```

[Federal Register Volume 77, Number 11 (Wednesday, January 18, 2012)]
[Proposed Rules]
[Pages 2497-2500]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-820]

-----------------------------------------------------------------------

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 1043

[EPA-HQ-OAR-2011-0928; FRL-9619-1]
RIN 2060-XXXX

Great Lakes Steamship Repower Incentive Program

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: EPA is proposing to simplify an existing provision in our 
marine diesel engine program that is intended to encourage owners of 
Great Lakes steamships to repower those steamships with cleaner marine 
diesel engines. The simplified program would automatically permit the 
use of residual fuel, through December 31, 2025, in a steamship if it 
has been repowered with a certified Tier 2 or later marine diesel 
engine, provided the steamship was operated exclusively on the Great 
Lakes and was in service on October 30, 2009. Steamships are powered by 
old, inefficient steam boilers. Voluntary replacement of these boilers 
with modern fuel-efficient marine diesel engines would result in 
reductions of particulate matter and sulfur oxides, even while the 
replacement diesel engines are operated on higher sulfur residual fuel, 
and would provide human health and welfare benefits for the people who 
live in the Great Lakes region. Conversion to new diesel engines would 
also result in considerable carbon dioxide reductions and fuel savings. 
In the ``Rules and Regulations'' section of this Federal Register, we 
are making this modification to the Great Lakes steamship incentive 
program as a direct final rule without a prior proposed rule. If we 
receive no adverse comment, we will not take further action on this 
proposed rule.

DATES: Written comments must be received by February 17, 2012.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2011-0928, by mail to: Environmental Protection Agency, Air Docket, 
Mail-code 6102T, 1200 Pennsylvania Avenue NW., Washington, DC 20460. 
Comments may also be submitted electronically or through hand delivery/
courier by following the detailed instructions in the ADDRESSES section 
of the direct final rule located in the rules section of this Federal 
Register.
    Public Hearing: If anyone contacts us requesting to speak at a 
public hearing on or before February 2, 2012, we will hold a public 
hearing. Additional information about the hearing would be published in 
a subsequent Federal Register notice.

FOR FURTHER INFORMATION CONTACT: Jean Marie Revelt, Environmental 
Protection Agency, Office of Transportation and Air Quality, Assessment 
and Standards Division, 2000 Traverwood Drive, Ann Arbor, Michigan 
48105; telephone number: (734) 214-4822; fax number: (734) 214-4816; 
email address: revelt.jean-marie@epa.gov.

SUPPLEMENTARY INFORMATION:

I. Why is EPA issuing this proposed rule?

    This document proposes to take action on our national marine diesel 
emission control program. We have published a direct final rule to 
simplify our Great Lakes steamship repower incentive program in the 
``Rules and Regulations'' section of this Federal Register because we 
view this as a noncontroversial action and anticipate no adverse 
comment. We have explained our reasons for this action in the preamble 
to the direct final rule.
    If we receive no adverse comment, we will not take further action 
on this proposed rule. If we receive adverse comment, we will withdraw 
the direct final rule and it will not take effect. We would address all 
public comments in any subsequent final rule based on this proposed 
rule.
    We do not intend to institute a second comment period on this 
action. Any parties interested in commenting must do so at this time. 
For further information, please see the ADDRESSES section of this 
document.

II. Does this action apply to me?

    This action will affect companies that own steamships operating 
exclusively on the Great Lakes that were in service on October 30, 
2009. The following table gives some examples of entities that may be 
affected by this rule; however, since these are only examples, you 
should carefully examine the regulations. You may direct questions 
regarding the applicability of this action as noted in FOR FURTHER 
INFORMATION CONTACT.

[[Page 2498]]

--------------------------------------------------------------------------------------------------------------------------------------------------------
                   Category                       NAICS Codes \a\                         Examples of potentially regulated entities
--------------------------------------------------------------------------------------------------------------------------------------------------------
Industry......................................              483113   Coastal and Great Lakes Freight Transportation.
Industry......................................              483114   Coastal and Great Lakes Passenger Transportation.
Industry......................................              336611   Shipbuilding and repairing.
Industry......................................              811310   Engine repair, remanufacture, and maintenance.
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ North American Industry Classification System (NAICS).

III. Summary of Rule

    EPA's final rule for Category 3 marine engines \1\ and their fuels 
(75 FR 22896, April 30, 2010) exempted steamships from the sulfur 
limits that apply to fuel used in ships operating on the Great Lakes 
\2\ beginning August 1, 2012 (40 CFR 1043.95(a)). This means steamships 
can continue to operate indefinitely on high sulfur residual fuel. 
However, because steamship engines have high emissions and low fuel 
efficiency, we included a provision to encourage owners of Great Lakes 
steamships to voluntarily replace their steam boilers with cleaner, 
more fuel-efficient marine diesel engines (40 CFR 1043.95(b)(4)(iv)). 
The current voluntary repower incentive is in the form of relief 
through EPA's economic hardship program, through which an owner may 
apply for a relaxation of the Great Lakes fuel sulfur limits for fuel 
used by the repowered diesel ship for a defined period of time. The use 
of lower price, higher sulfur residual fuel can help offset vessel 
repower costs.
---------------------------------------------------------------------------

    \1\ Category 3 marine engines are diesel engines with per 
cylinder displacement at or above 30 liters.
    \2\ For the purpose of this program, ``Great Lakes'' means all 
the streams, rivers, lakes, and other bodies of water that are 
within the drainage basin of the St. Lawrence River, west of 
Anticosti Island. (40 CFR 1043.20).
---------------------------------------------------------------------------

    EPA believes that the goal of repowering the fleet of Great Lakes 
steamships could be achieved more effectively by adding a new incentive 
program to provide an automatic, time-limited fuel waiver for repowered 
steamships. Instead of applying for relief through the economic 
hardship program, Great Lakes steamship owners who voluntarily repower 
their steamships with diesel engines would automatically qualify for a 
waiver that would allow the use of residual fuel in the replacement 
diesel engines that exceeds the global and ECA sulfur limits that 
otherwise apply to the fuel used in marine diesel engines operated on 
the U. S. portions of the Great Lakes. This automatic Great Lakes 
steamship repower fuel waiver would be valid through December 31, 2025; 
after that date, repowered steamships would be required to comply with 
the Great Lakes ECA fuel sulfur limits for diesel engines.\3\ To 
qualify for this automatic fuel sulfur waiver, the steamship must be 
exempt from existing requirements pursuant to 40 CFR 1043.95(a) in that 
it must operate exclusively on the Great Lakes and must have been in 
service on October 30, 2009, where ``in service'' means operating as a 
steamship, but is not limited to actually performing that service on 
that day. In addition, the replacement engine must be a Tier 2 or 
cleaner marine diesel engine as specified in 40 CFR 1042.104.
---------------------------------------------------------------------------

    \3\ Compliance can be through switching to ECA-compliant fuel or 
through the installation and use of an exhaust gas cleaning system 
(scrubber) or other technology or procedure that achieves equivalent 
sulfur emissions. See Section V.C of the preamble for our Category 3 
FRM for a discussion of compliance strategies.
---------------------------------------------------------------------------

    Voluntary replacement of steam engines with cleaner, more efficient 
Tier 2 or better marine diesel engines through this modification to our 
steamship repower incentive program would provide important air quality 
and energy benefits immediately, due to the improved fuel efficiency of 
the diesel engines, and even larger benefits in the long term, when the 
repowered ships will use fuel that complies with the 1,000 ppm sulfur 
limit on the Great Lakes.
    For additional discussion of the proposed rule changes, see the 
direct final rule EPA has published in the ``Rules and Regulations'' 
section of today's Federal Register. This proposal incorporates by 
reference all the reasoning, explanation, and regulatory text from the 
direct final rule.

V. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

    This proposed rule is not a ``significant regulatory action'' under 
the terms of Executive Order 12866 (58 FR 51735, October 4, 1993) and 
is therefore not subject to review under Executive Orders 12866 and 
13563 (76 FR 3821, January 21, 2011). This proposed rule would merely 
add an automatic waiver provision to encourage Great Lakes steamship 
owners to repower their vessels with cleaner marine diesel engines. 
There are no costs associated with this proposed rule because steamship 
owners are not required to repower their ships.

B. Paperwork Reduction Act

    The information collection requirements in this rule will be 
submitted for approval to the Office of Management and Budget (OMB) 
under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. The 
information collection requirements are not enforceable until OMB 
approves them.
    The program contained in this rule is a voluntary incentive program 
to encourage owners of Great Lakes steamship to repower their ships 
with diesel engines. A steamship owner taking advantage of the 
automatic fuel waiver is required to notify EPA's designated 
certification officer of the intention to use this provision. The 
notification must include a description of the project, the expected 
timeline, and other relevant information. The owner is also required to 
notify EPA's designated certification officer at completion of the 
project. The purpose of the reporting is to ensure that a repower has 
taken place, with a qualified EPA-certified engine. Because this 
program is voluntary, a steamship owner would provide this information 
only if the provision is exercised. When the project is completed, EPA 
will provide the owner with a statement that the repowered ship is 
covered by the steamship repower incentive program fuel sulfur waiver, 
which is to be kept onboard for compliance purposes.
    There are potentially six companies affected, which own the twelve 
remaining diesel steamships that operate on the Great Lakes. It is not 
known how many of these companies will actually take advantage of the 
waiver, or when they would repower. However, it is likely that the 
repowers would occur prior to 2015, to maximize the fuel savings 
afforded by the fuel sulfur waiver before it expires on December 31, 
2025.
    The total estimated burden associated with the automatic steamship 
repower incentive program is 14.0 hours annually. This is based on two 
steamship owners repowering two steamships in each of three years and 
an estimated 3.5 annual labor hours for each manufacturer to prepare 
and submit the required information for

[[Page 2499]]

each ship. Burden is defined at 5 CFR 1320.3(b).
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations in 40 CFR are listed in 40 CFR part 9. When this ICR is 
approved by OMB, the Agency will publish a technical amendment to 40 
CFR part 9 in the Federal Register to display the OMB control number 
for the approved information collection requirements contained in this 
final rule.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to prepare a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements under the Administrative 
Procedure Act or any other statute unless the agency certifies that the 
rule will not have a significant economic impact on a substantial 
number of small entities. Small entities include small businesses, 
small organizations, and small governmental jurisdictions.
    For purposes of assessing the impacts of today's proposed rule on 
small entities, small entity is defined as: (1) A small business 
primarily engaged in shipbuilding and repairing as defined by NAICS 
code 336611 with 1,000 or fewer employees (based on Small Business 
Administration size standards); (2) a small business that is primarily 
engaged in freight or passenger transportation on the Great Lakes as 
defined by NAICS codes 483113 and 483114 with 500 or fewer employees 
(based on Small Business Administration size standards); (3) a small 
business primarily engaged in commercial and industrial machinery and 
equipment repair and maintenance with annual receipts less than $7 
million (based on Small Business Administration size standards); (4) a 
small governmental jurisdiction that is a government of a city, county, 
town, school district or special district with a population of less 
than 50,000; and (5) a small organization that is any not-for-profit 
enterprise which is independently owned and operated and is not 
dominant in its field.
    After considering the economic impacts of today's proposed rule on 
small entities, I certify that proposed rule would not have a 
significant economic impact on a substantial number of small entities.
    In determining whether a rule has a significant economic impact on 
a substantial number of small entities, the impact of concern is any 
significant adverse economic impact on small entities, since the 
primary purpose of the regulatory flexibility analyses is to identify 
and address regulatory alternatives ``which minimize any significant 
economic impact of the rule on small entities.'' 5 U.S.C. 603 and 604. 
Thus, an agency may certify that a rule will not have a significant 
economic impact on a substantial number of small entities if the rule 
relieves regulatory burden, or otherwise has a positive economic effect 
on all of the small entities subject to the rule.
    This proposed rule would merely add an automatic waiver provision 
to encourage Great Lakes steamship owners to repower their vessels with 
cleaner marine diesel engines. There are no costs and therefore no 
regulatory burden associated with this rule because steamship owners 
are not required to repower their ships and can continue using their 
vessels indefinitely. This Great Lakes steamship repower incentive 
program would assist those steamship owners who choose to voluntarily 
repower their ships, however, by allowing them to use lower-price 
residual fuel in the repowered diesel ship for a specified period of 
time, which may help them cover the costs of the repower project. We 
have therefore concluded that today's final rule will not increase 
regulatory burden for affected small entities.

D. Unfunded Mandates Reform Act

    This action contains no Federal mandates under the provisions of 
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 
1531-1538 for State, local, or tribal governments or the private 
sector. The action imposes no enforceable duty on any State, local or 
tribal governments or the private sector. Therefore, this action is not 
subject to the requirements of sections 202 or 205 of the UMRA.
    This action is also not subject to the requirements of section 203 
of UMRA because it contains no regulatory requirements that might 
significantly or uniquely affect small governments. This proposed rule 
would merely add an automatic waiver provision to encourage Great Lakes 
steamship owners to repower their vessels with cleaner marine diesel 
engines. None of the thirteen U.S. steamships operating on the Great 
Lakes as of October 30, 2009 are owned or operated by a State, local, 
or tribal government.

E. Executive Order 13132: Federalism

    This action does not have federalism implications. It would not 
have substantial direct effects on the States, on the relationship 
between the national government and the States, or on the distribution 
of power and responsibilities among the various levels of government, 
as specified in Executive Order 13132. This proposed final rule would 
merely add an automatic waiver provision to encourage Great Lakes 
steamship owners to repower their vessels with cleaner marine diesel 
engines. None of the thirteen U.S. steamships operating on the Great 
Lakes as of October 30, 2009 are owned or operated by a State. Thus, 
Executive Order 13132 does not apply to this action.

F. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    This action does not have tribal implications, as specified in 
Executive Order 13175 (65 FR 67249, November 9, 2000). This proposed 
rule would merely add an automatic waiver provision to encourage Great 
Lakes steamship owners to repower their vessels with cleaner marine 
diesel engines. None of the thirteen U.S. steamships operating on the 
Great Lakes as of October 30, 2009 are owned or operated by an Indian 
tribal government. Thus, Executive Order 13175 does not apply to this 
action.

G. Executive Order 13045: Protection of Children From Environmental 
Health and Safety Risks

    This action is not subject to Executive Order 13045 (62 FR 19885, 
April 23, 1997) because it is not economically significant as defined 
in Executive Order 12866, and because the Agency does not believe the 
environmental health or safety risks addressed by this action present a 
disproportionate risk to children. This proposed rule would merely add 
an automatic waiver provision to encourage Great Lakes steamship owners 
to repower their vessels with cleaner marine diesel engines. To the 
extent Great Lakes steamship owners take advantage of this incentive 
program, their action would provide immediate air quality and energy 
benefits, due to the improved fuel efficiency of the diesel engines, 
and even larger benefits in the long term, when the repowered ship 
would use fuel that complies with the 1,000 ppm sulfur limit on the 
Great Lakes. These emission reductions would improve air quality for 
all people who live in the Great Lakes region, including children and 
other sensitive populations.

[[Page 2500]]

H. Executive Order 13211: Actions That Significantly Affect Energy 
Supply, Distribution, or Use

    This action is not subject to Executive Order 13211 (66 FR 28355, 
May 22, 2001), because it is not a significant regulatory action under 
Executive Order 12866.

I. National Technology Transfer Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law 104-113, 12(d) (15 U.S.C. 272 note) 
directs EPA to use voluntary consensus standards in its regulatory 
activities unless to do so would be inconsistent with applicable law or 
otherwise impractical. Voluntary consensus standards are technical 
standards (e.g., materials specifications, test methods, sampling 
procedures, and business practices) that are developed or adopted by 
voluntary consensus standards bodies. NTTAA directs EPA to provide 
Congress, through OMB, explanations when the Agency decides not to use 
available and applicable voluntary consensus standards.
    This action does not involved technical standards. Therefore, EPA 
did not consider the use of any voluntary consensus standards.

J. Executive Order 12898: Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations

    Executive Order 12898 (59 FR 7629, Feb. 16, 1994) establishes 
federal executive policy on environmental justice. Its main provision 
directs federal agencies, to the greatest extent practicable and 
permitted by law, to make environmental justice part of their mission 
by identifying and addressing, as appropriate, disproportionately high 
and adverse human health or environmental effects of their programs, 
policies, and activities on minority populations and low-income 
populations in the United States.
    EPA has determined that this proposed rule would not have 
disproportionately high and adverse human health or environmental 
effects on minority or low-income populations because it increases the 
level of environmental protection for all affected populations without 
having any disproportionately high and adverse human health or 
environmental effects on any population, including any minority or low-
income population. This proposed rule would merely add an automatic 
waiver provision to encourage Great Lakes steamship owners to repower 
their vessels with cleaner marine diesel engines. To the extent Great 
Lakes steamship owners take advantage of this incentive program, their 
action would provide immediate air quality and energy benefits, due to 
the improved fuel efficiency of the diesel engines, and even larger 
benefits in the long term, when the repowered ship would use fuel that 
complies with the 1,000 ppm sulfur limit on the Great Lakes. These 
emission reductions would improve air quality for all people who live 
in the Great Lakes region, including minority and low-income 
populations.

K. Statutory Authority

    The statutory authority for this action comes from section 1903 of 
the Act to Prevent Pollution from Ships (33 U.S.C. 1901 et seq.). The 
Act to Prevent Pollution from Ships implements Annex VI to the 
International Convention for the Prevention of Pollution from Ships 
(MARPOL) and makes those requirements enforceable domestically. Section 
1903 gives the Administrator the authority to prescribe any necessary 
or desired regulations to carry out the provisions of Regulations 12 
through 19 of MARPOL Annex VI.

List of Subjects in 40 CFR Part 1043

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Confidential business information, Economic 
hardship waiver, Great Lakes, North American Emission Control Area, 
Reporting and recordkeeping requirements, Steamships.

    Dated: January 11, 2012.
Lisa P. Jackson,
Administrator.
[FR Doc. 2012-820 Filed 1-17-12; 8:45 am]
BILLING CODE 6560-50-P
```