46406 Federal Register / Vol. 62, No. 169 / Tuesday, September 2, 1997 / Rules and Regulations

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 55

[FRL–5880–6]

RIN 2060–AG40 and AG39

Outer Continental Shelf Air

Regulations Remands

AGENCY: Environmental Protection

Agency (EPA).

ACTION: Final rule.

SUMMARY: The EPA is revising the outer

continental shelf (OCS) air regulations

in response to two remands from the

U.S. Court of Appeals for the District of

Columbia Circuit. These regulations

establish air pollution control

requirements for certain sources located

on the OCS.

In response to the requirements of

section 328 of the Clean Air Act (Act),

on September 4, 1992, EPA promulgated

the OCS regulations setting up two

regimes for controlling air pollution

from OCS sources for the purposes of

attaining and maintaining Federal air

quality standards and to comply with

certain Act requirements for

preconstruction review of new and

modified major sources on the OCS. The

Santa Barbara County Air Pollution

Control District (APCD) filed a petition

for review of the regulations on several

issues and the Court granted a remand

on two of those issues.

The first issue raised concerned EPA’s

decision not to provide for delegation to

State and local agencies of the authority

to implement and enforce the

regulations for sources located beyond

25 miles of the States’ seaward

boundaries (the 25-mile limit). The EPA

requested a voluntary remand of this

issue, and the court granted the remand.

On May 20, 1996, EPA proposed

revisions to the OCS regulations to

provide for delegation to State and local

agencies the authority to implement and

enforce the OCS regulations beyond the

25-mile limit. By this action, EPA is

promulgating those regulations.

Delegation of the program to any

specific State or local agency will be

under separate action.

The Santa Barbara APCD also

challenged the portion of the OCS

regulations that set up special offset

requirements for OCS sources located

within the 25-mile limit. Upon review,

the court found that the special offset

provisions departed from the Act,

vacated the regulation in part, and

remanded that portion to EPA for

further consideration.

On May 20, 1996, EPA promulgated

revisions to the OCS regulations to

delete the special offset provisions and

to require that for sources located

within the 25-mile limit, offset

requirements apply as they are required

in the corresponding onshore area

(COA). The EPA promulgated these

revisions as an interim final regulation

and requested comments on the

revisions. Today’s action removes the

interim status of those regulations.

DATES: The revisions to the regulations

will be effective October 2, 1997.

ADDRESSES: Two public dockets for

these actions are available for public

inspection and copying between 8 a.m.

and 4 p.m., Monday through Friday, at

the Air and Radiation Docket and

Information Center (6102), Attention

Docket A–95–06 (for the Offset Remand)

and Docket A–95–07 (for the delegation

remand), South Conference Center,

Room 4, 401 M Street, SW, Washington,

DC 20460. A reasonable fee for copying

may be charged.

FOR FURTHER INFORMATION CONTACT: Mr.

David Stonefield, U.S. EPA, MD–15,

Research Triangle Park, NC 27711,

telephone (919) 541–5350.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

The 1990 Amendments to the Act

(Pub. L. 101–549, 104 Stat. 2399 (1990))

added section 328 and transferred

authority to regulate sources on part of

the OCS from the Department of the

Interior (DOI) to EPA. The DOI retained

the authority to regulate OCS sources in

the Gulf of Mexico, west of 87.5 degrees

longitude. As to the remaining portions

of the OCS—the Atlantic, Pacific, and

Arctic coasts and the Gulf of Mexico,

east of 87.5 degrees—section 328

requires EPA to establish requirements

for the control of air pollution from OCS

sources for attaining and maintaining

Federal and State ambient air quality

standards, and to comply with the

prevention of significant deterioration

(PSD) provisions of part C of title I of

the Act. For sources within 25 miles of

the States’ seaward boundaries, those

requirements must be the same as

would be applicable if the source were

located in the COA. For sources beyond

the 25-mile limit, the Administrator had

discretion in determining the

requirements. The EPA proposed (56 FR

63774, December 5, 1991) and

promulgated (57 FR 40792, September

4, 1992) regulations to implement the

requirements of section 328. The

regulations require, among other things,

that sources located beyond 25 miles of

States’ seaward boundaries meet

applicable Federal pollution control

requirements which include PSD, new

source performance standards (NSPS),

and national emission standards for

hazardous air pollutants (NESHAP)

regulations to the extent that they are

rationally related to protection of air

quality standards or part C of title I of

the Act (40 CFR 55.13).

B. Delegation Authority

Section 328(a)(3) of the Act permits

States adjacent to an OCS source to

adopt and submit to EPA regulations for

implementing and enforcing the

requirements of that section. It requires

that:

(i)f the Administrator (of EPA) finds that the

State regulations are adequate, the

Administrator shall delegate to that State any

authority the Administrator has under this

Act to implement and enforce such

requirements.

Therefore, EPA included § 55.11 in

the OCS regulations to authorize the

delegation of the implementation and

enforcement authority to State and local

agencies for OCS sources that are

located within the 25-mile limit. The

EPA did not provide for the delegation

of the implementation and enforcement

authority for sources beyond the 25-mile

limit. (See the preamble to the proposed

regulatory revision, 61 FR 25173, May

20, 1996, for further information on the

background of this issue.)

C. Offset Provision

Generally, in nonattainment areas, a

new source or existing source

undergoing modification which results

in increased emissions must secure

emission reductions of an equal or

greater amount from existing sources in

that area to ‘‘offset’’ its new emissions.

In promulgating the OCS regulations,

EPA required that OCS sources obtain

offsets based on the requirements

imposed in the COA and in accordance

with special offset requirements for OCS

sources that EPA established in 40 CFR

55.5(d). The EPA set up three zones

based upon where the offsets were

obtained and applied the offset program

differently in each. Offsets obtained

seaward of the proposed source, zone 1,

were subject to the requirements of the

COA including any distance penalty or

discount. Offsets obtained between the

proposed source and the State’s seaward

boundary, zone 2, were subject to the

offset ratio of the COA but not any

distance penalties or discounts. Offsets

obtained on the landward side of the

State’s seaward boundary, zone 3, were

subject to the requirements of the COA

including any distance penalty or

discount, but for the purpose of

determining the distance from the

source to the offset emissions, the
Federal Register / Vol. 62, No. 169 / Tuesday, September 2, 1997 / Rules and Regulations 46407

proposed source was assumed to be

located at the State’s seaward boundary

(40 CFR 55.5(d) and 57 FR 40796). (See

the preamble to the interim final

regulation, 61 FR 25149, May 20, 1996,

for further information on the

background of this issue.)

D. Judicial Review

On November 2, 1992, the Santa

Barbara County APCD filed a petition

for review of the OCS regulations with

the U.S. Court of Appeals for the District

of Columbia Circuit (Santa Barbara

County Air Pollution Control District v.

EPA, 31 F. 3rd 1179 (D.C. Cir., 1994)).

One of the issues that the Santa Barbara

County APCD raised was EPA’s failure

to provide for delegation of the

authority to implement and enforce the

OCS regulations for sources located

beyond 25 miles from a State’s seaward

boundary. Another issue raised by the

Santa Barbara County APCD petition

involved the regulatory offset provisions

for OCS sources.

In reviewing the delegation issue,

EPA determined that section 328 of the

Act requires it to delegate ‘‘any’’

authority the EPA has under the Act to

implement and enforce the

requirements of section 328(a) if it

determines that the State government

has adequate regulations. Therefore,

EPA requested the court to remand this

issue to it for reconsideration. The court

granted EPA’s voluntary request for a

remand.

On August 12, 1994, the Court of

Appeals vacated the offset portion of the

OCS regulations as it applied to zones

2 and 3, finding that EPA should

promulgate the same offset requirements

for OCS sources as would be applicable

if the OCS sources were located in the

COA. The court remanded the provision

to EPA for further consideration (Santa

Barbara 31 F. 3rd at 1181–82).

II. Response to the Delegation Remand

A. Proposed Revisions to the

Regulations

On May 20, 1996 at 61 FR 25173, EPA

proposed to revise the OCS regulations

to provide for the delegation authority

to implement and enforce the

regulations for sources located beyond

the 25-mile limit. The EPA proposed

revisions to specific language in

§§ 55.3(c), 55.6(d), and 55.11(a) to allow

for such delegation. In addition, EPA

proposed revisions in the wording of

other sections to clarify the regulations

as they pertain to the delegation of

authority for sources located beyond the

25-mile limit. The specific regulatory

changes proposed included revisions to

§ 55.2 (definition of nearest onshore

area) and the addition of § 55.11(j)

(exercising delegation authority).

The EPA rescinded that preamble

language which specifically stated that

delegation beyond the 25-mile limit is

unacceptable (57 FR 40794, 40797,

40801, and 40802).

B. Response to Public Comments

The EPA received one comment in

response to its proposed regulatory

change. The Minerals Management

Service (MMS) of the DOI expressed one

general concern and raised three issues

about specific wording in the notice and

the proposed regulations. The general

concern involved the precedent

established by delegating to State and

local agencies the authority to control

sources located up to 200 miles off the

shore. The EPA understands MMS’

concern about the potential precedent of

delegating the implementation and

enforcement authority for sources

located on the OCS, however, the Act

clearly states that EPA must allow such

delegation. Although sources locating

beyond the 25-mile limit are only

subject to the Federal regulations

developed and promulgated by EPA,

many State and local districts already

have the authority to implement and

enforce those regulations onshore and

within the State’s seaward boundary.

Therefore, many State and local

agencies have already demonstrated

their ability to implement and enforce

these Federal regulations.

One of the specific wording issues

raised by MMS concerned an apparent

discrepancy between the preamble

language and the Act’s language. In the

preamble to the proposed regulations,

EPA stated ‘‘[s]ources located within 25

miles of the States’ seaward boundaries

(the 25-mile limit) must comply with

the regulations which are, in most

respects, the same as the regulations for

similar sources located onshore’’

(emphasis added). While the Act states

that the ‘‘ * * * those requirements

must be the same as would be

applicable if the source were located in

the corresponding onshore area * * * ’’

(emphasis added). Although, as MMS

pointed out, the CAA uses the phrase

‘‘must be the same as,’’ it also provides

for exemptions based on health and

safety considerations. Furthermore, as

provided in the preamble to the OCS

regulations, EPA has the authority not to

promulgate State or locally-adopted

rules which it determines are arbitrary

and capricious (57 FR 40802). While

these exceptions from enforcing all COA

requirements are few in number, EPA is

justified in using the phrase ‘‘in most

respects.’’

The MMS also suggests revisions in

the wording of proposed §§ 55.6(d)(2)

and 55.11(a). Specifically, MMS

identified a typographical error in

proposed § 55.6(d)(2) and suggested

numbering the phrases in § 55.11(a) to

clarify that there are two types of

delegations, one for sources located

within the 25-mile limit and one for

sources located beyond that limit. In

both cases, the wording of the final rules

has been revised consistent with MMS’s

comments.

C. Today’s Action

Except for the minor clarifications to

the wording of the regulations as

discussed above, EPA is promulgating

the revisions to the delegation

provisions of the OCS regulations as

they were proposed.

III. Response to the Offset Remand

A. Revisions to the Regulations

The EPA addressed the court’s August

12, 1994 decision by promulgating an

interim final rule revising the offset

provision that applies to OCS sources

(61 FR 25149, May 20, 1996). Because

the court vacated the existing

regulations as they apply to zones 2 and

3, and created a gap in continuity of the

regulation, EPA, under provisions of the

Administrative Procedure Act (APA) (5

U.S.C. 553(b)(B)), promulgated final

rules without prior notice and an

opportunity for comment. The EPA did,

however, provide the public with the

opportunity to comment on this interim

final action. The EPA committed to

reevaluating its decision in light of any

comments received during the comment

period and taking a subsequent final

action.

B. Response to Public Comments

The EPA received one comment on

the interim final regulation. The Santa

Barbara County APCD supported and

agreed with EPA’s action. However, the

APCD also criticized EPA’s estimated

costs for complying with the revised

regulations. The APCD noted that the

cost for obtaining the required offsets

was overstated, and APCD provided

examples of lower costs offsets. The

EPA agrees that the cost may have been

overstated, but the estimations were

made as a rough measure as to whether

this action should be considered as a

major rule. Since the estimates were far

below the minimum levels for a major

rule, no further refinement of the

estimates were or are necessary.

C. Today’s Action

In light of the favorable comment to

its interim final rule regarding offsets,

EPA finds that the interim rule does not
46408 Federal Register / Vol. 62, No. 169 / Tuesday, September 2, 1997 / Rules and Regulations

need revision, and thus, is revoking the

interim status of the rule, effective 30

days following publication of this action

in the Federal Register.

IV. Administrative Requirements

A. Review by the Office of Management

and Budget

Under Executive Order 12866 (58 FR

51735 (October 4, 1993)) the Agency

must determine whether the regulatory

action is ‘‘significant’’ and therefore

subject to OMB review and the

requirements of the Executive Order.

The Order defines ‘‘significant

regulatory action’’ as one that is likely

to result in a rule that may:

(1) Have an annual effect on the

economy of $100 million or more or

adversely affect in a material way the

economy, a sector of the economy,

productivity, competition, jobs, the

environment, public health or safety, or

State, local, or tribal governments or

communities;

(2) Create a serious inconsistency or

otherwise interfere with an action taken

or planned by another agency;

(3) Materially alter the budgetary

impact of entitlements, grants, user fees,

or loan programs or the rights and

obligations of recipients thereof; or

(4) Raise novel legal or policy issues

arising out of legal mandates, the

President’s priorities, or the principles

set forth in the Executive Order.

Because the OCS sources would be

regulated by two Federal agencies, EPA

and DOI, EPA submitted the May 20,

1996 proposed regulation concerning

the delegation remand and the interim

final regulation concerning the offset

remand to Office of Management and

Budget (OMB) for review. Changes made

in response to OMB suggestions or

recommendations are documented in

the public dockets. However, since EPA

received minimum public comments on

the notices, made no substantive

changes in the delegation remand notice

and is not revising the offset interim

rules, this final rule was considered not

significant by the OMB.

B. Unfunded Mandates Act

Section 202 of the Unfunded

Mandates Reform Act of 1995 requires

that EPA prepare a budgetary impact

statement before promulgating a rule

that includes a Federal mandate that

may result in expenditures by State,

local, and tribal governments, in

aggregate, or by the private sector, of

$100 million or more in any 1 year.

Section 203 requires EPA to establish a

plan for obtaining input from,

informing, educating, and advising any

small governments that may be

significantly or uniquely affected by the

rule.

Under section 205 of the Unfunded

Mandates Reform Act, EPA must

identify and consider a reasonable

number of regulatory alternatives before

promulgating a rule for which a

budgetary impact statement must be

prepared. The EPA must select from

those alternatives the least costly, most

cost-effective, or least burdensome

alternative that achieves the objective of

the rule, unless EPA explains why a

particular alternative is not selected or

the selection of a particular alternative

is inconsistent with law.

EPA has determined that this rule

does not impose any new mandates on

State, local, or tribal governments, and

the rule is estimated to result in the

expenditures by State, local, and tribal

governments or the private sector of less

that $100 million in any one year. Thus,

today’s rule is not subject to the

requirements of section 202 and 205 of

UMRA. Because small governments will

not be significantly or uniquely affected

by this rule, this rule is not subject to

the requirements of section 203.

However, EPA will work with eligible

State and local air pollution control

agencies to assist them in requesting

delegation of authority to implement

and enforce the OCS regulations.

C. Paperwork Reduction Act

These rule revisions do not contain

any information collection requirements

subject to review by the OMB under the

Paperwork Reduction Act, 44 U.S.C.

3501, et seq.

D. Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA),

as amended in 1996, requires Federal

agencies to identify potentially adverse

impacts of Federal rules upon small

entities. Small entities include small

businesses, organizations, and

governmental jurisdictions. In instances

where a rule would create a significant

economic impact on a substantial

number of these entities, agencies are

required to perform a regulatory

flexibility analysis. These revisions to

the OCS regulations do not, in

themselves, impose any requirements

on small entities, nor require or exclude

small entities from meeting the

requirements of the OCS regulations. As

a result, EPA has determined that these

revisions will not have a significant

impact on a substantial number of small

entities. Therefore, as required under

section 605 of the RFA, 5 U.S.C. 605, I

certify that these revisions do not have

a significant impact on a substantial

number of small entities.

E. Petition for Judicial Review

Under section 307(b)(1)of the Act, 42

U.S.C. 7607(b)(1), petitions for judicial

review of these actions must be filed in

the United States Court of Appeals for

the District of Columbia Circuit by

November 3, 1997. Filing petitions for

reconsideration of these final rules by

the Administrator does not affect the

finality of these rules for the purpose of

judicial review nor does it extend the

time within which a petition for judicial

review may be filed and shall not

postpone the effectiveness of such rule

or action. These actions may not be

challenged later in proceedings to

enforce the requirements.

F. Submission to Congress and the

General Accounting Office

Under 5 U.S.C. 801(a)(1)(A), as added

by the Small Business Regulatory

Enforcement Fairness Act of 1996, EPA

submitted a report containing these

rules and other required information to

the U.S. Senate, the U.S. House of

Representatives, and the Comptroller

General of the United States prior to

publication in the Federal Register.

These rules are not ‘‘major rules’’ as

defined by 5 U.S.C. 804(2).

List of Subjects in 40 CFR Part 55

Environmental protection,

Administrative practice and procedures,

Air pollution control, Continental shelf,

Intergovernmental relations, Nitrogen

oxides, Ozone, Reporting and

recordkeeping requirements, Sulfur

oxides.

Dated: August 18, 1997.

Carol M. Browner,

Administrator.

For reasons set out in the preamble,

40 CFR part 55 is amended as follows:

PART 55—OUTER CONTINENTAL

SHELF AIR REGULATIONS

1. The authority citation for part 55

continues to read as follows:

Authority: Sec. 328 of the Clean Air Act

(42 U.S.C. 7401, et seq.) as amended by Pub.

L. 101–549.

§ 55.2 [Amended]

2. In § 55.2 the definition of ‘‘Nearest

Onshore Area (NOA)’’ is amended by

adding a comma after ‘‘OCS source’’ and

removing the words ‘‘located within 25

miles of the States’ seaward boundary,’’.

3. Section 55.3 is amended by revising

paragraph (c) to read as follows:

§ 55.3 Applicability.

* * * * *

(c) The OCS sources located beyond

25 miles of States’ seaward boundaries

shall be subject to all the requirements
Federal Register / Vol. 62, No. 169 / Tuesday, September 2, 1997 / Rules and Regulations 46409

of this part, except the requirements of

§§ 55.4, 55.5, 55.12 and 55.14 of this

part.

* * * * *

4. Section 55.6 is amended by revising

paragraph (d)(2) to read as follows:

§ 55.6 Permit requirements.

* * * * *

(d) * * *

(2) The Administrator or delegated

agency shall not issue a permit-tooperate to any existing OCS source that

has not demonstrated compliance with

all the applicable requirements of this

part.

* * * * *

5. Section 55.11 is amended by

revising paragraph (a) and by adding

paragraph (j) to read as follows:

§ 55.11 Delegation.

(a) The governor or the governor’s

designee of any State adjacent to an OCS

source subject to the requirements of

this part may submit a request, pursuant

to section 328(a)(3) of the Act, to the

Administrator for the authority to

implement and enforce the

requirements of this OCS program:

Within 25 miles of the State’s seaward

boundary; and/or Beyond 25 miles of

the State’s seaward boundary. Authority

to implement and enforce §§ 55.5, 55.11,

and 55.12 of this part will not be

delegated.

* * * * *

(j) Delegated authority. The delegated

agency in the COA for sources located

within 25 miles of the State’s seaward

boundary or the delegated agency in the

NOA for sources located beyond 25

miles of the State’s seaward boundary

will exercise all delegated authority. If

there is no delegated agency in the COA

for sources located within 25 miles of

the State’s seaward boundary, or in the

NOA for sources located beyond 25

miles of the State’s seaward boundary,

the EPA will issue the permit and

implement and enforce the

requirements of this part. For sources

located within 25 miles of the State’s

seaward boundary, the Administrator

may retain the authority for

implementing and enforcing the

requirements of this part if the NOA and

COA are in different States.

[FR Doc. 97–23091 Filed 8–29–97; 8:45 am]

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