```

[Federal Register Volume 78, Number 8 (Friday, January 11, 2013)]
[Proposed Rules]
[Pages 2354-2359]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-00429]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R06-OAR-2012-0639; FRL-9769-9]

Approval and Promulgation of Air Quality Implementation Plans; 
Arkansas; Prevention of Significant Deterioration; Greenhouse Gas 
Tailoring Rule Revisions

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The EPA is proposing to approve two revisions to the Arkansas 
State Implementation Plan (SIP) submitted by the Arkansas Department of 
Environmental Quality (ADEQ) to EPA on February 17, 2010 and November 
6, 2012. The February 17, 2010 proposed SIP revision to the Arkansas 
New Source Review (NSR) Prevention of Significant Deterioration (PSD) 
program updates the Arkansas SIP to incorporate by reference (IBR) 
requirements for the Federal PSD permitting program under EPA's 
November 29, 2005 Phase 2 8-hour Ozone Implementation rule. The 
November 6, 2012 proposed SIP revision to the Arkansas NSR PSD program 
provides the state of Arkansas with the authority to issue PSD permits 
governing greenhouse gas (GHG) emissions and establishes appropriate 
emission thresholds for determining which new stationary sources and 
modifications to existing stationary sources become subject to 
Arkansas's PSD permitting requirements for their GHG emissions. The 
November 6, 2012 proposed SIP revision also defers until July 21, 2014 
application of the PSD permitting requirements to biogenic carbon 
dioxide emissions from bioenergy and other biogenic stationary sources. 
EPA is proposing to approve the February 17, 2010, and November 6, 2012 
SIP revisions to the Arkansas NSR PSD permitting program as consistent 
with Federal requirements for PSD permitting. EPA is also proposing to 
rescind the GHG PSD Federal Implementation Plan (FIP) for Arkansas that 
was put in place to ensure the availability of a permitting authority 
for GHG permitting in Arkansas, upon final approval of the November 6, 
2012 PSD SIP revisions. EPA is proposing this action under the Clean 
Air Act (the Act).

DATES: Comments must be received on or before February 11, 2013.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R06-
OAR-2012-0639, by one of the following methods:
     Federal Rulemaking Portal: http://www.regulations.gov. 
Follow the online instructions for submitting comments.
     Email: Mr. Mike Miller at miller.michael@epa.gov.
     Fax: Mr. Mike Miller, Air Permits Section (6PD-R), at fax 
number 214-665-6762.
     Mail: Mr. Mike Miller, Air Permits Section (6PD-R), 
Environmental Protection Agency, 1445 Ross Avenue, Suite 1200, Dallas, 
Texas 75202-2733.
     Hand or Courier Delivery: Mr. Mike Miller, Air Permits 
Section (6PD-R), Environmental Protection Agency, 1445 Ross Avenue, 
Suite 1200, Dallas, Texas 75202-2733. Such deliveries are accepted only 
between the hours of 8:30 a.m. and 4:30 p.m. weekdays, and not on legal 
holidays. Special arrangements should be made for deliveries of boxed 
information.
    Instructions: Direct your comments to Docket ID No. EPA-R06-OAR-
2012-0639. EPA's policy is that all comments received will be included 
in the public docket without change and may be made available online at 
http://www.regulations.gov, including any personal information 
provided, unless the comment includes information claimed to be 
Confidential Business Information (CBI) or other information the 
disclosure of which is restricted by statute. Do not submit information 
through http://www.regulations.gov or email, if you believe that it is 
CBI or otherwise protected from disclosure. The http://www.regulations.gov Web site is an ``anonymous access'' system, which 
means that EPA will not know your identity or contact information 
unless you provide it in the body of your comment. If you send an email 
comment directly to EPA without going through http://www.regulations.gov, your email address will be automatically captured 
and included as part of the comment that is placed in the public docket 
and made available on the Internet. If you submit an electronic 
comment, EPA recommends that you include your name and other contact 
information in the body of your comment along with any disk or CD-ROM 
submitted. If EPA cannot read your comment due to technical 
difficulties and cannot contact you for clarification, EPA may not be 
able to consider your comment. Electronic files should avoid the use of 
special characters and any form of encryption and should be free of any 
defects or viruses. For additional information about EPA's public 
docket, visit the EPA Docket Center homepage at http://www.epa.gov/epahome/dockets.htm.
    Docket: All documents in the docket are listed in the http://

[[Page 2355]]

www.regulations.gov index. Although listed in the index, some 
information is not publicly available, e.g., CBI or other information 
the disclosure of which is restricted by statute. Certain other 
material, such as copyrighted material, will be publicly available only 
in hard copy. Publicly available docket materials are available either 
electronically in http://www.regulations.gov or in hard copy at the Air 
Permits Section (6PD-R), Environmental Protection Agency, 1445 Ross 
Avenue, Suite 700, Dallas, Texas 75202-2733. The file will be made 
available by appointment for public inspection in the Region 6 FOIA 
Review Room between the hours of 8:30 a.m. and 4:30 p.m. weekdays 
except for legal holidays. Contact the person listed in the FOR FURTHER 
INFORMATION CONTACT paragraph below to make an appointment. If 
possible, please make the appointment at least two working days in 
advance of your visit. A 15 cent per page fee will be charged for 
making photocopies of documents. On the day of the visit, please check 
in at the EPA Region 6 reception area on the seventh floor at 1445 Ross 
Avenue, Suite 700, Dallas, Texas.
    The State submittals related to this SIP revision, and which are 
part of the EPA docket, are also available for public inspection at the 
Local Air Agency listed below during official business hours by 
appointment:
    Arkansas Department of Environmental Quality, 5301 Northshore 
Drive, North Little Rock, Arkansas, 72118-5317.

FOR FURTHER INFORMATION CONTACT: Mr. Mike Miller (6PD-R), Air Permits 
Section, Environmental Protection Agency, Region 6, 1445 Ross Avenue 
(6PD-R), Suite 1200, Dallas, TX 75202-2733. The telephone number is 
(214) 665-7550. Mr. Miller can also be reached via electronic mail at 
miller.michael@epa.gov.

SUPPLEMENTARY INFORMATION: Throughout this document whenever ``we,'' 
``us,'' or ``our'' is used, we mean EPA.

Table of Contents

I. Background for Our Proposed Action
    A. History of EPA's GHG-Related Actions
    B. EPA's Biomass Deferral Rule
II. Summary of State Submittals
    A. February 17, 2010
    B. November 6, 2012
III. EPA's Analysis of State Submittals
    A. February 17, 2010
    B. November 6, 2012
IV. What action is EPA proposing?
V. Statutory and Executive Order Reviews

I. Background for Our Proposed Action

    The Act at section 110(a)(2)(C) requires states to develop and 
submit to EPA for approval into the state SIP, preconstruction review 
and permitting programs applicable to certain new and modified 
stationary sources of air pollutants for attainment and nonattainment 
areas that cover both major and minor new sources and modifications, 
collectively referred to as the New Source Review (NSR) SIP. The CAA 
NSR SIP program is composed of three separate programs: Prevention of 
Significant Deterioration (PSD), Nonattainment New Source Review 
(NNSR), and Minor NSR. PSD is established in part C of title I of the 
CAA and applies in areas that meet the NAAQS--``attainment areas''--as 
well as areas where there is insufficient information to determine if 
the area meets the NAAQS--``unclassifiable areas.'' The NNSR SIP 
program is established in part D of title I of the CAA and applies in 
areas that are not in attainment of the NAAQS--``nonattainment areas.'' 
The Minor NSR SIP program addresses construction or modification 
activities that do not emit, or have the potential to emit, beyond 
certain major source thresholds and thus do not qualify as ``major'' 
and applies regardless of the designation of the area in which a source 
is located. EPA regulations governing the criteria that states must 
satisfy for EPA approval of the NSR programs as part of the SIP are 
contained in 40 CFR sections 51.160--51.166.
    Arkansas submitted on February 17, 2010 and November 6, 2012, a 
collection of regulations for approval by EPA into the Arkansas SIP, 
including some regulations specific to the Arkansas PSD permitting 
program. The February 17, 2010 SIP submittal includes the PSD 
permitting provisions that were adopted on December 5, 2008 at 
Regulation 19, Chapter 9 to ensure consistency with the federal PSD 
permitting requirements promulgated in EPA's Phase 2 8-hour Ozone 
Implementation Rule (70 FR 71612, November 29, 2005). The November 6, 
2012 SIP submittal includes the PSD permitting provisions to (1) 
establish that the state of Arkansas has the authority to issue PSD 
permits governing GHG emissions, and (2) establish appropriate emission 
thresholds for determining which new stationary sources and 
modification projects become subject to Arkansas's PSD permitting 
requirements for their greenhouse gas (GHG) emissions consistent with 
the ``PSD and Title V Greenhouse Gas Tailoring Final Rule'' (75 FR 
31514, June 3, 2010) hereafter referred to as the ``Tailoring Rule'', 
and 3) defers the application of the PSD requirements to biogenic 
carbon dioxide emissions from bioenergy and other biogenic stationary 
sources consistent with the EPA's final rule ``Deferral for 
CO2 Emissions from Bioenergy and other Biogenic Sources 
under the Prevention of Significant Deterioration (PSD) and Title V 
Programs'' (76 FR 43490, July 20, 2011).
    Today's proposed action and the accompanying Technical Support 
Document (TSD) present our rationale for proposing approval of these 
regulations as meeting the minimum federal requirements for the 
adoption and implementation of the PSD SIP permitting programs. Note 
that Arkansas is currently subject to the GHG PSD Federal 
Implementation Plan (FIP) at 40 CFR 52.37(b)(2). See 75 FR 82246, 
December 30, 2010. We are also proposing to rescind the GHG PSD FIP for 
Arkansas when we finalize today's proposed action.

A. History of EPA's GHG-Related Actions

    This section briefly summarizes EPA's recent GHG-related actions 
that provide the background for this action. Please see the preambles 
for the identified GHG-related rulemakings for more information.
    EPA has recently undertaken a series of actions pertaining to the 
regulation of GHGs that, although for the most part are distinct from 
one another, establish the overall framework for today's final action 
on the Arkansas SIP. Four of these actions include, as they are 
commonly called, the ``Endangerment Finding'' and ``Cause or Contribute 
Finding,'' which EPA issued in a single final action,\1\ the ``Johnson 
Memo Reconsideration,'' \2\ the ``Light-Duty Vehicle Rule,'' \3\ and 
the ``Tailoring Rule.'' \4\ Taken together and in conjunction with the 
CAA, these actions established regulatory requirements for GHGs emitted 
from new motor vehicles and new motor vehicle engines; determined that 
such regulations, when they took effect on January 2, 2011, subjected 
GHGs emitted from stationary

[[Page 2356]]

sources to PSD requirements; and limited the applicability of PSD 
requirements to GHG sources on a phased-in basis. EPA took this last 
action in the Tailoring Rule, which, more specifically, established 
appropriate GHG emission thresholds for determining the applicability 
of PSD requirements to GHG-emitting sources. PSD is implemented through 
the SIP system, and so in December 2010, EPA promulgated several rules 
to implement the new GHG PSD SIP program. Recognizing that some states 
had approved SIP PSD programs that did not apply PSD to GHGs, EPA 
issued a SIP call on December 13, 2010, that would require those states 
with SIPs that have approved PSD programs but do not authorize PSD 
permitting for GHGs to submit a SIP revision providing such 
authority.\5\ The State of Arkansas, along with several other states, 
did not submit a corrective SIP revision to apply their CAA PSD 
programs to sources of GHG emissions by the established deadline. EPA 
published a finding of failure to submit the required SIP revision by 
the specified deadline and then promulgated the GHG PSD FIP to ensure 
the availability of a permitting authority for GHG emitting sources 
subject to PSD requirements in Arkansas and the other 
states.67
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    \1\ ``Endangerment and Cause or Contribute Findings for 
Greenhouse Gases Under Section 202(a) of the Clean Air Act.'' 74 FR 
66496 (December 15, 2009).
    \2\ ``Interpretation of Regulations that Determine Pollutants 
Covered by Clean Air Act Permitting Programs.'' 75 FR 17004 (April 
2, 2010).
    \3\ ``Light-Duty Vehicle Greenhouse Gas Emission Standards and 
Corporate Average Fuel Economy Standards; Final Rule.'' 75 FR 25324 
(May 7, 2010).
    \4\ Prevention of Significant Deterioration and Title V 
Greenhouse Gas Tailoring Rule; Final Rule.'' 75 FR 31514 (June 3, 
2010).
    \5\ ``Action To Ensure Authority To Issue Permits Under the 
Prevention of Significant Deterioration Program to Sources of 
Greenhouse Gas Emissions: Finding of Substantial Inadequacy and SIP 
Call,'' 75 FR 77698 (Dec. 13, 2010). Specifically, by notice dated 
December 13, 2010, EPA finalized a ``SIP Call'' that would require 
those states with SIPs that have approved PSD programs but do not 
authorize PSD permitting for GHGs to submit a SIP revision providing 
such authority.
    \6\ ``Action To Ensure Authority To Issue Permits Under the 
Prevention of Significant Deterioration Program to Sources of 
Greenhouse Gas Emissions: Finding of Failure To Submit State 
Implementation Plan Revisions Required for Greenhouse Gases,'' 75 FR 
81874 (December 29, 2010).
    \7\ ``Action To Ensure Authority To Issue Permits Under the 
Prevention of Significant Deterioration Program to Sources of 
Greenhouse Gas Emissions: Federal Implementation Plan,'' 75 FR 82246 
(December 30, 2010). Because Arkansas did not submit by their 
established deadline, a corrective SIP revision to apply their Clean 
Air Act PSD program to sources of GHGs, Arkansas is subject to the 
GHG PSD FIP.
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    For other states, EPA recognized that many states had approved SIP 
PSD programs that do apply PSD to GHGs, but that do so for sources that 
emit as little as 100 or 250 tpy of GHG, and that do not limit PSD 
applicability to GHGs to the higher thresholds in the Tailoring Rule; 
therefore, EPA issued the GHG PSD SIP Narrowing Rule.\8\ Under that 
rule, EPA withdrew its approval of the affected SIPs to the extent 
those SIPs covered GHG-emitting sources below the Tailoring Rule 
thresholds. EPA based its action primarily on the ``error correction'' 
provisions of CAA section 110(k)(6).
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    \8\ ``Limitation of Approval of Prevention of Significant 
Deterioration Provisions Concerning Greenhouse Gas Emitting Sources 
in State Implementation Plans,'' 75 FR 82536 (December 30, 2010). 
The GHG PSD SIP Narrowing Rule does not apply to Arkansas because 
the GHG PSD FIP is in place.
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B. EPA's Biomass Deferral Rule

    On July 20, 2011, EPA promulgated the final ``Deferral for 
CO2 Emissions from Bioenergy and other Biogenic Sources 
Under the Prevention of Significant Deterioration (PSD) and Title V 
Programs'' (Biomass Deferral Rule). Following is a brief discussion of 
the deferral. For a full discussion of EPA's rationale for the rule, 
see the notice of final rulemaking at 76 FR 43490.
    The biomass deferral delays until July 21, 2014 the consideration 
of CO2 emissions from bioenergy and other biogenic sources 
(hereinafter referred to as ``biogenic CO2 emissions'') when 
determining whether a stationary source meets the PSD and Title V 
applicability thresholds, including those for the application of BACT. 
As with the Tailoring Rule, the Biomass Deferral addresses both PSD and 
Title V requirements. However, EPA is only taking action on Arkansas's 
PSD program as part of this action. Stationary sources that combust 
biomass (or otherwise emit biogenic CO2 emissions) and 
construct or modify during the deferral period will avoid the 
application of PSD to the biogenic CO2 emissions resulting 
from those actions. The deferral applies only to biogenic 
CO2 emissions and does not affect non-GHG pollutants or 
other GHG's (e.g., methane (CH4) and nitrous oxide 
(N2O)) emitted from the combustion of biomass fuel. Also, 
the deferral only pertains to biogenic CO2 emissions in the 
PSD and Title V programs and does not pertain to any other EPA programs 
such as the GHG Reporting Program. Biogenic CO2 emissions 
are defined as emissions of CO2 from a stationary source 
directly resulting from the combustion or decomposition of 
biologically-based materials other than fossil fuels and mineral 
sources of carbon. Examples of ``biogenic CO2 emissions'' 
include, but are not limited to:
     CO2 generated from the biological decomposition 
of waste in landfills, wastewater treatment or manure management 
processes;
     CO2 from the combustion of biogas collected 
from biological decomposition of waste in landfills, wastewater 
treatment or manure management processes;
     CO2 from fermentation during ethanol production 
or other industrial fermentation processes;
     CO2 from combustion of the biological fraction 
of municipal solid waste or biosolids;
     CO2 from combustion of the biological fraction 
of tire-derived fuel; and
     CO2 derived from combustion of biological 
material, including all types of wood and wood waste, forest residue, 
and agricultural material.
    EPA recognizes that use of certain types of biomass can be part of 
the national strategy to reduce dependence on fossil fuels. Efforts are 
underway at the Federal, state and regional level to foster the 
expansion of renewable resources and promote bioenergy projects when 
they are a way to address climate change, increase domestic alternative 
energy production, enhance forest management and create related 
employment opportunities. We believe part of fostering this development 
is to ensure that those feedstocks with negligible net atmospheric 
impact not be subject to unnecessary regulation. At the same time, it 
is important that EPA have time to conduct its detailed examination of 
the science and technical issues related to accounting for biogenic 
CO2 emissions and therefore have finalized this deferral. 
The deferral is intended to be a temporary measure, in effect for no 
more than three years, to allow the Agency time to complete its work 
and determine what, if any, treatment of biogenic CO2 
emissions should be in the PSD and Title V programs. The biomass 
deferral rule is not EPA's final determination on the treatment of 
biogenic CO2 emissions in those programs. The Agency plans 
to complete its science and technical review and any follow-on 
rulemakings within the three-year deferral period and further believes 
that three years is ample time to complete these tasks. It is possible 
that the subsequent rulemaking, depending on the nature of EPA's 
determinations, would supersede the biomass deferral rulemaking and 
become effective in fewer than three years. In that event, Arkansas may 
revise its SIP accordingly.
    For stationary sources co-firing fossil fuel and biologically-based 
fuel, and/or combusting mixed fuels (e.g., tire derived fuels, 
municipal solid waste (MSW)), the biogenic CO2 emissions 
from that combustion are included in the biomass deferral. However, the 
fossil CO2 emissions are not. Emissions of CO2 
from processing of mineral feedstocks (e.g., calcium carbonate) are 
also not included in the deferral. Various

[[Page 2357]]

methods are available to calculate both the biogenic and fossil 
portions of CO2 emissions, including those methods contained 
in the GHG Reporting Program (40 CFR part 98). Consistent with the 
other pollutants in PSD and Title V, there are no requirements to use a 
particular method in determining biogenic and fossil CO2 
emissions.
    EPA's final biomass deferral rule is an interim deferral for 
biogenic CO2 emissions only and does not relieve sources of 
the obligation to meet the PSD and Title V permitting requirements for 
other pollutant emissions that are otherwise applicable to the source 
during the deferral period or that may be applicable to the source at a 
future date pending the results of EPA's study and subsequent 
rulemaking action. This means, for example, that if the deferral is 
applicable to biogenic CO2 emissions from a particular 
source during the three-year effective period and the study and future 
rulemaking do not provide for a permanent exemption from PSD and Title 
V permitting requirements for the biogenic CO2 emissions 
from a source with particular characteristics, then the deferral would 
end for that type of source and its biogenic CO2 emissions 
would have to be appropriately considered in any applicability 
determinations that the source may need to conduct for future 
stationary source permitting purposes, consistent with that subsequent 
rulemaking and the Final Tailoring Rule (e.g., a major source 
determination for Title V purposes or a major modification 
determination for PSD purposes).
    EPA also wishes to clarify that we did not require that a PSD 
permit issued during the deferral period be amended or that any PSD 
requirements in a PSD permit existing at the time the deferral took 
effect, such as BACT limitations, be revised or removed from an 
effective PSD permit for any reason related to the deferral or when the 
deferral period expires. Section 52.21(w) of 40 CFR requires that any 
PSD permit shall remain in effect, unless and until it expires or it is 
rescinded, under the limited conditions specified in that provision. 
Thus, a PSD permit that is issued to a source while the deferral was 
effective need not be reopened or amended if the source is no longer 
eligible to exclude its biogenic CO2 emissions from PSD 
applicability after the deferral expires. However, if such a source 
undertakes a modification that could potentially require a PSD permit 
and the source is not eligible to continue excluding its biogenic 
CO2 emissions after the deferral expires, the source will 
need to consider its biogenic CO2 emissions in assessing 
whether it needs a PSD permit to authorize the modification.
    Any future actions to modify, shorten, or make permanent the 
deferral for biogenic sources are beyond the scope of the biomass 
deferral action and this proposed approval of the deferral into the 
Arkansas SIP, and will be addressed through subsequent rulemaking. The 
results of EPA's ongoing review of the science related to net 
atmospheric impacts of biogenic CO2 are incomplete. The 
framework to properly account for such emissions in Title V and PSD 
permitting programs based on the study is also incomplete. Thus, we are 
unable to determine which biogenic CO2 sources currently 
subject to the deferral would be subject to any permanent exemptions, 
or would be potentially required to account for their emissions in the 
future rulemaking EPA has committed to undertake. Only in that future 
rulemaking can EPA address the question of extending the deferral or 
putting in place requirements that would have the equivalent effect on 
sources covered by the biomass deferral. Once that rulemaking has 
occurred, Arkansas may address related revisions to its SIP.

II. Summary of State Submittals

    EPA most recently approved revisions to the Arkansas PSD SIP on 
April 12, 2007, where we updated our approval of the Arkansas PSD SIP 
to include the revisions adopted by the State on February 3, 2005 (72 
FR 18394). Since that time, Arkansas has submitted two revisions to the 
AR PSD SIP on February 17, 2010, and November 6, 2012.

A. February 17, 2010

    In a letter dated February 17, 2010, Governor Beebe submitted 
revisions to the Arkansas PSD SIP that were adopted by the Arkansas 
Pollution Control and Ecology Commission on December 5, 2008, and 
became effective on January 15, 2009. This February 17, 2010, SIP 
submittal consisted of the following revisions to Regulation 19, 
Chapter 9, Prevention of Significant Deterioration, of the Arkansas 
Plan of Implementation for Air Pollution Control:
     Non-substantive revisions to Regulation 19.902 to correct 
general formatting and typographical errors,
     Substantive revisions to Regulation 19.903 to update the 
incorporation by reference date of the federal PSD program through 
November 29, 2005, and
     Substantive revisions to Regulation 19.904 to update the 
incorporation by reference date of the federal PSD program through 
November 29, 2005, and non-substantive revisions to update internal 
numbering within the Arkansas rules.
    Taken together, the revisions to Regulations 19.902--19.904 ensure 
consistency with the federal PSD permitting requirements promulgated in 
EPA's Phase 2 8-hour Ozone Implementation Rule (70 FR 71612, November 
29, 2005). \9\
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    \9\ ``Final Rule To Implement the 8-Hour Ozone National Ambient 
Air Quality Standard--Phase 2; Final Rule To Implement Certain 
Aspects of the 1990 Amendments Relating to New Source Review and 
Prevention of Significant Deterioration as They Apply in Carbon 
Monoxide, Particulate Matter and Ozone NAAQS; Final Rule for 
Reformulated Gasoline.''
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B. November 6, 2012

    In a letter dated November 6, 2012, Governor Beebe submitted 
revisions to the Arkansas SIP that were adopted by the Arkansas 
Pollution Control and Ecology Commission on June 22, 2012 and October 
26, 2012. This SIP submittal consisted of the following revisions:
     The request to withdraw the existing SIP-approved fee 
regulations at Regulation 9 and replace with the submitted provisions 
at Regulation 9, Chapters 1, 2, 3, 5 and 9. This submittal includes 
substantive revisions to Regulation 9, Sections 9.502(B) and (C) for 
fee assessments of GHG permits;
     Substantive revisions to Regulation 19, Chapter 1 to add a 
rescission clause pertaining to GHG PSD permitting;
     Substantive revisions to Regulation 19, Chapter 2 
definitions to add definitions for CO2e, federally regulated 
air emissions and GHGs,
     Substantive revisions to Regulation 19.407(C)(3) for 
permit amendments;
     Substantive revisions to Regulation 19, Chapter 9, Section 
19.904(G) establishing GHG PSD permitting requirements and the 
provisions of the GHG biomass deferral,
     Substantive revisions to Regulation 19, Appendix A 
Insignificant Activities List to clarify GHG permitting applicability,
     Substantive revisions to Regulation 26, Section 26.401 to 
clarify an applicant's duty to apply for permitting in Arkansas.
    The revisions submitted on November 6, 2012 to the AR PSD SIP at 
Regulation 19, Chapter 9 will (1) establish that the state of Arkansas 
has the authority to issue PSD permits for GHG emissions under the PSD 
program, (2) establish appropriate emission thresholds for determining 
which new stationary sources and modification projects become subject 
to Arkansas's PSD permitting requirements for their greenhouse gas 
(GHG) emissions

[[Page 2358]]

consistent with the Tailoring Rule, and (3) defer the application of 
the PSD requirements to biogenic carbon dioxide emissions from 
bioenergy and other biogenic stationary sources consistent with EPA's 
Biomass Deferral Rule.
    EPA's proposed action today will only evaluate the revisions 
necessary to adopt and implement the permitting of GHG emissions 
subject to PSD permitting at Regulation 19, Chapter 9. EPA is severing 
and taking no action at this time on the remaining components of the 
November 6, 2012 SIP submittal. Specifically, we are severing and 
taking no action on the revisions to Regulation 9; Regulation 19, 
Chapters 1, 2, 4, and Appendix A; and Regulation 26. By severing, we 
mean that the submitted portions of the SIP revision that address 
Arkansas's ability to issue PSD permit for GHG emissions subject to 
EPA's Tailoring Rule can be implemented independently of the portions 
of the submittal relating to air permit fees, general air definitions 
and permitting below PSD thresholds. EPA anticipates taking action on 
the remaining portions of the November 6, 2012 SIP submittal at a later 
date.

III. EPA's Analysis of State Submittals

A. February 17, 2010

    The Phase 2 8-Hour Ozone Implementation Rule required states to 
submit applicable SIP revisions to EPA no later than June 15, 2007, to 
address this Rule's SIP requirements for both the PSD and NNSR 
programs. The SIP revision submittals were required by this Rule to 
revise the major source thresholds, significant emission rates, and 
offset ratios for ozone such that nitrogen oxides (NOX) are 
recognized as an ozone precursor. Arkansas's February 17, 2010 SIP 
submittal updated the incorporation by reference date of the federal 
PSD program to November 29, 2005, which is the date of the Phase 2 
rule. Therefore the Arkansas PSD SIP updates are consistent with the 
federal Phase 2 PSD permitting requirements.
    EPA partially approved and partially disapproved the Arkansas 
Infrastructure SIP on August 20, 2012 (77 FR 50033). In this action we 
approved the revisions in Regulation 19.903 and 19.904 specific to 
NOX as a precursor to ozone for the implementation of the 
Phase 2 8-hour ozone rule. However, we did not update the amendatory 
language table at 40 CFR 52.170 to reflect that the revisions to 
Regulation 19.902--19.904 as adopted on December 5, 2008, and submitted 
on February 17, 2010, were approved. Therefore, today's proposed action 
includes a proposal to fully approve the AR PSD program revisions 
adopted on December 5, 2008, and submitted on February 17, 2010.

A. November 6, 2012

    As explained more fully in the accompanying TSD in this rulemaking, 
Arkansas has adopted and submitted regulations that are substantively 
similar to the federal requirements for the permitting of GHG-emitting 
sources subject to PSD. The detailed analysis in our TSD demonstrates 
that the regulatory revisions adopted on June 22, 2012 and submitted on 
November 6, 2012; establish that Arkansas has the authority to issue 
PSD permits for GHG-emitting sources subject to PSD consistent with the 
federal PSD requirements of EPA's final GHG Tailoring Rule. The 
revisions also establish thresholds for determining which stationary 
sources and modification projects become subject to permitting 
requirements for GHG emissions under its PSD program. Our analysis also 
demonstrates that the regulatory revisions adopted on October 26, 2012 
and submitted on November 6, 2012, appropriately defer the 
applicability of these thresholds for biogenic CO2 emissions 
from bioenergy and other biogenic stationary sources consistent with 
EPA's Biomass Deferral Final Rule.

IV. What action is EPA proposing?

    EPA proposes to approve the February 17, 2010 and November 6, 2012, 
submitted revisions to Regulation 19, Chapter 9 into the Arkansas PSD 
SIP. Arkansas's February 17, 2010, proposed SIP revision updates the 
incorporation by reference date of the PSD program to address the 
permitting requirements in EPA's Phase 2 8-hour ozone final rule. 
Arkansas's November 6, 2012, proposed SIP revision (1) provides the 
state of Arkansas with the authority to issue PSD permits governing 
GHGs, and (2) establishes appropriate emissions thresholds for 
determining PSD applicability to new and modified GHG-emitting sources 
in accordance with EPA's Tailoring Rule. EPA has made the preliminary 
determination that the February 17, 2010 and November 6, 2012 revisions 
to Regulation 19, Chapter 9 are approvable because they are adopted and 
submitted in accordance with the CAA and EPA regulations regarding PSD 
permitting for 8-hour ozone and GHGs. Therefore, under section 110 and 
parts C and D of the Act, and for the reasons stated above, EPA 
proposes to approve the following revisions to the Arkansas SIP:
     Substantive revisions to Regulation 19, Chapter 9, 
Sections 19.903 and 19.904 to update the incorporation by reference 
date of the PSD program,
     Substantive revisions to Regulation 19, Chapter 9, Section 
19.904(G) establishing GHG PSD permitting requirements and the biomass 
deferral provisions.
    As explained in today's proposed notice, Arkansas is subject to the 
Federal Implementation Plan for PSD permitting of GHG emissions. This 
GHG PSD FIP remains in place and EPA remains the PSD permitting 
authority for GHG-emitting sources in Arkansas until EPA finalizes our 
proposed approval of the November 6, 2012 submitted revisions to the 
Arkansas SIP. Therefore, we propose that upon finalization of today's 
action, EPA will rescind the GHG PSD FIP for Arkansas at 40 CFR 
52.37(b)(2).
    Consistent with the analysis presented in today's proposed notice 
and the accompanying TSD, EPA is severing and taking no action on the 
fee related regulations at Regulation 9; as well as the revisions to 
Regulation 19, Chapters 1, 2, 4 and Appendix A, and Regulation 26, 
submitted on November 6, 2012.

V. Statutory and Executive Order Reviews

    Under the CAA, the Administrator is required to approve a SIP 
submission that complies with the provisions of the Clean Air Act and 
applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). 
Thus, in reviewing SIP submissions, EPA's role is to approve state 
choices, provided that they meet the criteria of the Clean Air Act. 
Accordingly, this action merely proposes to approve state law as 
meeting Federal requirements and does not impose additional 
requirements beyond those imposed by state law. For that reason, this 
action:
     Is not a ``significant regulatory action'' subject to 
review by the Office of Management and Budget under Executive Order 
12866 (58 FR 51735, October 4, 1993);
     Does not impose an information collection burden under the 
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Is certified as not having a significant economic impact 
on a substantial number of small entities under the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.);
     Does not contain any unfunded mandate or significantly or 
uniquely affect small governments, as described in the Unfunded 
Mandates Reform Act of 1995 (Pub. L. 104-4);
     Does not have Federalism implications as specified in 
Executive

[[Page 2359]]

Order 13132 (64 FR 43255, August 10, 1999);
     Is not an economically significant regulatory action based 
on health or safety risks subject to Executive Order 13045 (62 FR 
19885, April 23, 1997);
     Is not a significant regulatory action subject to 
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of Section 12(d) of the 
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 
note) because application of those requirements would be inconsistent 
with the Clean Air Act; and
     Does not provide EPA with the discretionary authority to 
address, as appropriate, disproportionate human health or environmental 
effects, using practicable and legally permissible methods, under 
Executive Order 12898 (59 FR 7629, February 16, 1994).
    In addition, this rule does not have tribal implications as 
specified by Executive Order 13175 (65 FR 67249, November 9, 2000), 
because the SIP is not approved to apply in Indian country located in 
the state, and EPA notes that it will not impose substantial direct 
costs on tribal governments or preempt tribal law.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Intergovernmental 
relations, Reporting and recordkeeping requirements.

    Dated: December 17, 2012.
Ron Curry,
Regional Administrator, Region 6.
[FR Doc. 2013-00429 Filed 1-10-13; 8:45 am]
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