TRANSCRIPT OF PROCEEDINGS

HERITAGE REPORTING CORPORATION

Official Reporters

1220 L Street, N.W., Suite 600

Washington, D.C. 20005-4018

(202) 628-4888

contracts@hrccourtreporters.com

IN THE MATTER OF: )

 )

PUBLIC HEARING ON THE PROPOSED )

RULE TO IMPLEMENT THE 1997 )

8-HOUR OZONE NATIONAL AMBIENT )

AIR QUALITY STANDARD: NEW )

SOURCE REVIEW ANTI-BACKSLIDING )

PROVISIONS FOR FORMER 1-HOUR )

OZONE STANDARD )

REVISED AND CORRECTED COPY

Pages: 1 through 35

Place: Washington, D.C.

Date: October 12, 2010
1

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U.S. ENVIRONMENTAL PROTECTION AGENCY

IN THE MATTER OF: )

 )

PUBLIC HEARING ON THE PROPOSED )

RULE TO IMPLEMENT THE 1997 )

8-HOUR OZONE NATIONAL AMBIENT )

AIR QUALITY STANDARD: NEW )

SOURCE REVIEW ANTI-BACKSLIDING )

PROVISIONS FOR FORMER 1-HOUR )

OZONE STANDARD )

 Room 1332

Ariel Rios Building North

1200 Pennsylvania Avenue, N.W.

Washington, D.C.

 Tuesday,

October 12, 2010

The parties met, pursuant to the notice, at 

9:13 a.m.

BEFORE: DAVID PAINTER

Audience Presenters:

DOUG DEASON

RUSSELL S. FRYE

LESLIE S. RITTS
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1 P R O C E E D I N G S

2 (9:13 a.m.)

3 MR. PAINTER: Good morning, and thank you 

4 for attending this public hearing. We are holding 

this hearing to take comment on EPA's 

9 The proposed rule would apply to areas that 

10 were nonattainment for the one-hour ozone NAAQS on the 

11 effective date of the 1998 (sic) eight-hour 

12 designations. This proposed action was published in 

13 the Federal Register on August 24, 2010.

5 Proposed Rule to 

6 Implement the 1997 8-Hour Ozone National Ambient Air 

7 Quality Standard: New Source Review Anti-Backsliding 

8 Provisions for Former 1-Hour Ozone Standard.

14 My name is David Painter, and I am in the 

15 New Source Review Group in EPA's Air Quality Policy 

16 Division of the Office of Air Quality Planning and 

17 Standards. I will be chairing today's hearing.

18 We are here today to listen to your comments 

19 on EPA's proposed rule that would address concerns 

20 about backsliding in areas designated nonattainment 

21 for both the one-hour and 1997 eight-hour ozone NAAQS. 

This rule responds to the South Coast

24 December 26, 2006.

22 decision by the 

23 U.S. Court of Appeals for the D.C. Circuit on

25 In that decision concerning EPA's Phase 1 
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1 ozone implementation rule, the Court made a number of 

2 holdings pertaining to implementation of the 1997 

3 eight-hour ozone NAAQS. Those aspects involving 

4 classifications under the NAAQS for nonattainment 

5 areas are being addressed in a separate rulemaking.

A section of the South Coast

15 Section 185 penalty fees are being addressed 

16 separately by the Agency, and the third control, NSR 

17 permitting, is a subject of the proposed rulemaking 

18 upon which we're accepting comment today. This 

19 proposed NSR rule addresses issues related to how 

20 permitting requirements under the NSR permitting 

21 program should transition from the one-hour to the 

22 1997 eight-hour standard.

6 decision 

7 addressed the subject of controls in the context of 

8 Clean Air Act ' 172(e) anti-backsliding provisions. 

9 Those controls in question included contingency 

10 measures, preconstruction NSR permits and ' 185 

11 penalty fees. The separate action addressing 

12 classifications will also address the aspects of the 

13 Court's decision pertaining to the contingency 

14 measures.

23 EPA is proposing that the NSR permitting 

24 requirements for the one-hour ozone standard continue 

25 to apply until an area is redesignated as being in 
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1 attainment for the 1997 ozone standard. EPA also is 

2 communicating its Clean Air Act interpretation that 

3 areas attaining the current ozone standard should 

4 implement the PSD permitting program regardless of 

5 their status relative to the revoked one-hour ozone 

6 standard.

7 Today's hearing is an opportunity for the 

8 public to comment on EPA's proposed NSR rule changes. 

9 I may answer questions that seek to clarify what we 

10 have proposed, but the purpose of the hearing is to 

11 listen to your comments, not to discuss or debate the 

12 proposal.

13 We invite comment on the specific elements 

14 of the proposal, as well as any other issues raised by 

15 the proposal. Specifically, we propose that one-hour 

16 NSR requirements would remain in effect until such 

17 time as an area attains the 1997 eight-hour ozone 

18 NAAQS and is redesignated as being in attainment.

19 Designation status is important in that the 

20 applicability of the NSR program versus the PSD hinges 

21 upon the designation. The exception to this is for 

22 states in the Ozone Transport Region, which is also 

23 addressed in the proposal.

24 Our proposal includes a supplemental option 

25 under which areas attaining the one-hour NAAQS, but 
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1 not the 1997 eight-hour NAAQS, might remove the

2 one-hour NSR requirements with their attendant 

3 applicability thresholds and offset requirements, 

4 following an EPA determination of eligibility.

5 The key concerns are detailed in the Federal 

6 Register notice. From those supporting the 

7 alternative path, we specifically requested comment 

8 upon the legal and procedural aspects of pursuing such 

9 a path.

10 Now let me describe how this hearing will 

11 operate and how to comment. Today we will be 

12 accepting oral comments on our proposal and we will be 

13 preparing a written transcript of this hearing. The 

14 transcript will be available as part of the official 

15 record for this rule, and EPA will consider it as we 

16 move forward.

17 We are also accepting written comments on 

18 the proposed rule until November 13. We have a fact 

19 sheet available at the registration area that contains 

20 detailed information for submitting written comments.

21 For those who will be providing oral 

22 comments today, I will call each scheduled speaker to 

23 speak. Actually, we do have a microphone. To the 

24 microphone. When it is your turn to speak, please 

25 state your name and your affiliation. It will help 
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1 our court reporter if you also spell your name.

2 If you wish to speak, but have not already 

3 registered to speak either through preregistration or 

4 today, please do so. Were you preregistered to speak?

5 MALE VOICE: I'm with the press.

6 MR. PAINTER: Okay.

7 When the time slots were allotted they gave 

8 10 minutes. If you want 15 for a presentation please 

9 let me know. We aren't really tight on the schedule 

10 today so I'll do that.

11 After you finish your testimony I may ask 

12 you clarifying questions. If in addition to the 

13 transcript you would also like us to put the full text 

14 of your written comments into the docket, please be 

15 sure to give a copy of any written comments to me or 

16 to Steve Edgerton at the registration desk.

17 We intend to stay until 2 p.m. this 

18 afternoon. To expedite matters, there will be no 

19 lunch break scheduled. I'd like to thank you all 

20 again for participating, and with that I guess we 

21 should go ahead and start.

22 Doug, you are at this time recognized. For 

23 the record, go ahead and give your name and how you're 

24 representing someone else today.

25 MR. DEASON: Sure. My name is Doug Deason. 
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1 I'm from ExxonMobil, and I'm here in this slot to 

2 present testimony on behalf of the Chemical Industry 

3 Council of Illinois, the CICI.

4 CICI is a state-wide trade association 

5 representing the chemical industry in Illinois. They 

6 represent 209 member companies, including ExxonMobil, 

7 that employ over 48,000 workers at an average annual 

8 wage of $81,000 in 726 manufacturing facilities and 

9 877 wholesale and distribution facilities in Illinois.

10 CICI would like to voice its comments 

11 regarding the U.S. EPA's proposed rule. Many of the 

12 CICI members are located in nonattainment areas in 

13 Illinois, specifically the Chicago-Gary-Lake County, 

14 Illinois-Indiana, area addressed by U.S. EPA in Table 

15 1 of the Federal Register proposal.

16 CICI believes that Illinois EPA should not 

17 have to request a separate designation from U.S. EPA 

18 to remove the one-hour standard. Illinois EPA has 

19 appropriately shown attainment in both the one-hour 

20 standard and the 1997 eight-hour standard, regardless 

21 of redesignation to attainment of either standard.

22 The Chicago nonattainment area attained the 

23 one-hour standard for three years at the time it was 

24 revoked, and in January 2007 the Illinois EPA 

25 submitted a request for a finding of attainment, which 
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1 in December 2008 was granted by the U.S. EPA. The 

2 U.S. EPA granted this action via the Federal Register, 

3 73 Fed.Reg. 79652.

4 U.S. EPA should review all of the findings 

5 regarding the Chicago-Gary-Lake County, Illinois6 Indiana, monitoring results, especially as they 

7 pertain to differences between the Chicago area and 

8 those brought forward in the U.S. Circuit Court South 

Coast

10 Illinois EPA has shown its burden of proof 

11 in attaining the one-hour standard. If U.S. EPA 

12 insists on including the Illinois monitor in the

9 decision.

13 one-hour standard, this will impede economic growth in 

14 the State of Illinois.

15 Illinois already has a 9.6 percent 

16 unemployment rate with a deficit of approximately $13 

17 billion in its current state budget. Companies will 

18 be hindered from investing in Illinois to build new 

19 facilities or expand existing ones due to the economic 

20 burden of complying with the regulation, the two NAAQ 

21 standards that Illinois has already met.

22 CICI represents the chemical sector in the 

23 manufacturing industry, and the chemical sector hasn't 

24 seen any substantial growth in the economic downturn 

25 in business since 2001.
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1 CICI would like to reserve the right to 

2 provide more detailed comments during a post-hearing 

3 date comment period and thank you for your work on the 

4 proposal.

5 MR. PAINTER: Thank you for your comments.

6 MR. DEASON: And this is one that I have by 

7 email and so I'll send it in to your docket and copy 

8 Pam.

9 MR. PAINTER: Thank you very much. The next 

10 speaker is at 9:30. Will you be speaking for them as 

11 well?

12 MR. DEASON: Let's give them a few minutes 

13 to show up. I believe that's the IMA.

14 MR. PAINTER: Okay. It is the IMA.

15 MR. DEASON: Yes. Let's stop for a moment, 

16 please.

17 (Whereupon, a short recess was taken.)

18 MR. DEASON: Good morning. My name is Doug 

19 Deason, and I'm here to present testimony on behalf of 

20 the Illinois Manufacturers Association, also known as 

21 the IMA. The IMA represents over 4,000 member 

22 companies in Illinois, including my employer, 

23 ExxonMobil, and other businesses engaged in the 

24 chemical, food, pharmaceutical, transportation 

25 equipment, energy, heavy manufacturing, steel, oil, 
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1 cement and power generation sectors.

2 In Illinois, manufacturing employs nearly 

3 570,000 workers at 18,900 plants, including the single 

4 largest share, 13 percent, of Illinois' gross domestic 

5 product. According to statistics from the Illinois 

6 Department of Commerce and Economic Opportunity, 

7 manufacturing companies contribute a gross output of 

8 more than $76 billion, along with the annual value 

9 added productivity of over $106 billion.

10 Many of the IMA's member facilities are 

11 located in the Illinois portion of the Chicago-Gary12 Lake County ozone nonattainment area, which is 

13 specifically identified in Table 1 of EPA's proposed 

14 rule as an area that may be impacted by the rule. The 

15 Chicago ozone nonattainment area includes all or parts 

16 of eight counties in Illinois and two counties in 

17 Indiana that are located around the western and 

18 southern shore of Lake Michigan.

19 The catalyst for this rulemaking is the D.C. 

20 Circuit Court decision in South Coast, which occurred 

21 in December 2006. In the time since that ruling, EPA 

22 has been deliberating on the details of a rulemaking 

23 that would conform to the Court's decision. The 

24 length of time that this has taken suggests that the 

25 possible options for complying with the Court's ruling 
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1 are varied and complex.

2 EPA's proposal itself shows that there are 

3 potential alternatives to EPA's approach that may be 

4 permissible under the Court's ruling. In the 

5 meantime, the EPA has told states like Illinois to 

6 comply with the Court's ruling even before EPA's 

7 rulemaking process is completed.

8 What exactly does that directive entail for 

9 the Chicago area? We believe that the circumstances 

10 that apply to the Chicago ozone nonattainment area can 

11 be distinguished from those relevant to the South 

Coast

13 EPA should recognize and acknowledge in its 

14 rulemaking that in the void left between the Court's 

15 ruling and EPA's efforts to modify its rule states 

16 like Illinois have relied upon their federally 

17 approved NSR rules, up-to-date ozone air quality 

18 measurement results and their interpretation of the 

19 Court's decision to guide their decisions.

12 Court decision.

20 The appropriateness of such decisions in 

21 light of the South Coast ruling cannot and should not 

22 be judged solely on the basis of their strict 

23 adherence to whatever final rule the EPA eventually 

24 promulgates. Furthermore, the IMA believes that ample 

25 evidence exists for EPA to remove the Chicago-Gary-
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1 Lake County nonattainment area from Table 1 of the 

2 proposed rule and find that this area was at no time 

subject to the South Coast

7 EPA proposes to apply one-hour New Source 

8 Review requirements to Chicago air based on Chicago's 

9 one-hour ozone classification. This would continue 

10 until the area is designated attainment for the eight11 hour ozone standard set in 1997.

3 ruling. The IMA will 

4 provide additional written support to EPA in this 

5 matter by the close of the record for this public 

6 hearing. 

12 However, it should be noted that the ozone 

13 monitors in all of the counties of the Chicago ozone 

14 nonattainment area showed attainment of the standard 

15 at the time of the eight-hour ozone standard 

16 designation.

17 However, Illinois was not given an 

18 opportunity to request redesignation of the Chicago 

19 area since, as stated in the proposed rule, the EPA 

20 was no longer determining an attainment for the

21 one-hour standard once the standard was revoked.

22 The air quality monitoring data showing 

23 attainment of the one-hour ozone standard supports the 

24 conclusion that the Chicago area circumstances differ 

25 from South Coast where the one-hour standard was not 
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1 being met. While we support the EPA's proposal to 

2 remove the one-hour NSR requirements once the

3 eight-hour ozone standard is attained, we believe that 

4 EPA's suggested alternative should also be adopted.

5 The IMA supports EPA's alternative allowing 

6 the one-hour NSR requirements to be removed once an 

7 area has been deemed to have attained the one-hour 

8 standard. NSR requirements applicable to the area 

9 would then be based on the classification for the 

10 eight-hour designation for the 1997 standard.

11 It should be noted that one month after the 

Court's ruling in South Coast

18 In closing, it is well known that the 

19 difficult economic conditions that have impacted all 

20 sectors of the U.S. economy continue to pose a 

21 daunting challenge to businesses that are seeking to 

22 recover and compete in the global economy.

12 the Illinois 

13 Environmental Protection Agency requested that EPA 

14 find that the Chicago area had attained the one-hour 

15 ozone standard. EPA made such a finding in December 

16 of 2008. This supports the IMA's contention that the 

17 Chicago area should be excluded from this rulemaking.

23 The ultimate decision that the EPA makes 

24 pursuant to this proposed rulemaking will impact the 

25 business plans of our members in the Chicago area and 
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1 could be a determining factor in their decision to 

2 invest in this area. The scope of that impact will 

3 depend upon the approach EPA chooses for meeting the 

4 goals of the proposed rulemaking.

5 The IMA urges the EPA to select an approach 

6 which does not create a burden for the business 

7 community that is out of proportion with the 

8 environmental benefit that might be attained. Thank 

9 you for giving me the opportunity to provide this 

10 testimony today on behalf of the IMA.

11 MR. PAINTER: Thank you. No questions. 

12 (Whereupon, a short recess was taken.)

13 MR. PAINTER: And once again this is for 

14 whom?

15 MR. DEASON: These are comments of the 

16 Illinois Environmental Regulatory Group.

17 MR. PAINTER: Okay.

18 MR. DEASON: Good morning. My name is Doug 

19 Deason of ExxonMobil, and I'm here today representing 

20 the Illinois Environmental Regulatory Group of which 

21 my company is a member.

22 IERG consists of 51 member companies 

23 throughout Illinois, including major industrial 

24 facilities and companies in the chemical, food, 

25 pharmaceutical, transportation equipment, energy, 
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1 heavy manufacturing, steel, oil, cement and power 

2 generation sectors. Many of these facilities are 

3 located in the Illinois portion of the Chicago-Gary4 Lake County nonattainment area for ozone as listed in 

5 the proposed rulemaking.

6 IERG represents its members in the 

7 development of the environmental regulations at the 

8 state level in Illinois and at the federal level when, 

9 as in this case, the proposed regulation has 

10 particular impacts on its members.

11 The application of the anti-backsliding 

12 provisions of the Clean Air Act to require the 

13 application of the one-hour New Source Review severe 

14 nonattainment provisions to the Chicago-Gary-Lake 

15 County nonattainment area as discussed in the proposed 

16 rulemaking would have severe negative impacts on our 

17 members in the Chicago area.

18 Not only would the imposition of those 

19 requirements on an area make new construction of major 

20 facilities within the area virtually impossible, but 

21 these requirements would make it extremely problematic 

22 to make those major modifications necessary to keep 

23 existing facilities operating efficiently and safely.

24 The imposition of these requirements 

25 directly impacts the economic viability both of 
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1 existing facilities and of the industrial community as 

2 a whole. For this reason, we urge the Agency to look 

3 carefully at the unique circumstances surrounding the 

4 Chicago-Gary-Lake County nonattainment area as set 

5 forth more fully in our written comments.

6 As explained in those comments, the Illinois 

7 portion of the nonattainment area had already attained 

8 the one-hour standard for three years at the time it 

9 was revoked, and the state submitted its request for a 

10 finding of attainment in January 2007. In fact, this 

11 request was granted by U.S. EPA on December 30, 2008.

12 We urge the Agency to find that attainment 

13 of the one-hour standard is sufficient to lift the 

14 one-hour nonattainment NSR review requirements, 

15 especially where that attainment was the result of an 

16 approved State Implementation Plan, without awaiting a 

17 full redesignation to attainment, particularly as the 

18 one-hour standard has been revoked.

19 Of course, we also support the concept that 

20 achieving the eight-hour standard is sufficient to 

21 lift the one-hour nonattainment NSR requirements 

22 where, as in the case of the Chicago area, that too 

23 has already been a met requirement.

24 We will more fully set forth our position in 

25 our written comments to follow this public hearing. 
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1 Thank you again for giving us the opportunity to 

2 present these comments today.

3 MR. PAINTER: Thank you. Any more?

4 MR. DEASON: And I didn't turn on my email 

5 this morning, so if there's any more from Illinois --

6 MR. PAINTER: They'll show up as written 

7 comments. Let's recess for 10 minutes.

8 (Whereupon, a short recess was taken.)

9 MR. FRYE: Good morning. My name is Russell 

10 Frye, and I am speaking on behalf of the American 

11 Petroleum Institute or API.

12 API for the most part agrees with and 

13 supports the interpretations that EPA has adopted in 

14 the proposed rule concerning when the more stringent 

15 nonattainment New Source Review requirements 

16 associated with the now revoked one-hour ozone ambient 

17 air quality standard should continue in effect.

18 API perceives two basic principles in the 

19 proposed rule that API believes EPA should continue to 

20 apply in the final rule. First, that the D.C. 

21 Circuit's South Coast decision addressed only areas 

22 that were one-hour ozone nonattainment areas at the 

23 time that the one-hour standard was revoked and 

24 continue to be in nonattainment for the replacement 

25 eight-hour standard.
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1 And, secondly, that it is clear from the 

2 Clean Air Act and from judicial precedent that the 

3 only form of new source review that can apply in an 

4 attainment area is the PSD program.

5 This means, as is reflected in the proposed 

6 rule, that an area that was designated attainment for 

7 the eight-hour ozone standard at the time the one-hour 

8 standard was revoked or that has since come into 

9 attainment with the eight-hour standard cannot be 

10 required to continue to apply the one-hour ozone 

11 nonattainment NSR. We think that's an appropriate 

interpretation of the South Coast

14 This also means that the one-hour ozone 

15 nonattainment NSR requirements should not be and in 

16 our view cannot be maintained in a State 

17 Implementation Plan as a contingency measure because 

18 that's really the function, one of the functions, of 

19 the PSD program.

12 decision and the 

13 statute.

20 We do think there are a few things that need 

21 to be clarified in the proposed rule. In some cases 

22 the proposed rule says that a state has to request 

23 that EPA allow it to remove one-hour ozone NSR 

24 provisions from the state regulations.

25 Given that once the area has become 
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1 designated attainment the PSD program is the only 

2 method that Congress has provided for new source 

3 review, it seems the state should not have to request 

4 EPA's approval, which implies that EPA can also 

5 disapprove the removal of the superseded one-hour 

6 nonattainment NSR procedures from the state 

7 regulations.

8 Also another minor clarification. The 

9 proposed rule does not always refer specifically to 

10 the 1997 eight-hour ozone standard, and API believes 

11 that EPA ought to amend the wording of the proposed 

12 rule to make it clear that once an area came into 

13 attainment with the 1997 eight-hour ozone standard 

14 then the most stringent one-hour ozone nonattainment 

15 NSR procedures will no longer apply in that area, even 

16 if the area subsequently is designated nonattainment 

17 for any subsequent version of the ozone ambient air 

18 quality standard that EPA may adopt.

19 The wording presently could be interpreted 

20 to have an effect that an area that became attainment 

21 with the eight-hour ozone standard or that was in 

22 attainment at the time with the eight-hour standard, 

23 the 1997 eight-hour standard at the time, at the time 

24 the one-hour standard was revoked could have to sort 

25 of reimplement the one-hour NSR procedures if it was 
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1 later designated nonattainment for the next version of 

2 the eight-hour ozone standard. So we think a slight 

3 clarification is necessary to make sure everybody has 

4 the understanding that that's not what was intended.

5 And finally, API urges EPA to adopt what was 

6 called the supplemental proposal in the proposed rule; 

7 namely, if an area presently has air quality that 

8 would meet the one-hour ozone standard were it to 

9 continue to apply then the special NSR provisions that 

10 Congress adopted in 1990 to speed attainment with the 

11 one-hour ozone standard have accomplished their 

12 purpose and they should not continue to apply.

13 API does not believe that there should be 

14 any additional conditions to removing one-hour ozone 

15 NSR in such circumstances; merely a demonstration that 

16 the level of the one-hour standard is being attained, 

17 but if EPA does apply any additional considerations in 

18 deciding whether the one-hour nonattainment NSR 

19 provisions could be removed we agree with the 

20 tentative position EPA expressed in the proposal that 

21 those additional conditions ought to be applied on a 

22 case-by-case basis rather than having a specified set 

23 of conditions in the regulations.

24 So those are American Petroleum Institute's 

25 comments, in addition to the written comments that we 
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1 filed, and we appreciate your consideration.

2 MR. PAINTER: Okay. Thank you.

3 (Whereupon, a short recess was taken.)

4 MR. PAINTER: Back in session.

5 MS. RITTS: I'm Leslie Ritts, and I'm 

6 testifying for the National Environmental Development 

7 Association's Clean Air Project.

8 We are a multi-sector manufacturing 

9 coalition that was formed in 1979 to address Clean Air 

10 implementation issues with a balanced perspective on 

11 environment and economics, giving particular 

12 consideration to balancing environmental welfare with 

13 the considerations and issues that manufacturers face 

14 in the global economy, as well as the issues that 

15 their communities face in attracting and retaining a 

16 strong economic base.

17 NEDA/CAP appreciates the opportunity to 

18 testify on this important proposed rule to implement 

19 the Federal Court of Appeals 2007 holding in South 

Coast Air Quality Management District v. EPA

22 navigate, and we appreciate that the Agency officials 

23 understand the importance of this issue to 

24 manufacturers and communities.

20 . New 

21 Source Review is a difficult Clean Air Act program to

25 As Intervenors on behalf of EPA in the 
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1 challenge to the 2004 ozone implementation rule, we 

also recognize that the South Coast Management

6 As our comments reflect, NEDA/CAP's members 

7 support what EPA has proposed. We believe that EPA 

8 has provided the legal analysis to allow states to 

9 move more proactively to remove the one-hour NSR 

10 provisions from the SIPs. We also submitted that once 

11 attainment of the one-hour or eight-hour NAAQS could 

12 be demonstrated there is no legal obstacle to removing 

13 the one-hour ozone NSR provisions from those SIPs.

2

3 decision erects some potentially difficult legal 

4 obstacles to removing the one-hour ozone NSR 

5 provisions after the one-hour ozone NAAQS was revoked.

14 Today we would like to address two issues. 

15 The first is the need for clear procedural steps and 

16 timing for states to remove the one-hour NSR provision 

17 from their SIPs, and the second is clear direction 

18 from the EPA for the states regarding their ability to 

19 remove the one-hour NSR provisions during the 

20 transition period to the revised 2010 NAAQS, which the 

21 Assistant Administrator suggested would be issued 

22 close to the time of the mid-term election.

23 On the first issue, procedural clarity and a 

24 toolbox for states, NEDA/CAP recommends that the final 

25 rule EPA publishes should contain a toolbox that 
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1 contains a flowchart with time intervals to help 

2 states navigate the attainment demonstration process 

3 and the SIP revision process for removing the former 

4 one-hour NSR provisions and implementing the PSD 

5 requirements immediately when states demonstrate 

6 attainment with the eight-hour NAAQ and/or the

7 one-hour ozone NAAQS.

8 NEDA envisions that the toolbox and the 

9 flowchart would take advantage of a finding in the 

10 final rule that would provide that upon submission of 

11 a state's demonstration of attainment with the

12 one-hour and 1997 ozone standards that states can 

13 change their own regulations and, while waiting for 

14 EPA notice of approval of the concomitant SIP 

15 revision, revise the state law to remove the one-hour 

16 NSR requirements, which would become enforceable 

17 pending the final SIP revision action on EPA's part.

18 This also could be accompanied by a finding 

19 in the rule that in exchange for fast-tracking removal 

20 of the one-hour standard and NSR requirements if a 

21 state's demonstration ultimately fails to show 

22 attainment and maintenance of the respective ozone 

23 standard the state and affected industry would 

24 immediately be required to retroactively implement the 

25 prior one-hour NSR requirements, which remain in the 
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1 SIP as a federally enforceable requirement.

2 In order to operate by rule, these findings 

3 must be clearly set forth in EPA's final Agency action 

4 and become effective 60 days from its promulgation.

5 The second issue that I wanted to address in 

6 this testimony was the transition to the more 

7 stringent revised ozone NAAQS. NEDA is very concerned 

8 that states will feel they are trapped from removing 

9 the former one-hour NSR provisions because of the 

10 upcoming more stringent 2010 ozone NAAQS, even if they 

11 can demonstrate attainment with the prior one-hour 

12 and/or eight-hour 1997 ozone NAAQS.

13 We suggest, therefore, that EPA needs to 

14 underscore unequivocally that states that are able to 

15 demonstrate attainment with one or both of the prior 

16 ozone standards can remove the one-hour NSR provisions 

17 from their SIPs, because until the state is designated 

18 under the new ozone NAAQS provisions the state NSR 

19 program converts to a PSD program.

20 Some states may not opt to take advantage of 

21 this procedure, but NEDA/CAP believes that the 

22 economic crunch on many communities that have been 

23 subject to these onerous one-hour NSR provisions will 

24 motivate many states to amend their local air codes to 

25 remove the obsolete one-hour NSR nonattainment 
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1 provisions if EPA is clear.

2 NEDA/CAP also urges EPA to make this 

3 transition clear in the implementation plan and 

4 guidance for the revised ozone NAAQS. For instance, 

5 we believe that it is extremely important that EPA 

6 signal to the states that EPA will accept removal of 

7 the NSR provisions during the redesignation process.

8 We also suggest that EPA inform the 

9 respective governors that in the governors' letters 

10 recommending designations under the new ozone NAAQS 

11 EPA will accept notice that the states' new PSD 

12 provisions are in place, triggering the provision in 

13 the final EPA rule so that state law will supersede 

14 federal SIP provisions for the one-hour NAAQS unless 

15 and until EPA determines that the state has failed to 

16 make the required demonstration showings for the prior 

17 standards.

18 In other words, states may operate their 

19 attainment preconstruction review programs and remove 

20 the federally enforceable NSR programs during the 

21 transition to the new NAAQS and can do so by providing 

22 notice thereof during the redesignation process.

23 As NEDA/CAP indicated in its comments on the 

24 NSR anti-backsliding provisions, we do not believe 

25 that Congress intended the onerous one-hour NSR 
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1 provisions to remain in the SIPs forever, and that 

2 includes being moved to a state's maintenance plan.

3 In order to convey to the states that they 

4 may remove these provisions, we think it's important 

5 for the Agency to not only clarify with a toolbox 

6 approach the steps that can be taken to remove the 

7 one-hour NSR provisions, but to underscore in several 

8 places during the new implementation rule and other 

9 training or guidance documents shared with EPA regions 

10 and the states how this can be accomplished in concert 

11 with the governors' recommendations on the new ozone 

12 designations.

13 NEDA/CAP's members would be willing to work 

14 with EPA and with others, including NACAA, on this 

15 task if we're invited. It's very important to our 

16 members. Thank you very much.

17 MR. PAINTER: Thank you.

18 MS. RITTS: And for you.

19 MR. PAINTER: Thank you.

20 MS. RITTS: And Diane.

21 MR. PAINTER: Might I ask? Can you send me 

22 this by email?

23 MS. RITTS: I absolutely can.

24 MR. PAINTER: I would appreciate that very 

25 much.
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1 You're the last scheduled speaker. Do you 

2 want to go ahead?

3 MR. DEASON: Sure.

4 MR. PAINTER: Okay. Mr. Frye, could you 

5 email me yours as well? Thank you.

6 Okay, Doug. You might as well start.

7 MR. DEASON: Thank you. Good morning. My 

8 name is Doug Deason. I'm speaking on behalf of 

9 ExxonMobil.

10 ExxonMobil is a member of national 

11 associations like NEDA and API and also state 

12 associations like the Louisiana Chemical Association. 

13 Our facilities in Texas and Illinois are regulated by 

14 the environmental agencies in these states. All these 

15 associations and two states plus Wisconsin have 

16 submitted comments that are supportive of much of the 

17 EPA proposal. The facilities affected by these rules 

18 are in California, Illinois, Louisiana and Texas.

19 The 1997 eight-hour ozone standard has been 

20 attained for multiple years since 2005 where our 

21 facilities are located in Illinois, Louisiana and 

22 Texas. In the case of the Baton Rouge, Beaumont and 

23 the Chicago areas, the one-hour ozone NAAQS has also 

24 been attained for multiple years in these areas since 

25 2005.
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1 We agree with and support much of the EPA 

2 proposal, which seems to reasonably address some of 

3 the confusion created by the D.C. Circuit Court's 

4 December 2006 decision disagreeing with the methods by 

5 which EPA transitioned from the former one-hour ozone 

6 standard, now revoked, to the 1997 eight-hour ozone 

7 standard.

8 The interpretations EPA has proposed and is 

9 taking comment on follow a logical line of reasoning. 

10 The one-hour ozone nonattainment New Source Review 

11 requirements should be discontinued upon attainment of 

12 either the one-hour ozone or 1997 eight-hour ozone 

13 NAAQ standards.

14 In the event both of these standards are 

15 attained, the PSD program for attainment areas should 

16 then be in place. In the event the one-hour ozone 

17 standard is attained, but not the eight-hour ozone 

18 standard, the one-hour nonattainment New Source Review 

19 program should be replaced by the 1997 eight-hour 

20 ozone NAAQS NSR program. We fully support EPA using 

21 the Clean Air determination process to transition from 

22 nonattainment New Source Review in this instance.

23 We feel a few things need to be clarified in 

24 the final rule. A general clarification theme is that 

25 EPA needs to specifically identify which nonattainment 
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1 area NSR permit programs will need modifications after 

2 the final rule is effective.

3 While Table 1 in the proposal indicates 

4 areas that may be subject to the proposed rulemaking, 

5 it doesn't explicitly identify and determine which 

6 ones actually have programs that will perhaps need to 

7 be modified, and we feel like this would be a useful 

8 addition in the final rule. 

9 EPA should also clarify "How do areas 

10 transition from the NSR program in place at the 

11 effective date of the rule to any new nonattainment 

12 New Source Review program?" While Table 1 in the 

13 proposed rule lists these potentially affected areas, 

14 it does not specifically identify nonattainment areas 

15 that will be affected and subsequently require NSR 

16 program changes.

17 I've got a few examples based on areas where 

18 our facilities operate to illustrate the point. We 

19 have facilities in the Chicago area. In regards to 

20 our Joliet Refinery located in Channahon, Illinois, 

21 which resides within the Chicago area ozone 

22 nonattainment area, promulgation of these proposed 

23 rules without the requested clarification would impose 

24 a major impact to the daily operations, many times 

25 which require permit modifications from the state 
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1 agency.

2 Our Joliet Refinery has been operating 

3 consistent with the Illinois EPA's approach that with 

4 the one-hour standard revoked in June of 2005 the 

5 December 20, 2008, Federal Register publication by 

6 which EPA issued its attainment finding based upon 

7 Illinois' January 30, 2007, petition that the area had 

8 achieved the one-hour standard and that only the 

9 moderate eight-hour ozone requirements for the NSR 

10 program would apply.

11 If this Illinois approach is to be altered 

12 by the final rule, I would like to see clarification 

13 as to what the specific steps EPA and IEPA will need 

14 to take all together to alternate and to modify the 

15 nonattainment permitting program. 

16 In Illinois, the IEPA has relied on the 35 

17 Admin Code 203 rules to issue permits, and if there 

18 are any problems they should have been deemed put on 

19 notice or received a SIP deficiency from the U.S. EPA. 

20 We're not aware of any actual permits with 

21 deficiencies that have been issued during this 

22 timeframe, nor are we aware that the state program has 

23 been issued a deficiency.

24 Furthermore, in the permit process the 

25 Illinois EPA addressed anti-backsliding concerns by 
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1 assuring that no provisions established under the

2 one-hour standard were removed as they were relied 

3 upon in their attainment demonstration.

4 If the proposed provisions are approved in a 

5 final rule, how is the U.S. EPA going to deal with 

6 companies located in the Illinois nonattainment area 

7 that have attained permits properly in accordance with 

8 approved SIP provisions?

9 With these many questions being raised by 

10 those at the hearing that I represented in their 

11 absence, we'd like to understand better how is the 

12 U.S. EPA going to address concerns for all the 

13 facilities located within the Chicago ozone 

14 nonattainment area? 

15 Finally, a Chicago-specific question. I 

16 don't think this is specifically addressed in the 

17 proposed rulemaking, but they have a question. How is 

18 the Chicago area's one-hour NAAQS waiver going to be 

19 dealt with in this proposed rule, if at all?

20 Another area that follows with an example is 

21 the Baton Rouge area. Our ExxonMobil Baton Rouge 

22 facilities have been operating consistent with the 

23 Louisiana Department of Environmental Quality (DEQ) 

24 permit program for years. EPA has issued a one-hour 

25 ozone and the 1997 eight-hour ozone NAAQS Clean Air 
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1 determination for the Baton Rouge area for multiple 

2 years. The area has actually been clean, and we've 

3 been attaining both of these standards in the Baton 

4 Rouge area.

5 EPA and Louisiana have also been working 

6 diligently to administratively complete a 

7 redesignation to attainment for the 1997 eight-hour 

8 ozone NAAQS. As you know, since the one-hour standard 

9 has been revoked EPA has not been issuing 

10 redesignations to attainment for the one-hour 

11 standard. So our question here is how would the final 

12 rule apply to the specific circumstances in place for 

13 the Baton Rouge nonattainment area?

14 A third example is in our Beaumont area 

15 where we have ExxonMobil facilities that have again 

16 been operating consistent with the Texas permit 

17 program. EPA has issued a one-hour ozone and 1997 

18 eight-hour ozone NAAQS Clean Air determination, and 

19 both EPA and the Texas Commission on Environmental 

20 Quality, the TCEQ, have been working diligently to 

21 administratively complete a redesignation to 

22 attainment for the 1997 eight-hour ozone NAAQS for the 

23 Beaumont area.

24 As of the last time I was able to check the 

25 Federal Register, this had not yet been published, but 
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1 we're expecting to actually hear good news on the 

2 attainment redesignation for that particular area by 

3 the end of the year.

4 And similar to the Baton Rouge area, we have 

5 a question about how would the final rule apply in 

6 practice to the Beaumont nonattainment area? I could 

7 go on with more examples, but I think those three are 

8 illustrative of the questions that some of the state 

9 agencies and the regulated communities have.

10 In closing, I'd like to ask EPA to clarify 

11 in the final rule a step-wise practical process for 

12 the EPA and states to follow that recognizes proper 

13 achievement of one-hour ozone and 1997 eight-hour 

14 ozone standards and provides to these areas the 

15 benefits of attainment.

16 The final rule should, as Congress intended, 

17 provide the incentive for the nonattainment areas to 

18 gain attainment and to be able to reap the related 

19 benefits of cleaner air for the region, while allowing 

20 for continued economic prosperity and further 

21 industrial development.

22 The questions we have raised here and the 

23 U.S. EPA's responses are very important for our 

24 impacted facilities and their state agencies to fully 

25 understand any needed permit program modifications for 
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1 these legacy ozone regulations which continue as we're 

2 in transition to a new ozone standard that may be 

3 published by the end of this year.

4 We'll submit more detailed comments 

5 outlining our concerns and our written comments to be 

6 submitted by November -- about a month following this 

7 hearing.

8 And, Dave, I just want to personally again 

9 thank you. I know you put in a lot of work on this 

10 over the last three or four years. Those of us that 

11 work within the complexities of the Clean Air Act 

12 really appreciate all the work by the senior agency 

13 staff to try and help to in some cases clarify what's 

14 almost unintelligible, even to people who are pretty 

15 expert and knowledgeable in the rules of the states 

16 that have been put in place to follow the Clean Air 

17 Act. We really appreciate your efforts.

18 MR. PAINTER: Thank you. Okay. Well, you 

19 are our last scheduled speaker. We'll be in recess 

20 awaiting someone to register.

21 (Whereupon, a short recess was taken.)

22 (Whereupon, at 2:00 p.m., the hearing in the 

23 above-entitled matter was concluded.)

24 //

25 //
LOCATION: WI)

I hereby certify that the proceedings and

evidence are contained fully and accurately on the

tapes and notes reported by me at the hearing in the

above case before the

Date:

— —-

/s -

Gabriel GheorghiuOff icial ReporterHeritage Reporting Corporation

Suite 600

1220 L Street, N.W.

Washington, D.C. 20005-4018