Support of the Definitions for Urbanized Area / Urban Cluster

& Regulatory Precedent in 40 CFR 63 Subparts HH

Issue Paper

Prepared for:

American Petroleum Institute

1220 L Street, NW

Washington, DC 20005

Prepared by:

Innovative Environmental Solutions, Inc.

P.O. Box 177

Cary, IL 60013

May 2009 Rev 0
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EXECUTIVE SUMMARY

The Clean Air Act (CAA) required EPA to identify hazardous air pollutants (HAPs) from area

sources that present the greatest threat to public health in the largest number of urban areas and to

develop a strategy to reduce these emissions. The CAA does not provide a definition of "urban".

To spatially allocate emissions on an urban and rural basis, Census Bureau statistical data and

classifications are relied upon. Urban/rural designations from the 1990 census data were referenced

in the U.S. Environmental Protection Agency (EPA) National Air Toxics Program: The Integrated

Urban Strategy (64 FR 38706, July 19, 1999). These definitions included “Urban-1” and “Urban-2”

designations for areas. A key provision of the Urban Air Toxics Strategy (UATS) is that, per

§112(d)(5), area source regulations can be addressed based on generally available control

technology (GACT) standards that include work practices, rather than MACT, which is required for

major sources.

Subsequent to release of EPA’s UATS, new definitions for urban areas were developed after the

2000 census was completed. In the January 3, 2007 Final Rule to regulate area source Oil and

Natural Gas Production facilities (ONG NESHAP), addressed gas dehydration equipment. EPA

relied on data and definitions from Census 2000 to better represent the geographic distribution of oil

and natural gas facilities, and did not use the “Urban-2” definition. EPA concluded that since the

CAA does not define “urban”, the agency has discretion in differentiating between urban and rural

areas. API agrees and does not believe that EPA is precluded from applying the improved Census

2000 approach which uses Urbanized Areas (UAs) and Urban Clusters (UCs). The ONG NESHAP

did not address combustion equipment used in ONG production, and those sources are to be

addressed under the respective combustion standard (e.g., reciprocating internal combustion engines

(RICE), boilers).

The UATS strategy document simply relied upon the common contemporary 1990 Census Bureau

definitions, and there is no compelling reason to ignore subsequent improvements in the knowledge

base. For example, outdated emission factors or emissions technology should not be used in a 2010

rule simply because it was the 1990’s point of reference for the UATS.

The majority of area source gas-fired RICE are located at ONG production facilities. Thus, lacking

a compelling reason for an alternative approach, consistent definitions should be used to designate

an area as “rural” or “urban” for the ONG NESHAP and RICE NESHAP. The ONG NESHAP

area source regulations made a concerted effort to address the geographic distribution of emission

sources and properly considered source proximity to urban areas. API recommends that EPA use

the identical definitions for area sources affected by the RICE NESHAP, as this represents the

“best” available Census data and urban/rural classification technique and more appropriately

designates a geographical area as urban or rural. Additionally, it would be confusing to EPA, state

agencies and industry for dehydrators at a facility to be classified as rural under the Subpart HH

definitions of UA/UC, while RICE at the same facility may be classified as urban under the UATS

definitions of U1/U2.

API estimates that the majority of the natural gas RICE would be designated as rural using the Oil

and Gas NESHAP definitions of urban vs. rural (UA plus offset and UC). API bases this estimate

on the fact that most natural gas RICE operate in the ONG industry and these units are collocated or

sited in relative proximity to the gas dehydrators affected by the ONG NESHAP, 40 CFR Part 63
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Subpart HH. In the ONG NESHAP, EPA found that only 50 of the 2,222 affected area source

dehydrators were located within urban areas (UA plus offset and UC, definitions detailed below).

This white paper presents a discussion of the CAA background associated with area source

regulations under the urban air toxics strategy and the progression of the Census Bureau urban/rural

classification schemes. This white paper also addresses the regulatory precedent established in the

ONG NESHAP, 40 CFR 63 Subpart HH, and the need to maintain regulatory consistency.

BACKGROUND

Section 112(k) of the 1990 Clean Air Act (CAA) Amendments defines the required area source

program and requirements. Under section 112(k)(3), EPA is required to develop a comprehensive

strategy to control emissions of hazardous air pollutants (HAPs) from area sources in urban areas.

EPA addressed this requirement through the promulgation of the National Air Toxics Program: The

Integrated Urban Strategy (UATS) [64 FR 38706, July 19, 1999] that was intended to identify and

address risks to the public in urban areas, which is principally an urban risk-driven requirement.

The Act defines a “major source” as a stationary facility emitting 10 tons per year (TPY) of a

single listed hazardous air pollutant (HAP) or 25 tons per year (TPY) of aggregate HAPs. An area

source is any source of HAP that is not a major source.

As part of the Strategy, EPA is required to identify categories and subcategories of sources of

hazardous air pollutants (HAPs) in urban areas that pose a threat to human health. Specifically, the

EPA must identify area sources of at least 30 HAPs that present the greatest threat to urban

populations, and assure that sources that account for 90 percent or more of the aggregate emissions

are subject to regulation. Importantly, the Act does not require these sources to be subject to the

same level of regulation required for major sources (i.e. MACT standards), but specifically

authorizes the Agency to meet this requirement by imposing management practices or other

generally available control technology (GACT) standards.

Key provisions of the UATS are outlined below.

1) Identify the 30 Worst HAPs. Subparagraph 112(k)(3)(B)(i) of the CAA requires EPA to

“identify not less than 30 hazardous air pollutants which, as the result of emissions from

area sources, present the greatest threat to public health in the largest number of urban

areas.”

2) List the Area Sources representing at least 90 percent of the emissions of these 30 HAPs.

Paragraph 112(c)(3) of the CAA requires EPA to “list . . . area sources to ensure that area

sources representing 90 percent of the area source emissions of the 30 hazardous air

pollutants that present the greatest threat to public health in the largest number of urban

areas are subject to regulation under this section.”

3) Regulate the Listed Area Sources. Paragraphs 112(c)(3) and 112(k)(3)(B)(ii) both require

that the listed area sources are to be subject to standards pursuant to subsection 112(d).

Clean Air Act section 112(k)(1) states the purpose of area source standards:

3The Congress finds that emissions of hazardous air pollutants from area sources may

individually, or in the aggregate, present significant risks to public health in urban areas.
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Considering the large number of persons exposed and the risks of carcinogenic and other

adverse health effects from hazardous air pollutants, ambient concentrations characteristic of

large urban areas should be reduced to levels substantially below those currently experienced.

It is the purpose of this subsection to achieve a substantial reduction in emissions of hazardous

air pollutants from area sources and an equivalent reduction in the public health risks

associated with such sources including a reduction of not less than 75 per centum in the

incidence of cancer attributable to emissions from such sources.” [emphasis added]

The statutory language in Section 112(k) requires the identification of HAPs that are presenting a

public health threat in urban areas. However, the CAA does not provide a definition of "urban". To

spatially allocate emissions on an urban and rural basis, Bureau of the Census statistical data were

used. Although EPA's UATS acknowledges that the CAA provides the discretion to implement

either MACT or GACT to satisfy CAA urban area source air toxic emission standards, it recognizes

that EPA "expect[s] most sources will be subject to GACT standards developed in accordance with

section 112(d)(5)." UATS at 38723. All RICE will be regulated by either the MACT or GACT

standard under EPA’s current regulatory concepts.

1990 CENSUS BUREAU URBAN/RURAL CLASSIFICATION

The Bureau of the Census has designated urban and rural areas within every county in the United

States. The criteria used include population density and total population. Urban/rural designations

from 1990 census data were referenced in the U.S. Environmental Protection Agency (EPA)

National Air Toxics Program: The Integrated Urban Strategy (64 FR 38706, July 19, 1999).

Using population data and urban/rural designations for 1990, every county in the United States was

classified as one of the following categories:

Urban-1 (U1) counties which include a metropolitan statistical area (MSA) with a

population greater than 250,000;

Urban-2 (U2) counties that do not include a MSA with a population greater than 250,000,

but the Bureau of the Census designates more than 50 percent of the county population as

"urban." These counties include areas which comprise one or more central places and

adjacent densely settled surrounding urban fringe. The urban fringe consists of continguous

territory having a density of at least 1,000 persons per square mile.

Rural (R) counties that do not include a MSA with a population greater than 250,000, and

the Bureau of the Census designates more than 50 percent of the county population as

"rural."

If any part of a county contained an Urban-1 area, then the whole county was classified as Urban-1.

For all remaining counties, if greater than 50 percent of the population was classified as rural, then

that county was considered Rural. Counties not designated as Urban-1 or Rural were classified as

Urban-2. The Urban-1 and Urban-2 counties were combined and listed as urban.
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EVOLUTION OF URBAN/RURAL AREA CLASSIFICATION SCHEME BASED ON THE

2000 CENSUS

Before each decennial census, the Census Bureau reviews the criteria for delineating urban

areas and extended cities. The Census Bureau updated the 1990 definitions of urbanized areas

using the criteria published in the Federal Register on March 15, 2002 (67 FR 11663). These

Census 2000 updates are more refined and include significant changes in the universe of urbanized

areas compared to those defined based on the 1990 Census and criteria, especially for areas that

previously were within the Urban-2 category.

The 2000 Census refined the 1990 urbanized areas (UAs) by incorporating urban clusters (UCs).

Urbanized areas and urban clusters combined constitute "urban areas”. The Census Bureau

delineates UA’s/UC’s to provide a better separation of urban and rural territory, population, and

housing. The urban cluster concept, which further delineates an urbanized area, was not created

until a decade after Congress had used the term “urban areas” in the CAA Amendments of 1990.

However, as definitions are refined and improved, the CAA does not preclude the use of updated

definitions because it does not define “urban”.

The Federal Register Notice documenting Qualifying Urban Areas for Census 2000 (Federal

Register / Vol. 67, No. 84 / Wednesday, May 1, 2002 / Notices) contains a list of:

• 2000 Census urban areas (UAs) and their populations;

• New UAs based on Census 2000;

• 1990 census UAs that were combined or split;

• 1990 census UAs that have had significant changes; and

• 1990 census UAs that have had name changes.

For Census 2000, the Census Bureau classifies as "urban" all territory, population, and housing

units located within an urbanized area (UA) or an urban cluster (UC). It delineates UA and UC

boundaries to encompass densely settled territory, which consists of:

• core census block groups or blocks that have a population density of at least 1,000 people

per square mile and

• surrounding census blocks that have an overall density of at least 500 people per square

mile

PRIMARY ADVANCEMENTS OF THE CENSUS 2000 URBAN AREA CRITERIA

The following paragraphs provide a summary of the most significant differences between the 1990

census and Census 2000 urban criteria and illustrate the improvements and refinements that

occurred during the 10 year period. DzThese criteria revisions over the years reflect the Census

Bureau’s desire to improve the classification of urban and rural population by refining the criteria to

take advantage of improvements in data collection and reporting methodologies as well as

advancements in technology” (66 FR 17018). Since the 1990 census, significant technological

advancements, together with already existing nationwide block numbering (which was initiated

with the 1990 census), has made it possible to classify urban and rural territory on a uniform basis.

The following provides a summary of the most important differences between the 1990 census UA
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criteria and the urban area criteria for Census 2000. These summaries were taken from the US

Census Bureau website: http://www.census.gov/geo/www/ua/uac2k_90.html :

• Technological advances in the field of geographic information systems (GIS) during the 10

years period between 1990 and 2000 allowed the Census Bureau to automate the urban and

rural delineation process for the first time in Census Bureau history.

• The Census Bureau did not automatically recognize previously existing UA territory as part

of the Census 2000 UA delineation process. There was no "grandfathering" of areas that

qualified based on the results of earlier censuses.

• For Census 2000, the Census Bureau used the territory designated as UCs, rather than the

entity of places that have a specified population, to determine the total urban population

outside of UAs. Previously, place boundaries generally were used to determine the urban or

rural classification of territory outside of UAs. With the creation of UCs, place boundaries

became "invisible" when creating and classifying the cores of densely settled population

agglomerations.

• The extended city criteria were modified extensively for Census 2000. Any place that is

divided by a UA or UC boundary is referred to as an extended place. Previously, the

extended city criteria included only sparsely settled territory within incorporated places and

relied on density and area measurements to determine whether or not portions of an

incorporated place were excluded from the UA. The new urban area criteria, based solely on

the population density of census Block Groups (BGs) and census blocks, provide a

continuum of urban areas for Census 2000.

• The Census 2000 criteria increased the allowable jump distance from 1.5 to 2.5 miles to

appropriately recognize urbanization spread over broader areas. The increase in the jump

distance was proposed as a means to recognize improvements in the transportation network,

and the associated changes in development patterns that reflect these improvements, coupled

with governmental influence to provide additional "green space" between developments.

• New criteria enabled the Census Bureau to use an automated methodology that reduced the

chances of incorrectly classifying sparsely settled territory along the fringe of a core as

urban. For Census 2000, the area of an indentation in qualifying territory had to be four

times the area of a circle with a diameter equal to the closure line of the indentation for the

territory to be included in a UA or UC. Previously, an indentation only had to be two times

longer than the distance across the mouth.

• The uninhabitable jump criteria were revised for Census 2000 to be more restrictive

regarding the types of terrain over which an uninhabitable jump could be made. For Census

2000, only water, military reservations, national parks, and qualifying floodplains were

deemed to be "exempted territory," which replaced undevelopable as the term applied to

these areas.

• The UA central place and title criteria no longer follow standards predefined by other

federal agencies. Previously, many UA central places and titles were based on metropolitan

area (MA) central city definitions set forth by the Office of Management and Budget.
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The new MA criteria will be, and always have been, applied later than the UA criteria. To

avoid creating a situation in which the 2000 UA or UC central places and titles would need

to follow MA central city definitions that were established in the early 1990s, the Census

2000 criteria create an objective, zero-based approach.

REGULATORY PRECEDENT & NEED FOR CONSISTENCY

In developing the area source ONG NESHAP, EPA requested comment on retaining older

definitions or integrating newer definitions for urban areas. The Census 2000 improvements were

thoughtfully considered and incorporated into the Final Rule. Thus, the NESHAP for area source

dehydrators (40 CFR 63, Subpart HH) provides regulatory precedent for consideration.

The July 19, 1999 Notice (64 FR 38724), the National Air Toxics Program, Integrated Urban

Strategy indicates that,

"For those area source categories where the standards only apply in urban areas, we'll look

to the consolidated metropolitan statistical area (C/MSA) boundaries as a starting point to

define the urban area. Although we used the urban 1 and urban 2 definitions for the

development of the inventory to support the HAPs and source category analysis, we believe

the C/MSAs are more appropriate for defining applicability of area source standards because

the C/MSAs better reflect the nature of population density, commercial development, area

growth, and air emissions that represent urban areas.

Although we generally believe that urban areas are those C/MSAs with populations of

more than 50,000 [emphasis added], we recognize that the appropriate area in which

standards should apply may vary among area source categories. Consequently, we believe

the determination of the area in which standards will apply should be made separately for

each source category.”

Although the Urban Strategy indicates that the area of applicability should be considered for each

source category, it also includes a logical discussion of what constitutes an urban area – and notes

that a population of more than 50,000 is appropriate. This is consistent with the Census 2000

approach that stated an urbanized area (UA) will consist of a densely settled core of census block

groups (BGs) and census blocks 2 that meet minimum population density requirements, along with

adjacent densely settled surrounding census blocks that together encompass a population of at least

50,000 people.

Pertinent definitions from 40 CFR Part 63 Subpart HH - National Emission Standards for

Hazardous Air Pollutants From Oil and Natural Gas Production Facilities follow:

§ 63.761 Definitions

UA plus offset and UC is defined as the area occupied by each urbanized area, each urban

cluster that contains at least 10,000 people, and the area located two miles or less from each

urbanized area boundary.

Urban-1 County is defined as a county that contains a part of a Metropolitan Statistical Area

with a population greater than 250,000, based on the Office of Management and Budget's
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Standards for defining Metropolitan and Micropolitan Statistical Areas (December 27,

2000), and Census 2000 Data released by the U.S. Census Bureau.

Urbanized area refers to Census 2000 Urbanized Area, which is defined in the Urban Area

Criteria for Census 2000 (March 15, 2002). Essentially, an urbanized area consists of

densely settled territory with a population of at least 50,000 people.

Urban cluster refers to a Census 2000 Urban Cluster, which is defined in the Urban Area

Criteria for Census 2000 (March 15, 2002). Essentially, an urban cluster consists of densely

settled territory with at least 2,500 people but fewer than 50,000 people.

The final Subpart HH requirements for area sources allow an owner or operator of an affected unit

to determine whether the source is located within an urban area based on proximity to an "urban

area" or an "urban cluster". Proximity is based on the U.S. Census Bureau's definition of urban

area, urban cluster and most current decennial census data (i.e. TEG dehydrators located in

Urbanized Areas (UA), plus a two-mile buffer zone (Offset) around each Urbanized Area, plus

Urban Clusters (UC) containing  10,000 people). As is appropriate for an area source rule with

emphasis on urban impacts, requirements and implementation deadlines differ depending upon

location, and “non-urban” area source dehydrators comply via a management practice in all cases.

U.S. Census Bureau defines Urban Cluster as an urban area containing 2,500 persons. Accordingly,

the U.S. Census Bureau does not provide maps for Urban Cluster data in the “EPA 10,000 person”

format. EPA, however, developed regulatory guidance documents to identify ONG sources in the

UA plus offset UC areas. See the link Locating Urban Areas on Census Websites and other EPA

guidance information as found on http://www.epa.gov/ttn/atw/oilgas/oilgaspg.html.

Subpart HH was developed by the EPA Sector Policies and Programs division responsible for the

RICE NESHAP and its conclusions should have bearing on the 40 CFR Part 63, Subpart ZZZZ

Proposed Rule. Because of the implication for affected sources, rule consistency should be retained

unless there is a compelling basis for an alternative approach. For the area source RICE NESHAP,

a determination based on urban proximity could be implemented for RICE area sources and

submitted in the initial notification. API believes that the vast majority of the natural gas-fired and

diesel engines used for oil and gas E&P will be designated as rural using the Oil and Gas NESHAP

definitions of urban vs. rural.

SUMMARY

In summary, the Census Bureau evolution of the urban / rural classification scheme has exploited

Geographic Information System (GIS) technology and leveraged population data to improve and

refine definitions over time. API does not believe that EPA is limited to the narrow outdated

definitions of U1 and U2 from the 1990 Census approach referenced in the UATS, instead the

UATS recognized that urban areas would evolve by proposing that “the area in which standards will

apply should be made separately for each source category.” The UATS simply relied upon the

common contemporary Census Bureau definitions, and there is no compelling reason to ignore

subsequent improvements in the knowledge base. For example, outdated emission factors or

emissions technology should not be used in a 2010 rule simply because it was the 1990’s point of

reference for the UATS. Similarly, the best information available from Census 2000 should be used

to differentiate rural from urban areas.
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Further, the reliance on the Census 2000 approach in 40 CFR 63 Subpart HH illustrate the need for

consistency and continued advancements including better definitions. For example, relying on the

1990 Census classification scheme and urban-1 / urban-2 definitions would classify many counties

in oil and natural gas production locations like Wyoming as “urban”.

To further illustrate this point, based upon the urban-2 definition, many areas in remote western and

mountain-west regions would be classified as urban, with urban designation applying to:

• 14 of 23 counties in Wyoming;

• 20 of 33 counties in New Mexico;

• 10 or 17 counties in Nevada; and

• 17 of 56 counties in Montana

An urban designation for the majority of the counties within these states is not a reasonable

classification of the area. This illustrates and highlights the deficiencies associated with U1 and U2

categorization and further supports the rationale for improving the classification approach in the

Census 2000.

API estimates that the vast majority of the natural gas RICE would be designated as rural using the

Oil and Gas NESHAP definitions of urban vs. rural (UA plus offset and UC). API bases this

estimate on the fact that most natural gas RICE are operated in the O&G industry and these units

are parallel to the gas dehydrators in the ONG GACT, Subpart HH. In the ONG GACT, EPA found

that only 50 of the 2,222 affected dehydrators were located within urban areas (UA plus offset and

UC).