### ENVIRONMENTAL PROTECTION AGENCY 40 

### CFR 

### Part 52 [EPA-R04-OAR-2009-1014-201002; 

### FRL- ] 

### Approval and Promulgation of Implementation Plans; Commonwealth of Kentucky: Prevention of Significant Deteriorationand Nonattainment New Source Review Rules: Nitrogen Oxide as Precursor to Ozone.



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

### ACTION: Proposed rule. 

### SUMMARY: EPA is proposing to approvea revision to Kentucky's StateImplementation Plan (SIP), submitted by the Kentucky Energy and Environment Cabinet, through the Kentucky Division of Air Quality (KDAQ) to EPA on February 5,2010. The proposed revisionmodifies Kentucky's prevention of significantdeterioration (PSD) and nonattainment new sourcereview (NNSR) permitting regulations in the SIP to address permit requirementspromulgated in the 1997 8-Hour OzoneNational Ambient Air Quality Standards(NAAQS) Implementation RulePhase 

### 2 (hereafter referred to as the "Ozone ImplemqntationNSR Update"). The Ozone ImplementationNSR Update revised permit requirements relating to the implementationofthe 1997 8-hour ozone NAAQS specificallyincorporating nitrogen oxides (NOx) as a precursor to ozone. The proposed revision also includesprovisions addressingpermit requirements promulgated by EPA on May 1,2007, which excludefrom the NSR major source permitting requirements "chemical process plants" that produce ethanol through a natural fermentation process (hereafterreferred to as the "Ethanol Rule7'.)

### DATES: Comments must be received on or before [insert date 30 days after date ofpublication in the Federal Register].



### ADDRESSES: Submit your comments, identifiedby Docket ID No. EPA-R04-OAR-2009- 1014,by one of the following methods: 1. www.regulations.g;ov: Follow the on-line instructions for submitting comments. 

### 2. E-mail: beniamin.lynorae@,eva. gov. 3. Fax: (404) 562-9019. 4. Mail: EPA-R04-OAR-2009-10 14, Regulatory Development Section, Air Planning Branch, Air, Pesticides and Toxics Management Division, U.S. EnvironmentalProtection Agency, Region 4,61 Forsyth Street, SW,Atlanta, Georgia 30303-8960. 5. Hand Delivery or Courier: Ms. Lynorae Benjamin, Chief, Regulatory Development Section,Air Planning Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street, 

### SW, Atlanta, Georgia 30303-8960. Such deliveries we only accepted duringthe Regional Office's normal hours of operation. 

### The Regional Office's official hours ofbusiness are Monday through Friday, 8:30 to 4:3 0, excluding federalholidays.

Instructions: Direct your comments to Docket ID No. 

### ccEPA-R04-OAR-2009-1014." EPA's policy isthat all comments received will be included inthe public docket without change 

### and may be made available online at www.remlations.e;ov, including any personal information

### provided, unless the comment includes information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Do not submit through www.regulations.aov or e-mail, information that you consider to be CBI or otherwise ' 

### protected. The www.regulations.nov website is an "anonymous access" system, which means EPA will not know your identity or contact information unless you provide it 

### in the body of your comment. If you send an e-mail comment directly to EPA without going through www.re~ulations.~ov, your e-mail address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you include your name and other contact information in the body ofyour comment and with any disk or CD-ROM you submit. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should avoid the use of special characters, any form of encryption, and be free of any defects orviruses. For additional information about EPA's public docket visit the EPA Docket Center homepage at 

### htt~:llwww.epa.gov/epahome/dockets.htm.

Docket: 

### All documents in the electronic docket are listed in the www.reaulations.gov index. Although listed in the index, some information is not publicly available, i.e., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically in www.reaulations.g;ovorin hard copy at the Regulatory Development Section,Air Planning Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street, SW, Atlanta, Georgia 30303-8960. EPA requests that if at all possible, you contact the person listed in the 

### FOR FURTHER INFORMATION CONTACT section to scheduleyour inspection. The Regional Office's official hours ofbusiness are Monday through Friday, 8:30 to 4:30, excluding federal holidays.



### FOR FURTHER INFORMATION CONTACT: For information regarding the Kentucky SIP, contact Ms. Twunjala Bradley, Regulatory Development Section, Air Planning Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 

### 61 Forsyth Street, 

### SW,Atlanta, Georgia 30303-8960. Telephone number: (404) 562-9352; email address: 

### bradle~.twuniala@epa.nov. For information regarding NSR, contact Ms. Yolanda Adams, Air Permits Section, at the same address above. Telephone number: (404) 562-9214; email address: adarns.volanda@e~a.~ov. For information regarding 8-hour ozone NAAQS, contact Ms. Jane Spann, Regulatory Development Section, at the same address above. Telephone number: (404) 562-9029; e-mail address: spann.iane@,e~a.~ov.

SUPPLEMENTARY INFORMATION: Table of Contents I. What Action is EPA Proposing Today? 11. What is the Background for the Action that EPA is Proposing to Take Today?111. What is EPA's Analysis of Kentucky's SIP Revision? IV. Proposed Action

V. Statutory and Executive Order Reviews.

I. What 

### Action is 

### EPA Proposing 

### today? The Commonwealth of Kentucky, through KDAQ, submitted a revision on February 5, 2010,to the Kentucky SIP which relates to Kentucky's Air Quality Regulations, Chapter 5 1 

### - 401 KAR 5 1:001 "Definitions for 401 KAR Chapter 51," 401 

### KAR 

### 5 1:017 "Prevention of Significant Deterioration of Air Quality," and 401 

### KAR 5 1:052 "Review ofNew Sourcesin or Impacting upon Nonattainment Areas." The SIP revision addressesthe Ozone Implementation NSR Update requirements for Kentucky to includeNOx as an ozone precursor for permitting purposes. Specifically, the Ozone ImplementationNSR Update requirements included changes to major source thresholds for sources in certain classes of nonattainment areas, changesto offset ratios for marginal, moderate, serious, severe, and extreme ozone nonattainment areas, provisions addressing offset requirementsfor facilitiesthat shut down or curtail operation, and a requirement stating that NOx emissions are ozoneprecursors. The proposed revision also includes provisions for excluding "chemical process plants7' that produce ethanol through a natural fermentation process from the NSR major source permitting requirements. Pursuant to section 1 10 of the Clean Air Act 

### (CAA or Act), EPA isproposing to approve these revisions into the Kentucky SIP. Additionally,the rule revision provided in Kentucky's February 5,2010, submittal

### updates Kentucky's PSD and NSR permitting regulationsto make them consistent with changes to the Federal regulationsby removing the existing standards and requirements for clean units (CU) 

### and pollution control projects (PCP). However, EPA is not taking action on the Kentucky rule updates regarding CU and PCP because these portions of Kentucky's rule are specifically not approved into Kentucky's federally-approved SIP. 11. What is the Background for the Action that EPA is Proposing to Take Today? 

### On July 18, 1997,EPA promulgated a revised 8-hour ozone NAAQS of 0.08 parts per million -

### also referred to as the 1997 8-hour ozone NAAQS. On April 30,2004, EPA designated

areas as attainment, nonattainment and unclassifiable for the 1997 8-hour ozone NAAQS. As part ofthe 2004 designations, EPA also promulgated an implementation rule for the 1997 8-hour

ozoneNAAQS in two phases. Phase 1ofEPA7s1997 8-hour ozone implementation rule (Phase 1Rule), published on April 30,2004, effective on June 15,2004,provided the implementation requirements for designating areas under subpart 1 and subpart 2 of the CAA (69 FR 23857). On November 29,2005,EPA promulgated the second phase for implementation provisions related to the 1997 8-hour ozone standards-

### also known as the Phase 2 

### Rule (70FR 71612). The Phase 2 Rule addressed control and planning requirements as they applied to areas designated nonattainment for the 1997 8-hour ozoneNAAQS such as reasonably available control technology, reasonably available control measures, reasonable further progress, modeling and attainment demonstrations and NSR, and the impact to reformulated gas for the 1997 8-hour ozone NAAQS transition. Specificto this rulemaking, the Phase 2 Rule made changes to Federal regulations 40 CFR 

### 51.165and 5 1.166, which govern the NNSR and PSD permitting

6programs. Pursuant to these changes, states were required to submit SIP revisions incorporating NOx 

### as an ozone precursor by no later than June 15,2007. Kentucky's February 5,2010, SIP submission (the subject of this action) addresses the state requirement to adopt provisions to includeNOx 

### as a precursor for ozone for PSD and NNSR permitting purposes. In addition, on May 1,2007, EPA promulgated revisions to the PSD and NNSR regulationsto address applicability of permitting requirements for "chemical process plants" (72 FR 24059). The revisions to 40 CFR 5l.l65,5 1.166, 52.2 1, and Appendix S, define "chemical process plants" under the regulatory definition of "major stationary source" to exclude ethanol manufacturing facilities that produce ethanol by natural fermentation processes. Kentucky's February 5,2010, SIP submission addresses these minimum program elements of the PSD and NNSR programs for "chemical processing plants."

111. 

### What is EPA's Analysis 

### of

### Kentucky's SIP Revision? On February 5,2010, the Commonwealth of Kentucky submitted a revision to EPA for approval which revised the Commonwealth's permitting provisions to adopt EPA7s federal regulations specified in the Ozone Implementation NSR Update relating to the incorporationof NOx 

### as an ozone precursor and to address permitting requirements specified in EPA's Ethanol Rule. Specifically, the revision relatesto Kentucky's Air Quality Regulations, Chapter 51 

### - 401 KAR 5 1:001 "Definitions for 401 KAR Chapter 

### 5 1

### ,"40 1KAR 5 1:017 "Prevention of Significant Deterioration of Air Quality," and 401 KAR 5 1:052 "Review of New Sources in or Impacting upon Nonattainment Areas." The revision became state-effective on February 5,20 10. The submittal revised Kentucky's PSD and NNSR permit programs to make them consistent with changes to the Federal regulations set forth in the Ozone ImplementationNSR Update. These changes include changes to major source thresholds for sources in certain classes of nonattainment areas, changes to offset ratios for marginal, moderate, serious, severe, and extreme ozone nonattainment areas, provisions addressing offset requirements for facilities that shut down or curtail operation, and a requirement stating that NOx emissions are ozone precursors. 

### In addition, the submittalrevised Kentucky's PSD and NNSR permit programs to make them consistent with changesto the Federal regulations set forth in EPA's Ethanol Rule.' These changes include changes to the regulatory definition of "major stationary source" to exclude ethanol manufacturing facilities that produce ethanol by natural fermentation processes. These changes affect both the applicability threshold and whether this industry must count fugitive emissions in determining its major source status. The revision included in Kentucky's PSD and NNSR programs are substantively the same

as the Ozone Implementation NSR Update and the Ethanol Rule. The Kentucky rules have been formatted to conform to Kentucky rule drafting standards (KRS Chapter 13A),but in substantive content the rules are the same asthe Federal rules. As part of its review of the Kentucky submittal,

### EPA performed a line-by-line review ofthe proposed revisions and has determined that they are consistent with the permit program requirements for NSR, set forth at 40 CFR 51.165 and 5.1.166. Kentucky's February 5,2010, SIP submissionproviding the PSD and NNSR rule revisions also includes the removal of provisionsthat were vacated by the United States Court ofAppeals for the District of Columbia circuit'. Since EPA did not take action on Kentucky's SIP with regard to the vacated portions (i.e., these provisions were not incorporated into the federally-approved SIP), EPA is not taking action through this rulemaking on the removal of these provisions as provided in Kentucky's February 5,2010, submittal.



### IV. Proposed Action Pursuant to section 110of the CAA, EPA isproposing to approve Kentucky's SIP revision, submitted February 5,2010, which incorporates

### NOx as an ozone precursor for permitting purposes into the Kentucky SIP, and addresses major source applicability for ethanol manufacturing facilities. EPA is proposing to approvethese revisions because they are cqnsistent with the CAA, and EPA regulation and policy.



### V. Statutory

### and Executive Order Reviews. Under the CAA, the Administrator isrequired to approve a SIP submission that complies with the provisions ofthe Act and applicable Federal regulations. 

### 42 U.S.C. 7410(k); 40 CFR 52,02(a). Thus, in reviewing SIP submissions, EPA's role isto approve state choices, provided that they meet the criteria ofthe CAA. Accordingly, this proposed action merely approves state 

# ' On December 3 1,2002(67 FR 80186),EPA published final rule changes to 40 CFR parts 5 1 and 52, regardingthe CAA's PSD and NNSR programs. On November 7,2003 (68 FR 63021), EPA published a notice of final action on the reconsideration ofthe December 3 1,2002, final rule changes. The December 3I, 2002, and the November 7,2003, final actions are collectively referred to as the "2002 NSR Reform Rules." On June 24,2005, the United States Court of Appeals for the DC Circuit Court vacated portions ofthe 2002 NSR Reform Rules pertaining to CU and PCP.

### law asmeeting 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 ofManagement and Budget under Executive Order 12866 (58 FR 5

### 1735, October 4,1993); does not impose an information collectionburden under the provisions of the Paperwork ReductionAct (44 U.S.C. 3501 et 

### seq.); , 

### is certified as not having a significanteconomic impact on a substantial number of small entities under the Regulatory FlexibilityAct (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 (Public Law 104-4); does not have Federalism implicationsas specified in Executive Order 13132(64 FR 43255, August 10,1999); is not an economically significantregulatory actionbased on health or safetyrisks 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 22,200 1); is not subject to requirements of Section 12(d) of the National Technology Transferand Advancement Act of 1995 (15 U.S.C. 272 note) because application ofthose requirementswould be inconsistent with the CAA; and does not provide EPA 

### with the discretionaryauthority to address, as appropriate, 10disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 

### FR 7629, February 16, 1994).

In addition, this rule does not have tribal implications as specified by Executive Order 13 175 (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, Incorporationby reference, Intergovernmental relations, Nitrogen oxide, Ozone, Reporting and recordkeeping requirements, Volatile organic compounds.

Authority: 42 

### U.S.C. 7401et 

### seq.

Dated; HAR 1 7 2010 BeverJy H. aqiste; Acting Reg~onal ~&mmstrator, Region 4.