6560-50-P

**ENVIRONMENTAL PROTECTION AGENCY**

**40 CFR 51,** **52, 70, and 71**

**\[FRL - \_\_\_\_\_\_, Docket ID No. EPA-HQ-OAR-2006-0089\]**

**RIN 2060- \_\_\_\_\_\_\_**

**Prevention of Significant Deterioration, Nonattainment New Source
Review, and Title V: Treatment of Corn Milling Facilities** **Under the
"Major Emitting Facility" Definition**

**AGENCY:** Environmental Protection Agency (EPA).

**ACTION:** Proposed rule.

**SUMMARY:** The EPA has treated wet and dry corn milling facilities
differently under the Clean Air Act (CAA or Act) depending on whether
the facilities in question produce ethanol fuel or ethanol fit for human
consumption. In particular, EPA has applied different major source size
cut offs to these facilities under the Prevention of Significant
Deterioration (PSD) program based on the product these facilities
produced. Additionally, when the list of source categories relative to
the definition of "major emitting facility" was first promulgated on
August 7, 1980, this same list was promulgated in the same final
regulatory package for determining from which source categories fugitive
emissions were to be counted in determining whether a source is a major
source. As a result, although two of the regulatory changes being
proposed today address the major source threshold for PSD sources, the
remaining proposed regulatory changes address when fugitive emissions
are counted for purposes of determining whether a source is a major
source under the PSD, nonattainment New Source Review (NSR), or title V
programs.

In today's action, we are requesting public comment on two options under
consideration by EPA with respect to corn milling facilities. Under
Option 1, EPA would treat wet and dry corn milling facilities in the
same manner under the PSD, nonattainment NSR, and title V programs
regardless of whether they produce ethanol fuel or ethanol fit for human
consumption. If EPA adopts Option 1, EPA would redefine chemical process
plants under the definition of "major emitting facility" to exclude wet
and dry corn milling facilities which produce ethanol fuel. Under Option
2, EPA would retain the current distinction between wet and dry corn
milling facilities under these regulatory programs based on whether they
produce ethanol fuel or ethanol fit for human consumption. The EPA's
preferred option is Option 1. We are requesting comment on these two
options and on the revisions that we propose to make if we adopt Option
1.

**DATES:** [Comments]{.underline}. Comments must be received on or
before **\[INSERT DATE 60 DAYS AFTER PUBLICATION IN THE FEDERAL
REGISTER.\]**

[Public Hearing]{.underline}. If anyone contacts us requesting to speak
at a public hearing **\[INSERT 20 DAYS AFTER PUBLICATION IN THE FEDERAL
REGISTER\]**, we will hold a public hearing approximately 30 days after
publication in the [Federal Register]{.underline}.

**ADDRESSES:** Submit your comments, identified by Docket ID No.
EPA-HQ-OAR-2006-0089 by one of the following methods:

-   [www.regulations.gov](http://www.regulations.gov/): Follow the
    on-line instructions for submitting comments.

    • Fax: 202-566-1741.

    • Mail: Attention Docket ID No. EPA-HQ-OAR-2006-0089, U.S.
    Environmental Protection Agency, EPA West (Air Docket), 1200
    Pennsylvania Avenue, Northwest, B102, Mail code 6102T, Washington,
    DC 20460. Please include a total of 2 copies.

-   Hand Delivery: U.S. Environmental Protection Agency, EPA West (Air
    Docket), 1301 Constitution Avenue, Northwest, Room B102, Washington,
    DC 20004, Attention Docket ID No. EPA-HQ-OAR-2006-0089. Such
    deliveries are only accepted during the Docket's normal hours of
    operation, and special arrangements should be made for deliveries of
    boxed information.

*Instructions:* Direct your comments to Docket ID No.
EPA-HQ-OAR**-**2006-0089. EPA\'s policy is that all comments received
will be included in the public docket without change and may be made
available online at [www.regulations.gov]{.underline}, including any
personal information provided, unless the comment includes information
claimed to be Confidential Business Information (CBI) or other
information whose disclosure is restricted by statute. Do not submit
information that you consider to be CBI or otherwise protected through
EDOCKET, regulations.gov, or e-mail. The
[www.regulations.gov](http://www.regulations.gov/) website is an
Aanonymous access@ systems, which means EPA will not know your identity
or contact information unless you provide it in the body of your
comment. If you send an e-mail comment directly to EPA without going
through [www.regulations.gov](http://www.regulations.gov/), your e-mail
address will be automatically captured and included as part of the
comment that is placed in the public docket and made available on the
Internet. If you submit an electronic comment, EPA recommends that you
include your name and other contact information in the body of your
comment and with any disk or CD-ROM you submit. If EPA cannot read your
comment due to technical difficulties and cannot contact you for
clarification, EPA may not be able to consider your comment. Electronic
files should avoid the use of special characters, any form of
encryption, and be free of any defects or viruses. For additional
information about EPA=s public docket visit the EPA Docket Center
homepage at <http://www.epa.gov/epahome/dockets.htm>. For additional
instructions on submitting comments, please see section B. of the
**SUPPLEMENTARY INFORMATION** section of this document.

*Docket:* All documents in the docket are listed in the
[www.regulations.gov](http://www.regulations.gov/) index. Although
listed in the index, some information is not publicly available, i.e.,
CBI 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 either electronically
in [www.regulations.gov](http://www.regulations.gov/) or in hard copy at
the U.S. Environmental Protection Agency, EPA West (Air Docket), 1200
Pennsylvania Avenue, Northwest, B102, Mail code: 6102T, Washington, DC
20460, Attention Docket ID No. EPA-HQ-OAR-2006-0089, Washington, DC
20004\]. This Docket Facility and Public Reading Room is open from 8:30
a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The
telephone number for the Public Reading Room is (202) 566-1744, and the
telephone number for the EPA-HQ-OAR-2006-0089 is (202) 566-1742.

**FOR FURTHER INFORMATION CONTACT:** Ms. Joanna Swanson, (C339-03), Air
Quality Policy Division, U.S. Environmental Protection Agency, Research
Triangle Park, NC 27711, telephone number: (919) 541-5282; fax number :
(919) 541-5509, or electronic mail at swanson.joanna@epa.gov.

**SUPPLEMENTARY INFORMATION:**

**I. General Information**

[A. What are the regulated entities?]{.underline}

Entities potentially affected by the subject rule for today=s action
include wet and dry corn milling facilities and industrial ethyl alcohol
production.

  ---------------------------- ---------- -------------------------------
  Industry Group               SIC^a^     NAICS^b^

  Wet Corn Milling             2046       311221

  Industrial Organic Chemicals 2869       325193
  (Ethyl Alcohol)                         

                                          
  ---------------------------- ---------- -------------------------------

^a^ Standard Industrial Classification (1987)

^b^ North American Industry Classification System. Entities potentially
affected by the subject rule for today=s action also include State,
local, and tribal governments.

[B. How Should I submit CBI to the Agency?]{.underline}

1\. Submitting CBI. Do not submit this information that you consider to
be CBI electronically through www.regulations.gov or e-mail. Clearly
mark the part or all of the information that you claim to be CBI. For
CBI information in a disk or CD ROM that you mail to EPA, mark the CD
ROM the specific information that is claimed as CBI. In addition to one
complete version of the comment that includes information claimed as
CBI, a copy of the comment that does not contain the information claimed
as CBI must be submitted for inclusion in the public docket. Information
so marked will not be disclosed except in accordance with procedures set
forth in 40 CFR part 2. Also, send an additional copy clearly marked as
above not only to the Air docket but to: Roberto Morales, c/o OAQPS
Document Control Officer, (C339-03), U.S. Environmental Protection
Agency, Research Triangle Park, NC 27711, Attention Docket ID No.
EPA-HQ-OAR-2006-0089.

C. [What Should I Consider as I prepare My Comments for
EPA]{.underline}?

When submitting comments, remember to:

i.  Identify the rulemaking by docket number and other identifying
    information (subject heading, Federal Register date and page
    number).

ii. Follow directions - The agency may ask you to respond to specific
    questions or organize comments by referencing a Code of Federal
    Regulations (CFR) part or section number.

iii. Explain why you agree or disagree; suggest alternatives and
     substitute language for your requested changes.

iv. Describe any assumptions and provide any technical information
    and/or data that you used.

v.  If you estimate potential costs or burdens, explain how you arrived
    at your estimate in sufficient detail to allow for it to be
    reproduced.

vi. Provide specific examples to illustrate your concerns, and suggest
    alternatives.

vii. Explain your views as clearly as possible, avoiding the use of
     profanity or personal threats.

viii. Make sure to submit your comments by the comment period deadline
      identified.

      D. [How Can I Find Information About a Possible Public
      Hearing]{.underline}?

Persons interested in presenting oral testimony should contact Mrs.
Pamela S. Long, Air Quality Division (C339-03), U.S. Environmental
Protection Agency, Research Triangle Park, NC 27711, telephone number
(919) 541-0641, at least 2 days in advance of the public hearing.
Persons interested in attending the public hearing should also contact
Mrs. Long to verify the time, date, and location of the hearing. The
public hearing will provide interested parties the opportunity to
present data, views, or arguments concerning these proposed changes.

E. [How is this preamble organized]{.underline}?

The information presented in this preamble is organized as follows:

General Information

A. What are the regulated entities?

B. How should I submit CBI material to the Agency?

C. What should I consider as I prepare my comments for EPA?

D. How can I find information about a possible public hearing?

E. How is this preamble organized?

II\. Background

A.  What is the history of the term "major emitting facility"?

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A.  What is the basis for the source categories listed in the definition
    of "major emitting facility" in section 169(1) of the Act?

B.  What is the connection between source categories regulated by NSPS
    and source categories listed in the definition of "major emitting
    facility" in section 169(1) of the Act?

C.  How was the chemical process plants source category addressed in the
    NSPS Study?

D.  How have ethanol production facilities been considered under the PSD
    Program?

> F. What additional changes are being proposed for wet and dry corn
> milling facilities?

III\. Today's Proposed Rule

A. What is being proposed?

B. What are the implications of changing the classification of
facilities which produce ethanol fuel as a result of the wet or dry
milling process?

C. What are the implications of not changing the classification for
facilities which produce ethanol fuel as a result of the dry or wet
milling process?

IV\. Statutory and Executive Order Reviews

A. Executive Order 12866 - Regulatory Planning and Review

B. Paperwork Reduction Act

C. Regulatory Flexibility Analysis

D. Unfunded Mandates Reform Act

E. Executive Order 13132 - Federalism

F. Executive Order 13175 - Consultation and Coordination with Indian
Tribal Governments

G. Executive Order 13045 - Protection of Children from Environmental
Health Risks and Safety Risks

H. Executive Order 13211 - Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use

I. National Technology Transfer and Advancement Act

**II. Background**

The NSR program legislated by Congress in parts C and D of title I of
the Act is a preconstruction review and permitting program applicable to
new or modified major stationary sources of air pollutants regulated
under the Act. In areas not meeting health-based NAAQS and in ozone
transport regions (OTR), the program is implemented

under the requirements of part D of title I of the Act for
''nonattainment'' NSR.

In areas meeting NAAQS (''attainment'' areas) or for which there is
insufficient

information to determine whether they meet the NAAQS (''unclassifiable''
areas), the NSR requirements for the prevention of significant
deterioration of air quality under part C of title I of the Act apply.
The NSR regulations are contained in 40 CFR 51.165, 51.166, 52.21,
52.24, and Appendix S of part 51.

The Act, as implemented by our regulations, sets applicability
thresholds for major sources in attainment areas (100 or 250 tons per
year (tpy) depending on the source type) and nonattainment areas (100
tpy or less, depending on the nonattainment classification). A new
source with a potential to emit (PTE) at or above the applicable
threshold amount ''triggers,'' or is subject to, major NSR. To determine
whether a source is subject to a 100 or a 250 tpy threshold for purposes
of determining whether it is a "major emitting facility," section 169(1)
of the Act contains a definition of major emitting facility.

Title V of the CAA required EPA to promulgate regulations governing the
establishment of operating permits programs. The current regulations are
codified at 40 CFR parts 70 and 71. All major sources, as that term is
defined for title V purposes, are required to obtain title V operating
permits. Sources required to obtain title V permits also include those
sources subject to PSD and nonattainment NSR. Therefore, title V relies
in part on the definition of major emitting facility for the PSD program
and any change to this definition under this program could affect
whether a source is required to obtain a title V permit.

[A. What is the history of the term "major emitting
facility]{.underline}"?

On August 7, 1977, the President signed the Clean Air Act Amendments of
1977 (1977 Amendments) into law. Those amendments established, in Part C
of Title I of the Clean Air Act (the Act or CAA), a set of requirements
for the prevention of significant deterioration (PSD) of air quality in
so-called "clean air," or attainment, areas. See sections 160-69, 42
U.S.C. 7470-79. As part of these amendments, the major emitting facility
definition in section 169(1) was added to the CAA. The definition of
major emitting facility as incorporated into section 169(1) of the 1977
Amendments reads as follows:

The term 'major emitting facility' means any of the following stationary
sources of air pollutants which emit, or have the potential to emit[^1],
one hundred tons per year or more of any air pollutant from the
following types of stationary sources: fossil-fuel fired steam electric
plants of more than two hundred and fifty million British thermal units
per hour heat input, coal cleaning plants (thermal dryers), kraft pulp
mills, Portland Cement plants, primary zinc smelters, iron and steel
mill plants, primary aluminum ore reduction plants, primary copper
smelters, municipal incinerators capable of charging more than two
hundred and fifty tons of refuse per day, hydrofluoric, sulfuric, and
nitric acid plants, petroleum refineries, lime plants, phosphate rock
processing plants, coke oven batteries, sulfur recovery plants, carbon
black plants (furnace process), primary lead smelters, fuel conversion
plants, sintering plants, secondary metal production facilities,
chemical process plants, fossil-fuel boilers of more than two hundred
and fifty million British thermal units per hour heat input, petroleum
storage and transfer facilities with a capacity exceeding three hundred
thousand barrels, taconite ore processing facilities, glass fiber
processing plants, charcoal production facilities. Such term also
includes any other source with the potential to emit two hundred and
fifty tons per year or more of any air pollutant. This term shall not
include new or modified facilities which are nonprofit health or
education institutions which have been exempted by the State.

The source categories established in the above definition have wide
applicability under the major New Source Review (NSR) and Title V
operating permits programs. Although the above definition includes a
number of source categories, it is the history and definition of the
chemical process plants source category that we will be examining
relative to the production of ethanol by wet or dry corn milling (also
known as wet or dry milling) in this proposal.

[B. What is the basis for the source categories listed in the definition
of "major emitting facility" in section 169(1) of the Act]{.underline}?

Section 111 of the Act requires the Administrator of EPA to establish
Federal standards of performance for new stationary sources which may
significantly contribute to air pollution and was intended by Congress
to complement the other air quality management approaches authorized by
the 1970 Act. After enactment of section 111, EPA hired Research
Corporation of New England (Research Corp.) to study stationary sources
of air pollution in order to establish priorities for developing and
promulgating New Source Performance Standards (NSPS). Because of limited
resources, EPA could not feasibly set NSPS requirements for all
categories of stationary sources simultaneously. Therefore, the goal of
the Research Corp. study was to identify sources for which NSPS controls
would have the greatest impact on reducing the quantity of atmospheric
emissions. Research Corp. examined approximately 190 different types of
stationary combustion sources that potentially could be determined to be
major emitting facilities, and provided information on the types of air
pollutants that those sources emitted. The Research Corp. study was used
by EPA in setting priorities for the order in which it would promulgate
NSPS requirements for categories of stationary sources.

The Research Corp. study was also relied on by Congress in identifying
the 28 categories of stationary sources specifically listed in the
definition of the term "major emitting facility" in section 169(1) of
the Act. 122 Cong. Rec. 24,520-23 (1976). As explained by Senator
McClure in the [Congressional]{.underline} [Record]{.underline}, the EPA
Administrator examined the data from the draft Research Corp. study and
determined that 19 of the stationary source categories examined should
initially be classified as major emitting facilities. Senator McClure
further explained that the Senate Committee added nine more categories
of stationary sources to the 19 selected by EPA for a total of 28 source
categories. 122 Cong. Rec. at 24,521[^2].

In discussing the specific sources identified in section 169(1), Senator
McClure stated:

Mr. President, I ask unanimous consent that an extract from that report
of the Research Corp. of New England, listing the 190 types of sources,
from which the EPA took 19, and the committee took 28, be printed in the
Record at this point as an illustration of what the committee examined
and the kinds of sources the committee intended to include and exclude,
recognizing that it is neither exclusive nor invariable. There is
administrative discretion to add to the list, to change the list. But
the committee spoke very clearly on its intent on that question.

122 Cong. Rec. at 24,521 (1976). As a result of Senator McClure's
action, the table from the draft Research Corp. of New England report
containing the list of 190 types of sources was printed in the
[Congressional]{.underline} [Record]{.underline}.

[C. How was the chemical process plants source category addressed in the
Research Corp.]{.underline} [NSPS Study?]{.underline}

The approximately 190 source categories identified in Research
Corporation's report were further classified into ten general groups for
purposes of the study -- stationary combustion sources, chemical
processing industries, food and agricultural industries, mineral
products industries, metallurgical industries, and miscellaneous sources
(evaporation losses, petroleum industry, wood products industry, and
assembly plants).

For the chemical process industry grouping, the Research Corp. study
considered 24 different source categories and their associated
pollutants. Notably, within the chemical process industry listings in
the 1977 final report and in the 1976 draft report (as incorporated into
the [Congressional]{.underline} [Record]{.underline}) there is no
listing which refers to ethanol production, ethanol fuel production, or
corn milling operations. Of course, it is worth noting that although the
first U.S. ethanol fuel plant was built by the U.S. Army in the 1940's,
few, if any, ethanol fuel production facilities existed in the mid to
late 1970's. Thus, at the time that Congress drafted section 169(1), for
which it appears to have relied on the draft Research Corp. study
developed for NSPS purposes, plants producing ethanol were not listed
among the types of facilities that fell within the category for chemical
processing industries.

[D. How have ethanol production facilities been considered under the PSD
Program?]{.underline}

In addition to the term "major emitting facility" addressing sources
within specified source categories which emit, or have the potential to
emit, 100 tons per year or more of any air pollutant, this term also
establishes a potential to emit threshold of 250 tons per year or more
of any air pollutant for sources which fall outside of the source
categories specified in section 169(1) of the Act. Thus, for new sources
which are locating in attainment areas, the applicable major source
threshold under the PSD program will be either 100 tons per year for
sources in one of the source categories specifically listed in section
169(1), or 250 tons per year for all other sources. For new sources
located in nonattainment areas, the applicable thresholds for the
nonattainment pollutants will depend on the nonattainment area's status.
For operating sources in attainment areas, the relevant major source
threshold under title V is 100 tons per year, but is lowered in
nonattainment areas for the relevant pollutant.

In its August 7, 1980, rulemaking, EPA decided to use the 2-digit "Major
Group" listings as defined by the SIC manual of 1972 (as amended in
1977) [^3] as its basis for defining a source under PSD and
nonattainment NSR. Thus, to determine which source category a source
belongs to, and therefore what major source thresholds apply, EPA
determines which 2-digit "Major Group" code applies to the source. These
classifications are based on the source's primary activity, which is
determined by the source's principal product(s) -- either produced or
distributed -- or services rendered. (August 7, 1980, 45 FR 52676,
52694).

It is important to note that the Standard Industrial Classification
(SIC) manual was not designed for regulatory application, but was
developed primarily for the collection of economic statistics and for
the consistent comparison of economic data between various sectors of
the U.S. economy. The use of SIC codes by EPA is also not required by
the Act or even mentioned in the Act. As explained above, EPA chose to
use SIC codes to define sources including sources within the 28 listed
source categories. EPA\'s regulatory use of SIC codes does not have to
follow the exact approach taken by the SIC manual. While it may be
appropriate for economic statistical purposes, to place ethanol fuel and
ethanol fit for human consumption in different categories ("Major
Groups" 28 and 20 respectively), this does not limit EPA\'s discretion
to treat both types of ethanol in the same manner for regulatory
purposes.

[Ethanol Production Facilities]{.underline}:

In the U.S., ethanol (ethyl alcohol) is currently being produced either
synthetically or through the fermentation of sugars derived from
agricultural feedstocks. For ethanol produced synthetically, either
ethylene or hydrogen (H~2~) and carbon monoxide (CO) are used as the
feedstock. As of 2002, only two facilities in the U.S. were producing
synthetic ethanol. (Memorandum from Mary Lalley, Easter Research Group,
Inc., to Bob Rosensteel, U.S. EPA, July 2, 2002).

The majority of ethanol produced in the U.S. is produced from sugar or
starch-based feedstock (e.g., corn, millet, beverage waste) using two
basic processes: the dry mill process and the wet mill process. The key
difference between these two processes is the initial treatment of the
grain. In the wet mill process, the grain is soaked and then ground to
remove germ, fiber, and gluten from the starch prior to cooking. In the
dry mill process, the grain or feedstock is not separated into its
constituent parts prior to cooking.

Both wet and dry milling operations produce ethanol as well as other
co-products.

"Co-products from the dry mill process, separated from the ethanol in
the distillation step, include distiller's dried grain (DDG) and
solubles (S), which are often combined and referred to as DDGS. DDGS is
used as an animal feed. In the wet mill process, co-products are
separated from the ethanol production process in the initial grinding or
milling step. Co-products from the wet milling process include fiber and
gluten, which are used for animal feed and corn oil." (Memorandum from
Mary Lalley, July 2, 2002).

Most new ethanol production capacity comes from dry mill processing
facilities (R.W. Beck, Inc., Renewable Energy Bulletin, Special
Projects). Wet milling operations, on the other hand, can produce
ethanol, including ethanol for fuel, but are typically primarily engaged
in producing starch, syrup, oil, sugar, and by-products, such as gluten
feed and meal. For ethanol which will be used as fuel, toxic solvents
(typically gasoline) are added to the ethanol to render it unfit for
human consumption (denatured). This additional step is required to
develop ethanol fuel regardless of whether the dry or wet mill process
was employed to develop the initially potable ethanol. It is EPA's
understanding that whether the wet or dry milling process is used, the
process for making ethanol for food products, and that for making
ethanol for fuel, is essentially the same up until the step at which
gasoline or other toxic solvents are added in the process for making
ethanol for fuel.

As noted above, one of the source categories in the list of 28 source
categories included in the "major emitting facility" definition (and in
the NSR and Title V regulations) is chemical process plants[^4]. The
major group SIC code (2-digit SIC code) in which chemical process plants
falls is major group 28 -- "Chemicals and Allied Products". The 4-digit
SIC code which is directly applicable to the production of ethanol for
fuel is SIC code 2869 -- "Industrial Organic Chemicals, Not Elsewhere
Classified." "Ethanol, industrial" and "Ethyl alcohol, industrial
(nonbeverage)" are both listed in the SIC Manual as a specific product
within this 4-digit category.

In addition to the specific references in the SIC Manual relative to
ethanol production, EPA also specifically addressed this issue in an
internal EPA memorandum dated March 31, 1981, from Edward Reich,
Director, Division of Stationary Source Enforcement, Office of
Enforcement to the Directors, Air and Hazardous Materials Divisions,
Regions I-X, and the Directors, Enforcement Divisions, Regions I-X. In
this memo, Mr. Reich states the following:

> This is to clarify the proper classification for ethanol fuel plants
> for purposes of PSD applicability. The Agency regards any source
> listed under major Group 28 of the Standard Industrial Classification
> (SIC) manual as a chemical process plant. Ethanol fuel is listed under
> SIC Group 286: Industrial Organic Chemicals. Ethanol fuel plants
> should therefore be considered a chemical process plant subject to the
> 100 tons per year threshold for PSD review.

Given that ethanol fuel production is specifically listed under the
2-digit "Major Group" SIC code of 28 in the SIC manual and given the
above-noted memo, EPA has historically required production facilities or
units which produce ethanol fuel to be classified as chemical process
plants (regardless of whether they are wet or dry corn mills); such
facilities are therefore subject to the 100 tons per year threshold
under PSD.

Wet milling operations are specifically addressed under SIC Code 2046
("Wet Corn Milling") in the SIC Manual. Although the SIC Manual lists
this category as "Wet Corn Milling" the description for this 4-digit
category specifically notes that this category applies to establishments
primarily engaged in milling corn or sorghum grain (milo) by the wet
process. The relevant Major Group for "Wet Corn Milling" is "Major
Group" 20 -- "Food and Kindred Products".

Accordingly, for the units at wet corn milling operations engaged in
producing the food products noted in the SIC Manual, these units are
classified under "Major Group" 20 and are therefore subject to the 250
tons per year threshold under PSD. However, if units at wet corn mills
produce ethanol for fuel, EPA and States have treated wet corn mills as
a part of a chemical process plant and therefore subject to the 100 tons
per year threshold. This is evident in various State permits that permit
wet corn milling that produces ethanol fuel as "nested" chemical process
plants. See, e.g., Archer Daniels Midland, Columbus, Nebraska Operating
Permit, February 17, 2005.

As discussed above, both wet and dry corn milling processes can produce
ethyl alcohol for human consumption. Our understanding is that the
processes in these facilities are identical to a facility which produces
ethyl alcohol for fuel with the exception of an additional step in which
a toxic solvent is added to the ethyl alcohol to render it unfit for
human consumption.

Some industry stakeholders believe that it is unfair for EPA and States
to have applied two different thresholds, i.e., a 100 tons per year
threshold for ethanol fuel production and a 250 tons per year threshold
for ethanol intended for human consumption, especially since the
processes are the same except for the additional step of adding toxic
solvents to the ethyl alcohol. Some stakeholders have mentioned to EPA
that this permitting practice is not consistent. EPA requests
information on (1) whether the corn milling processes for making ethanol
for fuel and ethanol for food are essentially the same up until the step
at which gasoline or another toxic solvent is added to the ethanol
intended for fuel; (2) what steps take place beyond the step at which
gasoline or another toxic solvent is added to the ethanol intended for
fuel; (3) what steps in the ethanol intended for food (e.g., beverage)
process are different from the ethanol for fuel process; (4) whether the
technology used to manufacture the ethanol fuel and ethanol for food is
the same technology; and (5) how the corn milling process for producing
industrial ethanol varies from the corn milling processes used to
produce ethanol fuel or ethanol used for food. Finally, we also request
information on how EPA and States have permitted corn mills that produce
ethanol for fuel, ethanol for food, and industrial ethanol and whether
EPA and States have been consistent in applying the correct major source
threshold and counting fugitive emissions appropriately.

**III. Today's Proposed Rule**

[A. What is being proposed]{.underline}?

Today we are taking comment on two options that EPA is considering with
respect to the treatment of wet and dry corn mills that produce either
ethanol for fuel or ethanol for food under the "major emitting facility"
thresholds. Under the first option, EPA proposes to redefine chemical
process plants under the definition of "major emitting facility" found
in section 169(1) of the Act to exclude wet and dry corn milling
facilities which produce ethanol fuel. Under the second option, we would
continue to include wet and dry corn milling facilities that produce
ethanol fuel within the definition of chemical process plants and within
the definition of "major emitting facility" found in section 169(1).
EPA's preferred option is Option 1. If EPA selects Option 1, we would
base this proposal on several factors: (1) EPA's discretion to define
chemical process plants to exclude wet and dry corn milling facilities;
and (2) the desire to treat wet and dry corn milling facilities in the
same manner under the PSD, nonattainment NSR, and title V permits
programs due to the similar processes that are employed by these
facilities regardless of whether ethanol fuel or potable ethanol is
being produced.

The PSD and nonattainment NSR regulations that we are proposing to amend
today if we select option 1 are found in 40 CFR 51.165, 51.166, 52.21,
and 52.24. We are not proposing to amend Appendix S of part 51 in
today's action. The title V regulations that we are proposing to amend
today are found in 40 CFR parts 70 and 71.

In this proposal, we are soliciting comment on whether wet and dry corn
milling facilities that produce ethanol for fuel should continue to be
considered a part of the chemical process plants source category. In
addition, we are also soliciting comment on whether other types of
facilities which produce ethanol fuel, such as those using cellulosic
biomass feedstocks, e.g., solid waste, agricultural wastes, wood, and
grasses, should also be considered for exclusion from the chemical
process plants definition due to having production processes similar to
those found at wet and dry milling facilities in cases where potable
ethanol or ethanol fuel is being produced. We request information,
including process flow diagrams, on the processes used to develop
ethanol fuel using the above-noted feedstocks.

[B. What additional changes are being proposed for wet and dry corn
milling facilities?]{.underline}

Two of the regulatory changes being proposed today address the major
source threshold for PSD sources, i.e., Number range CHAPTER40 CFR
51.166(b)(1)(i)(a) and 52.21(b)(1)(i)(a). The remaining proposed
regulatory changes address when fugitive emissions are counted for
purposes of determining whether a source is a major source under the
PSD, nonattainment NSR, or title V programs.

Section 302(j) of the Act states:

> Except as otherwise expressly provided, the terms 'major stationary
> source' and 'major emitting facility' mean any stationary facility or
> source of air pollutants which directly emits, or has the potential to
> emit, one hundred tons per year or more of any air pollutant
> (including any major emitting facility or source of fugitive emissions
> of any such pollutant, as determined by rule by the Administrator).

When the list of source categories relative to the definition of "major
emitting facility" was first promulgated in the NSR regulations on
August 7, 1980 (45 FR 52676), this same list was promulgated in the NSR
regulations for determining from which source categories fugitive
emissions were to be counted in determining whether a source was a major
source. These 28 source categories were promulgated as a result of the
decision in *Alabama Power v. Costle,* 626 F. 2d. 323 (D.C. Cir. 1979).
In *Alabama Power,* the court held that "fugitive emissions are to be
included in determining whether a source or modification is major only
if and when EPA issues an appropriate legislative rule." EPA conducted
rulemaking by which it identified the 28 source categories for which
fugitive emissions would be counted in determining whether a source is a
major source. We also identified the two criteria by which we would
decide whether a source's fugitive emissions would be included in major
source determinations: (1) sources in the category could degrade air
quality significantly, and (2) there were no unreasonable costs compared
to benefits associated with listing the category. See 49 FR 43,203
(1984).

However, as to the 28 initial source categories listed under section
302(j), EPA provided no discussion of the types of sources within the 28
source categories, nor any specific analyses associated with the
development of this list, when the list was proposed (1979) and then
promulgated (1980). Thus, the term "chemical process plants" was
included in the list developed under section 302(j) of source categories
whose fugitive emissions would be counted in a determination of whether
it is a major source, even though no specific analysis was done as to
that source category. Furthermore, EPA also did not perform any analysis
of the specific types of plants that may have fallen within the category
of "chemical process plants."

Thus, pursuant to section 302(j) of the Act, EPA by rulemaking listed
categories of sources from which fugitive emissions shall be included
for purposes of determining whether a source is a "major stationary
source." One of the categories of sources on that list is chemical
process plants. If we adopt Option 1, we are not proposing to change the
list of categories that we developed by rule under 302(j). However, we
are proposing to change the definition of chemical process plants to
exclude wet and dry corn milling facilities. Since we are not changing
the list of source categories that we listed under section 302(j), but
merely redefining one of those listed categories, we do not believe that
it is now necessary to conduct a rulemaking which meets the requirements
of 302(j) of the Act in order to redefine when we count fugitive
emissions relative to chemical process plants. We solicit comment,
however, on whether it is appropriate to define chemical process plants
to exclude wet and dry corn milling facilities for the purpose of
determining when fugitives are to be counted in major source
determinations under PSD, nonattainment NSR, and title V without
specifically addressing the requirements associated with a 302(j)
rulemaking.

[1. EPA's discretion to modify its approach]{.underline} [if we Adopt
Option 1]{.underline}

As explained previously (See "II. Background"), we have no knowledge
that ethanol production facilities, ethanol fuel production facilities,
or corn milling facilities were specifically considered by Congress when
major emitting facilities as specified in section 169(1) of the Act were
being defined. We do know, however, that none of these facilities were
specifically listed within the chemical process plants source category
in either the draft report (as incorporated into the
[Congressional]{.underline} [Record]{.underline}) or in the final
Research Corp. report entitled "Impact of New Source Performance
Standards on 1985 National Emissions from Stationary Sources."
([See]{.underline} 122 Cong. Rec. 24,520-23 (1976)). This report by
EPA's contractor (Research Corp.) appears to be a significant source
upon which Congress relied when it drafted section 169(1) and, more
specifically, when it developed the list of identified source categories
in this statutory provision. Therefore Congress, when it enacted section
169(1), appears not to have expressed its intent as to whether ethanol
production facilities, ethanol fuel production facilities, or corn
milling facilities should be considered within the "chemical process
plants" source category.

As explained previously, in its August 7, 1980, rulemaking, EPA decided,
in the exercise of its discretion and in the absence of an expression of
Congressional intent on the issue, to use the 2-digit "Major Group"
listings as defined by the SIC manual of 1972 (as amended in 1977) as
its basis for defining a source. Using this approach to define a source,
a facility producing fuel ethanol, would be classified under "Major
Group 28 -- Chemicals and Allied Products" given that "Ethanol,
industrial" and "Ethyl alcohol, industrial (nonbeverage)" are two
specific products under the more specific 4-digit SIC code of
"Industrial Organic Chemicals, Not Elsewhere Classified."

Although EPA's policy, as defined in its March 31, 1981, memorandum
above, has been to define wet and dry corn milling facilities which
produce ethanol fuel as being within Major Group 28, EPA has the
discretion to modify its classification of these facilities through
notice and comment rulemaking. Congress did not indicate an intent,
either in the statutory provision, or in the legislative history, to
define ethanol fuel production facilities or wet and dry corn milling
facilities as being within the chemical process plants source category,
nor did Congress assign such facilities to any particular 2-digit "Major
Group" within the SIC system. Given this absence of Congressional intent
on the issue, EPA has the discretion to promulgate reasonable
regulations on the appropriate treatment of plants that manufacture
ethanol for fuel under section 169(1) of the CAA and under the PSD,
nonattainment NSR, and title V programs.

EPA's discretion to modify its approach given that Congress has not
spoken directly to how wet and dry corn mills are to be classified is
allowed by the *Chevron* decision ([Chevron U.S.A., Inc. v. Natural Res.
Def. Council]{.underline}, 467 U.S. 837 (1984)). This decision was
recently explained in [New York v. EPA]{.underline}, 413 F.3d 3, 18
(D.C. Cir. 2005) as follows:

> As to EPA's interpretation of the CAA, we proceed under Chevron's
> familiar two-step process. *See* 467 U.S. at 842-43. In the first step
> ('*Chevron* Step 1'), we determine whether based on the Act's
> language, legislative history, structure, and purpose, 'Congress has
> directly spoken to the precise question at issue.' *Id.* at 842. If
> so, EPA must obey. But if Congress's intent is ambiguous, we proceed
> to the second step ('*Chevron* Step 2') and consider 'whether the
> agency's \[interpretation\] is based on a permissible construction of
> the statute.' *Id.* at 843. If so, we will give that interpretation
> 'controlling weight unless \[it is\] arbitrary, capricious, or
> manifestly contrary to the statute.' *Id*. at 844.

As a result, although it remains EPA's policy to classify sources under
the PSD, nonattainment NSR, and title V programs using the 2-digit
"Major Group" classification system as defined by the SIC manual, EPA is
proposing to depart from this approach in classifying wet and dry corn
mills. As summarized above, EPA has the discretion to modify its
approach to classifying sources as appropriate through notice and
comment rulemaking if it meets the criteria outlined in *Chevron*.

[2. Similar treatment of wet and dry corn milling facilities regardless
of the product produced]{.underline}

Within this rulemaking, the two basic processes that are discussed for
producing ethanol fuel are the wet mill and dry mill process. Both of
these processes result in fermentation ethanol as opposed to synthetic
ethanol. As discussed above, the primary feedstock for fermentation
ethanol is corn, millet, or beverage waste; for synthetic ethanol, it is
ethylene or hydrogen (H~2~) and carbon monoxide (CO).

As also discussed above, the key differences between the wet and dry
mill processes is the initial treatment of the grain or feedstock.
Additionally, in situations where ethanol fuel is being produced,
whether as a result of the dry or wet milling process, a denaturing step
is added to the process in order to make the ethanol unfit for human
consumption. This denaturing step is a step in which a small amount of
gasoline (2-5%) or other toxic solvents are added to the ethanol. This
additional step is what causes the ethanol fuel production facility to
be classified under "Major Group" 28 of the SIC manual. If the gasoline
or other toxic solvents were not added to the ethanol in this additional
step, the facility would produce ethanol fit for human consumption and
would be classified under "Major Group" 20 -- "Food and Kindred
Products." In this latter classification, a facility would not be
subject to the 100 tons per year threshold under the PSD regulations,
but instead would be subject to the 250 tons per year threshold under
these regulations.

As discussed in this section, if EPA adopts its preferred option, Option
1, EPA is proposing to depart from its practice of classifying ethanol
fuel production facilities, which use the wet or dry milling process, as
chemical process plants. EPA solicits comment on whether we should
retain our current practice of classifying an ethanol fuel production
facility, which uses the wet or dry milling process, as a chemical
process plant, or if the Agency should adopt a different approach for
classifying these facilities such as is discussed above. EPA also
solicits comment on whether characteristics of the wet and dry milling
processes for producing ethanol fuel are such that they are in important
ways distinct from other sources that are included in the "chemical
process plants" source category.

[B. What are the implications of changing the classification of
facilities which produce ethanol fuel as a result of the wet or dry
milling process?]{.underline}

The obvious implication of changing the classification of facilities
which produce ethanol fuel as a result of the wet or dry milling process
to a classification other than chemical process plants is that this will
allow these sources to expand production without triggering PSD
permitting requirements, as a result of raising the applicable major
source threshold from 100 tons per year to 250 tons per year. Many
existing sources have taken PTE limits just below the 100 tons per year
threshold to avoid PSD. Such sources would be able to raise these limits
to just below 250 tons per year if the proposed rule is finalized as
proposed. Alternatively, even without raising the current 100 tons per
year threshold, sources could expand production to some extent without
triggering PSD, nonattainment NSR, or title V permitting requirements,
because the calculation of actual and potential emissions would no
longer need to include fugitive emissions at the facilities. This is
because if the proposed rule is finalized as proposed, fugitive
emissions would no longer be counted in determining whether the facility
producing ethanol fuel as a result of the wet or dry milling process is
a major source under these programs[^5].

Moreover, such a change will potentially undermine the use of the SIC
Manual in assigning SIC codes to source categories. This classification
process is important and has implications in determining (1) what major
source threshold under the PSD program is applicable to a source; (2)
whether fugitive emissions from a source are considered in determining
whether the source is subject to the PSD, nonattainment NSR, and title V
programs; and (3) how a source is to be aggregated with other collocated
sources at the site to determine whether a major source exists. Another
implication of such a classification change is that it would likely
create a disparity in how facilities which produce ethanol fuel as a
result of the dry or wet milling process are considered under the NSR
and Title V programs versus how other ethanol fuel producers are
considered under these programs.

A number of existing dry mills and wet mills which produce ethanol fuel
have installed emission controls and have synthetic minor permits that
limit plant-wide emissions to less than 100 tons per year. Changing the
facility classification such that the major source threshold would be
250 tons per year could allow these sources to increase their emissions
by more than 149 tons and still remain minor sources. EPA is seeking
comment on the potential environmental effects of increasing the major
source threshold from 100 tons per year to 250 tons per year, and
eliminating the requirement to count fugitive emissions in these
threshold determinations, for ethanol fuel facilities which have been
proposed for construction and which will employ the wet or dry milling
process.

Finally, if a State does not allow a permit change to reflect the new
increased threshold, the change in classification may create an unlevel
playing field between those existing wet and dry mills that have
complied with the existing 100 tons per year threshold and have
installed controls and those existing wet and dry mills with similar
emissions that may currently be in violation of the existing threshold.
Existing wet and dry mills subject to a 100 tons per year threshold may
also be placed in a competitive disadvantage with newly constructed
sources that may not be required to install any pollution control
devices given the new higher regulatory threshold. Pending enforcement
actions against corn milling facilities may also be compromised
resulting in a missed opportunity to reduce tens of thousands of tons of
pollution. We are seeking comment on all of the above potential
implications of the described classification change.

[C. What are the implications of not changing the classification for
facilities which produce ethanol fuel as a result of the dry or wet
milling process?]{.underline}

If the classification for facilities which produce ethanol fuel as a
result of the dry or wet milling process is not changed to a
classification other than chemical process plants, then these facilities
will continue to be subject to the 100 tons per year threshold under the
PSD program and will be required to continue counting their fugitive
emissions in determining whether they are subject to PSD or
nonattainment NSR (whichever program is applicable) and title V. In
theory, this could potentially stymie the growth of the ethanol
production industry which, in turn, could lead to reduced energy
diversification and independence in this country. Industry information
seems to suggest, however, that these facilities have experienced robust
growth in recent years, even though they were subject to the major
source threshold of 100 tons per year and the requirement to count
fugitive emissions in their major source determinations.

On the other hand, if the threshold is not changed, newly constructed
facilities which produce ethanol fuel as a result of the dry or wet
milling process may install pollution controls at the time of initial
construction, which is known to be the most cost effective time to
install pollution control devices. EPA is soliciting comment on how
pollution control devices have affected the ethanol production industry
and whether the 100 tons per year threshold and the requirement to count
fugitive emissions has hindered the construction of facilities which
produce ethanol fuel as a result of the wet or dry milling process.
Based on the responses to the above requests for comment, we may decide
to adopt Option 2.

**IV. Statutory and Executive Order Reviews**

[A. Executive Order 12866 - Regulatory Planning and Review]{.underline}

Under Executive Order 12866 (58 FR 51735, October 4, 1993), the Agency
must determine whether the regulatory action is \"significant\" and
therefore subject to Office of Management and Budget (OMB) review and
the requirements of the Executive Order. The Order defines \"significant
regulatory action\" as one that is likely to result in a rule that may:

\(1\) Have an annual effect on the economy of \$100 million or more or
adversely affect in a material way the economy, a sector of the economy,
productivity, competition, jobs, the environment, public health or
safety, or State, local, or tribal governments or communities;

\(2\) Create a serious inconsistency or otherwise interfere with an
action taken or planned by another agency;

\(3\) Materially alter the budgetary impact of entitlements, grants,
user fees, or loan programs, or the rights and obligations of recipients
thereof; or

\(4\) Raise novel legal or policy issues arising out of legal mandates,
the President\'s priorities, or the principles set forth in the
Executive Order.

Pursuant to the terms of Executive Order 12866, it is determined that
this rule is a \"significant regulatory action\" because it raises
policy issues arising from the President's priorities. The EPA has
submitted this action to OMB for review. Changes made in response to OMB
suggestions or recommendations will be documented in the public record.

[B. Paperwork Reduction Act]{.underline}

This action does not impose any new information collection burden. We
are not promulgating any new paperwork requirements (e.g., monitoring,
reporting, recordkeeping) as part of today=s proposed action. However,
the Office of Management and Budget (OMB) has previously approved the
information collection requirements contained in the existing
regulations (40 CFR parts 51 and 52) under the provisions of the
Paperwork Reduction Act, 44 U.S.C. 3501 [et seq.]{.underline}, and has
assigned OMB control number 2060-0003, EPA ICR number 1230.17. However,
a revised information collection request was submitted to OMB in
relation to the October 20, 2005 proposed rule (70 FR 61081) called the
"Prevention of Significant Deterioration Nonattainment New Source
Review, and New Source Review Performance Standards: Emissions Test for
Electric Generating Units." This revised ICR has been assigned EPA ICR
number 1230.18. A copy of the OMB approved Information Collection
Request (ICR) EPA ICR number 1230.17 may be obtained from Susan Auby,
Collection Strategies Division; U.S. Environmental Protection Agency
(2822T); 1200 Pennsylvania Avenue, NW, Washington, DC 20460 or by
calling (202) 566-1672.

Burden means the total time, effort, or financial resources expended by
persons to generate, maintain, retain, or disclose or provide
information to or for a Federal agency. This includes the time needed to
review instructions; develop, acquire, install, and utilize technology
and systems for the purposes of collecting, validating, and verifying
information, processing and maintaining information, and disclosing and
providing information; adjust the existing ways to comply with any
previously applicable instructions and requirements; train personnel to
be able to respond to a collection of information; search data sources;
complete and review the collection of information; and transmit or
otherwise disclose the information.

An agency may not conduct or sponsor, and a person is not required to
respond to, a collection of information unless it displays a currently
valid OMB control number. The OMB control numbers for EPA\'s regulations
in 40 CFR are listed in 40 CFR part 9.

[C. Regulatory Flexibility Analysis (RFA)]{.underline}

The RFA generally requires an agency to prepare a regulatory flexibility
analysis of any rule subject to notice and comment rulemaking
requirements under the Administrative Procedure Act or any other statue
unless the Agency certifies that the rule will not have a significant
economic impact on a substantial number of small entities. Small
entities include small businesses, small organizations, and small
governmental jurisdictions.

For purposes of assessing the impacts of today\'s action on small
entities, a small entity is defined as: (1) a small business that is a
small industrial entity as defined in the U.S. Small Business
Administration (SBA) size standards ([see]{.underline} 13 CFR 121.201);
(2) a small governmental jurisdiction that is a government of a city,
county, town, school district, or special district with a population of
less than 50,000; or (3) a small organization that is any not-for-profit
enterprise that is independently owned and operated and is not dominant
in its field.

After considering the economic impacts of today=s proposed action on
small entities, I certify that this action will not have a significant
economic impact on a substantial number of small entities. This proposed
rule will not impose any requirements on small entities. We are only
requesting public comment on whether or not corn milling facilities
should be subject to the same major source threshold regardless of
whether they produce ethanol fuel or ethanol fit for human consumption.
We continue to be interested in the potential impacts of the proposed
rule on small entities and welcome comments on issues related to such
impacts.

[D. Unfunded Mandates Reform Act]{.underline}

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law
104‑4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector. Under section 202 of the UMRA, EPA
generally must prepare a written statement, including a cost‑benefit
analysis, for proposed and final rules with \"Federal mandates\" that
may result in expenditures to State, local, and tribal governments, in
the aggregate, or to the private sector, of \$100 million or more in any
1 year. Before promulgating an EPA rule for which a written statement is
needed, section 205 of the UMRA generally requires EPA to identify and
consider a reasonable number of regulatory alternatives and adopt the
least costly, most cost-effective or least burdensome alternative that
achieves the objectives of the rule. The provisions of section 205 do
not apply when they are inconsistent with applicable law. Moreover,
section 205 allows EPA to adopt an alternative other than the least
costly, most cost-effective or least burdensome alternative if the
Administrator publishes with the final rule an explanation as to why
that alternative was not adopted. Before EPA establishes any regulatory
requirements that may significantly or uniquely affect small
governments, including tribal governments, it must have developed under
section 203 of the UMRA a small government agency plan.

The plan must provide for notifying potentially affected small
governments, enabling officials of affected small governments to have
meaningful and timely input in the development of EPA regulatory
proposals with significant Federal intergovernmental mandates, and
informing, educating, and advising small governments on compliance with
the regulatory requirements. Today's rule contains no Federal mandates
(under the regulatory provisions of Title II of the UMRA) for State,
local, or tribal governments or the private sector.

Thus, today's rule is not subject to the requirements of sections 202
and 205 of the UMRA.

[E. Executive Order 13132 - Federalism]{.underline}

Executive Order 13132, entitled \"Federalism\" (64 FR 43255, August 10,
1999), requires EPA to develop an accountable process to ensure
\"meaningful and timely input by State and local officials in the
development of regulatory policies that have federalism implications.\"
\"Policies that have federalism implications\" is defined in the
Executive Order to include regulations that 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.\"

This proposal rule 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, as
specified in Executive Order 13175. Thus, Executive Order 13175 does not
apply to this action.

In the spirit of Executive Order 13132, and consistent with EPA policy
to promote communications between EPA and State and local governments,
EPA is soliciting comment on today=s proposal from State and local
officials.

[F. Executive Order 13175 - Consultation and Coordination with Indian
Tribal Governments]{.underline}

Executive Order 13175, entitled AConsultation and Coordination with
Indian Tribal Governments@ (65 FR 13175, November 9, 2000, requires EPA
to develop an accountable process to ensure Ameaningful and timely input
by tribal officials in the development of regulatory policies that have
tribal implications.@ This proposed rule does not have tribal
implications, as specified in Executive Order 13175. There are no Tribal
authorities currently issuing major NSR and Title V permits. Thus,
Executive Order 13175 does not apply to this rule.

Although Executive Order 13175 does not apply to this proposed rule, EPA
specifically solicits comment on this proposed rule from tribal
officials.

[G. Executive Order 13045 - Protection of Children from Environmental
Health Risks and Safety Risks]{.underline}

Executive Order 13045, entitled \"Protection of Children from
Environmental Health Risks and Safety Risks\" (62 FR 19885, April 23,
1997), applies to any rule that: (1) is determined to be \"economically
significant\" as defined under Executive Order 12866; and (2) concerns
an environmental health or safety risk that EPA has reason to believe
may have a disproportionate effect on children. If the regulatory action
meets both criteria, the Agency must evaluate the environmental health
or safety effects of the planned rule on children, and explain why the
planned regulation is preferable to other potentially effective and
reasonably feasible alternatives considered by the Agency.

Today=s action is not subject to the Executive Order because it is not
economically significant as defined in Executive Order 12866, and
because the Agency does not have reason to believe the environmental
health or safety risks addressed by this action present a
disproportionate risk to children. Today=s proposed action is not
expected to present a disproportionate environmental health or safety
risk for children.

[H. Executive Order 13211 - Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use]{.underline}

Today=s action is not a Asignificant energy action@ as defined in
Executive Order 13211, AActions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use@ (66 FR 28355,
May 22, 2001) because it is not likely to have a significant adverse
effect on the supply, distribution, or use of energy.

[I. National Technology Transfer and Advancement Act]{.underline}

Section 12(d) of the National Technology Transfer and Advancement Act of
1995 (NTTAA), Public Law 104‑113, section 12(d) (15 U.S.C. 272 note)
directs EPA to use voluntary consensus standards in its regulatory
activities unless to do so would be inconsistent with applicable law or
otherwise impractical.

Voluntary consensus standards are technical standards (for example,
materials specifications, test methods, sampling procedures, and
business practices) that are developed or adopted by voluntary consensus
standards bodies. The NTTAA directs EPA to provide Congress, through
OMB, explanations when the Agency decides not to use available and
applicable voluntary consensus standards.

Today=s action does not involve technical standards. Therefore, EPA did
not consider the use of any voluntary consensus standards.

Number range CHAPTER[List of Subjects]{.underline}

[40 CFR Parts 51 and 52]{.underline}

Environmental protection, Administrative practice and procedure, Air
pollution control, Intergovernmental relations, Nitrogen dioxide, Ozone,
Particulate matter, Reporting and recordkeeping requirements, Sulfur
oxides.

[40 CFR Part 70]{.underline}

Environmental protection, Administrative practice and procedure, Air
pollution control, Intergovernmental relations, Reporting and
recordkeeping requirements.

[40 CFR Part 71]{.underline}

Environmental protection, Administrative practice and procedure, Air
pollution control, Reporting and recordkeeping requirements.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Dated: Signature

For the reasons set out in the preamble, title 40, chapter I of the Code
of Federal Regulations is proposed to be amended as set forth below.

**PART 51---\[Amended\]**

1\. The authority citation for part 51 continues to read as follows:

Authority**:** 23 U.S.C. 101; 42 U.S.C. 7401, et seq.

**Subpart I---\[Amended\]**

2\. Section 51.165 is amended by revising paragraphs (a)(1)(iv)(C)*(20)*
and

(a)(4)(xx) to read as follows:

**§** **51.165 Permit requirements**.

\(a\) \* \* \*

\(1\) \* \* \*

\(iv\) \* \* \*

\(C\) \* \* \*

*(20)* Chemical process plants -- which does not include wet and dry
corn milling facilities which produce ethanol fuel;

\* \* \* \* \*

\(4\) \* \* \*

> \(xx\) Chemical process plants -- which does not include wet and dry
> corn milling facilities which produce ethanol fuel;

\* \* \* \* \*

3\. Section 51.166 is amended by revising paragraphs (b)(1)(i)*(a)*,
(b)(1)(iii)*(t)*, and (i)(1)(ii)*(t)* to read as follows:

**§** **51.166 Prevention of significant deterioration of air quality.**

\* \* \* \* \*

\(b\) *Definitions.* \* \* \*

(1)(i) *Major stationary source* means:

*(a)* Any of the following stationary sources of air pollutants which
emits, or has the potential to emit, 100 tons per year or more of any
regulated NSR pollutant: Fossil fuel-fired steam electric plants of more
than 250 million British thermal units per hour heat input, coal
cleaning plants (with thermal dryers), kraft pulp mills, portland cement
plants, primary zinc smelters, iron and steel mill plants, primary
aluminum ore reduction plants, primary copper smelters, municipal
incinerators capable of charging more than 250 tons of refuse per day,
hydrofluoric, sulfuric, and nitric acid plants, petroleum refineries,
lime plants, phosphate rock processing plants, coke oven batteries,
sulfur recovery plants, carbon black plants (furnace process), primary
lead smelters, fuel conversion plants, sintering plants, secondary metal
production plants, chemical process plants (which does not include wet
and dry corn milling facilities which produce ethanol fuel), fossil-fuel
boilers (or combinations thereof) totaling more than 250 million British
thermal units per hour heat input, petroleum storage and transfer units
with a total storage capacity exceeding 300,000 barrels, taconite ore
processing plants, glass fiber processing plants, and charcoal
production plants;

\* \* \* \* \*

\(iii\) \* \* \*

*(t)* Chemical process plants -- which does not include wet and dry corn
milling facilities which produce ethanol fuel;

\* \* \* \* \*

\(i\) *Exemptions*.

\(1\) \* \* \*

\(ii\) \* \* \*

*(t)* Chemical process plants -- which does not include wet and dry corn
milling facilities which produce ethanol fuel;

\* \* \* \* \*

**PART 52---\[AMENDED\]**

1\. The authority citation for part 52 continues to read as follows:

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

**Subpart A---\[Amended\]**

2\. Section 52.21 is amended by revising paragraphs (b)(1)(i)*(a)*,
(b)(1)(iii)*(t)*, and (i)(1)(vii)*(t)* to read as follows:

**§** **52.21 Prevention of significant deterioration of air quality.**

\* \* \* \* \*

\(b\) *Definitions*. \* \* \*

(1)(i) *Major stationary source* means:

*(a)* Any of the following stationary sources of air pollutants which
emits, or has the potential to emit, 100 tons per year or more of any
regulated NSR pollutant: Fossil fuel-fired steam electric plants of more
than 250 million British thermal units per hour heat input, coal
cleaning plants (with thermal dryers), kraft pulp mills, portland cement
plants, primary zinc smelters, iron and steel mill plants, primary
aluminum ore reduction plants, primary copper smelters, municipal
incinerators capable of charging more than 250 tons of refuse per day,
hydrofluoric, sulfuric, and nitric acid plants, petroleum refineries,
lime plants, phosphate rock processing plants, coke oven batteries,
sulfur recovery plants, carbon black plants (furnace process), primary
lead smelters, fuel conversion plants, sintering plants, secondary metal
production plants, chemical process plants (which does not include wet
and dry corn milling facilities which produce ethanol fuel), fossil-fuel
boilers (or combinations thereof) totaling more than 250 million British
thermal units per hour heat input, petroleum storage and transfer units
with a total storage capacity exceeding 300,000 barrels, taconite ore
processing plants, glass fiber processing plants, and charcoal
production plants;

\* \* \* \* \*

\(iii\) \* \* \*

*(t)* Chemical process plants -- which does not include wet and dry corn
milling facilities which produce ethanol fuel;

\* \* \* \* \*

\(i\) *Exemptions*.

\(1\) \* \* \*

\(vii\) \* \* \*

*(t)* Chemical process plants -- which does not include wet and dry corn
milling facilities which produce ethanol fuel;

\* \* \* \* \*

3\. Section 52.24 is amended by revising paragraphs (f)(4)(iii)*(t)* and
(h)(20) to read as follows:

**§** **52.24 Statutory restrictions on new sources.**

\* \* \* \* \*

\(f\) \* \* \*

\(4\) \* \* \*

\(iii\) \* \* \*

*(t)* Chemical process plants -- which does not include wet and dry corn
milling facilities which produce ethanol fuel;

\* \* \* \* \*

\(h\) \* \* \*

\(20\) Chemical process plants -- which does not include wet and dry
corn milling facilities which produce ethanol fuel;

\* \* \* \* \*

**PART 70---\[AMENDED\]**

1\. The authority citation for part 70 continues to read as follows:

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

2\. Section 70.2 is amended by revising paragraph (2)(xx) of the
definition of M*ajor source* to read as follows:

**§70.2 Definitions.**

\* \* \* \* \*

*Major source* \* \* \*

\(2\) \* \* \*

\(xx\) Chemical process plants -- which does not include wet and dry
corn milling facilities which produce ethanol fuel;

\* \* \* \* \*

**PART 71---\[AMENDED\]**

1\. The authority citation for part 71 continues to read as follows:

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

Subpart A---\[Amended\]

2\. Section 71.2 is amended by revising paragraph (2)(xx) of the
definition of *Major source* to read as follows:

**§** **71.2 Definitions.**

\* \* \* \* \*

*Major source* \* \* \*

\(2\) \* \* \*

\(xx\) Chemical process plants -- which does not include wet and dry
corn milling facilities which produce ethanol fuel;

\* \* \* \* \*

[^1]: Under the PSD program, we define potential to emit (PTE) as the
    maximum capacity of a source to emit under its physical and
    operational design, taking into account any physical or operational
    limitations on the source that are enforceable as a practical
    matter. (See, for example, §52.21(b)(4) for the full definition of
    PTE.)

[^2]: The Research Corp. of New England draft study mentioned in the
    Congressional record was a study developed to assist EPA in
    establishing the priorities for developing and promulgating New
    Source Performance Standards (NSPS). Although a draft of the study
    is referenced in the [Congressional]{.underline}
    [Record]{.underline}, the study entitled "Impact of New Source
    Performance Standards on 1985 National Emissions from Stationary
    Sources" wasn't finalized until April, 1977 (EPA-450/3-76-017).

[^3]: The version of the SIC code manual that is used for purposes of
    classifying sources under the title V operating permits is the 1987
    SIC Manual. See, e.g., the definition of "Major Source" in 40 CFR
    70.2. However, there are no differences between these manuals in
    terms of how wet corn milling facilities and facilities which
    produce "ethanol, industrial" or "ethyl alcohol, industrial
    (nonbeverage)" are classified.

[^4]: It is important to note that although this document refers to the
    list of 28 source categories, you will actually see a list of 27
    categories when you review the NSR and Title V regulations. This is
    because when the list was first promulgated on August 7, 1980 (45 FR
    52676), the hydrofluoric, sulfuric, and nitric acid plants were
    listed as one category and an additional category (the 27^th^
    category) was added to address sources regulated by section 111 or
    112 standards as of August 7, 1980.

[^5]: A wet or dry corn milling facility may be required to count its
    fugitive emissions to determine whether it is a major source
    regardless of whether today's proposal is finalized as proposed.
    This is because even if the facility isn't considered to be a part
    of the chemical process plants source category, one or more units
    within the facility may be considered to fall within another source
    category for which fugitive emissions are required to be counted.