### ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 

### [EPA-RO4-OAR-2009-1014-201026; 

### JML- ] Approval and Promulgationof Implementation Plans; Commonwealth of Kentucky; Prevention of Significant Deterioration and NonattainmentNew Source Review Rules: Nitrogen Oxide as Precursor to Ozone



### AGENCY: Environmental Protection Agency (EPA). 

### ACTION: Final rule. 

### SUMMARY: EPA is taking final action to approve a revision to the Commonwealth of Kentucky's State Implementation Plan (SIP), submitted to EPA by the Kentucky Energy and Environment Cabinet, through the Kentucky Division for Air Quality (KDAQ), on February 5,2010. The revision modifies Kentucky's prevention of signLficant deterioration (PSD) and nonattainmentnew sourcereview (NNSR) permitting regulations in Kentucky's SIP to address permit requirementspromulgated in the 1997 8-Hour Ozone National Ambient Air Quality Standards (NAAQS) Implementation Rule-Phase I1 (hereafterreferred to as the "Ozone ImplementationNSR Update"). The Ozone Implementation NSR Update revised permit requirements relating to the implementation of the 1997 8-hour ozone NAAQS, specifically, incorporating nitrogen oxides (NOx) as a precursor to ozone. EPA's approval of Kentucky's provisions to includeNOx as an
ozone precursor into the Kentucky SIP is based on EPA's determination that Kentucky's SIPrevision related to these provisions complies with federal requirements. EPA is alsoaddressing the general adverse comments received on EPA's proposal to approveNOx 

### as
an ozone precursor for permitting purposes into the Kentucky SIP. The February 5,2010, SIPrevision also included provisions to exclude facilities that produce ethanol through a natural fermentation process from the definition of "chemical process plants" in the NSR major source permitting program in the Kentucky SIP. EPA also received adverse comments for its proposal to approve these provisions. At this time, 

### EPA is not taking final action on Kentucky's provisions to exclude facilities that produce ethanol through a natural fermentationprocess from the definition of "chemical process plants" in the NSR major source permittingprogram. EPA will consider the comments received regarding these provisions and take any frnal action for these provisions in a separate rulemaking.



### EFFECTIVE DATE: This rule will be effective [insert 30 days after date of publication in the Federal Register].



### ADDRESSES: EPA has established a docket for this action under Docket Identification No. EPA-R04-OAR-2009-1014. All documents in the docket are listed on the www.regulations.gov Web site. Although listed 

### in the index, some informationis not publicly available, i.e., Confidential Business Information or other informationwhose disclosure is restricted by statute. Certain other material, such as copyrightedmaterial, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronicallythrough www.regulations.gov or in hard copy at the RegulatoryDevelopment Section, AirPlanning Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental ProtectionAgency, Region 4,61Forsyth Street, SW, Atlanta, Georgia 30303-8960. EPA requests that if at all possible, you contact the person listed in the 

### FOR FURTHER INFORMATION CONTACT sectionto schedule your inspection. The Regional Office's officialhours of business are Monday through Friday, 8:30 to 4:30, excluding federal holidays.



### FOR FURTHER INFORMATION CONTACT: For information regarding the Kentucky SIP, contact Ms. Twunjala Bradley, Regulatory Development Section,Air Planning Branch, Air, Pesticides and Toxics ManagementDivision,U.S. Environmental ProtectionAgency, Region 4,61Forsyth Street, SW, Atlanta, Georgia 30303-8960. Ms. Bradley can be reached via telephone at (404) 562-9352and electronicmail at bradlev.twuniala@e~a.nov. For informationregarding NSR, contact Ms. Yolanda Adams, Air Permits Section, at the same address above. Ms. Adams can be reached via telephone at (404) 562-9214 and electronicmail at adams.volanda@epa.gov. For information regarding 8-hour ozoneNAAQS, contact Ms. Jane Spann,Regulatory Development Section, at the same address above. Ms. Spann can be reached via telephone at (404) 562-9029 and electronicmail at spann.iane@epa.gov.



### SUPPLEMENTARYINFORMATION: Table of Contents I. 

### Background 11. Today's Action

### 111. Comments and Responses IV. Final Action V. Statutoryand Executive Order Reviews

I. Background On February 5,2010,the Commonwealthof Kentucky, through KDAQ, submitted a revision to the Kentucky SIPwhich relates to Kentucky's Air Quality Regulations, Chapter 5 1 

### - 401 Kentucky Administrative Regulation (KAR) 5 1:001 "Definitions for 401 KAR Chapter 5 1," 401 KAR 5 1:017 "Prevention of Si@icant Deteriorationof Air Quality," and 401 KAR 51:052 "Review of New Sources in or Impactingupon NonattainmentAreas." The SIPrevision addressed various issues.' This final action addresses only 

## one component of the February 5,2010, submittal -the Ozone Implementation NSR Update requirements, as contained in 40 Code of Federal Regulations (CFR) 5 1.165 and 5 1.166, and promulgated on November 29,2005, as part of EPA's Ozone ImplementationNSR Update. On July 18, 1997, EPA promulgated a revised 8-hour ozone NAAQS of 0.08 parts per million -also referred to as the 1997 8-hour ozone NAAQS. On April 30,2004,EPA designated areas as attainment,nonattainment and unclassifiablefor the 1997 8-hour

ozone NAAQS. As part of the 2004 designations,EPA also promulgated an 

## ' Kentucky's February 5,2010, SIPrevision also included provisions for excluding facilities that produce ethanol through a natural fermentation process from the definition of "chemical process plants" in the NSR major source permitting program. In an action published on April 1,2010(75FR 16388),EPA proposed to approve the aforementioned revisions into the Kentucky SIP. At this time, EPA is not taking action on the ethanol provisions. On a separate, unrelated issue, the rule revisionsprovided in Kentucky's February 5, 2010, submittal also requested the removal of certain provisions for clean units (CU) and pollution control projects (PCP),which were vacated by the United States Court of Appeals for the District of Columbia Circuit. EPA has not previously taken action to approve that portion of Kentucky's submittal (regarding the vacated rules) and EPA is not now taking action on those provisions.implementation rule for the 1997 8-hour ozone NAAQS in two phases. Phase I of EPA's 1997 8-hour ozone implementation rule (Phase 1Rule), published on April 30,2004, and effective on June 15,2004,provided the implementationrequirements for designating

areas under subpart 

### 1and subpart 2 of the CAA. See 69FR 23857. On November 29,2005, EPA promulgated the secondphase for implementation provisionsrelated to the 1997 8-hour ozone NAAQS - also known as the Phase I1 Rule. See 70 FR 71612. The Phase I1 Rule addressed control and planning requirements as they applied to areas designatednonattainrnent for the 1997 8-hour ozone NAAQS which included NSR requirements. Specific to this rulemaking,the Phase I1 Rule made changes to Federal regulations40 CFR 51.165 and 5 1.166, which govern the NNSR and PSD permittingprograms. The revisions to the NSR permittingrequirements 

### in the Phase I1 Rule are also known as the Ozone ImplementationNSR Update. Specifically, the Phase I1 Rule requirements included, among other changes, a
new provision stating that NOx is an ozone precursor. See 70 FR 71612, (page 71679) (November 29, 2005). In the Phase I1Rule, EPA stated as follows:

"The EPA has recognized NOx as an ozone precursor in several national rules because of its contribution to ozone transport and the ozone nonattainrnent problem. The EPA's recognition of NOx as an ozone precursor is supported by scientific studies, which have long recognized the role of NOx in ozone formation and transport. Such formation and transport is not limited to nonattainment areas. Therefore, we believe NOx should be treated consistently as an ozone precursor in both our PSD andnonattainment NSR regulations. For these reasons we have promulgated final regulations providing that NOx is an ozone precursor

## ..." In the Phase I1Rule, EPA established that states must submit SIPSincorporatingrequired changes (including the addition of NOx as a precursor for ozone) no later than June 15, 2007. See 70 FR 71612 (page 71683). On February 5,2010, Kentucky submitted a revision to include NOx as 

### a precursor for ozone for PSD and NNSR permitting purposes in order to comply with the Phase I1 Rule.

11. 

### Today's Action EPA has determined that Kentucky's February 5,2010, SIPrevision revising Kentucky's PSD and NNSR permit programs is consistent with changes to the Federal NSR requirements (40 CFR 5 1.165 and 

### 51.166, and the Phase I1 Rule) relating to the incorporationof NOx as an ozone precursor. Therevision, which became state-effective

on February 5,2010, is included in Kentucky's PSD and NNSR programs and meets the requirements of the Phase I1 Rule by identifyingNOx as a precursor for ozone.2 EPA received comments on its proposal to approve the Kentucky SIPrevision to incorporateNOx as a precursor for ozone, onApril 29,2010, from the Law Office of Robert Ukeiley onbehalf of the Sierra Club and Valley Watch, Incorporated. The comments opposed approval of the SIPrevision. EPA's responsesto these comments can be found in Section I11 of this rulemaking.



## * The Kentucky rules were formattedto conform to Kentucky rule drafting standards (KRS Chapter 13A), but in substantive content the rules are the same as the Federal rules.111. Comments and Responses On April 29,2010,EPA received a letter providing comments on EPA's proposal to approve Kentucky's February 5,2010, SIPrevision to includeNOx as a precursor for

ozone for PSD and NNSR purposes. Below is a summaryof the comments and EPA's response. ~omments:~ The comments acknowledged that "[tlhis revision is long overdue;" however, the comments further stated that, "EPA should not approve Kentucky's revision just because it is "line-by-line" consistent with the federalrules." The comments expressed concerns regarding Kentucky's implementation of modeling requirements for ozone, particularly in reference to certain coal-fired utilities in Kentucky (that were specificallyidentified in the letter), and for those reasons, the Commenter appearsto oppose the SIP revision. The Commenter explains that "[tlhis proposed rulemakingis EPA's opportunityto provide Kentucky with much-needed direction onhow to ensure air quality does not further degrade." Onebasis for the Cornmenter's concerns appearsto be his position on Kentucky's attainment status for the

ozone NAAQS as well as some permitting activities. The Commenter explains his position on Kentucky's alleged noncompliancewith ozone requirements particularly with regard to issuingpermits for major new sources of air pollution. The concerns seemed focused on ozone related modeling and monitoring. Further, the Commenter explains his concerns regarding ozone preconstruction monitoring at certain stationary sources. The Commenter concludesby explainingthat "[tlhe proposed SIPrevision is EPA's opportunity to work with the state of Kentucky to design a program that will help

A full text of the comments is availablein the Docket for this action. Electronic docket information can be found in the "Addresses" portion of this notice. The comments are summarized in this document; however, EPA consideredall the comments expressed in the letter.Kentucky achieve present and future attainmentwith ozone standards." The Commenter requests that EPA (I)not approve the SIPrevision until Kentucky agrees to make serious efforts at attaining and assuring continuing attainmentwith the ozone standards; and (2)

use its powers under CAA Section 167 to prevent constructionof three major sources of

ozoneprecursor pollution (identified in the letter). Response: EPA's Phase I1 Rule required states to add NOx as a precursor for ozone to their SIPs. EPA explained the basis for that decision in the Phase I1 Rule, which is part of the CAA program to improve air quality and reduce ground-level ozone. The air quality benefits were the primary basis for EPA's final action in the Phase I1Rule requiring states to incorporateNOx as a precursor for ozone in their SIPs. See 68

### FR 32802 (proposal);70 FR 71612,71674,71679 (final Phase I1 Rule). The Commenter acknowledges that this action is "overdue" and recognizesthat NOx is in fact a precursor for ozone. While the comments are adverse in the sense that they request that EPA not approve the SIP revision, the commentsprovide no scientificor legal basis for EPA to disapprove Kentucky's February 5,2010, SIPrevision. The comments are focused on
concerns about Kentucky's major source air program, and include no specific information explainingwhy adding NOx as a precursor to ozone in Kentucky's PSD and NNSR programs is contrary to the CAA or its implementing regulations. Notably, the Commenter has raised similar concerns in response to other actions (e.g., permit revisions and other SIPrevisions), including a lawsuit against EPA seeking EPA to use Clean Air Act Section 167 at certain coal-fired utilities in Kentucky. 

### In a letter dated April 17,2009(which was resubmitted onJanuary 20,2010), the Commenterprovided adverse comments to EPA regarding a separate (and unrelated) proposed approval actions for four Kentucky 1lO(a)(l) maintenance plans, stating "the Kentucky PSD program only requires that sources conduct ambient monitoring and impact analysis when a source is over 100 tons per year of [volatile organic compounds]. See 401 

### KAR 51:017 

### 5 7(5)(a). The Kentucky PSD program illegally leaves out major sourcesof NOx. Id."



### In that separate action, the Commenter supported disapprovalbased on NOx not being listed as an ozone precursor in the Kentucky SIP. Nonetheless, in this action to incorporateNOx as a precursor for ozone, the same Commenter is opposing the action. Commenter appears to be trying to achieve changes not directlyrelated to the SIP revision at issue, but more specifically focused on certain major stationary sources identifiedin the letter. These other actions have their own independent regulatory processes wherein Commenter has other opportunitiesto raise concerns and seek changes. EPA's action to approveNOx as a precursor for ozone in Kentucky supports the improvement of air quality in Kentucky, in part because of the associatedmodeling and monitoringrequirements. EPA's approval of this SIPrevision ensures that Kentucky's PSD and NNSR permit programs are consistent with the Federal NSR permit requirements (40 CFR 5 1.165 and 5 1.166) relating to the incorporation of NOx as an
ozone precursor set forth in the Phase I1 Rule.



### IV. Final ActionPursuant to Section 110of the CAA, EPA is taking final actionto approve Kentucky's SIPrevision submitted February 5,2010,which incorporatesNOx as 

### an 1 ozone precursor for PSD and NNSR purposes into the Kentucky SIP. The revision included in Kentucky's PSD and NNSR programs is equivalent to the provision 

### in the Ozone ImplementationNSR Update. EPA is approving these revisions into the Kentucky SIPbecause they are consistent with the CAA and its implementing regulations.



### 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 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 CAA. Accordingly, this action merely approves state law as meeting Federal requirements and does not impose additional requirementsbeyond those imposed by state law. For that reason, this action: is not a "significant regulatory action" subjectto review by the Off~ce of Management and Budget under Executive Order 12866 (58 FR 51735, October 4, 1993); does not impose an mformation 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 FlexibilityAct (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 (Public

### Law 104-4); does not have Federalism implications as specified in Executive Order 13132 

### (64 

### FR 43255, August 10, 1999); is not an economically significantregulatory actionbased 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 1321 1 (66 

### FR 28355, May 22,2001); is not subject to requirementsof 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 CAA; 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 implicationsas 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. The CongressionalReview Act, 

### 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generallyprovides that before a rule may take effect, the agency promulgating the rule must submit a rule report, whichincludes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this action and other required informationto the U.S. Senate, the U.S. House of Representatives, and the Comptroller Generalof the United Statesprior to publication of the rule in the Federal Register. A major rule cannot take effect until 60 days after it is published in the Federal Register. This action is not a "major rule" as defined by 5 U.S.C. 804(2). Under section 307(b)(l) of the CAA, petitions forjudicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by [FEDERAL REGISTER OFFICE: insert date 60 days from date of ~ublication of this document in the Federal Register]. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes ofjudicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectivenessof suchrule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2)).

### List of Subjects 

### in 40 

### CFR Part 52 Environmental protection,Air pollution control, Ozone 

### and Volatile organic compounds.

Acting Regional Administrator, Region 4.

### 40 

### CFR part 52 

### is amended as 

### follows: 

### PART 52-[AMENDED] 1. The authority citation for 

### part 52 continues to read as follows: Authority: 42 U.S.C. 7401 et seq. 

### Subpart S

# - Kentucky 2. Section 52.919 (c) Table 1is amended by revising the entries for "401 

### KAR 51:001," "401 KAR 51:017," and "401 

### KAR 51:052" to read as follows:



### 5 52.919 

### Identification of plan 

## *****Chapter 5 1 A $01KAR 51:OOl EPA-Approved Kentucky Approved Kentucky Regclations

401 KAR 51:017
f iinment and Maintc Definitions for 401 

### KAR Chapter 5 1 Explanation

Prevention of siWcant deteriorationof air quality EPA app~oval date 

## *

ance of the Nai 2/5/2010 State effective date 

## * State Citation

k* mal Ambient A [Insert date of publication in Federal Register1 [Insert citation of publication] Titlelsubject 

## **

[Insert date of publication in Federal Register] [Insertcitation of publication] Quality Standards Except the phrase "except ethanol production facilities producing ethanol by natural fermentation under the North American Industry Classification System (NAICS)codes 325 19 or 312140," in 401 KAR 51:001Section1 (1l8)(l)(b)(i) and the phrase "except ethanol production facilities producing ethanolby natural fermentation under NAICS codes 325193or 312140,'' in 401 KAR 51:001 Section l(118) (2)(c)(20) Except the phrase "except ethanol production facilities producing ethanol by natural fermentation under the North American Industry Classification System (NAICS) codes 325193 or 312140;" in 401 KAR 51:017 Section 7(l)(c)20.Review of new sources 

### in or impacting upon nonattainrnent areas. [Insert date of publication in Federal Register] [Insert citation of publication] Except the phrase "except ethanol production facilities producing ethanolby natural fermentation under the North American Industry Classification System (NAICS) codes 325 193 or 312140," in 401 KAR 5l:OZ Section 2 (3)(t)