the CAA.
Similarly, we find that Rule 2201 is approvable under section 193
of the Act because it does not modify any control requirement in effect
before November 15, 1990.
Rule 2201 is generally consistent with criteria for the EPA's
approval of regulations submitted for inclusion in the SIP, including
the requirement in CAA section 110(a)(2)(A) that submitted regulations
be clear and legally enforceable.
For the reasons stated above and explained further in our technical
support document (TSD), we find that the submitted rule generally
satisfies the applicable CAA and regulatory requirements for minor NSR
and NNSR permit programs under CAA section 110(a)(2)(C) and part D of
title I of the Act and other applicable requirements, subject to the
exceptions noted below where the EPA has identified deficiencies.
Because Rule 2201 is not fully consistent with these requirements, we
are proposing a limited approval and limited disapproval of Rule 2201
under CAA sections 110(k)(3) and 301(a). Rule 2201 provisions that do
not meet the evaluation criteria are summarized in the following
section and described in more detail in the TSD included in the docket
for this proposed action.
C. What are the rule deficiencies?
The following provisions of Rule 2201 do not satisfy the
requirements of section 110 and/or part D of title I of the Act, and
prevent full approval of the Rule 2201:
1. Definitions
Section 3.18 of Rule 2201 incorporates the federal definition of
``major modification'' through the definition of ``Federal Major
Modification,'' but omits several other definitions necessary for
proper application of this term and related calculation provisions.
These missing definitions are listed in the TSD for this proposed
rulemaking. The District must either include definitions for these
terms, or explicitly state that for the purposes of the Rule 2201
definition of ``Federal Major Modification,'' all terms used in the
definition are as defined in 40 CFR 51.165, as it exists on the date of
adoption.
Additionally, Rule 2201 contains deficient definitions for the
following terms: Major Source; Routine Maintenance, Repair and
Replacement; PM10 Emissions; Secondary Emissions; and
Volatile Organic Compounds. The specific deficiencies associated with
these terms, and the necessary revisions necessary to correct the
deficiencies, are described in the TSD for this proposed action.
2. Interpollutant Offset Requirements
Section 4.13.3.1 allows the District to approve interprecursor
trading (IPT) of ozone precursors to satisfy emission offset
requirements, provided certain conditions are satisfied. However, on
January 29, 2021, the D.C. Circuit Court of Appeals in Sierra Club v.
EPA, 984 F.3d 1055, issued a decision holding that the CAA does not
allow IPT for ozone precursors and vacating the provisions in the EPA's
NNSR regulations allowing IPT for ozone precursors. In light of the
Court's decision, the provision in section 4.13.3.1 allowing for IPT
for ozone precursors is no longer permissible. The District must revise
section 4.13.3.1 to ensure it is consistent with the Courts decision
and the provisions of 40 CFR 51.165(a)(11) as it pertains to ozone
precursors.
3. Offset Exemptions
Sections 4.6.6 and 4.6.7 both allow exemptions from otherwise
applicable offset requirements for the relocation of an entire
stationary source or emission unit, respectively, if certain conditions
are met. Because federal requirements do not allow any exemptions from
offset requirements for relocation projects, we find these provisions
deficient. The District may allow a source or emission unit to obtain
emission reduction credits for the quantity of actual emissions
previously emitted at the old location and use them as offsets at the
new location. However, the full potential to emit (PTE) of the source
or emission unit at the new location must be offset at the appropriate
offset ratio. Alternatively, the District may limit the applicability
of these exemptions to minor sources that are not subject to the NNSR
offsetting requirements.
Section 4.6.8 provides an offset exemption for the installation or
modification of required emission control equipment. Paragraph 4.6.8.4
establishes emissions increase limits for a project to qualify for this
exemption but does not include a limit for PM2.5 emissions
and is therefore deficient. The District must update this provision to
add a limit on increases in permitted emissions or potential to emit of
no more than 10 tpy of PM2.5. This will ensure that the
exemption only applies to emission control projects that will not
trigger a PM2.5 major modification.
4. Public Notice Requirements for Minor Source Permits Emitting Ozone
Precursors
Section 5.4.5 requires public notice for any project resulting in
an increase in permitted emissions of any pollutant exceeding 20,000
pounds per year (10 tpy). As an extreme ozone nonattainment area, the
major source threshold for ozone precursors is also 10 tpy, meaning
that the rule currently does not require any public notice for minor
sources of NOX and VOC, whose emissions may contribute to
ozone nonattainment in the San Joaquin Valley. Therefore, the public
notice threshold does not adequately address the minor source and minor
modification public notice requirements for VOC and NOX. The
District must demonstrate that its public notice threshold for minor
sources of NOX and VOC is sufficiently stringent to exclude
only sources whose emissions are inconsequential to attainment.
5. District Equivalency With Federal Offset Requirements
Section 173 of the CAA and the EPA's implementing NSR regulations
at 40 CFR 51.165 require emissions increases associated with new major
sources and major modifications to be offset through corresponding
decreases in emissions.
[[Page 45733]]
To be creditable as offsets, these offsetting emissions reductions must
be surplus, permanent, quantifiable, and federally enforceable,\7\ and
meet other federal requirements.
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\7\ 40 CFR 51.165(a)(3)(ii)(C)(1)(i).
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The EPA allows local permitting authorities flexibility in
designing and implementing emissions offset programs, so long as these
programs achieve an equal or greater amount of creditable emissions
reductions as would be required under the offset program described in
the federal NSR regulations. Rule 2201 differs from the federal offset
requirements in several respects, including especially how it
calculates ``surplus'' emission reductions required to offset emissions
increases from new major sources and major modifications.
To account for these differences, Rule 2201 includes an offset
equivalency tracking system in Section 7, which requires the District
to submit an annual report comparing the offsets actually required by
the District to those that would have been required under the federal
requirements in terms of both the quantity of offsets required (``Test
1'') and the creditable ``time-of-use'' surplus value of the offsets
(``Test 2'').\8\
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\8\ ``Time-of-use'' surplus signifies that the offsetting
emissions reductions are surplus of applicable requirements as of
the issuance date of the ATC permit for the project whose emission
increases the reductions are used to offset. The federal offset
program requires all offsets to be time-of-use surplus. CAA
173(c)(2). In contrast, the quantity of offsets surrendered for
construction permits issued by the District, as measured in Test 1,
are surplus-adjusted only at the time the emission reduction credit
is initially issued (``time-of-issuance'' surplus). Rule 2201 at
section 3.2.2. Since emissions reductions may be credited years
before they are used to offset a project, more stringent control
requirements implemented in the interim period may significantly
reduce the time-of-use surplus value relative to the time-of-
issuance surplus value. Therefore, the District's allowance of ERCs
valued at time-of-issuance is generally less stringent than federal
requirements because it may assign higher value to a credit than is
federally creditable.
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If there is a shortfall under either Test 1 or Test 2, the District
may supplement the demonstration by retiring additional creditable
emission reductions that have not been used as offsets.\9\ If the
District cannot produce sufficient additional creditable emission
reductions to make up a shortfall under either test, the failure
triggers specific remedies under section 7.4. For a shortfall under
Test 1, all new major source and major modification authority to
construct (ATC) permits issued after the report deadline must apply the
federal offset calculation requirements from 40 CFR 51.165 and part D
of title I of the CAA, including the requirements to provide the
federally required quantity of offsets and to ensure that these offsets
are time-of-use surplus adjusted.\10\ For a shortfall under Test 2, all
new major source and major modification ATC permits issued after the
report deadline must ensure that emissions reductions used to satisfy
offset requirements are creditable and time-of-use surplus
adjusted.\11\
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\9\ Id. at sections 7.2.1.2 and 7.2.2.2.
\10\ Id. at section 7.4.1.2.
\11\ Id. at section 7.4.2.1.
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The EPA first approved these provisions in 2004.\12\ In the years
since, the District has submitted annual equivalency demonstrations as
described under the rule, showing equivalency under Test 1 and Test
2.\13\ For many pollutants and years, the District has demonstrated
equivalency on an annual basis, by collecting more offsets annually
than required under the federal program.\14\ However, tightened federal
requirements resulting from the San Joaquin Valley's 2010
reclassification to Extreme ozone nonattainment has resulted in the
District collecting, in some years, fewer annual offsets for VOC and
NOX than federally required. As a result, recent VOC and
NOX equivalency demonstrations have relied on ``carryover''
offsets collected in previous reporting years, as well as additional
creditable emission reductions from facility closures that have not
been claimed for offset credit by the facility operators (often termed
``orphan shutdowns''), and agricultural engine electrification
projects.
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\12\ 69 FR 27837 (May 17, 2004). The TSD for this proposed
action includes more detail on the history of the Section 7
provisions and EPA's approval of the equivalency system.
\13\ These reports are generally available at www.valleyair.org/busind/pto/annual_offset_report/annual_offset_report.htm.
\14\ This has been most common for PM10, CO, and
SOX, when the District has applied lower offsetting
thresholds than applicable under the federal major source
definitions at 40 CFR 51.165(a)(1)(iv)(A).
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The District's 2019-2020 Annual Offset Equivalency Report (``2019--
2020 Report'') was the first to demonstrate a shortfall for any
pollutant.\15\ The 2019-2020 Report showed a failure of Test 1 and Test
2 for VOC, and a Test 2 failure for NOX, and attributed
these failures to the District's provisional removal of the additional
creditable emission reductions associated with orphan shutdowns and
engine electrification projects.\16\ In response to the Report's VOC
and NOX failures, the District began implementing the
federal offset requirements for VOC, and the federal requirements for
offset surplus value (but not offset quantity) for NOX, as
described in the section 7 remedy provisions.\17\
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\15\ SJVAPCD, ``2019-2020 Annual Offset Equivalency Report,''
November 20, 2020.
\16\ Id. at 4-5. The District withdrew these credits in response
to a CARB report that identified concerns about the assumptions and
calculations that the District applied in crediting these
reductions, among other issues associated with the District's
implementation of its offset program. See CARB, ``Review of the San
Joaquin Valley Air Pollution Control District Emission Reduction
Credit System,'' June 2020.
\17\ Rule 2201, section 7.4.1.2 and 7.4.2.1.
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The District's 2020-2021 Annual Offset Equivalency Report (``2020-
2021 Report'') showed offset equivalency for PM10,
PM2.5, CO, and SOX.\18\ The 2020-2021 Report did
not include a Test 1 or Test 2 demonstration for VOC, or a Test 2
demonstration for NOX, since the 2019-2020 Report found that
the District's program was no longer showing equivalency under these
tests. The 2020-2021 Report's Test 1 demonstration for NOX
showed that the District required fewer offsets in the reporting year
than would have been required under federal offset requirements, but
that the District's offset program maintained a sufficient balance of
carryover offsets from previous reporting years to make up the
difference. Critically, however, while NOX offsets collected
in the most recent reporting year were surplus adjusted to time-of-use
pursuant to federal requirements (per the District's response to the
prior year's Test 2 failure), the carryover offsets were credited at
their full time-of-issuance value (i.e., these offsets were not
federally surplus-adjusted). Since the District's previous report had
shown a Test 2 shortfall for NOX offsets, these carryover
offsets no longer retained any surplus balance that could be counted
toward equivalency. The District subsequently issued a revised report
withdrawing the NOX portion of the 2020-2021 Report, based
on the District's concern that the remedy of requiring a federal time-
of use surplus adjustment was not adequate to ensure full federal
equivalency.\19\
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\18\ SJVAPCD, ``2020-2021 Annual Offset Equivalency Report,''
November 19, 2021.
\19\ SJVAPCD, ``2020-2021 Revised Annual Offset Equivalency
Report,'' March 1, 2022 (``2020-2021 Revised Report''). See also
letter dated March 21, 2022, from Elizabeth J. Adams, Director, EPA
Region IX Air and Radiation Division, to Samir Sheikh, Executive
Director, SJVAPCD (conveying EPA concerns about 2020-2021 Report
NOX demonstration, and supporting District decision to
withdraw through 2020-2021 Revised Report).
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Since the shortfalls from the 2019-2020 and 2020-2021 Reports,
several shortcomings in the District's equivalency system have become
apparent. As an initial matter, the equivalency failures for VOC and
NOX mean that the District must update the rule to apply
federal applicability and
[[Page 45734]]
offset requirements for these pollutants.\20\ More generally, the 2020-
2021 Report showed a significant disconnect between the section 7 tests
and remedies for all pollutants. Specifically, once the District has
failed Test 2, it has effectively demonstrated that its program is less
stringent than the federal requirements because it has not provided an
equivalent amount of time-of-use surplus emissions reductions as would
have been required under the federal program.\21\ However, the remedy
for a Test 2 failure provides only that the District must require the
offsets collected for future permits to be time-of-use surplus
adjusted, and does not contain any explicit requirement for the
District to collect the federal quantity of time-of-use surplus offsets
for those permits. Therefore, the Test 2 remedy does not ensure full
offset equivalency following a Test 2 failure.
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\20\ See Rule 2201, section 7.4.1.2.
\21\ See CAA 173(a)(1)(A) (requiring state NSR programs to
obtain ``sufficient offsetting emissions reductions'' as determined
by federal NSR regulations).
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Additionally, we identified a deficiency in Rule 2201 in that it
does not contain any requirement to prevent the equivalency system from
continuing to operate at a deficit once available carryover offsets and
additional creditable emission reductions are exhausted. Because the
rule only requires the District to demonstrate equivalency on an annual
(rather than ongoing) basis, the District may continue to issue permits
that require less than the federal quantity of surplus offsets even
after the equivalency system has run out of excess offsets and emission
reductions that can be used to restore the difference. This could allow
the District to incur an increasing deficit for up to 15 months before
any remedy is in place, since the rule's remedies become effective only
after the submission deadline for the annual offset equivalency
report.\22\
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\22\ See Rule 2201 at section 7.4.1.2 and 7.4.2.1. Fifteen
months represents the outermost time for a shortfall to be
addressed, running from the start of a reporting year (August 20) to
the reporting deadline (November 20 of the following year). We note
that the District initiated federal time-of-use surplus adjustments
for VOC and NOX once it could no longer demonstrate Test
2 equivalency for these pollutants, consistent with the Test 2
remedy but prior to the reporting deadline. We recognize this as a
voluntary correction consistent with the District's provisional
withdrawal of additional creditable reductions of these pollutants,
rather than a requirement of the existing rule text.
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As described above, our 2004 approval of Rule 2201 found that an
annual aggregate demonstration was generally appropriate and would not
cause significant delay in implementing a remedy. However, this finding
relies on demonstrations involving an annual shortfall that could be
made up using carryover offsets, rather than a shortfall that exceeds
the balance of available carryover offsets and additional creditable
emission reductions within the equivalency system, as happened in the
2019-2020 Report.\23\ On reconsideration, we find that an annual
aggregate system may be inappropriate because it does not ensure that
sufficient creditable emission reductions are available to offset
emissions from new construction prior to an ATC permit being
issued.\24\ Moreover, we find that the specific provisions of Rule 2201
are inadequate because they do not contain any safeguards to prevent
the District from continuing to operate its equivalency system with a
negative balance during a reporting period.
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\23\ See 69 FR 27837, 27841.
\24\ See CAA sections 173(a) and 173(c)(1) (specifying that
emission reductions used to offset a new or modified major source
must be federally enforceable before a permit for the source is
issued, and must be in effect and enforceable by the time the source
commences operation). See also CAA section 173(a)(1)(A) (requiring
sufficient emissions reductions to have been ``obtained'' by the
time the source commences operation).
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Finally, because neither remedy provides a mechanism to require the
District to quantify or restore a negative balance in the equivalency
system, both remedies fail to ensure full federal offset equivalency in
the event of a shortfall. Thus, even where the District adopts all
offset requirements of the federal program in response to an
equivalency failure, it will retain an historic deficit relative to the
federal program, which is not made whole under the rule. Therefore, the
EPA finds that the District must revise the rule to address these
deficiencies.
The TSD for this proposed action includes suggestions for how the
District can correct these deficiencies. We encourage the District to
consult with Region 9 during the rule development process to ensure
that all deficiencies are properly addressed.
6. Temporary Replacement Emission Units
The submitted version of Rule 2201 includes revisions to section
8.1.3 to provide an ``application shield'' for Temporary Replacement
Emission Units (TREUs). An application shield is an administrative
mechanism that allows a source to operate prior to submitting an
application and obtaining an ATC, if certain conditions are met. While
this provision is generally approvable, we have identified two
deficiencies. First, the provision specifies that TREUs must be
addressed by a best available retrofit control technology (BARCT) rule,
but ``BARCT'' is not defined in Rule 2201 or the approved SIP. Second,
the provision specifies that a TREU must be equipped with a control
device that is ``capable'' of at least 85% emission control but does
not specify any required minimum level of control that must actually be
achieved. The definition of Routine Replacement Emissions Unit in
section 3.35.5 of the existing rule also contains these same two
deficiencies. These provisions must be revised to incorporate a
definition of ``BARCT'' and to specify a minimum level of emission
control to be achieved.
7. Other Deficiencies
The TSD for this proposed action describes several other federal
NNSR requirements not addressed in Rule 2201. These include the
following: stack height requirements at 40 CFR 51.164; enforceable
procedures as provided at 40 CFR 51.165(a)(5)(i) and (ii); and permit
issuance restrictions based on inadequate SIP implementation at CAA
section 173(a)(4). This section of the TSD also notes that the rule
contains a cross-reference to a State statutory provision that should
be clarified with an applicable date. See our discussion in Section
6.3.6 of the TSD for more information on these deficiencies.
D. EPA Recommendations to Further Improve the Rule
The TSD includes recommendations for the next time the SJVAPCD
modifies Rule 2201.
E. Proposed Action and Public Comment
As authorized in sections 110(k)(3) and 301(a) of the Act, the EPA
is proposing a limited approval and limited disapproval of Rule 2201.
We will accept comments from the public on this proposal until August
29, 2022. If we finalize this action as proposed, this action will
incorporate Rule 2201 into the SIP, including those provisions
identified as deficient. This approval is limited because EPA is
simultaneously proposing a limited disapproval of the rule under
section 110(k)(3). If finalized as proposed, our limited disapproval
action would trigger an obligation on the EPA to promulgate a Federal
Implementation Plan unless the State corrects the deficiencies, and the
EPA approves the related plan revisions, within two years of the final
action. Additionally, because the deficiency relates to NNSR
requirements under part D of title I of the Act, the offset sanction in
CAA section 179(b)(2) would apply in the San Joaquin Valley 18 months
after the effective date of a
[[Page 45735]]
final limited disapproval, and the highway funding sanctions in CAA
section 179(b)(1) would apply in the area six months after the offset
sanction is imposed. Neither sanction will be imposed under the CAA if
the State submits and we approve, prior to the implementation of the
sanctions, a SIP revision that corrects the deficiencies we identify in
our final action. The EPA intends to work with the SJVAPCD to correct
the deficiencies in a timely manner.
Note that Rule 2201 has been adopted by the SJVAPCD, and the EPA's
final limited disapproval would not prevent the local agency from
enforcing it. The limited disapproval would also not prevent any
portion of the rule from being incorporated by reference into the
federally enforceable SIP.\25\
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\25\ Memorandum dated July 9, 1992, from John Calcagni,
Director, Air Quality Management Division, Office of Air Quality
Planning and Standards, U.S. EPA, to EPA Regional Air Directors,
Regions I-X, Subject: ``Processing of State Implementation Plan
(SIP) Submittals.''
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III. Incorporation by Reference
In this rule, the 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, the EPA is proposing to incorporate by
reference the rule discussed in Section I. and listed in Table 1 of
this preamble. The EPA has made, and will continue to make, this
document available electronically 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).
IV. Statutory and Executive Order Reviews
Additional information about these statutes and Executive Orders
can be found at www.epa.gov/laws-regulations/laws-and-executive-orders.
A. Executive Order 12866: Regulatory Planning and Review and Executive
Order 13563: Improving Regulation and Regulatory Review
This action is not a significant regulatory action and was
therefore not submitted to the Office of Management and Budget (OMB)
for review.
B. Paperwork Reduction Act (PRA)
This action does not impose an information collection burden under
the PRA because this action does not impose additional requirements
beyond those imposed by state law.
C. Regulatory Flexibility Act (RFA)
I certify that this action will not have a significant economic
impact on a substantial number of small entities under the RFA. This
action will not impose any requirements on small entities beyond those
imposed by state law.
D. Unfunded Mandates Reform Act (UMRA)
This action does not contain any unfunded mandate as described in
UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect
small governments. This action does not impose additional requirements
beyond those imposed by state law. Accordingly, no additional costs to
state, local, or tribal governments, or to the private sector, will
result from this action.
E. Executive Order 13132: Federalism
This action does not have federalism implications. It will not have
substantial direct effects on the states, on the relationship between
the national government and the states, or on the distribution of power
and responsibilities among the various levels of government.
F. Executive Order 13175: Coordination With Indian Tribal Governments
This action does not have tribal implications, as specified in
Executive Order 13175, because 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, and will not
impose substantial direct costs on tribal governments or preempt tribal
law. Thus, Executive Order 13175 does not apply to this action.
G. Executive Order 13045: Protection of Children From Environmental
Health Risks and Safety Risks
The EPA interprets Executive Order 13045 as applying only to those
regulatory actions that concern environmental health or safety risks
that the EPA has reason to believe may disproportionately affect
children, per the definition of ``covered regulatory action'' in
section 2-202 of the Executive Order. This action is not subject to
Executive Order 13045 because it does not impose additional
requirements beyond those imposed by state law.
H. Executive Order 13211: Actions That Significantly Affect Energy
Supply, Distribution, or Use
This action is not subject to Executive Order 13211, because it is
not a significant regulatory action under Executive Order 12866.
I. National Technology Transfer and Advancement Act (NTTAA)
Section 12(d) of the NTTAA directs the EPA to use voluntary
consensus standards in its regulatory activities unless to do so would
be inconsistent with applicable law or otherwise impractical. The EPA
believes that this action is not subject to the requirements of section
12(d) of the NTTAA because application of those requirements would be
inconsistent with the CAA.
J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Population
The EPA lacks the discretionary authority to address environmental
justice in this rulemaking.
List of Subjects in 40 CFR Part 52
Environmental protection, Administrative practice and procedure,
Air pollution control, Incorporation by reference, Intergovernmental
relations, Nitrogen dioxide, Ozone, Particulate matter, Reporting and
recordkeeping requirements, Sulfur dioxide, Volatile organic compounds.
Authority: 42 U.S.C. 7401 et seq.
Dated: July 25, 2022.
Martha Guzman Aceves,
Regional Administrator, Region IX.
[FR Doc. 2022-16245 Filed 7-28-22; 8:45 am]
BILLING CODE 6560-50-P