Federal Register / Vol. 77, No. 164 / Thursday, August 23, 2012 / Proposed Rules 50973 

submit updates made by the state to its 

LEV Program rule. Specifically, this SIP 

revision includes changes made by 

Maryland to regulation .02 

Incorporation by Reference under 

COMAR 26.11.34. This regulatory 

revision was adopted by Maryland on 

April 14, 2011 and became effective in 

Maryland on May 16, 2011. The purpose 

of the SIP revision including this rule 

revision was to update Maryland’s 

incorporation by reference to be 

consistent with changes made by 

California to its LEV rules. Since the 

time that Maryland initially adopted 

California’s rules in 2007, California had 

updated its rules to: improve on-board 

diagnostic and emission standards for 

testing vehicles; adopt standards for 

testing plug-in hybrid electric vehicle 

conversions; and to adopt the national 

GHG emissions standards framework 

agreement between the EPA, NHTSA, 

and CARB. Although the changes made 

by California (and the resulting changes 

made by Maryland to its incorporation 

of California’s rules by reference) are 

minimal, they are important for 

purposes of making sure Maryland’s 

rules are consistent with those of 

California, in compliance with the 

requirements for adoption of California 

standards by other states, per section 

177 of the CAA. These changes serve 

primarily to achieve consistency 

between Maryland’s and California’s 

rules, for purposes of maintaining parity 

of Maryland’s rules with those of 

California. 

II. Proposed Action 

EPA is proposing to approve three 

Maryland SIP revisions submitted to 

EPA adopting the Maryland Clean Car 

Program. Maryland adopted California’s 

LEV and ZEV programs, in addition to 

California’s GHG emissions standards 

for light-duty passenger vehicles and 

trucks and medium-duty vehicles. 

Maryland initially submitted the first of 

these three SIP revisions on December 

20, 2007. Maryland subsequently 

submitted the second of these three SIP 

revisions to EPA on November 12, 2010, 

to amend its 2007 SIP revision. 

Maryland then submitted a SIP revision 

on June 22, 2011, to amend its earlier 

SIP revisions. EPA is soliciting public 

comments on the issues discussed in 

this document. These comments will be 

considered before taking final action. 

III. Statutory and Executive Order 

Reviews 

Under the CAA, the Administrator is 

required to approve a SIP submission 

that complies with the provisions of the 

CAA and applicable Federal regulations. 

42 U.S.C. 7410(k); 40 CFR 52.02(a). 

Thus, in reviewing SIP submissions, 

EPA’s role is to approve state choices, 

provided that they meet the criteria of 

the CAA. Accordingly, this action 

merely proposes to approve state law as 

meeting Federal requirements and does 

not impose additional requirements 

beyond those imposed by state law. For 

that reason, this proposed action: 

• Is not a ‘‘significant regulatory 

action’’ subject to review by the Office 

of Management and Budget under 

Executive Order 12866 (58 FR 51735, 

October 4, 1993); 

• Does not impose an information 

collection burden under the provisions 

of the Paperwork Reduction Act (44 

U.S.C. 3501 et seq.); 

• Is certified as not having a 

significant economic impact on a 

substantial number of small entities 

under the Regulatory Flexibility Act (5 

U.S.C. 601 et seq.); 

• Does not contain any unfunded 

mandate or significantly or uniquely 

affect small governments, as described 

in the Unfunded Mandates Reform Act 

of 1995 (Pub. L. 104–4); 

• Does not have Federalism 

implications as specified in Executive 

Order 13132 (64 FR 43255, August 10, 

1999); 

• Is not an economically significant 

regulatory action based on health or 

safety risks subject to Executive Order 

13045 (62 FR 19885, April 23, 1997); 

• Is not a significant regulatory action 

subject to Executive Order 13211 (66 FR 

28355, May 22, 2001); 

• Is not subject to requirements of 

Section 12(d) of the National 

Technology Transfer and Advancement 

Act of 1995 (15 U.S.C. 272 note) because 

application of those requirements would 

be inconsistent with the CAA; and 

• Does not provide EPA with the 

discretionary authority to address, as 

appropriate, disproportionate human 

health or environmental effects, using 

practicable and legally permissible 

methods, under Executive Order 12898 

(59 FR 7629, February 16, 1994). 

In addition, this proposed rule to 

approve Maryland’s Clean Car Program 

does not have tribal implications as 

specified by Executive Order 13175 (65 

FR 67249, November 9, 2000), because 

the SIP is not approved to apply in 

Indian country located in the state, and 

EPA notes that it will not impose 

substantial direct costs on tribal 

governments or preempt tribal law. 

List of Subjects in 40 CFR Part 52 

Environmental protection, Air 

pollution control, Carbon monoxide, 

Intergovernmental relations, Nitrogen 

dioxide, Ozone, Reporting and 

recordkeeping requirements, Volatile 

organic compounds. 

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

Dated: August 08, 2012. 

W.C. Early, 

Acting Administrator, Region III. 

[FR Doc. 2012–20787 Filed 8–22–12; 8:45 am] 

BILLING CODE 6560–50–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 52 

[EPA–R09–OAR–2010–1078; FRL–9717–7] 

Revision to the South Coast Portion of 

the California State Implementation 

Plan, CPV Sentinel Energy Project AB 

1318 Tracking System 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Supplemental Proposed Rule. 

SUMMARY: The Environmental Protection 

Agency (EPA) is supplementing our 

prior proposal to approve a sourcespecific State Implementation Plan (SIP) 

revision and requesting public comment 

on additional information we are adding 

to our docket to revise the South Coast 

Air Quality Management District 

(District or SCAQMD) portion of the 

California SIP. This source-specific SIP 

revision is known as the CPV Sentinel 

Energy Project AB 1318 Tracking 

System (‘‘AB 1318 Tracking System’’). 

We are supplementing our proposed 

approval of this SIP revision to provide 

additional information and request 

comment on three issues: (1) the 

District’s quantification of the offsets it 

transferred to the AB 1318 Tracking 

System; (2) the District’s surplus 

adjustment of the offsets in the AB 1318 

Tracking System; and (3) which District 

Air Quality Management Plan (AQMP) 

is appropriate for determining the base 

year to evaluate the availability of 

offsets from shutdown sources. 

DATES: Comments on this Supplemental 

Notice of Proposed Rulemaking (NPRM) 

must be submitted no later than 

September 24, 2012. 

ADDRESSES: Submit comments, 

identified by docket number EPA–R09– 

OAR–2010–1078, by one of the 

following methods: 

1. Federal eRulemaking Portal: 

www.regulations.gov. Follow the on-line 

instructions. 

2. Email: r9airpermits@epa.gov. 

3. Mail or deliver: Gerardo Rios (Air– 

3), U.S. Environmental Protection 

Agency Region IX, 75 Hawthorne Street, 

San Francisco, CA 94105–3901. 


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Instructions: All comments that EPA 

receives within the public comment 

period will be included in the public 

docket without change and may be 

made available online at 

www.regulations.gov, including any 

personal information provided, unless 

the comment includes Confidential 

Business Information (CBI) or other 

information where disclosure of the 

information is restricted by statute. 

Information that you consider CBI or 

otherwise protected should be clearly 

identified as such and should not be 

submitted through www.regulations.gov 

or email. www.regulations.gov is an 

‘‘anonymous access’’ system, and EPA 

will not know your identity or contact 

information unless you provide it in the 

body of your comment. If you send 

email directly to EPA, your email 

address will be automatically captured 

and included as part of the public 

comment. If EPA cannot read your 

comment due to technical difficulties 

and cannot contact you for clarification, 

EPA may not be able to consider your 

comment. 

Docket: The index to the docket for 

this action is available electronically at 

www.regulations.gov and in hard copy 

at EPA Region IX, 75 Hawthorne Street, 

San Francisco, California. While 

documents in the docket are listed in 

the index, some information may be 

publicly available only at the hard copy 

location (e.g., copyrighted material or 

voluminous background documents), 

and some may not be publicly available 

in either location (e.g., CBI). To inspect 

the docket, please schedule an 

appointment during normal business 

hours with the contact listed in the FOR

FURTHER INFORMATION CONTACT section. 

FOR FURTHER INFORMATION CONTACT: 

Laura Yannayon, EPA Region IX, (415) 

972–3524, yannayon.laura@epa.gov. 

SUPPLEMENTARY INFORMATION: 

Throughout this document, ‘‘we’’, ‘‘us’’, 

and ‘‘our’’ refer to EPA. 

Table of Contents 

I. Background 

A. Facility Description and Background 

B. Procedural History of Source Specific 

SIP Revision 

C. Offsets in this Source-Specific SIP 

Revision 

D. Appropriate AQMP for Determining the 

Base-Year 

II. Evaluation of Source Specific SIP Revision 

A. What is in the SIP revision? 

B. What are the Federal Clean Air Act 

requirements? 

C. What actions has EPA taken previously? 

D. How is EPA supplementing its prior 

proposal now? 

E. Section 110(l) Evaluation 

F. Public Comment and Final Action 

III. Statutory and Executive Order Reviews 

I. Background 

A. Facility Description and Background 

For a detailed discussion of this topic, 

please refer to our proposed rule at 76 

FR 2294 (Jan. 13, 2011). In summary, the 

Sentinel Energy Project is designed to be 

a nominally rated 850 Megawatt 

electrical generating facility covering 

approximately 37 acres within Riverside 

County, adjacent to Desert Hot Springs, 

California in the Palm Springs area. The 

District determined that the Sentinel 

Energy Project requires 118,120 pounds 

(‘‘lbs’’) of PM10 offsets and 13,928 lbs of 

SOX offsets for the District to issue a 

permit for construction and operation. 

B. Procedural History of Source Specific 

SIP Revision 

The District adopted the AB 1318 

Tracking System on July 9, 2010. The 

California Air Resources Board (CARB) 

submitted the AB 1318 Tracking System 

to EPA as a source specific SIP revision 

on September 10, 2010. EPA issued a 

completeness letter on October 27, 2010, 

finding that the submittal met the 

completeness criteria in 40 CFR part 51 

Appendix V. EPA proposed approval of 

the source specific SIP revision on 

January 13, 2011. 76 FR at 2294. On 

April 20, 2011, EPA responded to 

comments and finalized approval of the 

source specific SIP revision. 76 FR 

22038. 

California Communities Against 

Toxics (CCAT) and Communities for a 

Better Environment (CBE) filed a 

petition for review with the United 

States Court of Appeals for the Ninth 

Circuit. On July 26, 2011, CCAT and 

CBE filed their Opening Brief. In the 

Brief, CCAT and CBE alleged that EPA 

committed a procedural error by failing 

to post all of the back-up documentation 

for the offset transactions on EPA’s 

eDocket Web site. EPA was not and is 

not obligated to post all of these 

voluminous documents to the eDocket 

Web site. Copies of those documents 

were available for inspection in EPA’s 

offices. In addition, those documents 

had been provided directly to the 

Petitioners several months earlier. Id. 

CCAT and CBE’s Opening Brief set 

forth some detailed assertions regarding 

the quantification and surplus 

adjustments of the offset transactions in 

the AB 1318 Tracking System. The 

detailed arguments that CCAT and CBE 

included in their Ninth Circuit Opening 

Brief were not included in their 

comments on our proposed rulemaking. 

On September 13, 2011, EPA 

requested that the Court remand the 

rulemaking to EPA to supplement the 

record and provide additional 

justification for our action. The Ninth 

Circuit summarily denied this motion. 

Several months later after briefing and 

oral argument, the Court remanded the 

rulemaking to EPA for additional 

justification. The Court did not vacate 

the rule upon remand. 

This Supplemental proposal on 

remand is seeking comment on three 

specific issues: (1) The District’s 

quantification of some of the offsets in 

the AB 1318 Tracking System; (2) the 

District’s surplus adjustment of certain 

offsets; and (3) which District Air 

Quality Management Plan is appropriate 

for determining the base year to evaluate 

the availability of offsets from sources 

that shutdown. These three issues are 

discussed in more detail below. 

C. Offsets in This Source-Specific SIP 

Revision 

When equipment or an entire facility 

is shutdown, it no longer emits air 

pollutants. The CAA allows the 

emission reductions from shutdown 

equipment or facilities to be used to 

offset the operation of new or modified 

stationary sources provided the offsets 

meet the requirements of CAA Section 

173. See 40 U.S.C. 7503(a)(1)(A). 

Section 173 requires offsets to be 

permanent, enforceable, quantifiable, 

and surplus. Id. 7503(c). This 

Supplemental proposal provides 

additional information regarding EPA’s 

prior determination that at least 118,120 

lbs of PM10 and 13,928 lbs of SOX offsets 

meet the requirements of Section 173 as 

transferred by the District into the AB 

1318 Tracking System. Because the 

briefs that CCAT and CBE filed with the 

Ninth Circuit pointed to potential 

deficiencies with a small number of 

offsets in the AB 1318 Tracking System, 

EPA is providing additional information 

in this Supplemental proposal to 

identify the specific offsets that we are 

determining meet all federal 

requirements. 

Attachment A to the Technical 

Support Document (TSD) for this 

Supplemental proposal includes two 

spreadsheets, one for PM10 emissions 

and one for SOX emissions. These 

spreadsheets list each source that has 

shut down and is no longer operating 

resulting in offsets that the District 

transferred into the AB 1318 Tracking 

System. 

The offsets listed in Attachment A 

meet CAA Section 173’s requirements to 

be permanent and enforceable because 

the owner or operator surrendered the 

permits to the District. It is illegal under 

SCAQMD Rule 203 for any source to 

emit any amount of an air pollutant 

without a valid permit, unless the 

source is specifically exempted from 

this requirement under District Rule 219 


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(Equipment Not Requiring a Written 

Permit Pursuant to Regulation II). The 

Federal government or local air agency 

may bring an enforcement action against 

a source operating without a permit. 

Citizens may also bring such actions 

because Rule 203 is included in the SIP. 

For these reasons, when a source shuts 

down and surrenders its permit to the 

District, its emissions reductions are 

permanent and enforceable. The source 

would be required to apply for a new 

permit, and provide new offsets, in 

order to operate again. 

The offsets listed in Attachment A are 

also quantifiable as required by Section 

173. Each spreadsheet contains two 

sections, Section I and II, each with two 

parts (Parts A and B). For all of the 

sources listed in Section I, two years of 

actual emission data was used to 

calculate an annual average. Section I.A. 

lists those sources where District 

Annual Emissions Report (AER) data 

were used, and Section I.B. lists sources 

where AER, Acid Rain or Emission 

Reduction Credit (ERC) application data 

were used. Section II lists the sources 

where only one year of AER data was 

reported. Section II.A. lists those 

sources where only Year 2 data was 

reported and Section II.B. lists those 

sources where only Year 1 data was 

reported. Quantification of the offsets 

for which only one year of data is 

available is discussed in more detail 

below in Section II.D.1. 

The offsets listed in Attachment A are 

surplus in addition to being 

quantifiable, permanent and 

enforceable. Our detailed discussion in 

Section II.D.2. below provides our 

justification for finding that each pound 

of offsets listed in Attachment A is 

surplus to the requirements of the CAA. 

In summary, the Sentinel Energy 

Project needed 118,120 lbs of PM10

offsets and 13,928 lbs of SOX offsets. 

The District transferred more than these 

amounts into the AB 1318 Tracking 

System for the exclusive use of Sentinel 

Energy Project. EPA has determined that 

each of the offsets listed in Attachment 

A meets all of the creditability 

requirements of Section 173 of the CAA. 

The sum of the offsets in Attachment A 

is 124,797 lbs of PM10 and 25,178 lbs of 

SOX, which exceeds the amount needed 

by Sentinel. For any offset transactions 

the District included in the AB 1318 

Tracking System that are not 

specifically listed in Attachment A, EPA 

is not taking a position at this time on 

whether those offsets meet the federal 

creditability requirements. Those offsets 

are not necessary for the Sentinel 

Energy Project to comply with Section 

173(a)(1) even though the District 

transferred them to the AB 1318 

Tracking System. 

D. Appropriate AQMP for Determining 

the Base-Year 

CCAT and CBE raised a third 

objection to our approval of the sourcespecific SIP revision. CCAT and CBE 

claim the District is prohibited from 

using any emission reductions from 

facilities that shutdown equipment prior 

to the last day of 2002. 2002 is the baseyear in the 2007 Air Quality 

Management Plan (AQMP) that the 

District adopted to demonstrate 

attainment with the federal PM2.5 and 8- 

hour Ozone National Ambient Air 

Quality Standards (NAAQS). 

40 CFR 51.165(a)(3)(ii)(C)(1)(ii) 

provides that emissions reductions from 

shutting down equipment may be used 

as offsets if ‘‘[t]he shutdown or 

curtailment occurred after the last day 

of the base year for the SIP planning 

process.’’ The regulation also allows 

pre-base year emissions reductions from 

shutdown equipment to be used ‘‘if the 

projected emission inventory used to 

develop the attainment demonstration 

explicitly includes the emissions from 

such previously shutdown or curtailed 

emission units.’’ Id. Based on this 

regulation, CCAT and CBE contend the 

District may not include emission 

reductions from facilities shutting down 

equipment prior to the last day of 2002 

in the AB 1318 Tracking System. In our 

prior rulemaking, EPA responded to this 

comment by stating that the District had 

added the offsets into the attainment 

demonstration in the 2007 AQMP for 

the PM2.5 and 8-hour Ozone NAAQS. 

This Supplemental proposal changes 

our reasoning on this issue. EPA has 

evaluated this issue further and 

determined that the District’s 2003 

AQMPs for PM10 for the South Coast 

and the Coachella Valley Basins 

establish the correct base year. The base 

year in these AQMPs is 1997. All of the 

emission reductions in the AB 1318 

Tracking System occurred after 1997, 

and therefore comply with 40 CFR 

51.165(a)(3)(ii)(C)(1)(ii). This issue is 

discussed in more detail in Section 

II.D.3. below. 

II. Evaluation of Source Specific SIP 

Revision 

A. What is in the SIP revision? 

For a detailed discussion of the SIP 

revision package, please see our 

proposed approval from January 13, 

2011. 76 FR 2294. 

The text of the proposed sourcespecific SIP revision, in relevant part, is: 

The Executive Officer of the South Coast 

Air Quality Management District shall 

transfer sulfur oxides and particulate 

emission credits from the CPV Sentinel 

Energy Project AB 1318 Tracking System, 

attached hereto and incorporated by 

reference herein, to eligible electrical 

generating facilities pursuant to Health and 

Safety Code section 40440.14, as in effect 

January 1, 2010, (i.e. the Sentinel Energy 

Project to be located in Desert Hot Springs, 

CA) in the full amounts needed to issue 

permits to construct and to meet 

requirements for sulfur oxides and 

particulate matter emissions. 

Notwithstanding District Rule 1303, this SIP 

revision provides a federally enforceable 

mechanism for transferring offsets from the 

AQMD’s internal accounts to the Sentinel 

Energy Project. 

This SIP revision is intended to 

provide a federally approved and 

enforceable mechanism for the District 

to transfer PM10 and SOX offsets from 

the District’s internal bank to the 

Sentinel Energy Project and to account 

for the transferred offsets through the 

AB 1318 Tracking System. 

The District’s SIP revision 

incorporates by reference each of the 

offsets from the facilities that shutdown 

equipment. Based on EPA’s analysis, 

however, EPA is only proposing to 

approve that the PM10 and SOX offsets 

listed in Attachment A of our TSD meet 

the federal criteria for purposes of this 

source-specific SIP revision. This 

proposal is not taking any action on 

offsets that are not listed in Attachment 

A. 

B. What are the Federal Clean Air Act 

requirements? 

For a detailed discussion of these 

requirements, please refer to our 

proposed approval. 76 FR 2294. 

This Supplemental proposal focuses 

on three requirements. First, the offsets 

that the District transferred to the AB 

1318 Tracking System must be 

quantifiable. Second, the offsets must be 

surplus. As discussed in more detail in 

Section II.D. the offsets in Attachment A 

meet those requirements. Third, offsets 

resulting from shutting down emissions 

units must occur after the base year for 

the applicable SIP attainment 

demonstration or otherwise be explicitly 

included in the SIP’s attainment 

demonstration. The offsets transferred 

into the AB 1318 Tracking System meet 

this requirement with respect to the 

2003 AQMPs for PM10 and precursors 

for the South Coast and Coachella Air 

Basins. 

C. What actions has EPA taken 

previously? 

Prior to our January 13, 2011 proposal 

to approve this SIP revision, EPA 

reviewed the District’s Offset 

Verification Forms and attachments 


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1For one project, Seagull Sanitation, the source 

shutdown and applied for ERCs. The District 

subtracted the amount of offsets required to comply 

with Best Available Retrofit Technology at the time 

of shutdown. Then the District subtracted the 

amount of offsets that the source ‘‘owed’’ the 

District. 

provided for each source’s offsets that 

the District had transferred to the AB 

1318 Tracking System. Our review 

determined that a sufficient amount of 

the offsets met the requirements to offset 

the PM10 and SOX emissions increases 

from the operation of the Sentinel 

Energy Project. Specifically, the Project 

required 118,120 lbs of PM10 and 13,928 

lb of SOX offsets. The District had 

transferred a total of 137,799 lbs of PM10

and 25,346 lbs of SOX offsets into the 

AB 1318 Tracking System. 

EPA has re-evaluated the creditability 

of some of the offsets in AB 1318 

Tracking System. We are now listing the 

offsets we have determined are 

creditable in Attachment A. For each 

source of offsets listed in Attachment A, 

the District provided documentation 

demonstrating those offsets meet the 

Section 173 requirements. Attachment 

A contains a total of 124,797 lbs of PM10

and 25,178 lbs of SOX, thereby 

exceeding the amount required for the 

Project. 

Our prior rulemaking did not 

specifically identify the offsets that we 

found met the Section 173 

requirements. This Supplemental 

proposal now specifically identifies the 

offsets that we have determined meet 

the requirements of Section 173 and 

lists those offsets in Attachment A. EPA 

is not taking any action on, and has not 

reached any conclusion regarding the 

creditability of, any offsets the District 

transferred into the AB 1318 Tracking 

System that are not listed in Attachment 

A. 

D. How is EPA supplementing its prior 

proposal now? 

This Supplemental proposal provides 

additional details concerning EPA’s 

determination that at least 118,120 lbs 

of PM10 and 13,928 lbs of SOX offsets 

transferred into the AB 1318 Tracking 

System meet the offset integrity 

requirements of Section 173. See 

Attachment A to the TSD. 

1. The District Has Demonstrated That 

at Least 118,120 lbs of PM10 and 13,928 

lbs of SOX Offsets Are Properly 

Quantified 

To determine if the offsets listed in 

Attachment A were properly quantified, 

we reviewed the District’s Offset 

Verification Forms and additional 

documents. From these documents, we 

have listed the following information in 

Attachment A: The type of equipment 

shutdown, the year the equipment was 

shutdown, the year 1 (i.e. the year 

immediately preceding the shutdown) 

and year 2 (i.e. the second year prior to 

shutdown) data of pre-shutdown actual 

emissions, the annual average of both 

years of pre-shutdown actual emissions 

(if available), the amount of emissions 

reductions calculated by the District, the 

amount calculated for this 

Supplemental proposal and the source 

of the emissions data. 

The offsets listed in Section I.A. of 

Attachment A rely on two years of 

emissions data reported by the source in 

its AER. The offsets listed in Section I.B. 

rely on two years of emissions data 

reported to EPA’s Acid Rain database 

(either solely or in addition to an AER), 

or in one case, in an application for an 

ERC.1 These sources of emissions data 

are reliable and inherently discourage 

inaccurate reporting. The permittee 

must pay substantial fees to the District 

based on the quantity of emissions 

reported in the AER, thereby 

discouraging over-reporting. The Acid 

Rain database collects data directly from 

Continuous Emission Monitors or 

throughput combined with a well 

established emissions factor. Finally, 

the emission data used to evaluate the 

Emission Reduction Credit application 

was based on actual operating data and 

reported emissions. 

The offsets from sources listed in 

Section II rely upon one year of 

emissions data. Section 173 of the CAA 

does not define how to calculate actual 

emissions for purposes of providing 

offsets. EPA’s regulations setting forth 

SIP requirements for offsets are also 

silent on this issue. See 40 CFR 

51.165(a)(3)(i)(C). EPA’s Emissions 

Offset Interpretative Ruling at 40 CFR 

Part 51, Appendix S, however, provides 

guidance for calculating the ‘‘baseline 

for determining credit for emission and 

air quality offsets’’. Appendix S 

provides: 

When offsets are calculated on a tons per 

year basis, the baseline emissions for existing 

sources providing the offsets should 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). 

Id. at IV.C. (emphasis added). Therefore, 

Appendix S contemplates situations in 

which one year of emissions data is 

sufficient. 

CCAT and CBE have asserted that the 

District must use two years of actual 

emissions to calculate the actual 

emissions for offsets. This assertion 

relies on the definition of ‘‘actual 

emissions’’ in 40 CFR 51.165(a)(1)(xii). 

This definition of ‘‘actual emissions’’ is 

not provided for determining offset 

credit. 

We do not need to resolve whether 

CCAT has relied on the incorrect 

definition or whether 2 years of 

emissions data is required for purposes 

of this proposal. For this proposal, the 

District either used 2 years of data or 

appropriately adjusted the single year 

data. Section II.A. lists sources where 

we had only Year 2 data (i.e. data for the 

second year prior to shutdown) and 

Section II.B. lists sources where only 

Year 1 data (i.e. data for the year 

immediately preceding shutdown) was 

available. For the offsets in Section II.A 

where the source only reported AER 

data for Year 2, the District assumed 

that Year 1 emissions data (the year 

immediately prior to shutdown) was 

zero, and the Year 2 data was divided 

by two to calculate an annual average. 

Therefore, the District’s approach for the 

sources in II.A is very conservative in 

calculating the lowest possible amount 

of offsets. 

For the sources listed in Section II.B. 

where the source only reported AER 

data for Year 1, then the District 

assumed that Year 2 data was not 

reported and the Year 1 data determined 

the quantity of offsets. For this small 

fraction of the facilities, the baseline 

emissions were calculated based on the 

emissions data from the year 

immediately preceding the shutdown 

date. For these facilities, because the 

data from the twelve month period 

immediately preceding the shutdown 

was available, there was no possibility 

that the year one emissions over 

estimated the actual emissions for the 

facility prior to shutdown. There was 

also no information to indicate that the 

emissions from the year immediately 

preceding shutdown were not 

representative. Therefore, the one year 

of emissions are representative and not 

over estimated. 

Based on the requirement in 40 CFR 

part 51, Appendix S and 51.165, EPA is 

proposing to determine that the District 

appropriately quantified the offsets for 

those sources with only one year of 

emissions data and that these emission 

reductions meet the requirement of CAA 

section 173 and 40 CFR part 51 

Appendix S and 51.165(a)(1)(C) to be 

quantifiable. 

2. Offsets From Aggregate Facilities and 

Cement Operations Are Surplus 

When EPA proposed approval of the 

SIP revision in January 2011, we 

received a comment from CBE and 

CCAT that contended generally that not 

all of the offsets from aggregate 

facilities, spray booths and other 

industrial sources were surplus. In our 


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2We considered the surplus adjustment at the 

time of our prior approval, however, the District 

made some final surplus adjustments before issuing 

the permit. This later adjustment does not change 

our prior determination that the available offsets in 

the AB 1318 Tracking System were more than 

required for the Sentinel Energy Project. 

3As stated in the District’s Staff Report for Rule 

1156, the two facilities affected by Rule 1156 are 

TXI Riverside Cement and Cal Portland Cement. 

4See letter from Barry R. Wallerstein to Malcolm 

C. Weiss, Subject: Rule 1157—PM10 Emission 

Reductions from Aggregate and Related Operations, 

dated December 15, 2006. 5Appendix S has the same language that is used 

in 40 CFR 51.165. 

6EPA also notes that we had not approved the 

2007 PM2.5 AQMPs at the time the District 

transferred the offsets to the AB 1318 Tracking 

System. EPA proposed approval of the 2007 PM2.5

AQMP in July 2011 and finalized approval on 

November 9, 2011. 

7Although we are now relying on the 2003 PM10

AQMPs, EPA has not changed our determination 

that the District explicitly added offsets into the 

inventories for the 2007 AQMP as discussed in 

EPA’s and the District’s briefing to the Ninth 

Circuit. 

response to comments, we stated that all 

of the emissions reductions were 

surplus because ‘‘[t]he District has not 

promulgated any new rules or standards 

that would apply to these types of 

sources, and thus no adjustments to the 

credits were required.’’ 76 FR at 22038. 

After we issued our response to 

comments and final rule, CBE and 

CCAT petitioned for judicial review. In 

briefing to the Court, CBE and CCAT 

stated for the first time that the District 

had adopted Rules 1156 and 1157 that 

require reductions of emissions at 

cement plants and aggregate plants. In 

this Supplemental proposal, EPA is 

adding information on the surplus 

adjustment made for the offsets in the 

AB 1318 Tracking System subject to 

Rule 1157 (PM10 Emission Reductions 

From Aggregate and Related 

Operations). 

It is important to note that the surplus 

adjustment of the offsets was not 

required to be performed until the time 

the authority to construct permit was 

issued because EPA requires the surplus 

adjustment ‘‘at the time of use’’. The 

permit was not issued until after the 

final approval of our prior SIP action 

and was not included in the docket. 

However, now that the permit has been 

issued, we have re-evaluated the need to 

surplus adjust the offsets.2

Rule 1156 does not apply to any of the 

offsets included in the AB 1318 

Tracking System. Rule 1156 (Further 

Reduction of Particulate Emissions from 

Cement Manufacturing Facilities) only 

applies to cement manufacturers, not 

users of cement products.3 Two 

facilities in the AB 1318 Tracking 

System, Elsinore Ready-Mix Co., Inc. 

and Oldcastle Westile, Inc., use cement 

products but do not manufacture 

cement. Therefore, Rule 1156 does not 

apply to those facilities and Rule 1156 

does not require any surplus adjustment 

to the offsets from these facilities or any 

others in the AB 1318 Tracking System. 

Rule 1157, which applies to aggregate 

facilities, was also adopted after the 

earliest date equipment was shutdown 

for any offsets included in the AB 1318 

Tracking System (i.e. 1999). Six 

aggregate facilities are included in the 

AB 1318 Tracking System. Matthews 

International Corp. is not subject to Rule 

1157 because the rule only applies to 

aggregate operations which are defined 

as ‘‘operations that produce sand, 

gravel, crushed stone, and/or quarried 

rocks.’’ Since Matthews is a foundry 

operation that uses, but does not 

produce sand, the facility is not subject 

to Rule 1157. 

Rule 1157 applies to the six aggregate 

facilities in the AB 1318 Tracking 

System. If any of these facilities were 

already operating in compliance with 

the new standards in Rule 1157, then no 

surplus adjustment was required to 

ensure the emission reductions were 

surplus (i.e. went beyond the reductions 

required by the rule). In other words, 

the emissions from these facilities were 

already equal to or less than the 

emissions allowed by Rule 1157. The 

rule requires various techniques to be 

used throughout the facility to minimize 

PM10 emissions. These techniques 

include housekeeping provisions such 

as cleaning spills on paved roads; 

control techniques such as the 

application of water or dust 

suppressants, enclosures and baghouses; 

and equipment and work standards to 

minimize track out of materials. The 

District establishes emission factors 

based on the use of these techniques as 

part of the rulemaking process for 

adopting Rule 1157. If the facility’s total 

emissions are below the material 

throughput multiplied by the applicable 

emissions factors, the facility is in 

compliance with Rule 1157. In this case, 

no further surplus adjustment is 

required unless the rule is amended to 

further reduce the allowable emissions 

before the offsets are used. While Rule 

1157 has not been amended, the District 

has adopted revised emission factors for 

the various operations subject to this 

rule,4 and therefore, further adjustments 

were made to the offsets from these six 

aggregate facilities. These further 

adjustments are discussed in more 

detail in the TSD and shown in 

Attachment A. 

3. The District Properly Transferred 

Offsetting Emission Reductions From 

Sources that Shutdown in 1999–2002 

The final issue for comment in this 

Supplemental proposal concerns the 

appropriate SIP AQMP for the District 

and EPA to use to evaluate whether the 

emissions reductions from shutdown 

units have been included in the SIP’s 

base year. 

40 CFR part 51, Appendix S,5 at IV.3, 

provides: Emissions reductions achieved by 

shutting down an existing source or 

curtailing production or operating hours may 

be generally credited for offsets if they meet 

the requirements in paragraphs IV.C.3.i.1 

through 2 of this section. 

Section IV.C.3.i.1 requires the emissions 

reductions to be surplus, permanent, 

quantifiable and federally enforceable. 

Section IV.C.3.i.2 allows emission 

reductions from shutdown equipment or 

curtailed operations to be used 

provided: 

The shutdown or curtailment occurred 

after the last day of the base year for the SIP 

planning process. For purposes of this 

paragraph, a reviewing authority may choose 

to consider a prior shutdown or curtailment 

to have occurred after the last day of the base 

year if the projected emissions inventory 

used to develop the attainment 

demonstration explicitly includes the 

emissions from such previously shutdown or 

curtailed emissions units. 

In our final rulemaking, EPA 

responded to comments on this issue by 

indicating our understanding that the 

District properly added pre-base year 

credits into its 2007 PM2.5 AQMP which 

we concluded met the requirements of 

the second sentence of the IV.3.C.i.2. 

EPA has now determined that it 

would be more appropriate to rely on 

the District’s 2003 PM10 AQMPs, rather 

than their 2007 PM2.5 AQMP for two 

reasons. The reason for relying on the 

2003 AQMPs is that the offsets the 

District transferred to the AB 1318 

Tracking System are for PM10, not PM2.5. 

The District has approved PM10 AQMPs 

for both the South Coast Air Basin and 

the Coachella Valley that were adopted 

in 2003. Therefore, the appropriate 

AQMP for EPA to reference when 

evaluating PM10 offsets (and precursors 

including SOX) for the AB 1318 

Tracking System is the approved 2003 

PM10 AQMPs. The inventories in the 

2003 PM10 AQMPs have a base year of 

1997 for both the South Coast Air Basin 

and the Coachella Valley.6 None of the 

offsets transferred by the District were 

derived from shutdowns occurring 

before the last day of 1997. Therefore all 

of the offsets in the AB 1318 Tracking 

System resulting from shutdown 

equipment were included in the base 

year for the 2003 PM10 AQMPs, 

including SOX as a precursor.7


ebenthall on DSK5SPTVN1PROD with PROPOSALS
50978 Federal Register / Vol. 77, No. 164 / Thursday, August 23, 2012 / Proposed Rules 

EPA is now proposing to approve the 

AB 1318 Tracking System because all of 

the offsets for PM10 and the precursor 

SOX occurred after the base year of 1997 

in the PM10 AQMPs. 

E. Section 110(l) Evaluation 

Under section 110(l) of the CAA, EPA 

may not approve any SIP revision that 

would interfere with attainment, 

reasonable further progress (RFP) or any 

other CAA requirement. 

We have determined that this SIP 

revision will not interfere with 

attainment or RFP because the offsets in 

the AB 1318 Tracking System are not 

relied on for attainment or RFP in the 

District’s attainment demonstrations. 

We are also not aware of this revision 

interfering with any other CAA 

requirement. For example, this sourcespecific SIP revision provides a new but 

equivalent mechanism to provisions in 

Regulation XIII for satisfying the offset 

requirements of CAA Section 173 

because the offsets the District is 

transferring from its internal bank to the 

AB 1318 Tracking System meet all 

federal requirements. In addition, the 

District supplied a copy of its air quality 

analysis for the Sentinel Energy Project 

that shows that operation of the facility 

will not interfere with the ability of the 

District to reach attainment. 

F. Public Comment and Final Action 

Because EPA believes the submittal 

fulfills all relevant requirements, we are 

proposing to fully approve it as 

described in section 110(k)(3) of the Act. 

We will accept comments from the 

public on this proposal for the next 30 

days. Unless we receive convincing new 

information during the comment period, 

we intend to publish a final approval 

action, addressing all public comments, 

which will incorporate this submittal 

into the federally enforceable SIP. 

III. Statutory and Executive Order 

Reviews 

Under the Clean Air Act, the 

Administrator is required to approve a 

SIP submission that complies with the 

provisions of the Act and applicable 

Federal regulations. 42 U.S.C. 7410(k); 

40 CFR 52.02(a). Thus, in reviewing SIP 

submissions, EPA’s role is to approve 

state choices, provided that they meet 

the criteria of the Clean Air Act. 

Accordingly, this action merely 

proposes to approve state law as 

meeting Federal requirements and does 

not impose additional requirements 

beyond those imposed by state law. For 

that reason, this proposed action: 

• Is not a ‘‘significant regulatory 

action’’ subject to review by the Office 

of Management and Budget under 

Executive Order 12866 (58 FR 51735, 

October 4, 1993); 

• Does not impose an information 

collection burden under the provisions 

of the Paperwork Reduction Act (44 

U.S.C. 3501 et seq.); 

• Is certified as not having a 

significant economic impact on a 

substantial number of small entities 

under the Regulatory Flexibility Act (5 

U.S.C. 601 et seq.); 

• Does not contain any unfunded 

mandate or significantly or uniquely 

affect small governments, as described 

in the Unfunded Mandates Reform Act 

of 1995 (Pub. L. 104–4); 

• Does not have Federalism 

implications as specified in Executive 

Order 13132 (64 FR 43255, August 10, 

1999); 

• Is not an economically significant 

regulatory action based on health or 

safety risks subject to Executive Order 

13045 (62 FR 19885, April 23, 1997); 

• Is not a significant regulatory action 

subject to Executive Order 13211 (66 FR 

28355, May 22, 2001); 

• Is not subject to requirements of 

Section 12(d) of the National 

Technology Transfer and Advancement 

Act of 1995 (15 U.S.C. 272 note) because 

application of those requirements would 

be inconsistent with the Clean Air Act; 

and 

• Does not provide EPA with the 

discretionary authority to address, as 

appropriate, disproportionate human 

health or environmental effects, using 

practicable and legally permissible 

methods, under Executive Order 12898 

(59 FR 7629, February 16, 1994). 

In addition, this proposed rule does 

not have tribal implications as specified 

by Executive Order 13175 (65 FR 67249, 

November 9, 2000), because the SIP is 

not approved to apply in Indian country 

located in the state, and EPA notes that 

it will not impose substantial direct 

costs on tribal governments or preempt 

tribal law. 

List of Subjects in 40 CFR Part 52 

Environmental protection, Air 

pollution control, Intergovernmental 

relations, Particulate matter, Reporting 

and recordkeeping requirements. 

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

Dated: August 9, 2012. 

Jared Blumenfeld, 

Regional Administrator, Region IX. 

[FR Doc. 2012–20777 Filed 8–22–12; 8:45 am] 

BILLING CODE 6560–50–P 


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