UNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGION 8



### Ref: 8P-AR Bryce Bird, Director Utah Division ofAir Quality P.O. Box 144820 Salt Lake City, Utah 84114-4820 1595 Wynkoop Street DENVER, CO 80202-1129 Phone 800-227-8917 http://www
.epa .gov/region08 

## FEB 1 22015

RE: EPA Region 8 Comments on Utah's Proposed Rule R307-311 State Implementation Plan Revision and Draft Technical Support Document Dear Mr. Bird: Thank you for the opportunity to provide comments on the state ofUtah's proposed Rule R307-311 and the proposed rule's associated draft Technical Support Document (TSD). The purpose ofthe proposed rule is to provide a State Implementation Plan (SIP) revision that will allow, as appropriate, trading between the PM10 and NOx Motor Vehicle Emissions Budgets (MVEB) that are part ofthe EPAapproved Utah County PM10 attainment plan element ofthe SIP (see: 67 FR 78181 , December 23 , 2002). The EPA was advised by the Utah Division ofAir Quality (UDAQ) that the reason for a MVEB trading rule, which is allowed by 40 CFR 93 .124(b), arose from the need to demonstrate transportation conformity while using one ofEPA's currently approved motor vehicle emissions models, MOVES2010b or MOVES2014. Utah County's Mountainland Association ofGovernments (MAG), which is the area's Metropolitan Planning Organization, cannot demonstrate transportation conformity to the prior-approved NOx MVEB, which is based on EPA's older MOBILE6 model, contained in the Utah County PM10 attainment plan element ofthe SIP. It 

### is our further understanding that should EPA be able to approve R307-311, and its supporting associated TSD, this would then facilitate MAG's ability to demonstrate transportation conformity using current EPA-approved models. We have completed our review ofthe proposed R307-311 and the draft TSD
. Our comments are detailed in the enclosure to this Jetter. We note that these comments are preliminary; we will not reach any final conclusions until the state provides a formal submittal ofthe R307-311 Utah County MVEB trading rule SIP revision and after we conduct our own notice and comment rulemaking.

1

### We will provide any assistance needed by the UDAQ to resolve the issues and concerns that we have identified and look forward to working with you and your staff. Ifyou have any questions , please contact me at (303) 312-6416, or have your staff contact Tim Russ at (303) 312-6479.

Enclosure 

# 0:0cC)

Carl Daly,

# Direct~ Air Program

2ENCLOSURE EPA Region 8 Comments on the Proposed Rule R307-311 and the Associated Draft Technical Support Document 

### A.) EPA Review and Comments Regarding the Proposed Rule R307-311: 1.) 

### EPA has compared the proposed rule R307-311 to the EPA-approved Salt Lake County (MVEB) trading rule R307-310. EPA does not have any comments regarding the proposed rule language in R307- 311 as the language is very similar to the PM 10 MVEB trading rule (R307-31 0) that we approved in 2002 for Salt Lake County. For reference, please see the Salt Lake County MVEB trading rule Federal Register final rule action; see 67 FR 44065 , July 1, 2002. B.) EPA Review and Comments Regarding the Proposed R307-311's Draft TSD: 

### EPA of fers the following comments with respect to the draft TSD : 1.) 

### Please refer to page one ofthe draft TSD under the heading "What Fraction of the NOx Emissions Convert to PMlO?": 

### EPA acknowledges and understands that the method the UDAQ used to establish the PM 10 to NOx trading ratio would be conservative and follows the approach for the EPA-approved Salt Lake County trading rule (R307-31 0). This understanding is with respect to the 1 to 1 trading ratio and the single direction; with only available PM10 (which includes PM2
.s) reductions being used to compensate for increases in NOx. 2.) 

### EPA notes a concern on page one ofthe draft TSD under the heading "What Fraction ofthe NOx Emissions Convert to PMlO?" 

### regarding thejustification for the PM10 for NOx MVEB trading. Our concern is that UDAQ continues to only rely on preamble language regarding interpollutant trading for New Source Review (NSR) offsets in the EPA's 1996 proposed rule for " Prevention of Significant Deterioration (PSD) and Nonattainment New Source Review (NSR) "; see 61 FR 38250, July 23 , 1996. While EPA has also relied in part upon this language in our proposed rule and final rule for the Salt Lake County MVEB trading rule R307-310 (67 FR 21607 , July 1, 2002) , we note there is more recent interpollutant information available that UDAQ should evaluate and reference. EPA issued guidance on July 21 , 2011 regarding the appropriate technical demonstration for interpollutant trading, again in the context ofNSR offsets, with reference to PM2
.s. Our July 21,2011 guidance document (copy attached) is entitled "RevisedPolic y to Address Reconsideration of Interpollutant Trading Provisions for Fine Particles (PM2.5 ) ." We recommend that UDAQ review the guidance with specific attention to the four steps for developing trading ratios located on pages four and five. We believe there may be information in this guidance that could lend additional support and correlation to the PM10 and NOx MVEB trading that would be allowed by R307-311
. In addition, we believe that additional support and correlating information may be available from the data/modeling contained in the Utah's recently submitted (December 16, 2014) Utah County PM2
.s nonattainment impracticability demonstration SIP revision 1•

1 The " Utah State Implementation Plan Control Measures for Area and Point Sources, Fine Particulate Matter, PM2.5 SIP for the Provo, UT Nonattainment Area Section IX
. Part A.22 " as adopted by the Utah Air Quality Board (UAQB) on December 3, 2014 and submitted to EPA on December 16, 2014
. 3

### 3.) On page two ofthe draft TSD under the heading "Consistency with the Approved Utah County PMlO SIP", 

### second and third paragraphs: The UDAQ makes reference to the 2013 Utah County PM2
.s SIP revision. The third paragraph notes that PM2
.s and NOx modeling was done as part of a SIP revision that was"
... submitted to EPA in 2013." EPA has concerns with UDAQ's reference and use ofthis information from the 2013 Utah County 24-hour PM2.s SIP revision as justification in the draft R307- 311 TSD
. We note that at this point in time the modeling and data from the Utah County PM2
.s 2014 impracticability demonstration is the more appropriate reference to use in support ofthe draft TSD. EPA recommends that UDAQ use this updated emissions information, data, modeling, and derivation of PM2.s to NOx ratios to support the information and conclusions in the draft TSD. Our reasons for the above recommendation are: (1) 

### EPA never took action on the Utah County PM2.s 2013 SIP revision submittal; and (2) with the December 16, 2014 Governor's letter submitting the final Clean Air Act (CAA) subpart 1 and subpart 4 PM2.s SIPs (including the impracticability demonstration for Utah County), the Governor also officially withdrew the 2013 PM2
.s SIP submittals
. With the Governor's withdrawal ofthe 2013 Utah County PM2.s SIP revision, the information, modeling, and data from that particular SIP revision are no longer available for EPA to reference should we determine that we can propose approval ofR3 07-311 and its TSD. Therefore, any references or information derived from the 2013 SIP submittal should be deleted from the draft TSD. 4.) 

### On page two, and continuing into page three, ofthe draft TSD under the heading "Consistency with the Approved Utah County PMlO SIP": 

### EPA does not have concerns with the UDAQ ' s information with regard to its understanding ofthe relationship between NOx and the formation ofPM10 and PM2
.sin the Utah County airshed. However, we have two issues with this particular section ofthe draft TSD: (1) the reliance on sensitivity modeling from the 2013 PM2
.s SIP revision submittal; and (2) the statement regarding the PM2
.s component ofPMto in Utah County: a.) With regard to the sensitivity modeling from Utah's 2013 PM2
.s SIP revision submittal, EPA notes in our comment #3 above that this 2013 SIP revision was withdrawn with the Governor's December 16, 2014 submittal ofthe Utah County PM2
.s impracticability demonstration. We recommend that similar information and data be extracted from the Utah County PM2
.s 20 14 impracticability demonstration rather than from the withdrawn 2013 SIP submittal. The referenced information from the PM2
.s 2014 impracticability demonstration could then be used to document and support the statement in the draft TSD that reducing primary PM2
.s is more beneficial to improving Utah County's air quality than reducing NOx. b.) 

### We also note the statement which appears at the bottom ofpage two ofthe draft TSD: " PM10 in Utah County consists mainly ofPM2.5 during wintertime inversion events." This statement needs additional supporting information as it is important with regard to the UDAQ's CAA section 11 0(1) demonstration that the proposed R307-311 will not impair the attainment of the 24-hour PM2
.s National Ambient Air Quality Standard (NAAQS) in Utah County. We suggest that UDAQ consider evaluating information contained in the Utah County PM2.s 2014 impracticability demonstration SIP revision for potential references to support this statement in the draft TSD. 5.) 

### On page three ofthe draft TSD under the heading "Impact of the Combined Budget Program on Other Pollutants": 

### EPA questions the relevance ofUDAQ's write-up regarding the interim emissions 4

### conformity test for PM2. s as it relates to emissions in 2008. This type oftransportation conformity test is only applicable to the Utah County PM2
.s SIP and considers emissions in calendar year 2008 as relevant at the time ofthe PM2.s nonattainment designations (74 FR 58688, November 13 , 2009)
. For PM10 specifically, MAG's transportation conformity evaluation for its Regional Transportation Plan (RTP) will take place in 2015 and will use MAG' s latest planning assumptions and motor vehicle emissions modeling tools
. Therefore, EPA recommends that UDAQ consider using the 2015 mobile sources NOx emission inventory data in the Utah County 2014 PM2
.simpracticability demonstration to facilitate a comparison between the potential increases in NOx emissions due to PM 10 MVEB emissions trading and the Utah County PM2
.s SIP ' s NOx emissions. 6.) On page three ofthe draft TSD under the heading "Impact of the Combined Budget Program on Other Pollutants" 

### EPA notes incorrect references to possible ozone MVEBs for Utah County. See "Like ozone, the CO maintenance has its own CO budget
. .. " and "Nothing in this proposal changes this budget, and as with ozone, the MPO
... "We note that Utah County is designated as unclassifiable/attainment for the 2008 8-hour ozone NAAQS and there are no NOx and VOC MVEBs as part of an ozone plan. 7.) On page three ofthe draft TSD under the heading "Impact of the Combined Budget Program on Other Pollutants" 

### EPA recommends this section address the requirements of section 11 0(1) ofthe CAA. Section 11 0(1) states that a SIP revision cannot be approved by EPA ifthe revision would interfere with any applicable requirement concerning attainment and reasonable further progress towards attainment ofa NAAQS , or any other applicable requirement ofthe CAA. The draft TSD needs to provide a CAA section 11 0(1) demonstration to justify the approval ofR307-311 into the Utah SIP. The CAA section 11 0(1) demonstration should address not only PM 10, PM2
.s, and CO, but also other potentially impacted NAAQS including ozone and N02. Supporting information for PM10 may involve the most recent three years ofambient air quality monitoring data. For PM2
.s, the same ambient monitoring data years should be considered in addition to information and data excerpted from the Utah County PM2
.s 2014 impracticability demonstration. Components ofthe demonstration for ozone and N02could involve a qualitative analysis that discusses the relevance ofNOx emissions for these NAAQS and would also consider the most recent three years of ambient air quality monitoring data.

5

# JUL 21 2011

MEMORANDUM SUBJECT : Revised Policy to Address Reconsideration ofInterpollutant Trading Provisions for Fine Particles (PM2
.s) 

### FROM:
TO: Regional Au Division Directors, Regions 1-10 The purpose ofthis memorandum is to announce a change in the policy that the U.S. Environmental Protection Agency originally set forth in the 2008 PM2 

### .s New Source Review Implementations Rule (the 2008 final rule) concerning the development and adoption ofinterpollutant trading (offset) provisions for PM2.s under state nonattainment area New Source Review (NA NSR) programs for PM2.5• As a result ofour reconsideration ofthe policy, we no longer support the ratios provided in the preamble to the 2008 final rule as presumptively approvable ratios for adoption in state implementation plan (SIPs) containing NA NSR programs for PM2
.S· This revised policy does not affect the EPA rule provisions that allow states to adopt as part oftheir NA NSR programs for PM2
.s appropriately supported interpollutant offset provisions involving PM2 .5 precursors. In sum, the new policy is that any ratio involving PM2 .5 precursors submitted to EPA for approval for use in a state's interpollutant offset program for PM2.5 nonattainment areas must be accompanied by a technical demonstration that shows the net air quality benefits of such ratio for the PM2 .5 nonattainment area in which it will be applied. 

### Background: The 2008 final rule authorizes states to adopt provisions in their NA NSR rules that would allow major stationary sources and major modifications locating in areas designated nonattainment for PM2 .5 to offset emissions increases ofdirect PM2 .5 emissions or PM2 .5 precursors with reductions ofeither direct PM2 .5 emissions or PM2 .5 precursors in accordance with offset ratios contained in the approved SIP for the applicable nonattainment area. The inclusion, in whole or in part, ofthe interpollutant offset provisions for PM2 .5 is discretionary on the part ofthe states. In the preamble to the 2008 final rule, the EPA included preferred or presumptive offset ratios, applicable to specific PM2 .5 precursors that states may adopt in conjunction with the new interpollutant offset provisions for PM2 .5, and for which the state could rely on the EPA's technical work to2 demonstrate the adequacy ofthe ratios for use in any PM2
.s nonattainment area. Alternatively, the preamble indicated that states may adopt their own ratios, subject to the EPA ' s approval , that would have to be substantiated by modeling or other technical demonstrations ofthe net air quality benefit for ambient PM2 .5 concentrations. The preferred ratios were subsequently the subject ofa petition for reconsideration, which the Administrator granted. This memo is a result ofthat reconsideration and, as stated above, we no longer support the ratios provided in the preamble to the 2008 final rule as presumptively approvable ratios for adoption in SIPs containing NA NSR programs for PM2.sAdditional Background: Section 173 ofthe Clean Air Act (CAA) sets forth certain requirements for obtaining a preconstruction permit for major stationary sources that are located, or propose to locate, in an area designated nonattainment for a NAAQS. One such requirement is that the proposed major stationary sources and major modifications must obtain emissions reductions ofthe affected nonattainment pollutant from the same source or other sources in the area to offset the proposed emissions increase. CAA 

### § 173(c). The 2008 final rule included a provision in the nonattainment NSR regulations at 40 CFR § 51.165 and 40 CFR Part 51, Appendix S that provided an option for meeting the offset requirement for PM2
.s with interpollutant (precursor) offsets. Under the provision, states could allow reductions in direct PM2 .5 emissions to offset precursor emissions increases, emissions reductions ofone precursor to offset emissions increases ofanother precursor, and reductions in precursor emissions to offset direct PM2
.s emissions increases. The provision further stipulates that the use ofa PM2 .5 precursor offset must "comply with the interprecursor trading hierarchy and ratio established in the approved plan for a particular nonattainment area." 40 CFR § 51.165(a)(ll). In the preamble to the 2008 final rule, the EPA issued "preferred" offset ratios that it recommended states use as part ofan interpollutant offset provision in their NSR rules. As part of its policy authorizing states to implement the new PM2.5 offset provision within their approved NSR SIPs, the EPA provided a hierarchy and "preferred" ratios involving two PM2.5 precursors--sulfur dioxide (S02 ) and nitrogen oxides (NOx). Implementation ofthe New Source Review (NSR) Program for Particulate Matter Less Than 2
.5 Micrometers (PM2 5), 73 Fed. Reg. 28321,28339-40 (May 16, 2008). We indicated that the preferred ratios were the result ofa technical assessment that we conducted to support use of the ratios
. (The preamble clearly indicated that such ratios were for purposes of offsets only and not applicable to source netting for applicability purposes.) The technical assessment, with details on data and modeling inputs, was fully described in a technical memo entitled " Details on Technical Assessment to Develop Interpollutant Trading Ratios for PM2 .s Offsets, " which was placed in the docket to the 2008 final rule. We recommended that states use the EPA-preferred ratios in
. their PM2 .5 SIPs for PM2.5 nonattainment areas, and that we would approve such ratios based on our own technical demonstration, "absent a credible showing that the EPA's trading ratios are not appropriate for that location. " We further stated that if any states chose to develop their own hierarchies and ratios , then such states would have to " substantiate by modeling and/or other technical demonstrations of [sic] the net air quality benefit for PM2
.s ambient concentrations, and such trading programs will have to be approved by EPA. " Ibid
. In 2009 , portions ofthe 2008 final rule, including the preferred interpollutant offset ratios for PM 2.5 precursors, were the subject ofa Petition for Reconsideration filed by Earthjustice on behalfofNRDC and Sierra Club. On April 24 , 2009, the Administrator signed a letter granting the Petition for3 Reconsideration and agreed to reconsider portions ofthe 2008 final rule, including the preferred offset ratios discussed in the preamble
. The reconsideration proceedings for the Interpollutant Trading Policy have resulted, in part, in the issuance ofthis policy memorandum.
Revised Policy on Preferred Ratios: We continue to support the basic policy that sources may offset increases in emissions ofdirect PM2.5 or of any PM2
.s precursor in a PM2
.s nonattainment area with actual emissions reductions in direct PM2 .5 or PM2.s precursors in accordance with offset ratios as approved in the SIP for the applicable nonattainment area. However, we will no longer consider the preferred ratios set forth in the preamble to the 2008 final rule for PM2
.s NSR implementation to be presumptively approvable. Instead, any ratio involving PM2.5 precursors adopted by the state for use in the interpollutant offset program for PM2 .5 nonattainment areas must be accompanied by a technical demonstration that shows the net air quality benefits of such ratio for the PM2.5 nonattainment area in which it will be applied. We have revised the policy based on our re-evaluation ofthe "preferred" ratios. We have reached several key conclusions. First, upon re-examination ofthe original data, we believe that the original preferred ratios are not sufficiently representative ofconditions in all areas ofthe country. Any preferred ratios would need to be considerably more conservative to be applied nationwide and to account for the inherent differences in the nature ofPM2.5 ambient concentrations across nonattainment areas and the associated variability in responsiveness to direct and precursor emissions changes. We believe that the 2008 preferred precursor offset ratios for PM2.5 are not sufficiently conservative to ensure the net air quality benefit for PM2 .5 ambient concentrations across all areas ofthe country and, thus, to serve as presumptively approvable ratios for the EPA's general SIP approval in state PM2.5 NA NSR programs . The EPA's original technical assessment only reflected nine urban areas in detail and therefore did not sufficiently account for the full spectrum ofdifferences across all nonattainment areas . As a result, the technical assessment did not adequately identify the offset ratios that would be needed to be considered presumptively approvable ratios. Second , we have determined that the ratios defmed 

### in the 2008 preamble are generally not suitable for application to offsets that address violations ofthe 24-hour primary PM2.s NAAQS
. The 2008 preamble did not distinguish between the annual and daily averaging periods to defme applicable offset ratios. One could have assumed that the offset ratios provided in the 2008 final rule would apply with respect to of

fsets for any averaging period
. However, we have determined that those ratios are not adequate for addressing the precursor relationship for PM2 .5 for the short-term averaging period, because the modeling setup that we used to develop the original preferred ratios does not adequately capture the local and seasonal nature ofthe short-term PM2 .5 responsiveness to direct and precursor emissions changes
. Daily PM2 .5 concentrations in the air are highly dependent on both source and meteorological factors and are widely variable across and within urban and rural areas. Accordingly, states will be expected to develop separate PM2.5precursor offset ratios that are demonstrated to be suitable for addressing the particular precursor's relationship with ambient PM25 concentrations for 24-hour averaging period(s) that are causing violations in that nonattainment area.

### 4 As stated above, under the EPA ' s revised policy, the ratios contained in the preamble to the 2008 final rule will no longer carry a presumptive approval status. While we believe that our original modeling analysis is valid and demonstrates the technical capability and approach to develop such ratios for areas across the country, states wishing to adopt any ofthose ratios contained in the 2008 preamble must treat them as any other ratios that they may choose, such that each ratio will need to be supported by modeling or other technical demonstration to show that such ratio is suitable for the particular PM2 .5 nonattainment area(s) ofconcern, and will be subject to the EPA's evaluation prior to approval in the state plan. For the nine urban areas included in the EPA ' s original technical assessment, that assessment may already contain the kind ofinformation that a state needs to support the ratios oftheir choosing.
General Guidance for Developing Case-specific Offset Ratios for PM2.s Precursors: The July 23 , 2007 technical analysis entitled " Details on Technical Assessment to Develop Interpollutant Trading Ratios for PM2
.s Offsets, " provides details on the method used to establish the original "preferred" precursor offset ratios. We do not expect that the specific results from the EPA' s 2007 technical assessment could be used generally by a state as part oftheir demonstration without additional technical demonstration specific to the area(s) within which the ratios would be applied, unless the area(s) is among the nine areas in the 2007 assessment. We expect EPA regional offices , with assistance from the EPA' s Office ofAir Quality Planning and Standards, to assist states, as necessary, to structure appropriate technical demonstrations leading to the development ofarea-specific ratios for PM2
.s nonattainment areas. We do not, however, plan to develop new EPA-preferred or presumptive ratios
. We believe any presumptively approvable ratios at the national level that we might ultimately develop for use across the different PM2 .5 nonattainrnent areas would need to be considerably more conservative, such that they likely would be considered undesirable by most states and permit applicants for use in many, ifnot most, nonattainrnent areas ' permitting scenarios
. We expect existing models and techniques to be adequate for states to conduct local demonstrations leading to the development ofarea-specific ratios for PM2 .5 nonattainrnent areas . The general framework for such developmental efforts would include the following steps : 1) Define the geographic area(s) in which offsets between emission sources are allowed, i
.e., nonattainrnent area(s). 2) Conduct a series of sensitivity runs with appropriate air quality models to develop a database of modeled PM2 .s concentration changes associated with reductions ofdirect PM2 .5 emissions and PM2
.s precursor emissions (e.g. , S02 and NOx) from anthropogen
. ic point sources within the area ofinterest. For precursor emissions, a photochemical model (e.g. , CMAQ, CAMx) at grid resolution of 

### 12 kilometers (km) or less is recommended to predict changes in PM 2.5 concentrations. For direct PM2 .5emissions, a dispersion model (e.g., AERMOD) or photochemical model at grid resolution of4 km or less is recommended to predict changes in PM2
.s concentrations
. 3) Calculate the interpollutant offset ratios for PM2
.s between direct PM2
.s emissions and precursor emissions in a manner similar to the EPA ' s 2007 technical assessment, i.e ., the ratio ofimpact metrics from step 3 , above
.

### 5 4) Conduct quality assurance ofthe resulting ratios and evaluate their interpretation and appropriateness given the nature ofPM2.s sources and formation in the area ofinterest. This evaluation will likely require emissions inventory data and observed ambient data for PM2.5 and its component species. Ifthere are questions about applying these steps we encourage states to contact their Regional Office modeling contact for further technical consultation.
Effects of This Revised Policy: This document is intended as a general statement ofthe EPA's policy with respect to the review and approval ofinterpollutant offset ratios to meet offset requirements for PM2.5 in accordance with 40 CFR 

### § 51.165(a)(ll) and 40 CFR Part 51, Appendix S(IV)(G)(5). The preferred offset ratios described in the preamble to the 2008 final rule were not promulgated in the Code ofFederal Regulations, were not outlined in the proposed rule, and were not subject to public review and comment. The description ofthe preferred offset ratios in the preamble did not impose binding, enforceable requirements on the states, but rather provided a statement ofthe EPA's policy
. The 2008 preamble described how the EPA intended to exercise its discretion in reviewing ratios submitted to the EPA for approval in accordance with 40 CFR § 51.165 and 40 CFR Part 51 , Appendix S
. This memorandum reflects the EPA's reasoned reconsideration ofthat policy position. This document does not substitute for the statutory provisions or regulations, nor is it a regulation itself. Since each proposal to allow interpollutant offsets under a SIP or in accordance with 40 CFR Part 51, Appendix S will be considered on a case-by-case basis, this policy statement does not limit or restrict any particular approach states may take to set appropriate interpollutant offset hierarchies and ratios. Thus, the policies set forth in this paper are intended solely as guidance, do not represent final agency action, and cannot be relied upon to create any rights or obligations enforceable by any party. cc: Steve Page Anna Wood Scott Mathias Raj Rao Dan DeRoeck Tyler Fox Richard Wayland Brian Doster Stephanie Hogan