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Citation: 44 Fed. Reg. 3274 1979

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### 3274

the Uranium Mill Tailings Radiation ControlAct of 1978, publishing there- sults ofsuch study and furnishing the results thereof to the Congress and, based on such study, determining and taking whatever actions, if any, shall be appropriate and in the public interest to require payment by such per- sons as the study identifies, of all or any part of the costs incurred by the United States for such remedial action for which he determines such persons
areliable. i

Dated: January 5, 1979.

GRIFFIN B. BELL, Attorney General EFRDoe.79-1481 Filed 1-15-79; 8:45 am]

[6560-01-M]

Title 40-Protection of Environment

CHAPTER I-ENVIRONMENTAL PROTECTION AGENCY

SUBCHAPTER C-:AIR PROGRAMS

[FRL963-2]

PART 51-REQUIREMENTS FOR PREPARATION, ADOPTION AND SUBMITTAL OF IMPLEMENTATION PLANS

Emission Offset Interpretative Ruling
AGENCY: Environmental Protection Agency.
ACTION: Final Rule.
SUMMARY: This rule describes the requirements

.for preconstruction review-which apply to large new (or modified) air pollution sources affect- ,ing areas with air quality worse than the levels set to protect the public health and welfare. The Action makes certain revisions to ERA's Emission Offset Interpretative Ruling of December 21, 1976 (41 FR .55524). These revisions are a result of the public comments (including four public hearings) on the December 21, 1976, Interpretative Ruling and changes required by the Clean Air Act Amendments of, 1977 (Pub. L. 95-95, note under 42 U.S.C. 7401).
DATES: These changes are applicable topermits applied foron or after January 16, 1979. States may, if they so desire, make these changes applicable

on a retroactive basis unless specified otherwise in theRuling. Comments on specified issues shouldbe submitted in accordance with the proposal pub-. lished elsewhere in 'today's FEDERAL
REGISTER.

FOR FURTHER INFORMATION 

### CONTACT:

D. Kent Berry, Office ofAir Quality Planning and Standards, Environ

### RULES AND REGULATIONS

mental Protection Agency, Mail Drop 11, Research Triangle Park, North Carolina 27711, Telephone: 

### 919-541-5341.

SUPPLEMENTARY INFORMATION: On December 21, 1976, EPA Issued an Interpretative Ruling (41 FR 55524) addressing the issue ofwhether and to what extentnational ambientair qual- ity standards (NAAQS) established under the Clean Air Act may restrict

or prohibit construction of major new or modified stationary air pollution

sources. TheRulingprovides, in gener- al, that a major new source, which emits pollutants in excess of specified amounts and would otherwise contribute to an existing violation of a na- tional standard, may be constructed only if stringent conditions can be met. These conditions are designed to insure that the new source's emissions will be controlled to the greatest degree possible; that more than equiv- alent offsetting emission reductions 

### ("emission offsets") will be obtained from existing sources; and that there willbeprogress toward achievement of the standards. Where such a source would otherwise cause a new violation of an NAAQS, offsets or additional control must be provided to prevent a new violation ofthestandards.

Although this Ruling was made ifmediately effective, the Agency solicited written comments and held public hearings in SanFrancisco, Dallas, Chicago, and New York. The comments received (including a summary of those commerits) and the public hearing records are available for public inspection and copying

.during normal business hours at: Public Information Reference Unit,_ Environmental 'Protection Agency, Room 2922 (EPA Ilbrary) 401M Street,SW., Washington, 

### D.C. 20460.

S- PERMITS REQUIRED FOR

### NEW OR MODIFIED AIRPOLLUTION SouRcEs
The Federal Clean AirAct and most State regulations require that new air pollution sources and modifications of existing sources which would increase air pollution emissions must obtain a permit before construction is begun. The State (orlocal) new source review procedures apply to almost all new or modified air pollution sources. This review is intended to ensure that new
sources will meet all alplicable air pol- lution regulations adopted by the States. In addition, larger sources (which will have increased emissions of 50 tons per year of any air pollut- ant)Iwill be subject to more stringent requiremen'ts relating to the source's impact upon air quality.

A given source may have air pollu- tion impacts in an area which has

'The criteriafor determining the applica- bility of these more stringent requirements

are actually more complex andcanbefound in the specific regulations mentioned below. clean air orin an area which has dirty air. Some sources can affect both types of areas. The type of review re- quirements that a new source must comply with depends on whether the

source affects a dirty air or clean air

area. A source which impacts an area where the air Is cleaner than the na- tional ambient air quality standards (NAAQS) is subject to regulations for preventing significant deterioration (PSD) of air quality. 2 The purpose of these regulations Is to keep clean air clean and the primary focus Isto limit

new emissions of sulfur oxides and particulate matter.

A new source that would affect a dirty. air area will also be subject to EPA's Emission Offset Interpretative Ruling, the niain provisions of which require the new source to meet the lowest achievable emission rate forthe problem pollutant(s) and to obtain

more than equivalent 'offsetting emission reductions (emission offsets) from existing sources. Asource may be subject to PSD for one pollutant and to the Offset Ruling for another pollutant, ormay affect both clean and dirty

areas forthe samepollutant.

At the present time, the Offset Ruling is generally carried out by the States as part oftheir own new source review procedures. In most areas, EPA's Offset Ruling will terminate as ofJuly 1, 1979, and will bereplaced by State-adopted new source review re- quirements. However, if States fail to adopt an acceptable plan to attain the NAAQS by the dates specified in the Clean AirAct, theAct requires that no permits for majornew sources applied forafter June 30, 1979 be Issued.

ThePSD program Is generally being carried out by EPA through its Regional Offices. Thus, large dources mustnow geta preconstruction permit from both the State (for offsets) and EPA (forPSD): However, many States will be developing their own PSD program, allowing the air permit program to be consolidated at the State level. Until this occurs, major source owners should obtain their State permit before applying to EPA for a PSD permit. It is recommended that source
owners consult withboth EPA and the States before submitting a permit ap- plication to determine what requirements willbe applicable and whatkind of information must be submitted, To avoid delays, major source owners should apply for a permit as early in their planning process as possible and should allow for a minimum of three months from the date of application for apermitto be issued.

IMMEDIATELY EFFECTIVE CHANGES RESUdLTING FROM 197T CLEAN AIR ACT AMENDMENTS
1. Baseline. In the December 21, 1976 Ruling, the baseline for deter.

2SeeFederalRegister ofJune 19, 1978, pp 26380-26410.

FEDERAL REGISTER, VOL 44,NO. I-TUESDAY, JANUARY 16, 1979mining emission offset credit was the SIP emission limitations in effect for existing sources (Le., control of existing sources beyond that required by the SIP could be used to offset irmissions from new sources). Howeer, for

areas where EPA had formally-found the State plan inadequate and had re- quested revision, the baseline was the emissions that would result from application or reasonably available con- trol measures (RACM) by existing kources. Furthermore, even where the baseline wasthe existing SIP rather than RACM, the 1976Ruling provided forseveral adjustments tothe baseline to take account of unusual circumstances. Explicit provisions were included to govern situations where there was no applicable SIP requirement, where offset credit would come from switching to cleaner fuels, and where the permitted emissionlevel ex- ceeded the uncontrolled' emission factor of the'source. 41 FR at 55529 cols.2-3. In addition, EPAdoes not interpret the 1976 Ruling as allowing offset credit for tightening SIP re- quirements for a source toyeduce the emission level allowed by the SIP down to the level allowed for the

source by applicable new source performance standards (NSPS) or national emission standards for hazardous air pollutants (NESHAPS) requirements (i.e., requirements under Sections 111 and 112, respectively, of the Act). Any other approach would allow offset credit for so-called "paper" re- ductions, where the .SIP is adjusted but no -actual tightening of requirments under the Act occurs. These special provisions all implement the general principle behind the "1976 JRuling, that offsets must ordinarily

represent, reductions in emissions below the emissions allowed by existingrequirements.

-Section 129(a)(1) of the Clean Air Act Amendments of 1977 (Pub. I.95- 95 (note under 42 U.S.C. 7502)) states that the 1976 Ruling, as it may be modified, shall remain in effect, except thatthe baseline for determinIng emissionoffset credit "shallbe the applicable implementation plan of the Statein effect at the time of applicationforapermit *! * *." The legislative history indicates that this provision

was intended to eliminate the provisionin the 1976 Ruling that the baselinewas RACM where EPA had called for -aSIP revision. But this provision

was not inntended to displace the provisions under the 1976 Ruling to ac- cominmodate special circumstances, giving credit onlyforreductions below the emissions allowed by existing re- quirements..

Forthe foregoingreasons, the ruling is--revised to eliminate therequirement that the baseline be RACM where EPAhas called for SIPrevisions.3EPA

3The 1977 Amendments and legislative history clearly callforthisAmendment. See 

### RULES AND REGULATIONS

invites public comment on its policy that the Ruling does not allow offset creditfor tightening SIPrequirements down to NSPS or NESHAPS levels, and invites comment on whether the language ?f the Ruling establishing thebaseline shouldberevised tomake thispolicymore explicit.

2. Nonattainment requirements under the amendedAct-a. Amendments requiredby nonattainment pro- visions oftheAct.New PartD ofTitle Irof the Act 'requires States to revise their SIP's for every area where an NAAQS is not being met. For each standard, areas were designated,under Section 107(d) and 171(2) of the Act,

as either attaining the standard (at- tainment areas), violating the standard (nonattainment areas), or areas that canrotbe classified on the basis of available information (unclassifiable areas). For areas Initially desig- nated as nonattanment areas,5 

### the deadline forStates to submit required SIP revisions is January 1, 1979. RevisedSIP'smeetingtherequirments of Part D must be in effect by July 1, 1979. For areas initially designated as attainment or unclassiflable but are later found to be nonattinment areas, additional tinie may be necessary for development, submittal and approval ofthe requiredSIPrevisions.

The Actprovides thattheRuling be superseded afterJune 30, 1979-(a) by preconstruction review provisions of the revised SIP, Ifthe SIP meets the requiretnents ofPartD, or (b)by pro- hibitionon cdnstruction underthe applicable SIP and Section 110(a)(2)(I) of the Act, if tfie SIP does nbtmeet the requirments ofPartD.TheRuling is now being amended to reflect this, and to state that the Ruling will remain in effect to the extent not superseded under provisions ofthe Act. The above prohibition on major new
source construction does not apply to
asourcewhosepermit forconstruction

or modification wasapplied forduring

aperiod when the SIP was in compliance with PartD, or before the deadline for having a revised SIP in effect that satisifies Part D. The Ruling Is amended toreflect this.'

123 Congressional Record at S 9165 col. 2 (daily ed. June 6,1977). therfore. EPA has determined that notice and public proce- dure are unnecessary before making this Amendment.

'Part D of the Act, which includes Sec

### tions 171 through 178 (42U..C.7501-7508).

5WIntia designations were published by EPA on March 3. 1978, 43 FR 8962. Revi. sions to theInitial designationswere recently published for some'States (43 FR40412. 43 FR 40502. and 43 FR 45993. September 11 and 12. and October 5. 1978) and will

soonbepublished forotherStates.Designa. tionsare codified at40 CFR81.300eL seq.

'These amendments to the Ruling do no more than state that the Act provides for supersession ofthisRuling.Furthermore, it is important to have a clear statement at 

### 3275

b. Additional effects of nonattainment requirementson thisRuling.By its terms, this Ruling has always applied to proposed major sources and major modifications anywhere in the State thatwill cause orcontributeto a violation of an NAAQS, regardless of whether the sources ormodifications

were within an area determined in general to be nonattainment. 41 FR 55528 col. 2. Designations of nonattainment, therefore, do not limit the

areas within which this Ruling applies.

In EPA's view, the Act requires that for any area disignated as monattainment for any NAAQS, the preconstruction reviewprovisions under Part D, or the prohibition onconstruction under the applicable SIP and Section 110(a(2)(I), must apply to all major

sources within the State that will

cause or contribute to a violation of the NAAQS within an area initially designated as a nonattainment area. Consequently, after July 1, 1979, the Intrepretative Ruling will only apply in the followng situations: (a) To

sources in one State which contribute to a violation ofan NAAQS only with another State, (b) during the time allowed for the development and approval and/orpromulgation ofrevised SIP in an area which is subsequently determined to violate an NAAQS, and (c) during any extended time allowed under Section 110(b) for development of a SIP revision of an area thatviolates only a secondary NAAQS. Also, forsources in one State(which has an acceptable SIP)that would contribute to a violation in another State (which does nothave an acceptable SIP), the restrictions on new source constructionunder theapplicable SIPand Section 110(a)(2)(I) donotapply.

Under the preconstruction permit requirements in Part D, States have two basic options fordealing withproposed newmajorsources withina non- attainment area that cause or contribute to a violation ofan NAAQS. The SIP may provide an allowance for growth while assuringreasonable further progress toward attainment, and

new sources-may be allowed that do
not result (individually or in the aggregate) in emissions that exceed the allowance. If the growth allowance is used up, or if none is provided, the State's other option istoallow sources to be constructed only if case-by-case offsets are obtained sufficient to provide for reasonable further progress towards attaining the NAAQS by the attainment date prescribed under Part D. If the SIP for the nonattainment

this time oftheearliest possibleapplication ofthe prohibitionon majornewsourcecon- struction, to assist industrial planning. For these reasons. EPAhas determined thatso- licitingpubliccommentbeforemakingthese amendmentswouldbe unnecessaryandcon- trary tothe publicinterest.

FEDERAL REGISTER, VOL 44, NO. I)-TUESDAY, JANUARY 16, 1979

a-

### 3276

area is not being carried out, however,

no permits may be issued within the

area as required by Section 173(4).

The discussion in this notice of the requirements for revised SIP's under Part D, and for a prohibition on con- struction under the applicable SIPand Section 110(a)(2)(I), is provided to place the Ruling- in perspective, and ,does not constitute regulations promulgated or final action taken by the Administrator to establish or interpret those requirements. Many of the approaches used by the Agency in revising the Ruling may be used by the States as guidance in developing provisions under Part D; but again, except

as noted below, this does not consititute regulations or final action establishing or interpreting requirements for preconstruction review provisions. The Agency's nationally applicable policy summarizing the elements that

a SIP submittal must contain to meet the requirements of Part D was.published in the FsEEAL, REGISTER on May 19, 1978, 43 FR 21673, and the discussion and guidance provided by this notice merely supplement that policy.

The only exception is that certain
terms in the Ruling-are also used in Sections 172(b)(6), 173, and 302(j) of the Act to prescribe the requirements forrevised preconstruction review provisions. Therefore, the definitions in this ruling ofthe terms "source," "potential," and "modification" (see dis- •cussion below on additional'flexibility in defining "modification") apply to the statutoiy requirements forpreconstruction review provisions under Sections 110(a)(2)(I) and PartD aswell as under this Ruling. The discussion below of "lowest achievable emission rate," and ofcut-offs-to limit review of small sources, also apply to State preconstruction review programs under Section 173 of the Act [although not to the prohibition on
. construction under Section 110(a)(2)(I)].

MAJOR SOURCEISSUES

1. Sourcessubjectto review-a.Defintitionof "'potential" to emit anddefinitionofcutoffpoints.Section 129(a) ofthe 1977 Amendments requires that the offset requirements be applicable to all major stationary sources (includ ing Federal facilities) as defined in Section 302. of the Act (i.e., sources with potential emissions of 100 tons or
more per year). The emission offset re- quirements currently apply to'sources with allowableemissions greater than 100 tons per year. Since the 1977 Act Amendments did not define potential emissions and .there has been some question as to the Congressional intent of this term, this change was not made immediately effective. However,this issuewas dealt within EPA's proposed regulations for preventing 

### RULES AND REGULATIONS

significant deterioration (PSD) of air quality (42 FR 26388). Ks set forth in the final PSD regulations, potential emissions are defined in terms of uncontrolled emissions -but sources are exempt from thebest available control technology and the air quality related
tests if the source's allowable emissions would be less than each of the following cutoff points: 50 -tons per year, 1000 pounds per day or 100 poundsperhour.The short-term criteria are
- included to ensure that a'

source that operates seasonally or intermittently is adequately dealt with regarding its impkct on short-term air quality. For the-same reasons as are discussed in the preamble to the PSD regulations, the Emission Offset Ruling is revised to require review of

sources based on their uncontrolled 'emissions, butto exempt sources from the major conditions of the Ruling if the allowable emissions are less than the above cutoffpoints.

-It should be noted that any source with allowable emissions less than the above amounts which is exempted from the offset requirements will use up part of the State's allocation for' growth (see discussion in preceding section) atthe time such 96urce begins operation. Thus, a State plan may need to require additional control of existing sources (or more rapidcompliance) in order to achieve the "annual reasonable further progress toward at-, tainment" requiredby theAct.

b. Definitionof "source." A number of commenters indicated the need for

a more explicit definition of "source." Some readers found that it was un- clear under the 1976 Rulingwhether a plant with a number of different proc-

esses and emission points would be considered a single source. The changes set forth below define a
source as "any structure, building, facility, equipment, installation, or operation (or combination thereof) which is located on one or more contiguous

or adjacent properties and which Is owned or operated by the same person (or by persons under common con- trol)." This definition precludes a large plant from being separated into individual production lines, for pyurposes of determining applicability of the offset requirements.

The revised definition of "source" is only a clarification, and represents no change from EPA's intent in the December'1976 Ruling and the way the Ruling has been implemrented. The definition is consistent with theuge of this term in other $IP-related regulations (e.g., 40 CFR Part 51, Appendix C), and isidentical to the approach re- cently adopted for the Prevention of Significant Deterioration (PSD) -regu- lations (see 40 CFR 52.21(b)(4), 43 FR '26388, June 19, 1978). c. Publiccomment. Comments were originally solicited on the definition of cut-off points to limit review of small

sources in the Advance Notice of Proposid Rulemaking published on December 21, 1976. 41 FR 55559. Comments were received on the definition of'"source" in the 1976 version of this Ruling. The definitions of the term "potential" and "source," and the definition ofcut-off points to limitreview,

were all the subject ofextensive public
comment In response to EPA's proposed PSD regulations, which con- tiined an approach very similar to that adopted here. The definitions adopted here were based on all of this public comment, and EPA has determined that It is unnecessary to postpone adoption of these definitions until after further comment Is solicited and evaluated. However, since a major industrial group has requested another opportunity to comment on these important Issues, EPA Isinviting further comment on these definitions, particularly to Identify any, considerations that were not relevant in developing the ,PSD regulations, and any additional considerations relevant to the application ofthese definitions to requirements for new preconstruction review programs under Section 173. Any comments must be subnmitted on

orbefore February 15, 1979.

d.Applicabilityto modificationsac- corApanied by emission reductions within the same source (intrasource, offsets). Some commenters Suggested that the Ruling should be amended to exempt a modification of an existing

source which increases allowable emissions by 50 tonsper year, 1000 pounds
per day, or 100 pounds per hour, or
more ifthere are accompanying reductions within the same source (intra-

source offsets) such that the net in-

crease from the source is less than the above amounts, oreven that there Is a net decrease. It was even suggested that this exemption apply to the addition of new facilities at an existing

source. Where a state Implementation plan Is revised and implemented to satisfy therequirements ofPart D,including the reasonable further prog-
ress requirement, the plan requirements for major modifications may exempt modifications of existing facilities that are accompanied by ntra-

source offsets so that there is no net increase in emissions. The Agency en- dorses such exemptions, which would provide greater flexibility to sources to effectively manage their air emissions at least cost. However, as long as the emission Offset Interpretative Ruling remains operational, the exemption will not be allowed for the reasons stated below. The text oftheRuling is rewritten to. state In positive terms that the exemption is not permitted. Since the 1976 Ruling invited public

FEDERAL REGISTER, VOL 44, NO. 11-TUESDAY, JANUARY 16, 1979comment on the requirements for modifications, and since this amendment clarifies the original language without changing the substance, EPA has determined that additional notice and bublic procedure before making the amendment areunnecessary.

If the-Ruling Were amended in the. suggested manner, a source owner could construct or substantially modify a facility by obtaining only part of the offsets ordinarilyrequired and avoiding the other conditions re- quired for major pollution sources in nonattainment areas prior to there being an adequate PartD implementationplan. This wouldconflict withsev- eral of the basic purposes of the Ruling, which are to assure that sufficient offsets be obtained to represent reasonable progress - toward

-attainment of the applicable standard, that the new facilities meet the lowest achievable emission rate (LAER), and /that other sources owned bythe applicant be in compliance with the approved SIP or on acceptable compli-

ance schedules. The need to reduce

new emissi6ns through these requirements is particularly great before re- vised plans under Part D are adopted and implemented. Therefore, it is not enough that there be no net increase in-emissions; there are additional independent requirements which must be met.Thereisnoreason to departfrom this principle simply because offsets happen to come from a-facility within the same source. Since the facility Will be new or substantially modified, it has an opportunity to employe LAER and satisfy the other requirements like any other source subject to the Ruling. This has been the consistent applicationofthisRuling.

Unlike this Ruling, EPA's recently-' published PSD regulations include an exemption for modifications of existing facilities which are accompanied by sufficient intrasource offsets that there wouldbeno netincrease in emissions (see discussion at 43 FR 26394, June 19, 1978). EPA believes that the need to reduce new emissions as-much

aspossible is greater under thisRuling for an area where standards are violated than under the PSD requirements for a clean area where deterioration is. the onlyconcern.

Modifications of existing facilities accompanied by sufficient intrasource offsets so that there would be.no net increase in emissions may, however,be exempted by the States from the new
source reviewprocedures underPartD' that will supersede this Ruling. This exemption would not be applicable where a major facility isadded to oris reconstructed at asource,whether the addition is to replace production ca- pacity or for growth. The above ex- emption is permitted under the SIP because, to be approved under PartD, 

### RULES-AND REGULATIONS
plan revisions due by January 1979 must contain adopted measures assuring that reasonable further progress will be made. Furthermore, in most circumstances, the measures adopted by January 1979 must be sufficient to actually provide forattainment ofthe standards by the dates required under the Act,and inall circumstances measures adopted by 1982 must provide for attainment. See Section 172 ofthe Act and43 FR21673-21677 (May 19. 1978). Also, Congress intended under Section 173 ofthe Act thatStates would have

some latitude to depart from thestrict requirements of this Rulingwhen the State plan is.revised and is being carried out in accordance with Part D. Under aPart D plan, therefore, there is less need to subject a modification of an existing facility to LAM and other stringent requirements if the modification is accompanied by sufficient ntrasource offsets so that there is nonet increase in emissions. Consequently, for a plan approved and implemented under Part D, It is accept- able forthe State toInclude the above exemption for intrasource offsets in its new source construction under the State plan and Sections 110(a)(2)(I) and 173(4) must apply tomajor modifications regardless of intrasource off- -setsif the planis found notto satisfy Part D or is not being implemented, because in those instances the plan cannot be relied upork to assure reasonable further progress and, eventually,attainment.

OTMa CHANGES TOTHERULING


### 1. Definition of 'signiAcant" air quality impacL Several commenters requested that EPA provide specific quantification as to the incremental levelofpollution thatwouldbeconsideredas contributingto an existingviolation of an NAAQS. The Ruling has been revised to include "significance levels" which are generally based on the Class I prevention of significant deterioration (PSD) increments containedin Section163 oftheAct.Anew
ormodified source will not be considered to cause or contribute to a violation of an NAAQS if the air quality impact of the source is less than the specified significance levels. The sig- nificance levels are only applicable whenamajor sourceistobelocatedin

a "clean" area (i.e., a locality where both the primary and secondary standards are being met), but would impact an area that exceeds an NAAQS some distance away. The sig- nificance levels are not intended to be used for PSD purposes where the Class I increments are concerned, nor are they to be used for implementing Condition 4 of Section IV of the Ruling (i.e., emission offsets must result in a netair.qualfty benefit).Significance increments are not specified 

### 3277

for photochemical oxidants, since atmospheric simulation models are not adequate to predict the air quality impact ofasingle sourceofvolatile or- ganic compounds (VOC). Further discussion of offsets for VOC sources appears below.

It ispossible forasourcewith a good engineering practice stack height and substantial plume rise, and with very good controls (e.g., partlilate matter from fuel combustion -sources) to not exceed the significance increments at any location. Thus, such a source would be able to locate just at the edge of a locality where the particulatestandard isviolated withoutbeing subject to the Ruling. This situation would bemostcommon forparticulate
matter (since controls exceeding 99%

arenormal) and wouldrarelyoccur for theotherpollutants.

2. Relationship of offset requirements to designationsofattainment
status. On March 3, 1978, EPA published the attainment status of all States in relation to the NAAQS. 43 FR 8962. However, as noted above, this Ruling has always provided that determinations be made on a case-by-

case basis independent of any general determination of nonattainment. 41 FR 55528. Therefore, the determination under this Ruling of whether a
source will cause or contribute to a violation of an NAAQS will continue to be made on a case-by-case basis. A

source maytry toprove thatalocality meetsan NAAQS even if thelocalityis part of a designated nonattainment

area. There are several reasons for this. First, the initial determinations

were made on thebasis of1975 or1976 air quality data, while the determination of whether a source would ciuse

or contribute to a violation of an NAAQS must be made as of the new source's start-up date. Thus, a source locating in a nonattainment area which isprojected tobean attainment

area as part of an approved SIP con- trol strategy by the source's start-up date maynotbesubjecttotherequirements of the Offset Ruling. Also a State may have designated a large county or air quality control region (AQCR) as nonattainment on the basis of a localized violation of stand- "ardsin a small portion ofthe county

or AQCR. The designations were designed to provide a starting point for State planning, and werenot designed toresolve issues of airquality for purposes of individual permit applications. While not altering the requirementoftheRulingthat airquality determinations be made on a case-by-

case basis, EPA has amended the language of the Rulingto explain the re- lationship in practice between the Ruling and the Section 107 designations. 7

'Because these amendments aretechnical andconforming, and donot change thesubFootnotes continued onnextpage

FEDERALREGISTER, VOL 44, NO. Il-TUESDAY, JANUARY 16, 1979

### 3278

a. Sources, in attainmentorunclassifiable areas.Certain portions of the Ruling'maybe applicable in areas designated as attaining the NAAQS or which cannot be classified as to their attainment status.A sourcelocatingin such an.area which would contribute to a violation of an NAAQS- anywhere (i.e., exceed the" , above significance levels at the site ofthe violation)must meet Conditions 1, 2 and 4 of SectionIV 'ofthis Ruling. Thisis true regard, less of the designation that applies to the locality where theviolation would

occur. Although full emission offsets

are not required, such a source must obtain emission offsets sufficient to compensate for its air quality impact where theviolation occurs. (States and local agencies are free to require larger offsets ifdeemed appropriate.)

Most such sources will,be subject to prevention.of significant,deterioration (PSD) requirements, which include a, requirement for best available control technology forallpollutants regulated under the Act. In addition, after August 7, 1978, many sources; subject
to PSD mustpresent air'quality monitoring data at the proposed site as- part of their application to construct, especially where there is good reason to believe that a new source would

cause or worseri a violation: of. an NAAQS. Thus, major sources applying for a permit after August 7, 1978, will not be exempt from the requirements of this.Ruling simply-because no air qualitydata are available to determine' whether the source would adversely impact upon anNAAQS.

b. Sources locatingin a."clean"portio7L of a designated nonattainmen

area.A source locatingin a clean por-- tion (or which will be clean as of the

new source start-up date) of a designated nonattainment area may be exempt from the requirements ofthis Ruling if the source would not exceed the significance levels discussed,above in the actual area of nonattainment (as of thenew source start-up date). If such asource wouldexceed the signifi-

cance increments in the actual nonattainment area, it is subject to the,

same requirements 'applicable to

sources in designated attainment or" unclassified areas (i.e., Conditions 1, 2 and4).

c. Generalimpactdfnonattainment designations dn the proceedings. It will be assumed as the starting point in reviewing a,permit application that every location within a designated nonattainment area will exceed the NAAQS (as ofthenew spurce start-up date), and that any source with,allowable emissions exceeding 50' tons per year, 1000 pounds per day, or 100

Footnotes continifedfromlastpage . stance of the Ruling, EPA has determined that notice and,public procedures on them

are.unnecessarr. 

### RULES AND REGULATIONS

.pounds per hour'locating in the area will significantly contribute toa violation. However, If the applicant or any other participant presents a 'substantial and relevant argument (including any necessary analysis or ottier documentation) why that assumption is incorrect,' then the-applicability of this Ruling would be determined by the sxecifiofacts'in thecase.

3. Exemptions.The Ruling has been revised- to exempt temporary emissions, such as pilot plants, portable facilities,which will be relocated away from the nonattainment area after a short period of time, and emissions re- sulting from theconstruction phase of

anew,source,-fromtheerdission offset and net air quality benefit require:
ments (Conditions 3 and 4 of Section IVof'theRuling). The LAER requirement and other conditions of the Ruling are still applicable to such

sources. A similar exemption would also be available to resource recoverr facilities utilizing municipal solid waste (including refuse derived fuel and/or sewage sludge from municipal sources) to provide more than 50% of the heatinput for generating steamor" electricity. In, addition, the use of refuse derived -fuel in an existing boiler wouldnot qualifyas amodification and would not be subjict'to the Interpretative Ruling.

The exemption for temporary emissions doesnot change the intent ofthe original Ruling and is consistent with interpretations issued under the original Ruling. Emissions occurring for less than two years within the nonattainment area would generally be con-. sidered temporary. Emissions for longer periods of time might also be considered to be temporary (such as the emissions related to the construction of power plants and other large sources), butshouldbe'dealt withon a. case-bY-ycaiebasis.

-

Again, it should be noted that any

source which is exempted from the offset requirements will useup part of the State's allocation for growth at thetime such sourcebegins operation. Thus, a State plan may need to re- quire additional control of existing

sources (or more rapid compliance) in order to. achieve the "annual reason- able further.progress toward attainment" requiredby theAct.

4. Geographicapplicabilityto major VOC sources One oftheissues nottotally resolved in the 'December 21, 1976, Ruling was,the 'letermination of the areas where offsets for sources of volatile organic compounds (VOC) would be required, especially since atmospheric simulation modeliig techniques are generally not available to estimate the air quality impact.on ap individual VOC source. Forrural VOC
sources, as for other sources, offsets and other conditions of the Ruling 'were required for major sources that would cause or contribute to a viola-' tion ofan NAAQS. Any source locatIng within d major metropolitan area (over 200,000 population). where the standard wasviolated was assumed to

cause orcontribute totheviolation. 41 FR 55527 col. 1. However, no firm rules were adopted for application of the Ruling to sources outside of such
areas, orfor determining where offsets could be found forproposed sourceS'in

or out of such areas. Reviewing au- thorities were left with discretion to determine, on .a case-by-case basis, whether any particular proposed rural

source would cause or contribute to a violation, or whether any particular emission reduction would constitute

an acceptable offset for a proposed

source.

The Ruling did refer to a discussion of the rural oxidant problem pub- "lished in the same FDERAL RtornS

issue asthe Ruling. 41 FR 55528 col 2, 55559-60. This discussion suggested tentative reasons why proposed VOC

sources outside of major metropolitan

areas shouldnot need offsets, and why

sources within such areas should obtain offsets from sources that are also vithin such areas, however, since thatdiscussion was contained in an ad-

vance notice of proposed rulemaking, It was intended only to inform, not to govern individual permit decisions.

On the basis of comments received responding to the, advance notice of .proposed rulemaking, EPA has devel- -oped the proposal for rural VOC

sources stated in the Ruling. Comments are invited on this proposal. Until final rulemaking on this issue is completed, this proposal represents EPA's interim policy for determining underthis Rulingwhether a proposed rural VOC source would cause or con- tribute to a violation or whether an emission reduction would constitute

an acceptable offset for a proposed rural source.

Under the proposal, offsets will generally be required for VOC sources located 'in or affecting any area that Is designated as rionattainment for oxidant or is otherwise shown to be ex- ceeding the NAAQS for oxidant. There are many situations where a

source locating outside a nonattainment area may adversely impact upon

a nearby locality where the standard is violated. Since photochemical dispersion models are not available to es- timate the air quality impact of a single VOC source, it is necessary to

use a general approximation of the

area around a nonattainment monitor where emissions would reasonably be expected to have an impact on ameas- ured violation. Unless specific data are available to define the impact of a VOC source, offsets, should be re- quired for VOC sources locating

FEDERAl RE-GISTERVOL44rNO. 11-TUESDAY', JANUARY 16, 1979RULES AND REGULATIONS

within 36 hours traveltime (under wind conditions associated with oxidant concentrations exceeding 'the NAAQS for oxidants) of a nonattainment monitor. This distance ig based

on evidence which suggests that precursor emissions which occur within 36 hours traveltime of each other interact to form oxidant.

In addition, the changes to the Ruling provide the owner of a proposed VOC source an opportunity to show that the emissions from the proposed source would have "virtually no effect onany area that exceeds theoxidant standard" and therefore the

source would be exempt from the Ruling.This exemption is only intended for remote rural sources whose emissions wouldbevery unlikely to interact with other significantsources of VOC or NO, to form additional oxidant. Such-a demonstration might in- -elude a showing that the proposed

source would. be located in an area that isnot subjecttomulti-day stagnation conditions and thatVOC and NO, emissions within the same AQCR or within 36 hours traveltime are minimal. Suggestions from the public are invited on establishing specific-criteria

or cut-offs to assist applicants in making such a demonstration.

Generally, offsets will be acceptable if obtained from within the same AQCR as the new source or from other nearby areas which may be con- tributing to the oxidant problem affected by the prol~osed new source.As with other pollutants, it is desirable to obtain offsets from sources located as close to the proposed new source site

as possible. If the proposed offsets would be from sources located at greater.distances from the new source, the reviewing authority should increase theratio ofthe required offsets andrequire ashowing thatnearby offsets were investigated and reasonable alternatives werenot available.

5. Changesto Section IV, Condition 2.In theoriginal Ruling,the reviewing authority was required to examine all enforcement orders for other sources owned by the applicant in the AQCR
to determine ifmore expeditious compliance was practical. Some commenters pointed outthat ininterstate AQCR's, the reviewing authority has

no control over compliance schedules

orenforcement ordersin the adjoining State(s). Also, in a very similar provision set forth in Section 173(3) of the Act, the demonstration concerning compliance by other sources owned by the applicant is specified on a state rather than an AQCR basis. Consequently, the Ruling has been changed
to be consistent with the provisions in the 1977 Act Amendments. The wording of Condition 2 has also have been changed in accordance with Section 173(3) to clarify the various forms of ownership and control covered by Condition 2. Condition 2 is intended tobe applied in a broad sense so as to cover subsidiaries controlled by the applicant and to all facilities owned by any individual business entity that controls ajoint enterprise applicant.

For the time being, determinations ofwhat entities control, are controlled by, orare under common control with, the applicant will be made on a case- by-case basis. 1owever. to save time and resources of both applicants and decisionmakers, EPA proposes to establish criteria for determining issues of control For example, any person with a ten percent voting interest in

an entity, or with the power to make

or veto decisions by the entity to Implement major emission-control measures, might be deemed to control the entity. Such criteria would also be used for determining whether facilities are partofthe samesource, under Section II.A.1. of this Ruling. Since the definition of "source" Is the same under theAgency's PSD regulations as well as thisRuling, the criteria for determining whether facilities are part of the same source are expected to be Identical. Comments and suggestions

are invited on such criteria for determining control.

6. Changeto Condition4. Condition 4 of the original Ruling required'that

anemission offsetmustalsoresult in a "net air quality benefit" in the area affected by the new source. In response to questions as to whether an air quality analysis is necessary for VOC and NO, emissions pursuant to the "net air quality benefit" requirement, the Ruling is clarified to indicate that fulfillment of the emission offsetrequirements ofCondition 3will be adequate to meet the requirements ofCondition 4forthese pollutants.

It should be noted that the "net air quality benefit" testneednot beinterpreted'as requiring an air quality Improvement at every location affected by the source. This condition is intended to insure that the sources involved in an offsetsituation impact air quality in the same general area, but the net air quality benefit test should be made "on balance" for the area affected bythe newsource.

7. EliminationofConditionS. Condition 5 of the original Ruling con- tained a prohibition on major source growth after January 1, 1979, in areas where EPA had called for a SIP revision, unless EPAhad approved orpromulgated the required SIPrevision by that date. EPA had issued 221 notices of required SIP revisions In mid-1976. One of the principal purposes of the * nonattainment provisions In the 1977 Amendments, however, was to revise this administrative approach. Under the Act,designation ofan area asnon- attainment constitutes, in effect, a call for a SIP revision. The required contents of the revision and the deadline for submittal are specified in the Act. The Act'srevision requirements differ from those established in the Agencys 1976 calls for revisions. Furthermore, the limitation on growth that wflI result from a failure of the State to comply Is set forth in Section 110(a)(2)(I) of the Act. The Administrator has, therefore, concluded that the 1976 calls for SIP revisions for nonattainment areas were superseded 

### by the 1977 Amendments, as was the limitation on growth provided in Condition 5. Therefore, Condition 5 has been deleted fromthisRuling."

8. Baselinewhere thereis no meaningfulSIP requirement.Section IV.C.2 had previously provided that where the particulate emission limit in the SIP for fuel combustion exceeded the uncontrolled emission rate forthefuel being burned (as when a State has a single emission limit for all fuels), emission offset credit would be allowed only for control below the appropriate uncontrolled emission factor. Since this situation may occur for sources other than fuel combustion sources, this provision has been made more general and incorporated in SectionIV.C.1.

9. Fuel conversion. The Interpretative Ruling as originally; published, provided thatthe useofanalternative fuel wouldnotbe considered a modificatlofi subjectto the Rulingif, priorto December 21. 1976, the sources could accommodate such alternative fuel.In

an associated Advance Notice of Proposed Rulemaking published on,December 21, 1976 (41 FR 55558), com- ments were solicited on whether this exemption should apply to sources affecting nonattainment areas. In the Administrator's judgment, the most appropriate way tohandle fuel conver- sions where no major physical-modification takes place is through the SIP revision process. In particular, new Section 124 of the Clean Air Act re- quires States to review their plans to

ensure that they will be adequate to attain and maintain the national am- bient air quality standards in light of known or anticipated fuel conversionsFurthermore, under Section 172(b)(4), emissions from fuel conversions must be considered in determining periodically whether the plan is adequate to

assure attainment by the required date. Therefore, the Ruling still exempts a fuel conversion where the

source Is designed to accommodate the alternative fuel.

'Since there Is no question but that Section 11O(a)(2XI) was intended to supersede Condition5.and sincein,anyeventrecisions of the1976 callsfor SIPrevisions eliminates any effect of Condition 5,EPA has determined that notice andpublic procedure on the elimination ofCondition 5 areunneces- sary.

FEDERAL REGISTER, VOL44, NO. 11-TUESDAY, JANUARY 16, 1979 

### 3279RULES, AND REGULATIONS

For purposes of controls ta protect airquality in clean areas,and controls that.States must. adopt in nonattainment areas, Congress. provided that "modification" should not include a conversion to an alternative fuel by

reason of an order under the Energy' Supply and Environmental Coordination Act of 1974.or a natural gas cur- tailment plan pursuant,to the Federal PowerAct. see Sections [11(a) (4) .and (8), 169(2)(C), and 171)4, 42 U.S.C7411(a) (4), and (8), 7479(2)(C), and 7501(4). EPA therefore has decided that it would be consistent.with Congressional intent,to exclude such con- versions from the definition of"modification" inthisRuling as well.

To further conform. the Ruling to: the Act andavoid confusion, ERPA 

### has also qualified the definition ofmodification by adding the provision that a switch to an alternative fuelbyreason.. of 'an order or rule under Section 125 of the Act (41 U.SC. 7425).is not. a *modification. 9

- In nonattainment areas, Statesmust. -deal with increased emissions. fr6m, fuel conversions in their 1979. revisions. For conversions that are not major modifications as defined in the Ruling and forpurposes ofPartD,the States may deal with increased emissions by any means they choose. A State may include in Its control strategy demonstration an assumption that. "all sources which couldf, reasonably

convert to,a.dirtier fuel will do so. Alternatively, theState may requirefuel conversions which are exempt, as a modification urnder the Ruling to obtain a permit prior to converting to

an alternate fuel, Such, conversions would-then be required to obtain offsets on'a case-by-case basis orwouldbe reviewed against the allowance forgrowth provided for in the SIP under Section 172(b)(5). Although conver- sions that are not major modifications need not satisfy all of the conditions of Section 173, in the.interest of simplicity the State may choose to-deal with the increased emissions by making the conversions subject to. these conditions.

.

10. Banking.One of the issues that

was frequently raised in comments on the Ruling involved' "banking" of emission reductions to allowforfuture

new source growth. Banking was re- stricted by EPA because it was felt that banking would create a difficult accounting problem, probablyr would not.result in any environmental benefit, and tended to dilute the potential benefits ofthe offset policy. However, the advocates of banking felt that if the offsets obtained in a given situation were considerably greater than the new source's emissions, some of

'EPA has determined -that,notice and, public procedurepriorto makingthisminor conforming amendment are unnecessary. the "excess" emission reductions should be "bankable" to allow for future growth. The* general argument

was that a "na-banking" rule would have an adverse airquality impact (at least in the short-term) by discouraging early clean-up of sources. For ex- ample, if a source were undergoing: a modernization program, and retiring a. number of obsolete facilities, a "nobanking" provision, might encourage the owner to delay retirement of sev- eralofthefacilities so that they could be used in future offset situations. .Furthermore, the Clean Air, Act Amendments 

### of 1977 modified thisre- strictionby allowing States toincorporateprovisionsfor growgth in SIPplans for nonattainment areas. Under Section 173(1) ofthe-Act, emission reductions are compared to a "reasonable" furtherprogress" goal, and reductions: beyond the minimum. requirement may be used to offset future growth. In essence, the State becomes- the banker and must, decide how to allocatethe banked emissions. Therefore. the restriction on banking in. the Ruling has been removed for offsets approved after the date of publication ofthesechangesin.theFEDERAL REGISTaLStates which wish.to allow banking may do so, as long as it is recognized thatthere will be chanies in the basis' for approval -of major new sourcesiafterJune 30, 1979,. "

A reviewing authority may allow, banked offsetsto be used under the preconstruction review" program re- quired by Part D, as long as these' banked emissions are identified and accountedfor inthe SIP controlstrategy

. So-long as the pollution control. requirements under the Act are satisfied; theState is free'to govern owner- ship,, use, sale, and commercial transactionsinbanked emission offsets as'-it

sees fit.Areviewing authority may not approve the construction of a source using bankedoffsets ifthenew/source would interfere with.the SIP control strategy or if such use would violate any othir condition set forth for use of offsets. To preserve-banked emission reductions, thereviewing authoritymust identify-them in either a SIP revision or a permit.Furthermore, the reviewing authority should provide a. registry toidentify theperson, private entity; orgovernmental authority that has the right to use or allocate the: banked emission reductions, and to ,record any transfers of, or liens on, this right thatthe reviewing authoritymay allow. Additional, comments on how banking should be implemented

aresolicited

1-1. Source shutdown and curtailments. A sub-issue related to banking is.the credit which may be taken for

source shutdowns or curtailments oc-• curring.prior. to the date the new-
source application is filed Footnote 7 of the original Ruling had restricted offset, credit to situations where the, shutdown or curtailment occurred as a result of an enforcement action and the new source was clearly a replacement.The Ruling hasbeen changed ta eliminate the requirement that a prior. shutdown be related to an enforcement action in order to be used as, offset credit. HoWever, toensure that

an offset relates to the current air quality problem, ItIs necessary to put

some limit on the credit that can be taken for shutdowns that have taken place in the past. Therefore, the Ruling requires that a source shutdown or curtailment must have oc- curred after the date of enactment of the 1977Amendments or less thanone ,year prior to the date the new source permit application Is filed, whichever is earlier, in order to be acdeptable as offset credit. Such credits may be banked, subject to the limitations outlined above.

12. EquivalencyofStateregulations. Some States have, ormay wish to develop, offset regulations which differ in some of the details from the EPA Interpretative Ruling. EPA Intends to approve such regulations if the State submits a demonstration that the overall impact on emissions In the

areas _where the regulation will apply is atleast as stringent as the EPA Interpretative- Ruling. At a minimum, theState regulations must contain the fourmajor conditions specified.in Section IV-. These constraints do not, apply to offset regulations applying after June 30. 1979, in accordance with the requirements of Section 173(1)(A): separate guidance will be issued 'for meeting these requirements. Nor does thisapply to general waivers ofthe re- quirements of this Ruling, under Section 129(a)(2) of the Clean Air Act Amendments of 1977 (note under 42 

### U.S.C. §7502).

13. Technology transferin deternitingLAER. It hasbeen EPA's interpretation that in determining the lowest achievable emission rate (LAER), the reviewing authority may consider transfer of technology from one
source type. to another where such technology is applicable. Although Congress changed the definition of LAER. EPA continues to believes that technology transfer may be consldeied In determining LAER. Congress intended to require new sources in non- attainment areas to apply the "maxi-

mum feasible pollution control," even if this involves "technology-forcing."t' Therefore, the Agency does not, feel

"'Seereport to accompany HR.6101, H.R. Rep. No. 95-294, 95th Congress. First Session 215 (May 12. 1977). Furthermore, technology transfer and technology forcing are accepted concepts In determining both new source performance standards and reason- ably available control technology under the Act.

FEDERAL REGISTER. VOL 44, NO- Il-TUESDAY, JANUARY- 16, 1979 

### 3280RULES AND REGULATIONS

that the phrase "achieved in practice by such class or category of source" (under Section 171(3)) prbhibits technology transfers, from other types of

sources. If pollution-control technology can feasibly be transferred from

onetype ofsource to anotier, thenfor purposes of determining LAER, EPA will consider both types of sourre to be in the same "class or category of source." Comments on this interpretation and whether it is necessary orappropriate to revisethe regulatory definitionare solicited.

14. FugitivedustAsnoted above, an Advance Notice of ProposedRulemakng was published on December 21, 1976 (41 FR 55558) which dealt with several issues closely related to the Interpretative Ruling published on the

same date. Comments were urged to be submitted onboth notices in a con- solidated fashion.

One of the issues raised related.to how fugitive dust, particularly rural fugitive dust which May significantly contribute to violations of theNAAQS for particulate matter, should be ac- counted for inperforiing new source reviews. This issue was also raised, in conjunction withEPA's proposed PSD regulations. Onthe basis of comments received responding to the Advance Notice of Proposed Rulemaking, EPA has developed the proposal for fugitive dustassociatedwithmajor sources stated in this Ruling. Comments are invited on this proposal. Until the final rulemaking on this issue is com- pleted, this proposal represents EPA'sinterimpolicy for dealing withfugitive dust associated with a major source. Under theproposal, fugitive dust associated with major sources locating-in clean portions ofnonattainment,areas
or in attainment or unclassified areas wouldbe subject only to applicable re- quirements for preventing significant deterioration of air quality (see 40 CFR 52.21). Under the PSD regulations, fugitive dust associated with a major source is subject to the best available control technology requirements, but is exempt from a review against the NAAQS and PSD increments. Fugitive dust associated with major sources locating in an actual nonattainment area." (and which is not exempt as a temporary source) would be subject to. Conditions 1, 2 and 3 of Section IV-4. of this Ruling.

15. Secondaryemissions.'The original Ruling .,required that if a major

new source would result in secondary

"Under existingEPA policy, arural area that exceeds the NAAQS for particulate matter primarily because of.fugitive dust emissions is not necessarily considered as nonattainment for purposesofSIP development and new source review (see "Fugitive Dust Policy: SIP's and New SourceReview," available from EPA, AirPollution Technical Information center, MD-35, Research TrianglePark,N.C. 27711.) emissions which could be accurately quantified, such emissions should also be dealt with under the Ruling (see footnote 3 at 41 FR 55528). Questions have arisen on the Agency's intent regarding secondary emissions, and further clarification is provided In the changes published today. A more specific definition isadded asfollows:

"Secondary emissions" means emissions fromnew or existingsources which occur as a result of the construction and/or oper- ation of amajor source or major modification.butdonotcome fromthesource Itself. Forpurposes ofthisruling, secondary emissions must be specific and well defined. must be quantifiable, and mustImpact the

same general nonattainment area as the major source which causes the secondary emissions. Secondary emissionsmayinclude. butarenotlimitedto:

a. Emissions from ships or trains coming to orfrom arefinery, terminal facility. etc.

b. Emissions from off-site support facillties which would be constructed or would otherwise increase emissions as a result of the constructionofamajorsource.

TheRuling indicates that secondary emissions need not be considered in determining whether the emission
rates in Section 31.C. wouldbe exceeded. However, if a source is subject to the Ruling on the basis of the direct emissions'fro&ii thesource, the applicable conditions ofthis Rulingmust also bemet forsecondary emissions.

The requirement that secondary emissions mustImpact thesame general nonattainment area as the major

source which causes the secondary emissionmeans different areas for different pollutants. For all pollutants, however, the test is whether, In the actual area of nonattainment, there is any overlap between the areas of impact ofthe direct emissions and the indirect emissions. This isa pollutantby-pollutant analysis. In other words, the conditions of the Ruling must be
met for secondary emission ofa particular pollutantonlyif the major source is subject to the Ruling conditions on the basis of direct emission of that

same pollutant.

-For nitrogen oxides, particulates, carbon monoxide, and SO2, the areas ofimpact canbe determined bymodeling. If the source and the permitting authority disagree as to whether the secondary emissions impact the same

area as the direct emissions, the

source has the burden ofproving It is
correct by performing the necessary modeling. For VOC emissions, the

areas of impact should be consistent with the treatment givento the direct emissions (see previous discussion on VOC sources). Under the proposal for VOCsources, thearea'ofimpact would be the areas to which the pollutants could be transported in 36 hoursfrom the sources, assuming wind conditions associated with oxidant concentrations exceeding the NAAQS for oxidants (unless more specific data on source Impacts are available)

A corollaryofthisaspect ofthedefinition is that secondary emissions
must be traceable to particular facilities. If this were not true,it would be impossible to determine the area of Impact oftheindirect emissions. Thus, forexample, a newsteelplantnecessitates more electric power being produced; but. If the power is supplied from a grid covering many States, the emissions couldnot be'quantified and would not Impact the same general nonattainment area. On the other hand, Increased particulate emissions froma cokeplantnear the same steel plant would be considered to be seeon'dary emissions If certain conditions

were met. Those conditions would be that theemissions came from anexisting coke plantwhich wasnotpreviously subject to the Ruling for those emissions, the coke plait emissions

were Increased above historical levels

as aresult of additional demand from the steelplant, andthe cokeplantwas situatednearthe steel plant.The coke plant emissions are specific, quantifiable, and impact the same general nonattainment area asthe direct emissions.

Since the 1976 Ruling invites public
comment on the treatment ofsecondary emissions, and since this amendment to the Ruling only clarifies the language without altering the substance, EPA has determined thatadditional notice and public procedure thereon are unnecessary.

16.Applicabilityof RuZingtonewor revised NAAQS. While this Ruling technically does not apply to new

sources oflead emissions which would

cause or contribute to a violation the newly established NAAQS for lead (43 FR 46246) during the period before the revised lead SIP's are submitted and approved, It is clear that such

sources will be required to abate their emissions after construction, if necessary to attain and maintain the lead standard. In addition, excessive lead emissions from a new source could result in health problems. Accordingly, States areurged tousetheiravailable authorities to review new sources oflead to protect against violations of the lead standard. The Ruling will, continue to apply to VOC sources which cause or contributetoviolations ofthe NAAQS forphotochemical oxidant '(ozone) which will be revised shortly (see proposal of June 28. 1978, 43 FR 26962). Specific proposals for dealingwithmewsources ofpollutants subject to new or revised NAAQS in thecontext oftherevised SIP'swill be included in upcoming changes to 40 CFR51.18.

FEDERAL REGISTER, VOL 44, NO. 1--TUESDAY, JANUARY 16, 1979 

## 3281

### 3282

SEVERABILITY

EPA intends that the changes made by this notice be treated as severable, If a court shouldrule that one ormore of the changes is not valid, EPA intends that the -other changes remain in effect andthat the provisions ofthe December 1976 Ruling that would have been amended by the invalid changes be in effect, unless th6 court rules that some other,disposition is legally required.

The Agency finds good cause to make the changes announced today effective for permit applications filed on

or after today, because the normal processing time between permit application and source construction provides adequate lead time for compliance with new requirements in the Ruling,

AUTHORITY'

The Administrator has determined that this rulemaking is nationally applicable and is based on determinations of nationwide scope and effect. This rulemaking is issued under Section 129(a) of the Clean Air Act Amendments of 1977, Pub. L. 95-95, 91 Stat. 745, August 7, 1977 (note under 42 U.S.C. 7502) and Section 301 of the Clean Air Act (42 U.S.C.7601).

Dated: December 29, 1978.

DOUGLAS M. COSTLE, Administrator.

The Interpretative Ruling published by EPA on December 21, 1976, at 41 FR 55524, is revised and codified as a

new Appendix S to 40 CFR Part 51. In the footnote to 40 CFR 51.18 "41 FR 55528, December 21, 1976," is deleted and "Appendix S" is inserted in its place. As revised Appendix S reads as follows:

APPENDIX S-EMISSION OFFSET INTERPRETATIVE RULING

I. INTRODUCTION
This appendix sets-forth EPA's Interpretative Ruling on the preconstruction review requirements for stationary sources of-air pollution (not including indirect sources) under 40 CFR 51.18 and Section 129 of the Clean Air Act Amendments of 1977, Pub. L. 95-95, (noteunder42 U.S.C. §7502). A major

new source or modification which would contribute to aviolation of a national ambient air quality standard (NAAQS) may be allowed to construct only if the stringent. conditions set forth below are met These conditions are designed to insure that the

new source's emissions will be controlled to thegreatest degree possible; that more than equivalent offsetting emission reductions ("emission offsets") will be obtained from existing sources; and that there.will beprog-
ress toward achievement oftheNAAQS.

For each area designated as exceeding an NAAQS (nonattainment area) -under 40 CFR 81.300 et seq., this Interpretative Ruling will be superseded after June 30, 1979-(a) by preconstruction review provisions of the revised SIP, if the SIP meets RULES AND REGULATIONS

the requirements ofPart D, Title 1,of the Act; or (b) by a prohibition on construction under the applicable SIP and Section 110(a)(2)(I) ofthe Act, ifthe SIP does not meet the requirements of Part D. The Ruling will remain in effect to the extent notsuperseded under the Act.This prohibi- tion on major new source construction does not apply to a source whose permit to con- structwas applied for during aperiod when the SIP was in compliance with Part D, or beforethe deadline forhaving arevised SIP ineffectthat satisfiesPart D.

IL INITIAL SCREENING ANAYLSES AND
'DETERMINATION OFAPPLICABLE REQUIREMENTS

A. Definitions.For purposes of this R ling.

1."Source" Means any structure,building, facility, equipment,installation oroperation (orcombination thereof) whichis located on
one ormore contiguous or adjacent properties and which Is owned or operated by the

same person (or by persons under common control).

2. "Facility" means an Identifiable piece

orprocess equipment. Astationary source is composed of one ormore pollutant-emitting facilities.

. 3., "Potential" to emit means the maximium capacity to emit a pollutant absent air pollution control equipment. "Air pollution control equipment" includes control equilpment which is not, aside from air pollution control laws and regulations, vital to production ofthenormal product ofthe source
or to Its normal operation. Annual potential shall be based on the maximum annual rated capacity of the source, unless the

source is subject to enforceable permit con- ditions which limit the operating rate or hours of operation, or both. Enforceable permit conditions on the type or amount of materials combusted or processed may be used in determining the potential emission
rate of asource.

4. "Major source" means any source for which thepotential emissionrate is equal to

or greater than 100 tons per year of any of the followingpollutants: particulate matter, sulfur oxides, nitrogen oxides, volatile or- ganiccompounds, or carbon monoxide.

5. "Major modification" means any physical change in, change in the method of operation of,or additiontoa stationary source which increases the potential emission rate ofany air pollutant specified inSection A.4. above (including.any not previously emitted and taking into account all accumulated In-

creases in-potential emissions occurring at

- the source since February 16, 1979, or since the time of the last construction approval issued for the source pursuant to this Ruling, whichever time is more recent, and regardless .'ofany emission reductions achieved ele~where in the source) -by 100
tonsperyear ormore.

(I) A physical change shall not include, routine maintenance, repair, and replacement.

(ii) A change in the method of operation, unless previously limited by enforceable permit conditions, shall notinclude:

(a) An increase in the production rate, if such increase does not exceed the operating designcapacity ofthe source;

-

(b)An increase in the hours ofoperation; (c) Use of an alternative,fuelsor raw material, if onDecember 21, 1976, the source was capable ofaccommodating such fuel orrna- terial; 7(d) Use of an alternative fuel or raWmate. rial by reason of an order in effect under Sections 2 (a) and (b) of theEnergy Supply and Environmental Coordination Act of 1974 (or any superseding legislatior), or by

reason of a'natural gas curtailment plan In effect pursuant tothe FederalPower Act:

(e) Use of an alternative fuel by reason of

an order or rule under Section 125 of the Act;

(f) Change inownership ofa source, or (g) Use of refuse derived fuel generated frommunicipal solid waste.

6. "Allowable emissions" means the emig-- sion rate calculated using the maximum rated capacity of the source'(unless the

source is subject to enforceable permit cow ditions which limit operating rate, or hours of operation, or both) and the most stringent ofthefollowing:

(I) Applicable new source performance standards or standards forhazardous pollutants setforth in 40 CFRPart 60 or 61:

(Ii) Applicable SIP erhission limitation: or (i1) The emission rate specified as an en. forceable permitcondition.

7. "Lowest achievable emission rate"
means, for any source, that rate of omis. sions based on the following, whichever is

more stringent:

(i) The most stringent emission limitation which is contained in the implementation plan of any State for such class or category of source, unless the owner or operator of the proposed source demonstrates thatsuch limitations are notachievable; or -

(i) The most stringent emissionlimitation which Is achieved in practice by such class

orcategory ofsource. '

This term, applied to a modification,

means the lowest achievable emission rate for the new ormodified facilities within the

source. In no event shall the application' of this term permit a propos6d new or modifled facility\to emit any pollutant in excess of the amount allowable under applicable

new source standards ofperformance,

8. "Fugitive dust" means particulate emissions composed ofsoil which Isuncontamin. ated by pollutants resulting from industrial activity. Fugitive dust may Include emis. sions from haul roads, wind erosion of ex- posed soil surfaces and soil storage piles and other activities in which soil is either re- moved, stored, transported, or redistributed,

9. "Reconstruction" will be presumed to have taken-place where -the fixed capital
cost of the new components exceed 50 per. cent ofthe fixed capital cost of a comparable entirely new facility. However, any final decision as to whether reconstruction lias occurred shall be made in accordance with the pr~visions of 40 CFR 60.15(f)()-(3). A reconstructed facility will be treated as a
new facility for purposes of this Ruling, except that use of an alternative fuel or raw material by reason of an order in effect under Sections 2 (a) and (b) of the Energy Supply and Environmental Coordination Act of 1974 (or any superseding legislation), by reason of a natural gas curtailment plan in effect pursuant to theFederal Power Act,

or by reason of an order orrule under Section 125 of the Act, shall not be considered reconstruction.

In determining LAER for a reconstructed
source, the provisions of 40 CFR 60.15(f)(4) shall be taken Into account in assessing whether i new sourceperformance standard -isapplicable to such source.

FEDERAL REGISTER, VOL 44, NO. I1-TUESDAY, JANUARY 16, 1979

### RULES AND REGULATIONS

10. "Fixed capital cost" means the capital needed to provide all the depreciable com- ponents.

11."Secondary emissions" meansemissions from newor existingsources which occur as

a result of the construction and/or operation of a major source or major modification,but do not come fromthe source itself. For purposes of this Ruling, secondary emissions must be specific and well defined.
must be quantifiable, and must impact the

-same general nonattainment area as the major source which causes the secondary emission. Secondary emissions may include, butarenotlimited to:

a. Emissions from ships or trains coming
to or from a refinery, terminal facility, etc.

b. Emissions from off-site support facilities which would be constructed or would otherwise increase emissions as a result of theconstruction ofamajor source.

12. "Resource recovery facility" means anyfacility atwhich solid waste isprocessed forthe purpose ofextracting, converting to energy, or otherwise separating and preparing solidwaste foireuse. Energy conversion facilities must utilize solid waste to provide

more than 50%ofthe heat input to be con- sidered a resource recovery facility under thisRuling.

B. Review ofallsourcesforemissionlimitation compliance. The reviewing authority must examine each proposed major new

source andproposed major modification-' to determine if such a source willmeet all applicable emission requirements in the SIP, any applicable new source performance standardin 40 CFRPart 60, or anynational emission standard for hazardous air pollutants in40 CFR Part 61. If thereviewing au- thority determines that the proposed major

newsource cannot meetthe applicable emission requirements, the permit to construct mustbe denied.

C.Reviiw ofspeciftedsources forairquality impact In addition, for each proposed major new source with allowable emissions exceeding 50 tonsper year, 1000 pounds per day, or 100 pounds-per hour, whichever is
most restrictive, the reviewing authority
must determine if the source will cause or contribute to a violation of an NAAQS.2 A proposed source which would not exceed any of the above emission levels needs no further analysis under thisruling, provided such a source meets the requirements of Section ILB.

Where asource isconstructed ormodified in increments which individually do not emitmore than the above amounts and the increments have not been offset in accordance with this Ruling, the allowable emissions from all such increments granted a permit to constructafterDecember 21, 1976,

'Hereafter -theterm-"source" will be used
to denotebothany sourceand anymodification.

'Required only for those pollutants for which the increased allowable emissions exceed 50 tons per year, 1000 pounds per day, or 100 pounds per hour, although the reviewing authority may address other pollutants if deemed appropriate. The precedinghourly and daily rates shall apply only with respect to a pollutant for which a na- tional ambient air quality standard, for a period less than 24-hours or for a 24-hour period, asappropriate,hasbeen established. shall be added together and this Ruling
may be applicable when a proposed Increment wouldcause the sum ofthe allowable emissions which have not been offset to equal or exceed 50 tons per year, 1000 pounds per day, or 100 pounds per hour. If the total modification would cause or contribute to a violation of the NAAQS. all of the provisions ofthis Ruling are then applicable to each Increment. Ifany oftheIncrements has not previously been subject to Condition I of Section IV.A. (requiring the

source to meet the lowest achievable emlssion rate), such determination must consid-

er the stage of construction of such increment and the'ability of thesource to Install additionalcontrol equipment.

For "stable" air pollutants (Le., SO,. particulate matter and CO), the determination ofwhethera source will cause orcontribute
to a violation of an NAAQS generally should be made ona case-by-case basis as of the proposed new source's start-up date using the source's allowable emissions in an atmospheric simulation model (unless a

source will clearly Impact on a receptor 'which exceeds anNAAQS).

For sources ofnitrogen oxides, the initial determination of whether a source would

cause or contribute to a violation of-the NAAQS for NO. should be made using an atmospheric simulation model assuming all the nitric-oxide emitted Is oxidized to NO bythe time theplume reaches ground level. The initial concentration estimates may be adjusted If adequate data are available to
accountfor theexpected oxidation rate.

For photochemical oxidants, sources of volatile organic compounds (VOC) locating in areas designated under 40 CFR 81.300 eL
seq.as nonattainment,forphotochemical ox- idant or otherwise shown to be In violation of the NAAQS for oxidant shall be subject to the provisions of Section IV of this. Ruling. In addition, VOC sources locating within 36 hours travel time (under wind conditions associated with concentrations exceeding the NAAQS for oxidants) of a nonattainment monitorshall also besubject
to Section IV of this Ruling. However, a VOC source maybe exempt from these re- quirements if the source owner can demonstrate thatthe emiions fromthe proposed

source will have virtually no effect-upon any area that exceeds the NAA(CS forphotochemical oxidant. This exemption is only intended for remote rural sources-whose emissions wouldbe very unlikelytointeract with other significant sources of VOC or NO. toformadditional oxidant.3

As noted above, the determination as to whether a source would cause orcontribute
to a violation ofan NAAQS should bemade

as ofthe new source's start-up date.Therefore, If a designated nonattainment area is projected to be an attainment ara aspart of an approved SIP control strategy by the

new source start-up date,offsets wouldnot be required if the new source would not

cause anew violation.

M2. Sourceslocatingin a "clean" portionof

a designatednonattainment area.A source locating In a clean portion (orwhich willbe clean as of thenew source start-up date)of

a nonattainment area designated pursuant to Section 107 of the Act may be exempt from the requirements of thisruling if the allowable emissions from the source or facility (notincluding any emissionreductions achieved elsewhere in thesource) wouldnot

cause the followingsignificance levelstobe exceeded In the actualarea of non-attainent (as ofthenew sourcestart-up date):

Averaglng Time
Pollutant Annual 24-Hour 8-Hour 3-Hour 1-Hour

SO, 1.0pg/m.-- 5J:/m'.- 25 pgjm.

. T1SP

_ 1.0 ___/m_. 5ktglm_.. NO. LO05s'2m ' CO_

.. .... 0.5 MZI=3- -_ 2mr/=.%.--

No significance Increments are applicable for hydrocarbofis or photochemical oxidants. If the source would exceed the significance levels in the portion of the designated nonattalnment area where the NAAQS is actually violated (actual area of nonattalnment), all requirements of this Ruling (except Condition 3of Section IVA.) wouldbe applicable.

It will be assumed as thestarting point in reviewing apermitapplication that everylocality in a designated nonattainment area will exceed the NAAQS (as of the new

source start-up date), and that any major

source locating in the area will significantly contribute to the violation. However, if the applicant or any other participant presents

a substantial and relevant argument (including any necessary analysis orother demonstration) why that assumption is-Incorrect. then the applicability of this Ruling would be determined by the specific facts in the

case.

E.Sources in attainmentorunclassifjable

areas.For areas designated under 40 CFR 81.300 eL seq.as attainment or unclassifiable fortheNAAQS. sources locating in such

areas which would exceed the abovesignifi-

cance increments at any locality that does
not meet the NAAQS are subject to this Ruling. However, such a source may be exempted from Condition3ofSection IVA.. ofthis Ruling.

F. Fugitfiredustsource&.IFugitive dust as- sociated with major sources locating, in clean portions of designated nonattainment

areas orin designated attainment orunclassifiable areas shall be subject.only to applicable requirements for preventing significantdeterioration,ofairquality (see40 CPR 52.21). Fugitive dust associated with major

sources locating In an actual area.ofnonattainment shall be subjectto Conditions 1, 2 and 3ofSectionIV.A. ofthisRuling.

G. Secondary emission&Secondary emissions need notbe considered in determining whether the emission rates.in Section ILC. above would be exceeded. However, if a

3The discussionin thisparagraph is a proposal, but represents EPA's interim policy until final rulemaking iscomplefed.

FEDERAL REGISTER, VOL 44, NO. 11-TUESDAY, JANUARY 16, 1979 

### 3283

### 3284

source is subject to this Ruling on the basis ofthe direct emissions from the source, the applicable conditions of this Ruling must also be'met for secondary emissions. However,If the secondary emissions are not under the control ofthe applicant, such secondary emissions may be exempt from Conditions 1 and 2 of Section IV. Also, since EPA's au- thority to performorrequire Indirect source review relating to mobile sources regulated under Title II of the Act (motor vehicles and aircraft) has beenrestricted by statute, consideration of the indirect impacts of motor-vehicles and aircraft traffic is not re- quired under this Ruling.

III. SOURCES LOCATING IN "CLEAN AREAS",

BUT WOULDCAUSE ANEw VIOLATION OF AN NAAQS

If the reviewing authority finds that the emissions from a proposed source would

cause a new violation of an NAAQS, but would not contribute to an existing violation, approval may be granted only if.both ofthe following conditions aremet:

Condition 1. The newsource isrequired to meet a more stringent emission limitation4 and/or the control of existing sources below allowable levels is required 'so that the

source will not cause a violation of any NAAQS.

Condition 2. The new emission limitations for the new source as well as any existing

sources affected must be enforceable in ac- cordance with the mechanisms set forth in Section Vbelow.

IV.SOURCES THAT WOULD°CON TRIBU TETO CONCENTRATIONS WHICH EXCEED AN NAAQS A. Conditions for approvalIf thereviewing authority finds that the emissions from

a proposed source would contribute to con- centrations which exceed an NAAQS as of the source's proposed start-up date, approval may be granted only Ifthefollowing con- ditions are met:

Condition 1.The new source isrequired to meet an emission Limitation which speci- fies the lowest achievable emission rate for -,suchsource.* Condition 2. The applicant must certify that all existing major sources5 owned or operated by the applicant (or any entity controlling, controlled by,orunder common

'If the reviewing authority determineg that technological or economic limitations

onthe application'of rmeasurement methodology to a iiarticular class of sources would. make the imposition of an enforceable nu- merical emission standard infeasible, theau- th6rity may instead prescribe a design, oper- ational or equipment standard. In such
cases, the reviewing authority shall make its best estimate as to the emission rate that will be achieved and must specify that rate In the required submission toEPA (seePart V). Any permits isstied without an enforceable numerical emission standard must con- tain enforceable conditions which assure that the design characteristics or equipment will be properly maintained (or that the operational conditions will be properly per- formed) so as to. continuously achieve the assumed degree ofcontrol. Such conditions shall be enforceable as emission limitations by private parties under Section 304. Hereafter, the term "emission limitation" shall also include such design, operational, or equipment standards. '

BSubject to the provisions of section IV.C. below. RULES AND REGULATIONS

control with the apppltcant) in the same State asthe proposed source are in compli-

ance with all applicable emission limitations and stafidards under the Act(orare in com- pliaice with an expeditious schedule which is Federally enforceable or contained in a court decree).

.Condition 3. Emission reductions ("off- sets") from existing sources In the area of the proposed source (whether ornot under the same ownershfp) are required suchthat there will bereasonable progress toward at. taifmnent of the applicable NAAQs.2Only intrapollutant emission offsets will be ac- ceptable (e.g., hydrocarbon increases may notbe offsetagainstSO 2 reductions). Condition4.Theemission offsetswill pro- vide apositive net air quality benefit in the affected area (see SectionIV.D. below). 2Atmospheric simulation modeling Isnot neces- sary for volatile organic compounds and NO,. Fulfillmentof Condition3and Section IV.D. willJbe considered adequate to meet this condition.

B. Exemptionsfrom certain conditions. The reviewing authority may exe~ipt the following sources from Condition 1 under Section III or Conditions 3 and 4. Section IV.A.: (i) Resource recovery facilities burning municipal solid waste, and (I) sources which must switch fuels due to lack of adequate fuel supplies or where a source Is re- quired tobemodifiedas aresult ofEPAreg- ulations (e.g., lead-in-fuel requirements) and

no exemption from such regulation is available to the source. Such an exemption may be grantedonlyIf:

1. The applicant demonstiates that It made its best efforts to obtain sufficient emission offsets to comply with Condition 1 under Section M or Conditions 3 and 4 under Section IV.A. and that such efforts

were unsuccessful;

2. The applicant has secured all available emissionoffsets; and

3.The applicant will continue to seek the necessary emission offsets and apply them whentheybecome available.

Such an exemptionmayresult inthe need to revise the SIP to provide additional con- trol ofexisting sources.

Temporary emissionsources, such aspilot plants, portable facilities whichwill be relocated- outside of the nonattainment area after a short period oftime, and emissions resulting from the construction phase ofa new source, are exempt from Conditions 3 and4ofthisSection.

C.' Baselinefor determining creditfor emissionand airquality offsets. The baseline for determining credit for emission and air quality offsets will be the SIP emission limitations in effect atthe time the applica- tionto construct ormodify asource isfiled. Thus, credit for emission offset purposes may be allowable for -existing control that goes beyond thatrequiredbythe SIP.Emis-

- sion offsets generally should be made on a pounds per hour basiswhen all facilitiesInvolved in the emission offset\ calculations

are operating attheirmaximum expectedor allowed production rate. The reviewing agency should specify other averaging peri- ods (e.g., tons per year) in addition to the pounds per hour basis'fnecessary to carry 'out the intent of this Ruling. When offsets are, calculated on a: tonsper year basis, the baseline emissions for existing sources pro- viding the offsetsshould be calculated using the actual annual operating hours for the previous one or two year period (or other appropriate period if warranted by cyclical .business conditions). Where the SIP re- quires certain hardware controls In lieu of

an emission limitation (e.g., floating roof tanksforpetroleum storage), baseline allowable emissions should be based on actual bp- erating conditions for the previous one or two year period (i.e., actual throughput and vapor pressures) in conjunction with the re- quiredhardware controls.

1. No meaningful or applicableSIP re- quirement Where the applicable SIP does not contain an emission limitation for a source or source category, the emission offset baseline Involving such sources shall be the actual emissions determined In ac- cordance with,the discussion above regard- ing operating conditions,

Where the SIP emission, limit allows greater emissions than the potential emis sionrate ofthe source (as when a State has

a single particulate emission limlt for all fuels), emission offset credit will,be allowed only for control below the potential emissionrate. '2. Combustion offuels. Generally, the emissions for determining emission offset credit involving an existing fuel combustion

source willbe the allowable emissions under the SIPforthe type of fuel being burned at the time the new source application Is filed (i.e., ifthe existing source has switched to a different type of fuel at some earlier date, any resulting emission reductlon (either actual or allowable] shall not be used for emission offset credit). If the existing

source commits to switchto acleaner fuel at
some future date, emission offset credit based on the allowable emissions for the fuels involved Is not acceptable unless the permit is conditioned to require the use ofa specified alternative control measure which would achieve the same degree of emission reduction should the source switch back to a dirtier fuel at some later date. The reviewing authority should ensure that adequtto long-term supplies ofthe new fuel are avail. able before granting emission offset credit forfuel switches.

3. Operatinghoursandsource shutdown, A source may be credited with emiSsion re- ductions achieved by shutting down an ex- isting source or permanently curtailing pro duction or operating hours below basblino levels (see initial discussion to this Section C) provided, that the work force to be af. fected has been notified of the proposed shutdown or curtailment. Emission offsets that involve reducing operating hours or production or source shutdowns must be legally enforceable, as inthe case forall emis sion offset situations.6

-

4. Credit forhydrocarbonsubstitution,As set forth in the Agency's "Recommended Policy on Control ofVolatile Organic Compounds" (42 FR 35314, July 8, 1977), EPA has-found that almost all non-methane hy- drocarbons are photochemically reactive and that low reactivity hydrocarbons even6Source shutdowns and curtailments In production or operating hours occurring prior to the date the new source application is filed generally may not be used for emis. sion offset credit, However, where an applicant can establish that it shut down or cur- tailed production after August 7,1977, or less than one yehr prior to the date of permit application, whichever is earlier, and the proposed new source is a replacement for the shutdown or curtailment, credit for such shutdown or curtailment may be ap. plied to offset emissions from the now

source.

FEDERAL REGISTER, VOL44, NO. 11-TUESDAY, JANUARY 16, 1979RULES AND REGULATIONS

tually form as much photochemical oxidant

as the highly reactive hydrocarbons. Therefore, no emission offset credit may be allowed for replacing one hydrocarbon com- pound with another of lesser reactivity, except for those compounds listed in Table 1oftheabove policystatement.

5. "Banking"ofemissionoffset credit.For

new sources obtaining permits by applying offsets after January 16,-1979, thereviewing authority may allow offsets that exceed the requirements ofreasonable progress toward attainment (Condition 3) to be "banked" (i.e., saved to provide offsets for a source seeking a permit in the future) for use under this Ruling. Likewise, the reviewing authority may allow the owner of an existing source that reduces its own emissions to bank any resulting reductions beyond those required by the SIP for use under this -Ruling, even ifnone of the offsets are applied immediately to anew source permit.A reviewing authority may allowthese banked offsets tobe used underthe preconstruction review program required by Part D, as long

as thee banked emissions are identified and accounted for inthe SIP control strategy.A reviewing authority may not approve the construction of a source using banked offsetsif the new source would interfere with the SIP control strategy or if such use would violate any other condition set forth for use of offsets. To preserve banked offsets,thereviewing authority should identify them in either a SIP revision or a permit, and establishrules asto howand when they may beused.

D.Locationof offsetting emissions.In the

caseofemission offsets involvingvolatile or- ganic compounds (VOC), the offsets may be obtained from sources located anywhere in the broad vicinity of the proposed new

source. Generally, offsets will be acceptable if obtained from within the same AQCR as the new source or from other areas which
may be contributing to the oxidant problem at the proposed new source location. As with other pollutants, it is desirable to obtain offsets from sources located as close
to the proposed new source site as possible.. If -the proposed offsets would be from

sources located at greater distances from the new source, the reviewing authority should increase the ratio of the required offsets and require a showing that nearby offsets were investigated and reasonable alternatives werenot available7.3

Offsets for NO. sources may also be obtained within the broad area ofnonattainment.This isbecause areawide oxidant and NO, levels are generally not as dependent

onspecific hydrocarbon orNO, source location as they are on overall area emissions. Since the airquality impact ofSO., particulate and carbon monoxide sources is site dependent, simple areawide mass emission offsets are not appropriate. For these pollutants, thereviewing authority should consid-

er atmospheric simulation modeling to

ensure that the emission offsets provide a positive net air quality benefit. However, to avoid unnecessary consumption of limited, costly and time consuming modeling re- sources, in most cases it can be assumed thit-if the emission offsets are obtained from an existing source on the same premises or inthe immediate vicinity ofthe new source, and the pollutants disperse from substantially the same effective stack height, the air quality test under Condition 4 of Section IV.A. above will be met. Thus,' when stack emissions are offset. against a ground level source atthe same site, modeling would be required. The reviewing au- thoritymay perform this analysis orrequire the applicant to submit appropriate modelingresults.

E. Reasonableprogress towards attainmeat.As longas theemission offsetIs great-

er than one-for-one, and the other criteria
set forth above are met, EPA does not intend to question a reviewing authority's judgment as to what constitutes reasonable progress towards attainment as required under Condition 3 in Section V.A. above. This does not apply to "reasonable further progress" as required by Section 173.

V.ADMUUSTRATIVE PROCEDURES
The necessary emission offsets may be proposed either by the owner of the proposed source or by the local community or the State. The emission reduction committed to must be enforceable by authorized State and/or local agencies and under the Clean Air Act, and mustbe accomplished by the new source's start-up date. If emission reductions are tobe obtained ina State that neighbors the State in which the new
source.Is to be located, the emission reductions committed to must be enforceable by the neighboring State and/or local agencies and under the Clean Air Act. Where the

new facility is a replacement for a facility that is being shut down in order to provide the necessary offsets, thereviewing authority may allow up to 180 days forshakedown of thenew facility before the existingfacilityisrequired tocease operation.

A. Source initiated emission offsets. A

source may propose emission offsets which involve: (1) Reductions from sources con- trolled by the source owner (internal emission offsets); and/or (2) reductions from neighboring sources (external emission offsets). The source does not have to investigate all possible emission offsets. As longas the emission offsets obtained representrea- sonable progress toward attainment, they will be acceptable. It is the reviewing authority's responsibility to assure that the emission offsets will be as effective as proposed by the source. An Internal emlssion offset will be considered enforceable if It Is made a SIP requirement by Inclusion as a condition ofthe new source permit and the permit Isforwarded to the appropriate EPA Regional Office.' An external emission offset will not be enforceable unless the affected source(s) providing the emission re- ductions is subject to a new SIP requirementto ensure that Its emissions will bere- duced by a specified amount In a specified time. Thus, If the source(s) providing the emissionreductions doesnot obtain thenec- essary reduction, It will be in violation ofa SIP requirement and subject to enforcement action by EPA. the State and/or privateparties.

The form of the SIP revision may be a State or local regulation, operating permit condition, consent or enforcement order, or any other mechanism available to the State that is enforceable under the Clean AirAct. If a SIP revision Is required, the public hearing on the revision may be substituted for the normal public comment procedure required for allmajor sources under40 CFR

'The emission offsetwill, therefore,be en- forceable by EPA under Section 113 as an applicable SIPrequirement and will be en- forceable by private parties under Section 304 asan emission limitation. 51.18. Theformal publication ofthe SIPre- vision approval in the FmE-mu. Rzsrza need not appearbefore the source mayproceed with construction. To minimize uncer- tanity that may be caused by these procedures. EPA will, if requested by the State, propose a SIP revision for public comment In the FERA REOrsaT concurrently with the State public hearing process. Ofcourse, any major change in the'final permit/SIP revision submitted by theState may require

a reproposal byEPA.

B. Stateorcommunity initiatedemission offset. AState or communitywhich desires thbLt a source locate in its area may commit
to reducing emissions from existing sources (including niobile sources) to sufficiently outweigh the impact of the new source and thus open the way for the new source. As with source-initiated emission offsets, the commitment must be somethingmore than one-for-one. This commitment mustbe submitted as aSIPrevision bytheState.

VL POLICY'WXE ATTAINUMM DAMES HAVE NOT PASSED

In some cases,the dates forattainment of primary standards specified in the SIP under Section 110 have not yetpased due
to a delay In the promulgation of a plan under this section of the Act. In addition the Act provides more flexibility with re- spect tothe aates forattainment ofsecondary NAAQS than for primary standards. Rather than setting specific deadlines, Section 110 requires secondary NAAQS to be achieved within a "reasonable time". Therefore. In some eases, the date for attainment of secondary standards specified in the SIP under Section 110 may also not-yet have passed. In such cases, a new source which would cause orcontribute to anNAAQS violation may be exempt from the Conditions of Section IV.A. so long as the new source meets the applicable SIP emission limitations and will not interfere with the attainment date specified in" the SIP under SecUon 110oftheAct. (See. 129(a), Pub. L. 95-95 (note under 42 U.S.C. 7502), and Sec. 301 ofthe Clean Air Act, asamended (42U.S.C. '7601).)

IFRDoc.79-1423 Filed 1-15-79; 8:45 am]



### [6560-o1-M]

-

-EFRL 1031-3] 

### PART 65-DELAYED COMPLIANCE
ORDERS
Delayed Compliance Order forU.S. AirForce 928th Tactical Airlift Group

AGENCY: U.S. Environmental Protec

### tionAgency.
ACTION: Final Rule.

SUMTMARY: By thisrule theAdministrat6r of U.S. EPA issues a Delayed Compliance Order to the U.S. Air Force 928th Tactical Airlift Group (Air Force). The Order requires the Air Force to bring air emissions from Its building 1 Heating Plant, Chicago, Illinois, into compliance with certain regulations contained in the federally approved Illinols State Implementation Plan (SIP). The Air Force's cornFEDERAL REGISTER, VOL 44, NO. I1-TUESDAY, JANUARY 16, 1979 

### 3285