# 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

- BACKSLIDIN G ) PROVISIONS FOR FORMER 1

- HOUR ) OZONE STANDARD )

**REVISED AND CORRECTED COPY**

Pages: 1 through 35

Place: Washington, D.C.

Date: October 12, 20101

Heritage Reporting Corporation (202) 628

- 4888 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 FORME R 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. RITTS2

Heritage Reporting Corporation (202) 628

- 4888 P R O C E E D I N G S 1

(9:13 a.m.) 2

MR. PAINTER: Good morning, and thank you 3

fo r attending this public hearing. We are holding 4

this hearing to take comment on EPA's

The proposed rule would apply to areas that 9

were nonattainment for the one

- hour ozone NAAQS on the 10

effective date of the 1998 (sic) eight

- hour 11

designations. This proposed action was published in 12

the Federal Register on August 24, 2010. 13 Proposed Rule to

5

Implement the 1997 8

- Hour Ozone National Ambient Air 6

Quality Standard: New Source Review Anti

- Backsliding 7

Provisions for Former 1

- Hour Ozone Standard. 8

My name is Davi d Painter, and I am in the 14

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

Division of the Office of Air Quality Planning and 16

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

We are here today to listen to your comments 18

on EPA's proposed rule that wou ld address concerns 19

about backsliding in areas designated nonattainment 20

for both the one

- hour and 1997 eight

- hour ozone NAAQS. 21

This rule responds to the South Coast

December 26, 2006. 24 decision by the 22

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

In that decision concerning EPA's Phase 1 253

Heritage Reporting Corporation (202) 628

- 4888 ozone implementation rule, the Court made a number of 1

holdings pertaining to implementation of the 1997 2

eight

- hour ozone NAAQS. Those aspects involving 3

classifications under the NAAQS for nonattainment 4

areas are being a ddressed in a separate rulemaking. 5

A section of the South Coast

Section 185 penalty fees are being addressed 15

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

permitting, is a subject of the proposed rulemaking 17

upon which we're accepting comment today. This 18

proposed NSR rule addresses issues related to how 19

permitting requirements under the NSR permitting 20

program should transition from the on e

- hour to the 21

1997 eight

- hour standard. 22 decision

6

addressed the subject of controls in the context of 7

Clean Air Act ' 172(e) anti

- backsliding provisions. 8

Those controls in question included contingency 9

measures, preconstruction NS R permits and ' 185 10

penalty fees. The separate action addressing 11

classifications will also address the aspects of the 12

Court's decision pertaining to the contingency 13

measures. 14

EPA is proposing that the NSR permitting 23

requirements for the one

- hour ozone standard continue 24

to apply until an area is redesignated as being in 254

Heritage Reporting Corporation (202) 628

- 4888 attainment for the 1997 ozone standard. EPA also is 1

communicating i ts Clean Air Act interpretation that 2

areas attaining the current ozone standard should 3

implement the PSD permitting program regardless of 4

their status relative to the revoked one

- hour ozone 5

standard. 6

Today's hearing is an opportunity for the 7

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

I may answer questions that seek to clarify what we 9

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

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

proposal. 12

We invite comment on the specific elements 13

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

the proposal. Specifically, we propose that one

- hour 15

NSR requirements would remain in effect until such 16

time as an area attains the 1997 eight

- hour ozone 17

NAAQS and is redesignated as being in attainme nt. 18

Designation status is important in that the 19

applicability of the NSR program versus the PSD hinges 20

upon the designation. The exception to this is for 21

states in the Ozone Transport Region, which is also 22

addressed in the proposal. 23

Our proposal inclu des a supplemental option 24

under which areas attaining the one

- hour NAAQS, but 255

Heritage Reporting Corporation (202) 628

- 4888 not the 1997 eight

- hour NAAQS, might remove the 1

one

- hour NSR requirements with their attendant 2

applicability thresholds and offset requirements, 3

following an EPA determination of eligibility. 4

The key concerns are detailed in the Federal 5

Register notice. From those supporting the 6

alternative path, we specifically requested comment 7

upon the legal and procedural aspects of pursuing such 8

a path. 9

Now let me describe how this heari ng will 10

operate and how to comment. Today we will be 11

accepting oral comments on our proposal and we will be 12

preparing a written transcript of this hearing. The 13

transcript will be available as part of the official 14

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

move forward. 16

We are also accepting written comments on 17

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

sheet available at the registration area that contains 19

detailed information for submitting written comments. 20

For those who will be providing oral 21

comments today, I will call each scheduled speaker to 22

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

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

state your name and your affiliation. It will help 256

Heritage Reporting Corporation (202) 628

- 4888 our court reporter if you also sp ell your name. 1

If you wish to speak, but have not already 2

registered to speak either through preregistration or 3

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

MALE VOICE: I'm with the press. 5

MR. PAINTER: Okay. 6

When the time slots were allo tted they gave 7

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

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

today so I'll do that. 10

After you finish your testimony I may ask 11

you clarifying questions. If in addition to the 12

transcript you wou ld also like us to put the full text 13

of your written comments into the docket, please be 14

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

to Steve Edgerton at the registration desk. 16

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

afternoon. To expedite matters, there will be no 18

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

again for participating, and with that I guess we 20

should go ahead and start. 21

Doug, you are at this time recognized. For 22

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

representi ng someone else today. 24

MR. DEASON: Sure. My name is Doug Deason. 257

Heritage Reporting Corporation (202) 628

- 4888 I'm from ExxonMobil, and I'm here in this slot to 1

present testimony on behalf of the Chemical Industry 2

Council of Illinois, the CICI. 3

CICI is a state

- wide trade association 4

representin g the chemical industry in Illinois. They 5

represent 209 member companies, including ExxonMobil, 6

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

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

877 wholesale and distribution facilities in Illinois. 9

CICI would like to voice its comments 10

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

CICI members are located in nonattainment areas in 12

Illinois, specifically the Chicago

- Gary

- Lake County, 13

Illinois

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

1 of the Federal Register proposal. 15

CICI believes that Illinois EPA should not 16

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

to remove the one

- hour standard. Illinois EPA has 18

appropriately shown attainment in both the one

- hour 19

standard and the 1997 e ight

- hour standard, regardless 20

of redesignation to attainment of either standard. 21

The Chicago nonattainment area attained the 22

one

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

revoked, and in January 2007 the Illinois EPA 24

submitted a request for a fin ding of attainment, which 258

Heritage Reporting Corporation (202) 628

- 4888 in December 2008 was granted by the U.S. EPA. The 1

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

, 2

73 Fed.Reg. 79652. 3

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

regarding the Chicago

- Gary

- Lake County, Illinois

5

Indiana, mo nitoring results, especially as they 6

pertain to differences between the Chicago area and 7

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

Coast

Illinois EPA has shown its burden of proof 10

in attaining the one

- hour standard. If U.S. EPA 11

ins ists on including the Illinois monitor in the 12 decision.

9

one

- hour standard, this will impede economic growth in 13

the State of Illinois. 14

Illinois already has a 9.6 percent 15

unemployment rate with a deficit of approximately $13 16

billion in its current state budget. Com panies will 17

be hindered from investing in Illinois to build new 18

facilities or expand existing ones due to the economic 19

burden of complying with the regulation, the two NAAQ 20

standards that Illinois has already met. 21

CICI represents the chemical sector in t he 22

manufacturing industry, and the chemical sector hasn't 23

seen any substantial growth in the economic downturn 24

in business since 2001. 259

Heritage Reporting Corporation (202) 628

- 4888 CICI would like to reserve the right to 1

provide more detailed comments during a post

- hearing 2

date comment period and th ank you for your work on the 3

proposal. 4

MR. PAINTER: Thank you for your comments. 5

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

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

Pam. 8

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

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

well? 11

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

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

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

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

please. 16

(Whereupon, a short recess was taken.) 17

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

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

the Illinois Manufacturers Association, also known as 20

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

companies in Illinois, including my employer, 22

ExxonMob il, and other businesses engaged in the 23

chemical, food, pharmaceutical, transportation 24

equipment, energy, heavy manufacturing, steel, oil, 2510

Heritage Reporting Corporation (202) 628

- 4888 cement and power generation sectors. 1

In Illinois, manufacturing employs nearly 2

570,000 workers at 18,900 plants, in cluding the single 3

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

product. According to statistics from the Illinois 5

Department of Commerce and Economic Opportunity, 6

manufacturing companies contribute a gross output of 7

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

added productivity of over $106 billion. 9

Many of the IMA's member facilities are 10

located in the Illinois portion of the Chicago

- Gary

11

Lake County ozone nonattainment area, which is 12

specifically identified in Table 1 of EPA's propose d 13

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

Chicago ozone nonattainment area includes all or parts 15

of eight counties in Illinois and two counties in 16

Indiana that are located around the western and 17

southern shore of Lake Michigan. 18

The catalys t for this rulemaking is the D.C. 19

Circuit Court decision in South Coast , which occurred 20

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

has been deliberating on the details of a rulemaking 22

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

length of ti me that this has taken suggests that the 24

possible options for complying with the Court's ruling 2511

Heritage Reporting Corporation (202) 628

- 4888 are varied and complex. 1

EPA's proposal itself shows that there are 2

potential alternatives to EPA's approach that may be 3

permissible under the Court's ruling. In the 4

meantime, the EPA has told states like Illinois to 5

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

rulemaking process is completed. 7

What exactly does that directive entail for 8

the Chicago area? We believe that the circumstances 9

that apply to th e Chicago ozone nonattainment area can 10

be distinguished from those relevant to the South 11

Coast

EPA should recognize and acknowledge in its 13

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

ruling and EPA's efforts to modify its rule st ates 15

like Illinois have relied upon their federally 16

approved NSR rules, up

- to

- date ozone air quality 17

measurement results and their interpretation of the 18

Court's decision to guide their decisions. 19 Court decision. 12

The appropriateness of such decisions in 20

light of the Sout h Coast ruling cannot and should not 21

be judged solely on the basis of their strict 22

adherence to whatever final rule the EPA eventually 23

promulgates. Furthermore, the IMA believes that ample 24

evidence exists for EPA to remove the Chicago

- Gary

- 2512

Heritage Reporting Corporation (202) 628

- 4888 Lake County non attainment area from Table 1 of the 1

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

subject to the South Coast

EPA p roposes to apply one

- hour New Source 7

Review requirements to Chicago air based on Chicago's 8

one

- hour ozone classification. This would continue 9

until the area is designated attainment for the eight

10

hour ozone standard set in 1997. 11 ruling. The IMA will

3

provide additional written support to EPA in this 4

matter by the close of the record for this public 5

hearing. 6

However, it should be no ted that the ozone 12

monitors in all of the counties of the Chicago ozone 13

nonattainment area showed attainment of the standard 14

at the time of the eight

- hour ozone standard 15

designation. 16

However, Illinois was not given an 17

opportunity to request redesignation of the Chicago 18

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

was no longer determining an attainment for the 20

one

- hour standard once the standard was revoked. 21

The air quality monitoring data showing 22

attainment of the one

- hour ozone standard support s the 23

conclusion that the Chicago area circumstances differ 24

from South Coast where the one

- hour standard was not 2513

Heritage Reporting Corporation (202) 628

- 4888 being met. While we support the EPA's proposal to 1

remove the one

- hour NSR requirements once the 2

eight

- hour ozone standard is attained, we beli eve that 3

EPA's suggested alternative should also be adopted. 4

The IMA supports EPA's alternative allowing 5

the one

- hour NSR requirements to be removed once an 6

area has been deemed to have attained the one

- hour 7

standard. NSR requirements applicable to the area 8

would then be based on the classification for the 9

eight

- hour designation for the 1997 standard. 10

It should be noted that one month after the 11

Court's ruling in South Coast

In closing, it is well known that the 18

difficult economi c conditions that have impacted all 19

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

daunting challenge to businesses that are seeking to 21

recover and compete in the global economy. 22 the Illinois 12

Environmental Protection Agency requested that EPA 13

find that the C hicago area had attained the one

- hour 14

ozone standard. EPA made such a finding in December 15

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

Chicago area should be excluded from this rulemaking. 17

The ultimate decision that the EPA makes 23

pursuant to this proposed rulemaki ng will impact the 24

business plans of our members in the Chicago area and 2514

Heritage Reporting Corporation (202) 628

- 4888 could be a determining factor in their decision to 1

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

depend upon the approach EPA chooses for meeting the 3

goals of the proposed rulem aking. 4

The IMA urges the EPA to select an approach 5

which does not create a burden for the business 6

community that is out of proportion with the 7

environmental benefit that might be attained. Thank 8

you for giving me the opportunity to provide this 9

testimo ny today on behalf of the IMA. 10

MR. PAINTER: Thank you. No questions. 11

(Whereupon, a short recess was taken.) 12

MR. PAINTER: And once again this is for 13

whom? 14

MR. DEASON: These are comments of the 15

Illinois Environmental Regulatory Group. 16

MR. PAI NTER: Okay. 17

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

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

the Illinois Environmental Regulatory Group of which 20

my company is a member. 21

IERG consists of 51 member companies 22

throughout Illinois, includ ing major industrial 23

facilities and companies in the chemical, food, 24

pharmaceutical, transportation equipment, energy, 2515

Heritage Reporting Corporation (202) 628

- 4888 heavy manufacturing, steel, oil, cement and power 1

generation sectors. Many of these facilities are 2

located in the Illinois portion of th e Chicago

- Gary

3

Lake County nonattainment area for ozone as listed in 4

the proposed rulemaking. 5

IERG represents its members in the 6

development of the environmental regulations at the 7

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

as in this case, t he proposed regulation has 9

particular impacts on its members. 10

The application of the anti

- backsliding 11

provisions of the Clean Air Act to require the 12

application of the one

- hour New Source Review severe 13

nonattainment provisions to the Chicago

- Gary

- Lake 14

Co unty nonattainment area as discussed in the proposed 15

rulemaking would have severe negative impacts on our 16

members in the Chicago area. 17

Not only would the imposition of those 18

requirements on an area make new construction of major 19

facilities within the are a virtually impossible, but 20

these requirements would make it extremely problematic 21

to make those major modifications necessary to keep 22

existing facilities operating efficiently and safely. 23

The imposition of these requirements 24

directly impacts the economi c viability both of 2516

Heritage Reporting Corporation (202) 628

- 4888 existing facilities and of the industrial community as 1

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

carefully at the unique circumstances surrounding the 3

Chicago

- Gary

- Lake County nonattainment area as set 4

forth more fully in ou r written comments. 5

As explained in those comments, the Illinois 6

portion of the nonattainment area had already attained 7

the one

- hour standard for three years at the time it 8

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

finding of attainment in J anuary 2007. In fact, this 10

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

We urge the Agency to find that attainment 12

of the one

- hour standard is sufficient to lift the 13

one

- hour nonattainment NSR review requirements, 14

especially where that attainme nt was the result of an 15

approved State Implementation Plan, without awaiting a 16

full redesignation to attainment, particularly as the 17

one

- hour standard has been revoked. 18

Of course, we also support the concept that 19

achieving the eight

- hour standard is suff icient to 20

lift the one

- hour nonattainment NSR requirements 21

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

has already been a met requirement. 23

We will more fully set forth our position in 24

our written comments to follow this public hearing. 2517

Heritage Reporting Corporation (202) 628

- 4888 Thank you again for giving us the opportunity to 1

present these comments today. 2

MR. PAINTER: Thank you. Any more? 3

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

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

-- 5

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

commen ts. Let's recess for 10 minutes. 7

(Whereupon, a short recess was taken.) 8

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

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

Petroleum Institute or API. 11

API for the most part agrees with and 12

supports the int erpretations that EPA has adopted in 13

the proposed rule concerning when the more stringent 14

nonattainment New Source Review requirements 15

associated with the now revoked one

- hour ozone ambient 16

air quality standard should continue in effect. 17

API perceives tw o basic principles in the 18

proposed rule that API believes EPA should continue to 19

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

Circuit's South Coast decision addressed only areas 21

that were one

- hour ozone nonattainment areas at the 22

time that the one

- hour s tandard was revoked and 23

continue to be in nonattainment for the replacement 24

eight

- hour standard. 2518

Heritage Reporting Corporation (202) 628

- 4888 And, secondly, that it is clear from the 1

Clean Air Act and from judicial precedent that the 2

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

attainment ar ea is the PSD program. 4

This means, as is reflected in the proposed 5

rule, that an area that was designated attainment for 6

the eight

- hour ozone standard at the time the one

- hour 7

standard was revoked or that has since come into 8

attainment with the eight

- hou r standard cannot be 9

required to continue to apply the one

- hour ozone 10

nonattainment NSR. We think that's an appropriate 11

interpretation of the South Coast

This also means that the one

- hour ozone 14

nonattainment NSR requirements sh ould not be and in 15

our view cannot be maintained in a State 16

Implementation Plan as a contingency measure because 17

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

the PSD program. 19 decision and the 12

statute. 13

We do think there are a few things that need 20

to be clarified in the pro posed rule. In some cases 21

the proposed rule says that a state has to request 22

that EPA allow it to remove one

- hour ozone NSR 23

provisions from the state regulations. 24

Given that once the area has become 2519

Heritage Reporting Corporation (202) 628

- 4888 designated attainment the PSD program is the only 1

meth od that Congress has provided for new source 2

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

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

disapprove the removal of the superseded one

- hour 5

nonattainment NSR procedures from the state 6

regulations. 7

Also another minor clarification. The 8

proposed rule does not always refer specifically to 9

the 1997 eight

- hour ozone standard, and API believes 10

that EPA ought to amend the wording of the proposed 11

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

attainment with the 1997 eight

- hour ozone standard 13

then the most stringent one

- hour ozone nonattainment 14

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

if the area subsequently is designated nonattainment 16

for any subsequent version of the ozone ambient air 17

qu ality standard that EPA may adopt. 18

The wording presently could be interpreted 19

to have an effect that an area that became attainment 20

with the eight

- hour ozone standard or that was in 21

attainment at the time with the eight

- hour standard, 22

the 1997 eight

- hour standard at the time, at the time 23

the one

- hour standard was revoked could have to sort 24

of reimplement the one

- hour NSR procedures if it was 2520

Heritage Reporting Corporation (202) 628

- 4888 later designated nonattainment for the next version of 1

the eight

- hour ozone standard. So we think a slight 2

clarifi cation is necessary to make sure everybody has 3

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

And finally, API urges EPA to adopt what was 5

called the supplemental proposal in the proposed rule; 6

namely, if an area presently has air quality that 7

woul d meet the one

- hour ozone standard were it to 8

continue to apply then the special NSR provisions that 9

Congress adopted in 1990 to speed attainment with the 10

one

- hour ozone standard have accomplished their 11

purpose and they should not continue to apply. 12

API does not believe that there should be 13

any additional conditions to removing one

- hour ozone 14

NSR in such circumstances; merely a demonstration that 15

the level of the one

- hour standard is being attained, 16

but if EPA does apply any additional considerations in 17

d eciding whether the one

- hour nonattainment NSR 18

provisions could be removed we agree with the 19

tentative position EPA expressed in the proposal that 20

those additional conditions ought to be applied on a 21

case

- by

- case basis rather than having a specified set 22

of conditions in the regulations. 23

So those are American Petroleum Institute's 24

comments, in addition to the written comments that we 2521

Heritage Reporting Corporation (202) 628

- 4888 filed, and we appreciate your consideration. 1

MR. PAINTER: Okay. Thank you. 2

(Whereupon, a short recess was taken.) 3

MR . PAINTER: Back in session. 4

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

testifying for the National Environmental Development 6

Association's Clean Air Project. 7

We are a multi

- sector manufacturing 8

coalition that was formed in 1979 to address Clean Air 9

impleme ntation issues with a balanced perspective on 10

environment and economics, giving particular 11

consideration to balancing environmental welfare with 12

the considerations and issues that manufacturers face 13

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

their c ommunities face in attracting and retaining a 15

strong economic base. 16

NEDA/CAP appreciates the opportunity to 17

testify on this important proposed rule to implement 18

the Federal Court of Appeals 2007 holding in South 19

Coast Air Quality Management District v. E PA

navigate, and we appreciate that the Agency officials 22

understand the importance of this issue to 23

manufacturers and communities. 24 . New 20

Source Review is a difficult Clean Air Act program to 21

As Intervenors on behalf of EPA in the 2522

Heritage Reporting Corporation (202) 628

- 4888 challenge to the 2004 oz one implementation rule, we 1

also recognize that the South Coast Management

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

support what EPA has proposed. We believe that EPA 7

has provided the legal analysis to allow states to 8

move more proactively to remove the one

- hour NSR 9

provisions from the SIPs. We also submitted that once 10

attainment of the one

- hour or eight

- hour NAAQS could 11

be demonstrated there is no legal obstacle to removing 12

the one

- hour ozone NSR provisions from those SIPs. 13

2

decision erects some potentially difficult legal 3

obstacles to removing the one

- hour ozone NSR 4

provisions after the one

- hour ozone NAAQS was revoked. 5

Today we would like to address two issues. 14

The first is the need for clear procedural steps and 15

timing for states to remove the o ne

- hour NSR provision 16

from their SIPs, and the second is clear direction 17

from the EPA for the states regarding their ability to 18

remove the one

- hour NSR provisions during the 19

transition period to the revised 2010 NAAQS, which the 20

Assistant Administrator sug gested would be issued 21

close to the time of the mid

- term election. 22

On the first issue, procedural clarity and a 23

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

rule EPA publishes should contain a toolbox that 2523

Heritage Reporting Corporation (202) 628

- 4888 contains a flowchart with time interva ls to help 1

states navigate the attainment demonstration process 2

and the SIP revision process for removing the former 3

one

- hour NSR provisions and implementing the PSD 4

requirements immediately when states demonstrate 5

attainment with the eight

- hour NAAQ and/o r the 6

one

- hour ozone NAAQS. 7

NEDA envisions that the toolbox and the 8

flowchart would take advantage of a finding in the 9

final rule that would provide that upon submission of 10

a state's demonstration of attainment with the 11

one

- hour and 1997 ozone standards that states can 12

change their own regulations and, while waiting for 13

EPA notice of approval of the concomitant SIP 14

revision, revise the state law to remove the one

- hour 15

NSR requirements, which would become enforceable 16

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

This also could be accompanied by a finding 18

in the rule that in exchange for fast

- tracking removal 19

of the one

- hour standard and NSR requirements if a 20

state's demonstration ultimately fails to show 21

attainment and maintenance of the respectiv e ozone 22

standard the state and affected industry would 23

immediately be required to retroactively implement the 24

prior one

- hour NSR requirements, which remain in the 2524

Heritage Reporting Corporation (202) 628

- 4888 SIP as a federally enforceable requirement. 1

In order to operate by rule, these findings 2

mus t be clearly set forth in EPA's final Agency action 3

and become effective 60 days from its promulgation. 4

The second issue that I wanted to address in 5

this testimony was the transition to the more 6

stringent revised ozone NAAQS. NEDA is very concerned 7

that states will feel they are trapped from removing 8

the former one

- hour NSR provisions because of the 9

upcoming more stringent 2010 ozone NAAQS, even if they 10

can demonstrate attainment with the prior one

- hour 11

and/or eight

- hour 1997 ozone NAAQS. 12

We suggest, t herefore, that EPA needs to 13

underscore unequivocally that states that are able to 14

demonstrate attainment with one or both of the prior 15

ozone standards can remove the one

- hour NSR provisions 16

from their SIPs, because until the state is designated 17

under the n ew ozone NAAQS provisions the state NSR 18

program converts to a PSD program. 19

Some states may not opt to take advantage of 20

this procedure, but NEDA/CAP believes that the 21

economic crunch on many communities that have been 22

subject to these onerous one

- hour NS R provisions will 23

motivate many states to amend their local air codes to 24

remove the obsolete one

- hour NSR nonattainment 2525

Heritage Reporting Corporation (202) 628

- 4888 provisions if EPA is clear. 1

NEDA/CAP also urges EPA to make this 2

transition clear in the implementation plan and 3

guidance for the revi sed ozone NAAQS. For instance, 4

we believe that it is extremely important that EPA 5

signal to the states that EPA will accept removal of 6

the NSR provisions during the redesignation process. 7

We also suggest that EPA inform the 8

respective governors that in the governors' letters 9

recommending designations under the new ozone NAAQS 10

EPA will accept notice that the states' new PSD 11

provisions are in place, triggering the provision in 12

the final EPA rule so that state law will supersede 13

federal SIP provisions for t he one

- hour NAAQS unless 14

and until EPA determines that the state has failed to 15

make the required demonstration showings for the prior 16

standards. 17

In other words, states may operate their 18

attainment preconstruction review programs and remove 19

the federally enforceable NSR programs during the 20

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

notice thereof during the redesignation process. 22

As NEDA/CAP indicated in its comments on the 23

NSR anti

- backsliding provisions, we do not believe 24

that Congress inte nded the onerous one

- hour NSR 2526

Heritage Reporting Corporation (202) 628

- 4888 provisions to remain in the SIPs forever, and that 1

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

In order to convey to the states that they 3

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

for the Agency to not onl y clarify with a toolbox 5

approach the steps that can be taken to remove the 6

one

- hour NSR provisions, but to underscore in several 7

places during the new implementation rule and other 8

training or guidance documents shared with EPA regions 9

and the states how this can be accomplished in concert 10

with the governors' recommendations on the new ozone 11

designations. 12

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

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

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

membe rs. Thank you very much. 16

MR. PAINTER: Thank you. 17

MS. RITTS: And for you. 18

MR. PAINTER: Thank you. 19

MS. RITTS: And Diane. 20

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

this by email? 22

MS. RITTS: I absolutely can. 23

MR. PAINTER: I would appreci ate that very 24

much. 2527

Heritage Reporting Corporation (202) 628

- 4888 You're the last scheduled speaker. Do you 1

want to go ahead? 2

MR. DEASON: Sure. 3

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

email me yours as well? Thank you. 5

Okay, Doug. You might as well start. 6

MR. DEASON: Thank you. Good m orning. My 7

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

ExxonMobil. 9

ExxonMobil is a member of national 10

associations like NEDA and API and also state 11

associations like the Louisiana Chemical Association. 12

Our facilities in Texas and Illinois are regul ated by 13

the environmental agencies in these states. All these 14

associations and two states plus Wisconsin have 15

submitted comments that are supportive of much of the 16

EPA proposal. The facilities affected by these rules 17

are in California, Illinois, Louisian a and Texas. 18

The 1997 eight

- hour ozone standard has been 19

attained for multiple years since 2005 where our 20

facilities are located in Illinois, Louisiana and 21

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

the Chicago areas, the one

- hour ozone NAAQS h as also 23

been attained for multiple years in these areas since 24

2005. 2528

Heritage Reporting Corporation (202) 628

- 4888 We agree with and support much of the EPA 1

proposal, which seems to reasonably address some of 2

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

December 2006 decision disagreeing with th e methods by 4

which EPA transitioned from the former one

- hour ozone 5

standard, now revoked, to the 1997 eight

- hour ozone 6

standard. 7

The interpretations EPA has proposed and is 8

taking comment on follow a logical line of reasoning. 9

The one

- hour ozone nonatta inment New Source Review 10

requirements should be discontinued upon attainment of 11

either the one

- hour ozone or 1997 eight

- hour ozone 12

NAAQ standards. 13

In the event both of these standards are 14

attained, the PSD program for attainment areas should 15

then be in p lace. In the event the one

- hour ozone 16

standard is attained, but not the eight

- hour ozone 17

standard, the one

- hour nonattainment New Source Review 18

program should be replaced by the 1997 eight

- hour 19

ozone NAAQS NSR program. We fully support EPA using 20

the Clea n Air determination process to transition from 21

nonattainment New Source Review in this instance. 22

We feel a few things need to be clarified in 23

the final rule. A general clarification theme is that 24

EPA needs to specifically identify which nonattainment 2529

Heritage Reporting Corporation (202) 628

- 4888 ar ea NSR permit programs will need modifications after 1

the final rule is effective. 2

While Table 1 in the proposal indicates 3

areas that may be subject to the proposed rulemaking, 4

it doesn't explicitly identify and determine which 5

ones actually have programs that will perhaps need to 6

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

addition in the final rule. 8

EPA should also clarify "How do areas 9

transition from the NSR program in place at the 10

effective date of the rule to any new nonattainment 11

New So urce Review program?" While Table 1 in the 12

proposed rule lists these potentially affected areas, 13

it does not specifically identify nonattainment areas 14

that will be affected and subsequently require NSR 15

program changes. 16

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

our facilities operate to illustrate the point. We 18

have facilities in the Chicago area. In regards to 19

our Joliet Refinery located in Channahon, Illinois, 20

which resides within the Chicago area ozone 21

nonattainment area, promulgation of these pro posed 22

rules without the requested clarification would impose 23

a major impact to the daily operations, many times 24

which require permit modifications from the state 2530

Heritage Reporting Corporation (202) 628

- 4888 agency. 1

Our Joliet Refinery has been operating 2

consistent with the Illinois EPA's approach t hat with 3

the one

- hour standard revoked in June of 2005 the 4

December 20, 2008, Federal Register publication by 5

which EPA issued its attainment finding based upon 6

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

achieved the one

- hour standard and that only the 8

moderate eight

- hour ozone requirements for the NSR 9

program would apply. 10

If this Illinois approach is to be altered 11

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

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

to take all together to alternate and to modify the 14

nonattainment permitting program. 15

In Illinois, the IEPA has relied on the 35 16

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

are any problems they should have been deemed put on 18

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

We're not aware of any actual permits with 20

deficiencies that have been issued during this 21

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

been issued a deficiency. 23

Furthermore, in the permit process the 24

Illinois EPA addressed anti

- ba cksliding concerns by 2531

Heritage Reporting Corporation (202) 628

- 4888 assuring that no provisions established under the 1

one

- hour standard were removed as they were relied 2

upon in their attainment demonstration. 3

If the proposed provisions are approved in a 4

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

companies located in the Illinois nonattainment area 6

that have attained permits properly in accordance with 7

approved SIP provisions? 8

With these many questions being raised by 9

those at the hearing that I represented in their 10

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

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

facilities located within the Chicago ozone 13

nonattainment area? 14

Finally, a Chicago

- specific question. I 15

don't think this is specifically addressed in the 16

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

the Chicago area's one

- hour NAAQS waiver going to be 18

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

Another area that follows with an example is 20

the Baton Rouge area. Our ExxonMobil Baton Rouge 21

facilities have been operating consistent with the 22

Louisiana Department of Environmental Quality (DEQ) 23

permit program for years. EPA has issued a one

- hour 24

ozone and the 1997 eight

- hour ozone NAAQS Clean Air 2532

Heritage Reporting Corporation (202) 628

- 4888 determination for the Baton Rouge area for multiple 1

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

been attaining both of these standards in the Baton 3

Rouge area. 4

EPA and Louisiana have also been working 5

diligently to administratively complete a 6

redesignation to attainment for the 1997 eight

- hour 7

ozone NAAQS. As you know, si nce the one

- hour standard 8

has been revoked EPA has not been issuing 9

redesignations to attainment for the one

- hour 10

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

rule apply to the specific circumstances in place for 12

the Baton Rouge nonattainment are a? 13

A third example is in our Beaumont area 14

where we have ExxonMobil facilities that have again 15

been operating consistent with the Texas permit 16

program. EPA has issued a one

- hour ozone and 1997 17

eight

- hour ozone NAAQS Clean Air determination, and 18

both EPA and the Texas Commission on Environmental 19

Quality, the TCEQ, have been working diligently to 20

administratively complete a redesignation to 21

attainment for the 1997 eight

- hour ozone NAAQS for the 22

Beaumont area. 23

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

F ederal Register , this had not yet been published, but 2533

Heritage Reporting Corporation (202) 628

- 4888 we're expecting to actually hear good news on the 1

attainment redesignation for that particular area by 2

the end of the year. 3

And similar to the Baton Rouge area, we have 4

a question about how would the final rule apply in 5

practice to the Beaumont nonattainment area? I could 6

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

illustrative of the questions that some of the state 8

agencies and the regulated communities have. 9

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

in the final rule a step

- wise practical process for 11

the EPA and states to follow that recognizes proper 12

achievement of one

- hour ozone and 1997 eight

- hour 13

ozone standards and provides to these areas the 14

benefits of attainment. 15

The final rul e should, as Congress intended, 16

provide the incentive for the nonattainment areas to 17

gain attainment and to be able to reap the related 18

benefits of cleaner air for the region, while allowing 19

for continued economic prosperity and further 20

industrial developm ent. 21

The questions we have raised here and the 22

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

impacted facilities and their state agencies to fully 24

understand any needed permit program modifications for 2534

Heritage Reporting Corporation (202) 628

- 4888 these legacy ozone regulations which continue as w e're 1

in transition to a new ozone standard that may be 2

published by the end of this year. 3

We'll submit more detailed comments 4

outlining our concerns and our written comments to be 5

submitted by November

-- about a month following this 6

hearing. 7

And, Dave , I just want to personally again 8

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

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

work within the complexities of the Clean Air Act 11

really appreciate all the work by the senior agency 12

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

almost unintelligible, even to people who are pretty 14

expert and knowledgeable in the rules of the states 15

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

Act. We really appreciate your efforts. 17

MR. PAINTER: Tha nk you. Okay. Well, you 18

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

awaiting someone to register. 20

(Whereupon, a short recess was taken.) 21

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

above

- entitled matter was concluded.) 23

// 24

// 25REPORTER’SCERTIFICATEDOCKETNO.:c(i:/?/(//e,;/c/7CASETITLE:/cC///‘i(/j,(e/HEARINGDATE:/,//C;LOCATION:WI)IherebycertifythattheproceedingsandevidencearecontainedfullyandaccuratelyonthetapesandnotesreportedbymeatthehearingintheabovecasebeforetheDate:——-/s-GabrielGheorghiuOfficialReporterHeritageReportingCorporationSuite6001220LStreet,N.W.Washington,D.C.20005-4018