federal register

38249

Tuesday

July 23, 1996

Part II

Environmental

Protection Agency

40 CFR Parts 51 and 52

Prevention of Significant Deterioration

and Nonattainment New Source Review;

Proposed Rule
38250 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Parts 51 and 52

[AD–FRL–5455–7]

RIN 2060–AE11

Prevention of Significant Deterioration

(PSD) and Nonattainment New Source

Review (NSR)

AGENCY: Environmental Protection

Agency (EPA).

ACTION: Notice of proposed rulemaking.

SUMMARY: The EPA is proposing to

revise regulations for both the approval

and promulgation of implementation

plans and the requirements for

preparation, adoption, and submittal of

implementation plans governing the

NSR programs mandated by parts C and

D of title I of the Clean Air Act (Act).

These proposed changes are largely

drawn from the discussions and

recommendations of the Clean Air Act

Advisory Committee’s (CAAAC)

Subcommittee on NSR Reform. The

proposed changes are intended to

reduce costs and regulatory burdens for

permit applicants, while still ensuring

that emissions from new or modifying

major stationary sources of air pollution

will not interfere with efforts to attain

and maintain the nation’s air quality

standards and goals.

DATES: Comments. All public comments

must be received on or before October

21, 1996.

Public Hearing. A public hearing is

scheduled for 8:30 a.m. to 4:30 p.m. in

Research Triangle Park, North Carolina

September 23, 1996. The hearing may be

canceled if no requests to speak have

been received 15 days prior to the

scheduled hearing date.

ADDRESSES: Comments. Comments on

this proposal should be mailed (in

duplicate if possible) to: U.S. EPA, Air

Docket Section, Air Docket A–90–37;

401 M Street SW., Washington, DC

20460.

Docket. Supporting information for

this proposal is contained in Docket No.

A–90–37. This docket is available for

public review and copying between 8:00

a.m. and 4:00 p.m., Monday through

Friday at the EPA’s Air Docket Section,

401 M Street SW., Washington, DC;

Room M–1500. A reasonable fee may be

charged for copying.

Public Hearing. A document

announcing the specific location of the

public hearing will be published in the

Federal Register.

FOR FURTHER INFORMATION CONTACT:

Dennis Crumpler, Information Transfer

and Program Integration Division, MD–

12, Office of Air Quality Planning and

Standards (OAQPS), U.S. EPA, Research

Triangle Park, North Carolina 27711,

(919) 541–0871. Persons wishing to

make oral presentations at the public

hearing, or seeking further information,

should contact Pam J. Smith at (919)

541–5319.

SUPPLEMENTARY INFORMATION: The

following outline reflects the contents of

this action:

I. Overview of This Proposal

A. Introduction

B. Background

II. Applicability of the NSR Program

A. Overview

B. Background

1. Current Provisions

2. Litigation over the Actual-to-Potential

Test

3. The Wisconsin Electric Power Company

(WEPCO) Rulemaking

C. The Proposed ‘‘Clean Unit’’ and ‘‘Clean

Facility’’ Exclusion

1. Introduction

2. Description of the Clean Unit Proposal

3. What Constitutes a ‘‘Clean Unit’’

4. Description of the Clean Facility

Proposal

D. Revision to the Netting Baseline

1. Introduction

2. Description of Proposed Netting Baseline

3. Protection of Short-term Increments and

National Ambient Air Quality Standards

(NAAQS)

E. Proposed Pollution Control Project

Exclusion

1. Background

2. Description of Proposed Exclusion of

Pollution Control Projects

3. The Environmentally Beneficial Test

4. Procedural Safeguards

5. Emission Reduction Credits

F. Proposed Plantwide Applicability Limits

(PAL)

1. Background

2. Description of PAL’s Proposal

3. Discussion

G. Actual-to-Future-Actual Methodology

1. Background

2. Limitation of the WEPCO Rule to One

Source Category

3. Issues Regarding the Future-Actual

Methodology

H. Proposal of Chemical Manufacturers

Association (CMA) Exhibit B

1. Description of the Exhibit B

Methodology

2. The EPA’s Preliminary Analysis

3. The EPA Action

I. Allowed Activities Prior to Receipt of

Permit

III. Proposed Revisions to Control

Technology Review Requirements

A. Introduction

B. Proposed Revisions to the Methodology

for Determining Best Available Control

Technology (BACT)

1. General Description of the BACT

Determination Process

2. The Core Criteria

3. Description of the Federal Methodology

for Determining BACT

4. Additional Guidance for BACT

Determinations

C. Improving Information about Available

Control Technologies: Changes to the

Reasonably Available Control

Technology (RACT)/BACT/Lowest

Achievable Emission Rate (LAER)

Clearinghouse (RBLC)

D. Streamline Proposed to BACT/LAER

Determinations

1. Permit Applications Must Include

Analysis of Control Technologies That

Are Demonstrated in Practice

2. Permitting Authority May Limit

Consideration of New or Emerging

Technologies After Complete

Application

E. Proposed Complete Application Criteria

F. Proposed Undemonstrated Control

Technology or Application (UT/A)

1. Introduction

2. Description of Proposed UT/A Waiver

G. Pollution Prevention

1. The Pollution Prevention Act (PPA) and

the EPA’s Pollution Prevention Policies

2. Pollution Prevention in BACT and LAER

H. States’ Discretion to Adopt or Enforce

More Stringent Requirements

I. Addressing the EPA’s Obligation Under

Pending Settlement Agreement

IV. Class I Areas

A. Introduction

B. Background

1. Overview of PSD Requirements for Class

I Areas

2. The Need to Improve PSD Requirements

Related to the Protection of Air Quality

Related Values (AQRV) in Class I Areas

C. The EPA Proposal

1. Defining AQRV and Determining

Adverse Impacts

2. Improving Federal Land Manager (FLM)/

Permitting Authority Coordination

3. Mitigating an Adverse Impact on AQRV

4. Class I Significant Impact Levels

5. Clarification of Miscellaneous Issues

6. Information Clearinghouse (Federal

Class I areas)

7. Visibility New Source Review

V. Prevention of Significant Deterioration

Preconstruction Monitoring

VI. Changes Resulting From the 1990 Clean

Air Act Amendments (1990

Amendments)

A. NSR Provisions for Nonattainment Area

Permitting

1. Provisions for Ozone Nonattainment

Areas

2. Provisions for Carbon Monoxide (CO)

Nonattainment Areas

3. Provisions for PM–10 Nonattainment

Areas

4. Statutory Restrictions for New Sources

5. Applicability of Nonattainment NSR to

Internal Combustion Engines

B. NSR Provisions for Prevention of

Significant Deterioration

1. Stratospheric Ozone-Depleting

Substances

2. Listed Hazardous Air Pollutants (HAP)

3. Applicability of PSD Requirements to

Internal Combustion Engines

C. Control Technology Information

VII. Other Proposed Changes

A. Emissions Credits Resulting From

Source Shutdowns and Curtailments
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38251

B. Judicial Review of NSR Permits

C. Department of Defense (DOD) Concerns

VIII. Additional Information

A. Public Docket

B. Public Comments and Public Hearing

C. Executive Order (EO) 12866

D. Regulatory Flexibility Act

E. Paperwork Reduction Act

F. Unfunded Mandates Reform Act

I. Overview of This Proposal

A. Introduction

The EPA is proposing substantial

changes to the major NSR program, a

preconstruction permitting program

required by the Clean Air Act (Act) that

regulates the construction and

modification of major stationary sources

of air pollution. This proposal

represents the first comprehensive

overhaul of the program in 15 years. The

proposed revisions are largely drawn

from the recommendations and

deliberations of the CAAAC’s NSR

Reform Subcommittee, a panel of

industry representatives, State and local

air pollution control officials,

environmentalists and other experts.

This proposal also contains certain

revisions to the NSR regulations for

State Implementation Plans (SIP) based

on requirements established by the 1990

Amendments. These revisions are

proposed here in order to clarify certain

requirements of the 1990 Amendments.

The adoption of the proposed changes

will resolve a number of the underlying

issues that have impeded full adoption

of the nonattainment NSR programs by

some States and caused uncertainties in

the permitting process thereby delaying

some projects. Other revisions, based on

the CAAAC that are deregulatory in

nature have also been included.

If adopted, the proposed reforms will

significantly reduce the number and

types of activities at sources that would

otherwise be subject to major NSR

under the existing NSR program

regulations, including the new and

revised requirements imposed by the

1990 Amendments. At the same time,

the proposed changes are intended to

provide States with greater flexibility to

customize their own regulations

implementing the NSR program, address

concerns raised about the permitting of

sources near protected National Parks

and other wilderness areas (Federal

Class I areas), promote the use of

innovative technologies and pollution

prevention, and, in general, streamline

the overall NSR permitting process.

The key elements of this proposal

designed to relieve regulatory burden

are:

• Deregulation of changes at ‘‘clean’’

emissions units and ‘‘clean’’ facilities

and of pollution control and pollution

prevention projects—Existing sources

that have clean emissions units or are

undertaking projects to clean up air

pollution should not be targeted for

major NSR.

• Promotion of voluntary plant-wide

limits—Rather than face complicated,

piecemeal applicability decisions every

time a change at a plant is

contemplated, plant managers may

prefer to work within an emissions cap

or emissions budget, an annual

emissions limit that allows managers to

make almost any change anytime as

long as the plant’s emissions do not

exceed the cap. Today’s action proposes

to create this option in EPA’s

regulations.

• Applicability criteria to reflect real

emissions increases—This proposal

would extend the range of years sources

can use to establish their historical

emissions and would allow sources to

calculate emissions increases using

projected future actual emissions rather

than maximum potential to emit (PTE).

This will especially benefit cyclical

industries which during economic

downturns are currently penalized for

making modernizing changes that are

vital to their recovery, even when the

changes lower emissions rates.

• Encouragement of pollution

prevention and innovative control

technologies—these proposed changes

would ensure that pollution prevention

qualifies for the pollution control

project exclusion and revamp the underused innovative control technology

waiver to simplify the process and

eliminate penalties for good faith

failures.

• Enhanced Public Awareness—

Increased public disclosure of source

impacts on Class I areas, establishment

of national database of major permit

applications, and improvements to

EPA’s pollution control technology

bulletin board to increase opportunities

for informed citizen participation in key

permitting decisions.

• Revised requirements for control

technology determinations—These

proposed changes would allow States to

adopt their own methodologies for

reviewing and determining BACT so

long as control technology evaluations

include reasoned consideration of the

most stringent control technology. Other

proposed changes clarify the extent of a

source’s duty to search out new

technology and shorten the technology

review process by providing

presumptive cut-offs.

• Better coordination of permit

reviews for sources potentially affecting

air quality in Federal Class I areas—

These proposed changes clarify the role

of the FLM, the State permitting

authority and the applicant with regard

to the NSR permitting process. The

steps in considering of Class I area

issues are clarified and would be

initiated earlier in the permit review

process than in current regulations. De

minimis levels for determining whether

Class I increment analyses must be

performed would be established. The

changes should reduce delays and

disputes associated with permitting near

Federal Class I areas.

• Increased State flexibility—Instead

of one-size-fits-all solutions to

applicability and other issues, States

will be allowed for the first time to

choose applicability and

implementation approaches from a

menu of alternatives.

• The EPA is taking comment on the

range of preliminary construction

activities that might be allowed to

proceed prior to the issuance of an NSR

permit in cases of modifications at

existing facilities.

• More offset credits available to

nonattainment area sources—Proposed

changes will ease restrictions on use of

emissions reductions credits resulting

from source shutdowns and

curtailments.

• New definition to ensure that the

definition of ‘‘stationary source’’

included stationary internal combustion

engines, but excludes newly-defined

‘‘nonroad engines’’ and ‘‘nonroad

vehicles.’’

Proposed deregulatory changes that

are authorized by the 1990 Amendments

include:

• Exclusion of HAP from PSD

requirements.

• Requirements on ozone-depleting

substances (ODS)—Relaxes PSD

requirements on the substitution of ODS

with lower potency.

Revisions in this document that are

being proposed based on requirements

mandated by the 1990 Amendments are:

• Revised major source thresholds

and emissions offset ratios for sources of

volatile organic compounds (VOC),

nitrogen oxides (NOX), particulate

matter with diameter of 10 microns or

less (PM–10) and CO according to

severity of a nonattainment area’s

ambient air quality problem.

• Special requirements for

determining major modifications of

VOC and NOX sources in serious and

severe ozone nonattainment areas.

• Requirements for the submittal of

control technology information into the

EPA’s RACT/BACT/LAER

Clearinghouse.

This proposal also includes proposed

‘‘housekeeping’’ revisions to the NSR

regulations at § 51.165(a) (NSR in

nonattainment areas) for control
38252 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

1Section 112(g) of the Act provides for

preconstruction review of HAP. Section 112(b)(6) of

the Act specifies that the ‘‘part C’’ PSD program

shall not apply to HAP listed under section 112.

The EPA has published guidance on NSR

implementation issues presented by these

provisions. See 57 FR 18074–18075 (April 28,

1992).

2The meetings of the CAAAC and its NSR Reform

Subcommittee are announced in the Federal

Register and open to the public. The last meeting

of the NSR Subcommittee was in July 1994. A

preliminary draft of this rulemaking was discussed

at that meeting and made available for public

comments. A copy is in the Docket for this

rulemaking. See 59 FR 35119 (July 8, 1994).

technology review, complete

application criteria, and public

participation, which are consistent with

similar provisions under the PSD

regulations at §§ 51.166 and 52.21.

Further, consistent with proposed

reform-related revisions to public

participation provisions, the EPA is also

proposing provisions that clarify permit

applicants’ and the public’s

opportunities for judicial review in

State court regarding PSD or

nonattainment permit actions.

Finally, the EPA is proposing

clarification of source definition criteria

as they relate to military installations

during ‘‘national security emergencies’’.

B. Background

The NSR program legislated by

Congress in parts C and D of title I of

the Act is a preconstruction review and

permitting program applicable to new or

modified major stationary sources of air

pollutants regulated under the Act.1

In areas not meeting health-based

NAAQS and in ozone transport regions

(OTR), the program is implemented

under the requirements of part D of title

I of the Act for ‘‘nonattainment’’ NSR.

In areas meeting NAAQS (‘‘attainment’’

areas) or for which there is insufficient

information to determine whether they

meet the NAAQS (‘‘unclassifiable’’

areas), the NSR requirements for the

prevention of significant deterioration of

air quality under part C of title I of the

Act apply. These regulations are

contained in 40 CFR 51.165, 51.166,

52.21, 52.24 and part 51 appendix S.

The NSR provisions of the Act are a

combination of air quality planning and

air pollution control technology

program requirements for new and

modified stationary sources of air

pollution. In brief, section 109 of the

Act requires the EPA to promulgate

primary NAAQS to protect public

health and secondary NAAQS to protect

public welfare. Once these standards

have been set, States must develop,

adopt, and submit to the EPA for

approval a SIP which contain emission

limitations and other control measures

to attain and maintain the NAAQS and

to meet the other requirements of

section 110(a) of the Act.

Each SIP is required to contain a

preconstruction review program for the

construction and modification of any

stationary source of air pollution to

assure that the NAAQS are achieved

and maintained; to protect areas of clean

air; to protect AQRV (including

visibility) in national parks and other

natural areas of special concern; to

assure appropriate emission controls are

applied; to maximize opportunities for

economic development consistent with

the preservation of clean air resources;

and to ensure that any decision to

increase air pollution is made only after

full public consideration of all the

consequences of such a decision. See,

e.g., sections 101(b)(1), 110(a)(2)(C), 160,

and 173 of the Act.

On November 15, 1990, Congress

enacted numerous changes to title I of

the Act, including changes involving the

NSR provisions under parts C and D for

major new sources and major

modifications locating in attainment

and unclassifiable areas, nonattainment

areas, and ozone transport regions. Most

of these changes are described in the

‘‘General Preamble for Implementation

of Title I of the Clean Air Act

Amendments of 1990’’ (General

Preamble; see 57 FR 13498, April 16,

1992). The EPA has not yet revised its

NSR regulations to reflect the statutory

changes resulting from the 1990

Amendments.

In August 1992, amidst concerns

expressed by regulated industries that

the EPA’s major NSR regulations were

too complex and burdensome, the EPA

began an effort to revise those

regulations. This effort involved the

solicitation of ideas and

recommendations from the CAAAC, as

well as public input.2 The goal of the

NSR Reform effort is to eliminate as

much of the program complexity,

administrative burden and resultant

project delays as possible without

sacrificing the current level of

environmental protection and benefits

derived from the program.

In today’s action, the EPA is

proposing changes to various aspects of

the current NSR program based

primarily on its consideration of

recommendations provided through the

NSR Reform effort, but also based on

independent EPA initiatives to clarify

the NSR program. The EPA further

proposes to add certain new

requirements established by the 1990

Amendments.

The reader should note that the

proposed new and revised regulations

in this document do not

comprehensively address all the

statutory revisions to the NSR program

in the 1990 Amendments.

Consequently, EPA’s promulgation of

any or all revisions in this proposal

should not create the expectation that

States and permit applicants may obtain

program approvals or be issued permits,

respectively, by solely following the

NSR rules, as proposed or ultimately

promulgated.

II. Applicability of the NSR Program

A. Overview

The issue of NSR applicability proved

to be one of the most difficult and

divisive issues for the CAAAC’s NSR

Reform Subcommittee. While the issue

was considered by a subgroup of the

Subcommittee for several months and

debated by the full Subcommittee

during several sessions, consensus

proved elusive. As a result, no formal

recommendations were proffered to the

CAAAC or the EPA on this issue. Still

the discussions provided the EPA with

a better understanding of the concerns

of all sides and revealed a few areas of

potential agreement. There were

common elements in many of the

competing proposals circulated by

members of the Subcommittee. Thus,

while there was no CAAAC resolution

of the issues, today’s proposed

applicability changes build upon the

Subcommittee’s deliberations.

This preamble discusses the following

proposed changes to NSR applicability:

(1) A new exclusion from major NSR for

existing emissions units and facilities

that are subject to BACT or LAER,

equivalent minor NSR control

requirements, or comparable ‘‘clean’’

emissions control technology (see

section II.C); (2) a new baseline for

determining if a physical or operational

change will result in a significant net

emissions increase and thereby trigger

major NSR, allowing sources to use any

12 consecutive months in the past 10

years to establish the unit’s pre-change

emissions level (see section II.D); (3) a

pollution control project exclusion,

patterned after the exclusion recently

adopted by EPA for utilities but

covering all source categories and

pollution prevention projects (see

section II.E); (4) a new provision

allowing States to base applicability on

a PAL (see section II.F); and (5)

extension of a version of the ‘‘actual-tofuture-actual’’ test, currently only

available for utilities, to all source

categories (see section II.G). Finally, the

EPA is proposing for comment an

applicability approach which the EPA

agreed to consider and take final action
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38253

3 The ‘‘PTE’’ is currently defined as the

‘‘maximum capacity of a stationary source to emit

a pollutant under its physical and operational

design.’’ Any physical or operational limitation on

the capacity of the source to emit a pollutant,

including a permit limitation, is treated as part of

its design provided the limitation or its effect on

emissions is federally enforceable (e.g., see existing

§§ 51.165(a)(1)(iii) and 51.166(b)(4)).

In recent decisions, National Mining Ass’n v.

EPA, 59 F.3d 1351 (D.C. Cir. 1995) and Chemical

Manufacturers Ass’n v. EPA, No. 89–1514, slip op.

(D.C. Cir. Sept. 15, 1995), the District of Columbia

Circuit court addressed challenges related to EPA’s

requirement that a source which wishes to limit its

PTE must obtain a federally enforceable limit. The

EPA is currently reviewing its Federal

enforceability requirements in light of these court

decisions, and has not yet decided how it will

address this issue. Once EPA has completed its

review of the Federal enforceability requirements in

all relevant programs including NSR, the Agency

will make available in a Federal Register notice its

response to the court decisions.

on in accordance with the settlement of

a lawsuit with the CMA and other

industry petitioners (see section II.H).

In the past, EPA has essentially

required States to follow a single

applicability methodology. States could,

of course, have a more stringent

approach but most followed closely the

EPA prototype. The EPA is proposing to

break with this one-size-fits-all

approach to applicability by proposing

to adopt these changes as a menu of

options from which a State may pick

and choose in order to customize a

specific approach for its individual

needs. Thus, in its final action on this

rulemaking, EPA will consider placing

all or some of the applicability options

presented today as permissible

alternatives in its part 51 regulations

containing minimum requirements for

State NSR programs in nonattainment

and attainment/unclassified areas.

States will then be free to adopt any

combination of these menu options into

their own regulations and SIP to offer

sources these alternatives. For instance,

if EPA adopts in its final rulemaking

both the ‘‘Clean Unit’’ exclusion and the

PAL option, a State could retain its

current federally-approved applicability

approach without making changes,

retain its existing approach and add a

Clean Unit Test, or retain its existing

approach and add both a Clean Unit

Test and an option for PAL. The EPA

also proposes to include these

applicability approaches in the part 52

regulations governing Federal

permitting programs. The EPA solicits

comment on this approach and

specifically solicits comments on what

restrictions, if any, EPA should place on

States in selecting applicability options.

B. Background

1. Current Provisions

The major NSR provisions of part C

(PSD) and part D (nonattainment

requirements) of title I of the Act apply

to both the construction of new major

sources and the modification of existing

major sources. For new ‘‘greenfield’’

sources, ‘‘applicability’’—the

determination of whether an activity is

subject to the program or, stated

differently, whether the program applies

to particular circumstances—is a fairly

straightforward determination. The Act,

as implemented by the EPA’s

regulations, sets applicability thresholds

for nonattainment areas (PTE above 100

tons per year (tpy) of any pollutant

subject to regulation under the Act, or

smaller amounts, depending on the

nonattainment classification) and

attainment areas (100 or 250 tpy,

depending on the source type). A new

source with a ‘‘PTE’’ in excess of the

applicable threshold amount ‘‘triggers’’

or is subject to major NSR.3

The determination of what should be

classified as a modification subject to

major NSR presents more difficult

issues. The modification provisions of

the NSR programs in parts C and D are

based on the broad definition of

modification in section 111(a)(4) of the

Act: the term ‘‘modification’’ means

‘‘any physical change in, or change in

the method of operation of, a stationary

source which increases the amount of

any air pollutant emitted by such source

or which results in the emission of any

air pollutant not previously emitted.’’

That definition contemplates a two-step

test for determining whether activities at

an existing major facility constitute a

major modification subject to major NSR

requirements. In the first step, the

permitting authority determines

whether a physical or operational

change will occur. If so, then the

permitting authority proceeds in the

second step to determine whether the

physical or operational change will

result in an emissions increase over

baseline levels.

The reference to ‘‘any physical change

* * * or change in the method of

operation’’ in section 111(a)(4) of the

Act could—read literally—encompass

the most mundane activities at an

industrial facility (even the repair or

replacement of a single leaky pipe, or an

insignificant change in the way that

pipe is utilized). However, the EPA has

recognized that Congress did not intend

to make every activity at a source

subject to major new source

requirements under parts C and D. As a

result, the EPA has adopted several

exclusions from the ‘‘physical or

operational change’’ component of the

definition. For instance, the EPA has

specifically recognized that routine

maintenance, repair and replacement,

and changes in hours of operation or in

the production rate are not by

themselves considered a physical

change or change in the method of

operation within the definition of major

modification. See, e.g., existing

§§ 52.21(b)(2)(iii), 52.24(f)(5)(iii),

51.165(a)(1)(v)(C)(1), and

51.166(b)(2)(iii).

The EPA has likewise limited the

reach of the second step of the statutory

definition of modification by excluding

all changes that do not result in an

emissions increase above ‘‘significance’’

levels for the pollutant in question. See,

e.g., existing § 51.165(a)(1)(x). Taken

together, these regulatory limitations

restrict the application of the NSR

program in parts C and D to only ‘‘major

modifications’’ at existing major

stationary sources. See, e.g., existing

§ 51.165(a)(1)(v).

One key attribute of the NSR program

in general is that sources typically ‘‘net’’

modifications out of review by coupling

proposed emissions increases at the

source with contemporaneous emissions

reductions. The judicial decision in

Alabama Power Co. v. Costle, 636 F.2d

323, 400–403 (D.C. Cir. 1979), endorsed

use of this ‘‘plantwide bubble’’ concept

in the PSD program. The court reasoned

that since the principal purpose of the

PSD program was to prevent

deterioration in air quality, a PSD

permit was unnecessary so long as new

construction at an existing plant did not

increase overall emissions to the

environment. Thus, under the EPA

regulations promulgated in 1980

following Alabama Power (which are for

the most part still in place today),

source owners may modify or even

completely replace or add emissions

units without obtaining a PSD permit so

long as ‘‘actual emissions’’ do not

increase over baseline levels at the plant

as a whole. In 1984, the EPA regulations

expanding the use of the plantwide

bubble to the nonattainment area NSR

program under title I, part D of the Act

were upheld in Chevron, U.S.A., Inc. v.

NRDC, 467 U.S. 837 (1984).

Applicability of the part C and D NSR

provisions must be determined in

advance of construction and is

pollutant-specific. In cases involving

existing sources, this requires a

pollutant-by-pollutant determination of

the emissions change, if any, that will

result from the physical or operational

change. The EPA’s 1980 regulations

implementing the PSD and

nonattainment NSR programs thus

inquire whether the proposed change

constitutes a ‘‘major modification,’’ i.e.,

a nonexcluded physical change or

change in the method of operation ‘‘that
38254 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

4 In approximate terms, ‘‘contemporaneous’’

emissions increases or decreases are those which

have occurred between the date 5 years preceding

the proposed physical or operational change and

the date that the increase from the change occurs

[see, e.g., existing section 52.21(b)(3)(ii)].

5 Once a modification is determined to be major,

the PSD requirements apply only to those specific

pollutants for which there would be a significant

net emissions increase. See, e.g., existing sections

52.21(j)(3) (BACT) and 52.21(m)(1)(b) (air quality

analysis).

6 For example, consider an industrial coal-fired

boiler, constructed in the late 1960s and therefore

‘‘grandfathered’’ from NSR, which originally had a

PTE of 1000 tons per year of SO2. Since the mid1980s, this source has actually operated at 50

percent of its capacity and emitted only 500 tons

per year due to economic conditions or because the

boiler became less efficient as it aged, and hence

less economic to operate at full capacity. If the

boiler were to be modified through a non-routine

physical change which did not affect the unit’s

hourly emissions rate, the owner or operator would

need either to accept a cap on its post-modification

emissions at 539 tons per year (i.e., a level less than

a significant increase over its past actual emissions,

where the significant increase level for SO2 is 40

tons per year), or to obtain a major NSR permit if

it desires to maintain the ability to operate at 100

percent of its rated capacity. The 500 ton ‘‘cushion’’

between actual and potential emissions that existed

prior to the modification would no longer exist.

would result in a significant net

emissions increase of any pollutant

subject to regulation under the Act.’’ See

existing § 52.21(b)(2)(i). A ‘‘net

emissions increase’’ is defined as the

increase in ‘‘actual emissions’’ from the

particular physical or operational

change (taking into account the use of

emissions control technology and

restrictions on hours of operation or

rates of production where such controls

and restrictions are federally

enforceable), together with other

contemporaneous increases or decreases

in actual emissions at the source. See

footnote 3 and existing § 52.21(b)(3)(i).4

In order to trigger major NSR, the net

emissions increase must exceed

specified ‘‘significance’’ levels when

compared to a pre-modification

‘‘baseline.’’ 5 See existing

§§ 52.21(b)(2)(i) and 52.21(b)(23).

The EPA’s existing regulations

generally define baseline actual

emissions as ‘‘the average rate, in tpy, at

which the unit actually emitted the

pollutant during a 2-year period which

precedes the particular date and which

is representative of normal source

operation’’ (see, e.g., existing

§ 52.21(b)(21)(ii)). The Administrator

‘‘shall’’ allow use of a different time

period ‘‘upon a determination that it is

more representative of normal source

operation.’’ Id. The EPA has historically

used the 2 years immediately preceding

the proposed change to establish the

baseline [see 45 FR 52676, 52705,

52718]. However, in some cases it has

allowed use of an earlier period.

With respect to modifications at

existing sources, a prediction of whether

the physical or operational change will

result in a significant net increase in the

source’s actual emissions following the

modification is thus necessary. In part

this involves a straightforward and

readily predictable engineering

judgment—how will the change affect

the emissions factor or emissions rate of

the emissions units that are to be

changed. It also necessarily involves a

prediction of utilization rates—how

much of the source’s full production

capabilities as modified will be used per

hour, and how many hours per year the

source will be operated.

The current regulations provide that

when an emissions unit (other than an

electric utility steam generating unit)

‘‘has not begun normal operations,’’

actual emissions equal the PTE of the

unit. See existing § 52.21(b)(21)(iv). The

EPA has interpreted this provision as

creating an initial presumption that

because the changed unit ‘‘has not

begun normal operations’’ following the

change, it will operate at its full

capacity year round, i.e., at its full

emissions potential. This is referred to

as the ‘‘actual-to-potential’’ test. The

owner or operator is free to rebut the

presumption that actual emissions will

increase over pre-modification levels by

agreeing to limit its PTE, through the

use of federally enforceable restrictions,

to pre-modification actual emissions

levels (plus an amount that is less than

‘‘significant’’). See footnote 3. The effect

of this methodology is to require the

source to take minor NSR permit limits

to ensure that actual emissions will not

increase (by more than a prescribed

‘‘significant’’ amount, if any) above

baseline levels following the physical or

operational change.

2. Litigation Over the Actual-toPotential Test

Industry has long been concerned that

most physical or operational changes

under EPA’s rules will initially register

as emissions increases under EPA’s

actual-to-potential test because most

sources are operated at less than full

capacity on an annual basis. As a result,

a change at the source that does not

affect instantaneous emissions rates

shows up as a presumed emissions

increase because the pre-modification

actual utilization is less than the

projected post-modification utilization,

which is presumed to reflect full

capacity at all times. Hence, often

sources have accept federally

enforceable limits on post-modification

emissions or operations to avoid major

NSR.6 As a legal matter, some industry

representatives argue that under current

regulations the EPA cannot properly

presume that every non-routine or

otherwise nonexcluded change to an

existing emissions unit cannot be the

basis for finding that the unit ‘‘has not

begun normal operations.’’ They

contend that the fact that a unit is

proposed to be ‘‘changed’’ should not

necessarily mean that it has not yet

‘‘begun normal operations’’ following

the change.

Two cases have addressed the EPA’s

application of the actual-to-potential

test, and specifically, the interpretation

of the phrase ‘‘begun normal

operations.’’ In Puerto Rican Cement Co.

v. EPA, 889 F.2d 292 (1st Cir. 1989), the

court upheld the EPA’s application of

the actual-to-potential methodology in a

case involving conversion of a cement

plant from a wet process to a more

efficient dry process. The court upheld

the EPA’s interpretation that the words

‘‘emissions unit that has not begun

normal operations’’ include modified

units as well as new units, citing a

passage from the 1980 rulemaking

preamble that, in the court’s view, made

it clear that the EPA intended to apply

the actual-to-potential test to a ‘‘new or

modified unit.’’ 889 F.2d at 298 (45 FR

52676, 52677) (emphasis added by

court).

The court noted that its endorsement

of EPA’s use of the ‘‘actual-to-potential’’

approach for calculating an emission

change in this case was simplified by

the facts presented, and that under other

circumstances, the decision could have

been more difficult.

On a related issue, the court agreed

with the EPA’s position that the

regulatory exclusion for certain

increases in a source’s production rate

or hours of operation applies only when

such an increase is unaccompanied by

construction or modification activity.

See id. at 916, n.11. The EPA is today

proposing to make the existing

exclusion explicitly clear on this point

by inserting the phrase ‘‘standing alone’’

at the beginning of the exclusion. See

proposed amendatory language for

§§ 51.165(a)(1)(v)(C)(6),

51.166(b)(2)(iii)(F), 52.21(b)(2)(iii)(F)

and 52.24(f).

The actual-to-potential test was also at

the heart of a legal challenge brought by

WEPCO, see Wisconsin Electric Power

Co. v. Reilly, 893 F.2d 901 (7th Cir.

1990). The WEPCO proposed extensive,

life-extension renovations for several

older (35- to 50-year old) coal-fired

electric utility boilers. The EPA sought

to apply the ‘‘actual-to-potential’’ test

reasoning that the modernizing changes,

as confirmed by the WEPCO’s own

projections, would increase reliability
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38255

7The regulations define ‘‘electric utility steam

generating units’’ as any steam electric generating

unit that is constructed for the purpose of supplying

more than one-third of its potential electric output

capacity and more than 25 megawatts (MW) of

electrical output to any utility power distribution

system for sale. See e.g., existing section

51.166(b)(30).

8 In the WEPCO Rule, the EPA also created

special new source performance standard (NSPS)

treatment for certain repowering projects and

provided limited NSR exemptions for temporary

and permanent Clean Coal Technology projects, and

for certain ‘‘very clean’’ units. See e.g., existing

section 51.166(b)(2)(iii) (i), (j) and (k)]. All of these

changes implemented special provisions in the

1990 Amendments. In the rule, the EPA also

amended its NSPS regulations (40 CFR part 60) to

allow a utility to use as its pre-change baseline its

highest hourly emissions rate achieved during the

5 years prior to the proposed physical or

operational change. The changes implementing the

NSPS baseline change are neither discussed nor

affected by today’s rulemaking proposal.

9Under today’s proposal, for units that are

permitted to change feedstocks frequently, such as

pharmaceutical manufacturing and certain chemical

batch processes, the maximum hourly emissions

rate test would be applied on a per feedstock basis

to determine if an emission increase will occur. For

example, a unit which has state-of-the-art volatile

organic compounds (VOC) control technology and

uses toluene and other organic solvents as

feedstocks, the hourly maximum emission rate of

toluene before and after the proposed physical or

operational change would be assessed as if toluene

alone was to be fully utilized by the unit before and

after the proposed change. The other feedstocks

would also be individually assessed. A change in

feedstock would not trigger NSR if the control

technology designed to control emissions resulting

from the feedstock and the unit was previously

permitted to use the feedstock. The EPA encourages

suggestions in developing rules or guidance on

other approaches for determining emissions

Continued

and decrease operating costs, thus likely

leading to increased utilization and,

hence, increased actual emissions.

However, the Seventh Circuit disagreed

with the EPA’s interpretation. The court

coined the phrase ‘‘like-kind

replacement’’ to describe the type of

renovations occurring at the WEPCO

plant, where steam drums and other

major components were replaced by

new components of identical design and

function. 893 F.2d at 917. The court said

that where the renovations were likekind replacements, the EPA could not

reasonably interpret its regulations to

say that such a unit was so different that

it has not begun normal operations.

Following the remand in the WEPCO

case, the EPA employed an ‘‘actual-tofuture-actual’’ test for the WEPCO

facility comparing WEPCO’s emissions

during the baseline period to estimated

future-actual emissions drawn from

utilization projections available in the

record.

3. The WEPCO Rulemaking

In 1992, the EPA promulgated

revisions to its applicability regulations

creating special rules for physical and

operational changes at electric utility

steam generating units [see 57 FR 32314,

July 21, 1992].7 In this rule, prompted

by the WEPCO litigation and commonly

referred to as the ‘‘WEPCO Rule,’’ the

EPA adopted an actual-to-future-actual

methodology for all changes at electric

utility steam generating units except the

construction of a new electric generating

unit or the replacement or

reconstruction of an existing emissions

unit. Under this methodology, a utility

compares its actual annual emissions

before the change with its projected

annual emissions after the change to

determine if a physical or operational

change would result in a significant

increase in emissions. To ensure that

the projection is valid, the rule requires

the source to track its emissions for the

next 5 years. The EPA is today

proposing to allow use of this

methodology for all source categories as

described in more detail in section II.G

of this preamble.

The EPA also made changes to the

baseline portion of the actual-to-futureactual methodology. The EPA retained

the existing regulatory language, but

adopted a presumption that utilities

may use as baseline emissions the

annual actual emissions from any 2

consecutive years within the prior 5

years. This presumption would be

superseded by the proposed baseline

changes for all source categories

discussed in section II.D. of this

preamble. In the WEPCO rule, the EPA

also created a pollution control project

exclusion for utilities. As discussed in

section II.E. of this preamble, today’s

proposal would replace this pollution

control project exclusion with a new

pollution control project exclusion for

all source categories.8

C. The ‘‘Clean Unit’’ and ‘‘Clean

Facility’’ Exclusion

1. Introduction

The Applicability Subgroup of the

CAAAC’s NSR Reform Subcommittee

considered many applicability options.

While none of these proposals garnered

the full Subcommittee’s support,

representatives of State and local

regulators as well as environmental

groups expressed general support for the

idea that ‘‘benign’’ changes at existing

emissions units should not be subject to

the complicated NSR applicability rules

related to determining a significant net

emissions increase. There was also

support for the proposition that the NSR

applicability test should provide some

deference to sources that have already

undergone major NSR.

The EPA, after careful consideration

of these discussions, believes that the

best approach for a new exclusion is one

that focuses on the existing emissions

control of a unit, rather than the change

being proposed. Almost all stakeholders

identified the goal of ensuring that

modified units apply state-of-the-art

controls as being of paramount

importance. Accordingly, where an

emissions unit already meets this goal,

environmental concerns associated with

proposed changes are likely reduced.

For example, it is the EPA’s experience

that in many cases where an existing

well-controlled unit triggers major NSR,

the permitting process does not

necessarily result in improved controls.

On the other hand, where the review is

focused on units which have not

recently been required to meet a control

technology requirement, NSR can be

expected to result in more effective

controls and meaningful reductions in

actual emissions.

Similarly, where an entire facility

already meets the goal of the application

of state-of-the-art controls and has

undergone an air quality impact

analysis of its emissions, environmental

concerns associated with proposed

changes are likely reduced if the

changes remain consistent with

requirements imposed by the original

analysis. Thus, EPA is also proposing a

‘‘clean’’ facility exclusion that allows a

major stationary source to make changes

at its facility consistent with PSD or

NSR permits that have been recently

issued.

2. Description of the Clean Unit

Proposal

Based on these factors, the EPA is

today proposing a simplified

applicability test for changes to existing

emissions units that already are wellcontrolled considering the extent a

current BACT/LAER review for a

particular unit would result in lower

emissions. In general, this new ‘‘clean

unit’’ exclusion will allow States to

exclude from major NSR, proposed

changes to existing emissions units that

have installed major BACT or LAER

within the last 10 years or which

otherwise qualify as a ‘‘clean unit.’’

Under this exclusion, sources can make

any change to a qualifying unit so long

as the change will not increase the

unit’s emissions rate (measured in terms

of the unit’s maximum hourly

emissions, the NSPS test found at 40

CFR 60.14). Specifically, changes which

do not increase the unit’s hourly

potential emissions would not be

considered a physical or operational

change and thus would not trigger major

NSR.9 See proposed
38256 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

increases for processes with rapidly changing and

mixed feedstocks.

§§ 51.165(a)(1)(v)(C)(10),

51.166(b)(2)(iii)(L), 52.21(b)(2)(iii)(L),

and 52.24(f).

The proposed ‘‘clean unit’’ exclusion

would both simplify the applicability

test for qualifying units and increase

source flexibility. It would also reward

sources that in the recent past have

applied controls to their emissions units

that were equal or comparable to BACT

or LAER.

Ideally, the change in hourly potential

emissions would be assessed

immediately before and after the change

to determine if an emissions increase

did indeed occur. However, this may

not be practical in many instances

because information necessary to

establish the hourly potential emissions

rate may require considerable time to

develop or collect. Therefore, under the

proposed provision, the pre-change

hourly potential emission rate may be

established or verified at any time up to

6 months prior to the proposed activity

or project. The EPA solicits comment on

alternative periods for establishing the

pre-change hourly emissions rate,

particularly periods which might allow

the use of routine compliance emissions

tests to determine the emissions rate

(e.g., annual). Also, under the proposed

provision, where the unit is subject to

a federally enforceable limitation (on

operations or emissions) which limits

the unit’s hourly potential emissions to

less than the maximum physicallyachievable hourly rate, the unit’s lower

allowable rate must be used in

determining if an emissions increase

will occur at the unit.

3. What Constitutes a ‘‘Clean Unit’’?

For this exclusion to function, it is

necessary to distinguish a wellcontrolled unit from a poorly controlled

one. In other words, what criteria

distinguish a unit eligible for this

exclusion from one which is not?

Criteria which allow a broad range of

units to qualify could largely transform

the existing applicability system into

one based solely on assessing a unit’s

potential emissions, with the possibility

of a dramatic increase in a unit’s actual

annual emissions without undergoing

NSR.

The EPA proposes to require that in

order to qualify as a ‘‘clean unit’’ an

emissions unit must have a federally

enforceable emissions limit that ‘‘is

comparable’’ to the BACT or LAER

requirements for that type of unit,

whichever would otherwise be

applicable to the proposed change. See

proposed §§ 51.165(a)(1)(v)(C) (10)

through (13), 51.166(b)(2)(iii)(L),

52.21(b)(2)(iii)(L), and 52.24(f). The EPA

envisions that three types of limits

would qualify: (1) BACT or LAER limits

set within the last 10 years for the

particular unit; (2) a limit set within the

last 10 years for the particular unit by

a State technology review program

determined by EPA to be comparable to

the Federal BACT or LAER programs;

and (3) a limit found on a case-by-case

basis—after notice and opportunity for

public comment—to be comparable to

the current BACT or LAER limits that

would otherwise be imposed on the

source after weighing the cost and

benefits of additional or modified

controls, including retrofit cost and

benefits.

a. Units with BACT or LAER Limits.

One starting point for determining

whether a unit is well-controlled is the

level of control required to satisfy BACT

(in attainment/unclassified areas) or

LAER (in nonattainment areas). For

units which have recently undergone

these reviews, re-evaluation of the

technology shortly after the source is

constructed or modified to determine if

the technology is still ‘‘state-of-the-art’’

would likely result in very little or no

incremental improvement in emissions

control. Moreover, units that are

recently permitted are far less likely to

have physically deteriorated and more

likely to be running near permitted

capacity, reducing the risk that changes

to the unit will result in increased

utilization and increased actual

emissions.

Therefore, the EPA is proposing that

the new exclusion may presumptively

apply to any unit which received a

BACT or LAER limit in a currently

applicable major NSR permit within 10

years of the proposed change under

consideration. See proposed

§§ 51.165(a)(1)(v)(C)(11)(i),

51.166(b)(2)(iii)(L)(2)(i),

52.21(b)(2)(iii)(L)(2)(i), and 52.24(f). In

other words, for the first 10 years

following issuance of a PSD or

nonattainment NSR permit, units

subject to BACT or LAER set in that

permit are eligible for the clean unit

exclusion. At least some members of the

Subcommittee expressed concern that

the 10-year period is too long given the

improvement in control technology that

can occur in some source categories. For

this reason, EPA solicits comment on

using a shorter period such as 5 years

as the length of the Clean Unit

presumption derived from a NSR

permit.

During consideration of the Clean

Unit Exclusion, several participants

suggested that units subject to

maximum achievable control

technology (MACT) or reasonably

available control technology (RACT)

should also automatically qualify as

clean units. A recently required MACT

emissions limit, while not necessarily

equal to BACT or LAER, is likely to

result in significant emissions controls

such that a BACT or LAER review

would not necessarily result in

significant additional emissions

reductions. However, the EPA is also

concerned that a MACT limit could be

significantly less effective in limiting

VOC emissions than BACT or LAER in

many circumstances. A MACT emission

limit may adequately control a toxic

VOC but could result in emission

increases of pollutants subject to NSR.

For example, an incinerator installed to

reduce a toxic VOC will increase

nitrogen oxides (NOX) emissions

emitted to the atmosphere.

The EPA also has concerns with using

Federal RACT limits to presumptively

qualify a unit as a clean unit since

RACT emission limits can be less

stringent than LAER and BACT. Further,

in some instances RACT is based on the

attainment needs of the area and not a

specific control technology standard.

While EPA solicits comment on

presumptively applying the clean unit

exclusion test to units with Federal

MACT or RACT limits, the EPA is not

inclined to do so across the board.

Rather, the EPA believes that MACT or

RACT limits should be found to qualify

for the Clean Unit exclusion using the

case-by-case option described in section

II.C.3.c.

b. State Technology Programs

Comparable to BACT or LAER.There are

many emissions units at stationary

sources that were permitted according

to a State’s minor NSR permitting

program. While these units were not

subject to a major source BACT or LAER

limit per se, they may have installed

controls that would have satisfied major

source BACT or LAER requirements at

the time the permit was issued. For

instance, several jurisdictions have

control technology reviews as part of a

State, local or tribal minor NSR program

which requires new or modifying

sources to meet emissions levels

comparable to major source control

technology requirements (BACT or

LAER). For this reason, the EPA is

proposing that permitting authorities

may submit minor NSR control

technology requirements for

certification by the EPA that the minor

NSR program requires control

technology that would satisfy the

requirements for the clean unit

exclusion. See proposed

§§ 51.165(a)(1)(v)(C)(11)(ii),

51.166(b)(2)(iii)(L)(2)(ii),
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38257

10 In a separate rulemaking EPA has proposed

revising the public review and comment

requirements at 40 CFR 51.161 to give States more

flexibility in processing minor source permits for

projects that are determined to be ‘‘less

environmentally significant.’’ Certain minor source

actions, e.g., netting, that in effect shield a source

from major source permitting requirements would

not qualify for less environmentally significant

status. See 60 FR 45529, 45549 (August 31, 1995).

11While rules implementing title V address how

the unit’s major NSR permit and BACT or LAER

limit are incorporated into the title V permit, it is

not clear that the status of a unit as a NSR clean

unit would be included in the title V permit as an

applicable requirement. Whether the status of a unit

as a NSR clean unit presumption is an applicable

requirement in the title V permit will likely depend

upon how the clean unit test is adopted by the

permitting authority (e.g., adopted as a SIP

requirement). The EPA solicits comment on the best

approach for implementing and coordinating the

review and designation of clean units with the title

V permit process.

52.21(b)(2)(iii)(L)(2)(ii), and 52.24(f).

Once determined by EPA to be

comparable, all units subject to

emissions limitation established under

the jurisdiction’s minor NSR program

would be eligible for the clean unit

exclusion for the first 10 years following

issuance of the permit. This could also

apply to permits that have been issued

previously under minor NSR technology

requirements that are later determined

to be comparable to major source BACT

or LAER requirements. In such a case,

the clean unit exclusion would apply to

the unit covered by the minor NSR

permit, and it would take effect once

EPA makes the certification of

comparability (i.e., the clean unit test

would apply only to modifications

taking place after the EPA certification

of comparability). The clean unit test

could apply to the qualifying unit for up

to 10 years after issuance of the minor

source permit. The EPA also solicits

comment on whether a shorter period,

such as 5 years, would be more

appropriate.

The EPA also solicits comment on the

appropriate standards for EPA to use in

determining whether a permitting

authority’s minor NSR program control

technology requirements are comparable

to the BACT and LAER requirements.

The EPA envisions that as a minimum

a ‘‘pre-certified’’ minor NSR program

comply with 40 CFR 51.160 through

164.10

c. Qualification of Units on a Case-ByCase Basis. In many cases an emissions

unit not subject to major NSR is

constructed or retrofitted with a control

technology or strategy comparable to the

best controls applied in practice. This

may occur when a source minimizes

emissions in order to ‘‘net’’ a unit out

of major NSR or applies controls to

comply with other provisions of the Act.

For this reason, the EPA’s proposed

regulations would allow a source having

a limit on an emissions unit determined

to be comparable to BACT or LAER for

the particular unit considering cost and

benefits of additional or modified

controls, including retrofit cost and

benefits to qualify for the ‘‘clean unit’’

exclusion on a case-by-case basis.

Specifically, an existing unit which has

not undergone a BACT or LAER

determination or comparable State

technology requirement can also qualify

as a ‘‘clean unit’’ if, in the informed

judgment of the permitting agency, a

current BACT or LAER determination

for the unit would not be expected to

result in any lower level of emissions

from the unit for the pollutant in

question. The costs, benefits and

technical consideration associated with

the retrofit application of additional

controls to the particular unit may be

considered by the permitting agency in

the evaluation. Since this in effect may

require the permitting authority to

engage in a technology review that is

similar to BACT or LAER review in

order to qualify a unit for this exclusion,

the EPA is asking for comment on other

approaches for qualifying units.

Once a permitting authority makes

this determination through a process

involving notice and opportunity for

public comment, the unit would be

eligible for the clean unit exclusion for

the next 5 years. As with the other types

of proposed clean unit exclusions, EPA

requests public comments on the

proposed exclusion eligibility period.

See proposed

§§ 51.165(a)(1)(v)(C)(11)(iii),

51.166(b)(2)(iii)(L)(2)(iii),

52.21(b)(2)(iii)(L)(2)(iii), and 52.24(f).

The EPA solicits comments on several

other alternative bases upon which a

permitting authority could take to make

the determination that a unit has a

comparable BACT or LAER emissions

limitation. The first would be based on

an average of BACT or LAER for

equivalent or similar sources over a

recent period of time (e.g., most recent

3 years). The second would be based on

the unit’s control level being within

some percentage (e.g., 5 or 10 percent)

of the most recent, or average of the

most recent, BACT or LAER levels for

equivalent or similar sources. The EPA

solicits comment on these approaches

and on the general issues concerning

whether and how EPA should impose a

specific methodology for determining

that a specific emissions limit is

‘‘comparable’’ to the BACT or LAER

limit that would result from a major

source review.

For all of the above tests, the EPA

realizes that there are many source and

emission unit categories for which

BACT or LAER determinations do not

exist, let alone recent determinations.

For these sources, the EPA proposes that

their level of control be gauged against

the control level associated with BACT

or LAER for emission units with similar

emission stream characteristics. Since

this in effect requires the permitting

authority to engage in a BACT or LAER

review in order to qualify a unit for this

exclusion, the EPA is asking for

comment on other approaches for

qualifying units.

States are encouraged to use the

permitting process required by title V of

the Act as the vehicle for determining

and recording which units at a title V

source can qualify for this exclusion.11

The permitting authority could use the

title V permit issuance, revision or

renewal process as the mechanism for

making the case-by-case determination

(so long as the opportunity for public

comment is provided). For convenience,

one, many or all units at a source could

be reviewed and subjected to public

notice and comment concurrently with

the issuance or renewal of a title V

operating permit. For units eligible for

the ‘‘clean unit’’ exclusion due to a prior

NSR BACT or LAER determination, or a

determination under a program found

comparable by EPA, the title V permit

offers the opportunity to clearly set forth

the status of the unit under the clean

unit exclusion. Qualifying clean units

and the pollutant for which the

determination was made should be

clearly identified and listed in the title

V permit as ‘‘clean units’’ for NSR

purposes.

Under this proposal, a unit that does

not initially qualify for the clean unit

exclusion could install controls meeting

the criteria the EPA establishes for wellcontrolled units and thereby qualify to

use the exclusion. The controls or

pollution reduction strategy that are the

basis for the clean unit determination

must be in place and federally

enforceable at the time the source relies

on an exclusion under this provision. So

long as these federally enforceable

conditions are met, the source is free to

make any change at the permitted unit

including those which could affect a

unit’s efficiency, capacity, availability,

longevity and utilization. However,

changes which would compromise the

original emissions unit’s BACT or LAER

control level or air quality impact (e.g.,

modified stack parameters which would

cause or contribute to violation of any

applicable ambient standard,

replacement of the unit with a different

type or size of unit, or reconstruction of

the unit) would not be allowed. Also,
38258 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

for units excluded from major NSR

under this proposed revision, the

physical or operational change must

still comply with all otherwise

applicable Act and SIP requirements

including any federally enforceable

limits on emissions or operations and

minor NSR requirements.

Finally, the determination that a unit

is ‘‘clean’’ or ‘‘well-controlled’’ under

this proposal is an applicability test and

is independent from the case-by-case

determination of BACT or LAER for

sources subject to major NSR. While

control technology which qualifies a

unit as ‘‘clean’’ may be ‘‘comparable’’ to

BACT or LAER for a particular unit

considering its unique circumstances, it

is not necessarily equal to BACT or

LAER for that unit when considered as

part of a new major facility or major

modification, and in no way establishes

a presumptive BACT or LAER for that

unit, source type or category. Further, a

5- or 10-year presumption that a unit is

‘‘clean’’ does not in any way ‘‘freeze’’

BACT or LAER determinations in

permitting actions. The Act requires that

BACT and LAER be current

determinations for sources subject to

major NSR and the clean unit

designation does not override this

determination.

4. Description of the Clean Facility

Proposal

Similar to the clean unit exclusion,

EPA is proposing an exclusion for

changes at clean facilities. This ‘‘clean

facility’’ exclusion will allow States to

exclude from major NSR, proposed

changes to an existing major stationary

source that has undergone major NSR

for the entire source within the last 10

years. See proposed

§§ 51.165(a)(1)(v)(C)(11),

51.166(b)(2)(iii)(M), 52.21(b)(2)(iii)(M),

and 52.24(f). Under this exclusion, a

major source can make any change as

long as the source would still be in

compliance with its major NSR permit.

The EPA envisions this to allow any

changes that do not include adding new

units or allowing emissions trades that

were not evaluated for air quality

impacts in the major NSR permit. The

exclusion would, however, allow a

source to replace or reconstruct existing

units so long as they continue to meet

the emissions limitations established in

the permit. Thus, such replacement or

reconstruction would not result in a

different type of emissions unit than

envisioned and covered by the major

NSR permit and its requirements. The

addition of new emissions units would

not be allowed under the proposal

because such changes would not be

consistent with the existing NSR permit.

However, all other changes consistent

with the terms of the major NSR permit

would not be considered a ‘‘physical or

operational change’’ for the purposes of

major NSR applicability. Similarly,

emissions trades may not be permissible

where a different air quality impact

would result since the PSD or NSR

permit might limit such differing

impacts.

As proposed, a clean major stationary

source is one that underwent NSR

within the last 10 years. The EPA

requests comment on this approach and

specifically on whether this proposed

approach should not allow units or

facilities to be replaced or

reconstructed.

D. Revision to the Netting Baseline

This preamble describes and solicits

comment on a new method for

determining an existing source’s

baseline emissions for purposes of

determining whether a physical or

operational change will cause an

increase in emissions and trigger NSR.

1. Introduction

As discussed, in order to determine

whether a physical or operational

change will result in an increase in

emissions, it is necessary to compare a

source’s emissions before the change (its

baseline emissions) with its emissions

after the change. The EPA’s existing

regulations generally define baseline

actual emissions as ‘‘the average rate, in

tpy, at which the unit actually emitted

the pollutant during a 2-year period

which precedes the particular date and

which is representative of normal

source operation.’’ See, e.g., existing

§ 52.21(b)(21)(ii). The Administrator

‘‘shall’’ allow use of a different time

period ‘‘upon a determination that it is

more representative of normal source

operation.’’ Id. Prior to the WEPCO rule,

EPA historically used the 2 years

immediately preceding the proposed

change to establish the baseline. (See 57

FR 32323.) However, in the WEPCO

rule, EPA adopted a ‘‘presumption’’ that

utility sources could use any 2-year

period out of the preceding 5 years.

During the CAAAC Subcommittee

deliberations, there was considerable

interest in the issue of the proper

baseline. For instance in the automobile

industry, where low utilization rates

have persisted at some plants for several

years, EPA’s baseline presumptions

have the effect of leaving plant

managers with the choice of

surrendering capacity (that would not

be considered representative of normal

operations under the current NSR rules)

or taking the time and expense to secure

a major NSR permit for even small, nonexcluded changes to a portion of the

plant.

Provisions in the existing regulations

which, at the discretion of the

permitting authority, allow the use a

different, ‘‘more representative,’’ period

have not alleviated the problem in the

view of many Subcommittee members.

As with other aspects of current netting

rules, establishing representative

baseline periods other than the 2-year

period preceding the proposed change

can be complex and time-consuming,

and often involves disputed judgment

calls.

Several industry applicability

proposals included changing to a

netting baseline that allows sources to

use the highest year or 12 consecutive

months out of the previous 10 years.

Generally, the participating State air

pollution management officials favored

this increase in flexibility. Some of the

environmental group representatives

also recognized that the existing

baseline approach has the impact of

taking away ‘‘used and useful’’ capacity

and that a longer baseline period would

be appropriate. On the other hand, some

participants were concerned that the

test for determining a net emissions

increase take into account not only

annual emissions levels but short-term

levels as well. The proposal outlined

below addresses these concerns.

2. Description of Proposed Netting

Baseline

The EPA is today proposing to extend

the time period for determining baseline

in the definition of actual emissions to

10 years for all source categories and to

allow sources to base their actual

emissions on the highest consecutive 12

months during this 10-year period. See

proposed §§ 51.165(a)(1)(xii)(b),

51.166(b)(21)(ii) and 52.21(b)(21)(ii). As

described below, in nonattainment areas

and ozone transport regions, the EPA

proposes that the 12-month period begin

on or after November 15, 1990 to be

consistent with the area’s emissions

inventory and attainment plan

requirements. See proposed § 51.165

(a)(1)(xii)(B). In addition, this proposal

would replace the any 2-years-in-5

baseline established as a presumption

for utilities in the WEPCO rulemaking

and would be available for all source

categories, subject to the restrictions

discussed below. See, e.g., existing

§ 51.166(b)(21)(v).

The EPA’s intent is to allow sources

to determine applicability based on

their highest level of utilization and not

necessarily their highest emissions rate.

The emissions rate of units at issue may

be subject to any number of current

Federal or State restrictions (e.g., RACT,
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38259

12The PSD increments are explained in section

IV.B.1.

MACT, BACT, LAER, NSPS, national

emission standard for HAP (NESHAP))

as well as voluntary limits (e.g.,

reductions used for netting, offsets,

Emission Reduction Credits creation)

and these limits may have been imposed

since the time the source achieved its

highest emissions level. Therefore, these

limits must be included in establishing

the baseline emissions. For this reason,

the EPA is today proposing that sources

calculate the baseline by using their

current emissions factor in combination

with the utilization level from the 12-

month time period selected. This

safeguard insures that no significant loss

of environmental protection will result

from the proposed change.

Under the proposed provision, EPA

also would limit the new baseline in

nonattainment areas and ozone

transport regions to no sooner than the

enactment date of the 1990

Amendments, November 15, 1990. The

1990 Amendments included a number

of changes in how emissions are to be

inventoried and tracked, particularly in

nonattainment areas and ozone

transport regions. The changes

strengthen reasonable further progress

tracking requirements, offset limitations

and RACT requirements for

nonattainment areas and establish

enhanced emissions inventory

requirements for all areas. The EPA

believes that allowing baselines prior to

the 1990 Amendments may complicate

and impede State and local efforts to

track and reduce emissions from a 1990

emissions baseline which in many cases

may be lower than pre-1990 emission

levels. Therefore, the EPA is proposing

to limit use of an expanded baseline in

nonattainment areas and ozone

transport regions to a period of time no

earlier than November 15, 1990 and no

greater than 10 years, whichever is more

restrictive. This means that sources in

nonattainment areas would not be able

to utilize a 10-year look back until

November 15, 2000.

In attainment/unclassifiable areas, use

of pre-1990 emission baselines would

also pre-date general emission inventory

and reporting requirements of the 1990

Amendments which are expected to

improve recordkeeping and inventory

maintenance by State and local

agencies. Unlike nonattainment areas

and ozone transport regions, however,

these inventory and data requirements

are not directly linked to the PSD

requirements. Therefore, the EPA sees

no clear reason why the use of a 10 year

look back should be limited to after

November 15, 1990 in attainment/

unclassifiable areas. However, EPA

solicits comment on this issue for both

attainment/unclassifiable areas and

nonattainment areas.

It is the EPA’s experience that many

sources keep accurate records on

emissions or operations for only 3 to 5

years, unless expressly required to do so

for a longer period. A number of State

and local permitting authorities have

similar experiences. Thus, the EPA has

reservations concerning the use of 10-

year, and longer, baselines and solicits

comment on whether a shorter (e.g., 5-

year) period would be more appropriate.

In addition, if the EPA adopts a 10-year

look back period, the EPA also proposes

that such period be available only when

adequate emissions and/or capacity

utilization data are available for the

baseline calculation. The EPA solicits

comment on the need to condition the

use of such periods upon the accuracy

and completeness of available data, and

the need to establish specific criteria,

through guidance or otherwise, for

accuracy, completeness and

recordkeeping when using older data.

As noted, the EPA’s existing

regulations provide that the source may

seek to use another time period outside

the 2 preceding years upon a finding by

the permitting authority that this other

period is ‘‘more representative’’ of

normal source operations. See existing

§§ 51.165(a)(1)(xii)(B), 51.166(b)(21)(ii),

52.21(b)(21)(ii), and 52.24(f)(13)(ii). This

provision has been a source of

confusion and uneven implementation.

The EPA therefore proposes to eliminate

this provision. In other words, if the

EPA were to adopt a 10-year look back,

a source may simply choose the highest

consecutive 12-month period of

utilization within the 10 years prior to

a proposed physical or operational

change (but not before November 15,

1990 in ozone transport regions and

nonattainment areas). Neither the

permitting authority nor the EPA will

retain any discretion to allow a time

period outside this extended range.

The EPA also solicits comment on

how this proposed extension of the

emissions baseline for netting may

interact with the statutory requirements

in section 182 (c) and (e) of the Act

applicable in serious, severe and

extreme ozone nonattainment areas.

Section 182(c) (6), (7) and (8) of the Act

provides special rules for modifications

at major sources in serious and severe

ozone nonattainment areas including an

aggregation of all net increases in

emissions from a source over 5

consecutive calendar years. Section

182(e)(2) of the Act governs

applicability of NSR to modifications in

extreme ozone nonattainment areas

requiring any change that results in any

increase in emissions from a discrete

operation or unit to be subject to major

NSR. While the determination of the

emissions baseline is somewhat

independent of the actual netting

calculation, clearly the proposed new

baseline can affect netting transactions

and may be in tension with the design

and intent of these statutory provisions.

This proposal does not extend the

current 5-year contemporaneous period

for considering increases and decreases

for netting. See, e.g., existing

§§ 51.165(a)(1)(vi)(B), 51.166(b)(3)(ii),

52.21(b)(3)(ii), and 52.24(f)(6)(ii). While

this proposal would allow a 10-year

look back from the activity under review

to determine baseline emissions, any

contemporaneous increases and

decreases must occur within the 5-year

window to be applicable for netting.

The EPA solicits comment on the effect

of the differing look back and

contemporaneous periods and any

reasons why these periods should be

consistent, over either 5 or 10 years.

3. Protection of Short-term Increments

and NAAQS

In discussions of a longer baseline,

environmental group representatives

linked any change from the existing

baseline with the adoption of safeguards

for short-term NAAQS and PSD

increments.12 These representatives

suggested that the current netting

analysis be changed to require a source

to go through major NSR when there is

a net increase in short-term (e.g., hourly,

daily, weekly or monthly, depending on

the emission tracking capability of the

source) emissions when past actual

emissions are represented by the highest

short-term emissions in the previous

year. This step could provide assurances

that peak emissions, which could cause

violations of short-term NAAQS, would

not be allowed to increase without

major NSR. Some applicability

subgroup members argued that the

short-term test should be an air quality

screening test rather than an NSR

applicability trigger.

The EPA carefully considered the

possibility of adding a short-term

‘‘increase’’ test to the netting

calculation; however, ultimately

decided against this in the proposal for

two reasons. First, the EPA is concerned

that a test that relies on a source’s

highest short-term actual emissions

would be too easy to circumvent. For a

short time, sources can run at maximum

capacity so that the baseline short-term

emissions would likely be nothing less

than the source’s maximum potential

emissions.
38260 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

13The AQRV in Federal Class I areas are

explained in section IV.

14 July 1, 1994 memorandum from John Seitz,

Director, OAQPS, ‘‘Pollution Control Projects and

New Source Review (NSR) Applicability’’.

15The WEPCO rule refers specifically to

‘‘visibility limitation’’ rather than ‘‘air quality

related values.’’ However, EPA clearly stated in the

preamble to the final rule that permitting agencies

have the authority to ‘‘solicit the views of others in

taking any other appropriate remedial steps deemed

necessary to protect Class I areas * * *. EPA

emphasizes that all environmental impacts,

including those on Class I areas, can be considered

* * *.’’ See 57 FR 32322. Further, the statutory

provisions in section 165(d) of the Act plainly are

intended to protect against any adverse impact on

AQRV in such Class I lands (including visibility).

Based on this statutory provision, EPA believes that

any air quality assessment for a pollution control

project should consider impacts on visibility and

any other relevant AQRV for any Class I areas that

may be affected by the proposed project.

16The definition also includes certain clean coal

technology demonstration projects. See, e.g.,

existing section 51.166(b)(2)(iii)(i) and (j). Today’s

proposal would not affect these applicability rules

for certain clean coal technology projects that were

codified in the WEPCO rulemaking.

17The WEPCO rule adds that when evaluating

impacts the permitting authority may use that part

Moreover, the EPA is not sure that

limiting the source to its highest past

short-term emissions level will

necessarily provide any additional

protection to NAAQS, increments or

Class I AQRV. The current regulations

already restrict the creditability of some

decreases in emissions where the

overall netting transaction could

jeopardize air quality. In particular, a

provision in the definition of ‘‘net

emissions increase’’ allows credit for a

reduction only to the extent that it has

approximately the same qualitative

significance for public health and

welfare as the increase from the

proposed change. See, existing

§§ 51.165(a)(1)(vi)(E)(4),

51.166(b)(3)(vi)(c), 52.21(b)(3)(vi)(c),

and 52.24(f)(6)(v)(d). In a June 28, 1989,

rulemaking (54 FR 27286) EPA clarified

that aspect of the regulations to require

that, despite the absence of a significant

net increase in emissions, an applicant

proposing to net out of review must

demonstrate that the proposed netting

transaction will not cause or contribute

to an air quality violation before the

emissions reduction may be credited.

To ensure that the change to a netting

baseline based on the highest 12

consecutive months out of the last 120

consecutive months does not adversely

impact short- (or long-) term ambient

standards, the EPA is proposing to

clarify the regulations by requiring that,

to be creditable for netting purposes, an

emissions reduction must be sufficient

to prevent the proposed increase from

causing or contributing to a violation of

any NAAQS or PSD increment and must

not have an adverse impact on AQRV

(including visibility) of Class I areas.13

See proposed §§ 51.165(a)(1)(vi)(E)(4),

51.166(b)(3)(vi)(C), 52.21(b)(3)(vi)(C)

and 52.24(f). As discussed above, this

requirement is inherent in the EPA’s

current regulations and, therefore,

should already be part of any netting

analysis.

E. Pollution Control Project Exclusion

The 1990 Amendments are

stimulating a vast number of sources in

the country to undertake pollution

control and pollution prevention

projects during the next few years. As a

result, most stakeholders urged EPA to

clarify the applicability of major NSR

requirements to pollution control and

pollution prevention projects. The EPA

has previously adopted a limited

exclusion for pollution control project

undertaken by utilities as part of the

1992 WEPCO rulemaking. See 57 FR

32314. Based on the stakeholder

deliberations, EPA issued policy

guidance which covered all other source

categories and which excluded

qualifying pollution control projects

from major NSR.14 Today, EPA proposes

to replace both the WEPCO exclusion

and the policy guidance with a single

comprehensive regulatory exclusion for

all types of pollution control projects

(including add-on controls, switches to

less-polluting fuels, and pollution

prevention projects). The proposed

exclusion is designed to minimize

procedural delays while still ensuring

appropriate environmental protection

(i.e., that a project be allowed not cause

or contribute to a violation of a NAAQS

or PSD increment and not adversely

impact on the AQRV of Class I areas).

While this proposal was modeled

after the WEPCO exclusion, it contains

several significant changes reflecting the

fact that the WEPCO exclusion was

limited to a single source category and

covered only a small, finite set of

pollution control projects specific to

utility units. In contrast to the WEPCO

exclusion, this proposal reflects the

more complex task of addressing a vast

array of pollution control and pollution

prevention projects at a variety of

sources facing numerous Federal, State

and local environmental requirements.

Specifically, this proposal:

• Provides a much broader definition

of ‘‘pollution control project’’ than that

adopted in the WEPCO rule and

includes, unlike the WEPCO rule,

pollution prevention projects;

• Deletes the requirement that add-on

controls and fuel switches be subject to

an ‘‘environmentally beneficial’’ test;

instead only pollution prevention

projects are subject to this additional

safeguard;

• Incorporates the safeguard that no

project, whether an add-on control, a

fuel switch, or pollution prevention, can

result in an increase in actual emissions

that will cause or contribute to a

violation of a NAAQS or PSD

increment, and extends the policy to

protection against adverse impacts of

AQRV in a Class I areas.15

The EPA encourages commenters to

address EPA’s proposed decision to

supersede the WEPCO pollution control

project exclusion with a single

exclusion applicable to all types of

sources. Specifically, EPA invites

comment on two alternative approaches:

(1) In addition to today’s proposed

exclusion for all source categories,

retain the WEPCO pollution control

project exclusion for utilities only or (2)

in lieu of the comprehensive exclusion

proposed today, extend the WEPCO

pollution control project exclusion to all

source categories.

1. Background

In the WEPCO rulemaking, the EPA

amended its PSD and nonattainment

NSR regulations as they pertain to

utilities by adding ‘‘the addition,

replacement or use of a pollution

control project at an existing electric

utility steam generating unit’’ to the list

of activities excluded from major NSR

applicability. See, e.g., existing

§ 51.166(b)(2)(iii)(h). Because the

WEPCO rulemaking was directed only

at the utility industry, the EPA limited

the types of projects eligible for the

exclusion to those types of controls

typically associated with that industry,

namely add-on controls and fuel

switches to a less polluting fuel.16

The EPA built two safeguards into the

exclusion in the WEPCO rulemaking.

First, a project that meets the definition

of pollution control project would

nonetheless not qualify for the

exclusion where the ‘‘reviewing

authority determines that [the proposed

project] renders the unit less

environmentally beneficial.’’ See, e.g.,

existing § 51.165(a)(1)(v)(C)(8). This

provision is buttressed by a second

safeguard that directs permitting

authorities to evaluate the air quality

impacts of a proposed pollution control

project that the reviewing authority

believes could result in a significant net

increase in representative actual annual

emissions of a criteria pollutant (id.; see

also 57 FR 32322), since under no

circumstances can a pollution control

project cause or contribute to violation

of a NAAQS, PSD increment, or

visibility limitation.17 See, e.g., existing

§ 51.165(a)(1)(v)(C)(8)(ii); 57 FR 32322.
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38261

of any increase that exceeds an emissions level used

for that source—if any—in the most recent air

quality impact analysis in the area conducted for

the purpose of title I.

18As defined in proposed sections, pollution

prevention means any activity that through process

changes, product reformulation or redesign, or

substitution of less-polluting raw materials,

eliminates or reduces the release of air pollutants

and other pollutants to the environment (including

fugitive emissions) prior to recycling, treatment, or

disposal; it does not mean recycling (other than

certain ‘‘in-process recycling’’ practices), energy

recovery, treatment, or disposal [see Pollution

Prevention Act of 1990, Pub. L. 101–508, section

6602(b) and section 6603(5) (A) and (B), 42 U.S.C.

sections 13101(b) and 13102(5) (A) and (B); see also

‘‘EPA Definition of ’Pollution Prevention,’ ’’

memorandum from F. Henry Habicht II, May 28,

1992].

Subsequent to issuance of the WEPCO

rule, EPA’s July 1, 1994, policy

guidance provided a limited pollution

control project exclusion for other

source categories on a case-by-case

basis. The July 1994 guidance will

remain in effect until the EPA takes

final action on today’s proposal.

2. Description of Proposed Exclusion of

Pollution Control Projects

The EPA proposes to adopt for all

source categories a pollution control

project exclusion from the definition of

‘‘physical or operational change’’ within

the definition of major modification. See

proposed §§ 51.165(a)(1)(v)(C)(8),

51.166(b)(2)(iii)(H), 52.21(b)(2)(iii)(H),

and 52.24(f). This proposed exclusion

will shield these projects from being

considered ‘‘major modifications’’ and

subject to major NSR. As proposed, the

exclusion encompasses add-on controls,

switches to less polluting fuels and

pollution prevention projects and is

subject to one overarching safeguard

first applied in WEPCO: that the

proposed pollution control project

cannot result in an emissions increase

that will cause or contribute to a

violation of a NAAQS or PSD

increment. See 57 FR 32322. As

discussed, while the WEPCO

rulemaking also extended this

prohibition to ‘‘visibility limitations,’’

EPA is proposing instead to focus the

protection on AQRV (including

visibility) in Class I areas. In addition,

for pollution prevention projects, the

permitting authority must find that the

project is environmentally beneficial

before such projects may qualify as a

pollution control project.

a. Types of Projects Covered. (1) AddOn Controls and Fuel Switches. In the

WEPCO rulemaking, EPA found that

both add-on emissions control projects

and fuel switches to less polluting fuels

could be considered to be pollution

control projects. Today’s proposal

affirms that these types of projects are

appropriate candidates for the

exclusion, but also greatly expands the

types of add-on controls covered to

include other control projects. See

proposed §§ 51.165(a)(1)(xxv),

51.166(b)(31), 52.21(b)(31), and 52.24(f).

These types of projects include:

—The installation of conventional and

advanced flue gas desulfurization and

sorbent injection for sulfur dioxide

(SO2);

—-Electrostatic precipitators, baghouses,

high-efficiency multiclones, and

scrubbers for particulate or other

pollutants;

—Flue gas recirculation, low-NOX

burners, selective non-catalytic

reduction and selective catalytic

reduction for NOX; and

—Regenerative thermal oxidizers,

catalytic oxidizers, condensers,

thermal incinerators, flares and

carbon absorbers for VOC and HAP.

Projects undertaken to accommodate

switching to a less-polluting fuel, such

as natural gas when the source is

burning coal, would also qualify for the

proposed exclusion. In some instances,

where the emissions unit’s capability

would otherwise be impaired as a result

of the fuel switch, this may involve

certain necessary changes to the

pollution generating equipment (e.g.,

boiler) in order to maintain the normal

operating capability of the unit at the

time of the project.

The EPA has also concluded that

substitutions of less potent ODS for

more potent ODS is environmentally

beneficial and is therefore proposing

that such substitutions be considered a

pollution control project for PSD

purposes. See proposed

§§ 51.166(b)(2)(iii)(N) and 40 CFR

52.21(b)(2)(iii)(N). This proposed

exclusion is described further in section

VI.B.2. of this preamble.

(2) Pollution Prevention Projects. The

EPA’s policy is to promote pollution

prevention approaches and to remove

regulatory barriers to sources seeking to

develop and implement pollution

prevention solutions to the extent

allowed under the Act. For this reason,

the EPA proposes today to include in

the definition of pollution control

projects switches to inherently lesspolluting raw materials and processes

and certain other types of ‘‘pollution

prevention’’ projects.18 For instance,

under these proposed regulations, VOC

users who switch to water-based or

powder paint application systems as a

strategy for meeting RACT or switch to

a non-toxic VOC to comply with MACT

requirements, could qualify for this

exclusion.

Accordingly, under this proposal

permitting authorities would be allowed

to consider excluding from major NSR

raw material substitutions, process

changes and other pollution prevention

strategies where the proposed changes

are determined to be environmentally

beneficial as discussed below. See

proposed §§ 51.165(a)(1)(xxv)(A)(6),

51.166(b)(31)(i)(F), 52.21(b)(32)(i)(F),

and 52.24(f).

b. Safeguards. (1) General

Applicability. For the purpose of this

proposed exclusion, a pollution control

project is an activity or project at an

existing emissions unit where the

primary purpose of such activity or

project is the reduction of air pollutants

subject to regulation under the Act at

the emissions unit. See proposed

§§ 51.165(a)(1)(xxv), 51.166(b)(31),

52.21(b)(31), and 52.24(f). The proposed

exclusion would not be applicable to air

pollution controls and emissions

associated with the construction of a

proposed new emissions unit.

Consistent with the WEPCO rule and

EPA’s existing policy guidance the

replacement of an existing emissions

unit with a newer or different one

(albeit more efficient and less polluting)

or the reconstruction of an existing

emissions unit would not qualify as a

pollution control project. Similarly, the

fabrication, manufacture or production

of pollution control/prevention

equipment and inherently less-polluting

fuels or raw materials would not qualify

as pollution control projects (e.g., a

physical or operational change for the

purpose of producing reformulated

gasoline at a refinery is not a pollution

control project under the proposed

exclusion).

A point was raised to EPA that new

pollution control technologies are likely

to be developed over time that will meet

the same criteria that technologies

named above have met. Consequently, a

process would be useful whereby any

such new technology qualifies as a

‘‘pollution control project’’ when a

history of performance has been

established. The EPA is therefore

proposing that a new technology which

meets the following criteria should be

considered eligible for a pollution

control project exclusion: (1) It has been

installed for the purposes of a pollution

control project as defined in the

regulation; (2) it has been demonstrated

in practice; (3) it has been determined

by the permitting authority to be

environmentally beneficial. See

proposed §§ 51.165(a)(1)(xxv)(A)(7),

52.21(b)(32)(i)(G), 51.166(b)(31)(i)(G),

and 52.24(f).

The EPA solicits comment on

extending the pollution control project
38262 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

19A ‘‘cross media’’ pollution control project could

be defined as either a control technology or

application to comply with limitations established

under other Federal environmental laws (e.g., Safe

Drinking Water Act or Clean Water Act) that results

in emissions to the atmosphere. For example, to

comply with an effluent limitation established

under the Clean Water Act, a source chooses to

install a control device that removes the pollutant

from the wastewater stream and discharges it into

the atmosphere. This type of pollution control

project could qualify for the exclusion provide it is

environmentally beneficial.

exclusion to new qualifying

technologies and the qualification

criteria. Specifically, EPA requests

comment on whether control

technologies, other than those listed

above and at §§ 51.165(a)(1)(xxv)(A)(1)

through (6), 52.21(b)(32)(i) (A) through

(E), and 51.166(b)(31)(i) (A) through (E)

must be comparable in effectiveness to

those listed technologies on a pollutantspecific basis in order to qualify for the

exclusion contained under proposed

§§ 51.165(a)(1)(xxv)(A)(7),

52.21(b)(32)(i)(G), 51.166(b)(31)(i)(G),

and 52.24(f).

The EPA also solicits comment on

whether applicability of the pollution

control project exemption should be

extended to ‘‘cross media’’ pollution

control projects, and whether they

should be required to meet the

‘‘environmentally beneficial’’ test.19 To

qualify for this exemption, as for all

pollution control projects, a ‘‘cross

media’’ pollution control project could

not cause or contribute to a violation of

any NAAQS or PSD increment or have

an adverse impact on AQRV in a Class

I area.

(2) The Cause or Contribute Test. A

proposed pollution control project, or

any physical or operational change,

cannot result in an emissions increase

that will cause or contribute to a

violation of any NAAQS or PSD

increment, or have an adverse impact on

AQRV in a Class I area. See sections

110(a)(2)(C), 165, and 173 of the Act; see

also 57 FR 32322–32323. To ensure that

the proposed pollution control project

exclusion does not have this proscribed

impact, EPA is also proposing to adopt

(with some changes) the air quality

impacts safeguard currently in place for

utility pollution control projects. See

proposed §§ 51.165(a)(1)(v)(C)(8),

§ 51.166(b)(2)(iii)(H),

§ 52.21(b)(2)(iii)(H), and § 52.24(f).

It is possible that a pollution control

project, while significantly reducing the

emissions rate of a targeted pollutant,

could still cause an increase in actual

emissions of that or another pollutant at

the source. This could occur either from

the project causing collateral emissions

(such as in the case of a VOC incinerator

which causes NOX emissions) or

through a utilization change (where a

project reduces an emission rate but

increased utilization stemming from the

project results in increased emissions of

the same or other air pollutants). In

either case, the emissions increases

could cause or contribute to a violation

of any NAAQS or PSD increment, or

have an adverse impact on AQRV.

Under the WEPCO rule, permitting

authorities can require a source to

model its impacts whenever (1) the

permitting authority has reason to

believe that the proposed project would

result in a significant net increase in

actual emissions of any criteria

pollutant over levels used for that

source in the most recent air quality

impact analysis; and (2) the permitting

authority has reason to believe that such

an increase would cause or contribute to

a violation of any NAAQS or PSD

increment or visibility limitation. If this

analysis indicates that the increase in

emissions will cause or contribute to a

violation of any NAAQS or PSD

increment, or result in either visibility

limitation or impairment, the pollution

control exclusion does not apply. See 57

FR 32322.

The EPA believes that such safeguard

needs to be included in this proposal as

well. Thus, where a pollution control

project will result in a significant

increase in actual emissions and the

increased level has not been previously

analyzed for its air quality impact and

raises the possibility of a NAAQS or

increment or adverse impact on an

AQRV, the permitting authority would

require the source to provide an air

quality analysis sufficient to

demonstrate that the impact of the

project would not cause or contribute to

a violation of any NAAQS or PSD

increment, or have an adverse impact on

AQRV. The EPA would not necessarily

require that the increase be modeled,

but the source must provide sufficient

data to satisfy the permitting authority

that the new levels of emissions will not

cause or contribute to a violation of any

NAAQS or PSD increment, and will

have an adverse impact the AQRV in

nearby Class I areas.

Since a significant increase in a

nonattainment pollutant would be

considered to contribute to the existing

nonattainment problem, in the case of

nonattainment areas the State or the

source would be required under this

proposal to mitigate (e.g, through offsets

or SIP measures) any significant

increase in a nonattainment pollutant

resulting from the pollution control

project. De minimis collateral emissions

increases (e.g., less than 40 tpy of VOC

in a moderate ozone nonattainment

area) would not trigger such mitigation

requirements. However, a de minimis

increase may be subject to a State’s

minor NSR requirements.

(3) Determination of Increase in

Emissions. The EPA is today proposing

to use a representative actual annual

emissions approach to determining

whether a pollution control project will

result in increased emissions. See

proposed §§ 51.165(a)(1)(v)(C)(8),

51.166(b)(2)(iii)(H), 52.21(b)(2)(iii)(H),

and 52.24(f). This is the methodology

developed in the WEPCO rule and is

explained in detail in that rulemaking.

See 57 FR 32323. The use of this

approach is premised on the EPA’s

experience and expectation that in most

circumstances pollution control projects

will not affect how the source is

operated so that the calculation of

whether a pollution control project will

result in an emissions increase can be

made through the simple comparison of

pre-change and post-change emissions

rates. Of course, where the permitting

authority expects source operations to

change, this methodology allows the

post-change emissions to be projected

based on the new operating levels. In

the case of a pollution control project

that will not affect utilization but

collaterally increases a non-targeted

pollutant, this proposal requires that the

actual increase (calculated using the

new emissions rate and current

utilization pattern) must be analyzed to

determine its air quality impact.

Although the EPA is supportive of

pollution prevention projects and

strategies, special care must be taken in

classifying a project as a pollution

control project and in evaluating a

project under a pollution control project

exclusion. Virtually every

modernization or upgrade project at an

existing industrial facility which

reduces inputs and lowers unit costs has

the concurrent effect of lowering an

emissions rate per unit of fuel, raw

material or output. Nevertheless, it is

clear that these major capital

investments in industrial equipment are

the very types of projects that Congress

intended to address in the new source

modification provisions. See Wisconsin

Electric Power Co. v. Reilly, 893 F.2d

901, 907–10 (7th Cir. 1990) (rejecting

contention that the utility life-extension

project was not a physical or operational

change); Puerto Rican Cement Co., Inc.

v. EPA, 889 F.2d 292, 296–98 (1st Cir.

1989) (major NSR was found to be

applicable to a modernization that

decreased emissions per unit of output).

Moreover, projects which significantly

increase capacity, decrease production

costs, or improve product marketability

may dramatically increase source

operations. In these situations, the
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38263

20This is in marked contrast to the addition of

pollution control equipment which typically does

not, in EPA’s experience, result in any increase in

the source’s utilization of the emission unit in

question.

21The presumption that the listed projects are

environmentally acceptable is premised on an

understanding that such controls would be

designed and operated in a manner consistent with

standard and reasonable practices, (e.g., increases in

collateral pollutants are minimized within the

control’s inherent design, no unacceptable

increased risk due to the release of toxic pollutants

would occur). Where a permitting agency

determines that an otherwise listed project would

not be constructed and operated in such a manner,

then that specific project would not qualify as a

listed project for the purpose of the exclusion.

22 For example, a pollution prevention project

which while decreasing emissions of a criteria

pollutant results in an unacceptable increased risk

due to the release of air toxics should not be

considered environmentally beneficial. However,

the EPA expects that many pollution prevention

projects will be for the purpose of compliance with

title III MACT requirements and by their nature will

result in reduced risk from air toxics. Consequently,

in judging whether a pollution prevention project

can be considered environmentally beneficial,

permitting authorities may consider as a relevant

factor whether a project is being undertaken to

bring a source into compliance with a MACT,

RACT, or other Act requirement.

environment may or may not see a

reduction in overall source emissions

due to the project.20 Nevertheless, the

EPA believes that these types of projects

may have other desirable environmental

effects by reducing energy and raw

materials consumption and minimizing

waste by-products. Consequently, the

EPA solicits comment on how to

address pollution prevention projects

that can be reasonably expected to result

in a significant increase in emissions

resulting from increased utilization of

the affected emissions unit(s) where

notwithstanding such increase an

overall positive environmental benefit is

evident. Specifically, where emissions

are expected to increase significantly as

a result of a pollution prevention

project, should these types of projects be

allowed to take advantage of this

pollution control project exclusion?

3. The Environmentally Beneficial Test

The WEPCO rule also provided that,

to qualify for exclusion, a pollution

control project cannot render the unit

less environmentally beneficial. For the

proposed list of pollution control

projects and for fuel switches to a lesspolluting fuel, EPA is satisfied that the

overall impact on the environment of

these projects is beneficial and that,

consequently, such projects are

desirable from an environmental

perspective. These are the very types of

pollution controls that have historically

been applied to new and modified major

and minor sources for the purpose of

reducing emissions based on known and

permissible environmental effects.

Inherent in their historic use has been

the basic understanding that from an

overall environmental perspective the

use of such controls is acceptable. The

EPA has no reason at this time to doubt

the validity of this presumption when

such controls are applied to existing

sources in a manner consistent with

standard and reasonable practices.21

Consequently, as part of the exclusion

for pollution control projects, EPA’s

proposal would not require an overall

environmental impact test for the listed

pollution control projects. See proposed

§§ 51.165(a)(1)(xxv)(A) (1) through (5),

51.166(b)(31)(i) (A) through (E),

52.21(b)(31)(i) (A) through (E), and

52.24(f).

However, the EPA proposes to retain

the environmentally beneficial standard

for pollution prevention projects. See

proposed §§ 51.165(a)(1)(xxv)(A)(6),

51.166(b)(31)(i)(F), 52.21(b)(31)(i)(F),

and 52.24(f). Unlike the list of pollution

control projects described above for

which the environmental impacts are

known and EPA is satisfied that the

projects will be environmentally

acceptable, a project that may be

acclaimed as a pollution prevention

project may not be as well documented

or substantiated as others and its

effectiveness may depend on sitespecific factors. Any project requesting

a pollution prevention exclusion should

be reviewed by the permitting authority

to ensure that the project’s overall

impact on the environment is

beneficial.22 Once a particular kind of

project has been demonstrated to be

environmentally beneficial, the

permitting authority could rely on this

demonstration in evaluating subsequent

applications for the same kind of

project. A subsequent project could be

presumed environmentally beneficial

unless case-specific factors or impacts

would indicate otherwise.

4. Procedural Safeguards

Nothing in current guidance or in this

proposal voids or creates an exclusion

from any applicable minor NSR

preconstruction review requirement in

any SIP that has been approved

pursuant to section 110(a)(2)(C) of the

Act and 40 CFR 51.160 through 164. See

footnote 10. Accordingly, the EPA

believes that a pollution control project

qualifying for this proposed exclusion

generally will be required by the

applicable SIP to obtain a minor NSR

permit prior to beginning construction.

The EPA expects the minor NSR

permitting process to be the mechanism

by which the permitting agency reviews

the pollution control project to ensure

that the project design is consistent with

standard and reasonable practices,

determines if a significant net increase

in representative actual emissions will

occur and, if so, whether the resultant

air quality or AQRV impacts are

acceptable. See 57 FR 32322.

In addition, as discussed above, for a

proposed project to qualify as a

pollution control project the permitting

agency must first determine that the

project will be environmentally

beneficial. The decision-making process

should include documentation of the

basis for a finding that a proposed

pollution prevention project is

environmentally beneficial. The EPA

also solicits comment on the adequacy

of these procedural safeguards and the

need for any additional or alternative

safeguards.

5. Emission Reduction Credits

In general, certain pollution control

projects approved for an exclusion from

major NSR could result in emission

reductions which may serve as NSR

offsets or netting credits. Under this

proposal, credit may be given for all or

part of the emission reductions equal to

the difference between the premodification actual baseline emissions

and post-modification PTE for the

decreased pollutant provided that (1)

the project will not result in a

significant collateral increase in actual

emissions of any criteria pollutant, (2)

the project is still considered

environmentally beneficial, and (3) all

otherwise applicable criteria for the

crediting of such reductions are met

(e.g., quantifiable, surplus, permanent,

and enforceable). Where an excluded

pollution control project results in a

significant collateral increase of a

criteria pollutant, emissions reduction

credits from the pollution control

project for the controlled pollutant

could still be granted provided, in

addition to (2) and (3) above, the actual

collateral increase is reduced below the

applicable significance level, through

either internal contemporaneous

reductions or external offsets. However,

neither the exclusion from major NSR

nor any credit (full or partial) for

emission reductions would be available

where the type or amount of the

emissions increase which would result

from the use of such credits would

lessen the environmental benefit

associated with the pollution control

project to the point where the project

would not have initially qualified for an

exclusion.

The EPA solicits comment on

alternative methods for calculating

emissions reduction credits, especially

if the NSR applicability rules are

revised.
38264 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

F. Proposed Plantwide Applicability

Limitations (PAL)

The EPA today proposes a new

applicability approach for existing

sources under which a source, if

authorized by a State in a SIP, may base

its NSR applicability on a plantwide

emissions cap, termed a plantwide

applicability limitation (PAL). So long

as source activities do not result in

emissions above the cap level, the

source will not be subject to major NSR.

The voluntary source-specific PAL is a

straightforward, flexible approach to

determine whether changes to an

existing major stationary source result

in an emissions increase. In the NSR

Reform Subcommittee deliberations, the

PAL was viewed as an alternative that

a plant manager could readily

understand. Instead of a case-by-case

assessment of whether a modification is

excluded from major NSR, the manager

knows that as long as the plant stays

within its emissions cap, major NSR

will not be triggered. Production units

can be started and stopped, product

lines reconfigured, and products

changed and revamped without delay

from major NSR.

In addition, the PAL approach should

provide a valuable tool for managing a

number of other Act requirements. For

instance, a NSR PAL may also include

terms that allow changes to be made

without triggering minor NSR or which

essentially preauthorize the minor NSR

approval, as allowed by State law and

the SIP. In fact, the EPA and the State

of Oregon have been working with Intel

to develop a NSR/title V permit that

uses Oregon’s plant site emission limit

program, minor NSR pre-approval,

pollution prevention, and synthetic

minor limits on any HAP to create a

flexible permit under title V, major NSR,

and the State’s preconstruction review

program. Available information

regarding this permit is in the public

docket identified at the beginning of this

preamble.

In short, EPA foresees the PAL option

offering a number of advantages for

industry, permitting authorities and the

environment, including (1) increased

operational flexibility and the ability to

make timely changes to react to market

demand; (2) certainty regarding the level

of emissions at which a stationary

source will be required to undergo

major NSR (thereby eliminating the

need to establish a baseline for each

modification, calculate the

contemporaneous increases and

decreases, and determine whether the

source qualifies under another

exclusion or another emissions increase

test); (3) a decreased permitting burden

for the source and the permitting

authority; (4) an incentive for source

owners and operators to create room for

growth under the cap by implementing

pollution prevention and other

pollution reduction strategies on

existing emissions units; and (5)

reduction of some of the ‘‘paper’’

emissions in the system, thereby

creating additional room for growth for

new and modified sources.

1. Background

Plantwide emissions limits for NSR

applicability have been used in Oregon

for many years and have been utilized

by individual sources on a case-by-case

basis. The state-wide applicability

system in Oregon, known as the ‘‘plant

site emission limit’’ program, bases

major NSR applicability on an emission

limit set for each major source in the

State. When the program originated, the

State capped sources at their actual

emissions levels. New sources are

capped at their NSR permitted level.

During the NSR Reform Subcommittee

deliberations, representatives from

several companies with operations in

Oregon briefed members on the

advantages of the system for their firms.

They focused on the flexibility afforded

under the cap and their ability to

expand operations and production

without regulatory review.

During the NSR Reform

Subcommittee deliberations, the EPA

also developed and presented a

voluntary, source-specific PAL

approach, similar to that demonstrated

by a Minnesota Manufacturing and

Mining (3M) facility in St. Paul,

Minnesota. This permit established a

PAL which allowed 3M to make many

changes to its facility without triggering

NSR review. The source’s baseline

emissions were based on a level that

was lower than past actual emissions

but reflected most current actual

emissions based on current operations

with new controls. Since the 3M permit,

EPA understands that other States (and

sources) have experimented with the

issuance of permits with emissions caps

under EPA’s existing regulations.

Additional information on these

approaches is contained in the docket

for this proposal.

2. Description of the PAL Proposal

The EPA proposes to revise the NSR

regulations to allow States to authorize

PAL approaches on a voluntary sourceby-source basis. Although a source-bysource PAL approach may be

implemented in many situations under

the current regulations, several PALrelated issues are not clearly addressed

by the current regulations, policies, or

practice. The EPA believes that

regulatory changes would allow for

more ease, clarity, and certainty in the

implementation of a PAL approach.

Accordingly, the EPA proposes to define

PAL and PAL major modification. See

proposed §§ 51.165(a)(1)(xxx) and

(a)(1)(xxxi), 51.166(b)(44) and (b)(45),

52.21(b)(45) and (b)(46), and 52.24(f).

The EPA proposes to define

‘‘plantwide applicability limitation’’ as

a federally enforceable plantwide

emissions limitation established for a

stationary source to limit the allowable

emissions of a source to a level such

that major NSR is not required for

changes under that emissions limitation.

The applicable emissions limitation

must be established in a federally

enforceable permit that includes all

conditions needed to make the

limitation practically enforceable. The

EPA proposes to define a ‘‘plantwide

emissions limitation major

modification’’ as any emissions increase

over the PAL, notwithstanding the

general definition of ‘‘major

modification.’’

The EPA proposes to add regulatory

provisions that (1) allow the use of a

PAL for applicability determinations for

major modifications rather than the

existing or proposed provisions, (see

proposed §§ 51.165(a)(9)(i), 51.166(u)(1)

and 52.21(x)(1)); (2) prescribe the basis

for establishing a PAL and additional

PAL terms and conditions, (see

proposed §§ 51.165(a)(9)(iii),

51.166(u)(3) and 52.21(x)(3)); (3)

describe control technology application

when a source proposes a PAL major

modification, (see proposed

§§ 51.165(a)(9)(iv), 51.166(u)(4) and

52.21(x)(4)); (4) describe public notice

and comment procedures for

establishing a PAL, (see proposed

§§ 51.165(a)(9)(ii), 51.166(u)(2) and

52.21(x)(2)); (5) describe the process for

periodic reevaluation of a PAL, (see

proposed §§ 51.165(a)(9)(v), 51.166(u)(5)

and 52.21(x)(5)); and (6) describe

additional conditions that would ensure

a PAL remains protective of air quality

while providing flexibility for source

operations, (see proposed

§§ 51.165(a)(9)(iv)(A), 51.166(u)(4)(i)

and 52.21(x)(4)(i)).

3. Discussion

The EPA has determined that the

voluntary source-specific PAL is a

practical method to provide both

flexibility and regulatory certainty to

many existing sources, as well as

benefits to permitting authorities, while

maintaining air quality. Accordingly,

the EPA today proposes to revise its

NSR regulations to provide for this

approach as a voluntary source-specific
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38265

option that States may adopt in their

SIP.

The regulatory proposal allows PAL

to be established for existing major

stationary sources in PSD areas, and for

proposed and existing major stationary

sources in nonattainment areas. In all

cases, the EPA is proposing that the PAL

be established through a public

participation process consistent with

the requirements at 40 CFR 51.161, and

with a public comment period of at least

30 days. See proposed

§§ 51.165(a)(9)(ii), 51.166(u)(2) and

52.21(x)(2).

The EPA considered a number of

regulatory options addressing new and

existing sources in both areas and is

requesting comment on emissions levels

for PAL for both areas. The EPA believes

that the proposed PAL regulatory

provisions offer the best approach for

both proposed and existing major

stationary sources located in

nonattainment areas and existing major

stationary sources in attainment/

unclassifiable areas. In PSD areas, the

‘‘Clean Facility’’ exclusion offers the

best flexibility for new major stationary

sources. Certainly, when a facility

cannot exercise the clean facility

exclusion either because its permit is

older than 10 years or because a change

is not consistent with the PSD permit,

it will have historic emissions of at least

2 years upon which to establish a PAL.

A permitting authority may choose to

adopt an area-wide PAL approach,

rather than a voluntary source-specific

approach, so that all major sources in

the entire area, designated as

nonattainment or attainment/

unclassifiable for a given pollutant,

would have a PAL. Area-wide PAL

approaches would be options for States

and not mandatory for any area under

this proposal. The EPA seeks comment

on area-wide PAL approaches in light of

the source specific voluntary criteria in

this proposal and requests comment on

other criteria or minimum requirements

for area-wide PAL approaches. The EPA

also seeks comment on whether States

adopting an area-wide PAL system

should be allowed to establish PAL at

levels higher than actual emissions.

The EPA proposes that once a PAL’s

is established for a facility, the source

may make any physical or operational

changes at the facility as long as its

emissions remain under the PAL. Under

the proposal, for a source to increase

emissions over its PAL, whether or not

in connection with a physical or

operational change, it must first undergo

major NSR. The EPA proposes to

provide that emissions levels set by the

PAL may be reevaluated periodically,

consistent with the title V permitting

and public participation process, to

review the need for revisions. The EPA

also proposes to require that the PAL

must be federally and practicably

enforceable and therefore must be

incorporated into federally enforceable

permits containing compliance methods

and monitoring requirements.

a. PAL Levels. The EPA proposes that

a PAL be based on plantwide actual

emissions, including a reasonable

operating margin less than the

applicable significant emissions rate, for

existing sources or on a level

established pursuant to recent (within

the preceding 5 years) major

nonattainment NSR where the sourcewide levels were completely offset and

relied upon in an EPA-approved

attainment demonstration. See proposed

§§ 51.165(a)(9)(iii), 51.166(u)(3) and

52.21(x)(3). The EPA requests comment

on alternatives for establishing a PAL,

including (1) Actual emissions, as

defined in existing § 51.166(b)(21)(ii);

(2) actual emissions, as defined in

proposed § 51.166(b)(21)(ii); (3) actual

emissions with the addition of an

operating margin greater than the

applicable significant emissions rate; (4)

for a new stationary source, limits

established pursuant to review of the

entire facility under PSD, and (5) for

nonattainment pollutants (in

nonattainment areas), any emissions

level completely offset and relied upon

in an EPA-approved State attainment

demonstration plan, even when the

source has not recently received a major

NSR permit.

b. Options for Permitting Authorities.

The proposal would incorporate the

PAL approach into the NSR rules by

adopting new PAL provisions in

§§ 51.165, 51.166, and 52.21. A number

of new provisions have been developed

to specify the requirements of using a

PAL approach. The EPA requests

comments on these provisions which

are described in more detail below.

The proposed rules allow the use of

a PAL for NSR applicability in lieu of

the applicability provisions in § 52.21.

See proposed § 52.21(x). Similarly,

revisions to §§ 51.165 and 51.166 are

proposed to provide an alternative

applicability approach that States may

adopt into SIP to facilitate use of

voluntary source-specific PAL. See

proposed §§ 51.165(a)(9) and 51.166(u).

Under the proposed PAL rules, States

may choose to adopt or accept

delegation of PAL approaches to apply

at sources only in lieu of otherwise

applicable major NSR applicability

rules, or to apply in lieu of both major

and minor NSR requirements. When

adopting the PAL approach, States may

choose in their SIPs or delegation

agreement to adopt the PAL approach

on a limited basis. For example, States

may choose to adopt the PAL approach

only in attainment/unclassifiable areas,

only in nonattainment areas, for

specified source categories, or only for

certain pollutants in these areas. States

may also choose to allow the PAL

approach only for sources with a record

of existing emissions or normal

operations for at least 2 years, in order

to establish a PAL based on historical

actual emissions.

c. Changes Under the PAL Approach.

The EPA requests comment on several

possible scenarios involving changes

under the PAL approach. First, under

this proposal, facilities that wish to

increase source-wide emissions over the

PAL would trigger major NSR. See

proposed §§ 51.165(a)(9)(iv)(B),

51.166(u)(4)(ii) and 52.21(x)(4)(ii). In

some instances, the increase will result

from the addition of a new unit or

physical or operational change to an

existing unit. Clearly, the units

associated with the increase would be

reviewed for control technology, BACT

or LAER, air quality impact modeling,

and emissions offsets, if applicable.

However, the EPA raises for

consideration the situation where a

source may wish to increase emissions

above the PAL as a result of an increase

in an overall plant production rate. In

this case, it may not be obvious which

units would have to apply BACT or

LAER. As proposed, a PAL major

modification would require BACT or

LAER for each pollutant limited by the

PAL which will be increased. Thus,

BACT or LAER would apply to each

emissions unit that contributes to the

emissions increase that occurs above the

latest PAL. Id.

The EPA requests comment on how to

apply the major NSR requirements to

emissions increases that are not directly

associated with a particular

modification or physical change to an

emissions unit. Major NSR could be

applied to: (1) all modifications that

have occurred under the PAL; (2) all

modifications that have occurred under

the PAL since the last PAL renewal; (3)

all modifications that have occurred

under the PAL in the last 5 years; (4)

only those modifications that can be

associated with the increase, as

proposed by the source, or (5) the entire

facility and BACT or LAER can apply

where most appropriate, i.e, any

uncontrolled units or the less controlled

units.

In light of the benefits offered by this

approach and the ability of the States to

impose control technology requirements

in SIP, the EPA requests comment on

whether to require, for all new units
38266 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

23Emissions reductions of HAP to meet MACT at

emissions units under a PAL would generally not

necessitate a downward adjustment to the PAL

because the PAL is not designed to limit HAP.

However, if MACT reductions are relied on in the

SIP (e.g., VOC reductions in nonattainment areas

used for RFP or attainment demonstrations) then

the PAL needs adjustment downward.

which net out of major NSR or for all

new units added under a PAL, that

States must impose some level of

control technology, or similarly whether

to require in the Federal regulations the

application of a particular level of

control technology.

d. Plantwide Applicability Limitation

Review and Adjustments. The PAL,

once included in a permit, may be

adjusted for a number of reasons.

Industry, regulatory agencies, and the

public need to understand what

adjustments to a PAL may be necessary,

both on an immediate basis and during

some periodic review cycle. The EPA

requests comment on why, how, and

when a PAL should be lowered or

increased without being subject to major

NSR. The need for adjustments would

arise, for example, (1) Where technical

errors have been made, or technical

improvements have become available

with regard to calculating past actual

emissions or potential emissions or

emissions factors; (2) when new

requirements apply to the PAL

pollutant, such as RACT or other SIPrequired reductions 23; (3) to account for

the generation of offsets or permanent

shutdowns where the State has the

authority to remove permanent

shutdowns from the emissions

inventory after a certain time period; (4)

when any changes (though consistent

with the PAL) might cause or contribute

to a violation of any NAAQS or PSD

increment or would have an adverse

impact on air quality related values; and

(5) during periodic review, consistent

with the title V permit renewal process

of the appropriateness of emissions

levels set in the PAL. A concern was

raised in the NSR Reform Subcommittee

discussions about the uncertainty that

results from the State review and

renewal of the PAL as well as any

authority to adjust the PAL. It has been

recognized that sources will want to

maximize the room for growth under a

PAL. If there are too frequent

opportunities for a downward

adjustment to the PAL, a source may be

reluctant to accept a PAL for fear of

losing allowable emissions through the

State’s ability to make adjustments.

This proposal requires adjustments to

the PAL to incorporate new applicable

requirements. See proposed

§§ 51.165(b)(9)(v), 51.166(u)(5) and

52.21(x)(5). Nothing in this proposal

prevents the State’s PAL program from

being more stringent by requiring

adjustments in other circumstances

such as those described above. In

addition, the EPA solicits comments on

the need for a specific provision that

would require the PAL to be adjusted at

any time to address any technical errors

in the emissions calculations and other

permit deficiencies when discovered by

either the source owner or operator or

the permitting authority after the permit

has been issued.

e. Plantwide Applicability Limitations

in Serious and Above Nonattainment

Areas. The EPA also solicits comment

on how a PAL will comply with section

182(c) and (e) of the Act which contains

special provisions for modifications to

major sources in serious, severe and

extreme ozone nonattainment areas. For

serious and severe nonattainment areas,

depending on the baseline used to

establish a PAL, a PAL may effectively

assure that sources do not increase

emissions (thereby changes under the

PAL would not trigger these special

provisions). This is because the PAL in

an ozone nonattainment area would in

most cases be based on actual emissions

of the source and require any increase

over the PAL to be subject to major NSR

with no allowance for de minimis

emission increases over the PAL. Thus,

with these stipulations, the de minimis

emissions rate (25 tpy) under section

182(c)(6) of the Act could not be

exceeded without triggering major NSR.

In extreme ozone nonattainment areas,

section 182(e)(2) of the Act requires

major NSR for ‘‘any increase’’ at any

discrete operation or unit. In such areas

a PAL may be problematic because it

could allow for an increase at an

emissions unit by a change under a

PAL, although there would be no

emissions increase of the source’s PAL.

The provisions of section 182(e)(2)

appear to allow for a PAL provided that

any increase at an emissions unit would

impose a LAER emissions limit on that

unit and the unit’s increase in emissions

would have to be ‘‘internally offset’’

within the source, which is in effect a

1.3 to 1 internal ‘‘netting’’ transaction.

Thus a PAL in an extreme

nonattainment area may have to be a

‘‘declining value’’ cap reducing at a rate

that ensures sufficient ‘‘internal offsets’’

are undertaken to fulfill the

requirements of section 182(e)(2) of the

Act. The EPA welcomes additional

comment on how a PAL may comport

with the statutory requirements for

modifications to major sources in these

ozone nonattainment areas.

f. Air Quality Changes. Certain

changes under the PAL, such as changes

in effective stack parameters, can

change a source’s impact area, and must

be assessed to demonstrate protection of

NAAQS, increments, and AQRV. See

proposed §§ 51.165(a)(9)(iv)(A),

51.166(u)(4)(i) and 52.21(x)(4)(i). The

EPA requests comment on when

modeling or other types of ambient

impact assessments should be required

for changes occurring under a PAL.

Comments may also address the

usefulness of existing guidance on

similar issues (see e.g., June 28, 1989

Federal Register Notice addressing

CMA (54 FR 27274) and the Emissions

Trading Policy Statement (51 FR

43814)), and what should be done to

protect AQRV in Class I areas.

G. Actual-to-future-actual Methodology

As previously discussed, the EPA

explicitly limited the scope of the

WEPCO rulemaking to one source

category, i.e., electric utility steam

generating units. In the final rule,

however, the EPA indicated that it

would ‘‘consider the desirability of

adopting for other source categories the

changes to the methodology for

determining whether a source change

constitutes a modification’’ in a

subsequent rulemaking. See 57 FR

32333. In previous sections, the EPA

discusses its proposals to adopt a new

pollution control project exclusion

applicable to all source categories and to

replace its existing baseline regulations

with a new provision, again applicable

to all source categories. There remains

the question of the ‘‘future-actual’’

methodology which allows a utility to

use a prediction of its post-change

actual emissions—excluding any

increases in utilization caused by

demand growth—to determine whether

the change at issue will increase

emissions over baseline levels.

The WEPCO rule was challenged by

both industry and environmental

petitioners. These challenges included a

demand from some industries that EPA

expand the WEPCO rule to all source

categories and a demand from an

environmental group that EPA abandon

the rule or at least the demand growth

exclusion. This litigation is now

inactive pending the outcome of this

rulemaking. Today, EPA proposes to

allow use of the future-actual

methodology for all source categories.

See proposed §§ 51.165(a)(1)(xii)(F),

51.166(b)(21)(vi), 52.21(b)(21)(vi) and

52.24(f).

As discussed in section II.A. of this

preamble, EPA proposes that States be

given the choice of whether to retain in

their SIP the current actual-to-potential

test, or to adopt the actual-to-actual test

for all source categories. Although EPA

is also proposing the actual-to future
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38267

24This discussion of the use of the future-actual

methodology as an applicability test is separate

from the proposed use of the methodology to

project emission increases from pollution control

projects in section II.E.

25A unit is considered replaced if it would

constitute a reconstructed unit within the meaning

of 40 CFR 60.15 (the NSPS test for

‘‘reconstruction’’). The EPA reasoned that since

there is no relevant operating history for wholly

new units and replaced units, it is not possible to

reasonably project post-change utilization for these

units, and hence, their future level of

‘‘representative annual emissions.’’ For other

changes, past operating history and other relevant

information provides a basis for reasonable

projections. See 57 FR 32323.

26 In projecting future utilization and emissions

factors, the permitting authority may consider the

company’s historical operational data, its own

representations, filings with Federal, State or local

regulatory authorities, and compliance plans

developed under title V of the Act. See 57 FR

32323, footnote 19.

27The permitting authority may require a longer

period, not to exceed 10 years, where it determines

that no period within the first 5 years following the

change is representative of normal source

operations. 57 FR 32325.

actual test for the Federal permitting

program in lieu of the current actual-topotential test, EPA solicits comments on

whether to retain the actual-to-potential

test. In addition, EPA solicits comments

on whether to leave the scope of the

future actual methodology the same—

available only for utility units or

eliminating the methodology

completely.24 In addition, in regard to

use of a future actual methodology, the

EPA solicits comment on what changes

if any should be made to the demand

growth exclusion and the 5-year

tracking requirement.

1. Background

As noted, the WEPCO rule in EPA’s

regulations prescribed a new

methodology for determining whether a

physical or operational change would

result in a significant increase in

emissions and therefore constitute a

major modification. The rule provided

that the post-change emissions level of

a utility unit would be calculated using

a projection of the unit’s ‘‘future actual’’

emissions. The rule was limited to

existing electric utility steam generating

units and did not apply to the addition

of a new unit or the replacement of an

existing unit.25

Pursuant to the WEPCO rule, the

future actual projection is the product of

(1) the hourly emissions rate, which is

based on the unit’s physical and

operational capabilities following the

change and taking into account federally

enforceable operational restrictions that

would affect the hourly emissions rate

following the change; and (2) projected

capacity utilization, which is based on

both the unit’s historical annual

utilization and all available information

regarding the unit’s likely post-change

capacity utilization. See 57 FR 32323.26

To guard against the possibility that

significant unreviewed increases in

actual emissions would occur under this

methodology, the EPA provided in its

final regulations that any utility which

uses the ‘‘representative actual annual

emissions’’ methodology to determine

that it is not subject to NSR must submit

annually for 5 years after the change

sufficient records to demonstrate that

the change has not resulted in an

emissions increase over the baseline

levels. See 57 FR 32325. To meet this

requirement, utilities can use

continuous emissions monitoring data,

operational levels, fuel usage data,

source test results, or any other readily

available data of sufficient accuracy for

the purpose of documenting a unit’s

post-change actual annual emissions.

Where the change does not increase the

unit’s emissions factor, the utility may

submit annual utilization data, rather

than emissions data, as a method of

tracking post-change emissions. Id. If,

during the required 5-year tracking

period, the unit’s post-change actual

emissions exceed its pre-change

baseline level, the unit is then subject to

NSR. Emissions increases which occur

after the required 5-year tracking period

are presumed not to be related to the

earlier change.27

As discussed, the NSR regulatory

provisions require that the physical or

operational change must ‘‘result in’’ an

increase in actual emissions in order to

consider that change to be a

modification. See also the discussion of

the term ‘‘modification’’ in section II.B.

of this preamble. In other words, NSR

will not apply unless there is a causal

link between the proposed change and

any post-change increase in emissions.

In the WEPCO rule, EPA clarified this

provision in the context of

modifications at electric utility

generating units to exclude increases

due to ‘‘independent factors’’ such as

demand growth. The EPA stated that:

where projected increased operations are in

response to an independent factor, such as

demand growth, which would have occurred

and affected the unit’s operations during the

representative baseline period even in the

absence of the physical or operational

change, the increased operations cannot be

said to result from the change and therefore

may be excluded from the projection of the

unit’s future actual emissions. Conversely,

where the increase could have occurred

during the representative baseline period but

for the physical or operational change, that

change will be deemed to have resulted in

the increase.

Thus, the promulgated regulatory

provision excluded from the calculation

of future emissions:

that portion of the unit’s emissions following

the change that could have been

accommodated during the representative

baseline period and is attributable to an

increase in projected capacity utilization at

the unit that is unrelated to the particular

change, including any increased utilization

due to the rate of electricity demand growth

for the utility system as a whole.

See, e.g., existing § 51.166(b)(32)(ii).

The EPA explained that this provision

allows demand growth to be excluded

from the calculation of future emissions

only ‘‘to the extent it—and not the

physical or operational change—is the

cause of the emissions increase.’’ See 57

FR 32327. On the other hand, any

emissions increases attributable to a

physical or operational change that

‘‘significantly alters the efficiency of the

plant * * * must be included in the

post-change emissions calculations.’’

See 57 FR 32327. Thus, the question of

exclusion of independent factors, such

as system-wide demand growth, is ‘‘a

question of fact which must be resolved

on a case-by-case basis and is dependent

on the individual facts and

circumstances of the change at issue.’’

Id.

2. Limitation of the WEPCO Rule to One

Source Category

The EPA indicated in the WEPCO rule

that it had ‘‘high confidence’’ that a

workable ‘‘future-actual’’ methodology

could be developed for the utility

industry for all changes that did not

involve construction of a new unit or

the replacement of an existing unit. See

57 FR 32333. Specifically, the EPA

pointed to several factors, including (1)

a limited and technologically

homogeneous source population; (2)

oversight by State Public Utility

Commissions that typically evaluate

utility growth and utilization

projections; and (3) requirements in title

IV of the Act that mandate continuous

emissions monitors (CEM) or other

highly accurate methods for recording

actual emissions, as well as special

reporting requirements. In EPA’s

judgment, these factors meant that

permitting authorities could make

independent assessments of the likely

post-change emissions and utilization

rates of utility emissions units, and

could track these predictions for the

relevant period to ensure that the utility

did not exceed its predicted level of

emissions.

The EPA continues to view these

characterizations as generally accurate.

There are a relatively limited number of

electric utility installations and, due to
38268 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

title IV and other regulatory programs,

the EPA and State and local permitting

authorities have extensive information

on the type, fuel, size, and other

characteristics of the electric generating

units in operation. Most of the utilities

operating these units are subject to

regulatory oversight by a State Public

Utility Commission (PUC) which

regularly reviews growth patterns and

utility strategies for meeting future

electrical demand. Finally, as a result of

title IV, most large utility units are now,

or will be shortly, using CEM to

demonstrate continuous compliance

with many of the Federal and State

requirements applicable to their units.

Similarly, the EPA expects that most

major sources in the country will be

upgrading their monitoring and

reporting capabilities due to the Act’s

monitoring and title V operating permit

programs. Thus, these sources should

also be able to provide the necessary

documentation of their compliance with

a post-change emissions prediction.

However, utilities remain the only

source category where projections of

demand and facility utilization are

typically assessed by an independent

regulatory agency (the State PUC) and

are available to the public. Because of

this, permitting authorities should be

able to find independent data and

assessments regarding current

operations and costs for the utility unit

subject to the change as well as

projected data for the unit after the

change. Similarly, the PUC should have

made an assessment of future demand

growth and utility plans to meet this

increased demand so a permitting

authority should be able to secure

independent corroboration of utility

claims in this area as well. Because this

kind of information is typically not

available for other source categories, the

EPA is concerned about the basis

permitting authorities would have to

review projections for other source

categories.

On the other hand, the 5-year tracking

provision that was adopted in the final

WEPCO rule makes the accuracy of the

future projection subject to a safeguard

that should guarantee the accuracy of

the prediction for at least 5 years. This

tracking period may be extended to 10

years where the permitting authority is

concerned that the first 5 years will not

be representative of normal source

operation. See, e.g., existing

§ 51.166(b)(21)(v). Even after this time

period, the permitting authority may

still consider whether a particular

increase is ‘‘caused’’ by the change and

thus results in an emissions increase

subjecting the original change to major

NSR. See 57 FR 32326. In proposing to

expand the ‘‘future actual’’ methodology

to all source categories, the EPA also

solicits comment on the adequacy of

these safeguards and whether the

‘‘future-actual’’ methodology should

either be retained only for the electric

utilities, or be eliminated entirely.

3. Issues Regarding the ‘‘Future-actual’’

Methodology

The EPA seeks comment on two

specific parts of the WEPCO rule. First,

the EPA solicits comment on whether a

demand growth exclusion should be

included, with or without changes.

Second, the EPA solicits comment on

whether the 5-year reporting provision

is working as intended and whether it

should be changed in any way.

As discussed, the WEPCO rule

requires the permitting authority to

exclude from the post-change emissions

estimate, any increase in utilization that

is unrelated to the particular change,

‘‘including any increased utilization due

to the rate of electricity demand growth

for the utility system as a whole.’’ While

this provision ‘‘does not amount to a per

se exclusion of demand growth from the

emissions increase calculation’’ (57 FR

32327), it may create confusion outside

the utility area as to when demand

growth increases may be excluded.

The WEPCO preamble is very clear

that any increases at a unit that result

from a change that significantly affects

the efficiency of the unit must be

included in the calculation of future

actual emissions, although EPA

declined to create a presumption that

every emissions increase that follows a

change in efficiency (at an utility

electric generating unit) is inextricably

linked to the efficiency change. Id.

Indeed, where the proposed change will

increase reliability, lower operating

costs, or improve other operational

characteristics of the unit, increases in

utilization that are projected to follow

can and should be attributable to the

change. These factors are the very

factors that utilities use to order the

production dispatch of the various units

in the system. The EPA believes that

this approach has proven to be effective

in distinguishing between demand

growth and other factors that result in

load shifting for utilities. Comment is

requested on the experience to date with

the use of the WEPCO demand growth

exclusion.

Moreover, it is clear for other source

categories that predictions of future

demand and its impact on individual

emissions units are far more

complicated and uncertain. For

consumer-driven industries, for

instance, demand varies and

presumptions regarding its size and

source would be more speculative than

in the utility industry. In most

industries, the prediction of futureactual emissions would be left to the

permitting authority for a case-by-case

determination of whether the proposed

change will cause any increase in

emissions or whether all or part of any

projected increases will be caused by

independent factors. For this reason,

EPA seeks specific comments on

whether the demand growth exclusion

should be (1) expanded to all source

categories, (2) retained only for the

electric utility sector, or (3) eliminated

for all industries.

In addition, the EPA solicits comment

on the 5-year tracking requirement

which mandates that permitting

authorities track projections of future

actual emissions for the 5-year period

following the change to insure the

accuracy of such projections. The EPA

believes that the mechanism is working

as intended. However, the EPA invites

the public to comment on this issue and

the experience to date of applicability

determinations making use of this

safeguard.

H. Proposal of CMA Exhibit B

As part of the settlement of a

challenge to the EPA’s 1980 NSR

regulations by CMA and other industry

petitioners, the EPA agreed to propose

(for public comment) and take final

action on a methodology for

determining whether a source has

undertaken a modification based on its

potential emissions. The exact

regulatory language the EPA was to

propose was set forth in Exhibit B to the

Settlement Agreement, which is

contained in the docket for this

rulemaking. Under this methodology,

sources may calculate emissions

increases and decreases based on either

the actual emissions methodology in the

existing rules or the unit’s potential

emissions, measured in terms of hourly

emissions (i.e., pounds of pollutant per

hour). Sources could use this potentialto-potential test for NSR applicability,

as well as for calculating offsets, netting

credits and other emissions reductions

credits.

The following discussion describes

the proposed alternative in more detail

and provides the EPA’s preliminary

assessment of this alternative.

1. Description of the Exhibit B

Methodology

Exhibit B contains a series of

revisions to the EPA’s NSR regulations.

These revisions are all designed to

provide sources with the alternative of

using their hourly potential emissions to

determine baselines for NSR
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38269

28For example, Exhibit B calls for EPA to propose

these changes to § 52.21 by deleting ‘‘actual’’

wherever it appears in paragraph (b)(3), except in

paragraph (b)(3)(vi)(B) and adding a new paragraph

(b)(3)(ix) to read as follows: ‘‘(ix) For the purposes

of this subsection, ‘increase in emissions’ and

‘decrease in emissions’ shall refer to changes in the

source’s potential to emit (as calculated in terms of

pounds of pollutant emitted per hour) or in its

actual emissions.’’

29For example, Exhibit B calls for EPA to propose

these changes by deleting the second sentence and

the word ‘‘2-year’’ in the first sentence of existing

paragraph (b)(21)(ii).

30Since EPA’s ‘‘significance levels’’ are expressed

in tons per year, Exhibit B called for any increase

in a source’s PTE (as calculated in terms of pounds

of pollutant emitted per hour) to be extrapolated to

a maximum annual emission rate in order to

determine if it is significant. For example, exhibit

B proposed to revise § 52.21(b)(23)(iv) by changing

it to read as follows: ‘‘A net emissions increase in

a source’s PTE (as calculated in terms of pounds of

pollutant emitted per hour) is significant if that

increase, as multiplied by 8760 and divided by

2000, exceeds the rates specified in subparagraph

(i) above.’’

31For example, Exhibit B proposed to revise

§ 51.165(a)(3)(i) to read as follows: ‘‘Each plan shall

provide that for sources and modifications subject

to any preconstruction review program adopted

pursuant to this subsection, the baseline for

determining credit for emissions reductions is

either (A) the PTE (as calculated in terms of pounds

of pollutant emitted per hour) or (B) the actual

emissions of the source from which offset credit is

to be obtained’’ and by deleting § 51.165(a)(3)(ii) (A)

and (B) and renumbering the remaining paragraphs

accordingly. However, this proposal on offsets may

conflict with the 1990 Amendments. That is,

section 173(c) of the Act requires that a source

secure sufficient emissions reductions to assure that

‘‘the total tonnage of increased emissions of the air

pollutant from the new or modified source shall be

offset by an equal or greater reduction * * * in the

actual emissions of such air pollutants.’’ (Emphasis

added). Thus, offsetting emissions reductions

(including emissions reduction credits used for

offsets) must be calculated in terms of actual

emissions.

The CMA Exhibit B also calls for EPA to propose

language regarding the amount of offsetting

emissions. The relevant passage requires offsets to

‘‘represent (when considered together with the plan

provisions required under section 172 of the Act)

reasonable further progress (as defined in the plan

provisions required under section 172 of the Act).’’

The EPA views this proposed insert as merely a

restatement of the requirements in sections 172 and

173 of the Act. This proposal could be added as

§ 52.21(a)(3)(ii)(H).

32 In this example the ‘‘grandfathered’’ describes

a source that was permitted to construct prior to

promulgation of EPA’s PSD regulations. Thus, this

source was not subject to the applicable PSD

requirements (e.g., control technology review and

modeling analysis).

applicability and other NSR purposes.

First, Exhibit B would add the following

exclusion to the definition of major

modification:

A major modification shall be deemed not

to occur if one of the following occurs: (a)

there is no significant net increase in the

source’s PTE (as calculated in terms of

pounds of pollutant emitted per hour); or (b)

there is no significant net increase in the

source’s actual emissions.

Exhibit B would also delete all

references to actual emissions in the

definition of net emissions increase and

adds language indicating that all

references to ‘‘increase in emissions’’

and ‘‘decrease in emissions’’ in the

definition of ‘‘net emissions increase’’

‘‘shall refer to changes in the source’s

PTE (as calculated in terms of pounds

of pollutant emitted per hour) or in its

actual emissions.’’ 28

Other changes in Exhibit B modify the

applicability baseline by eliminating the

reference to the 2-year baseline period

and to a method for determining actual

emissions during the representative

period.29 Exhibit B also provides a

methodology for determining if an

increase in hourly emissions is

significant.30 Finally, Exhibit B provides

express authorization for sources to use

potential emissions in calculating

offsets and in creating emission

reduction credits.31 Industry has

championed the Exhibit B alternative

because it would maximize the

flexibility that a source has in

calculating the net emissions increase

due to a modification, which would

exclude more physical and operational

changes at existing sources from major

NSR. The Exhibit B approach would

also greatly simplify the task of tracking

emissions increases and decreases

because the level of operations and

actual emissions would generally no

longer be pertinent.

2. The EPA’s Preliminary Analysis

The EPA has undertaken a

preliminary analysis of the impact on

the NSR program of Exhibit B changes.

The EPA agrees that the Exhibit B

alternative would provide maximum

flexibility to existing sources with

respect to determining if a significant

net emissions increase would result

from a physical change or change in the

method of operation. The primary effect

of an hourly potential test is to

eliminate a source’s level of operations

as a factor when determining whether a

proposed change will result in an

increase. Past and future level of

utilization of the source are completely

disregarded, unless restricted in some

way by a federally enforceable SIP or

permit limit. Consequently, an existing

source could make any change so long

as the change does not significantly

increase the source’s hourly potential

emissions rate. For instance, under this

test, where a source has a widget maker

with maximum hourly emissions of 10

pounds per hour, the source may make

any changes it wishes to that machine

so long as the hourly emissions rate

remains at 10 pounds per hour or less.

Moreover under Exhibit B, an existing

source could also use as netting credits

a reduction in the hourly potential

emissions rate at one emissions unit,

even though that emission rate has

never been actually realized, against an

increase in the hourly potential

emissions of a new or modified unit.

Thus the widget maker could use credit

for reducing the potential hourly

emissions from a unit in the plant, even

though it had never operated at that

emissions level. This credit would allow

the hourly emissions rate of the

modified unit to increase to greater than

10 pounds per hour without subjecting

the source to NSR.

While EPA agrees that the Exhibit B

alternative would give a source

maximum operational flexibility and

reduce the administrative burden for

source and permitting agencies, there is

concern for the environmental

consequences. For example, assume the

emissions unit at the widget factory that

is emitting 10 pounds an hour but has

historically operated at 40 percent

capacity due at first to operating cost,

but with age, reduced efficiency and

reliability. Under the Exhibit B

alternative, the owner could modernize

the unit, thus lowering the operating

costs and increasing efficiency and

reliability. This change will allow the

owner to use the machine at much

higher levels (e.g., more hours per day

or week) than it had in the past. As a

result actual emissions (measured in

tpy) could more than double due to the

increase in utilization even though

hourly potential emissions remain the

same.

Further, since Exhibit B would allow

sources to generate netting credits and

emission reduction credit (ERC) for

offsets based on potential hourly

emissions, even if never actually

emitted, and unused operating capacity.

The effect could be to sanction an even

greater actual emissions increase to the

environment without any review. Of

particular concern are potential

emissions levels, which may be

consistent with older sources, whose

impact have never been assessed.

For example, suppose an old

‘‘grandfathered’’ 32 source has an hourly

PTE of 100 pounds per hour, which is

well under the SIP allowable limits

based on some other factor (e.g., process

weight table). Unless there are more

restrictive permit conditions, 8760

annual hours of operation are assumed,

so its annual PTE is 438 tpy. Assume

the process is old and inefficient,

however, so the source over its life has

averaged about 3000 hours of operation

annually and emitted 150 tpy. Under

Exhibit B, the difference, 278 tpy, is

available as a netting credit. However,
38270 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

33 In conjunction with its plant site emission limit

program, Oregon requires sources, after operation

for a specified period of time, to take enforceable

permit restrictions on annual allowable emissions

based on annual actual emissions during normal

operation. This requirement effectively removes

‘‘paper emissions’’ from its inventory. Oregon

appears to be unusual in its comprehensive

application of this requirement; consequently, its

data could not form the basis of any conclusions

about CMA Exhibit B. North Carolina’s historical

data was determined to be insufficient to allow

statewide analysis.

because the plant had never operated

more than 3500 hours per year and the

150 tpy emission rate had been constant

for several years prior to the most recent

inventory, 150 tpy was the value the

State used for various air quality

analyses. In this example the source

could build a second unit with a PTE of

288 tpy by simply limiting the existing

unit to its nominal 3000 hours of

operation per year.

The magnitude of the environmental

impact of Exhibit B, if promulgated, is

difficult to predict. Its effects will vary

from State to State depending to a great

degree on how much cumulative

difference exists between the unused

potential emissions ( so-called ‘‘paper’’

emissions and actual emissions in a

given inventory of sources and to what

extent those ‘‘paper’’ emissions have

been used in attainment

demonstrations, impacts analyses, etc. If

there is little difference between annual

allowable and actual emissions as may

be the case in some States, the choice of

either level as the baseline for netting

and other ERC’s purposes would have

little significance with regard to the

impact on air quality.

The EPA conducted an analysis to

estimate the potential environmental

impacts associated with the CMA

Exhibit B potential-to-potential

approach. (See ‘‘Results of Data

Gathering and Analysis Activities for

the CMA Exhibit B Settlement

Agreement,’’ November 1988, which has

been placed in the public docket

identified at the outset of this

preamble.) This analysis was performed

to estimate the difference between

allowable and actual emissions for

permitted facilities in selected study

areas. Available actual, permitted, and

SIP allowable emissions data were

obtained from the States of North

Carolina, Texas, Illinois, and Oregon.

Due to problems with the data and

other circumstances, the analysis

focused only on the States of Texas and

Illinois because these States appeared to

have a more thorough data base and

realistic distribution of data.33 Both

Texas and Illinois have engaged in

substantial permitting activity over the

years. The completeness, availability

and accessibility of their data, and the

mix of source categories thus was found

to represent more typical differences

between allowable and actual

emissions. From each State, a cross

section of sources were chosen.

Allowable and actual emissions were

determined for each source in the

sample, based on both annual and

hourly emission rates. For the analysis,

this information was then segregated by

pollutant and source type, and, for

combustion sources, further segregated

by unit size.

The results of the Texas and Illinois

analysis indicate that typical source

operation frequently does result in

actual emissions that are substantially

below allowable emissions levels. In

these two States, actual emissions

represent from 30 to 86 percent of the

allowable emissions, depending on

source category and pollutant.

Finally, one of the most troubling side

effects of the Exhibit B proposal is that

it could ultimately stymie major new

source growth by allowing unreviewed

increases of emissions from

modifications of existing sources to

consume all available increment in PSD

areas. After the minor source baseline

date has been established in an area, all

increases, whether subject to major NSR

or not, consume increment. As

illustrated in the example above, under

the CMA Exhibit B test an old

grandfathered source could experience a

‘‘significant’’ net increase in annual

actual emissions, yet it would not

necessarily be subject to review. Since

increment consumption after the minor

source baseline date is calculated based

on actual emissions increases, the

‘‘minor’’ modification of the

grandfathered source would still

consume increment. If a major new

source with state-of-the-art emission

controls proposes to locate in an area in

which the increment has been

consumed in this manner, it would be

barred from building unless and until

the increment problem was resolved. At

the same time, older plants would

continue to be able to make changes

resulting in significant unreviewed, and

possibly uncontrolled, actual emission

increases.

3. The EPA Action

As provided under the CMA

Settlement Agreement, the EPA is today

proposing the regulatory changes

contained in Exhibit B as another

alternative, and seeks comments on

those changes and the EPA’s

preliminary analysis described above.

The EPA also solicits comment on (1)

the environmental impact of the Exhibit

B proposal and how any adverse

environmental impacts associated with

the Exhibit B alternative could be

minimized or eliminated; (2) the impact

of Exhibit B on the permitting of new

‘‘greenfield’’ sources; and (3) whether

Exhibit B is consistent with the air

quality planning goals of the NSR

program. That is, while Exhibit B could

allow significant increases in actual

emissions to be unreviewed, section 173

of the Act requires offsets to be based on

actual emissions, and the PSD

increment system as well as many

nonattainment area plans are keyed to

an actual emissions baseline.

If EPA were to promulgate the Exhibit

B settlement as final rules, the Exhibit

B rules would need to be updated to

reflect other rule changes since 1980 as

well as provisions of the 1990

Amendments. In this context, the EPA

also solicits comment on updating the

Exhibit B language.

I. Allowed Activities Prior to Receipt of

Permit

Several industry members of the

Subcommittee recommended that EPA

change the NSR regulations to enable

sources to engage in a broader range of

activities prior to receipt of an NSR

permit in cases involving modifications

to existing sources. See, e.g., 40 CFR

§§ 51.166(b)(11) and 52.21(b)(11). These

industry members asserted that it was

unnecessary and inappropriate to

prohibit preliminary activities to

achieve the statutory purpose of

requiring a permit before construction

begins, and that such prohibitions

caused delay and added expense for no

good purpose. EPA realizes that there is

a wide difference of opinion on these

issues and is soliciting comments. Set

forth below is a summary to assist in

formulating comments.

New Source Review is a

preconstruction requirement, and the

statute plainly bars construction

without a permit. The congressional

policy behind this is obvious: to insure

that well-reasoned permitting decisions

that may involve millions of dollars and

significant, long-lasting environmental

impacts are made before companies

begin actual construction on a new or

modified source of air pollution. If it

were otherwise, and companies were

given unlimited ability to place ‘‘equity

in the ground’’ by constructing plants

before a permit is issued, permitting

authorities’ discretion in making permit

decisions may be compromised, and the

ability of EPA and citizens to challenge

the permit that is eventually issued may

likewise be undermined. Thus, the

general policy at issue is clear, and it is

likewise clear that core activities at an

industrial site, such as the fabrication or
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38271

34 In serious and severe ozone nonattainment

areas, section 182(c)(7) of the Act specifies that

BACT may apply in certain circumstances.

35A subsequent proposed rulemaking, for

implementing changes to the NSR regulations

pursuant to provisions in title I parts C and D of

the 1990 Amendments, will further update the

control technology requirements at 40 CFR

51.165(a)(2) to reflect statutory requirements.

36BACT is defined in section 169(3) of the Act

as, ‘‘[A]n emission limitation based on the

maximum degree of reduction * * * which the

permitting authority, on a case-by-case basis, taking

into account energy, environmental, and economic

impacts and other costs, determines is achievable

for such facility through application of production

processes and available methods, systems, and

techniques, including fuel cleaning, clean fuels, or

treatment or innovative fuel combustion techniques

for control of each such pollutant.’’ 0Section 169(3)

also provides that in no event may BACT result in

emissions that exceed those allowed by any

applicable standard established under section 111

or 112 of the Act. In addition, if the reviewing

authority determines that there is no economically

reasonable or technologically feasible way to

measure the emissions, and hence to impose an

enforceable emissions standard, it may require the

source to use a design, equipment, work practice or

operational standard or combination thereof, to

reduce emissions of the pollutant to the maximum

extent practicable. See also existing §§ 52.21(b)(12)

and 51.166(b)(12).

installation of pollution-generating

equipment, constitute ‘‘construction’’

within the meaning of the Act. At the

same time, the statute does not address

the details of the construction process,

nor does it constrain EPA’s discretion to

fashion regulatory mechanisms to

harmonize the needs of environmental

protection and economic growth in a

manner consistent with the legislative

purpose. Consistent with these statutory

goals, the regulations and EPA’s

longstanding policy clearly identify the

scope of prohibited preconstruction

activities. The current regulations and

policies remain in effect regardless of

today’s request for comment.

Accordingly, EPA today solicits

comments regarding (1) whether there

exists a significant problem with the

current system, and the specific nature

of such problem(s), and if so, (2)

whether a broader range of preliminary

activities should be allowed prior to the

issuance of a final NSR permit, and (3)

how EPA would implement any

approach ultimately adopted. EPA is

seeking comments regarding the need

for potential changes to the current

regulations that would allow greater

flexibility with respect to construction

activities in the case of a proposed

modification to the source, while

preserving the essential characteristics

of a preconstruction review program.

The EPA solicits comments on all

aspects of this issue, including

comments suggesting specific regulatory

language to implement it. In taking final

action on this proposal, EPA may adopt

specific regulatory language consistent

with this discussion without further

public notice.

III. Proposed Revisions To Control

Technology Review Requirements

A. Introduction

New major emitting facilities and

major modifications proposed in areas

designated ‘‘attainment’’ or

‘‘unclassifiable’’ under section 107 of

the Act must apply the BACT for each

pollutant subject to regulation under the

Act (in addition to other

preconstruction review requirements).

See sections 165(a)(4) and 169(3) of the

Act. New or modified major stationary

sources proposing to locate in an area

designated ‘‘nonattainment’’ under

section 107 of the Act are required to

meet the LAER.34 See section 173(a)(2)

of the Act.

The deliberative nature of BACT and,

to some extent, LAER determinations

has spawned considerable controversy.

Issues have included (1) the scope and

comprehensiveness of the universe of

candidate technologies which must be

considered; (2) when the universe of

control technology candidate

technologies may be closed to the

introduction of new technologies

relative to a given permit application

and, (3) the methodology for analyzing

the candidate technologies for BACT.

The CAAAC made several

recommendations to EPA that address

issues regarding the management of

EPA’s BACT/LAER data base and the

process by which BACT or LAER is

determined. Upon evaluation of those

recommendations the EPA is taking

steps, described in this preamble, to

improve and make more accessible its

existing database on BACT and LAER

determinations and other technical

information resources. These

improvements will not only limit the

costs permit applicants incur in

identifying and evaluating available

controls, but will also facilitate timely

review of the BACT analysis. The EPA

is also proposing regulatory revisions

that provide a framework for BACT

determinations under EPA-approved

State administered programs and a

specific, reliable and efficacious

methodology for federally-administered

programs, which would be available for

States to adopt. In proposing these

revisions and taking final action, EPA

will also discharge certain obligations

arising out of several judicial and

administrative matters. See section IV.I.

of this preamble.

The EPA is also proposing regulatory

revisions that significantly limit a

permit applicant’s responsibility to

review new control technologies that are

developed or emerge after a complete

permit application has been submitted.

This revision will reduce the number of

delays associated with evaluating

emerging control technologies in the

post-completeness stage of the

permitting process. See proposed

§ 51.166(j)(5).

The CAAAC’s discussions focused

primarily on BACT; no specific

recommendations were made

concerning the methodology for

determining LAER. Therefore, the EPA

is not proposing changes to existing

regulations which govern how to

determine LAER.35 However, the

recommendations and resultant

improvements to EPA’s control

technology information systems, the

proposed regulatory language pertaining

to the universe of candidate

technologies, and limitations on the

consideration of new technologies also

extend to LAER. Thus, the EPA is

proposing to add such new provisions

applicable to LAER, which are

analogous to the proposed changes

described above for BACT under the

PSD program. See proposed

§ 51.165(a)(2)(ii).

B. Proposed Revisions to the

Methodology for Determining BACT

1. General Description of the BACT

Determination Process

Typically, the proposed Major Source

Permit Applicant Conducts a BACT

analysis to be submitted with the permit

application to the permitting authority.

The analysis includes an evaluation of

the technical feasibility and the energy,

environmental, economic impacts, and

other costs associated with various

alternative control options. The

applicant includes in its application the

BACT analysis and what it considers to

be the best control technology or system

of controlling emissions for the

particular source or project. The

permitting authority reviews the

applicant’s analysis and, after taking

into account the energy, environmental,

and economic impacts and other costs,

and the public’s views, specifies an

emissions limitation for the source that,

in the permitting authority’s reasoned

judgment, reflects BACT.36

2. The Core Criteria

As noted, BACT requires the adoption

of an emission limitation based on the

‘‘maximum degree of reduction...which

the permitting authority, on a case-bycase basis, taking into account energy,

environmental, and economic impacts

and other costs, determines is

achievable.’’ See section 169(3) of the
38272 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

37See S. Rep. No. 127, 95th Cong., 1st Sess. 31

(1977).

38 Id.

39An applicant could limit its proposed list of

technology alternatives to the most effective control

technologies. Consideration of technologies that are

outdated or are clearly inferior to those in the

applicants proposed list would not be necessary.

The EPA is also proposing in this notice, limits on

the applicant’s responsibility to consider control

technologies that have not been demonstrated in

practice as of the time a permit application is

determined to be complete. See section IV.D. of this

notice.

40The applicant may need to consider collateral

emission increases of hazardous air pollutants

under other State programs.

Act. The Act confers substantial

discretion on the permitting authority in

establishing BACT.

The State flexibility in weighing

relevant factors and determining BACT

in any particular circumstance is

addressed in the legislative history

associated with congressional adoption

of the PSD program in the 1977

Amendments. The legislative history

provides that a central benefit of State

flexibility is that it facilitates

implementation of the best available

controls, allowing for the widespread

adoption of improved technologies far

more quickly than would occur with a

uniform standard:

The decision regarding the specific

implementation of best available technology

is a key one and the committee places this

responsibility with the State, to be

determined in a case-by-case judgment. It is

recognized that the phrase has broad

flexibility in how it should and can be

interpreted, depending on actual

construction location.

In making this key decision on the

technology to be used, the State is to take

into account energy, environmental, and

economic impacts and other costs of the

application of BACT. The weight assigned to

such factors is to be determined by the State.

Such a flexible approach allows the adoption

of improvements in technology to become

widespread far more rapidly than would

occur with a uniform Federal standard. The

only Federal guidelines are EPA’s individual

new source performance standards and

hazardous emissions standards, both of

which represent a floor for the State’s

decision.37

The legislative history also indicates

that an intended benefit of the BACT

requirement is the minimization of the

amount of increment consumed by any

single source, thus allowing for greater

growth in an area:

In the long run, the growth potential of

these clean areas may be quickly filled

without a reasonable policy to prevent

significant deterioration. The first new source

built in an area would often absorb the entire

available air resource, leaving no capacity for

future expansion or growth.

Under the policy to prevent significant

deterioration in this bill, the growth options

should be enlarged. This is because the

provision requires that any major source be

constructed to utilize the best available

control technology. This should leave room

for additional growth.38

The legislative history describes the

breadth of State discretion in regulating

significant air quality deterioration in a

community. While the legislative

history recognizes that the BACT

requirement helps limit the amount of

increment new sources consume, it also

recognizes that a proposed source

meeting BACT may nevertheless

consume substantial increment. The

legislative history provides that the

permitting authority has broad

discretion in deciding how much, if

any, incremental air quality

deterioration to apportion to a proposed

source meeting BACT. The legislative

history also indicates that a State has

discretion to reject a permit application

for a proposed source because of

impacts the proposed source could have

on the character of the community:

This congressional directive enables the

State to consider the size of the plant, the

increment of air quality which will be

consumed by any particular major emitting

facility, as well as such other considerations

as anticipated and desired economic growth

for the area. The balancing of these factors

allows States and local communities to judge

how much of the defined increment of

significant deterioration will be used by any

major emitting facility. If, under the design

which a major facility propose [sic], the

percentage of the increment would

effectively prevent growth after the proposed

major facility was completed, the State or

community could either refuse to permit

construction or limit its size. This is strictly

a State and local decision; the legislation

provides the parameters for that decision.

Similarly, when an analysis of energy,

economics, or environmental considerations

indicates that the impact of a major facility

could alter the character of that community,

then the State could, after considering those

impacts, reject the application or condition it

within the desires of the State or local

community. Flexibility and State judgment

are the foundations of this policy.

Accordingly, in adopting the PSD

program, Congress emphasized the

importance of thorough and public

analysis in PSD decision-making. One of

the enumerated purposes of PSD is to

assure that any decision to permit

increased air pollution in any area to

which PSD applies is made only after

careful evaluation of all the

consequences of such a decision and

after adequate procedural opportunities

for informed public participation in the

decision-making process. See section

160(5) of the Act.

In summary, for a given proposed

source or modification, BACT is not a

preordained level of emissions

reduction, but the result of a

determination by the permitting

authority based on an analysis of

available control methods, systems, and

techniques. The permitting authority

establishes an emissions limitation

based on the maximum degree of

reduction that is achievable in light of

the circumstances of the individual case

taking into account the energy,

environmental, economic impacts and

other costs of the candidate control

alternatives, and the concerns of the

State and local community that could be

impacted by the source under

consideration. Consequently, the EPA

believes a BACT determination should,

at a minimum, meet two core

requirements, including (1) all of the

available control systems for the source,

including the most stringent, must be

considered in the determination,39 and

(2) the selection of a particular control

system as BACT must be justified in

terms of the statutory criteria and

supported by the record, and must

explain the basis for the rejection of

other more stringent candidate control

systems. However, an applicant

proposing the most stringent candidate

control alternative need not provide cost

and other detailed information in regard

to other control options.40

Today, the EPA is proposing to make

the core criteria described herein the

minimum requirements for determining

BACT. The EPA is proposing to codify

in the Federal PSD regulations at 40

CFR 52.21, a specific methodology for

determining BACT that effectively

implements the statutory requirements

and the core criteria. See proposed

§ 52.21(j)(5) and (n)(2)(iii). However, to

allow states more flexibility under their

own rules for making case-specific

BACT determinations, EPA is proposing

to insert the core criteria for BACT

determinations into the part 51 PSD

regulations. Thus, so long as the core

criteria are met, these proposed

revisions allow for other methodologies

that provide equivalent results with less

time and effort. See proposed

§ 51.166(j)(5) and (n)(2)(iii). The EPA

requests public comment on this

approach and on the proposed core

criteria.

3. Description of the Federal

Methodology for Determining BACT

Since late 1987 EPA has

recommended a specific process for

determining BACT. The

recommendation evolved from a 1986

national program audit that identified

BACT determinations as a deficient

aspect of the PSD permitting process,

and a 1987 EPA permit appeal
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38273

41See ‘‘New Source Review Task Force Report,’’

Final Draft, Dec. 1986. Honolulu Resource Recovery

Facility, PSD Appeal No. 86–8 (Remand Order, June

22, 1987). ‘‘Operational Guidance on Control

Technology for New and Modified Municipal Waste

Combustors,’’ June 26, 1987. ‘‘Improving New

Source Review,’’ Memorandum from Craig Potter,

Assistant Administrator for Air and Radiation to

EPA Regional Administrators, Regions I–X,

December 1, 1987.

42See Chapter B of EPA’s 1990 Draft NSR

Workshop Manual for a more detailed description

of EPA’s BACT determination policies, including

guidance addressing the consideration of energy,

environmental, and economic impacts.

43The term ‘‘emissions unit’’ may also represent

a process or a system that might collect emissions

from several discrete pieces of equipment.

44Cost effectiveness is the cost of control divided

by the mass of emissions (usually in tons) reduced

by that control. Average cost effectiveness is the

cost per ton that would be incurred compared with

baseline controls, (i.e., either uncontrolled or the

control level that would be required in the absence

of the major source requirements for which the

source is making application). Marginal or

incremental cost effectiveness is the difference in

cost per ton of emissions reduced at the next most

stringent level of control, when comparing two

control options.

The EPA has developed and published detailed

procedural information for performing cost

analyses, including average and incremental cost

effectiveness, in the OAQPS Cost Manual. The

Manual is available through the National Technical

Information Service (NTIS) 5285 Port Royal Road,

Springfield, Virginia 22161; Phone No. (703) 487–

4807. Government agencies can order it from the

EPA CTC. The EPA has made parts of the Manual

dealing with general cost analysis procedures

available as retrievable electronic files on the CTC

bulletin board. See also footnote 49 for computer

access information.

decision.41 The EPA’s recommended

methodology for determining BACT is

described in detail in the 1990 Draft

NSR Workshop Manual 42 and is

summarized below.

The first step is to identify, for the

emissions unit in question, all

‘‘available’’ control options.43 See

proposed § 52.21(j)(5). Available control

options are those air pollution control

technologies or techniques with a

practical potential for application to the

emissions unit and the regulated

pollutant under evaluation, and which

have been ‘‘demonstrated in practice.’’

See proposed §§ 52.21(b)(42) and

(j)(5)(i). Air pollution control

technologies and techniques include the

application of production processes and

available methods, systems, and

techniques, including fuel cleaning,

clean fuels or treatment or innovative

fuel combustion techniques for control

of the affected pollutant. See section

169(3) of the Act. In some

circumstances, inherently lowerpolluting processes are appropriate for

consideration as available control

alternatives.

By proposing that for consideration in

permit applications, technologies

should be ‘‘demonstrated in practice,’’

EPA intends to require consideration of

technologies in EPA’s RACT/BACT/

LAER Clearinghouse (see section III.C.

of this preamble), technologies

identified or required in a regulatory

context and technologies meeting

minimum operating performance

requirements. The EPA proposes to

authorize limiting consideration of

emerging technologies that are

identified after an application is

complete. This is discussed in more

detail in sections III.D.1. and III.D.2. of

this preamble.

In the second step, the technical

feasibility of each control option that

was identified in step one is evaluated

with respect to the source-specific (or

emissions unit-specific) factors. See

proposed § 52.21(j)(5)(i). One or more of

the options may be eliminated from

consideration where they are

demonstrated to be technically

infeasible. A demonstration of technical

infeasibility should be clearly

documented and should show, based on

physical, chemical, and engineering

principles, that technical difficulties

would preclude the successful use of

the control option on the emissions unit

under review.

The control technology options

identified as available and technically

feasible are then ranked by overall

control effectiveness for the pollutant

under review, with the most effective

control alternative at the top. At this

point in the analysis, it is initially

assumed that the most stringent

alternative represents BACT pending

the consideration of the source-specific

energy, environmental and economic

impacts, and other costs associated with

each control option. See proposed

§ 52.21(j)(5)(i). Both beneficial and

adverse impacts should be discussed

and, where possible, quantified. In

general, the BACT analysis should focus

on the direct impact of the control

alternative.

Cost is often a major concern of the

owner or operator of the proposed

source and should be included in the

analysis. Both average cost effectiveness

and marginal (incremental) cost

effectiveness should be derived for the

control alternatives and considered in

the final decision.44

If the applicant is disposed toward

selecting the most stringent emissions

control alternative in the listing as

BACT, irrespective of cost, then the

analysis need only address generation of

other air pollutants, e.g., toxic

pollutants. See proposed § 52.21(j)(5)(i).

If there are no outstanding issues that

would justify selection of an alternative

control option, the analysis ends and

the results are proposed as BACT.

In the event that the most stringent

candidate control alternative is shown

to be inappropriate, due to energy,

environmental or economic impacts and

other costs, the rationale for this finding

must be documented for the public

record. See proposed § 52.21(j)(5)(i).

Then the next most stringent alternative

in the listing becomes the new control

candidate and is similarly evaluated.

This process continues until the

technology under consideration cannot

be eliminated by any source-specific

environmental, energy or economic

impacts which demonstrate that

alternative to be inappropriate as BACT.

In summary, under the methodology

just described, the most effective control

option not eliminated based on relevant

statutory factors is proposed as BACT

for the pollutant and emission unit

under review. The EPA believes the

proposed BACT determination

methodology is a rigorous and reliable

way of determining a level of control

that conforms with the statutory

definition of BACT and the core criteria.

For this reason the EPA is proposing to

codify this methodology in the Federal

NSR regulations. The proposed Federal

regulations could also serve as a

template for those States that choose to

incorporate this method into their SIP.

The EPA requests public comments

on alternative methods for determining

BACT. Commenters should explain or

illustrate how such alternative method

will satisfy the following core criteria

proposed in this document: (1) All

available control systems for the source

must be considered in the

determination, including the most

stringent emissions control alternative,

and (2) selection of a particular control

system as BACT, and the basis for the

rejection of the other more effective

emissions control systems, must be

justified in terms of the statutory criteria

and supported by the record.

Specifically, the comments should

address how the alternative

methodology would provide for

consideration of energy, environmental,

and economic impacts and other costs.

See section 169(3) of the Act.

4. Additional Guidance for BACT

Determinations

The Federal analytical methodology

outlined above provides for reasoned

BACT determinations, but it does not

dictate a particular result. Although the

progression of the analysis is logical, the

CAAAC suggested that it would be

helpful for EPA to develop more

detailed guidance addressing how the

method actually works in real-life

applications. The CAAAC

recommended that the EPA provide
38274 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

45The RACT is an acronym for reasonably

available control technology, which applies to

existing stationary sources located in nonattainment

areas. See section 172(c)(1) of the Act.

46 July 1, 1994 Letter from Patrick M. Raher to

Mary D. Nichols transmitting CAAAC’s

Recommendations for NSR rule reforms.

47 Inquiries may be addressed to: Control

Technology Hotline, Information Transfer Group,

OAQPS (MD–12), Research Triangle Park, NC

27711, Hotline No. (919) 541–0800, OAQPS TTN:

Electronic bulletin board, computer access

telephone number (919) 541–5642; Internet Access:

TELNET ttnbbs.rtpnc.epa.gov.

guidance in the form of specific

examples illustrating (1) how the

consideration of energy, environmental

or economic factors justified

establishing a less stringent control

technology as BACT, and (2) how the

BACT process may properly result in a

BACT determination based on control

technology more stringent than that

initially proposed by the source.

The EPA agrees that the issuance of

guidance in the form of illustrative

examples would improve understanding

of EPA’s BACT determination process.

Therefore, the EPA is preparing a case

study report, containing examples of

BACT determinations properly

employing the EPA methodology. The

EPA’s guidance will examine several

instances in which a technology less

stringent than the most stringent one

was determined to represent BACT, and

other instances where the permitting

authority imposed BACT requirements

that were more stringent than those

proposed by the applicant. This

document will be made available to the

public when it is completed,

independent of this proposed action. In

addition, the existing ‘‘OAQPS Cost

Manual’’ provides basic guidance on

how to perform cost analyses for air

pollution control equipment. See

footnote 45.

C. Improving Information about

Available Control Technologies:

Changes to the Reasonably Available

Control Technology (RACT)/BACT/

Lowest Achievable Emission Rate

(LAER) Clearinghouse (RBLC)

The EPA established the original

computerized database of BACT and

LAER determinations (the BACT/LAER

Clearinghouse) at the request of

permitting agencies to promote sharing

of technology determinations in the

permitting process. The clearinghouse

was installed on the OAQPS

Technology Transfer Network (TTN) for

convenient public access. The 1990

Amendments now requires the EPA to

make information regarding emission

control technology available to the

States and to the general public through

a central database. The 1990

Amendments directs that the database

include control technology information

received from States issuing NSR and

operating permits, which include

RACT45 SIP requirements. See sections

108(h) and 173(d) of the Act. This

discussion will refer to the database as

the RBLC. The EPA also established the

Control Technology Center (CTC) to

assist State and local permitting

agencies in identifying and evaluating

new control technologies or control

technologies for industrial categories

that have been previously uncontrolled.

It maintains a separate bulletin board

(CTC BBS) that operates in concert with

the RBLC.

Both bulletin boards, the RBLC and

the CTC BBS, are useful sources of

publicly available information on

control technology determinations, but

they are not exhaustive. The CAAAC

made numerous detailed

recommendations for improving the

content and management of the RBLC.46

The following discussion explains

several steps the EPA has taken or is

planning to take to improve the control

technology information resources that it

manages.

• The EPA is proposing in this

rulemaking to require permitting

authorities to submit BACT and LAER

determinations to the RBLC within 60

days following permit issuance. See

section VI.C. of this preamble.

• Based on the CAAAC’s

recommendation that the RBLC should

comprehensively catalog information on

critical data elements for new entries

(rather than obtaining missing data for

existing entries), the EPA is considering

ways to ensure—through better

cooperation with permitting authorities

and private industry—that the RBLC is

complete and comprehensive. The EPA

intends to focus the RBLC’s resources

on providing complete and correct

information about new permit

determinations. Data gaps in old

determinations will be addressed as

resources allow.

• The EPA has simplified the RBLC’s

reporting form and limited the

information in the RBLC. Data fields

that were of questionable value or have

received little use have been deleted.

These changes are expected to reduce

the burden on permitting agencies and

encourage participation. The EPA has

also prepared a stand-alone program on

computer disk for use by agencies to

submit determinations as an alternative

to completing forms and direct data

entry to the RBLC.

• The EPA intends, as resources

allow, to establish standard emission

units for reporting emission limits from

all major process categories.

• The EPA intends, as resources

allow, to implement a process to

highlight the most stringent

determinations reported to the RBLC

and to provide follow-up verification on

installation and compliance.

• Due to the case-by-case and

evolutionary nature of BACT, as well as

limited Agency resources, EPA does not

intend to implement a recommendation

that the EPA prepare written guidance

indicating demonstrated technology that

presumptively should be considered

BACT or LAER for certain industries.

Nevertheless, EPA will publicize the

RBLC’s capability to present technology

determinations in rank order (most to

least stringent) for a particular process

and pollutant. The EPA has already

placed such lists for several common

sources and pollutants in retrievable

document files on the RBLC and will

periodically update and add to these

rankings. Process-and pollutant-specific

rankings can be generated directly by

users by performing standardized search

and download procedures that are

integral functions of the RBLC.

• The EPA intends to up-date its

RBLC users manual to more clearly

explain options and searches available

to users. The manual is available in

hardcopy from the National Technical

Information Service (NTIS) of the U.S.

Department of Commerce, the CTC (for

government agencies), or as a retrievable

file on the RBLC. The RBLC also offers

an informational flyer which, in part,

fulfills basic user manual functions. The

flyer is available to anyone free of

charge from the CTC47 and is a

retrievable document file on the RBLC.

The EPA will continue to utilize the

CTC and the RBLC as well as other

available electronic media to

disseminate other guidance and

technical information such as the

OAQPS ‘‘Cost Manual.’’

If fully implemented, the impact and

scope of the CAAAC’s recommendations

to expand and improve EPA’s

technology information services would

require a substantial increase in

resources. The EPA invites comments

on funding alternatives for the RBLC

and CTC BB. The EPA also seeks

comments on a strategy for prioritizing

all or part of the RBLC’s functions if full

funding is not available.

D. Streamlining BACT/LAER

Determinations

The EPA’s current policy calls for

consideration of available control

techniques, including emerging

technology, in making BACT and LAER
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38275

48See J. Seitz memo, ‘‘BACT/LAER Determination

Cutoff Date,’’ January 11, 1990.

49 In the case of foreign technology that has been

installed and operating outside the U.S., the same

proposed criteria would apply in determining

whether a technology has been demonstrated in

practice.

determinations until the time that a

final NSR permit is issued.48 During the

NSR Reform Subcommittee meetings,

industry representatives expressed

concern about instances when

applicants have been required to

consider emerging technologies long

after their applications were prepared

but before a final permit was issued.

This practice interposes significant

uncertainty in business planning as well

as permit delays. For example, permit

applicants face the risk of having to

substantially redesign a project due to

the emergence of new control

technology prior to final permit

issuance. Further, there are research and

related transaction costs, and even

project jeopardy, when permit

processing is extended while more

information about the availability and

achievability of an emerging technology

is assessed.

The EPA is today proposing to alter

its current policy and proposing

accompanying changes to its NSR

regulations to address this problem.

These proposed changes strike a balance

between providing more certainty for

industry in making technology choices

for planning major projects, and

ensuring that state-of-the-art

technologies are adequately considered.

1. Permit Applications Must Include

Analysis of Control Technologies That

are Demonstrated in Practice

Specifically, the EPA is proposing to

require that the BACT analysis or LAER

determination that is submitted with a

permit application consider

technologies that have been

‘‘demonstrated in practice.’’ See

proposed §§ 51.165(a)(2)(ii)(A),

51.166(j)(5)(i), and 52.21(j)(5)(i). The

proposed regulations define

‘‘demonstrated in practice’’ to include

all technologies required and reported

through existing regulatory programs

and those that, while not identified in

the regulatory arena, meet specific

criteria for determining their availability

and appropriateness for consideration in

a BACT or LAER analysis. See proposed

§§ 51.165(a)(1)(xxviii), 51.166(b)(42),

52.21(b)(43), and 52.24(f).

With regard to regulatory

documentation, technologies from the

following sources must be considered in

the BACT or LAER analysis:

(a) The EPA’s RACT/BACT/LAER

Clearinghouse;

(b) Major source construction permits

issued pursuant to parts C (PSD) and D

(NSR in nonattainment areas) of title I

of the Act;

(c) Emissions limitations contained in

federally-approved implementation

plans, excluding emissions limitations

established by permits issued pursuant

to programs for non-major sources;

(d) Permits and standards developed

under sections 111 and 112 of the Act;

and

(e) Alternative Control Techniques

Documents and Control Techniques

Guidelines that have been issued by the

EPA.

The EPA is not proposing to require

that operating permits issued under

federally-approved title V Act programs

be among the sources of available

control technology that must be

examined in preparing a permit

application except where sources are

issued an ‘‘integrated’’ NSR and

Operating permit. Title V permits

generally compile requirements that are

independently established under other

Act programs. Title V programs do not

mandate substantive requirements

concerning the selection, installation

and performance of control

technologies. Therefore, a title V permit,

unless it jointly imposes the substantive

requirements of a major NSR permit,

would likely not provide significant

new control technology information.

Control technologies that may not be

implemented in a regulatory context of

a substantive Act program may

nevertheless be available for a given

BACT or LAER analysis. For example,

sources often install state-of-the-art

technology in order to be classified as a

minor source or to avoid NSR

requirements for major modifications.

(In this case permitting authorities are

encouraged to report the technology to

the RBLC.) Furthermore, new

technologies and innovations of existing

technologies occasionally evolve

without wide publicity in the regulatory

arena. Such technologies also deserve

consideration. Consequently, the EPA

also proposes to define ‘‘demonstrated

in practice’’ to include any technology

that meets the following criteria: (1) it

has been installed and operating

continually for at least 6 months on an

emissions unit(s) which has been

operating at least at 50 percent of design

capacity during that period of time; and

(2) its performance has been verified

during that 6-month period with a

performance test or performance data

while operating under a load that

coincides with either the operation of

the emissions units served by the

control technology at their PTE, or 90

percent of the control technology’s

design specifications. See proposed

§§ 51.165(a)(1)(xxviii), 51.166(b)(42),

52.21(b)(43), and 52.24(f). The 6-month

operating requirement within the

definition of ‘‘demonstrated in practice’’

is proposed to establish a minimum

operating history to demonstrate the

performance and reliability of the new

technology. The EPA believes that a 6-

month period is appropriate because

this is the maximum amount of time

currently allowed for the shakedown

period for establishing emissions of

replacement emissions units in NSR

netting transactions. See existing

§§ 51.165(a)(1)(vi)(F), 51.166(b)(3)(vii)

and 52.21(b)(3)(vii). The EPA also

believes that the 50 percent continual

load factor provides some assurance that

the control technology has been placed

in meaningful service during the 6-

month period, while recognizing that

higher loads may not be sustainable by

the source for extended periods of time

so soon after start-up.

Knowledge of the control technology’s

ability to perform effectively at specified

loads is essential for its consideration in

a BACT or LAER determination.

Therefore EPA is proposing to add the

emissions load criteria for testing a

control technology’s performance

during the 6 months in which the

sustained operability of the technology

is established. This testing requirement

is similar to that found under the NSPS,

which requires facilities to conduct

performance tests within the period 60

to 180 days after start-up to determine

compliance with the applicable

standards. See existing 40 CFR 60.8(a).

The EPA requests comment on the

criteria and rationale described above

for determining if a control technology

has been demonstrated in practice.

Further, EPA is proposing that

consideration of a technology that is

demonstrated in practice outside the

regulatory context not be required if the

operation period and performance test

concluded less than 90 days prior to the

date a permit application is complete.49

See proposed §§ 51.165(a)(2)(ii)(A),

51.166(j)(5)(i)(A) and 52.21(j)(5)(i)(A).

The proposed 90-day period preceding

the date of complete permit application

allows time for the installation and

performance that is ‘‘demonstrated in

practice’’ to be publicized in trade

journals and company newsletters and

the results to be examined by the

scientific community. On the other

hand, having the 90-day period keyed to

the completeness date creates an

incentive for the source to resolve

incomplete applications expeditiously.

The following examples illustrate the

proposed process.
38276 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

50 In a separate rulemaking EPA has proposed

revising the public review and comment

requirements at 40 CFR 51.161 to give States more

flexibility in processing minor source permits for

projects that are determined to be ‘‘less

environmentally significant.’’ See 60 FR 45529,

45549, (August 31, 1995).

Example A: On June 1 a permit applicant

submits an application that is subsequently

determined to have been complete on the

date of the submittal. The applicant in this

case would be responsible for evaluating all

technologies reported or required in a

regulatory context as of the date of submittal.

Those technologies that have been

‘‘demonstrated in practice’’ via the operating

and performance criteria specified above, as

of 90 days prior to June 1st would also have

to be evaluated.

Example B: On June 1st, a source submits

a permit application. One month later (May

1st), the permitting authority determines the

application to be incomplete. The source

submits new information on August 1st and

the permitting authority finds the application

complete as of the day the new information

was submitted. The applicant would be

responsible for evaluating all technologies

reported or required in a regulatory context

as of May 1st. Those technologies that have

been ‘‘demonstrated in practice’’ via the

operating and performance criteria specified

above as of 90 days prior to the original

submittal date would have to be evaluated.

Comment is solicited on the proposed 90-day

post-demonstration period in light of the 6-

month demonstration period within the

definition of ‘‘demonstrated in practice.’’

Finally the proposed regulations

would require, in evaluating control

technologies that are demonstrated in

practice under both the regulatory and

performance-based criteria, the

consideration of control technologies on

the basis of technology transfer.

Technology transfer is appropriate when

sources or source categories have

similar emission stream characteristics.

See proposed §§ 51.166(j)(5)(ii) and

52.21(j)(5)(ii).

Some industry and State

representatives on the NSR Reform

Subcommittee expressed concern about

the administrative delays if a permit

application is determined incomplete

due to the inadvertent omission from a

BACT or LAER analysis of a technology

alternative that has been ‘‘demonstrated

in practice.’’ For example a technology

that has recently been ‘‘demonstrated in

practice’’ may have been publicized in

a less well-known publication, and

thereby escaped notice of the applicant.

Certainly, overt disregard of reasonably

accessible information would be

grounds for determining the application

to be incomplete. Inadvertent omissions

should be evaluated by the permitting

authority in light of case-specific

factors. In all instances, if a technology

that should have been evaluated is

identified and the permitting authority

sustains the completeness finding, there

is still a duty to evaluate the omitted

technology relative to the other

technology alternatives prior to permit

issuance.

2. Permitting Authority May Limit

Consideration of New or Emerging

Technologies After Complete

Application

New or emerging technologies are

those technologies that have been

developed but have not satisfied the

criteria to be classified as

‘‘demonstrated in practice.’’ Some NSR

Reform Subcommittee members

recommended that EPA prohibit any

consideration of new or emerging

technologies identified after the permit

application is complete. Other members

recommended that EPA not allow any

limitations on consideration of new or

emerging technologies prior to the end

of the public comment period on a

permit application. The EPA is

proposing new regulatory provisions

that would authorize the permitting

authority to cut-off consideration of

technologies that evolve or appear after

the permit application is complete,

except under limited circumstances

described below. See proposed

§§ 51.165(a)(2)(ii)(B) and (a)(7)(iii),

51.166(j)(5)(iii) and (q)(3) and

52.21(j)(5)(iii) and (q)(3).

The EPA today proposes to add

provision concerning public

recommendations on new and emerging

control technologies as part of the new

provisions for public participation.

Under the proposed rules, the

permitting authority may require

commenters to submit a

recommendation, accompanied by

reasonably available information,

regarding new or emerging control

technologies. The accompanying

information could include the name and

location of the source utilizing the

control technology, the manufacturer

and type of control device, the date on

which the technology was installed and

became operational, appropriate

performance requirements, and any

resulting test or performance data

available. See proposed

§§ 51.165(a)(7)(ii) and 51.166(q)(2). With

regard to the implementation of the

Federal PSD requirements at § 52.21, the

EPA is proposing to require that public

commenters include the above

information along with any

recommendation for further

consideration of new control technology

alternatives. See proposed § 52.21(q)(2).

It should be noted that the existing

NSR regulations at § 51.165(a) do not

contain an explicit provision for public

participation procedures as do the PSD

regulations in parts 51 and 52.

Nevertheless, the public participation

procedures set forth under § 51.161

generally apply for both major and

minor new source review permitting. In

the proposal, certain minor source

actions, e.g. netting, that in effect shield

a source from major source permitting

requirements would not qualify for less

environmentally significant status. In

order to make clear the regulatory

context for today’s proposed provisions

concerning a cutoff date and

informational requirements for public

commenters, the EPA is today proposing

to amend § 51.165 to refer to the existing

requirements at § 51.161.50 See

proposed § 51.165(a)(7).

The permitting authority shall be

responsible for evaluating the

supporting documentation that has been

provided by commenters asserting new

or emerging technologies warrant

consideration as BACT or LAER. Based

on the facts that are presented, the

permitting authority will either accept

the recommendation at face value, reject

it as being insufficiently demonstrated,

or refer it to the permit applicant for

further consideration. The EPA is also

proposing to require the permitting

authority to notify the permit applicant

within 10 working days of receipt of

comments recommending a new

technology for which the permitting

authority determines the comments

have met the specificity criteria it has

established relative to the cut-off date.

See proposed §§ 51.165(a)(7)(iii),

51.166(q)(3) and 52.21(q)(3). This

requirement would provide applicants

with an opportunity to respond to the

comments and expedite their

investigation relative to the proposed

project.

The permitting authority, in

determining the extent to which

commenters’ recommendations deserve

further consideration, should consider

the difficulty of private citizens and

small organizations in getting access to

detailed supporting data. If information

about the emerging technology is

limited, commenters should document

their attempts to obtain data about the

source and the recommended

technology. For example, the

commenter may present logs of

telephone conversations with company

officials and correspondence with trade

associations, environmental

associations, government agencies and

technical consultants that might have

relevant information regarding the

availability and effectiveness of the

technology. A list of questions that are

asked and respective responses may be
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38277

helpful. While this information may not

actually demonstrate the availability of

a recommended technology, it will

provide the permitting authority with

information to help determine whether

further evaluation is warranted either by

its staff or the source. The EPA requests

comment on the proposed criteria for

evaluating public comments addressing

the availability of new technologies and

the appropriate burden of proof that

commenters should bear after a permit

is determined to be complete.

Unlike a recommendation to consider

new or emerging technology as

discussed above, the identification of a

technology alternative that has been

‘‘demonstrated in practice’’ and should

have been assessed prior to

completeness, places no burden on the

commenter to supply qualifying

information about the technology. The

permitting authority must ensure that

the omitted technology alternative is

adequately considered in the BACT or

LAER determination. The permitting

authority may be able, however, to

determine if the alternative is inferior to

the technology proposed by the

applicant. In all circumstances the

permitting authority would be

responsible for considering the

comments and documenting its

associated decisions for the public

record.

The proposed approach for

considering new or emerging

technologies promotes certainty and

limits permitting burdens for those

applicants that have included a

thorough review of control technologies

in their permit applications. The

proposed regulations would require

consideration of only those postcompleteness emerging technologies

whose availability and effectiveness are

substantiated to the satisfaction of the

permitting authority.

This proposal also preserves

opportunity for public participation. In

all instances, the public would have the

right to submit comments addressing

whether all control technologies that

were, in fact, ‘‘demonstrated in

practice’’ prior to completeness, were

adequately considered in the permit

application and during review by the

permitting authority. In addition, public

commenters have the opportunity to

recommend new or emerging

technologies provided that

recommendations are accompanied with

supporting information about the

existence and capabilities of the

technology. The permitting authority

would be required to consider timely

and documented public comments

addressing technologies that emerge

after completeness.

In light of the considerations

described above, the EPA is also

proposing regulatory changes to revise

its policy that sets the permit issuance

date as the final cut-off for consideration

of new and emerging technologies.

Proposed revisions to the Federal

regulations would set the final cut-off at

the close of the public comment period,

unless the permit is reopened for review

or the source fails to commence

construction within a prescribed time

period after the permit is issued.

The EPA also requests public

comment on alternative regulatory

changes that would (1) allow State NSR

programs to wholly preclude

consideration of public comments about

technology that is new or emerging after

an application is complete; and (2)

provide in the Federal NSR program for

wholly precluding consideration of

public comments about technology that

is new or emerging after an application

is complete.

Rules that allow or provide for

entirely precluding public comment on

technology that emerges after a permit

application is complete would provide

greater certainty for business planning

and have administrative ease and

simplicity benefits. On the other hand,

such rules would potentially eliminate

public input on emerging technologies

and for go any resulting emission

reductions benefits. If EPA did allow or

provide for a categorical cutoff of public

comment addressing technologies

emerging after an application is

complete, EPA may also need to include

an exception that provides for

consideration of new or emerging

technologies in circumstances where

substantial time elapses between the

completeness determination and final

permit issuance (e.g., a permit applicant

submits an application that is

determined complete but significant

deficiencies that substantially delay

permit processing with the application

are discovered during the full permit

review).

Under all of the alternatives

presented, the permitting authority

would be required to consider public

comment addressing whether the

technologies available (i.e.,

‘‘demonstrated in practice’’) at the time

the permit is complete were adequately

evaluated. The EPA seeks public input

on these alternatives and related issues.

E. Proposed Complete Application

Criteria

In several of the proposed regulatory

and policy changes based on the

consideration of the CAAAC

recommendations, the completeness

determination has emerged as a key step

in the permit review process. The cutoff date EPA is proposing to authorize

for consideration of new and emerging

technology for BACT or LAER, and the

proposed procedures for FLM

notification and coordination are

inseparably tied to the completeness

date. As discussed in this section and in

section V. (Class I Areas), the evaluation

and determination of whether a permit

application is complete is the

responsibility of the permitting

authority. Consequently, EPA is

proposing minimum criteria upon

which the permitting authority should

base its completeness determination.

Broadly, EPA is proposing that a permit

application shall contain information

necessary to make the demonstrations,

analyses, and determinations required

under the NSR regulations. See

proposed §§ 51.165(a)(6), 51.166(n), and

52.21(n).

The completeness criteria is derived

from applicable existing provisions on

‘‘Source information’’ at §§ 51.166(n)

and 52.21(n) that remain unchanged by

this rulemaking, as well as proposed

revisions and new provisions. In

addition, the EPA proposes renaming

§§ 51.166(n) and 52.21(n) to ‘‘Complete

application criteria,’’ and adding similar

provisions to § 51.165. Specifically,

proposed revisions to §§ 51.166(n)(1)

and 52.21(n)(1) assign the completeness

determination to the permitting

authority and indicate the

determination shall be made upon the

presence and adequacy of analyses and

information required under

§§ 51.166(n)(2) through (n)(5) and

§§ 52.21(n)(2) through (n)(5),

respectively. Proposed revisions at

§§ 51.166(n)(2) and (n)(3), and at

§§ 52.21(n)(2) and (n)(3), require that the

application contain sufficient

information to substantiate the

following: (1) the BACT

recommendation pursuant to proposed

§§ 51.166(j)(5) or 52.21(j)(5); (2) the

analyses required by §§ 51.166(k)

through (m) or §§ 52.21(k) through (m);

(3) the additional impact analysis

pursuant to §§ 51.166(o) or 52.21(o); (4)

determinations and analyses related to

the protection of Federal Class I areas

pursuant to §§ 51.166(p) or 52.21(p); (5)

the establishment of PALs under

§§ 51.166(u) or 52.21(x); and (6)

undemonstrated technology waiver

applications under §§ 51.166(s) and

52.21(v), as appropriate. The EPA is

proposing as independent requirements

for completeness at §§ 51.166(n)(4) and

(n)(5), and §§ 52.21(n)(4) and (n)(5), that

key information from the permit

application be registered on the

applicable EPA electronic bulletin board
38278 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

51The upcoming proposed rulemaking to

implement changes to the NSR regulations pursuant

to provisions in parts C and D of the Act as

amended in 1990 will provide additional detail of

required information for offset showings and the

alternatives analysis.

and that FLM review and coordination

has been provided.

The EPA is proposing similar

completeness criteria at § 51.165(a)(6)

for nonattainment area major source

construction permit applications. Under

the proposed provisions, the plan shall

require the application to include

information pertaining to the LAER, or

where applicable, the BACT

determination, statewide compliance

and undemonstrated technology or

application waiver.51

The EPA expects that the

demonstration of statewide compliance

would be met by the owner or operator

of the proposed source submitting, with

the permit application, the compliance

certifications for all other major

stationary sources that it owns or

operates in the State. See section

173(a)(3) of the Act. Title V compliance

certifications may serve to satisfy this

demonstration. However, with regard to

facilities that have certified

noncompliance or have experienced

noncompliance since the last title V

certification, an updated compliance

certification may be necessary to

demonstrate statewide compliance.

By proposing these complete

application criteria, EPA is not

proposing additional substantive

requirements for either PSD or

nonattainment NSR permits, but is

summarizing the information and

analyses required by the provisions of

the respective program. Generally,

information necessary for purposes of a

completeness determination is

described with the substantive

requirements, e.g., see the discussions

contained in this proposal on BACT,

protection of Federal Class I areas, PALs

and undemonstrated technology

waivers.

F. Proposed Undemonstrated Control

Technology or Application (UT/A)

1. Introduction

The EPA proposes to revise the

existing Innovative Control Technology

(ICT) Waiver. This provision allows

sources to satisfy the BACT requirement

through the use of innovative control

technologies. It is termed a waiver since

a source is allowed an extended period

of time to bring the new technology into

compliance with the required

performance level. The EPA today

proposes to make the innovative

technology alternative simpler and more

attractive in PSD areas and, for the first

time, proposes to add a similar waiver

to nonattainment NSR regulations.

These changes are intended to facilitate

the use of innovative or undemonstrated

pollution control, prevention, or

reduction technologies in NSR

permitting.

The utilization of undemonstrated

technologies or applications generally

involves risk-taking on the part of the

source, the permitting agency, the

public, and the environment. The

CAAAC’s NSR Reform Subcommittee

and the EPA recognized the risks

associated with undertaking innovative

projects while also recognizing the

potential benefits to all stakeholders of

a well designed and frequently used

waiver that leads to greater use of

previously undemonstrated control

strategies. As a result, the CAAAC

provided the EPA with a series of

detailed recommendations on how the

existing waiver should be recast. The

EPA has evaluated the

recommendations and proposes to adopt

many of them. Further, the EPA believes

that the following proposal minimizes

the uncertainty to the source while

protecting the environment from

undemonstrated technologies that fail.

Specifically, the EPA proposes (1)

changing the name of the waiver to

‘‘UT/A’’ and changing the definition to

expand the environmental

considerations, (2) adding UT/A

provisions for nonattainment area

sources, (3) ensuring FLM consultation

in UT/A decisions for sources in PSD

areas locating near Class I areas, (4)

establishing reference BACT/LAER

levels in the permit that grandfathers

sources out of application of later

demonstrated technologies if the UT/A

fails, (5) establishing protective

emission limits in the permit for the

duration of the waiver, (6) requiring that

contingency measures be addressed and

established in the application and the

permit, (7) reducing the duration of the

waiver, and establishing a limit on the

number of UT/A waivers issued for any

given UT/A to that necessary to

demonstrate the performance of a

technology or application. The EPA is

proposing modifications to the existing

ICT regulations that reflect the

differences in the proposed UT/A

approach. Many of the existing

provisions of §§ 51.166(s) and 52.21(v)

will remain unchanged. In several

instances, the EPA is proposing only

minor conforming changes. See

proposed §§ 51.166(s)(2) and 52.21(v)(2)

and newly created § 51.165(a)(8).

2. Description of Proposed UT/A Waiver

Section 111(j) of the Act provides for

the issuance of waivers to sources

which propose the use of control

technology which the Administrator

determines to be innovative. Concerned

that a source would be able to obtain a

section 111(j) waiver but remain subject

to BACT requirements thus

discouraging innovation, the EPA

incorporated into the PSD regulations a

corresponding ICT waiver. See 45 FR

52676 (August 7, 1980). However, this

waiver has not been widely used since

its adoption 15 years ago.

The CAAAC’s NSR Reform

Subcommittee examined the reasons for

the ICT waiver’s limited usage and

developed three possible outcomes,

other than performance as expected, for

the installation of undemonstrated

control technology—that the technology

performs better than expected; that there

is a ‘‘marginal’’ failure; or that there is

a ‘‘gross failure.’’ The Subcommittee

recommended options to reward the

source for incurring the risk of failure,

procedures to be taken by the permitting

agency in case of failure, and certain air

quality safeguards.

a. Proposed New Definition and

Scope. The CAAAC recommended that

the EPA replace the existing ‘‘Innovative

Control Technology’’ name with the

term ‘‘UT/A.’’ The CAAAC

recommended the following definition

for the waiver: ‘‘any system, process,

material, or treatment technology that

shows substantial likelihood to operate

effectively and to achieve either: (a)

greater continuous reductions of air

pollutant emissions than any

demonstrated system, or (b) comparable

emission reductions at lower cost, lower

energy input, with lesser non-air

environmental impacts, or with other

advantages that are defined and

mutually agreed on a case-specific basis

to justify the use of UT/A provisions.’’

In developing the proposed UT/A

definition, the EPA has slightly

modified the CAAAC’s suggested

definition. See proposed

§§ 51.166(b)(19) and 52.21(b)(19). For

PSD areas, the Agency proposes to

interpret ‘‘comparable emission

reductions’’ as allowing the UT/A to

achieve marginally less emission

reductions in the pollutants subject to

BACT than the otherwise applicable

BACT. This proposed flexibility allows

a permitting agency to issue a PSD UT/

A waiver for an undemonstrated

technology that achieves somewhat less

than the otherwise applicable BACT

emission limit provided that the

benefits (i.e., energy, environmental or

economics) associated with the UT/A
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38279

clearly compensate for the increase in

emissions. (As is discussed in the next

section, the EPA does not believe that

such ‘‘comparable’’ emissions

reductions can satisfy LAER.) In

addition, EPA’s proposed UT/A

definition includes undemonstrated

pollution prevention techniques as

potentially eligible UT/A candidates.

See also discussion of pollution

prevention issues in section IV.H. of this

preamble.

The EPA has made some changes to

the UT/A definition recommended by

the CAAAC. The EPA is not proposing

the general catch-all phrase for other

mutually agreed upon advantages

because it is vague and unnecessary,

and could potentially lead to misuse of

the waiver. In addition, although the

choice of ICT or UT/A is generally a

mutual agreement between the

permitting authority and the source, the

existing ICT rules properly make clear

that the source makes the request for an

ICT, and the permitting authority

approves or disapproves the request.

The EPA is also omitting ‘‘non-air’’ from

the CAAAC recommended UT/A

definition to allow air-related impacts to

be factored into the decision process

thus expanding the arena of potential

environment impacts that can be

considered. The EPA solicits comment

on this proposed definition, particularly

on whether any other factors should be

included in the definition. The

proposed PSD definition of UT/A does

not affect the section 111(j) ICT waiver

for sources seeking a waiver under the

NSPS.

b. Extension to Nonattainment NSR.

The CAAAC’s Subcommittee

recommended that the UT/A waiver be

extended to major nonattainment NSR,

in light of the increased number of

sources subject to nonattainment NSR

after the 1990 Amendments. Many of

these sources will be relatively small

(compared to typical pre-1990 major

nonattainment NSR sources) and may

have relatively unique emission units

which could greatly benefit from

expanded use of undemonstrated

control technologies and applications.

However, expanding the UT/A waiver

to nonattainment area NSR could create

a discrepancy between the UT/A

definition and the statutory definition of

LAER. The recommended UT/A

definition provides that a control

technique may qualify if it achieves

‘‘comparable emission reductions.’’ As

previously discussed, the EPA interprets

this as allowing the UT/A to achieve

marginally less emission reduction than

the applicable emissions level which

would otherwise be required by the

major NSR permit. However, section

171(3) of the Act defines LAER as the

more stringent of either: (1) The most

stringent emission limitation contained

in the implementation plan of any State

for such class or category of source; or

(2) the most stringent emission

limitation achieved in practice by such

class or category of source. The LAER

requirement, unlike BACT, does not

allow consideration of economic,

energy, or other environmental factors

to compensate for less emission

reductions. Accordingly, it is

inappropriate to include in the

definition of UT/A for nonattainment

areas technologies that achieve only

comparable emission reductions.

The EPA is proposing to expand UT/

A waiver applicability to nonattainment

area NSR and require that all applicable

part D requirements (e.g., LAER and

offsets) are met prior to issuance of a

waiver. See proposed

§§ 51.165(a)(1)(xxvi), and 51.165(a)(8).

This action supports an Agency

objective, as stated in a June 15, 1993

memorandum from Carol Browner, EPA

Administrator, entitled ‘‘Pollution

Prevention Policy Statement: New

Directions for Environmental

Protection,’’ to further pollution

prevention by providing opportunities

for technological innovation. The EPA is

proposing the recommended UT/A

definition for nonattainment NSR, but

replaces ‘‘comparable’’ with ‘‘equal’’ in

the ‘‘emission reductions’’ language and

omits the general, catch all ‘‘other

advantages’’ language for the same

reasons EPA declined to use the

language in the PSD context. The EPA

solicits comment on this definition,

particularly on whether any factors

other than those proposed should be

included in the definition.

To provide EPA information on the

waiver’s utilization and types of

technologies or applications approved,

the EPA is proposing that a copy of the

waiver be submitted to the Agency

within 30 days of its approval. See

proposed §§ 51.165(a)(8)(ix) and

51.166(s)(9).

c. Federal Land Manager (FLM)

Consultation. As part of the UT/A

waiver approval process, the CAAAC

recommended that the FLM be

consulted before the permitting

authority approves an UT/A waiver

where impacts on Class I area air quality

or AQRV’s may result from the UT/A

source. Existing §§ 51.166(s)(2)(vi) and

52.21(v)(2)(vi) require that before an ICT

waiver can be approved the Class I area

protection provisions of §§ 51.166(p)

and 52.21(p) must be satisfied with

respect to all periods during the life of

the ICT source or modification. The EPA

believes these provisions and revisions

to §§ 51.166(p) and 52.21(p) proposed in

this document, address these concerns

and proposes to retain these provisions

for a UT/A waiver under PSD.

d. Content of a UT/A Waiver. Based

on the CAAAC’s recommendations, the

EPA proposes to revise the existing ICT

waiver provisions to require that the

UT/A waiver contain the emission

control performance objective of the

UT/A and the otherwise applicable

BACT or LAER standard identified in

the UT/A permit for reference, but not

as enforceable limits during the life of

the UT/A waiver. See proposed

§§ 51.166(s)(5)(i) and 52.21(v)(5)(i).

With regard to a nonattainment area

NSR UT/A waiver, the EPA is proposing

that the undemonstrated technology

comply with the applicable LAER limit.

See proposed § 51.165(a)(8)(v)(A).

The CAAAC recommended that, in

addition to including the otherwise

applicable BACT or LAER emission

limit and the UT/A’s emission limit

objective in the permit, the permitting

authority should also establish an upper

emission limit for the UT/A. Based on

the Subcommittee’s discussions, the

Agency interprets this recommendation

as being an enforceable emission limit

established by the permitting authority

and not to be exceeded during the term

of the UT/A waiver. This issue is

discussed further in section IV.f of this

preamble.

As recommended by the CAAAC, a

proposed UT/A waiver application and

permit should include (1) identification

of potential failure modes, (2)

projections of corresponding emissions

increases expected from such failure

modes, (3) characterization of such

failure modes and corresponding

emission increases as marginal or gross

failures, and (4) identification of

potential contingency measures, both

short- and long-term, to reduce or

mitigate emission increases in the event

of worse-than-expected emissions

during the term of the UT/A waiver. The

CAAAC recommended that these

elements be included in the UT/A

permit and that the potential

contingency measures not be construed

to limit the consideration or use of any

other contingency measures that may be

identified later, if such measure would

better ameliorate worse-than-expected

UT/A performance. These projections

and contingency measures would, as for

any NSR permit term, be subject to

public notice, comment and review and

approval by the permitting authority.

The EPA has evaluated and largely

agrees with the CAAAC’s

recommendations. Thus, the EPA

proposes regulations requiring the

permitting authority to include in UT/
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A approved permits (1) the UT/A’s

emission control performance objective

and applicable reference BACT or LAER

emission limit and (2) the identification

and classification of potential failure

modes and associated contingency

measures. See proposed

§§ 51.165(a)(8)(v) (A) and (C),

51.166(s)(5) (i) and (ii), and 52.21(v)(5)

(i) and (ii). The EPA also proposes that

an application for a UT/A waiver

include a detailed description of the

continuous emission reduction system

and all information used or consulted in

applying for a UT/A waiver. See

proposed §§ 51.165(a)(6)(ii)(C),

51.166(n)(2)(iii) and 52.21(n)(2)(iii).

The CAAAC recommended that EPA

should allow the initial compliance

demonstration requirements to be

revised by mutual agreement within the

life of the UT/A provisions. The

CAAAC’s rationale was to allow

improvements in the suitability,

representativeness, repeatability,

accuracy, or reliability of emission

control performance test results, or for

such other causes as are mutually

agreed to justify a revision. Currently a

permitting authority has the flexibility

to revise compliance demonstration

requirements in a permit as allowed by

applicable law. In addition, EPA is

currently modifying its title V permit

revision process to allow sources

considerable flexibility in making

changes to existing permit terms. The

EPA expects to allow compliance

demonstration changes in the UT/A

context consistent with the Title V

revision process.

e. Failure of a UT/A. The

Subcommittee acknowledged that the

UT/A may fail to achieve its emission

control performance objective and that

the level of failure may vary thereby

warranting different types of corrective

action. As described in the preceding

section, the EPA is proposing

regulations largely consistent with the

CAAAC recommendations that would

require the UT/A permit to include

potential failure modes. Based on the

CAAAC’s recommendation, the EPA

proposes that potential failure modes be

identified as either ‘‘marginal’’ or

‘‘gross’’ and that emissions levels

associated with a ‘‘marginal’’ and a

‘‘gross’’ failure be specified in the

permit along with the corresponding

remedial actions. See proposed

§§ 51.165(a)(8)(v)(B), 51.166(s)(5)(ii) and

52.21(v)(5)(ii). ‘‘Marginal’’ and ‘‘gross’’

failure should be expressed as both an

emission rate (e.g., pounds/hour) and

mass emission limit (e.g., pounds/

million British thermal units).

Recognizing that the installation of each

UT/A will be unique, the EPA is

proposing to provide the permitting

authority with the flexibility to define

both ‘‘marginal’’ and ‘‘gross’’ failure on

a case-by-case basis. To protect public

health, NAAQS and AQRV, the EPA is

proposing that the ‘‘gross’’ failure limit

be included in the permit as an

enforceable emission limit that is not to

be exceeded during the term of the UT/

A waiver. See proposed

§§ 51.165(a)(8)(viii), 51.166(s)(8) and

52.21(v)(8).

The EPA envisions that a ‘‘marginal’’

failure would be addressed with specific

contingency measures, but the source

would not need to abandon the

technology. Thus, the permitting

authority is provided with the flexibility

to either permit the UT/A at its

‘‘marginal’’ failure emission level or

require the source to install technology

capable of achieving the appropriate

reference emission limit (i.e., BACT or

LAER). See proposed

§§ 51.165(a)(8)(vii), 51.166(s)(7) and

52.21(v)(7). The EPA solicits comment

on whether specific definitions of

‘‘marginal’’ and ‘‘gross’’ failure should

be established by the Agency by rule or

guidance.

f. Incentives. Recognizing that a very

limited number of PSD ICT waivers

have been requested or approved since

1980, the NSR Reform Subcommittee

discussed various options for promoting

the use of UT/A’s. One option discussed

by the Subcommittee would allow a

source to use, bank, or trade the portion

of emission offsets of a nonattainment

pollutant that becomes surplus when

the UT/A achieves greater emission

reductions than originally anticipated.

The second option would allow the

permitting authority, on a case-by-case

basis, in conjunction with the source

and subject to public review, to agree on

values of either mass emission

reduction credits or emission impact

reductions in PSD areas in the UT/A

permit. The third option, applicable to

both PSD and nonattainment areas,

would limit the benefit accruing to the

UT/A source to protection from

enforcement of the initial UT/A

emission limit during the life of the UT/

A waiver.

The EPA agrees that incentives should

be provided to encourage the

development of UT/As and is requesting

comment on whether existing policies

(e.g., Emission Trading Policy Statement

(51 FR 43814) and Economic Incentive

Program (59 FR 16690)) provide

sufficient guidance concerning emission

reduction credits thus making specific

UT/A provisions that address credits

unnecessary. In addition, the EPA

solicits comment on the second option

identified by the Subcommittee, i.e.

some type of PSD emission reduction

(or emission impact reduction) credit. In

regard to the third option, the EPA

believes that both the current ICT and

the proposed UT/A waivers provide the

protection envisioned by the

Subcommittee, namely a limited shield

from enforcement during the term of the

UT/A waiver, assuming all applicable

UT/A requirements are met. However,

the proposed UT/A waiver regulations

specifically require the permitting

authority to establish an enforceable

upper emission limit which is not to be

exceeded during the term of the UT/A

waiver. See proposed

§§ 51.165(a)(8)(viii), 51.166(s)(8) and

52.21(v)(8).

g. Duration and Number of UT/A

Waivers. The CAAAC recommended

that UT/A waiver provisions expire no

later than 4 years after start of operation

or 7 years after the initial UT/A permit

is issued, whichever is earlier, or by any

earlier date mutually agreed upon by the

parties. As described below, EPA is

proposing a shorter waiver period. The

EPA is also proposing that upon

expiration of the UT/A provisions,

either the initial UT/A emissions limit,

or a revised limit that meets the

requirements for either better-thanexpected or less-than-expected

emissions control performance, as

appropriate, would be incorporated into

a final permit (i.e. no longer an UT/A

waiver). The EPA also proposes to

require reporting of the final permit

limits to EPA’s RACT/BACT/LAER

Clearinghouse. See proposed

§§ 51.165(a)(8) (vi) and (vii), 51.166(s)

(6) and (7) and 52.21(v) (6) and (7).

The EPA is proposing that the UT/A

be allowed no longer than 2 years from

the time of startup or 5 years from

permit issuance (2/5 years), whichever

is earlier, to achieve the emission

control performance objective on a

continuous basis. See proposed

§ 51.165(a)(8)(ii)(B), and the amendatory

language for §§ 51.166(s)(2)(ii) and

52.21(v)(2)(ii). This proposal is

applicable to both PSD and

nonattainment area UT/A waivers. The

Agency is proposing a compliance

timeframe other than the CAAAC’s

recommendation due to comments

received during the Subcommittee’s

deliberations that indicated, as a general

rule, an UT/A must perform as

envisioned within a relatively short

timeframe, primarily due to production

constraints, or it is replaced with a

conventional control technology. In

addition, in order to protect air quality,

especially for nonattainment areas, the

EPA considers the proposed 2/5 year

compliance timeframe more appropriate

than the CAAAC’s recommendation.
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38281

The EPA solicits comment on the

allowable length of a compliance

schedule to meet the reference BACT or

LAER and on whether the allowable

length should be longer for BACT than

for LAER.

The CAAAC recommended that the

number of UT/A waivers approved for

any given UT/A should not exceed the

quantity that the permitting authority

deems appropriate to determine the

particular UT/A’s emission control

performance potential, its capability to

operate safely and effectively, and its

capability to protect health, safety, and

welfare.

Section 111(j) of the Act contains the

same language identified by the

Subcommittee; however, neither

existing § 51.166(s) nor § 52.21(v)

contain such provisions. While EPA is

inclined to allow additional waivers if

the criteria specified in section 111(j)(1)

are met, EPA does have reservations

about reissuing waivers for the same

system, particularly in nonattainment

areas. For both PSD and nonattainment

area UT/A waivers, the EPA is

proposing to incorporate the criteria

referenced in section 111(j)(1)(C) and

found in section 111(j)(1)(A) (ii) and (iii)

of the Act. See proposed

§§ 51.165(a)(8)(x), 51.166(s)(10) and

52.21(v)(9). The EPA solicits comment

on this proposal.

G. Pollution Prevention

1. The Pollution Prevention Act (PPA)

and the EPA’s Pollution Prevention

Policies

In 1990 Congress passed the PPA

which established as national policy

‘‘that pollution should be prevented or

reduced at the source whenever feasible;

pollution that cannot be prevented

should be recycled in an

environmentally safe manner, whenever

feasible; pollution that cannot be

prevented or recycled should be treated

in an environmentally safe manner

whenever feasible; and disposal or other

release into the environment should be

employed only as a last resort and

should be conducted in an

environmentally safe manner.’’ See 42

U.S.C. sec. 13101(b). In subsequent

correspondence (memorandum dated

May 28, 1992, from Hank Habicht III,

EPA Deputy Administrator, to all the

EPA personnel and memorandum dated

June 15, 1993, from Carol Browner, EPA

Administrator, to all the EPA

personnel), the EPA provided guidance

on interpreting the PPA and integrating

pollution prevention into the Agency’s

activities.

The Subcommittee developed several

draft recommendations on pollution

prevention issues, which were adopted

by the CAAAC. The CAAAC also

submitted a document from the

Business Roundtable related to the

definition of pollution prevention. The

CAAAC recommended that the EPA

define pollution prevention consistent

with the PPA and that the term

‘‘pollution prevention project’’ include

‘‘pollution prevention processes,

strategies, or systems,’’ so that the

concept is not limited to technology.

In adopting the PPA, Congress found

that ‘‘[t]here are significant

opportunities for industry to reduce or

prevent pollution at the source through

cost-effective changes in production,

operation, and raw material use.’’ See 42

U.S.C. sec. 13101(2). The PPA defines

‘‘source reduction’’ to mean any practice

which (1) Reduces the amount of any

hazardous substance, pollutant, or

contaminant entering any waste stream

or otherwise released into the

environment (including fugitive

emissions) prior to recycling, treatment,

or disposal; and (2) reduces the hazards

to public health and the environment

associated with the release of such

substances, pollutants, or contaminants.

The term includes equipment or

technology modifications, process or

procedure modifications, reformulation

or redesign of products, substitution of

raw materials, and improvements in

housekeeping, maintenance, training, or

inventory control. See 42 U.S.C. sec.

13102(5)(A). The PPA expressly

provides that the term ‘‘source

reduction’’ does not include any

practice which alters the physical,

chemical, or biological characteristics or

the volume of a hazardous substance,

pollutant or contaminant through a

process or activity which itself is not

integral to and necessary of the

production of a product or the providing

of a service. See 42 U.S.C. sec.

13102(5)(B). Under the PPA, recycling,

energy recovery, treatment, and disposal

are not included within the definition of

pollution prevention.

In the May 28, 1992 EPA pollution

prevention policy memorandum, the

Agency provided guidance on

incorporating pollution prevention into

the Agency’s ongoing programs. The

guidance provides that the selection of

a pollution prevention option, in any

given situation, depends on the

requirements of applicable law, the

level of risk reduction achieved, and the

cost-effectiveness of that option. In

addition, the policy provides that the

Agency’s environmental management

hierarchy is as follows: (1) Prevention,

(2) recycling, (3) treatment, and (4)

disposal or release, should be viewed as

a set of preferences, rather than an

absolute judgment that prevention is

always the most desirable option. The

Agency’s hierarchy is applied to many

different kinds of circumstances that

will involve judgment. Finally, the

Agency distinguishes between

prevention and recycling by including

what is commonly called ‘‘in-process

recycling,’’ as ‘‘prevention’’ but

excluding ‘‘out-of-process recycling.’’

This guidance memorandum further

observes that recycling conducted in an

environmentally sound manner shares

many of the advantages of prevention in

that it can reduce the need for treatment

or disposal, and conserve energy and

resources.

2. Pollution Prevention in BACT and

LAER

The CAAAC recommended that the

EPA issue guidance or regulatory

authority allowing consideration of

pollution prevention when determining

BACT or LAER. The CAAAC also

recommended that the Agency create

separate categories of demonstrated and

undemonstrated pollution prevention

BACT and LAER. The categories would

include systems, processes, or strategies

expected to achieve either (1) more

stringent emission levels than

demonstrated BACT and LAER or (2)

comparable emission levels at lower

energy input, lower collateral emissions

or having cross-media environmental

benefits, or other advantages that are

defined and mutually agreed upon to

justify the pollution prevention

approach. Both demonstrated and

undemonstrated pollution prevention

BACT would take cost into account.

The Agency examined whether

existing regulations provide permitting

agencies with the flexibility to consider

pollution prevention techniques in their

analysis of control options. The Act

defines ‘‘best available control

technology’’ as ‘‘an emission limitation

based on the maximum degree of

reduction of each pollutant subject to

regulation under the Act emitted from

or which results from any major

emitting facility, which the permitting

authority, on a case-by-case basis, taking

into account energy, environmental, and

economic impacts and other costs,

determines is achievable for such

facility through application of

production processes and available

methods, systems, and techniques,

including fuel cleaning, clean fuels, or

treatment or innovative fuel combustion

techniques for control of each such

pollutant.’’ See section 169(3) of the

Act.

The Agency interprets the phrase

‘‘production processes and available

methods, systems and techniques’’ in
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the statutory BACT definition to

encompass pollution prevention

techniques. Existing §§ 51.166(b)(12)

and 52.21(b)(12) incorporate the BACT

definition into PSD regulations. The

EPA solicits comment on any potential

revisions or new provisions in the PSD

regulations that would further facilitate

consideration of pollution prevention

techniques.

Any major stationary source or major

modification locating in an area

designated nonattainment pursuant to

section 107 of the Act is required to

meet LAER. See, e.g., sections 172(c)(5)

and 173 of the Act. The LAER is defined

as the more stringent of (1) the most

stringent emission limitation contained

in the implementation plan of any State

for such class or category of source,

unless the owner or operator

demonstrates that such limitations are

not achievable; or (2) the most stringent

emission limitation achieved in practice

by such class or category of source. See

section 171(3) of the Act. In general, the

LAER requirement is based on whether

an emission limitation is achievable

and, unlike BACT, does not provide for

consideration of economic, energy, or

other environmental factors on a caseby-case basis. The Agency has

interpreted the LAER definition as

including any method of emissions

reduction provided it achieves the

lowest emission rate feasible. Thus, for

nonattainment area purposes, pollution

prevention techniques can be

considered as a control option; however,

the techniques must achieve the same

emission rate as otherwise applicable

LAER.

After review of the Subcommittee’s

deliberations, the CAAAC’s

recommendation and public comment,

the EPA believes that current PSD and

nonattainment NSR regulations,

combined with today’s proposed

version of UT/A waivers, provide the

permitting agencies with the flexibility

to consider pollution prevention

techniques when considering either

BACT or LAER control options. Thus,

the EPA does not find that additional

regulatory authority is necessary. The

EPA solicits comment on this view and

any suggested rule changes to facilitate

the consideration of pollution

prevention in NSR permitting.

The Agency also reviewed the

CAAAC’s recommendation to create

separate categories for demonstrated

and undemonstrated BACT and LAER

control options in regard to the UT/A

waiver. As discussed above, the

Agency’s interpretation of the

definitions for BACT and LAER provide

for the inclusion of pollution prevention

techniques when considering available

control options. With respect to a

separate category for undemonstrated

pollution prevention options and as

discussed in the UT/A waiver section,

the EPA considers all undemonstrated

control options, including pollution

prevention, to be eligible to qualify for

this waiver. Thus, because the Agency

interprets BACT and LAER to allow for

demonstrated and certain

undemonstrated pollution prevention

techniques and because EPA is

proposing to explicitly provide that

undemonstrated pollution prevention

techniques may qualify for a UT/A

waiver, the EPA does not believe it

necessary to create a separate and

unique category for either demonstrated

or undemonstrated pollution prevention

control options.

Finally, EPA notes that it has

addressed pollution prevention

elsewhere in this document. In section

II.E. of this preamble, EPA proposes to

include pollution prevention projects in

the proposed pollution control project

exclusion. The EPA also proposes an

accompanying definition of pollution

prevention based on the PPA and EPA’s

pollution prevention policies. See

proposed §§ 51.165(a)(1)(xxix),

51.166(b)(43), 52.21(b)(44), and 52.24(f).

H. States’ Discretion To Adopt or

Enforce More Stringent Requirements

The regulatory revisions proposed in

this action represent minimum Federal

requirements under the Act. States

retain full discretion to adopt or enforce

more stringent air quality protection

requirements consistent with section

116 of the Act.

I. Addressing the EPA’s Obligation

under Pending Settlement Agreement

The ‘‘top-down’’ process, the

methodology described in section IV.B.

of this preamble, is the EPA’s

recommended approach for determining

BACT and is based on the EPA’s

interpretation of existing statutory and

regulatory requirements. On March 29,

1989 (supplemented on May 3 and 10,

1989), the American Paper Institute and

the National Forest Products

Association (collectively ‘‘API’’)

petitioned the EPA to rescind the topdown policy and initiate a rulemaking

on BACT determinations. The EPA

denied this request on May 12, 1989

(supplemented on June 13, 1989),

explaining that the top-down approach

was neither at variance with, nor a

revision of, the PSD regulations, and

that no rulemaking was required.

Subsequently, API filed suit in the U.S.

Court of Appeals for the District of

Columbia and in the U.S. District Court

for the District of Columbia. API v.

Reilly, No. 89–1428 (D.C. Cir. filed July

10, 1989); API v. Reilly, No. 89–2030

(D.C.C. filed July 18, 1989). The District

Court action was dismissed on January

5, 1993 for lack of subject matter

jurisdiction.

A consortium of utilities filed a

similar petition for review of the EPA’s

actions, Alabama Power Co. v. EPA, No.

89–1429 (D.C. Cir. filed July 11, 1989),

and the case was consolidated with the

pending API case in the D.C. Circuit. On

February 1, 1990, the Utility Air

Regulatory Group submitted an

administrative petition concerning the

EPA’s policy and practice on BACT

determinations. The API also challenged

a 1990 draft guidance document by the

EPA on top-down BACT, API v. Reilly,

No. 90–1364 (D.C. Cir. filed July 13,

1990).

All of these judicial and

administrative matters were resolved by

a settlement agreement in which the

EPA agreed to publish, by January 6,

1992, a proposed rule ‘‘to revise or

clarify the regulations defining BACT’’

and ‘‘to revise or clarify how BACT

determinations should be made.’’ See 56

FR 34202 (July 26, 1991) (request for

public comment on proposed

settlement). The EPA also agreed to take

final action on the proposed rule as

expeditiously as practicable. In the

event the EPA did not take the specified

action, the parties’ sole and exclusive

remedy under the express terms of the

settlement agreement was to reactivate

the underlying litigation.

This publication of proposed rules

revising and clarifying the BACT

regulations and how BACT

determinations should be made triggers

certain obligations by the other parties

to the settlement. The EPA’s final action

on the proposed rules will discharge all

of its remaining obligations under the

settlement agreement and require the

dismissal or withdrawal of the

remaining judicial and administrative

matters described above.

IV. Class I Areas

A. Introduction

The EPA is today providing guidance

and proposing a number of revisions to

the PSD regulations at 40 CFR 51.166

and 52.21 to address the protection of

air quality and air quality related values

in Class I areas. In many instances,

where it has been deemed appropriate,

the EPA is taking action consistent with,

or similar to, the CAAAC’s

recommendations.

In general, the EPA is proposing

several changes to better facilitate State

notification and coordination with the

FLM and to provide the States, permit
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38283

52Areas having air quality that meets the national

ambient air quality standards (NAAQS) are

designated ‘‘attainment,’’ and areas for which there

is insufficient information to reach a conclusion

about their air quality status are designated

‘‘unclassifiable’’ in accordance with procedures set

forth in section 107 of the Act.

53The ‘‘FLM’’ is defined as the Secretary of the

department with authority over such lands, i.e.,

Department of the Interior and Department of

Agriculture. See Act section 302(i). It should be

noted that FLM authority has been delegated to

other officials within these Departments. For

example, the Assistant Secretary for Fish and

Wildlife and Parks is the FLM for areas under the

jurisdiction of the National Park Service and U.S.

Fish and Wildlife Service. In today’s notice, the

EPA is proposing to clarify the definition of ‘‘FLM’’

to reflect the FLM’s authority to designate another

official to act on his or her behalf with respect to

Federal Class I areas. See proposed sections

51.166(b)(24) and 52.21(b)(24).

54See U.S. General Accounting Office Report to

the Chairman, Environment, Energy, and Natural

Resources Subcommittee, Committee on

Government Operations, House of Representatives,

‘‘Air Pollution: Protecting Parks and Wilderness

from Nearby Pollution Sources’’ (February 7, 1990)

reprinted in 136 Cong. Rec. S2879–2880 (March 21,

1990); U.S. General Accounting Office Testimony

before the Environment, Energy and Natural

Resources Subcommittee, Committee on

Government Operations, House of Representatives,

‘‘Air Pollution: Regional Approaches Are Needed to

Protect Visibility in National Parks and Wilderness

Areas’’ (April 29, 1994).

applicants and FLM with clearer

guidance about their relative roles and

responsibilities. The EPA is proposing

‘‘significant impact levels’’ for Class I

increments that would exclude

proposed sources with de minimis

ambient impacts from the requirement

to conduct comprehensive Class I

increment analyses and enable the

permitting authority to determine that

the emissions from such source would

not contribute to an increment violation.

The EPA is also establishing a general

policy, and proposing regulatory

language, allowing the use of offsets to

mitigate adverse impacts on AQRV in

Federal Class I areas. This policy will

provide a reasonable way to allow the

permitting of sources that would

otherwise face permit denial because of

their adverse impact on AQRV. The EPA

is also proposing several clarifications

to its PSD regulations where confusion

about a requirement has created

controversy or impeded more

expeditious permit review.

B. Background

1. Overview of PSD Requirements for

Class I Areas

The PSD program applies to ‘‘PSD

areas’’—areas designated as

‘‘attainment’’ or ‘‘unclassifiable’’

pursuant to section 107 of the Act.52 A

fundamental aspect of the PSD program

is an assessment of a proposed source’s

impact on the amount of air quality

deterioration that is allowed within a

particular PSD area. All PSD areas are

categorized as either Class I, II or III. See

section 162 of the Act. The classification

of an area determines the corresponding

‘‘maximum allowable increases’’ of air

quality deterioration (‘‘increments’’) for

that area. See section 163 of the Act.

Only a relatively small increment of air

quality deterioration is permissible in

Class I areas and, consequently, these

areas are afforded the greatest degree of

air quality protection.

The PSD program provides an

additional layer of special protection for

Federal Class I areas. See section

165(d)(2) of the Act. Mandatory Federal

Class I areas are national parks greater

than 6,000 acres in size, national

wilderness areas greater than 5,000

acres in size and other areas specified in

section 162(a) of the Act. These Federal

Class I areas are mandatory in that they

may not be redesignated as any other

classification. All other PSD areas in the

country were initially designated as

Class II areas in accordance with section

162(b) of the Act. Federal lands not

already designated as Class I areas

under section 162(a) may be

redesignated as Class I areas. See section

164 of the Act.

The FLM and the Federal official

charged with direct responsibility for

management of any Federal lands

within a Class I area have an

‘‘affirmative responsibility’’ to protect

the AQRV (including visibility) of such

lands.53 See section 165(d)(2)(B) of the

Act. The FLM protects AQRV through a

prescribed statutory role in assessing the

potential impacts of a proposed PSD

source. See section 165(d)(2)(C) of the

Act. If a proposed source does not cause

or contribute to a violation of a Class I

increment, the FLM may, nevertheless,

demonstrate to the satisfaction of the

permitting authority that the source will

have an adverse impact on AQRV in a

specific Federal Class I area and, if so

demonstrated, the PSD permit shall not

be issued. Conversely, if the proposed

source will cause or contribute to a

violation of a Class I increment, then the

owner or operator must demonstrate to

the satisfaction of the FLM that there

will be no adverse impact on AQRV. See

sections 165(d)(2)(C) (ii) and (iii) of the

Act.

2. The Need To Improve PSD Permit

Requirements Related to the Protection

of Air Quality Related Values (AQRV) in

Federal Class I Areas

Over the past several years Congress,

the FLM, and others increasingly have

expressed concern about the effects of

air pollution being observed and

documented in Federal Class I areas, as

well as the failure of Act programs to

adequately protect Federal Class I areas

from such effects. The U.S. General

Accounting Office has issued reports

addressing these issues.54

The FLM have sought to protect

Federal Class I areas by, among other

efforts, identifying concerns about the

potential impacts associated with

emissions from new source growth. In

their attempts to protect these lands,

FLM have indicated that their failure to

receive timely notice of relevant permit

applications has undermined their

ability to exercise their affirmative

responsibility to protect Class I areas

and that permitting authorities have

given insufficient weight to concerns of

FLM. Permit applicants have

complained that EPA’s existing

regulations are unclear and that there is

confusion and uncertainty about the

PSD permit requirements related to the

protection of AQRV in Federal Class I

areas. Moreover, permitting authorities

examining permit applications in the

face of objections by FLM have

complained to the EPA about the lack of

guidance on Class I area protection and

the consideration that should be given

to an FLM’s concerns. The EPA’s

proposal, described below, attempts to

address these various concerns and,

thereby, improve the PSD permitting

process.

C. The EPA Proposal

1. Defining AQRV and Determining

Adverse Impacts

The Act and the existing PSD

regulations are silent in explaining what

an AQRV (other than visibility) is, what

procedures should be followed for

defining an AQRV, and what criteria

should be used for setting critical

pollutant loadings for determining

whether an adverse impact on AQRV

would occur. The EPA is proposing to

add general definitions for the terms

‘‘AQRV’’ and ‘‘adverse impact on

AQRV.’’ In addition, the EPA is

clarifying the role and responsibilities of

the FLM in the PSD permitting process.

a. Definitions. The EPA is proposing

to add definitions of ‘‘air quality related

value’’ and ‘‘adverse impact on air

quality related values’’ to both sets of

PSD regulations. As noted, the Act is

silent in defining AQRV other than

visibility. However, the legislative

history provides the following:

[T]he term ‘‘air quality related values’’ of

Federal lands designated as class I includes

the fundamental purposes for which such

lands have been established and preserved by

the Congress and the responsible Federal

agency. For example, under the 1916 Organic

Act to establish the National Park Service (16
38284 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

55Section 164(e) of the Act provides for EPA

protection of AQRV when the EPA is requested to

resolve a dispute between a State and Tribe about

the redesignation of an area or a proposed PSD

permit. The reader is also referred to the discussion

in section IV.C.5 of this preamble, where EPA

clarifies its position concerning the authority of

States and Indian tribes to establish AQRV for their

respective lands.

56 In determining whether emissions from a

proposed source would present an adverse impact,

the effects of hazardous and toxic pollutant

emissions should be considered in the analysis if

they are constituents of any criteria pollutant

emitted in ‘‘significant’’ amounts by the source.

57 In a previous rulemaking, EPA determined that

an assessment of whether a proposed source would

cause an adverse impact on visibility requires the

permitting authority to review the new source’s

impact in the context of background impacts caused

by both existing and previously permitted (not yet

constructed) sources. See 50 FR 28548 (July 12,

1985).

U.S.C. 1), the purpose of such national park

lands ‘‘is to conserve the scenery and the

natural and historic objects and the wildlife

therein and to provide for the enjoyment of

the same in such manner and by such means

as will leave them unimpaired for the

enjoyment of future generations.’’

S. Rep. No. 127, 95th Cong., 1st Sess. 36

(1977).

The EPA proposes to define ‘‘AQRV’’

as a scenic, cultural, physical,

biological, ecological, or recreational

resource which may be affected by a

change in air quality, as defined by the

FLM for Federal lands and as defined by

a State or Indian Governing Body for

nonfederal lands within their respective

jurisdictions. See proposed

§§ 51.166(b)(40) and 52.21(b)(41). The

proposed definition addresses the

fundamental purposes for which such

lands have been established and

preserved. The proposed definition also

recognizes that (1) The FLM have the

responsibility to identify AQRV for

Federal lands, and (2) the Act gives

authority to States and Indian

Governing Bodies to identify AQRV for

areas within their respective

jurisdictions.55 The EPA is proposing to

define ‘‘adverse impacts on air quality

related values’’ as a deleterious effect on

any AQRV defined by the FLM,

resulting from the emissions of a

proposed source or modification, that

interferes with the management,

protection, preservation, or enjoyment

of the AQRV of a Federal Class I area.

See proposed § 51.166(b)(41) and

§ 52.21(b)(42). Under the part 52 PSD

regulations, the proposed definition

would be in addition to the existing

definition of ‘‘adverse impact on

visibility’’ [§ 52.21(b)(29)] which is

derived from the EPA’s visibility

regulations adopted pursuant to the

Act’s visibility protection program. See

existing 40 CFR 51.301(a) and 51.307.

Under the Federal PSD requirements,

EPA intends that the definition of

‘‘adverse impact on visibility’’ continue

to be used when the AQRV of concern

is visibility. The new definition is

intended to encompass all AQRV.

The proposed definition of ‘‘adverse

impact on air quality related values’’

includes the requirement that such

determinations be made on a case-bycase basis, considering the change in

existing air quality that will result from

the emissions of a particular pollutant

from a proposed major source or major

modification.56 Moreover, a

determination of whether a source will

have an adverse effect must consider the

AQRV specifically identified by the

FLM and, for each affected AQRV, the

projected impact of the emissions from

the proposed PSD source on the existing

background air quality (including the

predicted impacts of recently-permitted

sources not yet in operation) in the

Class I area.57 Thus, the FLM’s

demonstration of adverse impact on

AQRV, may consider a source’s impact

on existing conditions, which may

already be regarded as ‘‘adverse.’’ The

adverse impact demonstration is also

discussed in section IV.C.2.d. of this

preamble.

The proposed definition also

recognizes that the term ‘‘adverse

impact on air quality related values’’ has

special meaning under the Act that is

properly limited to Federal Class I areas.

See section 165(d) of the Act. As

described previously, permits must be

denied to sources whose emissions

would have an adverse impact AQRV in

a Federal Class I area, even though no

violation of a Class I increment would

result from those emissions.

b. Role of the FLM in Defining

Specific AQRV. In general, the EPA

explicitly recognizes that FLM have

special expertise and knowledge about

the Federal Class I areas which they

manage. In addition, the EPA agrees

with the CAAAC’s recommendation that

the FLM should be expressly recognized

as having the primary responsibility for

the identification of specific AQRV.

The EPA believes that it is

appropriate not to propose regulations

that would dictate how the FLM

identify AQRV (and associated critical

pollutant loadings) or demonstrate an

adverse impact on AQRV. These

responsibilities are closely tied to the

role of the FLM mandated by the Act,

and are also integral to the management

of those AQRV under the mandates of

the Federal Lands statutes as well (e.g.,

Wilderness Act, 16 U.S.C. 1131 et seq.,

and 1916 National Park Service Organic

Act, 16 U.S.C. 1 et seq.) Furthermore,

because of the wide variety of Federal

Class I areas and AQRV, sensitivities of

critical receptors, and the unavailability

of data in many cases, the EPA believes

that the FLM must have sufficient

latitude to address these issues on an

area-by-area, as well as a permit-bypermit, basis. At the same time, the EPA

encourages FLM to identify AQRV on a

regional or national basis where

appropriate, and to establish general

procedures for identifying AQRV.

c. Role of the FLM in Triggering a

Class I Area Analysis. It is generally

agreed that not all sources applying for

PSD permits should have to provide

information concerning potential Class I

area impacts. Various factors concerning

a particular source, including the type

and amount of its emissions, and the

source’s distance from the Class I area,

will influence whether the emissions

from a proposed source have the

potential to adversely impact a Class I

area. This proposal links the

requirement for a permit applicant to

provide Class I impact information with

the filing of a notice by the FLM (or

certain other government officials)

which (1) alleges that emissions of a

particular pollutant from a proposed

major emitting facility may cause or

contribute to a change in air quality in

a particular Class I area, and (2)

identifies the potential adverse impact

of such change in air quality on each

affected AQRV. The proposal is

consistent with section 165(d)(2)(C)(i) of

the Act which provides that once such

a notice is filed a permit shall not be

issued unless the applicant

demonstrates that its proposed

emissions will not cause or contribute to

a violation of the Class I increments. See

proposed §§ 51.166(p)(2)(i) and

52.21(p)(2)(i). The proposal also is in

accordance with the provisions under

section 165(e)(3)(B) of the Act which

require, for a proposed source, an

analysis of the ambient air quality,

climate and meteorology, terrain, soils

and vegetation, and visibility, at the site

of the proposed source and ‘‘in the area

potentially affected by the emissions

from such facility.’’

The permitting authority would

determine the status of the Class I

increments considering, as appropriate,

the analysis provided by the applicant.

The analysis of potential impacts on

Class I area resources will help provide

the basis for an eventual determination

of whether the source will have an

adverse impact on AQRV. The EPA

generally believes that the combined

informational requirements contained in

this proposed provision will greatly

facilitate resolution of AQRV issues

which must ultimately be addressed as

a prerequisite to permit issuance. That
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38285

is, the analyses will reveal whether the

Class I increments will be violated;

establish the relative roles of the

applicant; the FLM and the permitting

authority in making decisions

concerning the AQRV; and provide

information needed to determine

potential AQRV impacts. Moreover, this

proposal would limit an applicant’s

responsibility to perform Class I area

assessments to circumstances where

there is an identified potential that the

proposed source will have an adverse

impact on a Class I area.

If the proposed source will cause or

contribute to a violation of a Class I

increment, the applicant will provide

information pertaining to the source’s

impacts on, as appropriate in light of the

FLM’s notice, such things as soils,

vegetation and visibility to demonstrate

that there will be no adverse impact on

the potentially affected AQRV identified

by the FLM. See section 165(d)(2)(C)(iii)

of the Act. If the FLM agrees with this

demonstration, and so certifies, the

permitting authority may issue the PSD

permit even though a violation of a

Class I increment has been shown.

Alternatively, when the applicant’s

analysis shows, to the satisfaction of the

permitting authority, that the proposed

source will not cause or contribute to a

violation of a Class I increment, the

information pertaining to impacts on the

potentially affected AQRV identified by

the FLM will help the FLM determine

if the proposed source will have an

adverse impact on AQRV, and to make

a demonstration of such adverse impact

to the permitting authority, where

appropriate.

While the Act is silent concerning the

timing for filing the notice of potential

adverse impacts, the EPA believes that

it is reasonable and appropriate to

require the FLM or other named officials

to file the notice before the permitting

authority issues its completeness

determination on the permit

application. See proposed

§§ 51.166(p)(2)(i) and 52.21(p)(2)(i). One

reason for this proposal is that the filing

of the notice establishes certain

informational requirements which serve

as a measure of the application’s

completeness. Moreover, it is generally

important that EPA require that the

notice be filed early in the permit

process to expedite permit review. A

requirement for early notice submittal

helps ensure that the Class I area issues

are identified by FLM and other officials

early in the permit process and enables

the applicant to provide the appropriate

Class I analyses in a timely manner so

as not to delay the review and issuance

of the permit.

The EPA encourages, particularly

where a source proposes to locate

within 100 kilometers of a Federal Class

I area, the applicant to coordinate with

the FLM prior to the submittal of its

application in order to be able to learn

of any FLM concerns and to submit the

Class I analyses along with the other

required information in its initial permit

application. Otherwise, the FLM would

be expected to file the notice alleging

potential affects on the Federal Class I

area, where appropriate, during the 30-

day period for review of the application

for completeness, as provided under

this proposal and described in section

IV.C.2.c of this preamble. In the absence

of a notice being filed concerning

potential Class I impacts, the applicant

will still be required to demonstrate that

emissions from the proposed source do

not cause or contribute to any violation

of the Class II increments or NAAQS.

This proposal to require the applicant

to complete a comprehensive Class I

impact analysis is tied directly to the

filing of a notice (alleging potential

adverse impacts) prior to the permitting

authority’s issuance of its completeness

determination. However, this proposal

is not intended to preclude the FLM

from raising new concerns about effects

at a later time during the permit review.

The FLM may ultimately submit a

demonstration of adverse impact on

AQRV even if a notice has not been

previously filed. In such cases, where

additional information is needed to

enable the FLM to make the necessary

demonstration, the EPA believes that

the permitting authority has discretion

to determine whether, and to what

extent, the applicant should be required

to produce the additional information.

The EPA requests comments on this

aspect of the proposal in light of the

importance of having to file a notice

alleging potential Class I impacts in

order to trigger the applicant’s

responsibility to perform an analysis of

its Class I impacts. The EPA has

considered alternative approaches for

triggering the Class I analysis, including

a mandatory Class I analysis for any

proposed major source or major

modification proposing to locate within

100 kilometers, or some other specific

distance, from a Federal Class I area.

The proposed approach is consistent

with the Act requirement for the filing

of a notice.

With respect to alternative approaches

not proposed, a rigid distance-based test

may necessarily be either over- or

under-inclusive. For example, if a cutoff

of 100 kilometers was established, some

sources locating within 100 kilometers

from a Federal Class I area may be

required to perform an analysis even

though there is no potential that the

proposed source will have an adverse

impact on the area. Conversely, sources

proposing to locate more than 100

kilometers from a Federal Class I area

that may nevertheless adversely impact

a Class I area would not be required to

carry out the appropriate Class I

analyses. Thus, a rigid distance cutoff

would still need some kind of

accompanying triggering mechanism to

establish the informational requirement

for Class I impacts for potential sources

of concern locating beyond any

specified cutoff distance. The EPA is

interested in alternative approaches

which will establish a reasonable

requirement for Class I analyses at a

reasonable point in the permit process.

With regard to the notice, the EPA

believes that it should be in writing,

preferably in the form of a letter to the

permitting authority, and should

address at a minimum (1) the specific

pollutant emissions from the proposed

source that may cause or contribute to

a change in air quality in the specified

Federal Class I area, and (2) the

potential adverse impact of such change

on each specified AQRV. While the

alleged change in air quality and

potential impacts are naturally

preliminary, and perhaps somewhat

speculative, the intent is that the

allegation should present a potential

linkage between the proposed source—

based on its specific pollutant emissions

and its relative location to the affected

Class I area—and the specified AQRV in

the affected Federal Class I area as to

warrant the required Class I analysis.

The notice is also intended to provide

the applicant with sufficient

information to focus the required Class

I analysis on the appropriate pollutant

emissions and AQRV of concern to the

FLM. Accordingly, the notice should

not be used by the permitting authority

for any prejudgment as to whether any

potential effects on AQRV will be

adverse. If it is plausible that a source

may impact the affected Class I area,

further analysis should generally be

performed. The only basis for rejecting

such notice, and thereby determining

that a Class I analysis is not required, is

that the permitting authority finds no

potential linkage between the proposed

source’s potential impact (i.e., change in

air quality in the Class I area) and the

AQRV identified by the FLM.

An important related issue concerns

the responsibility for carrying out any

additional technical analyses which

may be necessary for the FLM to

demonstrate that a source’s emissions

will have an adverse impact on AQRV.

The EPA generally expects the analyses

performed by the applicant under the
38286 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

58The EPA is using the term ‘‘Federal official’’ to

reflect the terminology used in the Act. The

legislative history uses the term ‘‘supervisor of a

class I area’’ in lieu of ‘‘Federal official.’’ See S. Rep.

No. 127, 95th Cong., 1st Sess. 35–37 (1977). Once

a notice is filed alleging possible adverse impacts,

the FLM—not any other Federal official, unless

duly designated by the FLM—is authorized to

demonstrate to the satisfaction of the permitting

authority that a proposed source will have an

adverse impact on AQRV and that the permit

should be denied (as described elsewhere in this

preamble). See section 165(d)(2)(C)(ii) of the Act.

proposed provisions to enable a FLM to

evaluate the impacts on AQRV. In some

cases, however, additional information

may be necessary to make a thorough

AQRV assessment and there is a

question as to who should bear the

responsibility for such information.

Applicants for PSD permits are typically

required to provide information and

analyses necessary for the permitting

authority to make a variety of ambient

air quality decisions because, among

other reasons, applicants have detailed

knowledge about the proposed source’s

emissions and operations. Yet,

applicants should not necessarily be

expected to conduct an unlimited

number of studies. The permitting

authority should ultimately determine,

based on consultation with the FLM,

what additional information collection

should be required of the applicant.

The EPA solicits public comment on

this issue in order to establish an

equitable approach for completing the

required analyses for Class I areas

applicable to individual PSD permit

applicants. Specifically, the EPA seeks

input in determining what the

respective responsibilities of the FLM

and the permit applicant should be for

carrying out the analyses necessary to

enable the FLM to demonstrate an

adverse impact on AQRV. The EPA will

consider such input and decide whether

the regulations should explicitly

address these individual roles.

This proposal also recognizes that the

FLM is not the only official authorized

by the Act to file the notice concerning

potential impacts on a Federal Class I

area. Section 165(d)(2)(C)(i) of the Act

authorizes that the notice be filed by

any one of several officials, including

the Federal official charged with direct

responsibility for management of any

lands within the Class I area potentially

affected, the Federal Land Manager of

such lands, the EPA Administrator, or

the Governor of an adjacent State

containing such Class I lands.

Accordingly, the EPA is including in the

proposal that the FLM or other named

officials may file a notice when it is

believed that a proposed source may

affect air quality in a Federal Class I

area. See proposed §§ 51.166(p)(2)(i)

and 52.21(p)(2)(i). In addition, the EPA

is proposing to define the term ‘‘Federal

official,’’ which is used in the proposed

regulatory provision as well as in the

Act, as the Federal official charged with

direct responsibility for management of

any lands within a Federal Class I

area.58 See proposed §§ 51.166(b)(39)

and 52.21(b)(40).

d. Informational Responsibilities of

the FLM. The EPA believes that a logical

adjunct of an FLM’s expertise and

responsibility for protecting the AQRV

of Federal Class I areas and identifying

a potential adverse impact on AQRV is

the responsibility to provide relevant

information to persons involved in the

permitting process. Permitting

authorities and permit applicants

should have access to any information

concerning AQRV which an FLM has

defined for any Federal Class I areas that

may be affected by a proposed source or

modification. To address this concern,

the EPA is proposing that the FLM be

required to provide pertinent

information, where available, to PSD

permit applicants upon request. See

proposed §§ 51.166(p)(2)(ii) and

52.21(p)(2)(ii).

Specifically, the proposal would

benefit the owner or operator of a

proposed facility that may have an

adverse impact on AQRV in a Federal

Class I area. The proposed regulations

generally call for the FLM to provide all

available information about relevant

AQRV and methods for analyzing

potential impacts on those AQRV when

the applicant requests such information.

This information would include a

current listing of the AQRV, sensitive

receptors and critical pollutant loadings

for each AQRV, as well as the methods

and tools (e.g., models) available to

analyze the potential impacts for the

affected Class I area. The FLM also

would be expected to provide copies of

relevant previous findings of adverse

impact on AQRV that have been made

as part of other PSD permit reviews

affecting the same Class I area.

The EPA is pursuing the development

of a computerized compilation or

clearinghouse of available Class I area

information. The cooperation of the

FLM would be critical to the utility of

this resource. Relevant information

would be posted as it becomes available.

To the extent that the relevant

information is posted in the

clearinghouse, it would not be necessary

to provide such information to an

applicant. If however, the FLM has new

information not yet available in the

clearinghouse, the FLM should directly

provide such information to the

applicant when a request is made. This

clearinghouse is described in section

IV.C.6 of this preamble.

2. Improving Federal Land Manager

(FLM)/Permitting Authority

Coordination

The CAAAC recommendations

reflected general agreement that better

State and FLM coordination is integral

to avoiding delays and controversies

during the PSD permitting process.

Accordingly, the EPA is proposing a

general provision which requires that

the permitting authority provide for

consultation and coordination with the

FLM. See proposed §§ 51.166(p)(2)(iii)

and 52.21(p)(2)(iii). The permitting

authority is expected to use its judgment

in deciding the appropriate measure of

consultation and coordination that will

ensure adequate input from the FLM as

well as adequate consideration of the

FLM’s expertise and findings

concerning potential Class I area

impacts. While this particular provision

affords the permitting authority

flexibility in determining the

appropriate level of interaction with the

FLM throughout the permitting process,

the EPA also believes that certain

specific points of consultation and

coordination, as described below, are

needed to ensure that the FLM is given

adequate opportunity to carry out the

responsibilities conferred on the FLM

by the Act.

a. Pre-application Coordination. The

EPA is today proposing to require that

the FLM be informed of any advance

notification received by the permitting

authority from a prospective applicant

involving a source that would construct

within 100 kilometers of a Federal Class

I area. As proposed, the affected FLM

must be notified within 30 days of the

permitting authority’s receipt of any

such advance notification of a PSD

permit application. See proposed

§§ 51.166(p)(3)(i) and 52.21 (p)(3)(i).

The EPA recognizes that the type of

early notification that a prospective

applicant may provide to the permitting

authority will vary from one situation to

the next. Thus, the type of notification

provided by the permitting authority to

the FLM should be commensurate with

the type of information which is

received. For example, a brief letter or

phone call from the permitting authority

to the FLM may be appropriate when

the information about the potential

project is only very preliminary.

Generally, it should not be necessary to

notify the FLM more than once

concerning any early contacts by a

prospective applicant with the

permitting authority. An exception

would be where, as described below, a

pre-application meeting is arranged as a
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38287

59The 100-kilometer cutoff being used in this

proposal for mandatory notification requirements

involving FLM’s is consistent with the current EPA

policy concerning modeling of Class I impacts. In

an October 19, 1992 memorandum from John S.

Seitz, Director, Office of Air Quality Planning and

Standards to EPA Regional Offices, the EPA

clarified its guidance for modeling Class I area

impacts under the PSD program. The policy

statement advised Regional Office personnel that it

was appropriate to routinely consider the ambient

impacts resulting from PSD sources proposing to

locate within 100 kilometers of a Class I area. The

EPA further stated that such guidance was not to

be interpreted so as to preclude the consideration

of potential impacts of emissions from large sources

locating at distances greater than 100 kilometers if

there is reason to believe that such sources could

adversely affect the air quality in the Class I area.

result of subsequent communications

between the applicant and the

permitting authority.

Consistent with CAAAC

recommendations, the EPA is also

proposing to require that the permitting

authority provide the FLM with notice

of, and reasonable opportunity to

participate in, pre-application meetings

scheduled with prospective PSD

applicants that would locate within 100

kilometers of a Federal Class I area. See

proposed §§ 51.166(p)(3)(iii) and

52.21(p)(3)(ii). If given such an early

opportunity, the FLM would be

expected, where possible, to inform the

prospective applicant of concerns about

Class I impacts, as well as any intention

to file a notice alleging potential Class

I impacts.

While this proposal for advance

notification applies specifically to

prospective sources and modifications

located 100 kilometers or closer to a

Federal Class I area, there should be no

automatic presumption that sources

located farther than 100 kilometers will

not affect a Federal Class I area.59 There

will be instances where it would be

prudent for the permitting authority to

notify the FLM of a prospective source

that would locate more than 100

kilometers from a Federal Class I area.

As further described below, the FLM

will receive summary notification of

such distant sources at the permit

application notification stage and may

be interested in learning about them as

early as possible. However, the EPA has

declined to propose requirements for

mandatory pre-application notification

beyond the 100-kilometer distance.

Nevertheless, the EPA will consider a

more inclusive cutoff, e.g., 200

kilometers, for mandatory preapplication notification, if for some

reason it is unable to implement the

database that is intended to inform FLM

about the more distant proposed new

major sources and major modifications.

The EPA requests public comments

on all aspects of these proposed

regulatory revisions addressing advance

notification, including the appropriate

type of notification, the mandatory

notification within 100 kilometers of a

Federal Class I area, and the 30-day

timeframe for providing such

notification to the FLM. The EPA is

interested in the public’s views about

the need for these changes in light of the

other regulatory revisions, described

below, that the EPA is proposing to

improve FLM coordination, including

the proposed requirement that permit

applications for all PSD sources and

modifications proposing to locate

within 100 kilometers of a Federal Class

I area must automatically be transmitted

to the FLM.

b. Coordination of the Permit

Application. Several of the CAAAC

recommendations addressed improving

coordination between the permitting

authority and the FLM once a permit

application has been received. Similar

to the recommendations for preapplication coordination addressed

previously, such coordination was

considered important in helping to

avoid disputes and delays in carrying

out the permit review process.

The EPA is proposing to revise the

notification requirements that apply

when the permitting authority receives

a PSD permit application. The proposed

notification requirements are to apply

on the basis of the proximity of the

proposed source or modification to a

Federal Class I area. However, as

described previously, sources proposing

to locate near a Federal Class I area are

not automatically assumed to have an

adverse impact on that area. With the

proposed revisions, the FLM is afforded

an opportunity to review the contents of

any PSD permit application to

determine whether sufficient

information is available to assess the

potential impacts on a Federal Class I

area. As described earlier, in section

IV.C.1.c of this preamble, the EPA has

proposed to require that the FLM (or

other named officials) file a notice

alleging potential Class I impacts in

order to trigger specific Class I

informational needs in the permit

application. The proposed 100

kilometer cutoff described below

applies only to the automatic

notification (including forwarding of

permit application) of the FLM that

such source has applied for a PSD

permit.

(1) Notification to FLM for Sources

Located Within 100 Kilometers of a

Federal Class I Area. Because sources

located within a 100-kilometer range of

Federal Class I areas generally have the

greatest potential for affecting the air

quality in those areas, EPA is proposing

to require notification of the affected

FLM when a PSD permit application is

received for a new or modified source

proposing to locate within 100

kilometers of a Federal Class I area. The

proposed notification includes sending

a copy of the permit application and any

other relevant information. See

proposed §§ 51.166(p)(4)(i) and

52.21(p)(4)(i).

The proposed regulations do not

mandate that the permitting authority,

itself, must send each affected permit

application to the FLM. Instead, the

State may elect to require the PSD

applicant to directly transmit a copy of

its application and other relevant

information to the FLM. In either case,

the EPA believes that the permitting

authority will want to ensure that the

FLM receives the application promptly

so there will be few, if any, delays to the

initial phase of the permit process.

With regard to the existing

notification provision at § 51.166(p)(1),

the EPA proposes to move this

provision to a more appropriate

location. This provision requires that

the permitting authority transmit to the

Administrator a copy of each PSD

permit application received and does

not address FLM notification. In its

present location in the regulations, the

existing EPA notification requirement

could be interpreted to apply only to

proposed sources and modifications

whose emissions affect a Federal Class

I area. The Act provides that the EPA

notification requirement apply with

respect to all PSD permit applications—

not just those affecting Federal Class I

areas. See section 165(d)(1) of the Act.

In moving the existing provision to the

new location in the part 51 regulations,

its intended coverage of all PSD permit

applications will be better understood.

See proposed redesignated

§ 51.166(q)(1).

(2) Notification to FLM for Sources

Locating more than 100 Kilometers from

a Federal Class I Area. The EPA

recognizes that the FLM will have an

interest in reviewing the potential

effects associated with emissions from

certain sources proposing to locate more

than 100 kilometers from a Federal

Class I area. It emphatically is not the

EPA’s intention to enable such sources

to be automatically exempted from

consideration as to their potential

impacts on Class I areas. However, a

general requirement to transmit copies

of all permit applications to the FLM

would be quite burdensome and overly

inclusive. Accordingly, the EPA is

proposing a different approach for

providing notification to the FLM for

applications proposing sources more

than 100 kilometers from a Federal
38288 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

60 Under the part 51 PSD regulations, the

proposed requirement does not specify whether the

applicant or the permitting authority must enter the

data summary. The EPA believes that it is

appropriate in this situation to allow permitting

authorities to exercise their discretion in

determining what specific procedures they will

adopt and implement to ensure that the required

data is entered into the EPA electronic database.

61 For proposed sources more than 100

kilometers from a Federal Class I area, the

permitting authority may proceed to issue its

completeness determination any time after the 7-

day period for FLM review if the FLM does not

request a copy of the permit application. However,

the FLM is not precluded from requesting

additional information at any time after the formal

7-day review period. But, such later requests will

not trigger the 30-day FLM review period prior to

the permitting authority’s completeness

determination proposed elsewhere in this notice

[See, e.g., proposed section 51.166(p)(5)(i)].

Class I area. The EPA is developing a

special electronic database and

proposing to require that a summary of

each PSD permit application be entered

into this database.60

The proposed informational

requirements include the name and type

of source, the nature of the project,

source location and proximity to Class

I areas (i.e., within 250 kilometers), the

proposed emission rates (or emissions

increases) of air pollutants to be emitted

by the source, and key mailing

addresses. The FLM, as well as the

general public, will have access to this

information. The administration of this

electronic database is addressed in more

detail in section IV.C.6. of this

preamble, ‘‘Information Clearinghouse.’’

See proposed §§ 51.166(n)(4) and

52.21(n)(4).

Once relevant information pertaining

to a proposed major source or major

modification is registered in the EPA

database, the FLM will be able to check

the Bulletin Board, determine whether

such source represents a potential

concern to air quality or air quality

related values in the Class I area (based

on the summary information contained

therein), and request a copy of the entire

permit application. In order to ensure

that the FLM is given a reasonable

opportunity to request a copy of any

specific application (for sources that

would locate beyond the 100-kilometer

range), the EPA is proposing that the

FLM will be afforded at least 7 days

from the date of registration of

information on the electronic database

to review such information and request

the entire permit application. See

proposed §§ 51.166(p)(4)(ii) and

52.21(p)(4)(ii).

The EPA requests public comments

on its proposed requirements to

improve the notification procedures

which inform the FLM about incoming

permit applications. In particular, the

EPA requests public comments

addressing the proposed requirement to

transmit a permit application to the

FLM when the proposed source is

within 100 kilometers of a Federal Class

I area.

c. Coordination of the Completeness

Determination. The EPA is also

proposing to revise both sets of PSD

regulations by adding a requirement that

the FLM be given at least 30 days

(starting from receipt of the application

by the FLM) to review the application

prior to any completeness determination

issued by the permitting authority. The

30-day review is required only when the

FLM is to receive the permit application

as provided under this proposal [See

e.g., proposed § 51.166(p)(4)] where the

proposed source is located within 100

kilometers from a Federal Class I area or

where it is located beyond 100

kilometers but the FLM requests the

entire application within 7 days from

the inclusion of summary information

in EPA’s electronic data base. See

proposed §§ 51.166(p)(5)(ii) and

52.21(p)(5)(ii).61

During the proposed 30-day review

period, the FLM will have an

opportunity to determine whether there

is reason to believe that the proposed

source may adversely affect a Federal

Class I area and request additional

information, to be obtained from the

applicant, in order for an adequate Class

I impact analysis to be completed. The

request for additional information by

the FLM may be in the form of a notice

alleging that emissions from the

proposed source may cause or

contribute to a change in air quality in

the affected Class I area and identifying

the potential adverse impacts of such

change on AQRV (see section IV.C.1.c.

of this preamble). If such notice is given,

the permit applicant would be required

to perform the Class I impact analysis,

discussed previously, to satisfy its

obligation for a complete application.

The EPA’s proposed regulations would

also require permitting authorities to

consider, in making a completeness

determination, any comments provided

by the FLM concerning the

completeness of the application within

the 30-day review period. See proposed

§§ 51.166(p)(5)(iii) and 52.21(p)(5)(iii).

The EPA generally anticipates that the

permitting authority will respond

affirmatively to the FLM’s request for

additional information and will notify

the applicant that the application is

incomplete and require such additional

information from the applicant. The

permitting authority generally should

not announce that an application is

deemed complete until the FLM’s

request for additional information has

been satisfied by the applicant, and the

FLM has had an opportunity to file a

notice alleging potential Class I impacts,

if such notice has not already been filed.

In some cases, however, the permitting

authority may question the request

made by the FLM or simply disagree

with it. When this occurs, the EPA is

proposing that the permitting authority

must consult with the FLM and try to

resolve whatever problems may exist

prior to issuing a completeness

determination. See proposed

§§ 51.166(p)(5)(iv) and 52.21(p)(5)(iv).

Nevertheless, while the permitting

authority must give reasonable

consideration to the FLM’s concerns

under the proposed changes, the

permitting authority is responsible for

making the ultimate decision regarding

the application’s completeness. The

proposed provisions allow the

permitting authority to issue its

completeness determination any time

(either before or after the 30-day period

has ended) after any comments from the

FLM have been received and

consultation with the FLM has occurred

about any inconsistency between the

permitting authority’s views and the

FLM’s recommendations.

The CAAAC recommended that the

EPA consider establishing a formal

dispute resolution process as a part of

the completeness review. The EPA has

declined to propose any specific

requirements focusing on the resolution

of potential problems between the

permitting authority and the FLM.

Instead, the EPA’s proposal

contemplates that the permitting

authority and the FLM retain discretion

to determine the nature of consultation

that is appropriate. The EPA believes

that most permitting authorities and

permit applicants recognize the merits

of early consultation with the FLM and

that all affected parties will work in a

cooperative manner.

d. Coordination of the Preliminary

Determination. The Act provides that, if

the proposed source or modification

will not cause or contribute to a

violation of an increment in a Federal

Class I area, the FLM has the burden of

demonstrating to the satisfaction of the

permitting authority that the source will

have an adverse impact on AQRV. If so

demonstrated, the Act mandates that the

permit shall not be issued. Conversely,

if a proposed source or modification

causes or contributes to an increment

violation in a Federal Class I area, the

permit may be issued if the owner or

operator demonstrates to the satisfaction

of the FLM that the proposed source

will have no adverse impact on AQRV

and the FLM so certifies. See section
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38289

62 See 50 FR 28544, 28549 (July 12, 1985); see

also Old Dominion Electric Cooperative, PSD

Appeal No. 91–39 at 8 and n. 9 (Jan. 29, 1992).

165(d)(2)(C)(ii) and (iii) of the Act. In

either situation, the FLM has an

affirmative responsibility to protect the

AQRV associated with the affected

Federal Class I area. See section

165(d)(2)(B) of the Act.

The EPA is proposing several

revisions to the existing PSD regulations

concerning the permitting authority’s

preliminary determination to issue or

not issue the PSD permit where a

proposed source will not cause or

contribute to a violation of a Class I

increment and the FLM has submitted a

demonstration that a proposed source

will have an adverse impact on AQRV.

Specifically, these changes relate to (1)

clarifications to existing regulations

addressing the scope of the FLM’s

demonstration of an adverse impact on

AQRV, (2) timing for submittal of the

FLM’s demonstration to the permitting

authority for consideration prior to

issuing or denying a PSD permit, and (3)

criteria which the permitting authority

must consider in deciding to nonconcur

with the FLM’s demonstration.

(1) Scope of the FLM’s Demonstration

of an Adverse Impact on AQRV. The

existing part 52 PSD regulations are

inadequate because they only require

the Administrator to consider the FLM’s

demonstration of the visibility impacts

of a proposed source, and therefore do

not contemplate consideration of other

AQRV. See existing § 52.21(p)(3). When

the part 52 PSD regulations were

originally promulgated, visibility was

the only specified AQRV; however, the

FLM have identified a variety of AQRV

and, as discussed previously, the EPA is

proposing a more general definition of

AQRV similar to the definition that the

FLM have historically been using. See,

e.g., proposed § 51.166(b)(40). Thus, the

EPA is proposing to delete the existing

provision in § 52.21, and, under the

proposed revisions described

immediately below, provide for

consideration of the FLM’s

demonstration of an adverse impact on

AQRV.

(2) Timing for Submittal of the FLM’s

Demonstration of an Adverse Impact on

AQRV. Under the existing part 52 PSD

regulations, the FLM is given only 30

days from receipt of a notice (that a PSD

application has been submitted) from

the Administrator to provide the

required demonstration of an adverse

impact on AQRV for the Administrator’s

consideration prior to the

Administrator’s issuance of a

preliminary permit determination. This

time constraint places the FLM in a

dilemma. The FLM is expected to

provide a well-documented, reasoned

demonstration of an adverse impact on

AQRV that a proposed source will have

in a Federal Class I area, but is generally

given an abbreviated time to complete

this critical task.

In contrast, the part 51 PSD

regulations [See existing paragraph

(p)(3)] require that the State provide a

mechanism whereby the FLM may

present a demonstration of an adverse

impact on AQRV to the permitting

authority after the preliminary

determination has been made. This

existing requirement does not

contemplate that the FLM’s

demonstration would be best addressed

as part of the preliminary determination

and then made available for public

notice and comment.

The EPA believes that it is important

to the permitting process that the FLM’s

demonstration be submitted before a

preliminary determination is made and

that sufficient time be allowed to

complete the demonstration. Thirty

days is generally not a sufficient amount

of time for the FLM to complete a

demonstration of an adverse impact on

AQRV. Instead, the EPA proposes that

the FLM be allowed at least 60 days to

make the required demonstration.

Moreover, the proposed regulations

provide that the 60-day period occur

prior to a preliminary determination so

that any demonstration submitted by the

FLM may be adequately considered by

the permitting authority and addressed

as part of the preliminary

determination. See proposed

§§ 51.166(p)(6)(i) and 52.21(p)(6)(i).

The EPA also believes that a 60-day

period (beginning on the date that the

permitting authority formally issues its

determination that the application is

complete), taken together with the

improvements addressed above to

facilitate earlier FLM and permitting

authority coordination, provides the

FLM with a more reasonable period of

time. During this period, the FLM may

need to conduct a variety of technical

analyses or perhaps request (via the

permitting authority) that the applicant

provide additional analyses to provide

sufficient basis for the demonstration to

be developed. This will, of course,

depend on the amount of information

already contained in the application as

a result of prior coordination about the

potential impacts on AQRV in the

Federal Class I area. For example, if the

FLM has issued notice pursuant to

proposed §§ 51.166(p)(2)(i) or

52.21(p)(2)(i), alleging that the proposed

source may impact a Federal Class I

area, then the FLM may rely on the

ensuing impact analysis performed by

the applicant as at least a significant

starting point for the FLM’s evaluation.

The EPA invites public comments on

the adequacy of a 60-day period for

completing the demonstration of an

adverse impact on AQRV. The EPA will

consider a different time period if it can

be shown that such different period

would allow a more appropriate amount

of time for the FLM to complete any

necessary analyses without unduly

delaying the permit process.

In addition, the EPA requests

comments on its own role. Section

165(d)(2)(B) of the Act provides that the

FLM and the Federal official charged

with direct responsibility for land

management have an ‘‘affirmative

responsibility’’ to ‘‘consider, in

consultation with the Administrator,

whether a proposed major emitting

facility will have an adverse impact.’’

The EPA is not proposing a specific

role, beyond the significant

programmatic changes related to Class I

area protection proposed today,

concerning how it should consult with

the FLM. The EPA requests comments

on this issue.

(3) Rejection of the FLM’s

Demonstration of an Adverse Impact on

AQRV. The Act and EPA’s PSD

regulations provide that where the

permitting authority determines that a

proposed source’s emissions will not

cause or contribute to a violation of a

Class I increment, the FLM must

demonstrate ‘‘to the satisfaction of the

permitting authority’’ that the proposed

source will have an adverse impact on

AQRV. The permitting authority is thus

given the authority to accept or reject

the FLM’s demonstration. The

permitting authority’s concurrence with

such demonstration means that the

permitting authority must propose to

deny the PSD permit. See existing

§§ 51.166(p)(3) and 52.21(p)(4). [See

also proposed §§ 51.166(p)(6)(ii) and

52.21(p)(6)(ii).] If the permitting

authority determines that the FLM has

not demonstrated to its satisfaction that

a proposed source’s emissions will have

an adverse impact on AQRV, the

permitting authority may reject the

FLM’s demonstration so long as it has

a rational basis for doing so.62

Recent permit controversies have

underscored the need for national

guidance addressing the permitting

authority’s role in evaluating the FLM’s

demonstration of an adverse impact on

AQRV and the rationale for any decision

to disagree with the FLM’s findings. For

example, in a PSD permit appeal

proceeding, the EPA’s Environmental

Appeals Board held that the permitting

authority erred in summarily rejecting

the demonstrations of the FLM for the
38290 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

63 Hadson Power 14—Buena Vista, PSD Appeal

Nos. 92–3, 92–4 & 92–5 (Oct. 5, 1992). The EPA

Environmental Appeals Board reasoned that,

‘‘States do not have unfettered discretion to reject

an FLM’s adverse impact determination. If a State

determines that an FLM has not satisfactorily

demonstrated an adverse impact on AQRV from the

proposed facility, the State must provide a ‘rational

basis’ for such a conclusion, ‘given the FLM’s

affirmative responsibility and expertise regarding

the Class I areas within their jurisdiction.’ 50 FR

28549 (July 12, 1985). Arbitrary and capricious

rejections of adverse impact demonstrations are not

sustainable.’’ [Hadson at p. 21. (citations omitted)]

64 See, e.g., Multitrade Limited Partnership, PSD

Appeal Nos. 91–2 et alia (January 21, 1992). In

Multitrade the proposed source agreed to mitigate

its impact through a combination of reduced

emissions from the new source as originally

proposed and emission offsets from a nearby

existing source, resulting in an offset ratio

substantially greater than one-to-one. Based on

these changes, the FLM concluded that the

emissions from the proposed source, if modified,

would not have an adverse impact on the

Shenandoah National Park. Id. at 5.

65 See Old Dominion Electric Cooperative, PSD

Appeal No. 91–39 (January 29, 1992); Hadson

Power 14—Buena Vista, PSD Appeal Nos. 92–3, 92–

4 & 92–5 (October 5, 1992).

Shenandoah National Park and James

River Face Wilderness that the proposed

facility would have an adverse impact

on AQRV in those Federal Class I

areas.63

In an effort to provide clearer

guidance and promote more reasoned

decision-making, the EPA is proposing

to require that certain considerations

must be addressed and made public

concerning a permitting authority’s

rejection of the FLM’s demonstration of

an adverse impact on AQRV. In doing

so, the EPA has tried to balance the

statutory provisions concerning the

affirmative responsibility given to the

FLM to protect AQRV and the

stipulation that the permitting authority

must be satisfied with the FLM’s

demonstration of adverse impact on

AQRV in any particular situation.

The FLM are entrusted with

administering the statutes governing the

management and preservation of

Federal Class I areas, and are expressly

entrusted by the Act with an affirmative

responsibility to protect AQRV. The

FLM have expert knowledge about the

unique values associated with Federal

lands, and administer ongoing

monitoring and research programs to

help evaluate the effects that air

pollution has on such values.

Accordingly, the EPA believes it is

appropriate for the permitting authority

to recognize the FLM’s broad expertise

in the identification and evaluation of

adverse effects on AQRV.

Notwithstanding this expertise, the

permitting authority may call upon

experts of its own choosing to evaluate

the findings in the FLM’s

demonstration.

Where the permitting authority is not

satisfied with the FLM’s demonstration

of adverse impact on AQRV, the EPA is

proposing (1) a general consultation

provision necessitating some form of

communication and discussion between

the permitting authority and the FLM;

and (2) a provision requiring the

permitting authority to highlight the

issues raised by the FLM and explain its

reasons for disagreement in the public

record. The permitting authority would

satisfy this latter requirement by

including a brief summary of the Class

I area impact issues in the public notice

announcing the preliminary permit

determination, and explaining in

writing, in the public record, its specific

reasons for rejecting the FLM’s

demonstration of adverse impact. See

proposed §§ 51.166(p)(6)(iii),

51.166(q)(4)(ii) and (iii), and

52.21(p)(6)(iii). The EPA believes that

the requirement to indicate in the public

notice that the FLM’s demonstration has

been rejected will give the public

sufficient notice and opportunity to

access the permitting authority’s reasons

for not being satisfied with the FLM’s

demonstration. Such access will aid the

public’s ability to comment

meaningfully at any public hearing that

may be requested. As proposed, the

permitting authority’s written

explanation must address, at a

minimum, the following factors:

i. Scientific/Technical Basis. The

permitting authority must consider all

relevant data and analyses submitted by

the FLM and offer a reasoned

explanation for its disagreement with

such data and the resulting analyses.

See proposed §§ 51.166(p)(6)(iii)(A) and

52.21(p)(6)(iii)(A).

ii. Description of the AQRV and

Adverse Impact. The permitting

authority must address the FLM’s

findings describing the adverse impact

being demonstrated for each affected

AQRV, by explaining any conclusions it

reaches, about whether the projected

impacts of the source’s emissions will

have an adverse impact on the AQRV,

that are inconsistent with the

conclusions reached in the

demonstration submitted by the FLM.

See proposed §§ 51.166(p)(6)(iii)(B) and

52.21(p)(6)(iii)(B).

iii. Mitigative Measures. The

permitting authority must describe any

efforts that have been undertaken to

mitigate the potential impacts of a

proposed source on the Federal Class I

area of concern, including any estimated

emissions reductions, and the effect of

such reductions. See proposed

§§ 51.166(p)(6)(iii)(C) and

52.21(p)(6)(iii)(C).

Finally, the EPA is proposing to

require that, for any permit ultimately

issued to a source determined by the

FLM to have an adverse impact on

AQRV, the permitting authority must

address any additional comments or

input from the FLM (intended to

substantiate or augment its initial

demonstration) that may be submitted

during the public comment period. See

proposed §§ 51.166(p)(6)(iv) and

52.21(p)(6)(iv).

3. Mitigating an Adverse Impact on

AQRV

a. Background. In general, a PSD

permit shall not be issued when the

emissions from a proposed facility

would have an adverse impact on AQRV

in a Federal Class I area. See section

165(d)(2)(C) of the Act. This specific

prohibition on permit issuance applies

when the FLM of a Class I area

demonstrates to the satisfaction of the

permitting authority that emissions from

a proposed source will have an adverse

impact on AQRV, notwithstanding that

the proposed source does not cause or

contribute to a violation of a Class I

increment. See section 165(d)(2)(C)(ii) of

the Act. There have been several

instances over the past few years where,

in such circumstances, the FLM has

submitted a demonstration of an adverse

impact on AQRV in a Class I area. In

some cases, the FLM’s concerns have

been addressed through successful

negotiations between the FLM and the

permit applicant, where the source

obtained either emissions reductions

(offsets) from an existing source, or

adopted more stringent control

measures, or did some combination of

both.64 In other instances, similar

demonstrations of an adverse impact on

AQRV have been the subject of

contentious administrative litigation.65

b. General Policy for Mitigating Class

I Area Impacts. The CAAAC

recommended requiring offsets for any

proposed source that would have an

adverse impact on AQRV. Specifically,

the CAAAC recommended that where

the emission offset ratio was less than

1:1, a net air quality benefit analysis

should be made to support the specific

offset ratio proposed. The CAAAC

recommended that, where the emission

offset ratio is greater than 1:1, a

standardized emission/distance

adjustment factor for offsets could be

used instead of demonstrating that a net

air quality benefit results from the

offsets.

While the EPA agrees with the

CAAAC’s overarching concern that the

EPA provide guidance on the
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38291

66 See Multitrade at p. 7–8, n.5.

67 Incidental emission reductions not otherwise

required by the Act are to be creditable under

section 173(c)(2) of the Act. See also 57 FR 13553

(April 16, 1992) (guidance on creditable reductions

under the nonattainment NSR program).

68 For example, under the PSD regulations, a

comprehensive preconstruction review must be

conducted for each regulated pollutant that a

proposed major source or major modification will

have the PTE in ‘‘significant’’ amounts, as defined

in existing section 51.166(b)(23)(i) and

52.21(b)(23)(i). Under existing section 51.166(i)(8)

Continued

implementation of mitigating offsets, the

EPA declines to recommend rigid tests

for assessing the adequacy of offsets.

Rather, the EPA proposes that general

principles already established under the

PSD program guide the implementation

of offsets. In addition, the EPA is

proposing to add a provision to the PSD

regulations that explicitly provides what

EPA has previously acknowledged—that

sources may mitigate an adverse impact

on AQRV in order to obtain a PSD

permit.66 See proposed §§ 51.166(p)(7)

and 52.21(p)(7).

The proposed provision specifies that

PSD programs shall allow for mitigation

by a proposed source and specifically

provides that the permitting authority

may issue a permit for a proposed major

source or major modification that would

otherwise be denied a permit because of

an adverse impact on AQRV, if the

permitting authority determines, in

consultation with the FLM, that the

source has mitigated the adverse impact

on AQRV. The EPA believes that sound

technical evidence should support a

demonstration of mitigation. The

demonstration should show that there

will be no net adverse impact as a result

of the proposed source’s emissions. The

proposed provision specifically

acknowledges offsets as a mitigation

option where the owner or operator of

a proposed source obtains enforceable

and permanent emissions reductions of

sufficient amount and in such location

that the reductions will offset the

change in air quality in the Federal

Class I area that would have resulted

from the proposed source. See proposed

§§ 51.166(p)(7) and 52.21(p)(7). The

quantitative amount of the offsetting

emissions should, therefore, be shown

to be sufficient to in fact mitigate the

adverse impact on AQRV that would

otherwise be caused by the proposed

emissions increase. This will involve

consideration of the location of the

offsetting source relative to the Class I

area, as well as the meteorological and

topographical conditions which affect

dispersion of the offsetting emissions.

Another possible consideration in

evaluating whether any potential

emission reductions identified at

existing sources can be used to mitigate

the adverse impact on any AQRV is

whether the reductions are already

required by some other Act-mandated

program. In nonattainment areas,

section 173(c)(2) of the Act plainly

prohibits emission reductions otherwise

required under the Act from being

credited as offsets for new source review

purposes.67

Unlike the nonattainment NSR

program, offsets under the PSD program

are not expressly addressed by the Act.

The EPA is interested in the public’s

views about the crediting of those

emission reductions already required for

other purposes as offsets for mitigating

a proposed source’s adverse impact on

an AQRV.

As an alternative to emissions offsets,

a more stringent emission limitation

than the limitation that would otherwise

be required by BACT may be established

to mitigate an adverse impact on an

AQRV in a Federal Class I area.

Depending upon the remaining

emissions released and the sensitivity of

the AQRV of a Class I area, an emissions

limitation that would otherwise be

required by BACT, if an adverse impact

on an AQRV was not considered, may

be inadequate to entirely mitigate the

adverse impact. Thus, emission offsets,

a stricter emission limitation, or some

combination of both, may be

appropriate to mitigate an adverse

impact on an AQRV.

The EPA believes that measures such

as emission offsets from existing sources

represent a reasonable approach which

enables the mitigation of an adverse

impact on an AQRV. The EPA’s

mitigation policy provides needed

flexibility to the PSD permitting process

by allowing a new major source or major

modification that mitigates an adverse

impact on AQRV to receive a

construction permit, even though its

proposed emissions increase is

otherwise demonstrated by the FLM,

and concurred with by the permitting

authority, to have an adverse impact on

AQRV. The adoption of this policy is

also intended to promote dispatch in the

PSD permit process by providing a

clearly available elective recourse

enabling applicants to avoid potentially

contentious and protracted permitting

disputes where the FLM demonstrates

an adverse impact on AQRV and the

applicant wishes to mitigate its

demonstrated impacts prior to a formal

concurrence with the demonstration by

the permitting authority.

c. Post-construction Monitoring. The

CAAAC recommendations addressing

mitigation of an adverse impact on

AQRV included consideration of postconstruction monitoring for Class I

areas. Post-construction monitoring

alone would not directly mitigate an

adverse impact on AQRV. However,

such monitoring may provide critical

information about a source’s impact on

a Class I area.

The EPA is proposing to amend its

PSD regulations to clarify that postconstruction ambient monitoring may

be required for the purpose of

determining the effect emissions from a

facility may have, or are having, on

AQRV in a Federal Class I area. The

existing PSD regulations at

§§ 51.166(m)(2) and 52.21(m)(2)

currently require the owner or operator

of a new major source or major

modification to conduct such postconstruction ambient monitoring, as the

permitting authority determines to be

necessary, to determine the effect

emissions may have, or are having, on

air quality in any area. However, the

current EPA regulations do not specify

that such ambient monitoring may

include the monitoring of air qualityrelated impacts in Federal Class I areas.

The EPA is, therefore, proposing to

amend the PSD regulations to

specifically state that post-construction

ambient monitoring may be required in

Class I areas. See proposed amendatory

language for §§ 51.166(m)(2) and

52.21(m)(2). The EPA requests

comments on this proposed regulatory

change.

4. Class I Significant Impact Levels

Some members of the NSR Reform

Subcommittee recommended that the

EPA provide criteria indicating the

circumstances in which a proposed

source’s projected contribution to

ambient concentrations in a Class I area

may be considered de minimis for

certain planning requirements. These

members recommended that the EPA

identify a level of contribution (ambient

concentration) that is de minimis, or

insignificant, so that a proposed source

having a contribution less than that

concentration will know with certainty

that it will not be subject to the full

requirements for an increment analysis

in Class I areas. The EPA believes that

it is reasonable to extend the use of

significant impact levels to the Class I

increments. Levels of significant impact

are currently used as a matter of policy

in the PSD program for determining

whether a proposed source may be

excluded from certain requirements

(e.g., significant emissions rates, and

significant monitoring concentrations).68
38292 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

and section 52.21(i)(8), the permitting authority

may exempt a proposed source from having to

include ambient monitoring data in its permit

application for a particular pollutant if the

applicant’s air quality impact for such pollutant is

less than the ‘‘significant’’ concentration prescribed

in the regulations.

69Alabama Power Co. v. Costle, 636 F.2d 323,

360–61 (D.C. Cir. 1979).

70 See 45 FR 52676, 52707–52708 (August 7,

1980).

See, also, discussion in section IV.C.5.a.

of this preamble, addressing the

proposed codification of significant

impact levels for NAAQS and Class II

and III increments.

Administrative agencies may exempt

‘‘truly de minimis’’ situations from a

statutory command ‘‘when the burdens

of regulation yield a gain of trivial or no

value.’’ 69 Accordingly, the EPA is

proposing to add significant impact

levels for Class I increments to both sets

of PSD regulations. See proposed

§§ 51.166(b)(23)(v) and 52.21(b)(23)(v).

The proposed significant impact levels

would apply to the existing Class I

increments for PM–10, SO2, and NO2 in

the PSD regulations. The significant

impact levels would be used to

determine whether a new major source

or major modification, due to the

predicted ambient concentration from

its own emissions, would be required to

conduct a comprehensive Class I

increment analysis for a given pollutant.

A de minimis impact resulting from the

emissions from a proposed source

would serve as the basis for a

determination that such emissions will

not contribute to a violation of the

applicable Class I increments.

The proposed significant impact

levels for Class I increments were

derived by taking four percent of the

concentration defined for the existing

Class I increment for each applicable

pollutant and averaging period. The

EPA believes that where a proposed

source contributes less than four percent

to the Class I increment, concentrations

are sufficiently low so as not to warrant

a costly and detailed analysis of the

combined effects of the proposed source

and all other increment-consuming

emissions. The EPA previously used a

similar rationale to establish the

significant emissions rates for PSD

applicability purposes, concluding in

part that emissions rates which resulted

in ambient impacts less than four

percent of the 24-hour standards for

particulate matter and SO2 were

sufficiently small so as to be considered

de minimis.70

It should be noted that, while the

FLM representing the National Park

Service and the U.S. Fish and Wildlife

Service agree that the general use of

significant impact levels for Class I

increments may be appropriate, they

have indicated that such levels should

be adequately conservative. These FLM

have, in fact, recommended significant

impact levels that are more restrictive

than those being proposed today by

EPA. Their recommended levels were

developed using the ratios derived from

a comparison of existing significant

impact levels—used by EPA for NAAQS

and Class II increment analyses—and

the respective NAAQS. For comparative

purposes the significant impact levels

being proposed today by EPA and the

levels recommended by the FLM are

shown below.

Pollutant Averaging time Levels proposed

by EPA (ug/m3)

Levels Recommended by

FLM (ug/m3)

Sulfur Dioxide ..................................................................... Annual ......................................................... 0.1 0.03

24-hour ....................................................... 0.2 0.07

3-hour ......................................................... 1.0 0.48

Particulate Matter ................................................................ Annual ......................................................... 0.2 0.08

24-hour ....................................................... 0.3 0.27

Nitrogen Dioxide ................................................................. Annual ......................................................... 0.1 0.03

The EPA wishes to emphasize that the

specific significant impact levels that it

is proposing today for the Class I

increments are not intended to serve as

thresholds for determining the need for

an AQRV analysis or whether an

adverse impact on AQRV will occur. An

adverse impact on AQRV in a Class I

area depends upon the sensitivity of the

particular AQRV and involves an

assessment of potential harm. An

ambient pollutant concentration that is

deemed to be of relatively insignificant

consequence for purposes of increment

consumption should not automatically

be considered inconsequential relative

to the inherently fact-specific

demonstration upon which an adverse

impact on AQRV is to be based. Thus,

a notice may be filed (as described in

section IV.C.1.c. of this preamble)

alleging that a proposed source’s

emissions may cause or contribute to a

change in the air quality in a Federal

Class I area and identifying the potential

adverse impact of such change. The fact

that such source’s predicted ambient

impact is less than the applicable

significant impact level for Class I

increments would neither relieve the

applicant from having to complete an

analysis of impacts on AQRV nor

automatically allow the permitting

authority to reject the FLM’s

demonstration of adverse impact on

AQRV. The EPA requests comments on

its proposal to establish significant

impact levels for Class I increments in

general, and the proposed levels in

particular.

The EPA is declining to propose

specific significance levels for

determining whether the emissions from

a proposed source may have an adverse

impact on AQRV. The FLM is

specifically entrusted by the Act with

protecting AQRV and the decision to

establish any appropriate significance

levels for AQRV should be made

primarily by the FLM. Conceptually,

such significance levels would represent

ambient air pollutant concentrations or

deposition rates below which only de

minimis effects on AQRV will occur.

Accordingly, emissions increases not

resulting in ambient concentrations or

deposition rates exceeding the

prescribed significance levels would

therefore be excluded from a review of

AQRV impacts.

The EPA generally recognizes the

administrative benefits of categorically

eliminating certain pollutant-emitting

activities from regulatory review and

has employed significance levels in

other contexts in the NSR program,

including the significance levels

proposed above for Class I increments.

However, there are many obstacles to

formulating reasonable significance

levels in the AQRV context. For

example, there are numerous AQRV and

there is a wide variance in sensitivity to

emissions increases for particular

AQRV.

The FLM have been working with

other air pollution effects scientists to

develop lists of sensitive resources (e.g.,

species of plants and invertebrates, and

particular streams and lakes) and

sensitivity thresholds that could help
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38293

71Lands within reservation boundaries may be

Federal lands under Federal Indian law and may or

may not be ‘‘Federal lands’’ within the specific

meaning of the PSD program. ‘‘Federal lands’’

under the PSD program include: national

wilderness areas, national memorial parks, national

parks, national monuments, national reserves,

national seashores and other similar national public

land areas. See, e.g., sections 160(2), 162(a) and

164(d) of the Act. The term ‘‘non-Federal’’ is used

here to refer to State lands or lands within the

boundaries of an Indian reservation that are not

Federal lands within the meaning of the Act’s PSD

program.

72See section 302(r) of the Act. The Department

of the Interior periodically publishes a list of Tribes

officially recognized by the Federal government.

See 58 FR 54364 (Oct. 21, 1993).

establish significant impact levels for

individual AQRV in the future.

However, many studies conducted to

date have not yielded the information

needed to establish a critical threshold

level from which a significance level

could be derived. The EPA encourages

the FLM to continue pursuing research

on AQRV effects, and anticipates an

evolving process by which research and

information may eventually support the

establishment of site specific

significance levels for individual AQRV.

Any significant impact levels for AQRV

may necessarily be site specific since

each AQRV and its associated critical

pollutant loadings may be different from

one area to another and even within

individual Federal Class I areas. In any

event, EPA encourages the

establishment of an electronic database

about Class I area resources, described

elsewhere in this preamble, that will

make information about available

research on AQRV effects more

accessible.

The EPA requests public comment on

the issue of significance levels for

AQRV. In particular, EPA is interested

in suggestions regarding alternative

approaches that promote regulatory

certainty by excluding from

consideration proposed sources that

have truly de minimis impacts on Class

I resources while still ensuring that

AQRV are adequately protected in the

PSD permitting process. Commenters

should fully consider the legal

standards that govern the establishment

of de minimis regulatory exemptions.

See e.g., Alabama Power Co. v. Costle,

636 F. 2d 323, 360–61 (D.C. Cir. 1979).

5. Clarification of Miscellaneous Issues

The discussion which follows

addresses several relatively discrete

issues. The EPA is clarifying current

policy in areas where there is potential

for significant confusion or uncertainty

and, in some instances, is proposing

conforming changes to the

implementing regulations. The EPA is

also proposing changes that largely

codify existing policy.

a. Significant Impact Levels for

NAAQS and Class II and III Increments.

The EPA is proposing several changes to

the PSD regulations at both §§ 51.166

and 52.21 to make the rules consistent

with current practice. First, the EPA is

proposing to revise the provisions of

existing §§ 51.166(k) and 52.21(k) to

clarify that a source’s own emissions

must make a ‘‘significant contribution’’

to a violation of any NAAQS or PSD

Class II or III increment before that

source would be denied a PSD permit.

See proposed amendatory language for

§§ 51.166(k) and 52.21(k). Second, the

EPA is proposing to incorporate into the

PSD regulations the significant impact

levels currently set forth at

§ 51.165(b)(2)—which are being used to

determine whether major new source or

major modification contributes to a

violation of a NAAQS—so that they may

be directly applied to the ‘‘significant

contribution’’ test in the PSD

regulations. See proposed

§§ 51.166(b)(23)(iv) and 52.21(b)(23)(iv).

The EPA has long interpreted the

‘‘significant contribution’’ test set forth

in existing § 51.165(b)(2) to apply to

PSD sources, as well, since the

provision applies to major new sources

and major modifications located in

attainment and unclassifiable areas.

Finally, the EPA is proposing to add

significant impact levels for the Class II

and Class III increments. See proposed

§§ 51.166(b)(23)(v) and 52.21(b)(23)(v).

The proposed levels are the same as

those levels at existing § 51.165(b)(2),

which define a significant contribution

to a violation of the NAAQS, and simply

codify current EPA policy which allows

the significant impact levels from

§ 51.165(b)(2) to be directly applied to

the PSD program to determine a

significant contribution to either the

NAAQS or PSD increments. The EPA

requests comment on the need to

include these significant impact levels

in the PSD regulations and the need for

significant impact levels for Class II and

Class III increments. Furthermore, the

EPA requests comment on the proposed

significant impact levels for the Class II

and Class III increments, specifically

whether they should be lower than the

levels used for NAAQS compliance.

b. Analysis of Impacts on Federal

Class II Areas. This proposal also

clarifies the requirement for the

‘‘additional impact analysis’’ under

§ 51.166 and 52.21. In addition to the

central requirements that each PSD

source must demonstrate that its

allowable emissions will not cause or

contribute to a violation of any NAAQS

or PSD increment, each such source is

generally required to prepare further

analyses for the pollutants that it will

emit. Such ‘‘additional impact analysis’’

is consistent with the statutory

provisions under section 165(e)(3)(B) of

the Act, and includes an assessment of

the impairment of visibility, soils, and

vegetation within the proposed source’s

impact area, including Federal Class I

and II areas. See proposed amendatory

language for §§ 51.166(o)(1) and

52.21(o)(1). In addition, the EPA is

proposing more specific provisions for

Federal Class I areas that require similar

analysis where a FLM alleges that an

adverse impact on AQRV may occur in

Federal Class I area lands located

beyond the area normally considered to

be within the proposed source’s impact

area. See proposed

§§ 51.166(p)(2)(i)(A)(2) and

52.21(p)(2)(i)(A)(2), and related

discussion in section IV.C.1.c. of this

preamble.

The FLM have expressed concern that

the existing provisions, see, e.g.,

existing § 51.166(o)(1), which enable the

applicant to exclude from analysis any

impact on vegetation ‘‘having no

significant commercial or recreational

value,’’ could exclude the analysis of

certain vegetation with ecological

significance in the lands under their

jurisdiction, i.e., Federal Class I and II

areas. The EPA is proposing a change in

the existing provisions so that

applicants may not presume that soils

and vegetation in Federal Class I and II

areas are of no significant commercial or

recreational value, except where the

FLM indicates that such analysis is not

needed. See proposed amendatory

language for §§ 51.166(o)(1) and

52.21(o)(1).

c. Clarification of PSD Requirements

Applicable to Non-Federal Lands

Redesignated as Class I Areas.

Individual CAAAC members and Tribal

representatives have asked the EPA to

provide guidance on the PSD provisions

that apply to ‘‘non-Federal’’ reservation

lands that are redesignated as Class I

areas.71 In particular, guidance has been

requested concerning whether AQRV

may be established for such lands and

how these values are to be protected

under the PSD program. The discussion

below is intended to clarify the EPA’s

views on these issues and to describe

the accompanying, largely technical,

regulatory revisions that the EPA is

today proposing. The policies described

in the following discussion would also

apply to non-Federal State lands

redesignated as Class I areas.

(1) Redesignation of Class I Areas.

Section 164(c) of the Act gives federallyrecognized Indian Tribes72 broad

authority to request redesignation of

lands within the exterior boundaries of
38294 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

73Section 164(e) also provides that a State or

Tribe may request EPA to enter into negotiations to

resolve interjurisdictional disputes about PSD air

quality redesignation.

74 Note also that the dispute resolution

provisions are not limited to class I areas.

their reservations as Class I areas.

Several Indian Tribes have already had

lands within reservation boundaries

redesignated as Class I areas. The EPA

has approved redesignation of the

Northern Cheyenne Indian Reservation,

the Flathead Indian Reservation, the

Fort Peck Indian Reservation and the

Spokane Indian Reservation on the basis

of tribal requests. See 40 CFR 52.1382(c)

and 52.2497. States also have broad

authority under section 164(a) to request

redesignation of lands as Class I areas.

To date, the EPA has not received such

a State PSD redesignation request.

(2) Status of AQRV Protection for

Non-Federal Lands Redesignated as

Class I Areas. Any State or federallyrecognized Tribe may establish AQRV

for non-Federal lands within its

jurisdiction which have been

redesignated as Class I areas. The

mechanism identified in the Act, by

which a State or Tribe may seek

protection of such AQRV when a

proposed or modified major source in

another jurisdiction will affect any

AQRV which have been established, is

contained in section 164(e) of the Act.

See also § 52.21(t). Section 164(e) of the

Act is a special dispute resolution

provision involving intervention by the

EPA Administrator. If the governing

body of an affected Indian Tribe or

Governor of an affected State determines

that a proposed PSD source ‘‘will cause

or contribute to a cumulative change in

air quality in excess of that allowed in

this part [i.e., part C, title I of the Act,

containing the PSD program]’’ the Tribe

or State may request that the

Administrator enter into negotiations

with the parties involved to resolve the

dispute.73 If requested by the Tribe or

State, the Administrator must make a

recommendation ‘‘to resolve the dispute

and protect the air quality related values

of the lands involved.’’ See section

164(e) of the Act.

The EPA proposes to interpret these

provisions to direct EPA intervention, at

the request of a State or Tribe, when a

State or Tribe determines that a

proposed source will cause or

contribute to a violation of a NAAQS or

PSD increment or will harm AQRV

established by a State or Tribe. In

accordance with section 164(e), the PSD

provisions prohibit ‘‘changes in air

quality’’ that exceed these requirements.

See proposed § 51.166(t) and existing

§ 52.21(t). Further, as to AQRV, their

protection is a stated purpose of the

EPA’s involvement in the dispute—’’

the Administrator shall make a

recommendation to resolve the dispute

and protect the AQRV of the lands

involved.’’ See section 164(e) of the

Act.74 Accordingly, AQRV may be

identified by States and Tribes for

redesignated non-Federal Class I areas

and these areas may be protected by a

State’s or Tribe’s request for the EPA to

resolve an intergovernmental dispute

over a proposed PSD facility pursuant to

section 164(e). The EPA requests

comments on its proposed

interpretation of the circumstances that

authorize a State or Tribe to involve the

EPA in resolving interjurisdictional

permitting disputes pursuant to section

164(e).

The EPA, in the preceding discussion,

is drawing a key distinction between the

authority bestowed solely on FLM

under section 165(d) of the Act to

protect the AQRV of Federal Class I

areas and the authority States and

Tribes have under section 164(e) to

protect the AQRV of non-Federal lands

through the dispute resolution

mechanism. The EPA intends to clearly

distinguish between provisions that

apply to the protection of AQRV of nonFederal class I areas and the provisions

that apply to FLM under paragraph (p)

of the existing and proposed PSD

regulations in parts 51 and 52 by

proposing a definition for ‘‘Federal

Class I areas.’’ The EPA proposes to

define ‘‘Federal Class I areas’’ as those

areas owned by the United States and

either (1) designated by Congress as

mandatory Class I areas, unable to be

redesignated, pursuant to section 162(a)

of the Act, or (2) redesignated as Class

I pursuant to paragraph (g) of the

existing PSD regulations. See proposed

§§ 51.166(b)(38) and 52.21(b)(39).

The existing part 52 PSD regulations

already contain a dispute resolution

provision based on section 164(e) of the

Act. However, the existing provision at

§ 52.21(t) of the PSD regulations

requires that, when the parties involved

in a dispute do not reach agreement, the

Administrator’s determination (or the

results of agreements reached through

some other means) is to become part of

the applicable ‘‘State implementation

plan.’’ To avoid confusion, the EPA is

proposing to revise the language to

conform with the statutory language,

which refers instead to the ‘‘applicable

plan.’’ The EPA believes that the more

general reference to the ‘‘applicable

plan’’ used in the statutory language

will avoid potential confusion because,

in disputes involving a State and an

Indian Tribe, the Administrator’s

determination should be made part of

the applicable State implementation

plan or Federal implementation plan,

whichever is appropriate for the affected

State, or the applicable Tribal

implementation plan or Federal

implementation plan, whichever is

appropriate for the affected Indian

Tribe. Therefore, the EPA is proposing

to amend the existing regulatory

provision by changing the words ‘‘State

implementation plan’’ to read

‘‘applicable plan’’ consistent with the

language in the Act. See proposed

amendatory language for § 52.21(t).

The same wording problem is found

in existing §§ 51.166(g) and 52.21(g),

concerning area redesignation proposed

by States or Indian Tribes. In that

particular case, the regulatory

provisions provide that the

redesignation is subject to approval as a

revision to the ‘‘applicable State

implementation plan.’’ Accordingly, for

the same reasons, the EPA is proposing

clarifying revisions to §§ 51.166(g) and

52.21(g) by changing ‘‘applicable State

implementation plan’’ to read

‘‘applicable plan.’’ See proposed

amendatory language for §§ 51.166(g)(1)

and 52.21(g)(1). The proposed addition

of the dispute resolution provision in

the part 51 PSD regulations will

similarly use the statutory language, the

‘‘applicable plan.’’ See proposed

§ 51.166(t).

The EPA is also proposing to revise

superseded definitions of ‘‘Indian

Reservation’’ in existing §§ 51.166(b)(27)

and 52.21(b)(27). The 1990

Amendments to the Act added several

provisions relating to the authority of

Indian Tribes to administer Act

programs in the same manner as States.

See sections 301(d) and 110(o) of the

Act. Section 110(o) provides that

implementation plans for Tribes are to

be effective ‘‘within the exterior

boundaries of the reservation,

notwithstanding the issuance of any

patent and including rights-of-way

running through the reservation.’’ On

August 25, 1994, the EPA published

proposed rules implementing the

general Act Tribal authority added in

the 1990 amendments and proposed to

define reservation under those rules as

‘‘all land within the limits of any Indian

reservation under the jurisdiction of the

United States Government,

notwithstanding the issuance of any

patent, and including rights-of-way

running through the reservation.’’ See

59 FR 43956 at 43980 (proposed 40 CFR

49.2). In the accompanying preamble,

the EPA explained:

Based on recent Supreme Court case law,

EPA has construed the term ‘reservation’ to
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38295

75Historically, users of the NSR BB have been

able to retrieve, then read and/or download full text

of recent policy and guidance material. The users

may also solicit from or provide to other parties in

the NSR permitting community, information

pertaining to areas of interest within NSR.

76The PSD regulations currently provide that the

permitting authority has discretion to exempt an

applicant from the requirement to collect

continuous air quality monitoring data if (1) the

predicted ambient impact caused by the proposed

source, or (2) the ambient pollutant concentrations

that the proposed source would affect, are less than

prescribed significant monitoring concentrations for

the pollutants listed in the PSD regulations (or if the

pollutant emitted from the proposed source is not

among those listed). If, however, both the predicted

impacts and the existing ambient concentrations

exceed the significant monitoring concentrations,

then the applicant must provide the required

monitoring data. See existing sections 51.166(i)(8)

and 52.21(i)(8).

incorporate trust land that has been validly

set apart for use by a Tribe, even though that

land has not been formally designated as a

‘reservation.’ See 56 FR at 64,881 (Dec. 12,

1991); see also Oklahoma Tax Commission v.

Citizen Band Potawatomi Indian Tribe of

Oklahoma, 111 S.Ct. 905, 910 (1991). The

EPA will be guided by relevant case law in

interpreting the scope of ‘reservation’ under

the Act.

See 59 FR at 43,960. Accordingly, the

EPA adopts this interpretation of

reservation for the PSD program and

proposes to make conforming changes to

the definition of ‘‘Indian Reservation.’’

See proposed §§ 51.166(b)(27) and

52.21(b)(27).

6. Information Clearinghouse (Federal

Class I areas)

The CAAAC recommended that the

EPA establish a clearinghouse of

information about Federal Class I areas.

The EPA has been working on a

clearinghouse project that was originally

planned to be incorporated into the

EPA’s public NSR BB which is hosted

by the OAQPS TTN.75 The advent of the

‘‘Internet’’ system and new budgetary

constraints are causing EPA to consider

new strategies for transferring

information. Nevertheless, the EPA

plans to address the CAAAC’s

recommendations in two respects.

First, consistent with the proposed

requirement to improve permitting

authority and FLM coordination,

described in section IV.C.2., above, the

EPA is planning to create a publicly

accessible, electronic bulletin board for

posting notice of major NSR permit

applications by permitting authorities

and/or permit applicants. On this

bulletin board will be logged very basic

source information, such as the name

and type of source, a brief description

of its location in terms of the State and

county in which it will construct and

operate (including UTM coordinates),

the distance between the proposed

source and all Federal Class I areas

within 250 kilometers, and the proposed

emission rate or net emissions increase

of each air pollutant associated with the

project. It also will allow permit

applicants and permitting authorities to

present questions to the FLM regarding

air quality issues relative to any Federal

lands potentially affected by the

proposed new or increased emissions,

and, conversely, provide a contact to

whom the FLM may direct inquiries and

information. See proposed

§§ 51.166(n)(4) and 52.21(n)(4).

Second, EPA will pursue the

development of a FLM Clearinghouse in

which the FLM and the EPA will post

the following information as it becomes

available:

—Boundaries and size of existing

Federal Class I areas

—Area-specific AQRV information,

including sensitive receptors, critical

loadings, current source inventory,

current loadings from sources in the

source inventory, and existing adverse

conditions;

—Source-specific information on

increment consumption and impacts

on AQRV in specific Federal Class I

areas;

—Reports of research and investigations

about the impacts of air pollution on

natural resources in Federal Class I

areas, and contact persons for further

information;

—Comment letters and any findings of

an adverse impact on AQRV issued

relative to specific draft PSD permits;

—Adjudicative appeals and

corresponding orders from the EPA

Environmental Appeals Board and

court decisions relative to issues

involving Federal Class I areas.

All users of the NSR BB will be able

to download all the documents posted

in this clearinghouse. As suggested

earlier, the host mechanism, the

schedule for completion and the degree

of sophistication of this clearinghouse

will depend greatly on available

resources, the dynamics of the

electronic communications industry,

and the cooperation of the FLM

Agencies.

7. Visibility New Source Review

If adopted, these proposed revisions

to the PSD rules related to the

protection of air quality related values

(including visibility) in Federal Class I

areas may necessitate revisions to EPA’s

existing visibility new source review

rules (the ‘‘visibility NSR’’ rules), which

are codified separately from the PSD

rules. See, e.g., existing 40 CFR 51.307,

52.27 and 52.28. Section 169A(a)(1) of

the Act established as a national goal

the prevention of any future, and the

remedying of any existing, manmade

impairment of visibility in mandatory

Federal Class I areas. Section 169A also

called for EPA to promulgate regulations

to assure reasonable progress toward

meeting the national goal. See section

169A(a)(4) of the Act. Accordingly, EPA

has promulgated visibility regulations to

address prospective visibility

impairment in mandatory Federal Class

I areas from certain new or modified

major stationary sources.

The visibility NSR rules establish

independent visibility protection

requirements that apply in areas

designated attainment and

unclassifiable (PSD areas) and in areas

designated nonattainment. For

efficiency, these requirements generally

are implemented in conjunction with

PSD and nonattainment NSR permitting.

The current visibility NSR rules contain

FLM coordination procedures. In some

instances, the visibility NSR rules also

adopt, by cross reference, some of the

provisions of the PSD rules EPA is

proposing to revise today.

The EPA may therefore need to revise

its current visibility NSR rules,

depending upon the outcome of the

rules proposed today. The EPA would

want to ensure that the different sets of

rules are appropriately harmonized in

light of the permit streamlining goals

embodied in this proposal and the

potential for overall improvement in

FLM, State and permit applicant

coordination reflected in the rules

proposed today.

V. Prevention of Significant

Deterioration Preconstruction

Monitoring

Applicants for PSD permits often

must provide continuous air quality

monitoring data as part of the air quality

analysis requirements set forth in

§§ 51.166(m) and 52.21(m) of the PSD

regulations. In both sets of regulations

the air quality data provision generally

requires that an applicant for a new

major source or major modification

submit with the permit application

continuous air quality monitoring data

representing the 12-month period

preceding application submittal.76

Historically, this data requirement has

been satisfied largely through the use of

monitoring data collected from existing

State or local agency air quality

monitoring networks. However, in the

absence of existing data, it is the

applicant’s responsibility to establish,

operate and maintain sufficient air

monitoring stations to collect the

necessary ambient data to satisfy the

data requirement.

The prospect of having to operate

their own monitoring networks and
38296 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

77See, e.g., existing section 51.166(m)(1)(iv).

collect ambient data for 1 year prior to

the submittal of a complete PSD

application has long been a concern of

industry, particularly in cases where

there is no practical need for the data in

the air quality analysis. This monitoring

responsibility obligates a considerable

amount of an applicant’s resources and

often interposes significant time prior to

permit application submittal. Permitting

authorities frequently have agreed that

the monitoring requirement imposes an

unnecessary burden on industry where

the data is not needed for the air quality

analysis but is required by regulation

nevertheless.

The air quality data requirement

originates in the Act at section 165(e) (1)

and (2). Section 165(e)(1) requires, for

each PSD source, a preconstruction

analysis ‘‘of the ambient air quality at

the proposed site and in areas which

may be affected by emissions from such

facility for each pollutant subject to

regulation under [the Act] which will be

emitted from such facility.’’

Section 165(e)(2) of the Act requires

that the air quality analysis ‘‘shall

include continuous air quality

monitoring data gathered for purposes

of determining whether emissions from

such facility will exceed the maximum

allowable increases or maximum

allowable concentrations permitted

under [the PSD provisions].’’ Further,

section 165(e)(2) provides that data for

the analysis shall be gathered over a

period of 1 calendar year preceding the

permit application or for a shorter

period if a State determines that a

complete and adequate analysis may be

accomplished, according to the EPA

regulations.77

On June 19, 1978, the EPA

promulgated regulations which required

a source to submit an air quality

analysis that included continuous air

quality monitoring data only for those

pollutants, emitted by the source, which

would impact an existing NAAQS. See

43 FR 26380. Monitoring data was not

required to determine whether the

source would cause or contribute to a

violation of a PSD increment. In

Alabama Power Co. v. Costle, 636 F.2d

323, 371–372 (D.C. Cir. 1979), the

reviewing court found the June 19, 1978

regulation to be deficient in that it did

not provide for continuous

preconstruction monitoring for purpose

of determining impacts on both NAAQS

and increments. On August 7, 1980, the

EPA corrected the deficiency by

promulgating the current PSD

regulations covering preconstruction

monitoring requirements. See 45 FR

52676.

The EPA had argued in the Alabama

Power case that monitoring air quality

concentrations was technologically

infeasible for all but a small number of

pollutants and that the available

monitoring techniques were at best of

questionable accuracy even for the

relatively straightforward measurement

of whether an applicable NAAQS has

been exceeded. The Court rejected the

EPA’s arguments, reasoning that the

statute clearly required monitoring for

determining whether PSD increments

would be exceeded. The Court

discerned from the Act that Congress

had a technology forcing intent in

requiring such monitoring. The Court

indicated that Congress intended that

the development of monitoring

techniques and the resulting data

impose discipline on the use of

modeling. The Court explained that

Congress intended ‘‘that the

employment of modeling techniques

[the principal device relied on for

predicting source impacts] be held to

earth by a continual process of

confirmation and reassessment, a

process that enhances confidence in

modeling, as a means for realistic

projection of air quality.’’ See Alabama

Power, 636 F.2d at 372. However, the

Court added, ‘‘[o]f course even a

congressional mandate, such as a

technology-forcing requirement based

on a congressional projection of

emergence of technology for the future,

is subject to a justified excuse from

compliance where good-faith effort to

comply has not been fruitful of results.’’

Id. The Court found that such a

legitimate ‘‘excuse’’ had not been

presented in the case, in which the EPA

exempted sources from preconstruction

monitoring for PSD increments based

upon current technological infeasibility.

The Court’s opinion thus

contemplates that the EPA, after an

additional 15 years of experience under

the PSD program since Alabama Power,

may excuse strict compliance with the

requirements of section 165(e)(2) where

a good-faith effort in preconstruction

monitoring has failed in producing

fruitful results. Elsewhere in the

Alabama Power decision the court also

indicated that there is a basis for a

statutory exemption ‘‘when the burdens

of regulation yield a gain of trivial or no

value.’’ Id. at 360–61.

In the years since the court’s decision,

questions have continued concerning

the provisions requiring the submittal of

air quality monitoring data in cases

where such data is not deemed

necessary or useful as part of the air

quality analysis. Modeled estimates of

air quality are often sufficient to make

the required demonstrations of source

compliance with NAAQS and PSD

increments. Yet some sources still are

confronted with the requirement to

provide air quality monitoring data as

part of a complete application.

Further, the use of air quality data has

been used only to a limited extent in the

past to calibrate models for specific SIPrelated applications; however, such

calibration of air quality models has not

been a common practice. Moreover, the

EPA’s Guideline on Air Quality Models

describes the uncertainty associated

with comparing short-term model

estimates with ambient measurements

and concludes that ‘‘short term model

calibration is unacceptable.’’ See 58 FR

38816 at 38835, July 20, 1993. In

addition, ambient monitoring

techniques that could be used to

measure increment consumption are

still not available because of the

inability of ambient monitors to separate

the pollutant concentrations attributable

to increment-consuming and nonincrement consuming source emissions.

Available ambient monitoring methods

cannot make such distinctions.

The EPA believes that it is

appropriate to reassess the regulatory

requirement for preconstruction

monitoring data for proposed PSD

construction to address situations where

the collection of such air quality data

serves no practical purpose in the

required air quality analysis. A more

reasonable approach is to give the

permitting authority discretion not to

require the submittal of air quality

monitoring data—including the

installation and operation of monitoring

stations by the applicant—where the

permitting authority determines such

data to be unnecessary to assess the air

quality in the area affected by the

proposed source.

However, before the EPA decides

whether to propose specific changes to

the existing requirements, it is seeking

public input concerning the benefits

and disadvantages of the current air

quality monitoring requirements. The

EPA is also seeking information

concerning those specific situations

where air quality monitoring data was

required as part of a complete

application, and whether the data was

considered to serve a necessary or

useful purpose in the required air

quality analysis. Based on the resulting

comments and information, the EPA

will determine whether it is appropriate

to subsequently propose changes to the

current air quality monitoring

requirements at §§ 51.166(m)(1) and

52.21(m)(1).
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38297

78A detailed description of the individual area

classifications for ozone nonattainment areas is

contained in the EPA’s General Preamble for the

Implementation of Title I of the 1990 Amendments,

57 FR 13498 (April 16, 1992). The reader who is

not already familiar with these classifications, as

well as the general new SIP requirements for ozone,

should refer to the General Preamble for

background information.

79 The EPA policy on the applicability of NOX

requirements under section 182(f) of the Act is in

the document ‘‘Guideline for Determining the

Applicability of Nitrogen Oxides Requirements

Under Section 182(f)’’, December 1993, U.S. EPA,

OAQPS, and two memoranda, dated May 27, 1994

and February 8, 1995, both entitled, ‘‘Section 182(f)

Nitrogen Oxides (NOX) Exemptions—Revised

Process and Criteria,’’ from John Seitz, Director of

the OAQPS, to EPA’s Regional Air Directors.

80Nonclassifiable nonattainment areas include

transitional, submarginal, and incomplete or ‘‘no

data’’ areas, as defined in the General Preamble, 57

FR 13524 (April 16, 1992).

VI. Changes Resulting From the 1990

Clean Air Act (1990) Amendments

A. NSR Provisions for Nonattainment

Area Permitting

1. Provisions for Ozone Nonattainment

Areas

New sections 182 through 185 (part D,

title I) of the Act contain new NSR

requirements specifically for ozone

nonattainment areas that supplement

the basic requirements in section 173 of

the Act. In general, Congress intended

that these new requirements vary in

stringency according to the severity of

the ozone nonattainment problem. The

severity of the ozone nonattainment

problem is as expressed through a series

of area classifications.

a. Area Classifications. Section 181(a)

defines five area classifications for

ozone based on ambient ozone

concentrations (ozone design values).78

These five classifications (in ascending

order of severity) are marginal,

moderate, serious, severe, and extreme.

Some ozone nonattainment areas do

not fit under the section 181

classifications. Therefore, the EPA has

classified these ‘‘nonclassifiable’’

nonattainment areas into three

additional groupings referred to as

transitional, submarginal, and

incomplete/no data areas. The

nonclassifiable ozone nonattainment

areas should all be considered of equal

classification for purposes of

implementing the applicable NSR

requirements, and are subject to the

NSR requirements under section 173

(the basic requirements). However,

when such area is located within an

OTR, the area will be treated as a

moderate area for NSR purposes.

b. Major Stationary Sources. Congress

retained the 100 tpy major source

threshold for stationary sources of VOC

in the less severely polluted ozone

nonattainment areas. For those more

severely polluted areas, including ozone

transport areas, Congress specified

progressively lower thresholds. The

existing threshold of 100 tpy continues

to apply generally to sources of VOC in

areas classified as marginal, moderate,

or any category of nonclassifiable ozone

nonattainment areas. However, when

any of the above areas is in an ozone

transport area, the major source

threshold is 50 tpy of VOC pursuant to

section 184(b)(2). New section 182

establishes new major source thresholds

of 50 tpy, 25 tpy, and 10 tpy for sources

of VOC in areas classified as serious,

severe, and extreme, respectively.

Section 182(f) sets forth the

presumption that NOX is an ozone

precursor unless the Administrator

makes a finding of nonapplicability or

grants a waiver pursuant to criteria

contained in that subsection.79

Specifically, section 182(f) provides that

requirements applicable for major

stationary sources of VOC shall apply to

major stationary sources of NOX, unless

otherwise determined by the

Administrator. Pursuant to section

182(f), EPA is proposing that in cases

where NOX is considered an ozone

precursor, major stationary sources of

NOX are also subject to the part D NSR

requirements applicable for VOC in

ozone nonattainment areas and OTR’s.

See proposed § 51.165(a)(12). The major

stationary source thresholds for NOX

and VOC are the same except in the

OTR for marginal, moderate, or

unclassified ozone nonattainment areas

and attainment (or nonclassifiable)

ozone areas. For these latter areas, the

major stationary source threshold for

VOC is 50 tpy while the major source

threshold for NOX is 100 tpy. In serious,

severe, and extreme ozone

nonattainment areas, the applicable

major stationary source threshold for

NOX is 50 tpy, 25 tpy, and 10 tpy,

respectively. Note that NOX is not

considered an ozone precursor in

nonclassifiable ozone nonattainment

areas unless the area is in the OTR.

In this proposal, the EPA is changing

the existing definition of ‘‘major

stationary source’’ to add the new

statutory major source thresholds for

both VOC and NOX emissions, as

applicable. See proposed

§§ 51.165(a)(1)(iv)(A) (1) and (2).

c. Major Modifications. The 1990

Amendments change the requirements

applicable to modifications of stationary

sources in serious, severe, and extreme

ozone nonattainment areas to determine

whether such a modification is a major

modification subject to nonattainment

NSR. The 1990 Amendments do not

mandate a change in approach for

marginal, moderate, and nonclassifiable

ozone nonattainment areas.

(1) The Current Regulations. The

EPA’s current regulations for

determining a major modification are set

out at 40 CFR 51.165. These regulations

define a ‘‘major modification’’ as:

* * *any physical change in or change in

the method of operation of a major stationary

source that would result in a significant net

emissions increase of any pollutant subject to

regulation under the Act* * *

See existing § 51.165(a)(1)(v)(A).

Under these regulations, the ‘‘net

emissions increase’’ is calculated taking

into account all contemporaneous,

creditable, actual emissions increases

and decreases on a plant-wide basis. See

existing § 51.165(a)(1)(vi). Emissions

increases and decreases are

‘‘contemporaneous’’ with the increase

from the proposed project only if they

occur before the date that the increase

from the proposed project occurs, and

no earlier than the reasonable

contemporaneous time period specified

by the reviewing authority. Id.

‘‘Significant’’ is defined for ozone to

mean, in reference to a ‘‘net emissions

increase,’’ a rate of emissions equal to or

exceeding 40 tpy of VOC. See existing

§ 51.165(a)(1)(x). Thus, a net emissions

increase of VOC that is less than 40 tpy

is considered de minimis.

The EPA’s policy under its existing

NSR regulations has been that a

proposed modification resulting in a de

minimis increase (standing alone

without considering any decreases

associated with the proposed

modification), is not major, regardless of

previous contemporaneous emissions

increases and decreases. This policy

was discussed in detail in an EPA

memorandum dated June 3, 1983

entitled ‘‘Net Emission Increase Under

PSD’’ from Sheldon Myers, Director,

OAQPS. This has been called a ‘‘nonaggregation policy’’ because netting

contemporaneous increases and

decreases would not be necessary unless

the proposed modification standing

alone would result in a significant

emissions increase.

(2) Modifications in Marginal,

Moderate, and Nonclassifiable Ozone

Nonattainment Areas. As noted above,

the 1990 Amendments do not mandate

a change in the current regulatory

approach for major stationary sources of

VOC emissions in marginal, moderate,

and nonclassifiable ozone

nonattainment areas,80 or major

stationary sources in the ozone

attainment areas in the OTR under

section 184(b)(2). Therefore the
38298 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

81The 1990 Amendments do not mandate a

change in approach for modifications in marginal,

moderate, and nonclassifiable ozone nonattainment

areas.

82Note that it is only the project net emissions

increase from the proposed modification that could

potentially trigger the netting under section

182(c)(6). Therefore, it is only the proposed

modification that may possibly have to meet the

new source requirements, not all of the previous

projects that are aggregated in the determination of

contemporaneous ‘‘net emissions increase’’ under

section 182(c)(6). There is no requirement, for

example, to retroactively apply LAER to prior

changes within the 5 year contemporaneous period.

83States have the flexibility to be more stringent

than the EPA in their rules. For example, States

may opt to not allow emissions decreases when

determining the project net.

approach for determining whether

modifications at major stationary

sources of VOC emissions are major

(hence subject to nonattainment NSR) in

these areas will default to that which

emerges from the proposed NSR reforms

described in section II of this preamble.

Because Congress did not specify a

different significance level for these

areas, the EPA is not proposing to

change the current significance

threshold level for VOC emissions of 40

tpy for modifications at major VOC

sources in these areas.

For the entire OTR, section 184(b)(2)

requires that at a minimum the

nonattainment NSR provisions

applicable to moderate ozone

nonattainment areas also apply to major

stationary sources of VOC. Again,

section 182(f) makes requirements for

proposed modification applicable to

major stationary sources of NOX in an

OTR, as well. This means that, within

an OTR, the NOX requirements of

section 182(f) apply to classified and

nonclassifiable ozone nonattainment

areas and to ozone attainment (or

unclassifiable) areas.

The EPA is also proposing that the

approach retained for determining

whether a modification at an existing

stationary source of VOC emissions is

major will also apply to modifications at

major source of NOX in these areas. See

proposed § 51.165(a)(12). In addition, in

areas where the VOC significance

threshold for modifications is 40 tpy,

the EPA is also proposing that the

significance threshold level for NOX

emissions for modifications at major

NOX sources be 40 tpy. See proposed

§ 51.165(a)(1)(x)(C). Since Congress

generally intended to treat major NOX

sources in a manner similar to major

VOC sources and did not specify a NOX

significance threshold different from the

current VOC level, the EPA believes it

is appropriate to propose a NOX

significance level for modifications that

parallels the 40 tpy VOC significance

level.

(3) Special Modification Provisions in

Serious and Severe Areas. Sections

182(c)(6), (7), and (8) of the Act change

the procedures for determining the

applicability of the nonattainment NSR

requirements to a major stationary

source of ozone [and in some areas NOX

under section 182(f) of the Act] which

undergoes a modification in a serious or

severe ozone nonattainment area.81 The

States have requested EPA’s

interpretation of the new special

provisions to help States change their

NSR rules to implement these new

provisions of the Act. In addition,

sources are awaiting EPA’s proposed

interpretation so that sources may use

internal offsets to minimize the NSR

requirements as allowed under the Act.

In response to these requests EPA is

proposing to amend the nonattainment

NSR regulations to include the new

special provisions for modifications in

serious and severe ozone nonattainment

areas as discussed below. See proposed

§ 51.165(a)(1)(v)(D).

In sum, for serious and severe ozone

nonattainment areas the EPA is

proposing the following changes to the

current method for determining whether

proposed modifications emitting VOC at

major stationary sources of VOC are

subject to nonattainment NSR:

• The new significance level for

modifications would change from 40 tpy

or more to greater than 25 tpy;

• The provisions for determining the

net emissions increase (netting) during

the 5-year contemporaneous period

would apply to emissions increases

from the proposed modifications,

including such increases that are less

than ‘‘significant’’ standing alone;

• The contemporaneous time period

for netting would be the 5-year period

that includes the calendar year in which

the proposed modification will begin

emitting and the 4 previous calendar

years; and

• As a source option, creditable

internal offsets at a ratio of at least 1.3:1

could be used for the proposed

modification (or for any discrete unit,

operation, or pollution-emitting activity

that is part of the proposed

modification) to either: (a) avoid

nonattainment NSR at existing major

sources that emit, or have the potential

to emit, less than 100 tpy of VOC; or (b)

avoid LAER at existing major sources

that emit, or have the PTE, 100 tpy or

more of VOC.

Section 182(f) of the Act generally

requires new or modified sources of

NOX located in ozone nonattainment

areas classified as serious or severe to

meet permit requirements consistent

with those applicable to major sources

of VOC. Accordingly, the EPA is

proposing to require, in addition to the

proposed special provisions described

below, that such provisions also apply

to NOX emissions at modifications of

major sources of NOX. See proposed

§ 51.165(a)(11). The proposed regulatory

language also provides that such

requirements shall not apply to sources

of NOX in areas where the

Administrator has determined that the

provisions of section 182(f) do not

apply.

i. The De Minimis Rule. The new

section 182(c)(6) of the Act specifies a

new approach for determining whether

proposed modifications are subject to

nonattainment NSR. It states that

increased emissions of VOC resulting

from any modification of a major

stationary source:

* * * shall not be considered de minimis

for purposes of determining the applicability

of the permit requirements established by

this chapter unless the increase in net

emissions of such air pollutant from such

source does not exceed 25 tons when

aggregated with all other net increases in

emissions from the source over any period of

5 consecutive calendar years which includes

the calendar year in which such increase

occurred * * *

In short, this provision changes the

current significance level for VOC

emissions (in serious and severe ozone

nonatttainment areas) from 40 tpy to

‘‘greater than 25 tpy,’’ i.e., 25 tpy or less

is de minimis. See proposed

§ 51.165(a)(1)(x)(B). As explained below,

the EPA does not believe that this

provision necessarily changes the

approach to ‘‘netting’’ increases and

decreases. It does, however, specify a

‘‘contemporaneous’’ period slightly

different than that currently used, and

departs from the ‘‘nonaggregation’’

policy to require netting over the

contemporaneous period in all instances

where there is an increase in net

emissions from the proposed

modification standing alone.

The EPA is proposing that the first

step in applying section 182(c)(6) is to

determine the ‘‘increase in net

emissions’’ from the proposed

modification for which NSR

applicability is in question.82 The net

emissions from the proposed

modification (referred to here as the

‘‘project net’’) is the sum of all proposed

creditable emissions increases and

decreases proposed at the source

between the date of application for the

modification and the date the

modification begins emitting.83 See

proposed § 51.165(a)(1)(v)(D)(1). If the

project net is an emissions increase,

then the next step is to aggregate the

project net emissions increase with all
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38299

84Section 182(c)(6) of the Act also changes the

bounds of the contemporaneous period from the

pre-existing regulations. But this is not a major

change, and it is not surprising that it is not raised

in the legislative history discussions.

other ‘‘net increases in emissions from

the source’’ over the 5-year

contemporaneous period. This

aggregation is referred to as the

contemporaneous net. Note that this is

a change from the current regulatory

approach, in which proposed de

minimis modifications are not subject to

nonattainment NSR and there is no

aggregation over a contemporaneous

period for them.

Two associated issues must be

addressed in interpreting the new

provisions of section 182(c)(6) of the

Act: the first, is to what extent

creditable decreases in emissions may

be aggregated together with creditable

increases in emissions; the second, is

the precise 5-year period over which the

emissions are to be aggregated. In

implementing these special

modification provisions, note that

increases and decreases are creditable

for netting only to the extent the

creditability criteria under existing

§ 51.165(a)(1)(vi) are met. This netting

criterion requires that the emissions

reductions are consistent with the area’s

attainment demonstration and plan for

reasonable further progress (RFP).

(a) Netting Increases and Decreases.

The EPA believes that this new

provision is most reasonably understood

to change the significance threshold

emissions level for serious and severe

ozone nonattainment areas, and to

continue to allow both creditable

increases and creditable decreases

occurring during the contemporaneous

period to be ‘‘netted’’ together. The

language of section 182(c)(6) is

ambiguous. It refers to aggregating ‘‘net

increases in emissions from the source.’’

While the language omits any reference

to ‘‘decreases,’’ the word ‘‘net’’ indicates

that decreases may be deducted from

the increases. The EPA believes that

Congress intended for the EPA and the

States to use the current netting criteria

to determine what emission reductions

are creditable. The rationale for this

position is outlined below.

The statutory provision does not

address how increases and decreases are

to be ‘‘netted’’ to calculate the ‘‘net

increases’’ that are to be aggregated. The

use of the plural ‘‘net increases’’

arguably contradicts a single netting

calculation of increases and decreases

over the 5-year period. Under this view,

increases and decreases over the 5 years

would have to be grouped to result in

a series of ‘‘net increases.’’ The

reference to increases in emissions

‘‘from the source,’’ does not seem to

limit netting of increases and decreases

that occur from changes at a ‘‘discrete

operation, unit, or other pollutant

emitting activity.’’ Compare with

subsections 182(c) (7) and (8). Another

alternative might be to calculate a ‘‘net

increase’’ for changes that are made at

the same time, as part of a single project

in a single application. But there does

not seem to be a significant reason

Congress would have wanted to provide

an incentive for sources to plan

decreases at the particular time

increases would occur within the 5-year

period. Thus, the EPA believes that

Congress did not intend to exclude

permanent, quantifiable, enforceable,

and otherwise creditable decreases from

the netting calculation. The Agency

believes that Congress emphasized

increases simply because it is those that

are necessary to exceed the 25-ton

threshold, and, by this action, Congress

did not thereby intend to exclude

otherwise creditable decreases from the

netting calculations.

The Agency believes the legislative

history supports the above conclusion.

The House Report summarized the

treatment of ‘‘netting’’ in H.R. 3030

(containing the same language as the

statute as enacted) as follows:

In addition, the graduated control

requirements include continued use of

‘‘netting’’ in other than extreme areas subject

to increasingly stringent limitations for

higher classifications. The netting process

allows sources making modifications that

would otherwise be subject to the new source

review requirements of the Act to escape

such requirements upon a showing that the

emissions increase associated with the

modification is ‘‘netted out’’ to a de minimis

overall level by emission decreases from

elsewhere within the source. The netting

concept has in many cases allowed sources

to modernize and expand without

application of new source review provisions

intended to assure that modernization and

expansions bring about continued air quality

improvement. It is the Committee’s view that

new source review should reconcile

economic growth with clean air. It is an

important concept for modifications that

affect ongoing operations of existing facilities

and related existing jobs. Limitations on

netting in serious and severe areas include a

lowered de minimis level from today’s level

of 40 tons per transaction, to a 5-year total

of no more than 25 tons.

See H. Rep. No. 490, part 1, 101st Cong.,

2d Sess., at 234–35 1990. This

discussion highlights the important

netting changes involving the threshold

level mandatory aggregation,84 but

omits any discussion of a change in

eligibility of decreases in the netting

calculation. Had Congress intended

such an important change, it would be

surprising that it is not mentioned in

this discussion. Nor do other places in

the legislative history clearly specify

such a change. See id. at 241–42; Cong.

Rec. at H12870 (Oct. 26, 1990)

(statement of Rep. Oxley). The EPA

requests comment on this interpretation.

The EPA specifically requests comments

on whether emissions reductions should

be credited when determining the

‘‘project net’’ and the

‘‘contemporaneous net.’’

For these special modification

provisions, the quantity of emissions

that must be offset to meet the

nonattainment NSR general offset

provisions is the project net emissions

increase for proposed major

modifications. This means that the

project net emissions increase from the

proposed modification, and not the

contemporaneous net emissions

increase calculation over the

contemporaneous period, determines

the quantity of emissions from the

proposed modification that must be

offset. While only the project net

emissions increase need be offset, States

are required to reconcile their emissions

inventory by accounting for all increases

in emissions in order to demonstrate

RFP and attainment. For cases where

discrete emissions limits are offset

internally at a 1.3:1 offset ratio under

section 182(c) (7) or (8) of the Act, the

amount to be offset is the emissions

increase from the units within the

proposed project. However, if such units

replace existing units, the emissions

reduction from the replaced units may

be credited towards reducing the

quantity of emissions that must be

internally offset.

(b) The 5-Year Contemporaneous

Period. A remaining issue is the time

period over which other net increases

from the source are to be aggregated.

Section 182(c)(6) of the Act specifies

‘‘any period of 5 calendar years which

includes the calendar year in which

such increase occurred.’’ From this

plain language, the period must include

the full calendar year in which the

increase occurred, including the rest of

the calendar year beyond the actual time

of the increase. This differs from the

EPA’s current regulations that allow the

reviewing authority to specify a longer

period extending before construction of

the particular change and through the

date that the increase from the

particular change occurs. See existing

§ 51.165(a)(1)(vi)(B).

An ambiguity arises from the

provision’s reference to ‘‘any’’ 5-year

period. The EPA’s current regulations

specify a single period. Id. The reference

to ‘‘any’’ in section 182(c)(6) raises an

issue whether the contemporaneous

period may include other combinations
38300 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

85Congressman Waxman, in a law review article,

suggests that section 182(c)(6) requires that the sum

of net emissions increases be below the de minimis

level over all 5-year periods, including the year of

the particular increase. Under this approach, no

emissions increase could be determined to be de

minimis ‘‘until 5 years after it has occurred.’’ See

Waxman, Wetstone, and Barnett, ‘‘Roadmap to Title

I of the Clean Air Act Amendments of 1990,’’ 21

Northwest Univ. Envir. L. Rev. 1843, 1874 (1991).

The EPA believes this interpretation, while

conceivable on its face, conflicts with the structure

of NSR as a preconstruction permitting program.

Under Waxman’s approach, projects that have been

reviewed, approved, and completed could be

subject to retroactive NSR.

of 5 consecutive years including the

year of the particular increase. Other

combinations would, of course, include

future years beyond the year of the

particular increase. The EPA does not

believe Congress intended that the

contemporaneous period include such

future years. This is because the NSR

program has always been limited to

addressing the emissions impact of new

growth when it occurs, including both

‘‘offset’’ and LAER technology

requirements. If NSR applicability is

based on future actions, the need for

offsets and LAER could not be finally

determined at the time a particular

modification is made. Instead, the EPA

believes that the reference to ‘‘any’’ was

included simply in recognition of the

fact that the particular span of calendar

years will change over time. In short,

Congress simply recognized that the

period of 5 calendar years, from, for

example, 1992 to 1996 is different than

the period from 1993 to 1997.

Therefore, for these special

modification provisions the EPA is

proposing that the 5-year

contemporaneous period is the period of

5 consecutive calendar years ending

with the full calendar year when the

increase in emissions from the proposed

modification is to occur. See proposed

§ 51.165(a)(1)(vi)(C)(1). In any case, the

EPA believes consideration of future

years in the de minimis calculation

beyond the calendar year when the

increase occurs would raise serious

implementation problems, because

increases in future years must be

projected and may not be certain. The

permitting authority might impose

permit conditions to ensure that a

source limits increases in future years

consistent with a projection on which a

current de minimis calculation is

based.85 The EPA solicits comments on

whether the 5-year period may extend

beyond the calendar year when the

increase in emissions from the proposed

modification is to occur.

The EPA also requests comment on

whether a State may propose a different

contemporaneous period, so long as the

State can demonstrate that any such

period is as stringent as the EPA’s. To

the extent increases may be netted with

decreases over the contemporaneous

period, the EPA is concerned there may

be no way to tell in a particular case

whether a longer or different

contemporaneous period is more

stringent than the EPA’s proposed

approach.

(c) Trivial Increases. Some States have

inquired whether every single increase

that is a modification must be tracked

under the new de minimis rule or

whether States may adopt sub-de

minimis levels and exclude increases

(and, presumably, decreases) below

these levels. The EPA is not now

proposing a particular level of sub-de

minimis increases and decreases, but

the EPA may consider whether such

levels are acceptable in States’ NSR SIP

submissions. The EPA requests

comment on the following discussion of

this issue, and on what type of sub-de

minimis level, if any, might be

acceptable.

This issue turns on the EPA’s legal

authority to exclude emissions increases

(and decreases) from a rule that, on its

face, seemingly applies to every

emission increase—no matter how small

the increase may be. In Alabama Power

Co. v. Costle, 636 F.2d 323, 357 (D.C.

Cir. 1979), the court discussed two bases

for categorical regulatory exemptions

that could apply here. Where these

grounds exist, the availability of a

categorical regulatory exemption may be

presumed ‘‘save in the face of the most

unambiguous demonstration of

congressional intent to foreclose them.’’

636 F.2d at 357. However, the EPA lacks

the power to revise legislative directives

in a manner ‘‘inconsistent with the clear

intent of the relevant statute.’’ Id. at 358

[quoting NRDC v. Costle, 568 F.2d 1369,

1377 (D.C. Cir. 1977)].

First, the Agency may create a

categorical regulatory exemption out of

administrative necessity, where

compliance with the explicit

instructions of a statute may be

infeasible, impractical, or impossible.

See Alabama Power, 636 F.2d at 358–

59. However, there is a ‘‘heavy’’ burden

where, as here, the Agency seeks to

create a ‘‘prospective exemption of

certain categories from a statutory

command based upon the Agency’s

prediction of the difficulties of

undertaking regulation.’’ Id. at 359. The

EPA believes that, since very small

increases resulting from modifications

(physical changes or changes in the

method of operation) are routinely

tracked today as part of State

construction programs, a showing of

administrative necessity may be

difficult for all but the smallest

increases and decreases.

Second, under Alabama Power

categorical exemptions may also be

permissible as an exercise of an

Agency’s powers to recognize

inconsequential situations. Id. at 360. In

general, an Agency can create this

exemption where the application of a

regulation across all classes will ‘‘yield

a gain of trivial or no value.’’ Id. The

exemption is not available where the

regulatory scheme ‘‘does provide

benefits, in the sense of furthering the

regulatory objectives, but the Agency

concludes that the acknowledged

benefits are exceeded by the costs.’’ Id.

A determination of when a matter can

be classified as de minimis turns ‘‘on

the assessment of particular

circumstances’’ of the individual case.

Id. The EPA believes that a State’s

demonstration that a particular increase

is trivial and of no consequence in

furthering the statutory purpose must

take account of the size of the applicable

threshold and major source thresholds

applicable in the various areas. For

example, a 5-ton increase is 20 percent

of the de minimis threshold for serious

and severe areas and half the major

source threshold in extreme areas. It is

not at all clear that an increase of that

size could be characterized as trivial. On

the other hand, a level of less than one

ton might conceivably be more

reasonable. Any such showing by a

State would surely have to be supported

by solid scientific evidence and

analysis.

In any case, the EPA emphasizes that

States must track and quantify all

emissions increases to the extent

necessary to ensure progress toward

attainment. Small measurable increases

from any stationary source should be

addressed in States’ stationary source

permitting programs consistent with

section 110(a)(2)(C) of the Act to assure

that NAAQS are achieved. In addition,

small measurable increases should be

counted as minor source growth under

section 173(a)(1)(A) of the Act. These

provisions suggest a very high hurdle to

show that tracking such small increases

is either trifling or will administratively

frustrate the NSR program.

ii. Special Modification Rules. If a

particular physical or operational

change at a major stationary source in a

serious or severe ozone nonattainment

area is not considered de minimis under

section 182(c)(6), then the provisions of

sections 182(c) (7) and (8) of the Act

apply. Those provisions establish

special rules for major modifications at

sources that emit, or have the potential

to emit, less than 100 tpy, or 100 tpy or

more, respectively of VOC [or NOX,
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38301

consistent with section 182(f)]. These

subsections offer sources options that

may be more desirable than would

otherwise apply. Specifically, sections

182(c) (7) and (8) offer sources the

option of obtaining 1.3:1 internal offsets

in order to avoid NSR entirely (for

sources emitting less than 100 tpy), or

to avoid LAER (for sources emitting 100

tpy or more). These special provisions

are discussed below.

(a) Modifications at Sources Emitting

Less Than 100 TPY. Section 182(c)(7) of

the Act specifies a special rule for

modifications at existing major

stationary sources of VOC that emit, or

have the PTE, less than 100 tpy. This

rule applies to any change [as described

in section 111(a)(4)] at the source:

* * * that results in any increase (other than

a de minimis increase) in emissions of

volatile organic compounds from any

discrete operation, unit, or other pollutant

emitting activity at the source * * *

Thus, while the determination of de

minimis under section 182(c)(6)

requires that all changes within the 5-

year contemporaneous period at the

source be considered, sections 182(c) (7)

and (8) apply to the particular change at

the discrete unit, operation or activity at

issue. Sections 182(c)(7) and (8) do not

apply to other previous increases within

the 5-year period that are unrelated to

the change at issue. Of course, if the

contemporaneous net emissions

increase for the proposed modification

is a de minimis increase [as defined in

section 182(c)(6)], then the

nonattainment NSR provisions need not

apply at all.

The special rule for sources of less

than 100 tpy is that the particular

increase at issue:

* * * shall not be considered a modification

for [purposes of sections 172(c)(5) and 173]

if the owner or operator of the source elects

to offset the increase by a greater reduction

in emissions of VOC concerned from other

operations, units, or activities within the

source at an internal offset ratio of at least

1.3:1 * * *

A question may arise as to what

sources would choose to utilize the

1.3:1 offset ratio where the source could

possibly avoid NSR entirely by applying

creditable decreases at a ‘‘1:1 ratio’’

such that the aggregated increase

remains at 25 tons or less under section

182(c)(6). The EPA believes that sources

may not have enough emissions

decreases to internally ‘‘net’’ the entire

proposed modification to 25 tons or

less. However, where the proposed

modification results in increases at more

than one discrete unit, the source may

have sufficient creditable internal

emissions decreases to apply a 1.3:1

offset ratio and avoid review for that

particular unit. While some sources may

be able to plan modifications at various

units over time so that each could avoid

review through netting under section

182(c)(6), the EPA believes that not all

sources will be able to do so, and will

have reason to utilize the 1.3:1 internal

offset ratio option. See proposed

§ 51.165(a)(1)(v)(D)(2). Once an internal

offset has been used to exempt a

particular increase from NSR, the

particular increase and decrease(s)

would not be creditable for future

netting and offset transactions. See

proposed § 51.165(a)(10)(iii).

If the source does not avoid NSR

under the internal offset option, the

change is a modification subject to

nonattainment NSR. When applying the

nonattainment NSR requirements, note

that the special rule in section 182(c)(7)

of the Act provides that BACT is to be

substituted for LAER for sources of less

than 100 tpy. See proposed

§ 51.165(a)(10)(ii).

(b) Modifications of Sources Emitting

100 TPY or More. Section 182(c)(8) of

the Act provides a special rule for

modifications at major stationary

sources of VOC that emit, or have the

PTE, 100 tpy or more. This special rule

applies to any change at the source

according to the same terms as the

special rule in section 182(c)(7).

The special rule for sources of 100 tpy

or more is that:

* * * if the owner or operator of the source

elects to offset the increase by a greater

reduction in emissions of VOC from other

operations, units, or activities within the

source at an internal offset ratio of at least 1.3

to 1, the requirements of section 173(a)(2) of

this title [concerning the LAER (LAER)], shall

not apply * * *

This option to avoid LAER could be

utilized in the same circumstances as

described in section 182(c)(7), above.

While a source could avoid NSR

entirely for the proposed modification

by netting creditable emissions

reductions at any internal operations,

units, or activities at a 1:1 ratio under

section 182(c)(6), it may nevertheless

have the ability to arrange proposed

modifications over time in order to

avoid review under section 182(c)(7), or

the LAER requirement under section

182(c)(8). In such circumstances under

section 182(c)(8), the source would have

reason to use creditable internal

decreases that were insufficient to avoid

nonattainment NSR for the entire

project to avoid LAER for discrete units

at a 1.3:1 internal offset ratio. See

proposed § 51.165(a)(10)(i).

An additional issue under section

182(c)(8) is whether sources satisfying

the internal offset ratio of 1.3:1 to avoid

LAER must secure additional offsets to

separately satisfy the general offset ratio

requirements of sections 182(c)(10)

(1.2:1 ratio for serious areas) and

182(d)(2) (1.3:1 ratio for severe areas, or

1.2:1 if all major sources use BACT).

The EPA believes section 182(c)(8) of

the Act may reasonably be interpreted to

provide that the 1.3:1 internal offset

ratio is in lieu of the general offset ratio.

The EPA recognizes that the only

remaining NSR requirements of section

182(c)(8) would be less geared toward

emissions control at the source, such as

the alternative siting analysis of section

173(a)(5) and the compliance

demonstration of section 173(a)(3) of the

Act. But the EPA believes it is

reasonable to believe Congress intended

to provide an incentive to obtain offsets

internally, where the actual impact of

the new emissions may be most

precisely counteracted. Also, the 1.3:1

internal offset ratio would generally

offset minor source growth and

contribute to RFP as specified in section

173(a)(1)(A). Of course, if more

reductions are needed to offset minor

source growth and contribute to RFP

under section 173(a)(1)(A), the State

may need to require offsets beyond the

1.3:1 internal offset requirement. The

EPA requests comment on this

interpretation.

iii. Examples. Examples of the EPA’s

proposed approach for the special

modification provisions follow. Note

that the examples also apply to NOX

emissions consistent with section 182(f)

of the Act.

(a) Example A.

An existing major stationary source of VOC

has the PTE 285 tpy of VOC and is located

in a serious ozone nonattainment area. The

source proposes a modification (a physical

change or change in the method of operation)

that includes the following changes in VOC

emissions:

+40 tpy from addition of new unit A

¥30 tpy from shutdown of existing unit B

¥60 tpy from the addition of control

equipment on existing unit C

The shutdown of unit B and the addition of

controls to unit C are proposed by the source

as federally enforceable permit conditions to

occur during the period between the date of

permit application for the proposed

modification and the date the proposed

modification will begin emitting. Both

emissions reductions meet all criteria for

netting. As a result, the resultant project net

of VOC from the proposed modification is

¥50 tpy (+40 ¥30 ¥60), which is not an

increase. Therefore, since the special

provisions may only apply to proposed

modifications that result in a net project

emissions increase, nonattainment NSR does

not apply to this proposed modification.

(b) Example B.

An existing major stationary source of VOC

has the potential to emit 90 tpy of VOC and
38302 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

is located in a severe ozone nonattainment

area. The source proposes a modification (a

physical change or change in the method of

operation) with the following VOC emissions

changes:

+110 tpy from addition of new unit A

¥20 tpy from shutdown of existing unit B

+10 tpy from the addition of new unit C

The shutdown of unit B is proposed by the

source as a federally enforceable permit

condition. The shutdown is to occur during

the period between the date of permit

application for the proposed modification

and the date the proposed modification will

begin emitting. As a result, the project net is

+100 tpy of VOC, which is a VOC emissions

increase subject to netting over the 5-year

contemporaneous period.

The proposed modification is to begin

emitting in 1997, so the

contemporaneous period for netting is

the calendar years 1993 through 1997.

Creditable VOC emissions increases and

decreases at the source during the

contemporaneous period are +80 tpy in

1994, ¥60 tpy in 1996, and +100 tpy

from the proposed modification. The

contemporaneous net emissions

increase of +120 tpy is significant (>25

tpy). Therefore, the proposed

modification is major and subject to the

special modification provisions for

existing major stationary sources of VOC

with a PTE less than 100 tpy of VOC.

The major modification is subject to

nonattainment NSR, including a

requirement to provide at least 130 tpy

(100×1.3) of emissions offsets. However,

nonattainment NSR may be avoided if

the source elects to use the internal

offsets alternative. Under this option,

the entire proposed modification is not

subject to NSR if an internal offset of at

least 130 tpy (100×1.3) is provided by

the source. However, it is not likely that

this option is viable for this source of

the size given. Another option is to

avoid NSR for new unit C by providing

at least 13 tpy (10×1.3) of internal offsets

for that unit. Consequently, only unit A

would be subject to NSR.

If in this example the existing major

stationary source has the PTE 100 tpy or

greater, then nonattainment NSR applies

to the major modification, except that

the LAER provision will not apply if the

source elects to provide internal offsets

at a ratio of at least 1.3:1. The remaining

part D nonattainment NSR provisions

still apply. Alternatively, the source

may elect either to avoid LAER for the

entire modification if at least 130 tpy of

internal offsets is secured or to avoid

LAER for new unit C if at least 13 tpy

of internal offsets is provided. Note than

an emissions reduction at the source

occurring prior to the 5-year

contemporaneous period may be used as

an internal offset to the extent it meets

all otherwise applicable criteria for a

creditable offset.

iv. Transition. For purposes of

permitting in the absence of State NSR

SIP revisions, the EPA does not intend

to apply the interpretations proposed

here for the special modification

provisions of sections 182(c) (6), (7), and

(8) of the Act, except that the lower

significance threshold of greater than 25

tpy for applicability is in effect. The

EPA believes that the remainder of these

special modification provisions are

sufficiently complicated that it is

appropriate to defer implementation

until State NSR rules implementing the

provisions are in place or when the EPA

takes final action on this proposal,

whichever comes first. Upon

promulgation of the final rule, the EPA

expects to review each State’s NSR SIP

and issue a call for any necessary

additional SIP revisions under section

110(k)(5) of the Act to ensure that

States’ NSR SIP’s are ultimately

consistent with the provisions of the

final rule.

(4) Modifications in Extreme Areas.

For modifications of major stationary

sources of VOC [and NOX consistent

with section 182(f)] located in extreme

ozone nonattainment areas, the 1990

Amendments eliminate the concept of

de minimis altogether for purposes of

determining a major modification. New

section 182(e)(2) provides that any

physical change or change in the

method of operation at the source that

results in any increase in emissions

from any discrete operation, unit, or

other pollutant-emitting activity at the

source generally must be considered a

modification subject to the part D NSR

permit requirements, regardless of any

decreases elsewhere at the source. Thus,

the EPA is proposing to amend the both

the definition of ‘‘major modification

and the definition of ‘‘significant’’ to

specifically address proposed

modifications of major stationary

sources of VOC (and presumptively

NOX) in extreme areas for ozone. The

proposed change would reflect the

statutory requirement by requiring that

any increase in emissions from any

discrete operation, unit, or permit

emitting activity at a source locating in

an extreme ozone nonattainment area is

considered ‘‘significant’’ and, thereby, a

major modification. See proposed

§§ 51.165(a)(1)(v)(E) and

51.165(a)(1)(x)(F)].

d. Emissions Offset Ratios. The 1990

Amendments clarified the existing

statutory offset requirements under part

D of title I of the Act by stipulating that:

* * *the total tonnage of increased

emissions of the air pollutant from the new

or modified source shall be offset by an equal

or greater reduction, as applicable, in the

actual emissions of such air pollutant from

the same or other sources in the

[nonattainment] area * * *. [Emphasis

added.]

See section 173(c)(1) of the Act.

Elsewhere in the 1990 Amendments,

Congress prescribed a set of emissions

offset ratios, calling for greater than onefor-one emissions reductions, to be

applied to stationary sources of VOC

according to the severity of the ozone

nonattainment problem. Wherever NOX

emissions are considered an ozone

precursor under section 182(f), the

emissions offset ratios for VOC also

apply to NOX emissions. For purposes

of satisfying the section 173 emissions

offset provisions, new section 182

established five separate minimum

emission offset ratios, each

corresponding to one of five area

classifications for ozone nonattainment

areas, as follows: (1) 1.1:1 in marginal

areas; (2) 1.15:1 in moderate areas; (3)

1.2:1 in serious areas; (4) 1.3:1 in severe

areas; and (5) 1.5:1 in extreme areas.

The minimum offset ratio in the OTR is

1.15:1. For ozone nonattainment areas

outside the OTR that the EPA has

categorized as nonclassifiable

(transitional, submarginal, or

incomplete/no data), the emissions

offset ratio must be at least 1:1.

Consistent with section 173(c)(1), the

EPA interprets that the offset ratio, in

each case, is the ratio of total actual

emissions reductions of VOC (or NOX,

where applicable) to the total allowable

emissions increase of such pollutant

from the new or modified stationary

source.

In the case of severe and extreme

areas, section 182(c)(10) provides that

the emissions offset ratio is reduced to

a ratio of at least 1.2:1 if the applicable

SIP contains the requirement that all

existing major sources in such

nonattainment areas must use BACT for

the control of VOC emissions. Because

BACT changes over time as technologies

advance, some methodology must be

adopted for States to demonstrate that

all existing sources in a given

nonattainment area have met the BACT

requirement in section 182(d)(2). In the

PSD program, BACT applies to new

sources at the time of permitting. In the

context of existing sources, this

requirement could conceivably apply at

a fixed point in time, or might apply

continuously so that existing sources

must be using technology that

constitutes BACT at particular intervals.

The EPA believes that it may be most

appropriate to require BACT as of the

time the attainment demonstration is

due, so that the technology and offsets
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38303

requirements will be consistent with the

overall attainment plan. Alternatively, it

may be appropriate to require BACT as

of the time the permitting program that

would switch the offset ratio to 1.2:1 is

adopted. The EPA requests comment on

the appropriate methodology for

applying the BACT requirement in

section 182(d)(2) to existing sources.

The EPA is proposing the minimum

offset ratios in ozone nonattainment

areas and in the OTR in accordance

with the 1990 Amendments. See

proposed § 51.165(a)(14).

For extreme ozone nonattainment

areas section 182(e)(2) also provides for

an exemption from the section 173(a)(1)

offset requirements if the owner or

operator of the major stationary source

agrees to offset any proposed increase

by a greater reduction in onsite

emissions from other discrete

operations, units, or activities at an

internal offset ratio of 1.3:1. EPA is

proposing this exemption for extreme

ozone nonattainment areas at proposed

§ 51.165(a)(15). The remaining part D

NSR provisions still apply. In addition,

this new section stipulates that the

offset requirements do not apply in

extreme areas if the modification

consists of installing equipment

required to comply with the applicable

implementation plan, permit, or the Act

itself. The EPA notes with respect to

this offsets exemption in extreme areas

that the State must nonetheless account

for collateral increases in emissions

associated with installation of

equipment required to comply with

another legal mandate. For example,

where a source incinerates VOC in order

to limit VOC emissions, NOX emissions

may increase. The State may still

require offsets as an approach more

stringent than that the Act provides, or

must otherwise ensure that such

increases in emissions are counteracted

by other SIP measures so as to comply

with sections 110(a)(2)(C) and

173(a)(1)(A) of the Act. Of course, any

increase is still subject to the LAER

technology requirement, even where

offsets are not applicable. The EPA

encourages States to require alternatives

for compliance with legal mandates that

minimize collateral emissions increases,

so that the State’s obligation to

counteract such increases will also be

minimized. Finally, pursuant to section

182(e)(2) of the Act, EPA is also

proposing that, in extreme ozone

nonattainment areas, sources need not

offset emissions increases of VOC

resulting from modifications consisting

of equipment that is needed to comply

with a SIP, permit, or Act requirement.

See proposed § 51.165(a)(15)

2. Provisions for Carbon MoNOXide

(CO) Nonattainment Areas

New subpart 3 of part D of the Act

contains new NSR requirements for CO

nonattainment areas as determined by

the area’s CO design value. The 1990

Amendments established an area

classification system for the CO

nonattainment air quality problem

based on the area’s CO design value.

Only two types of area classifications

are defined in section 186 for CO

nonattainment areas— moderate and

serious.

The major stationary source threshold

for moderate areas is 100 tpy. Pursuant

to section 187(c), the EPA is proposing

to amend the definition of ‘‘major

stationary source’’ to incorporate a

lower emissions threshold of 50 tpy for

serious areas in which stationary

sources are significant contributors to

CO levels as determined by the

Administrator. See proposed

§ 51.165(a)(1)(iv)(A)(1)(vi). Also, for

such CO moderate areas, EPA is

proposing a significance threshold of 50

tpy for defining a major modification at

an existing major stationary source of

CO. See proposed § 51.165(a)(1)(x)(E).

In addition to the two classifications

for CO nonattainment areas, some

nonattainment areas do not fit into the

classification scheme and are

considered ‘‘nonclassifiable’’ CO

nonattainment areas. The following

discussion describes the EPA’s

proposed NSR requirements for all CO

nonattainment areas (moderate, serious

and nonclassifiable). Like those for

ozone, the NSR requirements for CO are

additive (i.e., a serious area has to meet

all moderate requirements in addition to

all serious requirements, etc.).

Requirements discussed for moderate

areas will be repeated for serious areas

only if the requirements are different.

a. Moderate Areas with a Design

Value of 12.7 Parts Per Million and

Below. The part D NSR requirements of

section 173 apply in CO nonattainment

areas. All States with moderate CO

nonattainment areas with a design value

of 12.7 parts per million (ppm) or less

must submit proposed part D NSR

programs no later than November 15,

1993. The provisions of these plans

must be developed in accordance with

the requirements of sections 172(c)(5)

and 173 of the Act.

b. Moderate Areas with a Design

Value Greater than 12.7 Parts Per

Million. In the General Preamble (57 FR

13533), the EPA interpreted sections

187(a)(7) to require that all CO

nonattainment areas with a design value

greater than 12.7 ppm submit part D

NSR programs meeting section 172(c)(5)

and 173 requirements not later than

November 15, 1992. Unless otherwise

noted, all moderate areas above 12.7

ppm are also to meet those requirements

applicable to moderate areas below 12.7

ppm.

c. Serious Areas. As specified in

section 187(c)(1), for serious CO

nonattainment areas in which stationary

sources contribute significantly to CO

levels (as determined according to rules

issued by the Administrator), a SIP shall

be submitted by November 15, 1992,

that provides that ‘‘major stationary

source’’ includes any stationary source

that emits or has the PTE 50 tpy or more

of CO. If stationary sources do not

contribute significantly to CO levels

under section 187(c)(1), then ‘‘major

stationary source’’ includes any

stationary source that emits or has the

potential to emit 100 tpy or more of CO.

d. Nonclassifiable Areas. The

‘‘nonclassifiable’’ category of CO

nonattainment areas is comprised of two

subcategories—’’not classified’’ and

‘‘incomplete/no-data.’’ The EPA

describes an area as ‘‘not classified’’ if

the area was designated nonattainment

both prior to enactment and (pursuant

to section 107(d)(1)(C) of the Act) at

enactment and if it did not violate the

primary NAAQS for CO in either year

for the 2-year period 1988 through 1989.

The EPA defines an ‘‘incomplete/nodata’’ area as an area that retained its

nonattainment designation at enactment

[under section 107(d)(1)(C)] but for

which data are not available to indicate

whether or not violations of the

standard have occurred. For a more

detailed discussion of nonclassifiable

CO nonattainment areas, see the General

Preamble (57 FR 13535). The specific

requirements of subpart 3 of part D of

the Act do not apply to CO ‘‘not

classified’’ and ‘‘incomplete/no data’’

areas. However, because these areas are

designated nonattainment, the

requirements of section 172(c)(5) apply.

Therefore, States with CO

nonattainment areas classified as ‘‘not

classified’’ or ‘‘incomplete/no data’’

areas, are required to adopt part D NSR

programs meeting the requirements of

section 173, as amended. As required by

section 172(b), States’ changes to NSR

SIP’s for such areas were due to the EPA

no later than 3 years (November 15,

1993) from designation under section

107(d)(4)(A)(ii).

3. Provisions for PM–10 Nonattainment

Areas

This proposal also adds certain new

requirements pertaining to PM–10 to the

nonattainment NSR permit regulations

at 40 CFR 51.165. These particular

changes are being made in accordance
38304 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

86See 50 FR 13145, April 2, 1985.

with new statutory provisions contained

in new subpart 4 of part D of the Act.

Prior to the 1990 Amendments,

designations identifying the attainment

status of an area pursuant to section

107(d) did not exist for PM–10.

Consequently, new and modified

stationary sources were not required to

undergo preconstruction review under

NSR nonattainment permit

requirements based on the amount of

PM–10 which they could emit. The

1990 Amendments established an area

classification system under section 188

to define the severity of the air quality

problem in designated nonattainment

areas for PM–10. Only two types of area

classifications for PM–10 nonattainment

areas were defined—moderate and

serious. A detailed discussion of the

nonattainment designation process for

PM–10 is contained in the General

Preamble (see 57 FR 13537).

a. Moderate Areas. Section

189(a)(1)(A) of the Act provides that

each State with a PM–10 nonattainment

area classified as moderate is to submit

an implementation plan [as required by

section 172(c)(5)] containing a permit

program meeting the requirements of

section 173 for the construction of new

and modified major stationary sources

of PM–10 (and in some cases PM–10

precursors). In moderate areas for PM–

10, new stationary sources are

determined to be ‘‘major’’ in accordance

with section 302(j) (also existing

§ 51.165(a)(1)(iv)(A)). Major stationary

sources of PM–10 will be subject to

preconstruction review under the NSR

nonattainment permit regulations if they

emit, or have the potential to emit, 100

tpy or more of PM–10 emissions (or in

some cases PM–10 precursors). No

changes to the applicability

requirements are needed under the

current Federal NSR regulations to

cause major new sources of PM–10 to

undergo the necessary preconstruction

review.

The regulations currently require that

any modification to an existing

stationary source that is major for the

same pollutant is subject to the part D

NSR requirements if the net emissions

increase of the applicable

nonattainment pollutant is significant.

The EPA is today proposing for

nonattainment purposes a significance

threshold of 15 tpy for PM–10

emissions. See proposed

§ 51.165(a)(1)(x)(A). This threshold is

the same emissions rate currently used

to define ‘‘significant’’ for PM–10

emissions under the PSD regulations at

§§ 51.166 and 52.21. See, e.g., existing

§ 51.166(b)(23)(i).

b. Serious Areas. For nonattainment

areas classified as serious for PM–10,

Congress determined that stationary

sources emitting 70 tpy or more of PM–

10 emissions must be considered major

stationary sources. See section 189(b)(3)

of the Act. Therefore, the EPA is

proposing to amend the current

definition of ‘‘major stationary source’’

to add a 70 tpy major source threshold

for any stationary source of PM–10

located in a serious area for PM–10. See

proposed § 51.165(a)(1)(iv)(A)(1)(i) This

new emissions threshold would apply

to new stationary sources of PM–10, as

well as existing major sources proposing

a modification resulting in an increase

in PM–10 emissions. An existing major

stationary source of PM–10 would be

considered a major modification when it

proposes a change that will result in a

significant net emissions increase. The

EPA is also proposing that the proposed

significance threshold of 15 tpy, as

described above, apply to any major

modification of PM–10 in a serious PM–

10 nonattainment.

c. PM–10 precursors. Section 189(e)

provides that the part D NSR

requirements applicable to major

stationary sources of PM–10 shall also

apply to major stationary sources of

PM–10 precursors (SO2, NOX, and

VOC). As described earlier, the EPA is

proposing regulatory language which

calls for each plan to subject major

stationary sources of specific PM–10

precursors to the same part D permit

requirements applicable to major

stationary sources of PM–10. See

proposed § 51.165(a)(13). States will not

be required to implement this particular

requirement in PM–10 nonattainment

areas where the Administrator

determines that PM–10 precursors (i.e.,

SO2, NOX, and VOC) are not significant

contributors of ambient PM–10.

To implement the new applicability

requirement for PM–10 precursors in

serious PM–10 nonattainment areas, the

EPA is proposing a major source

threshold of 70 tpy or more of any

individual PM–10 precursor. See

proposed § 51.165(a)(1)(iv)(A)(1)(i). For

stationary sources of PM–10 precursors

located in moderate PM–10

nonattainment areas, the EPA does not

intend to propose an emissions

threshold different from the existing

general threshold of 100 tpy or more of

any pollutant. Thus, under this proposal

the existing threshold of 100 tpy would

also apply to such sources of PM–10

precursors.

The EPA is also proposing that any

modification of a source emitting a PM–

10 precursor meet the same part D

permit requirements that apply to

modifications at major stationary

sources of PM–10. See proposed

§ 51.165(a)(1)(v)(G). For purposes of

defining a significant increase in

emissions of any PM–10 precursor, the

EPA is proposing a 40 tpy threshold.

See proposed § 51.165(a)(1)(x)(D). This

proposed threshold is the same

emissions rate used to define significant

emissions increases individually for

SO2, NOX, and VOC. Thus, the 40 tpy

threshold would be used to determine

whether a major modification would

occur under the part D NSR

requirements with respect to each

proposed net emissions increase of a

PM–10 precursor from a major

stationary source of that PM–10

precursor, except in areas where the

Administrator determines that the

sources of PM–10 precursors do not

contribute significantly to the PM–10

nonattainment problem in the area.

The EPA considered several

approaches before deciding on the use

of a level equal to the original

significance threshold in each case. One

approach involved the EPA’s

procedures for defining the significant

emissions rate for each criteria pollutant

under the current PSD and part D NSR

programs. In selecting those existing

rates for the criteria pollutants, the EPA

used four percent of the short-term

primary standard for each pollutant as

a design value. The design values were

then converted to emissions rates in

accordance with EPA’s modeling

procedures.86 The difficulty in using

this approach to select a significance

level for PM–10 precursors is the

uncertainty concerning the PM–10

conversion rate for each of the affected

pollutants. Such conversion rates

depend on the specific chemistry of the

pollutant emissions, as well as a number

of meteorological factors which are areaspecific. Thus, a standard conversion

rate has not been developed that would

apply to all sources emitting a particular

PM–10 precursor.

Another approach for PM–10

precursors involved the use of the 15

tpy significance level already used for

PM–10 emissions under the PSD

regulations, and being proposed today

for PM–10 emissions under the part D

NSR regulations. The EPA rejected this

approach, however, because of its overly

conservative nature. The EPA does not

believe that it would be reasonable to

assume a 100 percent conversion rate

for each of the PM–10 precursors.

Careful consideration should be given

before approving offsets between PM–10

and PM–10 precursors. An increase in

PM–10 emissions should not be offset

by an equivalent decrease in emissions

of a PM–10 precursor. This is because

a reduction of a PM–10 precursor
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38305

ordinarily will not negate an equivalent

increase in PM–10, as not all of a PM–

10 precursor will ordinarily convert to

the same mass of PM–10. The

conversion process may depend on

several variables, including the

availability of chemical reactants in the

atmosphere for the conversion process,

and the difference in mass between the

PM–10 precursor molecule and the PM–

10 particle that the precursor reacts to

become. Another concern is that the rate

of conversion of the precursor to PM–10

may be so long that the precursor may

not entirely convert to PM–10 within

the same nonattainment area. Thus,

there would be less counteracting effect

and no net improvement to air quality

in the area.

Under the EPA’s proposal, a source of

a PM–10 precursor may offset its

increased emissions with the same

precursor type or PM–10 (or a

combination of the two). In this

situation, a net improvement in air

quality would be assured. At this point,

however, the EPA is not proposing to

allow offsetting among different types of

PM–10 precursors, or offsetting PM–10

increases with reductions in PM–10

precursors, because the Agency does not

now have a scientific basis to propose

conversion factors. However, the

Agency does not intend through this

rulemaking to preclude trading between

PM–10 precursors at such time as

technical data supporting such a scheme

is developed. The Agency expects that

the approvability of a scheme allowing

trading between precursors will be

addressed in subsequent guidance or in

the context of individual SIP reviews,

though the Agency is considering

resolving certain policy and legal issues

in this rulemaking.

The EPA believes that nothing in

subpart 4 of part D of the Act would

prohibit trading between PM–10 and

PM–10 precursors, or among PM–10

precursors. The Agency recognizes that

section 173(c)(1) of the Act may be

relevant to whether Congress intended

to allow offsets trading among PM–10

precursors or between PM–10 and PM–

10 precursors, and requests comment on

the legal, technical, and policy aspects

of this issue.

Also, the EPA believes that trading

among PM–10 and PM–10 precursors

raises significant issues, including the

issue of scientific uncertainty. The EPA

requests comment on this issue and on

whether or how trading should be

allowed for netting in determining NSR

applicability. The scientific basis

supporting offsets conversions and

trading conceptually should apply with

equal force to netting. But allowing such

trading may improperly allow what

would have otherwise been major

modifications to escape review. Finally,

the Agency requests comment on

whether allowing trading among PM–10

and PM–10 precursors for offsets and

netting purposes should affect the

treatment of these emissions for major

source threshold applicability purposes.

The EPA requests comment on the

policy, technical and legal

considerations regarding all of these

issues.

4. Statutory Restrictions for New

Sources

The EPA is also proposing to amend

its regulations at 40 CFR 52.24 which

contain restrictions on the construction

or modification of new major stationary

sources (the construction ban). The

changes made by the 1990 Amendments

that alter the applicability of the

construction ban provisions are

reflected and clarified in this proposal.

The EPA is also proposing that the

definitions contained in proposed

§ 51.165 also apply in § 52.24.

Under the 1977 Amendments, section

110(a)(2)(I) of the Act required the EPA

to place certain areas under a federally

imposed construction moratorium (ban)

that prohibited the construction of new

or modified major stationary sources in

nonattainment areas where the State

failed to have an implementation plan

meeting all of the requirements of part

D. The 1990 amendments removed the

provision under section 110(a)(2)(I)

requiring this prohibition of

construction. However, in section

110(n)(3) of the Act (Savings Clause),

the 1990 Amendments retained the

prohibition in cases where it was

applied prior to the 1990 Amendments

based upon a finding that the area (1)

lacked an adequate NSR permitting

program (as required by section

172(b)(6) of the 1977 Act), or (2) the

State plan failed to achieve the timely

attainment of the NAAQS for sulfur

dioxide by December 31, 1982. All other

construction bans pursuant to section

110(a)(2)(I) are lifted as a result of the

new statutory provision. This includes

previously imposed construction bans

based upon a finding that the plan for

the area did not demonstrate timely

attainment and maintenance of the

ozone or CO NAAQS. In accordance

with the amended section 110(n)(3) of

the Act, any construction ban retained

remains in effect until the EPA

determines that the SIP meets either the

amended part D permit requirements, or

the requirements under subpart 5 of part

D for attainment of the NAAQS for

sulfur dioxide, as applicable.

Section 173 and the various subparts

of title I of the Act contain the

requirements for the issuance of NSR

permits to new or modified major

stationary sources in nonattainment

areas or ozone transport regions. To

issue such permits, the permit authority

must first find per section 173(a)(4) that

the ‘‘Administrator has not determined

that the applicable implementation plan

is not being adequately implemented for

the nonattainment area’’ in accordance

with the requirements of part D. If the

Administrator determines that the SIP

for meeting the part D requirements is

not being adequately implemented for

the nonattainment area where the new

source or modification wants to locate,

permits that would otherwise meet the

requirements of section 173 cannot be

issued. The Administrator intends to

make the determination by letter to the

permit authority, with a follow-up

notice to be published in the Federal

Register and need not undertake noticeand-comment procedures before taking

final action. The EPA solicits comments

on this method of communicating the

determination. Specifically, the EPA

requests comments on the need for an

opportunity for public notice and

comment prior to making the

determination effective.

While the EPA policy is generally to

impose a FIP where States fail to adopt

adequate NSR provisions, section

113(a)(5) of the Act provides that the

EPA may issue an order prohibiting the

construction or modification of any

major stationary source in any area,

including an attainment area, where the

Administrator finds that the State is out

of compliance with the NSR

requirements. Specifically, the EPA may

issue an order under section 113(a)(5)

banning construction in an area

whenever the Administrator finds that a

State is not acting in compliance with

any requirement or prohibition of the

Act relating to construction of new

sources or the modification of existing

sources.

This proposal does not include the

transition provisions under existing

§ 52.24 (c) and (g). These paragraphs

were removed because they were

originally designed to clarify the

applicable requirements for permits

issued prior to the initial SIP revisions

required by the 1977 Amendments. The

EPA solicits comments on the removal

of these paragraphs. Specifically,

comments are requested on the possible

need to maintain these paragraphs for

enforcement purposes for sources that

constructed prior to the initial SIP

revisions required by the 1977

Amendments.

In addition to the significant changes

already discussed, the proposed changes

to § 52.24 include several minor
38306 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

87 The proposed revisions to the definition of

‘‘stationary source,’’ as well as the addition of new

definitions for ‘‘stationary internal combustion

engine,’’ ‘‘nonroad engine,’’ and ‘‘nonroad vehicle’’

are also being proposed for inclusion in the PSD

regulations as discussed in section VI.B.3 of this

preamble.

changes. These minor changes include:

(1) The addition of requirements

applicable to transport regions, (2) the

inclusion of requirements applicable to

criteria pollutant precursors, (3)

incorporation of the definitions

proposed in § 51.165(a), (4) revisions to

the language at § 52.24 (h) (2), and (5)

revisions to § 52.24(j).

In §§ 52.24 (b), (d), (e), and (i), the

EPA proposes that all the requirements

of § 52.24 applicable to nonattainment

areas are now also applicable to

transport regions. The proposed revised

regulations also incorporate

requirements for criteria pollutant

precursors. Where previously only

criteria pollutants were covered under

§§ 52.24 (d) and (e), the EPA proposes

that the construction ban provisions of

proposed § 52.24 now extend to major

stationary sources of precursors of

pollutants for which the area is in

nonattainment or for which it is in a

transport region.

The EPA believes that the proposed

definitions at § 51.165(a) should also

apply when implementing the

provisions of proposed § 52.24. Instead

of listing each definition from

§ 51.165(a) in the amended § 52.24, the

EPA proposes that the definitions at

proposed § 51.165(a) apply under

§ 52.24(f). Also, by referring to the

definitions in § 51.165(a), the fugitive

emissions language at existing § 52.24(h)

is not needed, since the applicable

definition is contained in the definitions

under § 51.165(a) which the EPA is

today proposing to incorporate into

§ 52.24(f). The proposed changes to

existing NSR definitions and the

rationale for these changes is discussed

in the appropriate sections of this

preamble which discuss proposed

changes to regulations at § 51.165.

At § 52.24(g)(2), the EPA is proposing

to add that, under certain conditions

when an enforceable limitation is

relaxed, the requirements of § 51.165(a)

apply.

5. Applicability of Nonattainment NSR

to Internal Combustion Engines

Using new and revised definitions

contained in the 1990 Amendments

Congress drew a distinction between

emissions resulting from stationary

internal combustion engines and newlydefined ‘‘nonroad engines’’ (for

purposes of regulating internal

combustion engines under titles I and II

of the Act). Section 216(10) of the Act

defines ‘‘nonroad engine’’ as ‘‘an

internal combustion engine (including

the fuel system) that is not used in a

motor vehicle or a vehicle used solely

for competition, or that is not subject to

standards promulgated under sections

111 or 202.’’ Congress also added a

definition of ‘‘nonroad engine’’ in

section 216(10), a definition of

‘‘nonroad vehicle’’ in section 216(11), a

new definition of ‘‘stationary source’’ in

section 302(z), and revised the existing

definition of ‘‘stationary source’’ in

section 111(a)(3). Both definitions of

‘‘stationary source’’ include the

distinction between stationary and

nonroad internal combustion engines.

Under the amended Act, emissions

from a ‘‘stationary internal combustion

engine’’ are generally considered part of

a stationary source and subject to

control under title I State NSR permit

programs. On the other hand, emissions

resulting directly from internal

combustion engines considered to be

nonroad engines, or from nonroad

vehicles, are generally subject to

separate regulation under title II of the

Act. On June 17, 1994, the EPA

published regulations at 40 CFR part 89

regarding new nonroad engines and

nonroad vehicles, which included

definitions of the two terms. See 59 FR

31306.

In today’s document, the EPA is

proposing to amend the various NSR

regulations by revising the definition of

‘‘stationary source’’ to include

emissions from stationary internal

combustion engines, and to exclude

emissions from nonroad engines and

nonroad vehicles, as well as from

emissions resulting directly from an

internal combustion engine used for

transportation purposes. See proposed

§ 51.165(a)(1)(i). The EPA is also

proposing to complement the definition

of ‘‘stationary source’’ with new

definitions addressing the terms

‘‘stationary internal combustion

engine,’’ ‘‘nonroad engine,’’ and

‘‘nonroad vehicle.’’ 87 See proposed

§§ 51.165 (a)(1)(xxxii) through

(a)(1)(xxxiv), respectively. It should be

noted that the proposed definitions of

‘‘nonroad engine’’ and ‘‘nonroad

vehicle’’ are the same definitions that

EPA promulgated under 40 CFR part 89

on June 17, 1994 (59 FR 31337). As

proposed, a ‘‘stationary internal

combustion engine’’ refers to any

internal combustion engine that is

regulated by a Federal NSPS

promulgated under section 111 of the

Act, or an internal combustion engine

that is none of the following: a nonroad

engine, an engine used to propel a

motor vehicle or a vehicle used solely

for competition, or an engine subject to

standards promulgated under section

202 of the Act. See proposed

§ 51.165(a)(1)(xxxii).

It is the EPA’s intent to continue to

regulate internal combustion engines

that function in a stationary manner as

stationary internal combustion engines.

Apart from engines regulated under

section 111 and engines used to propel

a motor vehicle or a vehicle used solely

for competition, the proposed

definitions distinguish nonroad engines

from stationary internal combustion

engines primarily on the basis of engine

mobility and residence time. Engines

that are permanently affixed or are

otherwise non-portable and nontransportable are clearly stationary

internal combustion engines. In

addition, the definition of nonroad

engine provides that while portable and

transportable internal combustion are

generally to be regulated as nonroad

engines, those internal combustion

engines that remain in a particular

location for over 12 months (or a shorter

period of time for engines operating at

sources with seasonal operating

schedules) are to be treated as stationary

internal combustion engines (this

excludes engines in self-propelled

equipment and equipment intended to

be propelled while performing its

intended function).

Typical stationary internal

combustion engines generally include,

but are not limited to, engines

associated with pipeline pump and

compressor drives, electric power

generation, and certain well-drilling

operations. Examples of internal

combustion engines which, for the most

part, would be considered nonroad

engines (and nonroad vehicles) include

diesel locomotives, farm and

construction equipment, utility engines

(such as lawn and garden equipment),

forklifts, mobile cranes, and airport

service vehicles. Some internal

combustion engines perform both

mobile and stationary activities—i.e.,

they are used both to propel a vehicle

and to operate some equipment or

device when the vehicle is stationary.

The EPA is proposing that such engines

would be considered nonroad engines,

and not subject to review as stationary

internal combustion engines.

The EPA notes that as part of the

rulemaking on nonroad engines on June

17, 1994 (59 FR 31311), it is a

prohibited act to attempt to circumvent

the exclusion based on the residence

time of a portable or transportable

engine by means of removing the engine

from its location for a period and then

returning it to that same location. In

such cases, the time between removal of
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38307

88 Section 165(a)(4) of the Act provides that, in

order to obtain a PSD permit, a source must be

‘‘subject to the BACT for each pollutant subject to

regulation under this Act emitted from, or which

results from, such facility.’’ (Emphasis Supplied.)

89 Note that new section 112(b)(6) of the Act

exempts the HAP listed under section 112 from the

PSD provisions of part C of title I.

90 Prior to enactment of the new title VI, on

August 12, 1988 (53 FR 30566) the EPA published

rules implementing the Montreal Protocol. These

rules regulate CFC 11, 12, 113, 114, 115 and halons

1211, 1301 and 2402 as ODS. The PSD regulations

applied to the ODS regulated under the Montreal

Protocol.

the engine and its return to service (or

replacement) would be counted toward

the time period specified in paragraph

(2)(iii). An example of the final sentence

of paragraph (2)(iii) of the definition of

nonroad engine is when a portable

generator engine that functions as a

permanent backup generator is replaced

by a different engine (or engines) that

performs the same function. In that case,

the cumulative residence time of both

generators, including the time between

removal of the original engine and

installation of the replacement, would

be counted toward the consecutive

residence time period.

The definition of nonroad engine

includes a provision that if an engine is

replaced by another engine within the

12-month period, that the replacement

engine should be considered in

calculating the consecutive time period.

This provision is designed to ensure

that where an internal combustion

engine is necessary for the operation of

a stationary facility, the replacement of

one particular engine with another

would not prevent the engines from

being included as part of the stationary

facility. The EPA solicits comment on

the appropriateness of the proposed

definition of stationary internal

combustion engine and of the

appropriateness of incorporating the

same definition of nonroad engine as

was promulgated in part 89.

The EPA published on June 17, 1994

(59 FR 31339) an interpretative rule as

an appendix to 40 CFR part 89

explaining the EPA’s views concerning

the ability of States to regulate internal

combustion engines manufactured prior

to the effective date of part 89, as well

as the ability to impose in-use

restrictions on nonroad engines.

Paragraphs 1 and 2 of the Appendix

relating to engines manufactured prior

to the effective date of part 89 have been

remanded to EPA and ordered to be

vacated pursuant to a voluntary motion

by EPA to the Court of Appeals for the

District of Columbia Circuit. The EPA

expects to give further consideration to

the interpretations in these paragraphs

in a separate action. The full text of the

remaining paragraph (paragraph 3) of

the appendix is repeated here:

3. Moreover, EPA believes that States are

not precluded under section 209 from

regulating the use and operation of nonroad

engines, such as regulations on hours of

usage, daily mass emission limits, or sulfur

limits on fuel; nor are permits regulating

such operations precluded once the engine is

placed into service or once the equitable or

legal title to the engine or vehicle is

transferred to an ultimate purchaser, as long

as no certification, inspection or other

approval related to the control of emissions

is required as a condition precedent to the

initial retail sale, titling, or registration of the

engine or equipment. The EPA believes that

States are not prevented by section 209 from

requiring retrofitting of nonroad engines in

certain circumstances once a reasonable time

has passed after the engine is no longer new,

as long as the requirements do not amount

to a standard relating back to the original

manufacturer. Therefore, EPA believes that

modest retrofit requirements may be required

after a reasonable amount of time (e.g., at the

time of reregistration or rebuilding) and more

significant retrofit requirements may be

required after a more significant period of

time (e.g. after the end of the useful life of

the engine).

B. NSR Provisions for Prevention of

Significant Deterioration

As discussed below EPA is proposing

several changes pursuant to the 1990

Amendments to the PSD rules at 40 CFR

51.166 and 40 CFR 52.21 to codify some

of revised preconstruction permit

requirements of part C of title I of the

Act. These changes include (1) the

applicability of PSD to ozone depleting

substances (ODS) regulated under title

VI of the Act, and (2) the exemption of

the HAP listed under section 112 of the

Act from Federal PSD applicability. The

EPA is considering future rulemaking to

propose other changes to EPA’s PSD

program in light of the 1990

Amendments.

1. Stratospheric Ozone-Depleting

Substances

New title VI of the Act, entitled

‘‘Stratospheric Ozone Protection,’’

regulates the production and

consumption of substances that deplete

the stratospheric ozone layer. These

substances are typically used as

refrigerants for both household and

commercial purposes, and for other

common uses such as fire suppression,

solvents, and foam blowing. Methyl

bromide is also a listed ozone depleting

substance that is used as a broad

spectrum biocidal agricultural fumigant.

Pursuant to section 165(a)(4) 88, the PSD

regulations apply to all pollutants

regulated under the Act.89 See also, e.g.,

existing § 51.166(b)(23)(ii).

Section 602 of title VI of the Act lists

ODS for regulation and classifies the

substances as either Class I or Class II.

The Class I list includes the substances

previously regulated to implement the

Montreal Protocol on Substances that

Deplete the Ozone Layer (Montreal

Protocol).90 The Class I substances list

contains specific chlorofluorocarbons

(CFC), specific halons, carbon

tetrachloride, and methyl chloroform,

methyl bromide, and the

hydrochlorofluorocarbons (HCFC); the

Class II substances list contains specific

HCFC. These Class I and Class II lists

also include the isomers of the listed

substances, except for 1,1,2-

trichloroethane, which is an isomer of

methyl chloroform. Pursuant to the

listing criteria of section 602, the

Administrator may by rule add new

substances to the lists of Class I and

Class II substances. The EPA added

methyl bromide and the

hydrobromofluorocarbons (HBFC) to the

Class I list pursuant to Section 602. See

58 FR 65018, 65028 (December 10,

1993).

As ODS are regulated under title VI of

the Act, they are pollutants ‘‘subject to

regulation’’ under the Act for PSD

applicability purposes. The EPA is

therefore proposing that new major

stationary sources and major

modifications of sources of these

pollutants are subject to BACT for ODS.

Under section 169(1), a stationary

source is major if it is one of 28 listed

source categories and it emits, or has the

PTE, 100 tpy or more of any air

pollutant. Likewise, for other source

categories, the major stationary source

threshold is 250 tpy. Absent an EPA

determination of a ‘‘significance level’’

for a particular pollutant, a modification

at a major stationary source resulting in

any net increase in emissions of the

pollutant is subject to the PSD

requirements. See existing

§ 52.21(b)(23)(ii).

The EPA is proposing that the ODS

listed under section 602 be aggregated

as a single pollutant for PSD

applicability purposes. See proposed

§§ 51.166(b)(23)(i) and 52.21(b)(23)(i).

Since these substances are in many

cases used for the same purposes and

can be substituted for each other, and

because the nature of their

environmental impact is the same, the

EPA believes it is appropriate to

aggregate them as a single pollutant for

purposes of PSD applicability. Also,

treating ODS as a single pollutant is

similar to treatment of VOC for PSD

purposes. Like VOC, ODS have varying

levels of environmental impacts (or

reactivity), but PSD applicability for

VOC is nevertheless based on a total
38308 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

91Consumption equals production plus imports

minus exports.

92Letter from A. Stanley Meiburg, U.S. EPA

Region VI, to Randall Mathis, Arkansas Department

of Pollution Control and Ecology (February 1, 1994).

mass of emissions without adjustment

for reactivity.

As part of the same proposed change,

the EPA is proposing a significance

level of 100 tpy for determining PSD

applicability to modifications at major

stationary sources that result in a net

increase in emissions of aggregate ODS.

The EPA has determined significance

levels for all other pollutants based on

the local ambient impact associated

with that particular amount of

emissions. Since emissions causing

stratospheric ozone depletion is strictly

a global problem, no appreciable local

ambient impact will result from

emissions from a particular source.

Among regulated pollutants, ODS are

unique in this regard. Also, the global

stratospheric ozone impact from a

particular source is far below an amount

that would have a measurable local

ambient impact. In addition, the EPA

believes that title VI constitutes a fairly

comprehensive approach to addressing

ODS emissions, including a program to

recycle and reduce emissions under

section 608 of the Act.

On the other hand, the Act provides

that a new source emitting 100 tpy of

ODS (and for some source categories

250 tpy) should be subject to PSD

review, including the BACT

requirement. The EPA believes that PSD

should apply to any modification at a

major stationary source that would

result in a net emissions increase in

ODS of at least 100 tpy, which is the

lower major source threshold. This is

consistent with the purposes of

Congress in enacting the PSD provisions

to identify facilities which are

responsible for deleterious pollution

and which, due to their size, are

financially able to bear the costs

imposed by PSD. See Alabama Power

Co. v. Costle, 636 F.2d 323, 353 (D.C.

Cir. 1979) (discussing Congress’s intent

in enacting PSD provisions). However,

for the reasons discussed above, the

Agency believes that the global ambient

impact of emissions below that

threshold are de minimis. The EPA

requests comment on its proposed 100

tpy significance level for ODS.

Commenters should specify the basis for

any other suggested significance level.

The EPA is also considering an

alternative whereby groups of ODS that

may be used for the same purposes

would be aggregated, but that those that

are used for different purposes and

cannot be substituted for each other

would be treated separately for PSD

applicability. The current groupings

under section 602 may represent such

use groups. The EPA recognizes,

however, that these groups may not

sufficiently represent chemicals that can

be substituted for each other because

some within the same group may not be

substitutes, and because substitutes may

exist across groups. (Of course, as

discussed below, HCFC may be

substituted for CFC.) Under this

alternative, the major source thresholds

and the significance level would apply

independently for each group of

substitutable ODS. The EPA requests

comment on this option, and on the

appropriate groupings of ODS under

such an approach.

The EPA notes that the termination

date for production and consumption 91

of halons passed with the end of 1993,

and that the termination date for

production and consumption of the CFC

was the end of 1995. Therefore,

significant increases in emissions of

halons and CFC are not likely to occur

after final promulgation of this rule.

Rather, the EPA understands that it

intends that the termination of

production and consumption of the

more potent ODS will force users to

substitute less potent ODS. The most

common switch is the substitution of

the lower ozone-depleting potential

HCFC for the higher ozone-depleting

potential CFC. Much of this will have

been accomplished by the time of final

promulgation of this rule.

Currently, the EPA’s regulations

would appear to require that any

increase in the mass of emissions from

a non-routine change involving

substitution of HCFC for CFC would

trigger PSD review. Existing equipment

in many cases may have to be altered or

replaced to accommodate the substitute

ODS. Since the EPA’s title VI program

is geared toward forcing such changes

because they are environmentally

beneficial, the EPA has indicated that it

will consider treating such substitutions

as pollution control projects. The EPA

issued policy concerning pollution

control projects in a July 1, 1994

memorandum from John S. Seitz,

Director, OAQPS, entitled ‘‘Pollution

Control Projects and New Source

Review (NSR) Applicability.’’ The EPA

also took the position that the proposed

substitution of HCFC–141b for CFC–11

at Whirlpool Corporation’s Forth Smith,

Arkansas facility would qualify for a

case-by-case exclusion from PSD review

as a pollution control project.92 See 57

FR 32314, 32320 (July 21, 1992)

(explaining that the EPA will consider

pollution control projects on a case-bycase basis). This may be appropriate at

least where the switch will not increase

emissions of any other pollutant which

would impact a NAAQS, PSD

increment, or air quality-related value,

will not cause any cross-media

concerns, and will not increase any risk

associated with toxic or HAP.

The EPA is proposing this approach

as a regulatory exclusion. The title VI

program is designed to force such

substitution in order to reduce the

harmful effect of ODS on the

stratospheric ozone layer, and the

Agency encourages voluntary or early

substitution. Because substitution of

less potent ODS for more potent ODS is

a primary goal of the EPA’s ODS

regulatory program, the Agency believes

that an existing major stationary source

that emits ODS should be able to make

a change to use other ODS with less

ozone-depleting potential without

triggering PSD review. So long as the

modifications needed to accomplish

such substitution do not result in an

increase of the production capacity of

the ODS-emitting equipment, the EPA

believes that applying PSD and the

BACT requirement would not be within

the intended scope of the PSD program.

However, if the physical change or

change in the method of operation is

other than what is needed to

accommodate the switch in ODS, and if

there is a significant net emissions

increase of 100 tpy or greater of ODS,

then the change is a major modification

subject to PSD and the BACT

requirement. Accordingly, to implement

this policy regarding ODS substitution,

the EPA is proposing to provide that

such substitutions would not be

considered a physical change or change

in the method of operation, and

therefore would not be a major

modification for PSD purposes. See

proposed §§ 51.166(b)(2)(iii)(N) and 40

CFR 52.21(b)(2)(iii)(N).

The EPA recognizes that the very

specific assessment of ozone-depleting

potential for all listed substances under

section 602 of the Act also may support

a broader incorporation of relative

ozone-depleting potential into PSD

applicability for all ODS-related

modifications. In short, as noted above,

EPA is considering an alternative

whereby all modifications would be

assessed on a weighted basis relative to

their ozone-depleting potential. Under

this alternative approach, any increase

in amount of ODS emitted as a result of

a change to a substance with lower

ozone-depleting potential would be

discounted by the relative ODP of the

new substance. For example, if a facility

using 500 tpy of CFC–11 (with an

ozone-depleting potential of 1.0)

switched to use 1000 tpy of an HCFC
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38309

93Nevertheless, a hypothetical source in 1997

might delay substitution until 2003 because it

wishes to preserve the credit it would get from the

substitution for use to avoid PSD applicability for

new construction at the plant in 2008.

with an ODP of 0.1, there would

actually be a decrease in total ozonedepleting potential, and PSD review

would not apply. This approach is

arguably consistent with the purpose of

PSD to prevent deterioration in air

quality. To the extent a switch in ODS

actually reduces overall ozone-depleting

potential, no deterioration in air quality

would result. Were the EPA to adopt

this alternative approach, it would be

consistent for purposes of the PSD

netting calculation to adjust the mass of

each ODS involved based on its ozonedepleting potential to determine if a

modification results in a significant net

emissions increase.

The EPA recognizes that the

significant variation in ozone-depleting

potential could allow substantial plant

expansions contemporaneous with the

elimination of a substance having a

higher ozone-depleting potential. This

approach would thus allow a source

that builds new units

contemporaneously with a substitution

to avoid PSD (and the pollution

minimization opportunity it affords),

whereas a ‘‘green field’’ source simply

building the new units would be subject

to PSD. Nevertheless, from an

environmental impact standpoint, this

is arguably no different than an existing

utility replacing an uncontrolled NOXemitting boiler contemporaneously with

the construction of several wellcontrolled new boilers.

Still, section 165 of the Act specifies

preconstruction review requirements for

construction of ‘‘major emitting

facilities,’’ defined in section 302(j) in

terms of tons of pollutant emitted per

year. These provisions do not

specifically consider the relative

reactivity of pollutants in determining

whether PSD applies. The general rule

is that physical or operational changes

that do not increase emissions on a

plant-wide basis are excluded from the

PSD program because Congress

intended this program to prevent

significant increases in air pollution

and, hence, deterioration in air quality.

Alabama Power, 636 F.2d at 401. The

EPA recognizes that, based on our

knowledge of the reactivity of ODS, air

quality deterioration can be prevented

despite certain increases in the tpy of

ODS emissions.

But the Agency does not believe it is

obligated to adjust the increases in the

mass of pollution on a reactivity basis

in order to ensure that PSD apply only

where an increase in the mass of

pollution would actually deteriorate air

quality. This is particularly so where

title VI of the Act represents a

Congressional determination that

existing levels of ODS are unacceptable

and must be reduced (and ultimately

eliminated), and where PSD review may

constitute a tool for reducing ODS

emissions associated with major new

construction. The EPA therefore

believes that it has discretion to apply

PSD in a straight-forward manner under

section 165 to unadjusted mass

increases where sources are expanding

capacity in order to ensure BACT is

applied to such modifications.

The EPA believes this alternative

could promote early substitution of less

potent ODS to support expansion in

capacity. The EPA is also sensitive to

any incentive it might provide to delay

substitution until the source is ready for

plant expansion or other physical or

operational changes that may result in a

significant net increase in ODS. Since

sources could utilize credit from

substitution throughout the 5-year

contemporaneous period for netting, the

incentive to delay substitution may be

limited to unusual situations where a

source has flexibility to delay

substitution for 5 years and is aware of

construction it intends to commence

long in the future.93 The Agency expects

that the extra incentive for substitution

this approach will provide should

outweigh any risk of an incentive to

delay substitution. The EPA requests

comment on this alternative approach.

The EPA specifically requests that

commenters address the incentives this

alternative would create, the legal basis

for adjusting mass emissions in light of

the ozone-depleting potential and the

costs and benefits of applying BACT

and other PSD requirements to the

variety of ODS-emitting sources.

Finally, the Agency is again aware

that the phaseout schedule for the CFC

and halons is likely to prompt the bulk

of substitution to HCFC even before the

Agency takes final action on this rule.

As noted above, the Agency has already

taken the position for one such facility

that substitution of HCFC–141b for

CFC–11 would qualify for a case-by-case

exclusion from PSD review as a

pollution control project, where the

project would not increase production

capacity at the plant or result in

increased utilization of existing

capacity. The Agency may need to

address whether modifications

involving increases in plant capacity or

utilization and overall reduction in total

ozone-depleting potential should

qualify as a pollution control project

based on an overall decrease in

emissions, weighted on the basis of

ozone-depleting potential, from the

project. The Agency requests comment

on whether a project involving

expansion in plant capacity or

utilization may reasonably be

considered part of a pollution control

project. In any case, even if the Agency

does not allow such projects to qualify

as a pollution control project, if the

Agency adopts the ozone depletion

weighting alternative for all

modifications, substitutions that occur

before the final rule may still generate

credit to support expansions later in the

5-year contemporaneous period after

promulgation of the final rule. The EPA

requests comment on this view.

2. Listed Hazardous Air Pollutants

(HAP)

Under the 1977 Act Amendments and

regulations issued thereunder, the PSD

requirements of the Act apply to all

‘‘major’’ new sources and ‘‘major

modifications,’’ i.e., those sources

exceeding certain annual tonnage

thresholds. See, e.g., existing

§§ 51.166(b)(2)(i) and (b)(23)(i).

Typically, new sources and

modifications become subject to PSD

because their potential emissions

exceed the specified tonnage threshold

for a criteria pollutant (i.e., a pollutant

for which a NAAQS has been

established under section 109 of the

Act). For a major new source, the PSD

requirements apply to every pollutant

subject to regulation under the Act that

is emitted in ‘‘significant’’ quantities or,

in the case of a modification to an

existing major source, for which there is

a significant net emissions increase. See,

e.g., existing § 52.21(b)(23)(i). Under the

1977 Act Amendments, BACT and other

PSD requirements applied not only to

emissions of criteria pollutants but also

to emissions of pollutants regulated

under other provisions of the Act, such

as section 111 or section 112. This

regulatory structure was altered by the

1990 Amendments.

Section 112(b)(6) of Act generally

excludes the HAP listed in section 112

(as well as any pollutants that may be

added to the list) from the PSD

provisions of part C. Some of the

chemical compounds listed in (b)(1) are

arsenic compounds, beryllium

compounds, lead (Pb) compounds, and

mercury compounds. These compounds

are defined as including any unique

chemical substance that contains the

named chemical (i.e., arsenic,

beryllium, etc.) as part of the chemical’s

infrastructure. These named chemicals

are not independently listed on the

section 112(b)(1) list; however, with the

exception of Pb, the EPA is proposing

that the named chemicals (i.e., arsenic,
38310 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

94 Memorandum from John S. Seitz, Director,

OAQPS, ‘‘New Source Review (NSR) Program

Transitional Guidance,’’ (March 11, 1991).

95The compound hydrogen sulfide (H2S) was

inadvertently on the section 112(b)(1) list of HAP’s

in the 1990 Amendments. To correct this clerical

error, H2S was removed from the section 112(b)(1)

list by a joint resolution of Congress. The resolution

by the Senate was on August 1, 1991, while the

House resolution was on November 25, 1991. This

means that the PSD provisions of the Act continue

to apply to H2S, which is still regulated under

section 111 of the Act. The compound H2S is still

on the section 112(r) list.

beryllium, etc.) that are components of

the compounds listed under section

112(b)(1) are, like their compounds,

exempt from the Federal PSD

requirements. Regarding Pb, section

112(b)(7) states that elemental Pb (the

named chemical) may not be listed by

the Administrator as a HAP under

section 112(b)(1); therefore, elemental

Pb emissions are not exempt from the

Federal PSD requirements because

section 112(b)(6) exempts only the

pollutants listed in section 112.

Elemental Pb continues to be a criteria

pollutant subject to the Pb NAAQS and

other requirements of the Act.

The regulations specifying a

significance level refer to ‘‘Pb’’ and do

not specify whether the Pb covered is

‘‘elemental’’ or ‘‘Pb compounds.’’ As

noted in the EPA’s transition

guidance,94 the elemental Pb portion of

Pb compounds (as tested for in 40 CFR

part 60, appendix A, Method 12) is still

considered a criteria pollutant subject to

the Pb NAAQS and regulated under

PSD. Thus, the EPA intends that the

reference to ‘‘Pb’’ in the proposed

regulations covers the Pb portion of Pb

compounds. The Agency requests

comment on this position. The EPA also

requests comment on whether

references in the regulations should

specify ‘‘elemental’’ Pb, or whether the

word ‘‘elemental’’ might mislead the

public to believe that only Pb that is not

part of a Pb compound is covered.

Pollutants regulated under the Act

and not on the list of HAP, such as

fluorides (except for hydrogen fluoride),

total reduced sulfur compounds, and

sulfuric acid mist, continue to be

regulated under PSD.95 Because they are

on the initial HAP list of section

112(b)(1), the following pollutants,

which had been regulated under PSD

because they were covered by the

section 112 NESHAP, are now exempt

from Federal PSD applicability:

• Arsenic;

• Asbestos;

• Benzene (including benzene from

gasoline);

• Beryllium;

• Mercury;

• Radionuclides (including radon and

polonium);

• Vinyl chloride.

Pursuant to section 116 and the

preservation clause in section 112(d)(7),

States with an approved PSD program

may continue to regulate the HAP now

exempted from Federal PSD by section

112(b)(6) if the State PSD regulations

provide an independent basis to do so.

These State rules remain in effect unless

a State revised them to provide similar

exemptions. Such provisions that are

part of the SIP are federally enforceable.

Additionally, the listed HAP continue to

be subject to any other applicable State

and Federal rules; the exclusion is only

for the part C rules for PSD.

The EPA is proposing that any HAP

listed in section 112(b)(1) which are

regulated as constituents or precursors

of a more general pollutant listed under

section 108 are still subject to PSD as

part of the more general pollutant,

despite the exemption in section

112(b)(6). For example, VOC (a term

which includes benzene, vinyl chloride,

methanol, toluene, methyl ethyl ketone,

and numerous other compounds) are

still regulated as VOC (but not as

individual pollutants such as benzene,

etc.) under the PSD regulations because

these pollutants are ozone precursors,

not because they are HAP. Also,

particulates (including Pb compounds

and asbestos) are still regulated as

particulates (both PM–10 and PM)

under the PSD regulations.

Section 112(b)(6) provides: ‘‘The

provisions of part C (PSD) shall not

apply to pollutants listed under this

section.’’ Under the plain terms of

section 112(b)(6), PSD does not apply to

substances by virtue of their inclusion

on the list of substances that the

Administrator is to promulgate under

section 112(r), Prevention of Accidental

Releases. Subsection (r) establishes a

program to prevent and minimize the

consequences of an accidental release of

the listed HAP. Section 112(r) is not

intended to address emissions of these

pollutants outside of an accident, and

certain regulated sources may have no

emissions at all outside of accidental

releases. It thus makes sense that the

PSD program, which is designed to limit

and control emissions that occur in the

ordinary course of a source’s operations,

does not apply to substances by virtue

of their listing under section 112(r).

But, like substances listed under

section 112(b)(1), substances regulated

under section 112(r) may still be subject

to PSD if they are regulated under other

provisions of the Act. For example, the

EPA believes that even though H2S is

listed under section 112(r), hydrogen

sulfide is still regulated under the

Federal PSD provisions because it is

regulated under the NSPS program in

section 111. This means that the listing

of a substance under section 112(r) does

not exclude the substance from the

Federal PSD provisions; the PSD

provisions apply if the substance is

otherwise regulated under the Act.

In summary, the following pollutants

currently regulated under the Act as of

January 1, 1996, are still subject to

Federal PSD review and permitting

requirements:

• CO;

• NOX;

• SO2;

• PM and PM–10;

• Ozone (VOC);

• Pb (elemental);

• Fluorides (excluding hydrogen

fluoride);

• Sulfuric acid mist;

• H2S;

• Total reduced sulfur compounds

(including H2S);

• Reduced sulfur compounds

(including H2S);

• CFC’s 11, 12, 112, 114, 115;

• Halons 1211, 1301, 2402;

• Municipal waste combustor (MWC)

acid gases, MWC metals and MWC

organics.

• ODS regulated under title VI.

The PSD program will also

automatically apply to newly regulated

pollutants, for example, upon final

promulgation of an NSPS applicable to

a previously unregulated pollutant.

Based on the remand decision on June

3, 1986 by the EPA Administrator in

North County Resource Recovery

Associates (PSD Appeal No. 85–2), the

impact on emissions of other pollutants,

including unregulated pollutants, must

be taken into account in determining

BACT for a regulated pollutant. When

evaluating control technologies and

their associated emissions limits,

combustion practices, and related

permit terms and conditions in a BACT

proposal, the applicant must consider

the environmental impacts of all

pollutants, including those not

regulated by PSD. Once a project is

subject to BACT due to the emission of

nonexempted pollutants, the EPA

believes that the BACT analysis should

therefore consider the impact of the

various control options under

consideration on all pollutants,

including the section 112(b)(1) listed

HAP previously subject to PSD, in

determining which control strategy is

best. Likewise, consideration of

alternatives to a proposed PSD source,

as discussed in Section IV.D.7 of this

preamble, may include impacts from

listed HAP and other pollutants not

directly regulated under the PSD

program.

In addition, section 112(q) retains

existing NESHAP regulations by
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38311

specifying that any standard under

section 112 in effect prior to the date of

enactment of the 1990 Amendments

shall remain in force and effect after

such date unless modified as provided

in the amended section. Therefore, the

requirements of 40 CFR 61.05 to 61.08,

including preconstruction permitting

requirements, for new and modified

sources subject to existing NESHAP

regulations, are still applicable.

To implement the new requirements

of section 112 in the NSR program rules,

the EPA today proposes to exempt the

HAP listed under statutory section 112,

including any HAP that may be added

to the lists, from the Federal PSD

permitting requirements. See proposed

§ 52.21(i)(14). Should a listed pollutant

be removed from the list under the

provisions of section 112(b)(3) or

112(r)(3) of the Act, such pollutant

would be subject to the applicable PSD

requirements of part C to the extent it

is otherwise regulated under the Act.

The EPA also proposes to eliminate the

applicability of the PSD requirements to

individual HAP by deleting from the

existing regulations those HAP listed

under section 112, including beryllium,

mercury, vinyl chloride and asbestos.

See proposed §§ 52.21(b)(23)(i) and

52.21(i)(8)(i).

The PSD regulations at 40 CFR

51.166, which list the minimum criteria

for State SIP conformance, are also

being amended to reflect the changes

mentioned above. Accordingly, the EPA

proposes to allow States to exempt from

PSD the section 112(b)(1) list of HAP.

See proposed § 51.166(i)(13). The EPA

also proposes to revise the current

pollutant listings by deleting the HAP

which are now exempt from Federal

PSD applicability. See proposed

§§ 51.166(b)(23)(i) and 51.166(i)(8)(i).

3. Applicability of PSD Requirements to

Internal Combustion Engines

In accordance with the provisions of

the amended Act, the EPA today

proposes to revise the definition of

‘‘stationary source’’ in the PSD

regulations to include ‘‘stationary

internal combustion engines,’’ and to

exclude ‘‘nonroad engines’’ and

‘‘nonroad vehicles.’’ See proposed

§§ 51.166(b)(5) and 52.21(b)(5).

Accordingly, the EPA is also proposing

to add new definitions to address the

terms ‘‘stationary internal combustion

engine,’’ ‘‘nonroad engine,’’ and

‘‘nonroad vehicle.’’ See proposed

§§ 51.166(b) (46) through (48) and

§§ 52.21(b) (47) through (49). The

rationale and background for these

changes are the same as those provided

in section VI.A.5. of this preamble,

which describe similar changes to the

definition of ‘‘stationary source’’ under

the nonattainment NSR regulations.

C. Control Technology Information

Section 108(h) of the Act requires the

EPA to maintain a central database of

information regarding emissions control

technology, such as the RACT/BACT/

LAER Clearinghouse. Section 108(h)

also requires this information to be

disseminated by the EPA to the States

and to the general public. Today, the

EPA is proposing to require that

permitting authorities submit to EPA’s

RACT/BACT/LAER Clearinghouse,

within 60 days of issuance of either a

nonattainment NSR or PSD permit, all

requisite information on emission

control technology contained in any

such permit. See proposed

§§ 51.165(a)(16), 51.166(j)(5), and

52.21(j)(5)].

Section 173(d) of the Act specifically

requires such control technology

information from States for permitted

sources located in nonattainment areas.

This proposal extends that requirement

to apply to permits for PSD sources as

well. The EPA also solicits comment on

the availability of information in the

RACT/BACT/LAER Clearinghouse.

VII. Other Proposed Changes

A. Emissions Credits Resulting From

Source Shutdowns and Curtailments

The EPA’s current regulations limit

the use as offsets of emissions

reductions achieved by shutting down

an existing source or curtailing

production or operating hours below

baseline levels. See existing

§ 51.165(a)(3)(ii)(C). These regulations

provide that such emissions reductions

cannot be used as new source offsets if

the State lacks an approved attainment

demonstration, unless the shutdown or

curtailment occurs on or after the date

the new source permit application is

filed or the applicant can establish that

the proposed new source is a

replacement for the shutdown or

curtailed source. Such shutdown or

curtailment credits may be generally

credited if the reductions are

permanent, quantifiable, and federally

enforceable, if the area has an EPAapproved attainment demonstration.

In 1989, when EPA adopted the

current regulations regarding crediting

of shutdowns, it focused on the large

degree of discretion granted to it under

the Act to shape implementing

regulations, as well as the need to

exercise that discretion in a manner

consistent with the statutory directive

that offsets insure that new source

growth is consistent with reasonable

further progress (RFP) toward

attainment of the NAAQS, and on the

presence of an adequate nexus between

the new source and the shutdown

source. See 54 FR 27292. At that time,

EPA believed that adequate safeguards

to assure RFP were present when an

area had an approved attainment

demonstration, and so relaxed the 1980

regulations by allowing the crediting,

for offset purposes, of shutdowns that

occur after an application for a new or

modified major source is filed. Id. The

EPA also believed that the necessary

assurances of RFP were lacking, and

that the transactional ‘‘match’’ between

the new source and the shutdown

source was inadequate, when an area

was lacking an approved attainment

demonstration, and so the Agency

retained the restrictions on preapplication shutdowns in such cases. Id.

at 27292–94.

Passage of the 1990 Amendments has

significantly altered the landscape that

confronted EPA at the time of the 1989

rulemaking. Congress significantly

reworked the attainment planning

requirements of part D of title I of the

Act, such that EPA now believes it is

appropriate to delete the restrictions on

crediting of emissions reductions from

source shutdowns and curtailments that

occurred after 1990. In particular,

Congress enhanced the importance of

the requirement in section 172(c)(3) that

States prepare a ‘‘comprehensive,

accurate, current inventory of actual

emissions from all sources’’ in a

nonattainment area as the fundamental

tool for air quality planning. This was

done by restating the inventory

requirement as the first requirement in

several pollutant-specific planning

provisions, most notably for ozone

nonattainment areas. See section

182(a)(1) of the Act, requiring

submission of an inventory of ozone

precursor emissions within 2 years of

enactment of the amendments. Congress

also required submission of a revised

ozone precursor inventory every 3 years

thereafter. See section 182(a)(3)(A) of

the Act.

In addition, Congress added several

new provisions in 1990 that are keyed

to the inventory requirements. Ozone

nonattainment areas must adopt a series

of planning requirements including

specific reduction strategies and

‘‘milestones’’ that enable areas to

demonstrate that specific progress

toward attainment has been made. This

progress is measured from the 1990

ozone precursor inventory, or

subsequent revised inventories, and

must take any source shutdown or

curtailment into account. See General

Preamble, 57 FR 13498, 13507–13509

(April 16, 1992).
38312 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

96 See Memorandum from John Seitz, Director of

EPA’s OAQPS (July 21, 1993).

Moreover, the 1990 Amendments

mandate several adverse consequences

for States that fail to meet the planning

or emissions reductions requirements of

the amended Act that are tied to the

emissions inventories. For example, the

Act contains mandatory increased new

source offset sanctions for States that

fail to submit a required attainment

demonstration. The Act’s sanction for

failure to submit a required

demonstration is 2:1 offsets. The 1990

Amendments also contain provisions to

require that when an area fails to attain

the air quality standard by its statutory

attainment date, EPA must bump the

area up to the next higher classification

or the classification based on its design

value, whichever is higher. Additional

regulatory requirements are imposed as

a result of the higher classification.

Also, sections 181(b)(4) and 185 of the

Act contain fee provisions applicable to

severe ozone nonattainment areas that

do not attain the standard by their

statutory attainment date.

Thus, there is now a host of negative

impacts that flow from a State’s failure

to plan for and make reductions in the

amount of pollution set forth in the

emissions inventories. The EPA has

tentatively concluded that, taken

together, these statutory changes justify

a shift away from the focus of the

current regulations on individual offset

transactions between a specific new

source and a specific source that will be

shut down, and towards a systemic

approach. The EPA believes that a

benefit from easing the shutdown

restrictions is that emissions reductions

from the closing of some military

installations may be available as offsets

for new sources to build.

In this proposal, the EPA is proposing

to revise the existing provisions for

crediting emissions reductions by

restructuring existing §§ (a)(3)(ii)(C)(1)

and (2) for clarity without changing the

current requirements therein. See

proposed §§ (a)(3)(ii)(C)(1) through (4).

In addition, EPA is proposing two

alternatives which would ease, under

certain circumstances, the current

restrictions on the use of emissions

reductions as offsets from source

shutdowns and curtailments.

Under Alternative 1, EPA is proposing

for ozone nonattainment areas to lift the

current offset restriction applicable to

emissions reductions from source

shutdowns and curtailments in such

areas without EPA-approved attainment

demonstrations, so long as the

emissions reductions occur after

November 15, 1990 and the area is

current with part D ozone

nonattainment planning requirements.

See proposed §§ 51.165(a)(3)(ii)(C)(5)

and (6)[Alternative 1]. Proposed

Alternative 2 generally lifts the current

offset restriction applicable to emissions

reductions from source shutdowns and

source curtailments for all

nonattainment areas and all pollutants

where such reductions occur after the

baseyear of the emissions inventory

used (or to be used) to meet the

applicable provisions of part D of the

Act. See proposed

§ 51.165(a)(3)(ii)(C)(5)[Alternative 2].

Neither alternative changes the current

offset restrictions with respect to their

application to emissions reductions that

occur prior to the base-year of the

emissions inventory in nonattainment

areas without EPA-approved attainment

demonstrations. Moreover, both

alternatives allow States, if they so

choose, to retain the current restrictions

on the use of shutdown and curtailment

credits for offset purposes. The EPA is

seeking comments on these proposed

alternatives. Discussion of the two

proposed alternatives follows.

1. Shutdown Alternative 1

In a July 21, 1993 policy statement,

the EPA reconsidered the applicability

of these regulatory requirements for

ozone nonattainment areas and ozone

attainment and unclassifiable areas in

the OTR in light of the 1990

Amendments.96 The EPA explained that

States should be able to allow shutdown

or curtailment credits to be used under

conditions applicable to areas with

approved attainment demonstrations

until the EPA action to approve or

disapprove a timely submitted

attainment demonstration. The EPA also

explained that, if the State is delinquent

in submitting specified SIP revisions or

if the State’s attainment demonstration

is disapproved, the use of shutdown

credits would again be restricted to

those occurring on or after the filing

date of the new source permit

application (unless the applicant can

establish that the proposed new source

is a replacement for the one that was

shutdown or curtailed). The EPA also

took the position that areas not required

to submit an attainment demonstration

should be allowed to follow the less

restrictive shutdown policies applicable

to areas in compliance with the

attainment demonstration requirements

under the current regulations.

The EPA also specified that creditable

shutdowns or curtailments must (1)

have occurred on or after November 15,

1990, (2) have reduced emissions that

are included in the emissions inventory

for attainment demonstration and RFP

milestone purposes, and (3) generate an

amount of credit equal to the lower of

actual or allowable emissions for the

source. Consistent with the current

regulations, the EPA noted that all

shutdown or curtailment reductions

must be permanent, quantifiable, and

federally enforceable in order to be

creditable.

The EPA clearly explained in the July

21, 1993 policy statement that it did not

supersede existing Federal or State

regulations or approved SIP, but

intended solely to provide guidance

during the interim period prior to

submission and approval of attainment

demonstrations under the 1990

Amendments. The EPA also explained

that it would address matters relating to

shutdown credits in the rulemaking

regarding regulatory changes mandated

by the 1990 Amendments and would

take comment on its policy at that time.

The EPA chose to address this issue

through a policy statement rather than

through binding regulatory changes

because there was a need for immediate

guidance during the interim period. The

EPA therefore is proposing regulatory

changes in light of the 1990

Amendments to address the

creditability of shutdown and

curtailment reductions.

The EPA’s proposal regarding the

treatment of shutdown and curtailment

credits will affect a number of different

circumstances. First, the EPA believes

the interim period prior to approval or

disapproval of attainment

demonstrations for ozone nonattainment

areas will continue after the

promulgation of this final rule. The

attainment demonstration for serious

and above ozone nonattainment areas

was not due until November 15, 1994,

and the EPA action to approve or

disapprove these submissions may not

occur until some time after that. Second,

areas may be designated as new ozone

nonattainment areas in the future that

will have future attainment dates, and if

designated moderate or above will have

future dates for submission of an

attainment demonstration. Third, ozone

nonattainment areas not reaching

attainment by the applicable dates may

be ‘‘bumped up’’ to the next higher

nonattainment classification, and may

be given new future dates for

submission of an attainment

demonstration and for reaching

attainment.

The EPA’s rationale for its July 21,

1993 policy statement was rooted in the

belief that the 1990 Amendments new

schedules for submitting attainment

demonstrations rendered the restrictions

on the use of so-called ‘‘prior shutdown

credits’’ as unnecessarily hindering a
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38313

State’s ability to establish a viable offset

banking program. For those ozone

nonattainment areas (and areas in the

OTR), the EPA explained that the

purposes of the prior shutdown credits

restrictions would not be served if these

areas were treated as if they had failed

to make such a demonstration.

As explained in the July 21, 1993

policy statement, the EPA’s concern in

its final action establishing the current

regulatory approach to shutdown credits

in 40 CFR 51.165 was that unrestricted

use of prior shutdown credits would

lead to offset transactions without any

nexus between the decision to shut

down or curtail operations at the

existing source and the decision to

construct new capacity. Thus,

shutdowns or curtailments that would

have occurred in any case (not

prompted by a new source seeking

offsets) would not be applied to RFP,

but would instead be used to

accommodate additional emissions

growth in the nonattainment area.

The EPA explained in the July 21,

1993 policy statement that the 1990

Amendments merit a less restrictive

approach to the use of prior shutdown

and curtailment credits in ozone

nonattainment areas. The EPA took the

position that such credits may be used

as offsets until the EPA acts to approve

or disapprove an attainment

demonstration that is due. The 1990

Amendments established new

attainment deadlines for all

nonattainment areas. Ozone

nonattainment areas classified as

moderate and above must submit new

attainment demonstrations. (Marginal

and unclassifiable areas, as well as

attainment areas in the OTR, are not

obligated to submit an attainment

demonstration.) These ozone

nonattainment areas must adopt a series

of planning requirements including

specific reduction strategies and

‘‘milestone’’ requirements that areas

demonstrate that specific progress

toward attainment has been made. This

progress is measured from a specific

1990 ozone inventory, for which any

prior shutdown or curtailment

reductions must be taken into account.

See General Preamble, 57 FR 13498,

13507–13509 (April 16, 1992). For

pollutants other than ozone, the EPA

stated that it would consider requests

for relaxation of the shutdown and

curtailment credits policy on a case-bycase basis.

As Alternative 1, for ozone

nonattainment areas in general, the EPA

is proposing to adopt the policies

reflected in the July 21, 1993 policy

statement as regulatory changes. See

proposed §§ 51.165(a)(3)(ii)(C)(5) and (6)

[Alternative 1]. The EPA continues to

adhere to its view in the July 21, 1993

policy statement that the 1990

Amendments’ provisions for ozone

nonattainment areas justify use of prior

shutdown and curtailment credits as

offsets in the interim period before the

EPA approves or disapproves any

required attainment demonstration. The

EPA believes that the safeguards in the

new requirements of the 1990

Amendments provide adequate

assurance of progress toward attainment

so that restrictions on the use of prior

shutdown or curtailment credits is not

necessary. Thus, the EPA is proposing

that prior shutdown and curtailment

credits may be used as offsets in ozone

nonattainment areas (as well as areas in

the OTR, to the extent applicable), as

long as when they come due the State

(1) submits a complete emissions

inventory for the area under section

182(a)(1), (2) submits complete revisions

to its NSR program under section

182(a)(2)(C), (3) submits the 15 percent

plan for the area under section

182(b)(1)(A) for moderate and above

areas, (4) submits the attainment

demonstration for the area under section

182(b)(1)(A) (for moderate areas) or

section 182(c)(2) (for serious and above

areas), (5) submits the 3 percent

reduction plan under section

182(C)(2)(B) for serious and above areas,

and (6) submits milestone

demonstrations under section 182(g)(2)

for serious and above areas. To the

extent ozone nonattainment areas are

classified marginal (or lower), States are

not required by the Act to submit an

attainment demonstration, and may rely

on shutdown and curtailment credits for

offsets.

The EPA also continues to adhere to

the limitations explained in the July 21,

1993 policy statement. The EPA is

therefore proposing in Alternative 1 that

the restrictions on the use of prior

shutdown and curtailment credits will

again apply as soon as a State fails to

make any of these submissions, or if

such a submission is deemed

incomplete or is disapproved. These

limitations address the concern

underlying the initial imposition of

these restrictions that use of prior

shutdown and curtailment credits in

such circumstances would be

inconsistent with the RFP requirement.

Also, if a State is late in making any of

these submissions, once the submission

is made to the EPA, the State is allowed

to implement the less restrictive

shutdown credits policy. The EPA is

also proposing that, if a State becomes

delinquent during review of a permit

application that relies on emissions

reductions from prior shutdowns or

curtailments, the State may allow offsets

to remain creditable if the application

was complete before the State became

delinquent.

Areas currently designated attainment

or unclassifiable for ozone under section

107(d)(4) of the Act may be redesignated

under section 107(d)(3) to

nonattainment, and at the time of

redesignation will be classified by

operation of law under section 181(b).

The EPA is proposing that shutdown

and curtailment credits be available as

offsets in these new areas under the

same conditions applicable to those

areas now designated as nonattainment.

Just as the ozone nonattainment

provisions of the 1990 Amendments

provide assurance that currently

designated areas will achieve RFP and

attainment, so, too, do those provisions

provide assurance that new ozone

nonattainment areas will achieve RFP

and attainment.

Pursuant to section 181(b)(2), ozone

nonattainment areas that fail to reach

attainment by the applicable date are to

be reclassified (bumped up) by

operation of law to the higher of the

next higher classification or the

classification applicable to the area’s

design value at the time (except no area

is to be reclassified as extreme).

Pursuant to section 182(i), areas that are

reclassified on failure to attain are to

meet the requirements applicable to the

new classification, according to the

prescribed schedules, except that the

Administrator may adjust deadlines

other than the attainment dates to the

extent necessary or appropriate to

assure consistency among the required

submissions.

Thus, moderate areas failing to attain

by November 15, 1996, will be

reclassified as serious and the

Administrator may revise submission

dates including the date for submission

of a new attainment demonstration. The

EPA does not believe that prior

shutdown and curtailment credits

should be used as offsets in such areas

where the date for a new attainment

demonstration has been extended.

Having failed to reach attainment by the

date specified in the 1990 Amendments,

the EPA does not believe it may

continue to regard the new statutory

provisions as providing an

‘‘independent assurance of RFP.’’

Rather, the EPA believes that it should

regard failure to attain by the applicable

date as a delinquency rendering prior

shutdown and curtailment credits

unavailable as offsets.

Section 181(b)(3) of the Act provides

that the Administrator shall grant the

request of any State to reclassify a
38314 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

nonattainment area in that State to a

higher classification. Upon voluntary

reclassification, the fixed deadlines

applicable for the higher classified area

may well be later than those otherwise

applicable to the original classification.

For example, the attainment

demonstration submission date

applicable for a serious area is later than

such date for a moderate area.

Under alternative 1, the EPA is

proposing that shutdown and

curtailment credits be available as

offsets for voluntarily reclassified areas

under the same conditions applicable if

the area were originally classified in the

higher category. The EPA does not

believe voluntary reclassification

constitutes a delinquency, and believes

the provisions applicable to the higher

classification will provide the necessary

assurance that the area will achieve RFP

and attainment. The EPA requests

comment on this approach.

2. Shutdown Alternative 2

Under this alternative the EPA is

proposing for all nonattainment areas

and all pollutants that the current offset

restrictions on crediting of emissions

reductions from source shutdowns and

curtailments be lifted where the

reductions occur after the baseyear of

the emissions inventory used (or to be

used) to meet the applicable part D

requirements of the Act.

In light of the NSR requirements in

the 1990 Amendments, EPA believes

that the Act now contains sufficient

procedures, air quality tests, penalties,

and assurances to address air quality

concerns in nonattainment areas lacking

EPA-approved attainment

demonstrations. Specifically, the Act

requires a mandatory 2:1 offset sanction

for new or modified major sources in

States that fail to submit a required

attainment demonstration.

Consequently, the EPA is proposing that

continuing a prohibition on the use of

source shutdown and curtailment

credits generated after the baseline year

of the most recent inventory is not

warranted.

Under alternative 2, the EPA believes

that emissions reductions from the

shutdown or curtailment of emissions

which occur after the baseyear of the

most recent emissions inventory may be

fully creditable for offset purposes, and

that no additional nexus between source

shutdowns or curtailments and the new

source is necessary to insure that

construction of the new source will

result in reasonable further progress

towards attainment. From an air quality

planning perspective, such emissions

actually impacted the measurements of

air quality used in determining the

nonattainment status of an area.

Subsequently, reductions in these

emissions from source shutdowns or

curtailments are reductions in actual

emissions, and their use as emission

offsets at the statutorily-required greater

than 1:1 ratio constitutes progress

towards improved air quality. Also, for

all classified ozone nonattainment areas,

the Act now requires emission offsets at

ratios ranging from 1.15:1 to 1.5:1 be

obtained from either the same

nonattainment area or an area of equal

or greater classification.

For nonattainment areas for pollutants

other than ozone, the NSR regulations

also require each applicant to perform

modeling analyses to demonstrate that

the major new source or modification

will not interfere with reasonable

further progress and the State’s ability to

produce an attainment plan. The

applicant must not only secure actual

emission reductions sufficient to meet

the numerically calculated amount

necessary under the Act to offset the

associated allowable emissions increase

for the new source or modification, but

enough offsets such that the modeling

demonstrates no significant adverse air

quality impact from the proposed major

new source or modification.

B. Judicial Review of NSR Permits

The EPA is clarifying that the Act and

the EPA’s implementing regulations

require SIP to provide applicants and

affected members of the public with an

opportunity for State judicial review of

PSD and nonattainment NSR permit

actions under approved NSR SIP to

ensure an adequate and meaningful

opportunity for public review and

comment on all issues within the scope

of the permitting decision as required

under parts C and D of title I. The PSD

provisions of the Act emphasize the

importance of public participation in

permitting decisions. See section 160(5)

of the Act. In addition, section 165(a)(2)

of the Act provides that no PSD permit

shall be issued unless ‘‘a public hearing

has been held with opportunity for

interested persons including

representatives of the Administrator to

appear and submit written or oral

presentations on the air quality impact

of the source, alternatives thereto,

control technology requirements, and

other appropriate considerations.’’

Further, § 51.166(a)(1) provides that

‘‘[i]n accordance with the policy of

section 101(b)(1) of the Act and the

purposes of section 160 of the Act, each

applicable State implementation plan

shall contain emission limitations and

such other measures as may be

necessary to prevent significant

deterioration of air quality.’’ See also

section 161 of the Act.

The EPA interprets existing law and

regulations to require an opportunity for

State judicial review of PSD and

nonattainment NSR permit actions

under approved NSR SIP by permit

applicants and affected members of the

public in order to ensure an adequate

and meaningful opportunity for public

review and comment on all issues

within the scope of the permitting

decision. The EPA believes that the

opportunity for public review and

comment, as provided in the statute and

regulations, is seriously compromised

where an affected member of the public

is unable to obtain judicial review of an

alleged failure of the State to abide by

its NSR SIP permitting rules.

Accordingly, all such persons, as well as

the applicant, must be able to challenge

NSR permitting actions in a judicial

forum.

In section 307(b) of the Act, Congress

expressly provided an opportunity for

judicial review of NSR permitting

decisions when the EPA is the

permitting authority. There is no

indication that Congress intended that

citizens’ rights would be diminished

upon the EPA approval of a State’s NSR

program. Similarly, Congress has

provided citizens the ability to

challenge the failure of a major source

to obtain the NSR permit required under

part C or D or the violation of such

permit in Federal district court under

the citizen suit provisions of section

304(a)(3), regardless of whether the

permitting authority is the EPA or a

State.

The operative language of section

304(a)(3) could be read as equivalent to

the Federal NSR enforcement provisions

of sections 113(a)(5) and 167, which

enables EPA to challenge in Federal

court both construction without any

permit and construction without a

permit that satisfies applicable NSR

requirements. The EPA believes that the

better view is that expressed in the

legislative history of the 1977

Amendments, which provided Federal

court jurisdiction under section 304 for

citizen suits directed at the failure to

obtain any major NSR permit, but

directed citizen challenges to the terms

of major NSR permits to State court:

‘‘[i]n order to challenge the legality of a

permit which a State has actually

issued, or proposes to issue, under [the

PSD provisions of the Act] however, a

citizen must seek administrative

remedies under the State permit

consideration process, or judicial review

of the permit in State court.’’ Staff of the

Subcomm. on Environmental Pollution

of the Senate Comm. on Environment
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38315

and Public Works, 95th Cong., 1st Sess.,

A Section-by-section Analysis of S. 252

and S. 253, Clean Air Act Amendments

36 (1977), reprinted in five Legislative

History of the Clean Air Act

Amendments of 1977 (1977 Legislative

History) 3892 (1977). (Section 304(a)(3)

originated in S. 252; the House bill had

no such provision; the conference

committee expanded the coverage of the

provision to apply to nonattainment

major new source review as well. See

H.R. Conf. Rep. No. 564, 95th Cong., 1st

Sess., reprinted in three 1977 Legislative

History at 553). This reading is

supported by the limited case law on

the subject. See Ogden Projects, Inc. v.

New Morgan Landfill Co., Inc., No. 94–

CV–3048 (E.D. Pa.), Jan. 10, 1996 (slip

op. at 5–9); see also League to Save Lake

Tahoe, Inc. v. Trounday, 598 F.2d 1164,

1173 (9th Cir.), cert. denied, 444 U.S.

943 (1979). The EPA believes that

Congress intended such opportunity for

State judicial review of PSD and

nonattainment NSR permit actions to be

available to permit applicants and at

least those members of the public who

can satisfy threshold standing

requirements under Article III of the

Constitution. The EPA also solicits

comment on whether the statute should

instead be interpreted as providing for

citizen challenges to State-issued

permits in Federal court under section

304(a)(3), on whether citizens should be

given the option of proceeding in State

or Federal court, and on whether

citizens should be allowed to proceed in

Federal court only if a State court

remedy is not provided.

The EPA seeks to codify its

interpretation by proposing in this

action expressly to require that a SIP

provide for judicial review by private

parties in State court of PSD and

nonattainment NSR permit actions.

Such review must be available to the

applicant and any person who

participated in the public participation

process (unless that person can

demonstrate that it was impracticable to

raise an objection during the comment

period, e.g., because the permit term

complained of was one added to the

final permit without prior notice) and

who can satisfy threshold Article III

standing requirements. The EPA also

solicits comment on whether to require

States, either instead of such a SIP

revision requirement or in addition to

such a SIP revision requirement, to

submit a legal opinion from the

Attorney General for the State, or the

chief attorney for an air pollution

control agency that has independent

legal counsel, demonstrating that the

State has adequate legal authority to

provide for and implement the

opportunity for State judicial review of

a PSD or nonattainment NSR permit

action by the applicant and members of

the public who participated in the

public participation process and who

can satisfy threshold Article III standing

requirements.

The SIP may also provide that this

opportunity for judicial review is the

exclusive means by which citizens may

obtain judicial review of the permit, and

that all such actions for judicial review

must be filed within a reasonable period

of time specified in the SIP. If the SIP

includes such a time limit, it must also

provide that if new grounds for

challenge arise after the review period

has ended, a person may challenge the

permit on such new grounds within a

reasonable period specified in the SIP

after the new grounds arise. Such new

grounds may be limited to new

information which was not available

during the review period.

Finally, EPA also solicits comment on

the extent to which judicial review of

the provisions of PSD and

nonattainment NSR permits through the

provisions of title V of the Act may

substitute for judicial review under the

terms of the SIP. In August 1995 EPA

issued a supplemental rulemaking

notice proposing changes to the

requirements of 40 CFR Part 70

governing State operating permit

programs under title V of the Act. 60 FR

45529 (Aug. 31, 1995). In that

document, EPA proposed to require that

certain activities governed by a State

review program, including the issuance

of a PSD or nonattainment NSR permit

under parts C or D of title I of the Act,

meet the procedural requirements of

title V, such that there would only be a

single round of public process and EPA

review, as opposed to possibly

duplicative permit issuance procedures

under title I and title V. EPA solicited

comment, however, on whether EPA

review and, ultimately, judicial review

under title V should address all or only

some of the requirements of PSD and

nonattainment NSR permits. Thus, it is

not clear at this juncture whether EPA

and judicial review under part 70 will

extend to all PSD and nonattainment

NSR requirements, and hence, whether

adoption of the proposed changes to

part 70 would obviate the need for a

separate judicial review requirement

under title I. The EPA will coordinate

final action under both proposals, and

will take care to ensure that final action

under this proposal and under the

proposed revisions to part 70 are

consistent and do not result in

duplicative or unnecessary

requirements.

For the reasons discussed above, the

EPA is proposing that SIP provide for

judicial review in State court for PSD

and nonattainment NSR permits issued

under parts C and D of title I,

respectively. See proposed

§§ 51.165(a)(5)(iii) and 51.166(q)(6). The

EPA seeks comment on this proposal.

C. Department of Defense (DOD)

Concerns

The DOD has raised the question of

whether the NSR rules should provide

to military sources temporary

exclusions from the requirement for

preconstruction review of major

modifications in the event of a ‘‘national

security emergency.’’ The DOD defines

‘‘national security emergency’’ as a

situation where rapid response is

required on the part of a Military

Department or a DOD Component (i.e.,

the Army, the Navy, the Air Force, the

Marines, the Coast Guard when in the

naval service, the National Guard, and

the Reserves) to respond to emergency

situations that make it impractical to

meet the procedural requirements for

obtaining a major NSR permit in

advance of a major modification and the

associated increase in emissions.

‘‘National security emergencies’’ would

include situations where United States

forces are introduced into hostilities or

peacekeeping operations, other

situations where involvement in

hostilities is indicated, and situations

where U.S. forces are called upon to

provide emergency humanitarian relief

or protect the public health or welfare,

such as responding to civil disturbances

and natural disasters such as hurricanes,

earthquakes, and wildfires. Under a

temporary national security emergency

exclusion, in lieu of the normal

preconstruction review process, the

military facility would apply for and

obtain an NSR permit, if necessary, after

the emergency has ended. A temporary

national security emergency exclusion,

if provided, would be invoked only in

emergencies that require physical or

operational changes to military sources

that are significant enough to trigger the

NSR permitting requirements for a

major modification.

The DOD believes that regulatory

provisions to address ‘‘national security

emergencies’’ are necessary to enable

the DOD to immediately and

dramatically respond to support

specifically designated national security

missions or civilian emergencies. The

absence of such emergency provisions

could hinder the ability of local

commanders to comply with

Presidential directives in a timely

manner because of the time periods and
38316 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

public notice requirements involved in

obtaining NSR permits.

The EPA is requesting comment on

the need for an explicit regulatory

exclusion in the NSR rules for ‘‘national

security emergencies.’’ In particular, the

EPA is soliciting comment on the legal

authority and necessity for such an

exclusion in light of Act section 118,

whether such an exclusion should be

mandatory or voluntary for States with

approved NSR SIP, and whether such an

exclusion should be limited to the DOD,

or whether it should be made available

to other public agencies that may be

called on to protect the public health or

welfare in response to unforeseen

natural or civilian emergencies. In

addition, the EPA is requesting

comment on the specific form that any

such provisions should take, including

how to structure a definition for

‘‘national security emergency’’ that is

sufficiently descriptive to be

implemented as intended.

The August 31, 1995 supplemental

proposal concerning the EPA’s

regulations at 40 CFR parts 70 and 71,

that address requirements for title V

operating permit programs, raised the

issue of whether similar exclusion

provisions should be added to parts 70

and 71 to authorize local governments

(and other sources) to make changes

without revising the source’s title V

permit under specified circumstances to

respond to emergencies such as natural

disasters and severe weather conditions.

(See 60 FR 45560–45561) The EPA

requested comments on this topic in

response to preproposal comments

submitted by State and local air

pollution control agencies that already

have authority to grant temporary

exclusions as a matter of State or local

law. In that document, the Agency

solicited comment on the proper scope

and terms of any such authorization

provision that might be added to parts

70 and 71, including appropriate

procedural safeguards for exercising

such authority considering the scope of

the authorization. Examples of

procedural safeguards include prior

notification of a change by the source

requesting emergency authorization,

unless prior notification is not possible,

and authorization for the permitting

authority to attach conditions to the

authorization, as it deems appropriate,

to ensure that the change is being made

in a manner that will cause the least

change, modification, or adverse impact

to life, health, property, or natural

resources. The EPA believes that similar

considerations are appropriate in the

context of a temporary national security

emergency exclusion that might be

added to the NSR rules in parts 51 and

52. Furthermore, in the context of

responding to comments on the August

31, 1995 supplemental proposal and on

this proposal, the EPA will consider

whether temporary national security

emergency exclusion provisions that

specifically address DOD sources

should be added to parts 70 and 71 as

well as to the NSR regulations.

Although the EPA is not reopening the

public comment period for the August

31, 1995 supplemental proposal, the

EPA solicits comments in this document

on whether such temporary national

security emergency exclusion

provisions for the DOD should be added

to parts 70 and 71 and on how such

provisions should differ from those that

may be incorporated in the NSR

regulations, should such provisions be

adopted for either program.

The DOD has suggested the following

approach for including ‘‘national

security emergency’’ provisions in the

NSR regulations. Sections 51.165(a),

51.166, 52.21 and 52.24 would be

amended to add a definition for

‘‘national security emergency’’ that is

based on the description of that term

above. A new, stand-alone paragraph

would be added in §§ 51.165(a), 51.166,

52.21 and 52.24, entitled ‘‘Temporary

exclusions for national security

emergencies,’’ which would read as

follows:

Each plan shall provide that actions

on the part of a military facility to

respond to a national security

emergency that otherwise would

constitute a major modification shall not

constitute a major modification for the

purposes of this section for the duration

of the temporary exclusion provided by

this paragraph, provided that the

Commanding Officer of the military

facility complies with the following

conditions. For the purposes of this

section, ‘‘military facility’’ shall mean

the major stationary source that is

owned or operated by a United States

Department of Defense Component and

that is engaged in national security or

related activities.

(1) As soon as practicable, but no later

than seven calendar days after the

military facility begins to use the

national security emergency exclusion,

the Commanding Officer of the military

facility shall notify in writing all

affected State permitting authorities and

EPA Regional Offices, and the

appropriate Secretary of the Military

Department or Head of the Department

of Defense Component, that the military

facility is responding to a national

security emergency and is using the

exclusion. During the 7-day notice

period and the 30 calendar days after

the date of the document, the

Commanding Officer of the military

facility shall be authorized to determine

when the exclusion under this section

applies. Such determination shall be

made only after the Commanding

Officer has made all reasonable efforts

to accommodate the emissions increase

without deviating from otherwise

applicable permitting requirements.

(2) If the military facility seeks to rely

on the temporary national security

emergency exclusion for longer than 30

calendar days from the date of the

notice in paragraph (1), the continued

use of the exclusion must be reviewed

and approved by the appropriate

Secretary of the Military Department or

Head of the Department of Defense

Component taking into account any

public health, welfare, or environmental

concerns raised in consultation with all

affected permitting authorities. The

authorization to continue use of the

temporary national security exclusion

shall be required for each consecutive

30-day period following the date of the

notice required in paragraph (1).

(3) During the national security

emergency, the Commanding Officer of

the military facility shall take all

reasonable measures, where practicable,

to ensure that any physical or

operational changes to the source that

would result in an emissions increase

that otherwise would constitute a major

modification are made in a manner that

will minimize the emissions increase or

otherwise minimize any potential for

adverse impact to public health and

welfare or the environment. Such

measures may include the use of

emission controls and proper operation

and maintenance practices and/or

choosing materials or operating

scenarios that minimize deviations from

existing permit terms and conditions. In

addition, the Commanding Officer of the

military facility shall make a reasonable

effort, where practicable, to monitor

emissions during the emergency in

order to quantify the emissions resulting

from the physical or operational

changes.

(4) As soon as practicable, but no later

than 7 calendar days after the use of this

exclusion is no longer needed, the

Commanding Officer of the military

facility shall notify in writing all

affected State permitting authorities and

EPA Regional Offices, and the

appropriate Secretary of the Military

Department or Head of the Department

of Defense Component, that the military

facility has ceased responding to a

national security emergency for the

purposes of this section.

(5) As soon as practicable, but no later

than 45 calendar days after the date of

the notification in paragraph (4), the
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38317

Commanding Officer of the military

facility shall provide a written report to

all affected State permitting authorities

and EPA Regional Offices, and to the

appropriate Secretary of the Military

Department or Head of the DOD

Component, that describes the reasons

for relying on the exclusion, the

emissions units affected, the amount of

increased emissions, and other

information needed to determine the

nature and extent to which the source

deviated from otherwise applicable

permitting requirements.

(6)(i) The Commanding Officer of the

military facility need not submit an

application to the permitting authority

for a permit under this section if the

physical or operational changes to the

source resulted only in a temporary

modification, that is, a modification that

lasts no longer than the period of the

national security emergency and that

does not expand the capacity of the

source to emit at an increased level after

the cessation of the emergency.

(ii) As soon as practicable, but no later

than 45 calendar days after the date of

the notification required in paragraph

(4), the Commanding Officer of the

military facility shall submit an

application for a permit under this

section in the event that the physical or

operational changes made at the source

in response to the national security

emergency are not temporary. For

example, a permit shall be required if

the military facility is physically

changed or has capacity added in ways

that are not later reverted or otherwise

actually returned to the premodification conditions.

(7) The permit application under

paragraph (6)(ii) and the permitting

authority’s actions on that application

shall comply with the requirements of

this section as though construction had

not yet commenced on the modification.

The DOD has provided some

examples of actions that military

installations could be called on to take

during national security emergencies

that would result in ‘‘temporary’’ and

‘‘nontemporary’’ modifications that

otherwise would be subject to major

NSR. In the event of a national security

emergency involving hostilities, the

DOD may have to make physical

changes to a source to be able to paint

tactical equipment at that location.

These changes could involve the

construction of new painting facilities.

If these changes would result in

emissions increases but, after the

cessation of the emergency they are

returned to their pre-modification

condition, under the DOD’s suggested

language, the changes would be

considered ‘‘temporary’’ and would not

be required to undergo postmodification NSR permitting. However,

if the changes are not returned to their

pre-modification condition after the

cessation of the emergency, the changes

would be considered a ‘‘nontemporary’’

modification and they would be

required to undergo post-modification

NSR permitting.

The EPA is requesting comments on

the appropriateness and sufficiency of

the preceding suggested language for

inclusion in parts 51 and 52. In

particular, the EPA is soliciting

comments on whether any type of

authorization by the permitting

authority should be required before a

military installation may use the

temporary national security emergency

exclusion, if one is adopted. In

extraordinary circumstances, the

permitting authority may have concerns

about the public health, welfare, or

environmental impacts that would

result from an emissions increase or

other changes made at a military source

to respond to a national security

emergency. In such circumstances, the

EPA believes it may be appropriate for

the permitting authority to work with

the DOD to mitigate such adverse

impacts before the DOD facility

continues to rely on the national

security emergency exclusion provision.

The EPA expects that the permitting

authority’s assessment in such

circumstances would be made rapidly

and would take into account the

urgency with which the DOD must

respond to the particular emergency.

Under any version of the exclusion,

where the permitting authority is a State

or local agency, the EPA is requesting

comment on whether the Agency should

have a formal role in the process for

determining whether the DOD can

extend use of a national security

emergency exclusion beyond the initial

30-day period.

In addition, the EPA seeks comment

on the open-ended nature of the DOD’s

proposed national security emergency

exclusion and whether there should be

some limit on the total duration of the

exclusion, especially where an excluded

activity may have the potential for an

adverse impact on public health and

welfare or the environment.

Furthermore, when a national security

emergency is expected to last for an

extended period (such as longer than 30

days), the EPA requests comment on

whether a military facility acting under

such an exclusion should be required to

apply for and obtain an NSR permit, if

necessary, at some point after the

emergency response has commenced,

rather than waiting until the national

security emergency has ended. The EPA

also seeks comment on whether a

national security emergency exclusion

should apply to the construction of a

new major source where the existing

military facility is not an existing major

source.

Finally, the EPA is interested in

knowing commenters’ opinions and

concerns about any additional

requirements that should or could be

included, such as additional elements

that could be included in the report on

emissions increases resulting from

physical or operational changes made to

respond to a national security

emergency, and about the implications

of providing for a national security

emergency exclusion if such provisions

are not mandatory for all states.

The DOD also requested that the rules

at 40 CFR 51.161 and 51.166 be revised

to provide an exclusion from public

availability requirements for classified

information. The EPA agrees with the

DOD that information properly

classified under applicable laws,

including Executive Orders 12958 and

12968, is not required to be made

publicly available, and the Agency

proposes to codify this view in the

minor and major NSR rules. As

suggested by the DOD, the EPA

proposes that ‘‘classified information’’

be defined in the NSR rules as it is

defined in the Classified Procedures

Act, 18 U.S.C. App. 3, section 1(a), as

‘‘any information or material that has

been determined by the United States

Government pursuant to an Executive

order, statute, or regulation, to require

protection against unauthorized

disclosure for reasons of national

security.’’ The EPA notes that criminal

penalties exist for the unauthorized

disclosure of classified information,

defined as ‘‘information, which at the

time of a violation of this section, is, for

reasons of national security, specifically

designated by a U. S. Government

Agency for limited or restricted

dissemination or distribution.’’ 18

U.S.C. 798(b). The DOD and the EPA

believe that these laws must be read in

congruence with the Act and the need

for public availability of permitting

information. The Act cannot be

reasonably interpreted to require a

violation of criminal law by making

classified information publicly

available. As recommended by the DOD,

the EPA proposes that the public

availability provisions be revised as

follows. Existing § 51.161(b)(1) would

be revised to read:

Availability for public inspection in at

least one location in the area affected of

the information, except for classified

information, submitted by the owner or

operator and of the State or local
38318 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

agency’s analysis of the effect on air

quality. Classified information provided

by the Department of Defense or other

Federal agencies or contractors for such

agencies and designated as such will be

controlled by applicable law concerning

the release of classified information.

Existing § 51.166(q)(2)(ii) would be

revised to read:

Make available in at least one location

in each region in which the proposed

source would be constructed a copy of

all materials, except for classified

information, the applicant submitted, a

copy of the preliminary determination,

and a copy or summary of other

materials, if any, considered in making

the preliminary determination.

Classified information provided by the

Department of Defense or other Federal

agencies or contractors for such agencies

and designated as such will be

controlled by applicable law concerning

the release of classified information.’’

The EPA is proposing to adopt this

exclusion from public availability

requirements for classified information

not only in §§ 51.161 and 51.166 but

also in §§ 51.165 and 52.21. The EPA

solicits comment on all aspects of this

proposed provision.

VIII. Additional Information

A. Public Docket

This rulemaking action is subject to

section 307(d) of the Act. The aspects of

the rulemaking action related to PSD are

subject to section 307(d), in accordance

with section 307(d)(1)(J) of the Act.

Pursuant to section 307(d)(1)(V), the

Administrator hereby determines that

the other aspects of this rulemaking

action are subject to section 307(d).

Accordingly, section 307(d) applies to

this entire rulemaking action.

The public docket for this rulemaking

action is A–90–37. The docket is a file

of the information relied upon by the

EPA in the development of this

proposed rule (as well as interagency

review materials related to the proposed

rule). The EPA will also place the

following materials in the docket: (1)

Written comments EPA receives during

the public comment period; (2) the

transcript of the public hearing, if any;

(3) any documents that EPA determines

are of central relevance to the

rulemaking; (4) EPA’s response to

significant comments; (5) any additional

information the final rule is based on;

and (6) interagency materials related to

the final rule. The docket, excluding

interagency review materials, will

represent the record for judicial review.

See section 307(d)(7)(A) of the Act. The

docket is available for public review and

copying at EPA’s Air Docket, as

indicated in the ADDRESSES section at

the beginning of this document.

B. Public Comments and Public Hearing

The EPA requests public comment on

all aspects of this proposed action. All

public comments must be addressed to

the Docket for this rulemaking and

received no later than October 21, 1996,

at the address indicated in the

ADDRESSES section at the beginning of

this document.

The EPA plans to convene a meeting

of the NSR Reform FACA Subcommittee

in conjunction with the public comment

period. In this meeting the

Subcommittee will review today’s

proposed rulemaking. A transcript of

the Subcommittee’s meeting, will be

available for public inspection in EPA

Air Docket No. A–90–37. The NSR

Reform Subcommittee meeting will be

open to the public although seating may

be limited. Further information

regarding the specific dates, location

and starting time will be published in

the Federal Register prior to the

meeting.

The EPA plans to hold a public

hearing on this proposed action. A

public hearing is scheduled for 10:00

a.m. to 4:00 p.m. in Research Triangle

Park, North Carolina on September

23,1996. A notice announcing

additional information about the public

hearing, including the specific location,

will be published in the Federal

Register.

Persons wishing to make oral

presentations at the public hearing

should contact the EPA as indicated in

the DATES section at the beginning of

this preamble. The order of presentation

will be based on the order in which EPA

receives requests to speak. Written

statements in lieu of, or in addition to,

oral testimony are encouraged and may

be any length. If necessary, oral

presentations will be time limited. The

hearing may be canceled if no requests

to speak have been received 15 days

prior to the scheduled hearing date.

C. Executive Order 12866

Section 3(f) of Executive Order 12866

(E.O. 12866) defines ‘‘significant

regulatory action’’ for purposes of

centralized regulatory review by the

Office of Management and Budget

(OMB) to mean any regulatory action

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.

Drafts of this proposed rule and

associated materials were reviewed by

the OMB because of the novel policy

issues presented and anticipated public

interest in this action. Interagency

review materials have been placed in

the public docket in accordance with

section 307(d)(4)(B)(ii) of the Act and

section 6(a)(3)(E) of E.O. 12866

(including documents identifying the

substantive changes made between the

draft submitted to OMB for review and

the action proposed, and the changes

that were made at the suggestion or

recommendation of OMB).

The EPA has prepared a draft

Regulatory Impact Analysis (RIA) for

these proposed rules and it is included

in the docket for this rulemaking. The

EPA projects that as a result of the rule

changes being proposed today, the

overall costs and burdens for the major

NSR program to decrease. As shown in

the draft RIA for this rule, the EPA has

estimated the total annualized

‘‘information collection request’’ (ICR)

cost burden of the NSR permitting

program under the proposed reforms to

be $27.6 million. This includes costs for

preparation of permit applications,

including technology and

environmental impact analyses, recordkeeping, and reporting requirements. It

represents a projected decrease of $11.1

million in the annual ICR cost burden

to industry. The burden to State and

local air pollution control agencies is

expected to decrease by approximately

$2.5 million, and to EPA by

approximately $200,000.

Other cost savings will be realized by

sources that avoid major NSR and thus

become subject to minor NSR programs

implemented at the State and local

levels. The greatest savings, based on

industry comments during the NSR

Reform Subcommittee meetings, would

be realized due to the shorter processing

time of a minor versus major NSR

permit. Also, the streamlining of some

of the time-intensive aspects of the

major source requirements would have

a similar effect. The total industry

savings would be difficult to predict

given the diversity of industries covered

by this program; nevertheless, every

facility would experience less down

time, quicker start up and resumption of
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38319

revenue generation. Further savings

would accrue the extent that the minor

NSR technology control requirements

and mitigation measures are less costly

than the major source requirements and

measures. Industry and State

representatives reported that the

difference in emissions between minor

and major source technology

requirements are insignificant in most

cases. The incremental cost savings

could be quite large, however, if the

minor source requirements are

applicable. The EPA solicits further

comment on the cost savings that would

be derived from this proposed

rulemaking.

The reader should note that the ICR

cost burden reduction estimates in the

draft RIA are highly sensitive to the

estimated impact of the proposed

revisions to the applicability test for

modifications at existing major

stationary sources. The EPA estimates

that 20 percent fewer sources will be

classified as major as a result of revising

the period for establishing the baseline

for actual emissions from which to

calculate emissions increases to the

highest 12 consecutive months

operation by the source. Another 6%

reduction is anticipated from the ‘‘clean

unit’’ and ‘‘clean facility’’ tests and the

exclusion for pollution control and

pollution prevention projects. The EPA

estimates still another 25 percent of

modifications, which would otherwise

be subject to major NSR, would be

excluded due to allowing sources to use

projected future actual emissions to

calculate emissions increases rather

than requiring the calculation to be

based on the source’s potential to emit

in each case. The EPA solicits

comments on these estimated impacts

on the burden reduction of revising the

regulations for netting as proposed.

The proposed revisions include

certain provisions which, while

generally intended to clarify the

statutory Class I area protection process

under the existing PSD program and

improve coordination between the

permitting authority and the FLM (an

area of the PSD rules that has been the

subject of significant confusion and

controversy), may, in certain

circumstances, place additional burdens

on the permit applicant and the

permitting authority. The EPA requests

public comment on whether these

proposed revisions represent a net

increase in costs and burdens for

permitting authorities and permit

applicants in comparison with the

existing rules related to the protection of

Class I areas. These issues are described

in more detail in the Information

Collection Request (ICR) and will be

further assessed in the draft RIA for the

final rule.

D. Regulatory Flexibility Act

Under the Regulatory Flexibility Act,

5 U.S.C. 601–612, EPA must prepare

and make available for public comment

an initial regulatory flexibility analysis

assessing the impact of a proposed rule

on small entities. See 5 U.S.C. 603.

Small entities include small businesses,

small not-for-profit enterprises and

government entities with jurisdiction

over populations of less than 50,000.

See 5 U.S.C. 601. However, the

requirement to prepare a regulatory

flexibility analysis does not apply if the

Administrator certifies that the rule will

not, if promulgated, have a significant

economic impact on a substantial

number of small entities. See 5 U.S.C.

605(b).

The major NSR program applies to

new major stationary sources and major

modifications to existing major

stationary sources, as explained

elsewhere in this preamble. These rules

reform the existing major NSR rules,

making them less burdensome and

generally improving the rules for any

small entities that might be affected by

the major NSR program. Accordingly,

the Administrator hereby certifies that

these rules, if promulgated, will not

have a significant economic impact on

a substantial number of small entities.

E. Paperwork Reduction Act

The information collection

requirements in this proposed rule have

been submitted for approval to the

Office of Management and Budget

(OMB) under the Paperwork Reduction

Act, 44 U.S.C. 3501 et seq. An

Information Collection Request (ICR)

document has been prepared by EPA

(ICR No. 1230.08) and a copy may be

obtained from Sandy Farmer, OPPE

Regulatory Information Division; U.S.

Environmental Protection Agency

(2136); 401 M St., SW.; Washington, DC

20460 or by calling (202) 260–2740.

Section 110 of the Act requires all

States to adopt into their SIPs

preconstruction review programs for

new or modified stationary sources. The

programs must include provisions that

meet the specific requirements of Part C

‘‘Prevention of Significant

Deterioration’’ (PSD) and Part D ‘‘Plan

Requirements for Nonattainment Areas’’

of title I of the Act for permitting

construction and modification of major

stationary sources. Implementing

regulations for State adoption of the two

NSR programs into their SIPs are

promulgated at §§ 51.160 through

51.166 and appendix S. Federal

permitting regulations are promulgated

at § 52.21 for PSD areas that are not

covered by a SIP program. Essentially a

source cannot construct without

securing a permit to ensure that the

requirements of the Act are met.

Part C of title I of the Act outlines

specific preconstruction permitting

requirements for new and modified

sources constructing in areas that do not

violate the NAAQS. These PSD rules,

generally require a prospective major

new or modified source to: (1)

Demonstrate that the NAAQS and

increments will not be exceeded, (2)

ensure the application of best available

control technology (BACT), and (3)

protect Federal Class I areas from

adverse impacts, including adverse

impacts on air quality related values

(AQRVs).

Similarly, Part D of title I of the Act

specifies requirements for major new

and modified sources constructing in

areas designated as nonattainment for a

NAAQS pursuant to section 107 of the

Act. The part D provisions also apply to

major source permitting in the Northeast

Ozone Transport Region as established

under section 184 of the Act. The part

D rules generally require a major new or

modified source to: (1) ensure the

application of controls which will

achieve the lowest achievable emission

rate (LAER), (2) certify that all major

sources in a State owned or controlled

by the same person (or persons) are in

compliance with all air emissions

regulations, and (3) secure reductions in

actual emissions from existing sources

equal to or greater than the projected

increase to show attainment and

maintenance of the applicable NAAQS

(offsets). A public review and comment

period is required for all major source

permit actions and some non-major

source actions.

A new source that would be major if

operated at full capacity may accept

specific enforceable permit conditions

to keep its emissions below the major

source threshold. Similarly existing

major sources that propose

modifications that would produce

significant emissions increases as a

result of new or modified emissions

units may either contemporaneously

retire existing emissions units to

generate emissions reductions credits or

take permit limits on future emissions

or both to avoid major NSR.

Prospective sources must conduct the

necessary research, perform the

appropriate analyses and prepare permit

applications with documentation to

support the conclusion that their project

meets all applicable Statutory and

regulatory, requirement summarized

above. The specific activities are

described further in the draft RIA and
38320 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

the ICR for this proposed rulemaking,

which are available from OPPE at the

address stated above and in the Docket

for this rulemaking.

Permitting agencies, either State, local

or Federal, review the permit

applications to affirm the proposed

source or modification will comply with

the Act and applicable regulations,

conduct the public review process, issue

the permit and then verify that a source

has constructed and subsequently

operates in compliance with the permit

conditions. The EPA, more broadly,

reviews a fraction of the total

applications and audits the State and

local programs for its effectiveness.

Consequently, information prepared and

submitted by the source is essential for

proper administration and management

of the NSR program.

Information that is to be submitted by

sources as a part of their permit

application, should generally be a

matter of public record given the

requirements for public participation in

issuing permits. See sections 165(a)(2)

and 110(a)(2)(C), (D) and (F) of the Act.

Notwithstanding, to the extent that the

information required for the

completeness of a permit is proprietary,

confidential, or of a nature that it could

impair the ability of the source to

maintain its market position, that

information is collected and handled

according to EPA’s policies set forth in

title 40, chapter 1, part 2, subpart B—

Confidentiality of Business Information

(see 40 CFR part 2). See also section

114(c) of the Act.

As mentioned previously, this

proposed rulemaking would provide

substantial reduction in major NSR

permits, which would translate into a

reduction in industry respondents and

number of reviews by the Federal, State,

and local permitting agencies. The

baseline for comparison is drawn from

that of the NSR program ICR approved

in September 1995. A copy may be

obtained from OPPE at the address

stated above. As a result of this

proposal, the estimated number of major

PSD permits is expected to decrease

from 320 to 144. Major part D

nonattainment permits would decrease

from 590 to 266. The number of minor

source actions would increase by the

combined reduction in both major

source programs. The burden for PSD

permits is estimated to increase for

industry respondents by about 11 hours

per permit, and the burden for part D

permits should decrease by an estimated

5 hours per permit. The burden for State

and local permitting agencies is

estimated to decrease from 280 to 272

hours per permit for PSD, and stay

about the same for part D permits and

minor source actions, 110 hours and

eight hours per permit respectively. The

EPA burden on a per permit basis is

expected to remain unchanged—15

hours for all major source permits and

2 hours for minor source permits. The

resulting cost savings is estimated to be

$11 million for industry, about $2.5

million for States and local agencies and

about $250,000 for the EPA. These

estimates are discussed in detail in the

draft RIA and the Information ICR for

this rulemaking.

Burden means the total time, effort, or

financial resources expended by persons

to generate, maintain, retain, or disclose

or provide information to or for a

Federal agency. This includes the time

needed to review instructions; develop,

acquire, install, and utilize technology

and systems for the purposes of

collecting, validating, and verifying

information, processing and

maintaining information, and disclosing

and providing information; adjust the

existing ways to comply with any

previously applicable instructions and

requirements; train personnel to be able

to respond to a collection of

information; search data sources;

complete and review the collection of

information; and transmit or otherwise

disclose the information.

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 are listed

in 40 CFR part 9 and 48 CFR chapter 15.

Comments are requested on the

Agency’s need for this information, the

accuracy of the provided burden

estimates, and any suggested methods

for minimizing respondent burden,

including through the use of automated

collection techniques. Send comments

on the ICR to the Director, OPPE

Regulatory Information Division; U.S.

Environmental Protection Agency

(2136); 401 M St., SW.; Washington, DC

20460; and to the Office of Information

and Regulatory Affairs, Office of

Management and Budget, 725 17th St.,

NW., Washington, DC 20503, marked

‘‘Attention: Desk Officer for EPA.’’

Include the ICR number in any

correspondence. Since OMB is required

to make a decision concerning the ICR

between 30 and 60 days after July 23,

1996, a comment to OMB is best assured

of having its full effect if OMB receives

it by August 22, 1996. The final rule

will respond to any OMB or public

comments on the information collection

requirements contained in this proposal.

F. Unfunded Mandates Reform Act

Title II of the Unfunded Mandates

Reform Act of 1995 (UMRA), Public

Law 104–4, establishes requirements for

Federal agencies to assess the effects of

their regulatory actions on State, local,

and tribal governments and the private

sector. Under section 202 of the UMRA,

EPA generally must prepare a written

statement, including a cost-benefit

analysis, for proposed and final rules

with ‘‘Federal mandates’’ that may

result in expenditures to State, local,

and tribal governments, in the aggregate,

or to the private sector, of $100 million

or more in any 1-year. Before

promulgating an EPA rule for which a

written statement is needed, section 205

of the UMRA generally requires EPA to

identify and consider a reasonable

number of regulatory alternatives and

adopt the least costly, most costeffective or least burdensome alternative

that achieves the objectives of the rule.

The provisions of section 205 do not

apply when they are inconsistent with

applicable law. Moreover, section 205

allows EPA to adopt an alternative other

than the least costly, most cost-effective

or least burdensome alternative if the

Administrator publishes with the final

rule an explanation why that alternative

was not adopted. Before EPA establishes

any regulatory requirements that may

significantly or uniquely affect small

governments, including tribal

governments, it must have developed

under section 203 of the UMRA a small

government agency plan. The plan must

provide for notifying potentially

affected small governments, enabling

officials of affected small governments

to have meaningful and timely input in

the development of EPA regulatory

proposals with significant Federal

intergovernmental mandates, and

informing, educating, and advising

small governments on compliance with

the regulatory requirements.

As shown in the draft RIA for this

rule, EPA has estimated the total

annualized cost of the NSR permitting

program including the proposed reforms

does not include a Federal mandate that

may result in expenditures of $100

million or more to either State, local, or

tribal governments in the aggregate, or

to the private sector. Therefore, this

proposed rule is not subject to the

requirements of sections 202 and 205 of

the UMRA. In addition, EPA has

determined that this proposed rule

contains no regulatory requirements that

might significantly or uniquely affect

small governments, which generally do

not have new source permitting

authority.
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38321

Executive Order 12875 (‘‘Enhancing

the Intergovernmental Partnership’’) is

designed to reduce the burden to State,

local, and tribal governments of the

cumulative effect of unfunded Federal

mandates, and recognizes the need for

these entities to be free from

unnecessary Federal regulation to

enhance their ability to address

problems they face and provides for

Federal agencies to grant waivers to

these entities from discretionary Federal

requirements.

In accordance with the purposes of

Executive Order 12875, the EPA has

already initiated consultations with the

government entities affected by the NSR

changes. From August 1992 through

June 1993 EPA convened three NSR

simplification workshops, inviting

representatives from among those

involved with and affected by the major

source NSR permitting program. In July

1993 EPA formed the NSR Reform

Subcommittee under the auspices of the

CAAAC, a committee formed in

accordance with the Federal Advisory

Committee Act (FACA) (5 U.S.C. App.)

This committee is composed of

representatives from industry, State and

local air pollution control agencies,

environmental organizations and other

Federal agencies. The purpose of this

Subcommittee was to provide, under the

direction of the CAAAC, independent

advice and counsel to the EPA on policy

and technical issues associated with

reforming the major NSR program.

Specifically, the responsibilities of the

Subcommittee included developing

draft recommendations on approaches

for reforming the major NSR rules in

order to reduce complexity and

perceived impediments to speedy

review of permit applications in the

current systems, while at the same time

maintaining the environmental goals

and benefits embodied in the current

approach. Upon proposal EPA

anticipates reconvening the NSR Reform

FACA Subcommittee to review the

proposed revisions which will afford

another opportunity for State, local and

Tribal Governments to participate in

this rulemaking effort.

List of Subjects

40 CFR Part 51

Environmental protection,

Administrative practice and procedure,

Air pollution control, Carbon monoxide,

Hydrocarbons, Intergovernmental

relations, Lead, Nitrogen dioxide,

Ozone, Particulate matter, Sulfur oxides,

BACT, LAER offsets and Class I

increments.

40 CFR Part 52

Administrative practice and

procedure, Air pollution control, Carbon

monoxide, Hydrocarbons,

Intergovernmental relations, Lead,

Nitrogen dioxide, Ozone, Particulate

matter, Sulfur oxides, BACT, and Class

I increments.

Dated: April 3, 1996.

Carol M. Browner,

Administrator.

For the reasons set forth in the

preamble, parts 51 and 52 of chapter I

of title 40 of the Code of Federal

Regulations are proposed to be amended

as follows:

PART 51—REQUIREMENTS FOR

PREPARATION, ADOPTION, AND

SUBMITTAL OF IMPLEMENTATION

PLANS

1. The authority citation for part 51 is

revised to read as follows:

Authority: 42 U.S.C. 7401–7671q.

2. Section 51.165 is amended as

follows:

a. Revising paragraph (a)(1)(i);

b. Revising paragraph (a)(1)(iv)(A);

c. Amending paragraph (a)(1)(v)(C)(6)

by adding the words ‘‘Standing alone,’’

at the beginning of the sentence, and

revising the word ‘‘An’’ to read ‘‘an’’;

d. Revising paragraph (a)(1)(v)(C)(8);

e. Adding new paragraphs (a)(1)(v)(C)

(10) through (15);

f. Adding new paragraphs (a)(1)(v) (D)

through (G);

g. Revising paragraph (a)(1)(vi)(C)(1);

h. Removing the word ‘‘and’’ at the

end of paragraph (a)(1)(vi)(E)(2), adding

the word ‘‘and’’ at the end of paragraph

(a)(1)(vi)(E)(3), and revising paragraph

(a)(1)(vi)(E)(4);

i. Redesignating paragraph (a)(1)(x) as

(a)(1)(x)(A)

j. Amending newly redesignated

paragraph (a)(1)(x)(A) by adding the

words ‘‘Particulate matter: 15 tpy of

PM–10 emissions.’’ at the end of the list

of pollutant emission rates;

k. Adding new paragraphs (a)(1)(x) (B)

through (F);

l. Revising paragraph (a)(1)(xii)(B);

m. Amending paragraph (a)(1)(xii)(C)

by removing the word ‘‘reviewing’’ and

adding in its place ‘‘permitting’’;

n. Adding new paragraph

(a)(1)(xii)(F);

o. Amending paragraph (a)(1)(xxii) by

removing the word ‘‘it’’ and adding in

its place ‘‘the project’’;

p. Revising paragraph (a)(1)(xxv)

introductory text and (a)(1)(xxv)(A);

q. Removing paragraph (a)(1)(xxv)(B)

and redesignating paragraphs (a)(1)(xxv)

(C) and (D) as newly redesignated

paragraphs (a)(1)(xxv) (B) and (C);

r. Adding new paragraphs (a)(1) (xxvi)

through (xxxiv);

s. Redesignating paragraph (a)(2) as

(a)(2)(i);

t. Adding new paragraph (a)(2)(ii);

u. Revising paragraph (a)(3)(ii)(C);

v. Adding new paragraph (a)(5)(iii);

w. Adding new paragraphs (a) (6)

through (16).

§ 51.165 Permit requirements.

(a) * * *

(1) * * *

(i)(A) Stationary source means any

building, structure, facility, installation,

or stationary internal combustion engine

which emits or which may emit any air

pollutant subject to regulation under the

Act.

(B) A stationary source does not

include emissions resulting directly

from an internal combustion engine

used for transportation purposes, or

from a nonroad engine or nonroad

vehicle.

* * * * *

(iv)(A) Major stationary source means:

(1) Any stationary source of air

pollutants which emits, or has the

potential to emit, 100 tons per year or

more of any pollutant subject to

regulation under the Act, except that

lower emissions thresholds shall apply

as follows:

(i) 70 tons per year of PM–10 or,

where applicable, 70 tons per year of a

specific PM–10 precursor, in any

serious nonattainment area for PM–10.

(ii) 50 tons per year of volatile organic

compounds in any serious

nonattainment area for ozone.

(iii) 50 tons per year of volatile

organic compounds in an area within an

ozone transport region except for any

severe or extreme nonattainment area

for ozone.

(iv) 25 tons per year of volatile organic

compounds in any severe

nonattainment area for ozone.

(v) 10 tons per year of volatile organic

compounds in any extreme

nonattainment area for ozone.

(vi) 50 tons per year of carbon

monoxide in any serious nonattainment

area for carbon monoxide, where

stationary sources contribute

significantly to carbon monoxide levels

in the area (as determined under rules

issued by the Administrator);

(2) For the purposes of applying the

requirements of paragraph (a)(12) of this

section to stationary sources of nitrogen

oxides located in an ozone

nonattainment area or in an ozone

transport region, any stationary source

which emits, or has the potential to

emit, nitrogen oxides emissions as

follows:

(i) 100 tons per year or more of

nitrogen oxides in any ozone
38322 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

nonattainment area classified as

marginal or moderate.

(ii) 100 tons per year or more of

nitrogen oxides in any ozone

nonattainment area classified as a

transitional, submarginal, or incomplete

or no data area, when such area is

located in an ozone transport region.

(iii) 100 tons per year or more of

nitrogen oxides in any area designated

under section 107(d) of the Act as

attainment or unclassifiable for ozone

that is located in an ozone transport

region.

(iv) 50 tons per year or more of

nitrogen oxides in any serious

nonattainment area for ozone.

(v) 25 tons per year or more of

nitrogen oxides in any severe

nonattainment area for ozone.

(vi) 10 tons per year or more of

nitrogen oxides in any extreme

nonattainment area for ozone; or

(3) Any physical change that would

occur at a stationary source not

qualifying under paragraphs (a)(1)(iv)(A)

(1) or (2) of this section as a major

stationary source, if the change would

constitute a major stationary source by

itself.

* * * * *

(v) * * *

(C) * * *

(8) The addition, replacement, or use

of a pollution control project at an

existing emissions unit unless the

pollution control project will result in a

significant net increase in representative

actual annual emissions of any pollutant

regulated under the Act and the

permitting authority determines that

this increase will cause or contribute to

a violation of any national ambient air

quality standard or any maximum

increase over baseline concentrations

(in accordance with § 51.166(c) or

§ 52.21(c) of this chapter) or will have

an adverse impact on visibility in

accordance with the definition at

§ 51.301(a). For the purpose of this

paragraph (a)(1)(v)(C)(8), in lieu of the

source’s representative actual annual

emissions, the emissions levels used for

the source in the most recent air quality

impact analysis in the area conducted

for the purpose of title I, if any, may be

used.

* * * * *

(10) Any activity undertaken at an

existing emissions unit for which a

federally enforceable emission limit has

been established, provided the activity

or project will not increase the

maximum emissions rate, in pounds or

kilograms per hour, above the maximum

emissions rate achievable by the

emission unit at any time during the 180

consecutive days which precede the

date of the activity or project and the

emissions increase is determined by:

(i) Material balances, continuous

emission monitoring data, or manual

emission tests using the EPA-approved

procedures, where available, and

conducted under such conditions as the

permitting authority will specify to the

owner or operator based on

representative performance of the

emission units affected by the activity or

project, including at least three valid

test runs conducted before, and at least

three valid test runs conducted after, the

activity or project with all operating

parameters which may affect emissions

held constant to the maximum feasible

degree for all such test runs; or

(ii) Emission factors as specified in

the latest issue of ‘‘Compilation of Air

Pollutant Emission Factors,’’ EPA

Publication No. AP–42, available from

EPA, MD14, Emission Inventory and

Factors Group, RTP, NC 27711, or other

emission factors determined by the

permitting authority to be superior to

AP–42 emission factors, in such cases

where use of emission factors

demonstrates that the emission level

resulting from the activity or project

will clearly not increase emissions.

(11) Any activity undertaken at an

existing emissions unit for which a

federally enforceable emission limit has

been established, provided the federally

enforceable emissions limit at the time

of the change is comparable to the

emission limit that, considering the air

quality designation of the area where

the source is located, would result from

a current review in accordance with

either paragraph (a)(2) of this section or

regulations approved pursuant to

§ 51.166(j), or § 52.21(j) of this chapter,

for emission units of the same class or

source category. The permitting

authority may presume that a source

satisfies this paragraph (a)(1)(v)(C)(11)

if:

(i) The activity would occur no later

than 120 consecutive months from the

date of issuance of the permit, issued

under either this section or regulations

approved pursuant to § 51.166 or § 52.21

of this chapter, that established the

currently applicable emission limit for

the emissions unit;

(ii) The activity would occur no later

than 120 consecutive months from the

date of issuance of the permit, issued

under regulations approved pursuant to

§§ 51.160 through 51.164, that

established the currently applicable

emission limit for the emissions unit,

provided the permit was issued under

regulations that were determined by the

Administrator to provide for permits

that contain emission limitations

satisfying this paragraph (a)(1)(v)(C)(11);

or

(iii) The activity would occur no later

than 60 consecutive months from the

date on which the permitting authority

made a determination, with public

notice and opportunity for public

comment consistent with § 51.161, that

the emissions satisfied paragraph

(a)(1)(v)(C)(10)(iii) of this section.

(12) Any activity undertaken at an

existing emissions unit for which a

federally enforceable emission limit has

been established, provided the activity

would not require a revision to, or cause

a violation of, any federally enforceable

limit or condition in a permit issued

either under regulations approved

pursuant to §§ 51.160 through 51.166 or

under § 52.21 of this chapter.

(13) Any activity undertaken at an

existing emissions unit for which a

federally enforceable emission limit has

been established, provided the activity

or project does not include the

replacement or reconstruction of an

emissions unit.

(14) Any activity undertaken at an

existing major stationary source,

provided:

(i) The activity would not require a

revision to, or cause a violation of, any

federally enforceable limit or condition

in a permit issued under either

regulations approved pursuant to

§§ 51.160 through 51.166 or § 52.21 of

this chapter; and

(ii) The entire major stationary source

was permitted, and received the

currently applicable emission limits for

all emissions units under either this

section or regulations approved

pursuant to § 51.166 or § 52.21 of this

chapter no more than 120 consecutive

months prior to the proposed activity.

(D) For the purposes of applying the

requirements of this section to any

source of volatile organic compounds

locating in a serious or severe ozone

nonattainment area:

(1) A proposed modification shall not

be considered to result in a significant

net emissions increase for volatile

organic compounds and is therefore not

a major modification for if the project’s

net increase of volatile organic

compounds (any proposed creditable

increases and creditable decreases in

emissions of volatile organic

compounds at the source that are

federally enforceable and occur between

the date of permit application for the

proposed modification and the date that

the proposed modification begins to

emit) from the proposed modification

results in no increase of volatile organic

compounds;

(2) The provisions of this section shall

not apply to any and all discrete
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38323

emissions unit(s) (or other operations or

pollutant emitting activities) that are

part of a proposed modification (that is

otherwise a major modification) at an

existing major stationary source that

emits, or has the potential to emit, less

than 100 tons per year of volatile

organic compounds if such source

proposes creditable emissions

reductions from the source to internally

offset the emissions increase from the

selected discrete emissions unit(s) (or

other operations or pollutant emitting

activities) at a ratio of at least 1.3:1.

(E) For the purpose of applying the

requirements of paragraph (a)(12) of this

section to modifications at major

stationary sources of nitrogen oxides

located in ozone nonattainment areas or

in ozone transport regions, any

significant net emissions increase of

nitrogen oxides is considered significant

for ozone.

(F) Any physical change in, or change

in the method of operation of a major

stationary source of volatile organic

compounds located in an extreme

nonattainment area for ozone which

results in any increase in emissions of

volatile organic compounds from any

discrete operation, emissions unit, or

other pollutant emitting activity at the

source shall be considered a significant

net emissions increase and a major

modification for ozone.

(G) For the purposes of applying the

requirements of paragraph (a)(13) of this

section to modifications at major

stationary sources of PM–10 precursors,

any significant net emissions increase of

a PM–10 precursor is considered

significant for PM–10.

(vi) * * *

(C) * * *

(1) It occurs within a reasonable

contemporaneous period to be specified

by the reviewing authority, except that

for emissions of volatile organic

compounds from sources locating in

serious and severe ozone nonattainment

areas the contemporaneous period shall

be the period of 5 consecutive calendar

years that ends with the full calendar

year in which such increase is to occur;

and

* * * * *

(E) * * *

(4) It has approximately the same

qualitative significance for public health

and welfare as that attributed to the

increase from the particular change such

that, at a minimum, the decrease is

sufficient to prevent the proposed

increase from causing or contributing to

a violation of any national ambient air

quality standard or maximum allowable

increase over baseline concentrations

(in accordance with either § 51.166(c) or

§ 52.21(c) of this chapter) or having an

adverse impact on visibility in

accordance with the definition at

§ 51.301(a).

* * * * *

(x) * * *

(B) Notwithstanding the significant

emissions rate for ozone under

paragraph (a)(1)(x)(A) of this section,

significant means any net emissions

increase, as defined under paragraph

(a)(1)(vi) of this section, in actual

emissions of volatile organic

compounds that would result from any

physical change in, or change in the

method of operation, of a major

stationary source locating in a serious or

severe ozone nonattainment area if such

net emissions increase of volatile

organic compounds exceeds 25 tons per

year.

(C) For the purposes of applying the

requirements of paragraph (a)(12) of this

section to modifications at major

stationary sources of nitrogen oxides

located in an ozone nonattainment area

or in an ozone transport region, the

significant emission rates and other

requirements for volatile organic

compounds in paragraphs (a)(1)(x)(A)

and (B) of this section shall apply to

nitrogen oxides emissions.

(D) For the purposes of applying the

requirements of paragraph (a)(13) of this

section, where applicable, to a major

stationary source of a PM–10 precursor

located in a PM–10 nonattainment area,

the significant emission rate for a PM–

10 precursor is 40 tons per year or more

of that precursor.

(E) Notwithstanding the significant

emissions rate for carbon monoxide

under paragraph (a)(1)(x)(A) of this

section, a net emissions increase in

actual emissions of carbon monoxide

that would result from any physical

change in, or change in the method of

operation, of a stationary source in a

serious nonattainment area for carbon

monoxide is significant if such increase

equals or exceeds 50 tons per year,

provided the Administrator has

determined that stationary sources

contribute significantly to carbon

monoxide levels in that area.

(F) Notwithstanding the significant

emissions rates for ozone under

paragraphs (a)(1)(x)(A) and (B) of this

section, any increase in actual emissions

of volatile organic compounds from any

emissions unit at a major stationary

source of volatile organic compounds

located in an extreme nonattainment

area for ozone shall be considered a

significant net emissions increase.

(xii) * * *

(B) Actual emissions shall be

calculated using the unit’s actual

operating hours, production rates, and

types of materials processed, stored, or

combusted for any 12 consecutive

months during the 120 consecutive

months that precede the commencement

of construction of a proposed physical

or operational change at the source, and

any current, federally enforceable

limitations on emissions required by the

Act, including but not limited to, best

available control technology (as defined

at § 51.166(b)(12)), lowest achievable

emission rate, reasonably available

control technology, or emissions

standards for hazardous air pollutants

under section 112 of the Act.

* * * * *

(F) In lieu of paragraphs (a)(1)(xii)(D)

and (E) of this section, the plan may

provide that for any emissions unit,

actual emissions of the unit following a

physical or operational change shall

equal the representative actual annual

emissions of the unit, provided the

source owner or operator maintains and

submits to the permitting authority, on

an annual basis for a period of 5 years

from the date the unit resumes regular

operation, information demonstrating

that the physical or operational change

did not result in an emissions increase.

A longer period, not to exceed 10 years,

may be required by the permitting

authority if the permitting authority

determines such a period to be more

representative of normal source postchange operations.

* * * * *

(xxv) Pollution control project means:

(A) Any activity or project undertaken

at an existing emissions unit which, as

its primary purpose, reduces emissions

of air pollutants from such unit. Such

activities or projects do not include the

replacement of an existing emissions

unit with a newer or different unit, or

the reconstruction of an existing

emissions unit, and are limited to any

of the following:

(1) The installation of conventional or

advanced flue gas desulfurization, or

sorbent injection for SO2;

(2) Electrostatic precipitators,

baghouses, high efficiency multiclones,

or scrubbers for particulate matter or

other pollutants;

(3) Flue gas recirculation, low-NOX

burners, selective non-catalytic

reduction or selective catalytic

reduction for NOX;

(4) Regenerative thermal oxidizers,

catalytic oxidizers, condensers, thermal

incinerators, flares, or carbon absorbers

for volatile organic compounds or

hazardous air pollutants;

(5) Activities or projects undertaken

to accommodate switching to an

inherently less polluting fuel, including
38324 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

but not limited to, natural gas or coal

reburning, or the cofiring of natural gas

and other inherently less polluting

fuels, for the purpose of controlling

emissions, and including any activity

that is necessary to accommodate

switching to an inherently less polluting

fuel;

(6) Pollution prevention projects

which the permitting authority has

determined through a process consistent

with § 51.161 to be environmentally

beneficial. Pollution prevention projects

that may result in an unacceptable

increased risk from the release of

hazardous pollutants are not

environmentally beneficial; and

(7) Installation of a technology, for

purposes set forth in paragraph

(a)(1)(xxv) of this section, which is not

listed in paragraphs (a)(1)(xxv)(A)(1)

through (5) of this section but meets the

following:

(i) Its effectiveness in reducing

emissions has been demonstrated in

practice; and

(ii) It is determined by the permitting

authority to be environmentally

beneficial;

* * * * *

(xxvi) Undemonstrated technology or

application means any system, process,

material, or treatment technology

(including pollution prevention), that

has not been demonstrated in practice,

but would have a substantial likelihood

to:

(A) Operate effectively; and

(B) Achieve either equal or greater

continuous reductions of air pollutant

emissions than any demonstrated

system at lower cost, lower energy

input, or with less environmental

impact.

(xxvii) Complete means, in reference

to an application for a permit required

under this section, that the permitting

authority has deemed the application to

contain the information necessary to

begin formal review of the application.

Determining an application complete for

the purpose of beginning formal review

does not preclude the permitting

authority from requiring additional

information as may be needed to

determine whether the applicant

satisfies all requirements of this section.

(xxviii) Demonstrated in practice

means, for the purposes of this section,

a control technology that has been—

(A) Listed in or required by any of the

following:

(1) The EPA’s RACT/BACT/LAER

Clearinghouse;

(2) A major source construction

permits issued pursuant to either part C

or D of title I of the Act;

(3) An emissions limitations

contained in a federally-approved plan,

excluding any emissions limitations

established by permits issued pursuant

to programs for non-major sources;

(4) A permits or standard under either

section 111 or 112 of the Act; and

(5) The EPA’s Alternative Control

Techniques documents and Control

Techniques Guidelines; or

(B) Notwithstanding paragraph

(a)(1)(xxviii)(A) of this section, installed

and operating on an emissions unit (or

units) which:

(1) Has operated at a minimum of 50

percent of design capacity for 6 months;

and

(2) The pollution control efficiency

performance has been verified with

either:

(i) A performance test; or

(ii) Performance data collected at the

maximum design capacity of the

emissions unit (or units) being

controlled, or 90 percent or more of the

control technology’s designed

specifications.

(xxix) Pollution prevention means any

activity that through process changes,

product reformulation or redesign, or

substitution of less polluting raw

materials, eliminates or reduces the

release of air pollutants and other

pollutants to the environment

(including fugitive emissions) prior to

recycling, treatment, or disposal; it does

not mean recycling (other than certain

‘‘in-process recycling’’ practices), energy

recovery, treatment, or disposal.

(xxx) Plantwide applicability limit

means a plantwide federally enforceable

emission limitation established for a

stationary source such that subsequent

physical or operational changes

resulting in emissions that remain less

than the limit are excluded from

preconstruction review under this

section.

(xxxi) Plantwide applicability limit

major modification means,

notwithstanding the requirements of

paragraph (a)(1)(v) of this section, any

increase in the emissions rate, in tons

per year, over the plantwide

applicability limit. Any emissions

increase of volatile organic compounds

shall be considered an increase for

ozone.

(xxxii)(A) Nonroad engine means,

except as discussed in paragraph

(a)(1)(xxxii)(B) of this section, any

internal combustion engine:

(1) In or on a piece of equipment that

is self-propelled or that serves a dual

purpose by both propelling itself and

performing another function (such as

garden tractors, off-highway mobile

cranes and bulldozers);

(2) In or on a piece of equipment that

is intended to be propelled while

performing its function (such as

lawnmowers and string trimmers); or

(3) That, by itself or in or on a piece

of equipment, is portable or

transportable, meaning designed to be

and capable of being carried or moved

from one location to another. Indicia of

transportability include, but are not

limited to, wheels, skids, carrying

handles, dolly, trailer, or platform.

(B) An internal combustion engine is

not a nonroad engine if:

(1) The engine is used to propel a

motor vehicle or a vehicle used solely

for competition, or is subject to

standards promulgated under section

202 of the Act;

(2) The engine is regulated by a

Federal new source performance

standard promulgated under section 111

of the Act; or

(3) The engine otherwise included in

paragraph (a)(1)(xxxii)(A)(3) of this

section remains or will remain at a

location for more than 12 consecutive

months, or a shorter period of time for

an engine located at a seasonal source.

A location is any single site at a

building, structure, facility, or

installation. Any engine (or engines)

that replaces an engine at a location and

that is intended to perform the same or

similar function as the engine replaced

will be included in calculating the

consecutive time period. An engine

located at a seasonal source is an engine

that remains at a seasonal source during

the full annual operating period of the

seasonal source. For purposes of this

paragraph (a)(1)(xxxii)(B)(3), a seasonal

source is a stationary source that

remains in a single location on a

permanent basis (i.e., at least 2 years)

and that operates at that single location

approximately 3 months (or more) each

year. This paragraph (a)(1)(xxxii)(B)(3)

does not apply to an engine after the

engine is removed from the location.

(xxxiii) Nonroad vehicle means a

vehicle that is powered by a nonroad

engine and that is not a motor vehicle

or a vehicle used solely for competition.

(xxxiv) Stationary internal

combustion engine means:

(A) Any internal combustion engine

that is regulated by a Federal new

source performance standard

promulgated under section 111 of the

Act; or

(B) Any internal combustion engine

that is none of the following:

(1) A nonroad engine;

(2) An engine used to propel a motor

vehicle or a vehicle used solely for

competition; or

(3) An engine subject to standards

promulgated under section 202 of the

Act.

(2) * * *
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38325

(ii) Control technology review.

(A) In determining the lowest

achievable emission rate the applicant

shall consider all control technology

alternatives that have been

demonstrated in practice pursuant to

paragraph (a)(1)(xxviii)(A) of this

section prior to the date on which the

permit application is complete, and

paragraph (a)(1)(xxviii)(B) of this section

90 days prior to the date on which the

permit application is complete.

(B) The plan may establish a cut-off

date as the date on or subsequent to the

date that an application is complete

pursuant to paragraph (a)(6) of this

section, after which the permit

applicant will not be required to

consider control technology alternatives

that are identified through public

comments and that are in addition to

those alternatives required under

paragraph (a)(2)(ii)(A) of this section,

unless the permitting authority

determines that the alternatives warrant

further consideration by the applicant.

(3) * * *

(ii) * * *

(C)(1) Emissions reductions achieved

by shutting down an existing source or

curtailing production or operating hours

below baseline levels may be generally

credited if:

(i) Such reductions are surplus,

permanent, quantifiable, and federally

enforceable;

(ii) The area has an EPA-approved

attainment plan, except that the plan

may provide that the reductions

described in paragraph (a)(3)(ii)(C)(1)(i)

of this section may be credited in the

absence of an EPA-approved attainment

demonstration in areas where the Act

does not require an attainment

demonstration, including any area

designated attainment or unclassifiable

for ozone (areas) in an ozone transport

region and any marginal or

nonclassified ozone nonattainment area;

and

(iii) The shutdown or curtailment

occurred on or after the date specified

for this purpose in the attainment plan,

and if such date is on or after the date

of the most recent emissions inventory

used in the plan’s demonstration of

attainment.

(2) Where the plan does not specify a

cutoff date for shutdown credits, the

date of the most recent emissions

inventory or attainment demonstration,

as the case may be, shall apply.

However, in no event may credit be

given for shutdowns which occurred

prior to August 7, 1977.

(3) For purposes of paragraph

(a)(3)(ii)(C)(1)(iii) of this section, a

permitting authority may choose to

consider a prior shutdown or

curtailment to have occurred after the

date of its most recent emissions

inventory, if the inventory explicitly

includes as current existing emissions

the emissions from such previously

shutdown or curtailed sources.

(4) The reductions described in

paragraph (a)(3)(ii)(C)(1) of this section

may be credited in the absence of an

approved attainment demonstration in

an area where an attainment

demonstration is or will be required

only if the shutdown or curtailment

occurred on or after the date the new

source permit application is filed, or if

the applicant can establish that the

proposed new source is a replacement

for the shutdown or curtailed source,

and the cutoff date provisions of

paragraph (a)(3)(ii)(C) of this section are

observed.

Alternative 1—paragraphs

(a)(3)(iii)(C)(5) and (a)(3)(iii)(C)(6):

(5) Notwithstanding paragraph

(a)(3)(ii)(C)(4), the plan may provide

that for ozone nonattainment areas the

reductions described in paragraph

(a)(3)(ii)(C)(1) of this section, occurring

after November 15, 1990, may be

credited in the absence of an EPAapproved attainment demonstration in

an area where an attainment

demonstration is or will be required if

the following conditions are met as they

come due:

(i) The State has submitted a complete

emissions inventory as required by

section 182(a)(1) of the Act;

(ii) The State has submitted complete

revisions to its new source review

permitting program as required under

section 182(a)(2)(C) of title I of the Act;

(iii) The State has submitted the 15

percent volatile organic compounds

reduction plan required under section

182(b)(1)(A) of the Act for moderate (or

higher) ozone nonattainment areas;

(iv) The State has submitted the

attainment demonstration required for

moderate ozone nonattainment areas

under section 182(b)(1)(A) of the Act or

serious (or higher) ozone nonattainment

areas under section 182(c)(2) of the Act;

(v) The State has submitted the 3

percent reduction plan for serious (or

higher) ozone nonattainment areas

under section 182(c)(2)(B) of the Act;

and

(vi) The State has submitted milestone

demonstrations for serious (or higher)

ozone nonattainment areas under

section 182(g)(2) of the Act.

(6) If any of the submissions included

in paragraph (a)(3)(ii)(C)(5) of this

section are delinquent, or deemed

incomplete or disapproved by the

Administrator, then at such time the

restrictions of paragraph (a)(3)(ii)(C)(4)

of this section are in effect. However,

during review of a permit application, if

a State becomes delinquent for any of

these submissions, or a submission is

deemed incomplete or disapproved by

the Administrator, the plan may allow

the reductions to remain creditable if

the permit application was complete (as

determined in writing by the reviewing

authority) before the State became

delinquent or had a submission deemed

incomplete or disapproved by the

Administrator.

Alternative 2—paragraph

(a)(3)(iii)(C)(5) only:

(5) Notwithstanding paragraph

(a)(3)(ii)(C)(4) of this section, the plan

may provide that the reductions

described in paragraph (a)(3)(ii)(C) of

this section may be credited in the

absence of an EPA-approved attainment

demonstration if such reductions

occurred after the last day of the

baseline year of the most recent base

year emissions inventory used (or to be

used) in the plan.

* * * * *

(5) * * *

(iii) The reviewing authority shall

provide an opportunity for judicial

review in State court of the final permit

action by the applicant and any person

who participated in the public

participation process provided pursuant

to this part. The plan may provide that

the opportunity for judicial review shall

be the exclusive means by which

citizens may obtain judicial review of

the terms and conditions of permits, and

may require that such actions for

judicial review be filed no later than a

reasonable period after the final permit

action. If such a limited time period for

judicial review is provided in the plan,

then the plan shall provide that

petitions for judicial review of final

permit actions nevertheless can be filed

after the deadline if they are based

solely on grounds arising after the

deadline for judicial review and if filed

within a reasonable period specified in

the plan after the new grounds for

review arise.

(6) Complete application criteria.

(i) The plan shall provide that the

permitting authority shall—

(A) Determine that a permit

application is complete or deficient

based on the permitting authority’s

consideration of determinations,

analyses and other information

contained in the application, and

adequacy thereof, as specified in

paragraphs (a)(6)(ii) through (iii) of this

section; and

(B) Notify each applicant within a

specified time period as to either the

completeness of the application or any

deficiencies in the application or
38326 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

information submitted. In the event of

such a deficiency, the date of receipt of

the complete application shall be the

date on which the permitting authority

has received all required information.

(ii) The plan shall provide that such

information shall include:

(A) A description of the nature,

location, design capacity, and typical

operating schedule of the source or

modification, including specifications

and drawings showing its design and

plant layout;

(B) A detailed schedule for

construction of the source or

modification;

(C)(1) A detailed description of the

system of continuous emissions

reduction which the applicant has

submitted in a permit application for

the source or modification to qualify for

either the lowest achievable emission

rate or an approved undemonstrated

technology in accordance with the

waiver provision under paragraph (a)(8)

of this section; and

(2) All information used or consulted

by the applicant in recommending a

system of continuous emissions

reduction that qualifies as either the

lowest achievable emission rate or an

approved undemonstrated technology;

and

(D) All information necessary to

document that the owner or operator of

the proposed source or modification has

demonstrated that all major stationary

sources owned or operated by such

person (or by any entity controlling,

controlled by, or under common control

with such person) in such State are

subject to emission limitations and are

in compliance, or on a schedule for

compliance, with all applicable

emission limitations and standards

under the Act.

(iii) The plan shall provide that an

application shall not be considered

complete unless the permit application

has been registered on the applicable

EPA electronic bulletin board. To

register, at a minimum, the following

must be provided:

(A) Name and type of source;

(B) Nature of proposed project, i.e.,

new facility or modification;

(C) Proposed location of the source in

state/county (including Universal

Transverse Mercator coordinates) and

the distance between the source and

each Class I area within 250 kilometers;

(D) Anticipated allowable emissions,

or increase in emission rate, for each

affected air pollutant regulated under

the Act;

(E) Source contact mailing address

and telephone number; and

(F) The agency responsible for issuing

the permit.

(7) Public participation.

(i) The plan shall provide that prior to

issuing a permit under this section the

requirements under § 51.161 shall be

met;

(ii) The plan may set forth the

minimum information which must be

submitted by public commenters to

accompany any recommendations for

control technology alternatives for

which permit applicants would not

otherwise be responsible to consider in

determining the lowest achievable

emission rate as of the date an

application is complete according to

paragraph (a)(2)(ii) of this section. Such

information may include the name and

location of the source utilizing the

control technology, manufacturer and

type of control device, date of

installation and operation of control

device, and performance requirements

and available test data; and

(iii) The plan shall provide that—

(A) After any cut-off date established

in accordance with paragraph

(a)(2)(ii)(B) of this section, the

permitting authority shall notify a

permit applicant within 10 working

days from the date of receipt of a public

comment concerning any control

technology alternatives that the

permitting authority determines to

warrant further consideration by the

applicant; and

(B) The permitting authority shall

make available in the public record all

information that was submitted with

public comment regarding control

technology alternatives and provide the

basis for its decision to either require or

not require the permit applicant to

further consider such control

technology alternatives.

(8) Undemonstrated technology or

application waiver.

(i) The plan may provide that an

owner or operator of a proposed major

stationary source or major modification

may satisfy the requirements of

paragraph (a)(2)(ii) of this section

through the use of an undemonstrated

technology or application as set forth in

this section. The plan may provide that

the owner or operator shall provide to

the permitting authority a written

request for approval of an

undemonstrated technology or

application as part of the permit

application.

(ii) The plan may provide that the

permitting authority may approve a

system of undemonstrated technology or

application for a particular source or

modification if:

(A) The proposed control system

would not cause or contribute to an

unreasonable risk to public health,

welfare, or safety in its operation or

function;

(B) The owner or operator agrees to

achieve a level of continuous emissions

reduction equivalent to that which

would have been required under

paragraph (a)(2)(ii) of this section, by a

date specified by the permitting

authority. Such date shall not be later

than 2 years from the time of startup or

5 years from permit issuance;

(C) The source or modification would

meet the requirements equivalent to

those in paragraph (a)(2) of this section,

based on the emissions rate that the

stationary source employing the system

of undemonstrated technology or

application would be required to meet

on the date specified by the permitting

authority;

(D) The source or modification would

not, before the date specified by the

permitting authority, cause or contribute

to any violation of an applicable

national ambient air quality standard;

and

(E) All other applicable requirements

including those for public participation

have been met.

(iii) The plan shall provide that the

permitting authority shall withdraw any

approval to employ a system of

undemonstrated technology or

application made under this system if:

(A) The proposed system fails by the

specified date to achieve the required

continuous emissions reduction rate;

(B) The proposed system fails before

the specified date so as to contribute to

an unreasonable risk to public health,

welfare, or safety; or

(C) The permitting authority decides

at any time that the proposed system is

unlikely to achieve the required level of

control or to protect the public health,

welfare, or safety.

(iv) The plan shall provide that, if the

permitting authority withdraws

approval of a system of undemonstrated

technology or application, the owner or

operator shall bring the affected

emissions unit(s) into compliance with

the reference lowest achievable

emission rate within 18 months from

the date of withdrawal.

(v) The plan shall provide that the

permitting authority shall include, as a

minimum, the following information in

a waiver issued pursuant to paragraph

(a)(8) of this section:

(A) The undemonstrated technology

or application’s emission control

performance objective and the

applicable reference lowest achievable

emission rate;

(B) The marginal and gross failure

emission limits as defined by the

permitting authority on a case-by-case

basis; and
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38327

(C) Identification and classification of

potential failure modes and associated

contingency measures.

(vi) The plan shall provide that if, by

the date established in paragraph

(a)(8)(ii)(B) of this section, the

undemonstrated technology or

application does not achieve the

permitted emission limit, but actual

emissions are equal to or less than the

lowest achievable emission rate

referenced in the permit, the permitting

authority shall:

(A) Issue a final permit with the

emissions limit equal to the

undemonstrated technology or

application’s consistently achieved

actual emission rate; and

(B) Report the final permit limits to

the EPA’s RACT/BACT/LAER

Clearinghouse as a demonstrated control

technology.

(vii) The plan shall provide that if, by

the date established in paragraph

(a)(8)(ii)(B) of this section, the actual

emissions from the undemonstrated

technology or application constitute

marginal failure the owner or operator

may petition the permitting authority to

permit the undemonstrated technology

or application to operate at its actual

emissions limit. Accordingly, the

permitting authority may either:

(A) Approve the petition and proceed

in accordance with paragraph (a)(8)(vi)

of this section; or

(B) Disapprove the petition and

require the owner or operator to comply

with paragraph (a)(8)(iv) of this section.

(viii) The plan shall provide that if, at

any time prior to or on the date

established in paragraph (a)(8)(ii)(B) of

this section, the actual emissions from

the undemonstrated technology or

application constitute gross failure—

(A) The permitting authority shall

withdraw approval pursuant to

paragraph (a)(8)(iv) of this section; and

(B) The owner or operator shall

mitigate all emissions increases above

the emissions limit equivalent to the

applicable reference lowest achievable

emissions rate by reducing actual

emissions.

(ix) The plan shall provide that the

permitting authority submit to the

Administrator a copy of the approval of

the system of undemonstrated

technology or application within 30

days of its approval.

(x) The plan shall provide that the

permitting authority shall limit the

number of waivers granted to the

number necessary to ascertain whether

or not such system complies with

sections 111(j)(1)(A)(ii) and (iii) of the

Act.

(9) Plantwide applicability limit.

(i) Applicability. The plan may

provide that the owner or operator of a

proposed or existing major stationary

source may request the permitting

authority to approve a plantwide

applicability limit for any one or more

pollutants, and that the permitting

authority may approve a plantwide

applicability limit in accordance with

paragraphs (a)(9)(ii) through (iv) of this

section.

(ii) Procedure. The plan shall

provided that a plantwide applicability

limit for:

(A) A proposed major stationary

source may be established only through

a process that complies with paragraph

(a)(7) of this section;

(B) An existing major stationary

source may be established only through

a procedure consistent with § 51.161,

and with at least 30 days allowed for

public notice and opportunity for

comment.

(iii) Emission limitations and

conditions.

(A) The plan shall provide that a

plantwide applicability limit shall be

established based on either:

(1) Plantwide actual emissions (not to

exceed current allowable emissions),

including a reasonable operating margin

that is less than the applicable

significant emissions rate as defined

under paragraph (a)(1)(x) of this section;

or

(2) Source-wide limits on annual

emissions established in a permit issued

within the immediately preceding 5

years under regulations approved

pursuant to this section, where the

source-wide emissions limits were

completely offset and relied upon in an

approved state attainment

demonstration plan.

(B) The plan shall provide that any

plantwide applicability limit emissions

limitations shall be achievable through

application of production processes or

available methods, systems, and

techniques including, but not limited to,

emissions control equipment, fuel

cleaning or treatment, fuel combustion

techniques, substitution of less

polluting materials, or limits on

production that represent normal source

operations.

(C) The plan shall provide that

specific terms and conditions which

assure the practical enforceability of

plantwide applicability limit emissions

limitations shall be contained in a

federally enforceable permit applicable

to the source.

(D) The plan shall provide that the

emissions limitations and conditions

established for a plantwide applicability

limit shall not relieve any owner or

operator of the responsibility to comply

fully with any applicable control

technology requirements.

(iv) Plantwide applicability limit

modifications. The plan shall provide

that:

(A) Notwithstanding paragraphs

(a)(1)(v) and (vi) of this section (the

definitions for major modification and

net emissions increase), any physical or

operational change consistent with

plantwide applicability limit terms and

conditions and paragraph (a)(1)(vi)(E)(4)

of this section shall not constitute a

major modification for the pollutants

covered by the plantwide applicability

limit. All decreases in emissions shall

have approximately the same qualitative

significance for public health and

welfare as that attributed to the increase

from the particular change;

(B) Requirements equivalent to those

contained in paragraphs (a)(2) through

(7) of this section shall apply to any

plantwide applicability limit major

modification as if it were a major

modification, except that in lieu of

paragraph (a)(2)(ii)(B) of this section, a

plantwide applicability limit major

modification shall apply the lowest

achievable emission rate for each

pollutant subject to regulation under the

Act if an emissions increase above the

plantwide applicability limit would

occur; and

(C) The lowest achievable emission

rate requirement applies to each

emissions unit that contributes to the

emissions increase above the plantwide

applicability limit.

(v) Plantwide applicability limit

reevaluation. (A) The plan shall provide

that the permitting authority shall

reevaluate the plantwide applicability

limit emission limitations pursuant to—

(1) Permit renewal and public

notification procedures under parts 70

or 71 of this chapter; or

(2) Another proceeding with public

notice and opportunity for public

comment.

(B) As part of the reevaluation, the

permitting authority may reduce

permitted emission limitations or

otherwise adjust, but not increase,

permitted emission limitations to

reflect—

(1) Air quality concerns arising after

the approval of the plantwide

applicability limit;

(2) Changes at the source; or

(3) Other appropriate considerations.

(C) The plan shall provide that the

permitting authority shall adjust the

source’s plantwide applicability limit

emission limitations to reflect new

applicable requirements as they become

effective.

(10) For a major modification of

volatile organic compounds at a
38328 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

stationary source locating in a serious or

severe ozone nonattainment area the

plan shall include enforceable

procedures to provide that:

(i) The lowest achievable emission

rate requirement pursuant to paragraph

(a)(2)(i) of this section does not apply to

any discrete emissions unit(s) (or other

operations or pollutant emitting

activities) that is part of the proposed

major modification of volatile organic

compounds at an existing stationary

source which emits, or has the potential

to emit, 100 tons per year or more of

volatile organic compounds if such

source proposes creditable emissions

reductions from the source to internally

offset the emissions increase from the

selected discrete emissions unit(s) (or

other operations or pollutant emitting

activities) at a ratio of at least 1.3:1;

(ii) Notwithstanding the requirement

for the lowest achievable emission rate

pursuant to paragraph (a)(2)(i) of this

section, the best available control

technology requirement of section

165(a)(4) of the Act shall apply to a

proposed major modification of volatile

organic compounds at an existing major

stationary source which emits, or has

the potential to emit, less than 100 tons

of volatile organic compounds per year;

and

(iii) Any emissions reduction of

volatile organic compounds used as an

internal offset pursuant to this section

shall meet the applicable requirements

for crediting emissions reductions under

paragraph (a)(3)(ii) of this section.

(11) For modifications at major

stationary sources of nitrogen oxides in

serious or severe ozone nonattainment

areas the plan shall require that the

provisions of this section applicable to

modifications of volatile organic

compounds in serious and severe ozone

nonattainment areas shall also apply to

nitrogen oxides, except for serious or

severe ozone nonattainment areas where

the Administrator has determined that

the requirements of section 182(f) of the

Act do not apply.

(12) The plan shall provide that the

requirements of this section applicable

to major stationary sources and major

modifications of volatile organic

compounds shall apply to nitrogen

oxides emissions from major stationary

sources and major modifications of

nitrogen oxides in an ozone transport

region or in any ozone nonattainment

area classified as marginal, moderate,

serious, severe, or extreme, except in:

(i) Areas where the Administrator

determines that the net air quality

benefits are greater in the absence of

nitrogen oxides reductions;

(ii) Nonattainment areas not within an

ozone transport region if the

Administrator determines (when the

Administrator approves a plan or plan

revision) that additional reductions of

nitrogen oxides would not contribute to

attainment of the national ambient air

quality standard for ozone in the area;

or

(iii) Areas within an ozone transport

region if the Administrator determines

(when the Administrator approves a

plan or plan revision) that additional

reductions of nitrogen oxides would not

produce net air quality benefits in such

region.

(13) The plan shall require that the

requirements of this section applicable

to major stationary sources and major

modifications of PM–10 shall also apply

to major stationary sources and major

modifications of PM–10 precursors,

except where the Administrator

determines that such sources do not

contribute significantly to PM–10 levels

which exceed the PM–10 ambient

standards in the area.

(14)(i) The plan shall require that in

meeting the emissions offset

requirements of paragraph (a)(2) of this

section for ozone nonattainment areas,

the ratio of total actual emission

reductions of VOC to the emissions

increase of VOC shall be as follows:

(A) In any marginal nonattainment

area for ozone—at least 1.1:1;

(B) In any moderate nonattainment

area for ozone—at least 1.15:1;

(C) In any serious nonattainment area

for ozone—at least 1.2:1;

(D) In any severe nonattainment area

for ozone—at least 1.3:1 (except that the

ratio may be at least 1.2:1 if the

approved plan also requires all existing

major sources in such nonattainment

area to use BACT for the control of

VOC); and

(E) In any extreme nonattainment area

for ozone—at least 1.5:1 (except that the

ratio may be at least 1.2:1 if the

approved plan also requires all existing

major sources in such nonattainment

area to use BACT for the control of

VOC); and

(ii) Notwithstanding the requirements

of paragraph (a)(14)(i) of this section for

meeting the requirements of paragraph

(a)(2) of this section, the ratio of total

actual emissions reductions of VOC to

the emissions increase of VOC shall be

at least 1.15:1 for all areas within an

ozone transport region except for

serious, severe, and extreme ozone

nonattainment areas.

(15) The plan shall require that a

major modification of a major stationary

source of VOC locating in an extreme

nonattainment area for ozone shall be

considered to comply with the

emissions offset requirements under

paragraph (a)(2) of this section if the

owner or operator of the source elects to

offset the proposed emissions increase

of such VOC by a greater reduction in

actual emissions of VOC from other

discrete operations, units, or pollutant

emitting activities within the same

stationary source at a ratio of at least

1.3:1. Also, in extreme ozone

nonattainment areas emissions increases

of VOC resulting from modifications

consisting of equipment that is needed

to comply with the applicable

implementation plan, permit, or

provision under the Act need not be

offset under this section.

(16) The plan shall require that the

permitting authority shall, for each new

major source and major modification

subject to the provisions of this section,

submit to the RACT/BACT/LAER

Clearinghouse within 60 days of

issuance of the permit, all relevant

information on the emissions

prevention or control technology for the

new major source or major modification.

3. Paragraphs in § 51.166 are

redesignated as follows:

Old paragraph New paragraph

(b)(1)(i)(a) through (c) .............. (b)(1)(i)(A)

through

(C).

(b)(1)(iii)(a) through (aa) .......... (b)(1)(iii)(A)

through

(AA).

(b)(2)(iii)(a) through (k) ............. (b)(2)(iii)(A)

through

(K).

(b)(3)(i)(a) and (b) .................... (b)(3)(i)(A)

and (B).

(b)(3)(vi)(a) through (c) ............ (b)(3)(vi)(A)

through

(C).

(b)(13)(i)(a) and (b) .................. (b)(13)(i)(A)

and (B).

(b)(13)(ii)(a) and (b) ................. (b)(13)(ii)(A)

and (B).

(b)(14)(i)(a) and (b) .................. (b)(14)(i)(A)

and (B).

(b)(14)(ii)(a) and (b) ................. (b)(14)(ii)(A)

and (B).

(b)(14)(iii)(a) and (b) ................. (b)(14)(iii)(A)

and (B).

(b)(15)(ii)(a) and (b) ................. (b)(15)(ii)(A)

and (B).

(f)(4)(iii)(a) and (b) .................... (f)(4)(iii)(A)

and (B).

(i)(4)(ii)(a) through (aa) ............ (i)(4)(ii)(A)

through

(AA).

(i)(4)(iii)(a) through (d) .............. (i)(4)(iii)(A)

through

(D).

(i)(8)(i)(a) through (m) .............. (i)(8)(i)(A)

through

(M).

(m)(1)(i)(a) and (b) ................... (m)(1)(i)(A)

and (B).

(s)(2)(iv)(a) and (b) ................... (s)(2)(iv)(A)

and (B).
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38329

4. Section 51.166 is amended as

follows:

a. Amending newly redesignated

paragraph (b)(2)(iii)(F) by adding the

words ‘‘Standing alone,’’ at the

beginning of the sentence and revising

the word ‘‘An’’ to read ‘‘an’’;

b. Revising newly redesignated

paragraph (b)(2)(iii)(H);

c. Adding new paragraphs

(b)(2)(iii)(L) through (N);

d. Revising newly redesignated

paragraph (b)(3)(vi)(C);

e. Revising paragraph (b)(5);

f. Revising paragraphs (b)(19),

(b)(21)(ii), and (b)(22);

g. Adding a new paragraph (b)(21)(vi);

h. Revising paragraph (b)(23);

i. Amending paragraph (b)(24) by

adding the words ‘‘(or the Secretary’s

designee)’’ after the word ‘‘lands’’ at the

end of the sentence;

j. Revising paragraph (b)(27);

k. Revising paragraphs (b)(31)

introductory text and (b)(31)(i);

l. Removing paragraph (b)(31)(ii) and

redesignating paragraphs (b)(31)(iii) and

(iv) as new paragraphs (b)(31)(ii) and

(iii);

m. Adding new paragraphs (b)(38)

through (b)(48);

n. Amending paragraph (g)(1) by

removing the words ‘‘State

implementation’’ from the last sentence;

o. Amending paragraph (i)(8)(i) by

removing newly redesignated

paragraphs (i)(8)(i)(G), (H) and (J) and

redesignating paragraph (i)(8)(i)(I) as

paragraph (i)(8)(i)(G) and (i)(8)(i)(K)

through (i)(8)(i)(M) as (i)(8)(i)(H)

through (i)(8)(i)(J);

p. Adding new paragraph (i)(13);

q. Adding new paragraphs (j)(5) and

(6);

r. Amending the introductory text of

paragraph (k) by adding the word

‘‘significantly’’ after the words ‘‘would

not cause or’’;

s. Amending paragraph (m)(2) by

removing the word ‘‘ambient’’,

removing the word ‘‘reviewing’’ and

adding in its place ‘‘permitting’’, and

adding the words ‘‘, or on air quality

related values of a Federal Class I area.

Decisions about post-construction

monitoring for air quality related values

in Federal Class I areas shall be made in

consultation with the Federal Land

Manager.’’ at the end of the paragraph;

t. Revising the heading of paragraph

(n);

u. Revising paragraph (n)(1);

v. Redesignating paragraph (q)(1) as

new paragraph (n)(1)(ii);

w. Amending newly redesignated

paragraph (n)(1)(ii) by removing the

words ‘‘The reviewing authority shall’’,

and capitalizing ‘‘n’’ in the word

‘‘notify’’, adding the word ‘‘complete’’

after the words ‘‘receipt of the’’ in the

last sentence, and removing the word

‘‘reviewing’’ and adding in its place

‘‘permitting’’;

x. Amending paragraph (n)(2)

introductory text by removing the word

‘‘may’’ and adding in its place ‘‘shall’’

and removing the words ‘‘shall include’’

and adding in its place ‘‘includes’’;

y. Revising paragraph (n)(2)(iii) and

adding new paragraph (n)(2)(iv);

z. Revising paragraph (n)(3);

aa. Adding new paragraphs (n)(4) and

(n)(5);

bb. Amending paragraph (o)(1) by

adding ‘‘, except that for Federal Class

I and II areas such analysis may be

excluded only by approval of the

Federal Land Manager’’ to the end of the

second sentence;

cc. Revising the heading of paragraph

(p);

dd. Redesignating paragraph (p)(1) as

new paragraph (q)(1);

ee. Adding new paragraph (p)(1);

ff. Revising paragraphs (p)(2) and

(p)(3);

gg. Redesignating paragraphs (p)(4)

through (p)(7) as new paragraphs (p)(8)

through (p)(11);

hh. Adding new paragraphs (p)(4)

through (p)(7);

ii. Amending newly redesignated

paragraph (p)(9)(i) by revising the

citation ‘‘(q)(4)’’ to read ‘‘(p)(7)’’;

jj. Amending newly redesignated

paragraphs (p)(9)(iii) and (p)(10)(iii) by

removing the citation ‘‘(q)(7)’’ and

adding in its place ‘‘(p)(11)’’;

kk. Amending newly redesignated

paragraph (p)(11) by removing the

citation ‘‘(q)(5) or (6)’’ and adding in its

place ‘‘(p)(9) or (p)(10)’’;

ll. Amending newly redesignated

paragraph (q)(1) by removing the words

‘‘Notice to EPA,’’ and in the first

sentence, removing the word

‘‘reviewing’’ and adding in its place

‘‘permitting’’;

mm. Redesignating paragraph (q)(2)

introductory text through (q)(2)(v) as

new paragraphs (q)(4) introductory text

through (q)(4)(v);

nn. Redesignating paragraphs

(q)(2)(vi) through (viii) as new

paragraphs (q)(5)(i) through (iii);

oo. Adding new paragraphs (q)(2) and

(q)(3);

pp. Amending newly redesignated

paragraph (q)(4)(ii) by removing the

words ‘‘if any’’ and adding in its place

‘‘such as any information concerning an

adverse impact on air quality related

values required under paragraph

(p)(6)(iii) of this section’’;

qq. Amending newly redesignated

paragraph (q)(4)(iii) by adding the words

‘‘any potential adverse impact on air

quality related values,’’ after the words

‘‘source or modification,’’;

rr. Adding new paragraph (q)(6);

ss. Revising paragraph (r)(1);

tt. Revising the heading of paragraph

(s);

uu. Revising paragraphs (s)(1) and

(s)(2) introductory text;

vv. Amending paragraph (s)(2)(ii) by

removing the cite ‘‘(j)(2)’’ and adding in

its place ‘‘(j)’’, removing the word

‘‘reviewing’’ and adding in its place

‘‘permitting’’, removing the words ‘‘4

years’’ and adding in its place ‘‘2 years’’,

and removing the words ‘‘7 years’’ and

adding in its place ‘‘5 years’’;

ww. Amending the introductory text

of both paragraphs (s)(2)(iii) and (s)(3)

by removing the word ‘‘reviewing’’ and

adding in its place ‘‘permitting’’ and

removing the words ‘‘innovative control

technology’’ to read ‘‘undemonstrated

technology or application’’;

ww. Revising paragraph (s)(4);

xx. Adding new paragraphs (s)(5)

through (s)(10);

yy. Adding new paragraphs (t) and

(u).

§ 51.166 Prevention of significant

deterioration of air quality.

* * * * *

(b) * * *

(2) * * *

(iii) * * *

(H) The addition, replacement, or use

of a pollution control project at an

existing emissions unit unless the

pollution control project will result in a

significant net increase in representative

actual annual emissions of any pollutant

regulated under this section and the

permitting authority determines that

this increase will cause or contribute to

a violation of any national ambient air

quality standard or any maximum

allowable increase over the baseline

concentration, or will have an adverse

impact on air quality related values at

any Class I area. For the purpose of this

paragraph, in lieu of the source’s

representative actual annual emissions,

the emissions levels used for that source

in the most recent air quality impact

analysis in the area conducted for the

purpose of title I of the Act, if any, may

be used.

* * * * *

(L) Any activity undertaken at an

existing emissions unit for which a

federally enforceable emission limit has

been established, provided that:

(1) The activity or project will not

increase the maximum emissions rate,

in pounds or kilograms per hour, above

the maximum emissions rate achievable

by the emission unit at any time during

the 180 consecutive days which precede

the date of the activity or project and the

emissions increase is determined by:

(i) Material balances, continuous

emissions monitoring data, or manual
38330 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

emissions tests using the EPA-approved

procedures, where available, and

conducted under such conditions as the

permitting authority will specify to the

owner or operator based on

representative performance of the

emissions units affected by the activity

or project, including at least three valid

test runs conducted before, and at least

three valid test runs conducted after, the

activity or project with all operating

parameters which may affect emissions

held constant to the maximum feasible

degree for all such test runs; or

(ii) Emission factors as specified in

the latest issue of ‘‘Compilation of Air

Pollutant Emission Factors,’’ EPA

Publication No. AP–42, or other

emission factors determined by the

permitting authority to be superior to

AP–42 emission factors, in such cases

where use of emission factors

demonstrates that the emissions level

resulting from the activity or project

will clearly not increase emissions;

(2) The federally enforceable

emissions limit at the time of the change

is comparable to the emission limit that,

considering the air quality designation

of the area where the source is located,

would result from a review in

accordance with either paragraph (j) of

this section or regulations approved

pursuant to § 51.165(a)(2), or a review in

accordance with § 52.21(j) of this

chapter, for emission units of the same

class or source category. The permitting

authority may presume that a source

satisfies paragraph (b)(2)(iii)(L)(2) of this

section if:

(i) The activity would occur no later

than 120 consecutive months from the

date of issuance of the permit issued

under regulations approved pursuant to

either this section or § 51.165, or § 52.21

of this chapter, that established the

currently applicable emission limit for

the emissions unit;

(ii) The activity would occur no later

than 120 consecutive months from the

date of issuance of the permit issued

under regulations approved pursuant to

§§ 51.160 through 51.164, that

established the currently applicable

emissions limit for the emissions unit,

provided the permit was issued under

regulations that were determined by the

Administrator to provide for permits

that contain emission limitations that

satisfy paragraph (b)(2)(iii)(L)(2) of this

section; or

(iii) The activity would occur no later

than 60 consecutive months from the

date on which the permitting authority

made a determination, with public

notice and opportunity for public

comment consistent with § 51.161 of

this part, that the emissions limit

satisfied paragraph (b)(2)(iii)(L)(2) of

this section.

(3) The activity would not require a

revision to, or cause a violation of, any

federally enforceable limit or condition

in a permit issued under either § 52.21

of this chapter or regulations approved

pursuant to §§ 51.160 through 51.166;

(4) The activity or project does not

include the replacement or

reconstruction of an emissions unit; and

(M) Any activity undertaken at an

existing major stationary source,

provided:

(1) The activity would not require a

revision to, or cause a violation of, any

federally enforceable limit or condition

in a permit issued under either § 52.21

of this chapter or regulations approved

pursuant to §§ 51.160 through 51.166;

and

(2) The entire major stationary source

was permitted, and received the

currently applicable emission limits for

all emission units at the source issued

in accordance with either this section,

or regulations approved pursuant to

§ 51.165 or a permit issued under

§ 52.21 of this chapter, no more than

120 consecutive months prior to the

proposed activity.

(N) A change to ozone-depleting

substances with lower ozone-depleting

potential under the provisions of

sections 601 and 602 of the Act,

including changes to ozone-depleting

substances emitting equipment needed

to accommodate the change, as long as

the productive capacity of the

equipment is not increased.

* * * * *

(3) * * *

(vi) * * *

(C) It has approximately the same

qualitative significance for public health

and welfare as that attributed to the

increase from the particular change such

that, at a minimum, the decrease is

sufficient to prevent the proposed

increase from causing or contributing to

a violation of any national ambient air

quality standard or any applicable

maximum allowable increase over

baseline concentrations or having an

adverse impact on air quality related

values in Class I areas.

* * * * *

(5)(i) Stationary source means any

building, structure, facility, installation,

or stationary internal combustion engine

which emits or which may emit any air

pollutant subject to regulation under the

Act.

(ii) A stationary source does not

include emissions resulting directly

from an internal combustion engine

used for transportation purposes, or

from a nonroad engine or nonroad

vehicle.

* * * * *

(19) Undemonstrated technology or

application means any system, process,

material, or treatment technology

(including pollution prevention) that

has not been demonstrated in practice,

but would have a substantial likelihood

to operate effectively and achieve:

(i) A greater continuous reduction of

air pollutant emissions than any

demonstrated system; or

(ii) A comparable emissions reduction

at lower cost, or with lower energy

input, or with less environmental

impact.

* * * * *

(21) * * *

(ii) Actual emissions shall be

calculated using the unit’s actual

operating hours, production rates, and

types of materials processed, stored, or

combusted for any 12 consecutive

months during the 120 consecutive

months that precede the commencement

of construction of a proposed physical

or operational change at the source and

any current, federally enforceable

limitations on emissions required by the

Act, including, but not limited to, best

available control technology, lowest

achievable emission rate (as defined at

§ 51.165(a)(1)(xiii)), reasonably available

control technology, or emissions

standards for hazardous air pollutants

under section 112 of the Act.

* * * * *

(vi) In lieu of paragraphs (b)(21)(iv)

and (v) of this section, the plan may

provide that, for any emissions unit,

actual emissions of the unit following a

physical or operational change shall

equal the representative actual annual

emissions of the unit, provided the

source owner or operator maintains and

submits to the reviewing authority, on

an annual basis for a period of 5 years

from the date the unit resumes regular

operation, information demonstrating

that the physical or operational change

did not result in an emissions increase.

A longer period, not to exceed 10 years,

may be required by the reviewing

authority if it determines such a period

to be more representative of normal

source post-change operations.

(22) Complete means, in reference to

an application for a permit required

under this section, that the permitting

authority has deemed the application to

contain the information necessary (in

accordance with the criteria contained

in paragraph (n) of this section) to begin

formal review of the application.

Determining an application complete for

the purpose of beginning formal review

does not preclude the permitting
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38331

authority from requiring additional

information as may be needed to

determine whether the applicant

satisfies all requirements of this section.

(23) Significant means:

(i) In reference to a net emissions

increase or the potential of a source to

emit any of the following pollutants, a

rate of emissions that would equal or

exceed any of the following rates:

POLLUTANT AND EMISSIONS RATE

Carbon monoxide: 100 tons per year

Nitrogen oxides: 40 tons per year

Sulfur dioxide: 40 tons per year

Ozone: 40 tons per year of volatile organic

compounds

Particulate matter: 25 tons per year of

particulate matter emissions; 15 tons per

year of PM–10 emissions

Lead: 0.6 tons per year

Fluorides: 3 tons per year

Sulfuric acid mist: 7 tons per year

Hydrogen sulfide: 10 tons per year

Total reduced sulfur (including hydrogen

sulfide): 10 tons per year

Reduced sulfur compounds (including

hydrogen sulfide): 10 tons per year

Municipal waste combustor organics

(measured as total tetrathrough octachlorinated dibenzo-p-dioxins and

dibenzofurans): 3.2 × 10¥6 megagrams per

year (3.5 × 10¥6 tons per year)

Municipal waste combustor metals

(measured as particulate matter): 14

megagrams per year (15 tons per year)

Municipal waste combustor acid gases

(measured as sulfur dioxide and hydrogen

chloride): 36 megagrams per year (40 tons

per year)

Ozone-depleting substances (ODS): 100 tons

per year.

(ii) In reference to a net emissions

increase or the potential of a source to

emit a pollutant subject to regulation

under the Act that paragraph (b)(23)(i)

of this section does not list, any

emissions rate. However, for purposes of

the applicability of this section, the

hazardous air pollutants listed under

section 112(b)(1) of the Act, including

the hazardous air pollutants that may be

added to the list, are not considered

subject to regulation under the Act.

(iii) Notwithstanding paragraph

(b)(23)(i) of this section, any emissions

rate or any net emissions increase

associated with a major stationary

source or major modification, which

would construct within 10 kilometers of

a Class 1 area, and have an impact on

such area equal to or greater than 1

microgram per cubic meter (24-hour

average).

(iv) In reference to the predicted

ambient impact that the emissions from

a proposed major source or major

modification will have for purposes of

determining compliance with the

national ambient air quality standards,

concentrations which exceed any of the

following:

Pollutant Averaging

time

Significant

Impact

SO2 ........................ Annual ..... 1.0 μg/m3

24-Hour ... 5.0 μg/m3

3-Hour ..... 25.0 μg/m3

PM–10 ................... Annual ..... 1.0 μg/m/3

24-hour .... 5.0 μg/m3

NO2 ....................... Annual ..... 1.0 μg/m3

CO ......................... 8-hour ...... 0.5 mg/m3

1–Hour ..... 2.0 mg/m3

(v) In reference to the predicted

ambient impact that emissions from a

proposed major source or major

modification will have for purposes of

determining compliance with the

maximum allowable increases in

pollutant concentrations contained in

paragraph (c) of this section,

concentrations in excess of any of the

following:

Pollutant Averaging time Class I significant impact

Class II significant impact

Class III significant impact

SO2 ............................................................................................................. Annual .............. 0.1 μg/m3 ......... 1.0 μg/m3 ......... 1.0 μg/m3

24–Hour ............ 0.2 μg/m3 ......... 5.0 μg/m3 ......... 5.0 μg/m3

3–Hour .............. 1.0 μg/m3 ......... 25.0 μg/m3 ....... 25.0 μg/m3

PM–10 ........................................................................................................ Annual .............. 0.2 μg/m3 ......... 1.0 μg/m3 ......... 1.0 μg/m3

24-Hour ............ 0.3 μg/m3 ......... 5.0 μg/m3 ......... 5.0 μg/m3

NO2 ............................................................................................................ Annual .............. 0.1 μg/m3 ......... 1.0 μg/m3 ......... 1.0 μg/m3

* * * *

(27) Indian reservation means all land

within the limits of any Indian

Reservation under the jurisdiction of the

United States Government,

notwithstanding the issuance of any

patent, and including rights-of-way

running through the reservation.

* * * * *

(31) Pollution control project means:

(i) Any activity or project undertaken

at an existing emissions unit which, as

its primary purpose, reduces emissions

of air pollutants from such unit. Such

activities or projects do not include the

replacement of an existing emissions

unit with a newer or different unit, or

the reconstruction of an existing

emissions unit, and are limited to any

of the following:

(A) The installation of conventional or

advanced flue gas desulfurization, or

sorbent injection for SO2;

(B) Electrostatic precipitators,

baghouses, high efficiency multiclones,

or scrubbers for particulate or other

pollutants;

(C) Flue gas recirculation, low-NOX

burners, selective non-catalytic

reduction or selective catalytic

reduction for NOX;

(D) Regenerative thermal oxidizers,

catalytic oxidizers, condensers, thermal

incinerators, flares or carbon absorbers

for volatile organic compounds or

hazardous air pollutants;

(E) Activities or projects undertaken

to accommodate switching to an

inherently less polluting fuel, including

but not limited to natural gas or coal

reburning, or the cofiring of natural gas

and other inherently less polluting fuels

for the purpose of controlling emissions,

and including any activity that is

necessary to accommodate switching to

an inherently less polluting fuel;

(F) Pollution prevention projects

which are determined by the permitting

agency through a process consistent

with § 51.161 to be environmentally

beneficial. Pollution prevention projects

that may result in an unacceptable

increased risk from the release of

hazardous pollutants are not

environmentally beneficial; and

(G) Installation of a technology, for

purposes set forth in paragraph (b)(31)

of this section, which is not listed in

paragraphs (b)(31)(i)(A) through (E) of

this section but meets the following:

(1) Its effectiveness in reducing

emissions has been demonstrated in

practice; and

(2) It is determined by the permitting

authority, consistent with § 51.161, to be

environmentally beneficial.

* * * * *

(38) Federal Class I area means any

Federal lands within the United States

either designated by Congress as Class I

pursuant to section 162(a) of the Act

(and which may not be redesignated) or

redesignated as Class I pursuant to

either paragraph (g) of this section or

§ 52.21(g) of this chapter.

(39) Federal official means the Federal

official charged with direct
38332 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

responsibility for management of any

lands within a Federal Class I area.

(40) Air quality related value means,

for purposes of this section, visibility or

a scenic, cultural, physical, biological,

ecological, or recreational resource that

may be affected by a change in air

quality, as defined by the Federal Land

Manager for Federal lands, or by the

applicable State or Indian Governing

Body for nonfederal lands.

(41) Adverse impact on air quality

related values means, for purposes of

this section, a deleterious effect on any

air quality related value identified by a

Federal Land Manager, resulting from

emissions from a proposed major source

or major modification, that interferes

with the management, protection,

preservation, or enjoyment of such air

quality related values of a Federal Class

I area. This determination shall be made

on a case-by-case basis taking into

account existing air quality conditions.

(42) Demonstrated in practice means,

for the purposes of this section, a

control technology that has been—

(i) Listed in or required by any of the

following:

(A) The EPA’s RACT/BACT/LAER

Clearinghouse;

(B) A major source construction

permit issued pursuant to either part C

or D of title I of the Act;

(C) An emissions limitation contained

in a federally-approved plan, excluding

emissions limitations established by

permits issued pursuant to programs for

non-major sources;

(D) A permit or standard under

section 111 or 112 of the Act;

(E) The EPA’s Alternative Control

Techniques documents and Control

Techniques Guidelines; or

(ii) Notwithstanding paragraph

(b)(42)(i) of this section, installed and

operating on an emissions unit (or units)

which:

(A) Has operated at a minimum of 50

percent of design capacity for 6 months;

and

(B) The pollution control efficiency

performance has been verified with

either:

(1) A performance test; or

(2) Performance data collected at the

maximum design capacity of the

emissions unit (or units) being

controlled, or 90 percent or more of the

control technology’s designed

specifications.

(43) Pollution prevention means any

activity that through process changes,

product reformulation or redesign, or

substitution of less-polluting raw

materials, eliminates or reduces the

release of air pollutants (including

fugitive emissions) and other pollutants

to the environment prior to recycling,

treatment, or disposal; it does not mean

recycling (other than certain ‘‘in-process

recycling’’ practices), energy recovery,

treatment, or disposal.

(44) Plantwide applicability limit

means a plantwide, federally

enforceable emission limitation

established for a stationary source such

that any subsequent physical or

operational changes resulting in

emissions that remain less than the

limit, are excluded from preconstruction

review under this section.

(45) Plantwide applicability limit

major modification means,

notwithstanding the requirements of

paragraph (b)(2) of this section, any

increase in the emissions rate (in tons

per year) over the plantwide

applicability limit. Any emissions

increase of volatile organic compounds

shall be considered an increase for .

(46)(i) Nonroad engine means, except

as discussed in paragraph (b)(46)(ii) of

this section, any internal combustion

engine:

(A) In or on a piece of equipment that

is self-propelled or that serves a dual

purpose by both propelling itself and

performing another function (such as

garden tractors, off-highway mobile

cranes and bulldozers);

(B) In or on a piece of equipment that

is intended to be propelled while

performing its function (such as

lawnmowers and string trimmers); or

(C) That, by itself or in or on a piece

of equipment, is portable or

transportable, meaning designed to be

and capable of being carried or moved

from one location to another. Indicia of

transportability include, but are not

limited to, wheels, skids, carrying

handles, dolly, trailer, or platform.

(ii) An internal combustion engine is

not a nonroad engine if:

(A) The engine is used to propel a

motor vehicle or a vehicle used solely

for competition, or is subject to

standards promulgated under section

202 of the Act;

(B) The engine is regulated by a

Federal new source performance

standard promulgated under section 111

of the Act; or

(C) The engine otherwise included in

paragraph (b)(46)(i) of this section

remains or will remain at a location for

more than 12 consecutive months, or a

shorter period of time for an engine

located at a seasonal source. A location

is any single site at a building, structure,

facility, or installation. Any engine (or

engines) that replaces an engine at a

location and that is intended to perform

the same or similar function as the

engine replaced will be included in

calculating the consecutive time period.

An engine located at a seasonal source

is an engine that remains at a seasonal

source during the full annual operating

period of the seasonal source. For

purposes of this paragraph (b)(46)(ii)(C),

a seasonal source is a stationary source

that remains in a single location on a

permanent basis (i.e., at least 2 years)

and that operates at that single location

approximately 3 months (or more) each

year. This paragraph (b)(46)(ii)(C) does

not apply to an engine after the engine

is removed from the location.

(47) Nonroad Vehicle means a vehicle

that is powered by a nonroad engine

and that is not a motor vehicle or a

vehicle used solely for competition.

(48) Stationary internal combustion

engine means:

(i) Any internal combustion engine

that is regulated by a Federal new

source performance standard

promulgated under section 111 of the

Act; or

(ii) Any internal combustion engine

that is none of the following: a nonroad

engine, an engine used to propel a

motor vehicle or a vehicle used solely

for competition, or an engine subject to

standards promulgated under section

202 of the Act.

* * * * *

(i) * * *

(13) The plan may provide that the

provisions of this section do not apply

to any stationary source with respect to

any or all of the hazardous air pollutants

listed in section 112 the Act, as well as

any or all pollutants that may be added

to the list under the provisions of

section 112(b)(2) of the Act. However,

the applicable provisions of this section

shall apply to any pollutant listed under

sections 112(b)(1) or (b)(2) of the Act

that is deleted from such list under the

provisions of section 112(b)(3) of the

Act. Any hazardous air pollutants listed

in section 112 of the Act which are

regulated as constituents or precursors

of a more general pollutant listed under

section 108 of the Act are still subject

to the provisions of this section,

notwithstanding section 112(b)(6) of the

Act.

(j) * * *

(5)(i) In determining best available

control technology:

(A) The applicant shall identify and

evaluate all available and technically

feasible control technology alternatives

that have been demonstrated in practice

pursuant to either paragraph (b)(42)(i) of

this section prior to the date on which

the permit application is complete, or

paragraph (b)(42)(ii) of this section 90

days prior to the date on which the

permit application is complete; and

(B) The applicant shall demonstrate to

the satisfaction of the permitting
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38333

authority that the rejection of all

alternatives more stringent than the one

recommended as best available control

technology is justified by the energy,

environmental, and economic impacts

and other costs of those alternatives. If

the most stringent technology is chosen,

the permitting authority may wave the

requirement to analyze less effective

control technologies. Documentation

supporting the demonstration shall be

included in the public record pursuant

to paragraph (q)(6)(iii) of this section.

(ii) The control technology

alternatives considered in paragraph

(j)(5)(i) of this section shall be based

upon control technologies and methods

for the same and similar source

categories, i.e., those categories

including sources that have similar

emissions-stream characteristics.

(iii) The plan may establish a cut-off

date on or subsequent to the date that

an application is complete pursuant to

paragraph (n) of this section, after which

the permit applicant will not be

required to consider control technology

alternatives that are identified through

public comments and that are in

addition to those alternatives required

under paragraph (j)(5)(i)(A) of this

section, unless the permitting authority

determines that, based on information

submitted pursuant to paragraph (q)(2)

of this section, the alternatives warrant

further consideration by the applicant.

(6) For determinations of best

available control technology under the

requirements of this section, the

reviewing authority shall submit the

control technology information to the

EPA’s RACT/BACT/LAER

Clearinghouse within 60 days after

permit approval.

* * * * *

(n) Complete application criteria.

(1) The plan shall provide that the

permitting authority shall—

(i) Determine that a permit

application is complete or deficient

based on the permitting authority’s

consideration of determinations,

analyses and other information

contained in the application, and

adequacy thereof, as specified in

paragraphs (n)(2) through (n)(5) of this

section; and

* * * * *

(2) * * *

(iii)(A) A detailed description of the

system of continuous emissions

reduction which the applicant has

submitted in a permit application for a

source or modification, to qualify either

as best available control technology, or

for an undemonstrated technology

waiver in accordance with paragraph (s)

of this section; and

(B) All information used or consulted

by the applicant in recommending a

system of continuous emissions

reduction as either the best available

control technology or an approvable

undemonstrated technology.

(iv) Information and data used to

perform all required analyses or

determinations under paragraphs (o),

(p), (r), (s) and (u) of this section, as

applicable.

(3) The plan shall provide that upon

request of the permitting authority, the

owner or operator shall provide any

information and data used to perform all

required analyses or determinations

under paragraphs (k), (l) and (m) of this

section.

(4) The plan shall provide that an

application shall not be considered

complete unless the permit application

has been registered on the applicable

EPA electronic bulletin board. To

register, at a minimum, the following

must be provided:

(i) Name and type of source;

(ii) Nature of proposed project, i.e.,

new facility or modification;

(iii) Proposed location of the source in

state/county (including Universal

Transverse Mercator coordinates) and

the distance between the source and

each Class I area within 250 kilometers;

(iv) Anticipated allowable emissions,

or increase in emissions rate, for each

affected air pollutant regulated under

the Act;

(v) Source contact mailing address

and telephone number; and

(vi) The agency responsible for

issuing the permit.

(5) The plan shall provide that prior

to making a completeness

determination, the permitting authority

shall provide for any Federal Land

Manager review and coordination

required under paragraph (p)(5) of this

section.

* * * * *

(p) Sources potentially impacting

Federal Class I areas.

(1) Protection of air quality related

values. The Federal Land Manager and

the Federal Official have an affirmative

responsibility to protect the air quality

related values of Federal Class I areas

and to consider, in consultation with

the Administrator, whether a proposed

source or modification will have an

adverse impact on such values.

(2) General requirements.

(i) Notification of potential impacts

on a Federal Class I area and

requirement for impact assessment. The

plan shall provide that:

(A) Where the Federal Official,

Federal Land Manager, the

Administrator, the Governor of an

adjacent State, or the governing body of

an adjacent Indian Tribe containing a

Federal Class I area, files, prior to the

date a completeness determination is

made pursuant to paragraph (n)(1) of

this section, a written notice alleging

that emissions of a particular pollutant

from a proposed major source or major

modification may cause or contribute to

a change in the air quality in such area

and identifying the potential adverse

impact of such change on affected air

quality related values identified in the

area by the Federal Land Manager, a

permit shall not be issued unless the

owner or operator of such source:

(1) Demonstrates to the satisfaction of

the permitting authority that emissions

will not cause or contribute to ambient

pollutant concentrations in the Federal

Class I area which violate the maximum

allowable increases over baseline

concentrations; and

(2) Provides an analysis of the

potential impacts on air quality related

values at the Federal Class I area.

(B) Notwithstanding the restriction on

issuing a permit under paragraph

(p)(2)(i)(A)(1) of this section, a permit

otherwise prohibited under paragraph

(p)(2)(i)(A)(1) of this section may be

issued in accordance with the variance

provisions in paragraphs (p)(8) through

(p)(11) of this section.

(ii) Available information on air

quality related values and analytical

methods. The Federal Land Manager or

Federal Official shall, upon request,

provide to the owner or operator of a

proposed major source or major

modification that may have an adverse

impact on air quality related values in

a Federal Class I area all available

information about such values and

methods to analyze potential impacts.

(iii) Consultation with Federal Land

Manager. The plan shall provide for

consultation and coordination with the

Federal Land Manager, including the

procedures contained in paragraphs

(p)(3) through (p)(6) of this section.

(3) Pre-application coordination. The

plan shall provide that, for a proposed

major source or major modification

within 100 kilometers of a Federal Class

I area the permitting authority shall:

(i) Notify the affected Federal Land

Manager shall be notified within 30

days from receipt by the permitting

authority of advance notification of a

permit application; and

(ii) Give the affected Federal Land

Manager reasonable notice and an

opportunity to participate in preapplication meetings with the applicant.

(4) Permit application coordination.

The plan shall provide that:

(i) The Federal Land Manager of any

Federal Class I area within 100
38334 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

kilometers of a proposed major source

or major modification shall be provided

with a copy of the permit application

and other relevant information; and

(ii) The Federal Land Manager shall

be provided with a copy of a permit

application requested within 7 days

from the date information about such

application is registered on the

applicable EPA electronic bulletin board

(in accordance with paragraph (n)(4) of

this section).

(5) Completeness determination

coordination. The plan shall provide

that prior to making the completeness

determination under paragraph (n)(1) of

this section, the permitting authority

shall:

(i) Ensure that the applicant has

provided any analysis required pursuant

to paragraph (p)(2)(i) of this section;

(ii) Give the Federal Land Manager 30

days from receipt of an application to

review the application, where the

Federal Land Manager has received

such application pursuant to paragraph

(p)(4) of this section;

(iii) Consider any comments provided

by the Federal Land Manager within the

time period under paragraph (p)(5)(ii) of

this section; and

(iv) Consult with the Federal Land

Manager about any inconsistency

between the determination by the

permitting authority and the Federal

Land Manager’s recommendations.

(6) Preliminary and final permit

determination—No Class I increment

violation. The plan shall provide that,

where the permitting authority has

determined that the emissions from the

proposed major source or major

modification will not cause or

contribute to ambient pollutant

concentrations in the Federal Class I

area which violate the maximum

allowable increases over baseline

concentrations—

(i) The permitting authority shall not

issue a preliminary permit

determination until the Federal Land

Manager has been given at least 60 days

(from the date of issuance of the

completeness determination required

under paragraph (n)(1) of this section to

submit a demonstration that a proposed

major source or major modification will

have an adverse impact on air quality

related values;

(ii) If the permitting authority agrees

with the Federal Land Manager’s

demonstration under paragraph (p)(6)(i)

of this section, the permitting authority

shall propose to deny the permit;

(iii) If the permitting authority is not

satisfied with the Federal Land

Manager’s demonstration under

paragraph (p)(6)(i) of this section, the

permitting authority shall consult with

the Federal Land Manager, reference the

Federal Land Manager’s demonstration

and its rejection of the demonstration in

the public notice announcing the

preliminary permit determination and

propose to approve the permit with an

explanation in writing (for inclusion in

the public record along with the Federal

Land Manager’s demonstration) of the

reasons for rejecting the Federal Land

Manager’s demonstration. The

permitting authority’s written

explanation shall address, at a

minimum, the following:

(A) The basis for any disagreement

with the data and analyses contained in

the Federal Land Manager’s

demonstration of adverse impact on air

quality related values;

(B) Any conclusions the permitting

authority reaches, about whether the

projected impacts of the proposed

source’s emissions will have an adverse

impact on air quality related values, that

are inconsistent with the conclusions

reached in the demonstration submitted

by the Federal Land Manager; and

(C) Any measures undertaken to

mitigate the potential adverse impacts of

proposed emissions increases, including

the estimated effect of any mitigation;

(iv) In the final permit determination,

the permitting authority shall address

any comments made by the Federal

Land Manager concerning the

permitting authority’s preliminary

determination.

(7) Mitigation of adverse impacts. The

plan may provide that the permitting

authority may issue a permit for a

proposed major source or major

modification that would otherwise be

denied a permit under paragraph (p)(6)

of this section, if the permitting

authority determines, in consultation

with the Federal Land Manager, that the

source has mitigated its adverse impact

on air quality related values. The owner

or operator of a proposed major source

or major modification may mitigate an

adverse impact by obtaining enforceable

and permanent emissions reductions of

sufficient amount and in such location

that the reductions will offset the

change in air quality in the Federal

Class I area that would have resulted

from the proposed source.

* * * * *

(q) * * *

(2) The plan may set forth the

minimum information which must be

submitted by public commenters to

accompany any recommendations for

control technology alternatives for

which permit applicants would not

otherwise be responsible to consider in

determining best available control

technology as of the date an application

is complete according to paragraph

(j)(5)(iii) of this section. Such

information may include the name and

location of the source utilizing the

control technology, manufacturer and

type of control device, date of

installation and operation of control

device, and performance requirements

and available test data.

(3) The plan shall provide that—

(i) After any cut-off date established

pursuant to paragraph (j)(5)(iii) of this

section, the permitting authority shall

notify a permit applicant within 10

working days from the date of receipt of

a public comment concerning any

control technology alternatives that the

permitting authority determines to

warrant further consideration by the

applicant; and

(ii) The permitting authority shall

make available in the public record all

information that was submitted with

public comment regarding control

technology alternatives and provide the

basis for its decision to either require or

not require the permit applicant to

further consider such control

technology alternatives.

* * * * *

(6) The reviewing authority shall

provide an opportunity for judicial

review in State court of the final permit

action by the applicant and any person

who participated in the public

participation process provided pursuant

to this section. The plan may provide

that the opportunity for judicial review

shall be the exclusive means for

obtaining judicial review of the terms

and conditions of permits, and may

require that such petitions for judicial

review be filed no later than a

reasonable period after the final permit

action. If such a limited time period for

judicial review is provided in the plan,

then the plan shall provide that

petitions for judicial review of final

permit actions can be filed after the

deadline only if they are based solely on

grounds arising after the deadline for

judicial review and only if filed within

a reasonable period specified in the plan

after the new grounds for review arise.

(r) Source obligation.

(1) The plan shall include enforceable

procedures to—

(i) Provide that approval to construct

shall not relieve any owner or operator

of the responsibility to comply fully

with applicable provisions of the plan

and any other requirements under local,

State or Federal law; and

(ii) Require any owner or operator to

construct and operate a source or

modification in accordance with the

application submitted pursuant to this
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38335

section or with the terms of any

approval to construct.

* * * * *

(s) Undemonstrated technology or

application waiver.

(1) The plan may provide that an

owner or operator of a proposed major

stationary source or major modification

may satisfy the requirements of

paragraph (j) of this section through the

use of an undemonstrated technology or

application as set forth in this section.

The plan may provide that the owner or

operator shall provide to the permitting

authority a written request for approval

of an undemonstrated technology or

application as part of the permit

application.

(2) The plan may provide that the

permitting authority may approve a

system of undemonstrated technology or

application for a particular source or

modification if:

* * * * *

(4) The plan shall provide that, if the

permitting authority withdraws

approval of a system of undemonstrated

technology or application, the owner or

operator shall bring the affected

emissions unit(s) into compliance with

the reference best available control

technology emissions limit within 18

months from the date of withdrawal.

(5) The plan shall provide that the

permitting authority shall include, as a

minimum, the following information in

a waiver issued pursuant to paragraph

(s) of this section:

(i) The undemonstrated technology or

application’s emission control

performance objective and the

applicable reference best available

control technology emissions limit;

(ii) The marginal and gross failure

emissions limit(s) as defined by the

permitting authority on a case-by-case

basis; and

(iii) Identification and classification of

potential failure modes and associated

contingency measures.

(6) The plan shall provide that if, by

the date established in paragraph

(s)(2)(ii) of this section, the

undemonstrated technology or

application does not achieve the

permitted emission limit, but actual

emissions are equal to or less than the

best available control technology

emission limit referenced in the permit,

the permitting authority shall:

(i) Issue a final permit with the

emission limit equal to the

undemonstrated technology or

application’s consistently achieved

actual emission rate; and

(ii) Report the final permit limits to

the EPA’s RACT/BACT/LAER

Clearinghouse as a demonstrated control

technology.

(7) The plan shall provide that if, by

the date established in paragraph

(s)(2)(ii) of this section, the actual

emissions from the undemonstrated

technology or application constitute

marginal failure, the owner or operator

may petition the permitting authority to

permit the undemonstrated technology

or application at its actual emission

limit. Accordingly the permitting

authority shall either:

(i) Approve the petition and proceed

in accordance with paragraphs (s)(6)(i)

and (ii) of this section; or

(ii) Disapprove the petition and

require the owner or operator to comply

with paragraph (s)(4) of this section.

(8) The plan shall provide that if, at

any time prior to, or on, the date

established in paragraph (s)(2)(ii) of this

section, the actual emissions from the

undemonstrated technology or

application constitute gross failure:

(i) The permitting authority shall

withdraw approval pursuant to

paragraph (s)(4) of this section; and

(ii) The owner or operator shall

mitigate all emission increases above

the applicable reference best available

control technology emission limit by

reducing actual emissions.

(9) The plan shall provide that the

permitting authority submit to the

Administrator a copy of the approval of

the system of undemonstrated

technology or application within 30

days of its approval.

(10) The plan shall provide that the

number of waivers granted by the

permitting authority shall not exceed

such number as necessary to ascertain

whether or not such system complies

with section 111(j)(1)(A)(ii) and (iii) of

the Act.

(t) Disputed permits or redesignations.

If any State affected by the redesignation

of an area by an Indian Tribe, or any

Indian Tribe affected by the

redesignation of an area by a State

disagrees with such redesignation of an

area, or if a permit is proposed to be

issued for any major stationary source or

major modification proposed for

construction in any State which the

Governor of an affect State or Governing

Body of an affected Indian Tribe

determines will cause or contribute to a

cumulative change in air quality in

excess of that allowed in this section

within the affected State or Indian

Reservation, the Governor or Indian

Governing Body may request the

Administrator to enter into negotiations

with the parties involved to resolve

such dispute. If requested by any State

or Indian Tribe involved, the

Administrator shall make a

recommendation to resolve the dispute

and protect the air quality related values

of the lands involved. If the parties

involved do not reach agreement, the

Administrator shall resolve the dispute

and the Administrator’s determination,

or the results of agreements reached

through other means, shall become part

of the applicable plan and shall be

enforceable as part of such plan. In

resolving such disputes relating to area

redesignation, the Administrator shall

consider the extent to which the lands

involved are of sufficient size to allow

effective air quality management or have

air quality related values.

(u) Plantwide applicability limit.

(1) Applicability. The plan may

provide that an owner or operator of an

existing major stationary source may

request the permitting authority to

approve a plantwide applicability limit

for any one or more pollutants, and that

the permitting authority may approve a

plantwide applicability limit for an

existing major stationary source, in

accordance with paragraphs (u)(2)

through (5) of this section.

(2) Procedure. The plan shall provide

that a plantwide applicability limit for

an existing major stationary source may

be established only through a procedure

consistent with § 51.161 of this chapter,

and with at least 30 days allowed for

public notice and opportunity for

comment.

(3) Emission limitations and

conditions. (i) The plan shall provide

that a plantwide applicability limit shall

be established based on either:

(A) Plantwide actual emissions (not to

exceed current allowable emissions) and

a reasonable operating margin less than

the applicable significant emissions

rate; or

(B) Source-wide limits on annual

emissions established in a permit issued

within the immediately preceding 5

years under regulations approved

pursuant to § 51.165 of this part, where

the source-wide emissions limits were

completely offset and relied upon in an

approved state attainment

demonstration plan.

(ii) The plan shall provide that any

plantwide applicability limit emission

limitations shall be achievable through

application of production processes or

available methods, systems, and

techniques including, but not limited to,

emissions control equipment, fuel

cleaning or treatment, fuel combustion

techniques, substitution of less

polluting materials, or limits on

production that represent normal source

operations.

(iii) The plan shall provide that

specific terms and conditions that

assure the practical enforceability of

plantwide applicability limit emission

limitations shall be contained in a
38336 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

federally enforceable permit applicable

to the source.

(iv) The plan shall provide that the

emissions limitations and conditions

established for a plantwide applicability

limit shall not relieve any owner or

operator of the responsibility to comply

fully with any applicable control

technology requirements.

(4) Plantwide applicability limit

modifications. The plan shall provide

that:

(i) Notwithstanding paragraphs (b)(2)

and (b)(3) of this section (the definitions

for major modification and net

emissions increase), any physical or

operational change consistent with

plantwide applicability limit terms and

conditions of this section shall not

constitute a major modification for the

pollutants covered by the plantwide

applicability limits. All decreases in

emissions shall have approximately the

same qualitative significance for public

health and welfare as that attributed to

the increase from the particular change;

(ii) Requirements equivalent to those

contained in paragraphs (j) through (r)

of this section shall apply to any

plantwide applicability limit major

modification as if it were a major

modification, except that in lieu of

paragraph (j)(3) of this section, a

plantwide applicability limit major

modification shall apply best available

control technology for each pollutant

subject to regulation under the Act if an

emissions increase above the plantwide

applicability limit would occur; and

(iii) The best available control

technology requirement applies to each

emissions unit that contributes to the

emissions increase above the plantwide

applicability limit.

(5) Plantwide applicability limit

reevaluation.

(i) The plan shall provide that the

permitting authority shall reevaluate the

plantwide applicability limit emission

limitations pursuant to:

(A) Permit renewal and public

notification procedures under parts 70

or 71 of this chapter; or

(B) Another proceeding with public

notice and opportunity for public

comment.

(ii) As part of the reevaluation

required under paragraph (u)(5)(i) of

this section, the permitting authority

may reduce permitted emission

limitations or otherwise adjust (but not

increase) permitted emission limitations

to reflect:

(A) Air quality concerns arising after

the approval of the plantwide

applicability limit;

(B) Changes at the source; or

(C) Other appropriate considerations.

(iii) The plan shall provide that the

permitting authority shall adjust the

source’s plantwide applicability limit

emissions limitations to reflect new

applicable requirements as they become

effective.

PART 52–APPROVAL AND

PROMULGATION OF

IMPLEMENTATION PLANS

1. The authority citation for part 52 is

revised to read as follows:

Authority: 42 U.S.C. 7401–7671q.

2. Section 52.21 is amended by

redesignating the paragraphs as follows:

Old paragraph New paragraph

(b)(1)(i) (a) through

(c).

(b)(1)(i) (A) through

(C).

(b)(1)(iii) (a) through

(aa).

(b)(1)(iii) (A) through

(AA).

(b)(2)(iii) (a) through

(k).

(b)(2)(iii) (A) through

(K).

(b)(3)(i) (a) and (b) .... (b)(3)(i) (A) and (B).

(b)(3)(vi) (a) through

(c).

(b)(3)(vi) (A) through

(C).

(b)(13)(i) (a) and (b) (b)(13)(i) (A) and (B).

(b)(13)(ii) (a) and (b) (b)(13)(ii) (A) and (B).

(b)(14)(ii) (a) and (b) (b)(14)(ii) (A) and (B).

(b)(14)(iii) (a) and (b) (b)(14)(iii) (A) and (B).

(b)(15)(ii) (a) and (b) (b)(15)(ii) (A) and (B).

(i)(4)(ii) (a) through

(c).

(i)(4)(ii) (A) through

(C).

(i)(4)(iv) (a) through

(c).

(i)(4)(iv) (A) through

(C).

(i)(4)(v) (a) through

(c).

(i)(4)(v) (A) through

(C).

(i)(4)(vii) (a) through

(aa).

(i)(4)(vii) (A) through

(AA).

(i)(4)(viii) (a) through

(d).

(i)(4)(viii) (A) through

(D).

(i)(4)(ix) (a) through

(c).

(i)(4)(ix) (A) through

(C).

(m)(1)(i)(a) and (b) .... (m)(1)(i) (A) and (B).

(m)(1)(v) (a) through

(c).

(m)(1)(v) (A) through

(C).

(v)(2)(iv) (a) and (b) (v)(2)(iv) (A) and (B).

3. Section 52.21 is amended as

follows:

a. Amending newly redesignated

paragraph (b)(2)(iii)(F) by adding the

words ‘‘Standing alone,’’ at the

beginning of the sentence and revising

the word ‘‘An’’ to read ‘‘an’’;

b. Revising newly redesignated

paragraph (b)(2)(iii)(H);

c. Adding new paragraphs (b)(2)(iii)

(L) through (N); Revising newly

redesignated paragraph (b)(3)(vi)(C);

e. Revising paragraph (b)(5);

f. Revising paragraphs (b)(19),

(b)(21)(ii), and (b)(22);

g. Adding new paragraph (b)(21)(vi);

h. Revising paragraph (b)(23);

i. Amending paragraph (b)(24) by

adding the words ‘‘(or the Secretary’s

designee)’’ after the word ‘‘lands’’ at the

end of the sentence;

j. Revising paragraph (b)(27);

k. Revising paragraphs (b)(32)

introductory text and (b)(32)(i);

l. Removing paragraph (b)(32)(ii) and

redesignating paragraphs (b)(32)(iii) and

(iv) as new paragraphs (b)(32)(ii) and

(iii);

m. Adding new paragraphs (b)(39)

through (b)(49);

n. Amending paragraph (g)(1) by

removing the words ‘‘State

implementation’’ from the the last

sentence;

o. Revising paragraph (i)(8)(i);

p. Adding new paragraph (i)(14);

q. Adding new paragraphs (j)(5) and

(6);

r. Amending paragraph (k)

introductory text by adding the word

‘‘significantly’’ after the words ‘‘would

not cause or’’;

s. Amending paragraph (m)(2) by

removing the word ‘‘ambient’’ and

adding the words ‘‘, or on air quality

related values of a Federal Class I area.

Deci sions about post-construction

monitoring for air quality related values

in Federal Class I areas shall be made in

consultation with the Federal Land

Manager.’’ at the end of the paragraph;

t. Revising the heading and removing

the introductory text of paragraph (n);

u. Redesignating paragraph (n)(2) as

paragraph (n)(3) and revising it;

v. Redesignating paragraph (n)(1) as

paragraph (n)(2);

w. Revising newly redesignated

paragraph (n)(2) introductory text and

newly redesignated paragraph (n)(2)(iii)

and adding new paragraph (n)(2)(iv);

x. Adding new paragraphs (n)(1),

(n)(4) and (n)(5);

y. Amending paragraph (o)(1) by

adding the words ‘‘, except that for

Federal Class I and II areas such

analysis may be excluded only by

approval of the Federal Land Manager’’

to the end of the second sentence;

z. Revising the heading of paragraph

(p);

aa. Removing paragraph (p)(1);

bb. Redesignating paragraph (p)(2) as

paragraph (p)(1);

cc. Amending newly redesignated

paragraph (p)(1) by revising the heading

and removing the words ‘‘charged with

direct responsibility for management of

such lands’’;

dd. Adding new paragraph (p)(2);

ee. Revising paragraphs (p)(3) and

(p)(4);

ff. Redesignating paragraphs (p)(5)

through (p)(8) as paragraphs (p)(8)

through (p)(11);

gg. Adding new paragraphs (p)(5)

through (p)(7);

hh. Amending the newly redesignated

paragraph (p)(9) by removing the

citation ‘‘(q)(4)’’ and adding in its place

‘‘(p)(7)’’;
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38337

ii. Amending the newly redesignated

paragraphs (p)(9) and (p)(10) by

removing the citation ‘‘(q)(7)’’ and

adding in its place ‘‘(p)(11)’’;

jj. Amending the newly redesignated

paragraph (p)(11) by removing the

citation ‘‘(q) (5) or (6)’’ and adding in its

place ‘‘(p)(9) or (p)(10)’’;

kk. Revising paragraph (q);

ll. Amending paragraph (t) by

removing the words ‘‘State

implementation’’ in the phrase

‘‘applicable State implementation plan’’;

mm. Revising the heading of

paragraph (v);

nn. Revising paragraphs (v)(1) and

(v)(2) introductory text;

oo. Amending paragraph (v)(2)(ii) by

removing the cite ‘‘(j)(2)’’ and adding in

its place ‘‘(j)’’, removing the words ‘‘4

years’’ and adding in its place ‘‘2 years’’,

and removing the words ‘‘7 years’’ and

adding in its place ‘‘5 years’’;

pp. Amending paragraphs (v)(2)(iii)

and (v)(3) introductory text by removing

the words ‘‘innovative control

technology’’ and adding in its place

‘‘undemonstrated technology or

application’’;

qq. Revising paragraph (v)(4);

rr. Adding new paragraphs (v)(5)

through (v)(9);

ss. Adding new paragraph (x).

§ 52.21 Prevention of significant

deterioration of air quality.

* * * * *

(b) * * *

(2)—* * *

(iii) * * *

(H) The addition, replacement, or use

of a pollution control project at an

existing emissions unit unless the

pollution control project would result in

a significant net increase in

representative actual annual emissions

of any pollutant regulated under this

section and the Administrator

determines that this increase would

cause or contribute to a violation of any

national ambient air quality standard or

any maximum allowable increase over

the baseline concentration or will have

an adverse impact on any air quality

related value at any Class I area. For the

purpose of this paragraph, in lieu of the

source’s representative actual annual

emissions, the emissions levels used for

that source in the most recent air quality

impact analysis in the area conducted

for the purpose of title I of the Act, if

any, may be used.

* * * * *

(L) Any activity undertaken at an

existing emissions unit for which a

federally enforceable emissions limit

has been established, provided that:

(1) The activity or project will not

increase the maximum emissions rate,

in pounds or kilograms per hour, above

the maximum emissions rate achievable

by the emissions unit at any time during

the 180 consecutive days which precede

the date of the activity or project and the

emissions increase is determined by:

(i) Material balances, continuous

emissions monitoring data, or manual

emissions tests using the EPA-approved

procedures, where available, and

conducted under such conditions as the

permitting authority will specify to the

owner or operator based on

representative performance of the

emissions units affected by the activity

or project, including at least three valid

test runs conducted before, and at least

three valid test runs conducted after, the

activity or project with all operating

parameters which may affect emissions

held constant to the maximum feasible

degree for all such test runs; or

(ii) Emission factors as specified in

the latest issue of ‘‘Compilation of Air

Pollutant Emission Factors,’’ EPA

Publication No. AP–42, or other

emission factors determined by the

permitting authority to be superior to

AP–42 emissions factors, in such cases

where use of emission factors

demonstrates that the emissions level

resulting from the activity or project

will clearly not increase emissions;

(2) The federally enforceable

emissions limit at the time of the change

is comparable to the emission limit that,

considering the air quality designation

of the area where the source is located,

would result from a current review in

accordance with either paragraph (j) of

this section or regulations approved

pursuant to § 51.165(a)(2) or § 51.166(j)

of this chapter, for emissions units of

the same class or source category. The

Administrator may presume that a

source satisfies this paragraph

(b)(2)(iii)(L)(2) if:

(i) The activity would occur no later

than 120 consecutive months from the

date of issuance of the permit issued

under either this section or regulations

approved pursuant to § 51.165 or

§ 51.166 of this chapter, that established

the currently applicable emissions limit

for the emissions unit;

(ii) The activity would occur no later

than 120 consecutive months from the

date of issuance of the permit issued

under regulations approved pursuant to

§§ 51.160 through 51.164 of this

chapter, that established the currently

applicable emissions limit for the

emissions unit, provided the permit was

issued under regulations that were

determined by the Administrator to

provide for permits that contain

emissions limitations that satisfy

paragraph (b)(2)(iii)(L)(2) of this section;

or

(iii) The activity would occur no later

than 60 consecutive months from the

date on which the applicable permitting

authority made a determination, with

public notice and opportunity for public

comment consistent with § 51.161 of

this chapter, that the emissions limit

satisfied paragraph (b)(2)(iii)(L)(2) of

this section.

(3) The activity would not require a

revision to, or cause a violation of, any

federally enforceable limit or condition

in a permit issued under either this

section or regulations approved

pursuant to §§ 51.160 through 51.166 of

this chapter;

(4) The activity or project does not

include the replacement or

reconstruction of an emissions unit; and

(M) Any activity undertaken at an

existing major stationary source,

provided :

(1) The activity would not require a

revision to, or cause a violation of, any

federally enforceable limit or condition

in a permit issued under either this

section or regulations approved

pursuant to §§ 51.160 through 51.166 of

this chapter; and

(2) The entire major stationary source

was permitted, and received the

currently applicable emissions limits for

all emissions units, at the source issued

in accordance with either this section or

regulations approved pursuant to

§§ 51.165 through 51.166 of this chapter

no more than 120 consecutive months

prior to the proposed activity.

(N) A change to ozone-depleting

substances with lower ozone-depleting

potential under the provisions of

sections 601 and 602 of the Act,

including changes to ozone-depleting

substances emitting equipment needed

to accommodate the change, as long as

the productive capacity of the

equipment is not increased.

* * * * *

(3) * * *

(vi) * * *

(C) It has approximately the same

qualitative significance for public health

and welfare as that attributed to the

increase from the particular change such

that, at a minimum, the decrease is

sufficient to prevent the proposed

increase from causing or contributing to

a violation of any national ambient air

quality standard or any applicable

maximum allowable increase over

baseline concentrations or having an

adverse impact on air quality related

values in Class I areas.

* * * * *

(5) (i) Stationary source means any

building, structure, facility, installation,

or stationary internal combustion engine

which emits or which may emit any air
38338 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

pollutant subject to regulation under the

Act.

(ii) A stationary source does not

include emissions resulting directly

from an internal combustion engine

used for transportation purposes, or

from a nonroad engine or nonroad

vehicle.

* * * * *

(19) Undemonstrated technology or

application means any system, process,

material, or treatment technology

(including pollution prevention) that

has not been demonstrated in practice,

but would have a substantial likelihood

to operate effectively and achieve:

(i) A greater continuous reduction of

air pollutant emissions than any

demonstrated system; or

(ii) A comparable emissions reduction

at lower cost, or with lower energy

input, or with less environmental

impact.

* * * * *

(21) * * *

(ii) Actual emissions shall be

calculated using the unit’s actual

operating hours, production rates, and

types of materials processed, stored, or

combusted during any 12 consecutive

months during the 120 consecutive

months that precede the commencement

of construction of a proposed physical

or operational change at the source, and

any current, federally enforceable

limitation on emissions, as required by

the Act, including but not limited to,

best available control technology, lowest

achievable emission rate (as defined at

§ 51.165(a)(1)(xiii) of this chapter),

reasonably available control technology,

or emissions standards for hazardous air

pollutants under section 112 of the Act.

* * * * *

(vi) In lieu of paragraphs (b)(21)(iv)

and (v) of this section, actual emissions

of the unit following a physical or

operational change shall equal the

representative actual annual emissions

of the unit, provided the source owner

or operator maintains and submits to the

Administrator, on an annual basis for a

period of 5 years from the date the unit

resumes regular operation, information

demonstrating that the physical or

operational change did not result in an

emissions increase. A longer period, not

to exceed 10 years, may be required by

the Administrator if the Administrator

determines such a period to be more

representative of normal source postchange operations.

(22) Complete means, in reference to

an application for a permit required

under this section, that the

Administrator has deemed the

application to contain the information

necessary (in accordance with the

criteria contained in paragraph (n) of

this section) to begin formal review of

the application. Determining an

application complete for the purpose of

beginning formal review does not

preclude the Administrator from

requiring additional information as may

be needed to determine whether the

applicant satisfies all requirements of

this section.

(23) Significant means:

(i) In reference to a net emissions

increase or the potential of a source to

emit any of the following pollutants, a

rate of emissions that would equal or

exceed any of the following rates:

POLLUTANT AND EMISSIONS RATE

Carbon monoxide: 100 tons per year

Nitrogen oxides: 40 tons per year

Sulfur dioxide: 40 tons per year

Ozone: 40 tons per year of volatile organic

compounds

Particulate matter: 25 tons per year of

particulate matter emissions; 15 tons per

year of PM–10 emissions

Lead: 0.6 tons per year

Fluorides: 3 tons per year

Sulfuric acid mist: 7 tons per year

Hydrogen sulfide: 10 tons per year

Total reduced sulfur (including hydrogen

sulfide): 10 tons per year

Reduced sulfur compounds (including

hydrogen sulfide): 10 tons per year

Municipal waste combustor organics

(measured as total tetrathrough octachlorinated dibenzo-p-dioxins and

dibenzofurans): 3.2×10¥6 megagrams per

year (3.5 x 10¥6 tons per year)

Municipal waste combustor metals

(measured as particulate matter): 14

megagrams per year (15 tons per year)

Municipal waste combustor acid gases

(measured as sulfur dioxide and hydrogen

chloride): 36 megagrams per year (40 tons

per year)

Ozone-depleting substances (ODS): 100 tons

per year.

(ii) In reference to a net emissions

increase or the potential of a source to

emit a pollutant subject to regulation

under the Act that paragraph (b)(23)(i)

of this section does not list, any

emissions rate. However, for purposes of

the applicability of this section, the

hazardous air pollutants listed under

section 112(b)(1) of the Act, including

the hazardous air pollutants that may be

added to the list, are not considered

subject to regulation under the Act.

(iii) Notwithstanding paragraph

(b)(23)(i) of this section, any emissions

rate or any net emissions increase

associated with a major stationary

source or major modification, which

would construct within 10 kilometers of

a Class 1 area, and have an impact on

such area equal to or greater than 1

microgram per cubic meter (24-hour

average).

(iv) In reference to the predicted

ambient impact that the emissions from

a proposed major source or major

modification will have for purposes of

determining compliance with the

national ambient air quality standards,

concentrations which exceed any of the

following:

Pollutant Averaging

time

Significant

impact

SO2 ............... Annual .......... 1.0 μg/m3.

24–Hour ....... 5.0 μg/m3.

3–Hour ......... 25.0 μg/m3.

PM–10 .......... Annual .......... 1.0 μg/m3.

24–Hour ....... 5.0 μg/m3.

NO2 .............. Annual .......... 1.0 μg/m3.

CO ................ 8–Hour ......... 0.5 mg/m3.

1–Hour ......... 2.0 mg/m3.

(v) In reference to the predicted

ambient impact that emissions from a

proposed major source or major

modification will have for purposes of

determining compliance with the

maximum allowable increases in

pollutant concentrations contained in

paragraph (c) of this section,

concentrations which exceed any of the

following:

Pollutant Averaging time

Class I Class II Class III

Significant impact Significant impact Significant impact

SO2 ......................................... Annual .................................... 0.1 μg/m 3 ............................... 1.0 μg/m 3 ............................... 1.0 μg/m 3.

24-Hour .................................. 0.2 μg/m 3 ............................... 5.0 μg/m 3 ............................... 5.0 μg/m 3.

3-Hour .................................... 1.0 μg/m 3 ............................... 25.0 μg/m 3 ............................. 25.0 μg/m 3.

PM–10 .................................... Annual .................................... 0.2 μg/m 3 ............................... 1.0 μg/m 3 ............................... 1.0 μg/m 3.

24-Hour .................................. 0.3 μg/m 3 ............................... 5.0 μg/m 3 ............................... 5.0 μg/m 3.

NO2 ......................................... Annual .................................... 0.1 μg/m 3 ............................... 1.0 μg/m 3 ............................... 1.0 μg/m 3.
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38339

* * * * *

(27) Indian Reservation means all

land within the limits of any Indian

Reservation under the jurisdiction of the

United States Government,

notwithstanding the issuance of any

patent, and including rights-of-way

running through the reservation.

* * * * *

(32) Pollution control project means:

(i) Any activity or project undertaken

at an existing emissions unit which, as

its primary purpose, reduces emissions

of air pollutants from such unit. Such

activities or projects do not include the

replacement of an existing emissions

unit with a newer or different unit, or

the reconstruction of an existing

emissions unit, and are limited to any

of the following:

(A) The installation of conventional or

advanced flue gas desulfurization, or

sorbent injection for SO2;

(B) Electrostatic precipitators,

baghouses, high efficiency multiclones,

or scrubbers for particulate matter or

other pollutants;

(C) Flue gas recirculation, low-NOX

burners, selective non-catalytic

reduction or selective catalytic

reduction for NOX;

(D) Regenerative thermal oxidizers,

catalytic oxidizers, condensers, thermal

incinerators, flares, or carbon absorbers

for volatile organic compounds or

hazardous air pollutants;

(E) Activities or projects undertaken

to accommodate switching to an

inherently less polluting fuel, including

but not limited to, natural gas or coal

reburning, or the cofiring of natural gas

and other inherently less polluting

fuels, for the purpose of controlling

emissions, and including any activity

that is necessary to accommodate

switching to an inherently less polluting

fuel;

(F) Pollution prevention projects

which the Administrator has

determined through a process consistent

with § 51.161 of this chapter to be

environmentally beneficial. Pollution

prevention projects that may result in an

unacceptable increased risk from the

release of hazardous pollutants are not

environmentally beneficial; and

(G) Installation of a technology, for

purposes set forth in paragraph (b)(32)

of this section, which is not listed in

paragraphs (b)(32)(i) (A) through (E) of

this section but meets the following:

(1) Its effectiveness in reducing

emissions has been demonstrated in

practice; and

(2) It is determined by the

Administrator to be environmentally

beneficial.

* * * * *

(39) Federal Class I area means any

Federal lands within the United States

either designated as Class I pursuant to

section 162(a) of the Act (and which

may not be redesignated) or

redesignated as Class I pursuant to

either paragraph (g) of this section or

§ 51.166(g) of this chapter.

(40) Federal official means the Federal

official charged with direct

responsibility for management of any

lands within a Federal Class I area.

(41) Air quality related value means,

for purposes of this section, visibility or

a scenic, cultural, physical, biological,

ecological, or recreational resource that

may be affected by a change in air

quality, as defined by the Federal Land

Manager for Federal lands and as

defined by the applicable State or

Indian Governing Body for nonfederal

lands.

(42) Adverse impact on air quality

related values means, for purposes of

this section, a deleterious effect on any

air quality related value identified by a

Federal Land Manager, resulting from

emissions from a proposed major source

or major modification, that interferes

with the management, protection,

preservation, or enjoyment of such air

quality related values of a Federal Class

I area. This determination shall be made

on a case-by-case basis taking into

account existing air quality conditions.

(43) Demonstrated in practice means,

for the purposes of this section, any

control technology that has been—

(i) Listed in or required by any of the

following:

(A) The EPA’s RACT/BACT/LAER

Clearinghouse;

(B) A major source construction

permit issued pursuant to either part C

or D of title I of the Act;

(C) An emissions limitation contained

in a federally-approved plan, excluding

any emissions limitations established by

permits issued pursuant to programs for

non-major sources;

(D) A permit or standard under either

section 111 or 112 of the Act; and

(E) The EPA’s Alternative Control

Techniques documents and Control

Techniques Guidelines; or

(ii) Notwithstanding paragraph

(b)(43)(i) of this section, installed and

operating on an emissions unit (or units)

which:

(A) Has operated at a minimum of 50

percent of design capacity for 6 months;

and

(B) The pollution control efficiency

performance has been verified with

either:

(1) A performance test; or

(2) Performance data collected at the

maximum design capacity of the

emissions unit (or units) being

controlled, or 90 percent or more of the

control technology’s designed

specifications.

(44) Pollution prevention means any

activity that through process changes,

product reformulation or redesign, or

substitution of less polluting raw

materials, eliminates or reduces the

release of air pollutants (including

fugitive emissions) and other pollutants

to the environment prior to recycling,

treatment, or disposal; it does not mean

recycling (other than certain ‘‘in-process

recycling’’ practices), energy recovery,

treatment, or disposal.

(45) Plantwide applicability limit

means a plantwide federally enforceable

emissions limitation established for a

stationary source such that any

subsequent physical or operational

change resulting in plantwide emissions

that remain less than the limit are

excluded from preconstruction review

under this section.

(46) Plantwide applicability limit

major modification means,

notwithstanding the requirements of

paragraph (b)(2) of this section, any

increase in the emissions rate, in tons

per year, over the plantwide

applicability limit. Any emissions

increase of volatile organic compounds

shall be considered an increase for.

(47)(i) Nonroad engine means, except

as discussed in paragraph (b)(46)(ii) of

this section, any internal combustion

engine:

(A) In or on a piece of equipment that

is self-propelled or that serves a dual

purpose by both propelling itself and

performing another function (such as

garden tractors, off-highway mobile

cranes and bulldozers);

(B) In or on a piece of equipment that

is intended to be propelled while

performing its function (such as

lawnmowers and string trimmers); or

(C) That, by itself or in or on a piece

of equipment, is portable or

transportable, meaning designed to be

and capable of being carried or moved

from one location to another. Indicia of

transportability include, but are not

limited to, wheels, skids, carrying

handles, dolly, trailer, or platform.

(ii) An internal combustion engine is

not a nonroad engine if:

(A) The engine is used to propel a

motor vehicle or a vehicle used solely

for competition, or is subject to

standards promulgated under section

202 of the Act;

(B) The engine is regulated by a

Federal new source performance

standard promulgated under section 111

of the Act; or

(C) The engine otherwise included in

paragraph (b)(47)(i) of this section

remains or will remain at a location for
38340 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

1 No de minimis air quality level is provided for

ozone. However, any net increase of 100 tons per

year or more of VOC subject to PSD would be

required to perform an ambient impact analysis,

including the gathering of ambient air quality data.

more than 12 consecutive months, or a

shorter period of time for an engine

located at a seasonal source. A location

is any single site at a building, structure,

facility, or installation. Any engine (or

engines) that replaces an engine at a

location and that is intended to perform

the same or similar function as the

engine replaced will be included in

calculating the consecutive time period.

An engine located at a seasonal source

is an engine that remains at a seasonal

source during the full annual operating

period of the seasonal source. For

purposes of this paragraph (b)(47)(ii)(C),

a seasonal source is a stationary source

that remains in a single location on a

permanent basis (i.e., at least 2 years)

and that operates at that single location

approximately three months (or more)

each year. This paragraph (b)(47)(ii)(C)

does not apply to an engine after the

engine is removed from the location.

(48) Nonroad vehicle means a vehicle

that is powered by a nonroad engine

and that is not a motor vehicle or a

vehicle used solely for competition.

(49) Stationary internal combustion

engine means:

(i) Any internal combustion engine

that is regulated by a Federal new

source performance standard

promulgated under section 111 of the

Act; or

(ii) Any internal combustion engine

that is none of the following: a nonroad

engine, an engine used to propel a

motor vehicle or a vehicle used solely

for competition, or an engine subject to

standards promulgated under section

202 of the Act.

* * * * *

(i) * * *

(8) * * *

(i) The emission increase of the

pollutant from a new stationary source

or the net emissions increase of the

pollutant from a modification would

cause, in any area, air quality impacts

less than the following amounts:

(A) Carbon monoxide: 575

micrograms per cubic meter, 8-hour

average;

(B) Nitrogen dioxide: 14 micrograms

per cubic meter, annual average;

(C) Sulfur dioxide: 13 micrograms per

cubic meter, 24-hour average;

(D) Ozone; 1

(E) Particulate matter: 10 micrograms

per cubic meter PM–10, 24-hour

average;

(F) Lead: 0.1 micrograms per cubic

meter, 3-month average;

(G) Fluorides: 0.25 micrograms per

cubic meter, 24-hour average;

(H) Hydrogen sulfide: 0.2 micrograms

per cubic meter, 1-hour average;

(I) Total reduced sulfur: 10

micrograms per cubic meter, 1-hour

average;

(J) Reduced sulfur compounds: 10

micrograms per cubic meter, 1-hour

average; or

* * * * *

(14) The requirements of this section

do not apply to any stationary source

with respect to each hazardous air

pollutant listed pursuant to section 112

of the Act, as well as all pollutants that

may be added to such list under the

provisions of section 112(b)(2) of the

Act. However, the applicable provisions

of this section shall apply to any

pollutant listed pursuant to sections

112(b)(1) or (b)(2) of the Act that is

deleted from such list under the

provisions of section 112(b)(3) of the

Act. Any hazardous air pollutants listed

in section 112 of the Act which are

regulated as constituents or precursors

of a more general pollutant listed under

section 108 of the Act are still subject

to the provisions of this section,

notwithstanding section 112(b)(6) of the

Act.

(j) * * *

(5)(i) In determining best available

control technology:

(A) The applicant shall identify and

evaluate all available and technically

feasible control technology alternatives

that have been demonstrated in practice

pursuant to paragraph (b)(43)(i) of this

section prior to the date on which the

permit application is complete and

pursuant to paragraph (b)(43)(ii) of this

section 90 days prior to the date on

which the permit application is

complete;

(B) All control technology alternatives

identified pursuant to paragraph

(j)(5)(i)(A) of this section shall be ranked

and evaluated in descending order of

control effectiveness. The alternative

providing the maximum degree of

emissions reduction shall be established

as best available control technology

unless it is demonstrated to the

satisfaction of the Administrator that,

based upon technical considerations, or

energy, environmental, and economic

impacts and other costs, the maximum

degree of emissions reduction is not

achievable in that case. If the applicant

identifies the technology providing the

maximum degree of emissions reduction

as the best available control technology,

then the Administrator may waive the

requirement to analyze or evaluate less

effective control technologies.

Otherwise, the next most stringent

control technology shall then be

evaluated in the same manner.

Documentation supporting the

demonstration shall be included in the

public record pursuant to paragraph

(q)(2) of this section.

(ii) The control technology

alternatives considered in paragraph

(j)(5)(i) of this section shall be based

upon control technologies and methods

for the same and similar source

categories, i.e., those categories

including sources that have similar

emissions stream characteristics.

(iii) On or after the date that an

application is complete pursuant to

paragraph (n) of this section, the permit

applicant will not be required to

consider control technology alternatives

identified through public comments that

are in addition to those alternatives

required under paragraph (j)(5)(i)(A) of

this section, unless the Administrator

determines that, based on information

provided pursuant to paragraph (q)(2) of

this section, the alternatives warrant

further consideration by the applicant.

(iv) After the date on which the public

comment period is closed for a permit

issued pursuant to this section, the

applicant for such permit will not be

required to consider any control

technology that has not been identified

either prior to or during the public

comment period.

(6) For determinations of best

available control technology required

under this section, the Administrator

shall include the control technology

information in the EPA’s RACT/BACT/

LAER Clearinghouse within 60 days

after permit approval.

* * * * *

(n) Complete application criteria.

(1)(i) The Administrator shall

determine that a permit application is

complete or deficient based on the

consideration of determinations,

analyses and other information

contained in the application, and

adequacy thereof, as specified in

paragraphs (n)(2) through (n)(5) of this

section.

(ii) The Administrator shall notify

each applicant, in accordance with

procedures set forth in § 124.3(c) of this

chapter, as to either the completeness of

the application or any deficiency in the

application or information submitted. In

the event of such a deficiency, the date

of receipt of the complete application

shall be the date on which the

Administrator received all required

information.

(2) Information necessary to

determine a permit application

complete shall include:

* * * * *
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38341

(iii) (A) A detailed description of the

system of continuous emissions

reduction which the applicant has

submitted in a permit application for a

source or modification, to qualify either

as best available control technology, or

for an undemonstrated technology

waiver in accordance with paragraph (s)

of this section; and

(B) All information used or consulted

by the applicant in recommending a

system of continuous emissions

reduction as either the best available

control technology or an approvable

undemonstrated technology.

(iv) Information and data used to

perform all required analyses or

determinations under paragraphs (o),

(p), (r), (v) and (x) of this section, as

applicable.

(3) Upon request of the Administrator,

the owner or operator shall provide any

information and data used to perform all

required analyses or determinations

under paragraphs (k), (l) and (m) of this

section.

(4) An application shall not be

considered complete unless the permit

application has been registered on the

applicable EPA electronic bulletin

board. To register, at a minimum, the

following must be provided:

(i) Name and type of source;

(ii) Nature of proposed project, i.e.,

new facility or modification;

(iii) Proposed location of the source in

State/county (including Universal

Transverse Mercator coordinates) and

the distance between the source and

each Class I area within 250 kilometers;

(iv) Anticipated allowable emissions,

or increase in emissions rate, for each

affected air pollutant regulated under

the Act;

(v) Source contact mailing address

and telephone number, and

(vi) The agency responsible for

issuing the permit.

(5) Prior to making a completeness

determination, the Administrator shall

provide for any Federal Land Manager

review and coordination required under

paragraph (p)(5) of this section.

* * * * *

(p) Sources potentially impacting

Federal Class I areas.

(1) Protection of air quality related

values. * * *

(2) General requirements.

(i) Notification of potential impacts

on a Federal Class I area and

requirement for impact assessment.

(A) Where the Federal Official,

Federal Land Manager, the

Administrator, the Governor of an

adjacent State, or the governing body of

an adjacent Indian Tribe containing a

Federal Class I area, files, prior to the

date a completeness determination is

made pursuant to paragraph (n)(1) of

this section, a written notice alleging

that emissions of a particular pollutant

from a proposed major source or major

modification may cause or contribute to

a change in the air quality in such area

and identifying the potential adverse

impact of such change on affected air

quality related values identified in the

area by the Federal Land Manager, a

permit shall not be issued unless the

owner or operator of such source:

(1) Demonstrates to the satisfaction of

the Administrator that emissions will

not cause or contribute to ambient

pollutant concentrations in the Federal

Class I area which violate the maximum

allowable increases over baseline

concentrations; and

(2) Provides an analysis of the

potential impacts on air quality related

values at the Federal Class I area.

(B) A permit otherwise prohibited

under paragraph (p)(2)(i)(A)(1) of this

section may be issued in accordance

with the variance provisions in

paragraphs (p)(8) through (p)(11) of this

section.

(ii) Available information on air

quality related values and analytical

methods. The Federal Land Manager or

Federal Official shall, upon request,

provide to the owner or operator of a

proposed major source or major

modification that may have an adverse

impact on air quality related values in

a Federal Class I area all available

information about such values and

methods to analyze potential impacts.

(iii) Consultation with Federal Land

Manager. The Administrator shall

provide for consultation and

coordination with the Federal Land

Manager including the procedures

contained in paragraphs (p)(3) through

(p)(6) of this section.

(3) Pre-application coordination. For a

proposed major source or major

modification within 100 kilometers of a

Federal Class I area:

(i) The affected Federal Land Manager

shall be notified within 30 days from

receipt by the Administrator of advance

notification of a permit application; and

(ii) The affected Federal Land

Manager shall be given reasonable

notice and an opportunity to participate

in pre-application meetings with the

applicant.

(4) Permit application coordination.

(i) The Federal Land Manager of any

Federal Class I area within 100

kilometers of a proposed major source

or major modification shall be provided

with a copy of the permit application

and other relevant information, and

(ii) The Federal Land Manager shall

be provided with a copy of a permit

application requested within 7 days

from the date information about such

application is registered on the

applicable EPA electronic bulletin board

(in accordance with paragraph (n)(4) of

this section).

(5) Completeness determination

coordination. Prior to making the

completeness determination under

paragraph (n)(1) of this section, the

Administrator shall:

(i) Ensure that the applicant has

provided any analysis required pursuant

to paragraph (p)(2)(i) of this section;

(ii) Give the Federal Land Manager 30

days from receipt of an application to

review the application, where the

Federal Land Manager has received

such application pursuant to paragraph

(p)(4) of this section;

(iii) Consider any comments provided

by the Federal Land Manager within the

time period under paragraph (p)(5)(ii) of

this section; and

(iv) Consult with the Federal Land

Manager about any inconsistency

between the determination by the

Administrator and the Federal Land

Manager’s recommendations.

(6) Preliminary and final permit

determination—No Class I increment

violation. Where the Administrator has

determined that the emissions from the

proposed major source or major

modification will not cause or

contribute to ambient pollutant

concentrations in the Federal Class I

area which violate the maximum

allowable increases over baseline

concentrations:

(i) The Administrator shall not issue

a preliminary permit determination

until the Federal Land Manager has

been given at least 60 days (from the

date of issuance of the completeness

determination required under paragraph

(n)(1) of this section that the permit is

complete) to submit a demonstration

that a proposed major source or major

modification will have an adverse

impact on air quality related values.

(ii) If the Administrator agrees with

the Federal Land Manager’s

demonstration under paragraph (p)(6)(i)

of this section, the Administrator shall

propose to deny the permit.

(iii) If the Administrator is not

satisfied with the Federal Land

Manager’s demonstration under

paragraph (p)(6)(i) of this section, the

Administrator shall consult with the

Federal Land Manager, reference the

Federal Land Manager’s demonstration

and the Administrator’s proposed

rejection of the demonstration in the

public notice announcing the

preliminary permit determination, and

provide an explanation in writing (for

inclusion in the public record along
38342 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

with the Federal Land Manager’s

demonstration) of the reasons for

proposing to reject the Federal Land

Manager’s demonstration. The

Administrator’s written explanation

shall address, at a minimum, the

following:

(A) The basis for any disagreement

with the data and analyses contained in

the Federal Land Manager’s

demonstration of adverse impact on air

quality related values;

(B) Any conclusions the

Administrator reaches, about whether

the projected impacts of the proposed

source’s emissions will have an adverse

impact on air quality related values, that

are inconsistent with the conclusions

reached in the demonstration submitted

by the Federal Land Manager; and

(C) Any measures undertaken to

mitigate the potential adverse impacts of

proposed emissions increases, including

the estimated effect of any mitigation.

(iv) In the final permit determination,

the Administrator shall address any

comments made by the Federal Land

Manager concerning the Administrator’s

preliminary determination.

(7) Mitigation of adverse impacts. The

Administrator may issue a permit for a

proposed major source or major

modification that would otherwise be

denied a permit under paragraph (p)(6)

of this section, if the Administrator

determines, in consultation with the

Federal Land Manager, that the source

has mitigated its adverse impact on air

quality related values. The owner or

operator of a proposed major source or

major modification may mitigate an

adverse impact by obtaining enforceable

and permanent emissions reductions of

sufficient amount and in such location

that the reductions will offset the

change in air quality in the Federal

Class I area that would have resulted

from the proposed source.

* * * * *

(q) Public participation.

(1) The Administrator shall follow the

applicable procedures of part 124 of this

chapter in processing applications

under this section. The Administrator

shall follow the procedures at

§ 51.166(q) of this chapter to the extent

that the procedures of part 124 of this

chapter do not apply.

(2) The following information must be

submitted with any new control

technology alternatives recommended

by the public for the Administrator to

consider in determining best available

control technology pursuant to

paragraph (j)(5) of this section:

(i) Name and location of the source

utilizing the control technology;

(ii) Manufacturer, type and model of

pollution control device;

(iii) Date installed and date

operational;

(iv) Performance requirements

specified under applicable permits,

implementation plans or Federal

standards; and

(v) Available test or performance data

or identification of source of additional

information.

(3)(i) After any cut-off date

established in accordance with

paragraph (j)(5)(iii) of this section, the

Administrator shall notify a permit

applicant within 10 working days from

the date of receipt of a public comment

concerning any control technology

alternatives that the Administrator

determines to warrant further

consideration by the applicant; and

(ii) The Administrator shall make

available in the public record all

information that was submitted with

public comment regarding control

technology alternatives and provide the

basis for its decision to either require or

not require the permit applicant to

further consider such control

technology alternatives.

* * * * *

(v) Undemonstrated technology or

application waiver.

(1) An owner or operator of a

proposed major stationary source or

major modification may satisfy the

requirements of paragraph (j) of this

section through the use of an

undemonstrated technology or

application as set forth in this section.

The owner or operator shall provide to

the Administrator a written request for

approval of an undemonstrated

technology or application as part of the

permit application.

(2) The Administrator may approve a

system of undemonstrated technology or

application for a particular source or

modification if:

* * * * *

(4) If the Administrator withdraws

approval of a system of undemonstrated

technology or application, the owner or

operator shall bring the affected

emissions unit(s) into compliance with

the reference best available control

technology emissions limit within 18

months from the date of withdrawal.

(5) The Administrator shall include,

as a minimum, the following

information in a waiver issued pursuant

to paragraph (v) of this section:

(i) The undemonstrated technology or

application’s emissions control

performance objective and the

applicable reference best available

control technology emissions limit;

(ii) The marginal and gross failure

emissions limits as defined by the

Administrator on a case-by-case basis;

and

(iii) Identification and classification of

potential failure modes and associated

contingency measures.

(6) If, by the date established in

paragraph (v)(2)(ii) of this section, the

undemonstrated technology or

application does not achieve the

permitted emissions limit, but actual

emissions are equal to or less than the

best available control technology

emissions limit referenced in the

permit, the Administrator shall:

(i) Issue a final permit with the

emissions limit equal to the

undemonstrated technology or

application’s consistently achieved

actual emissions rate; and

(ii) Report the final permit limits to

the EPA’s RACT/BACT/LAER

Clearinghouse as a demonstrated control

technology.

(7) If, by the date established in

paragraph (v)(2)(ii) of this section, the

actual emissions from the

undemonstrated technology or

application constitute marginal failure

the owner or operator may petition the

Administrator to permit the

undemonstrated technology or

application to operate at its actual

emissions limit. Accordingly, the

Administrator shall either:

(i) Approve the petition and proceed

in accordance with paragraphs (v)(6) (i)

and (ii) of this section; or

(ii) Disapprove the petition and

require the owner or operator to comply

with paragraph (v)(4) of this section.

(8) If, at any time prior to or on the

date established in paragraph (v)(2)(ii)

of this section, the actual emissions

from the undemonstrated technology or

application constitute gross failure:

(i) The Administrator shall withdraw

approval pursuant to paragraph (v)(4) of

this section; and

(ii) The owner or operator shall

mitigate all emissions increases above

the applicable reference best available

control technology emissions limit by

reducing actual emissions.

(9) The Administrator shall limit the

number of waivers granted to the

number necessary to ascertain whether

or not such system complies with

sections 111(j)(1)(A)(ii) and (iii) of the

Act.

* * * * *

(x) Plantwide applicability limit.

(1) Applicability. The owner or

operator of an existing major stationary

source may request the Administrator to

approve a plantwide applicability limit

for any one or more pollutants, and the

Administrator may approve a plantwide

applicability limit for an existing major

stationary source, in accordance with

paragraphs (x)(2) through (x)(5) of this

section.
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules 38343

(2) Procedure. A plantwide

applicability limit for an existing major

stationary source may be established

only through a procedure consistent

with § 51.161 of this chapter, and with

at least 30 days allowed for public

notice and opportunity for comment.

(3) Emissions limitations and

conditions.

(i) A plantwide applicability limit

shall be established based on either:

(A) Plantwide actual emissions (not to

exceed current allowable emissions),

including a reasonable operating

margin, less than the applicable

significant emissions rate; or

(B) Source-wide limits on annual

emissions established in a permit issued

within the immediately preceding 5

years under regulations approved

pursuant to § 51.165 of this part, where

the source-wide emissions limits were

completely offset and relied upon in an

approved State attainment

demonstration plan.

(ii) Any plantwide applicability limit

emissions limitations shall be

achievable through application of

production processes or available

methods, systems, and techniques

including, but not limited to, emissions

control equipment, fuel cleaning or

treatment, fuel combustion techniques,

substitution of less polluting materials,

or limits on production that represent

normal source operations.

(iii) Specific terms and conditions

that assure the practical enforceability

of plantwide applicability limit

emissions limitations shall be contained

in a federally enforceable permit

applicable to the source.

(iv) The emissions limitations and

conditions established for a plantwide

applicability limit shall not relieve any

owner or operator of the responsibility

to comply fully with any applicable

control technology requirements.

(4) Plantwide applicability limit

modifications.

(i) Notwithstanding paragraphs (b)(2)

and (b)(3) of this section (the definitions

for major modification and net

emissions increase), any physical or

operational change consistent with

plantwide applicability limit terms and

conditions and paragraph (b)(3)(vi)(C) of

this section shall not constitute a major

modification for the pollutants covered

by the plantwide applicability limits.

All decreases in emissions shall have

approximately the same qualitative

significance for public health and

welfare as that attributed to the increase

from the particular change;

(ii) Requirements equivalent to those

contained in paragraphs (j) through (r)

of this section shall apply to any

plantwide applicability limit major

modification as if it were a major

modification, except that in lieu of

paragraph (j)(3) of this section, a

plantwide applicability limit major

modification shall apply best available

control technology for each pollutant

subject to regulation under the Act if an

emissions increase above the plantwide

applicability limit would occur; and

(iii) The best available control

technology requirement applies to each

emissions unit that contributes to the

emissions increase above the plantwide

applicability limit.

(5) Plantwide applicability limit

reevaluation.

(i) The Administrator shall reevaluate

the plantwide applicability limit

emissions limitations pursuant to—

(A) Permit renewal and public

notification procedures under part 70 or

71 of this chapter; or

(B) Another proceeding with public

notice and opportunity for public

comment.

(ii) As part of the reevaluation

required under paragraph (x)(5)(i) of this

section, the Administrator may reduce

permitted emissions limitations or

otherwise adjust (but not increase)

permitted emissions limitations to

reflect:

(A) Air quality concerns arising after

the approval of the plantwide

applicability limit;

(B) Changes at the source; or

(C) Other appropriate considerations.

(iii) The Administrator shall adjust

the source’s plantwide applicability

limit emissions limitations to reflect

new applicable requirements as they

become effective.

* * * * *

4. Section 52.24 is revised to read as

follows:

§ 52.24 Statutory restriction on new

sources.

(a) Any area designated

nonattainment pursuant to section

107(d) of the Act to which, immediately

prior to the enactment of the

Amendments to the Act of 1990

(November 15, 1990), a prohibition of

construction or modification of major

stationary sources was applied, shall

retain that prohibition if such

prohibition was applied by virtue of a

finding of the Administrator that the

State containing such an area:

(1) Failed to submit an

implementation plan meeting the

requirements of an approvable new

source review permitting program; or

(2) Failed to submit an

implementation plan that provided for

timely attainment of the national

ambient air quality standard for sulfur

dioxide by December 31, 1982. This

prohibition shall apply until the

Administrator approves a plan for such

area as meeting the applicable

requirements of part D of title I of the

Act as amended (NSR permitting

requirements) or subpart 5 of part D of

title I of the Act as amended (relating to

attainment of the national ambient air

quality standards for sulfur dioxide), as

applicable.

(b) Permits to construct and operate as

required by permit programs under

section 172(c)(5) of the Act may not be

issued for new or modified major

stationary sources proposing to locate in

nonattainment areas or areas in a

transport region where the

Administrator has determined that the

applicable implementation plan is not

being adequately implemented for the

nonattainment area or transport region

in which the proposed source is to be

constructed or modified in accordance

with the requirements of part D of title

I of the Act.

(c) Whenever, on the basis of any

information, the Administrator finds

that a State is not in compliance with

any requirement or prohibition of the

Act relating to the construction of new

sources or the modification of existing

sources, the Administrator may issue an

order under section 113(a)(5) of the Act

prohibiting the construction or

modification of any major stationary

source in any area to which such

requirement applies.

(d) The restrictions in paragraphs (a)

and (b) of this section apply only to

major stationary sources of emissions

that cause or contribute to

concentrations of the pollutant (or

precursors, as applicable) for which the

transport region or nonattainment area

was designated such, and for which the

applicable implementation plan is not

being carried out in accordance with, or

does not meet, the requirements of part

D of title I of the Act.

(e) For any transport region or any

area designated as nonattainment for

any national ambient air quality

standard, the restrictions in paragraphs

(a) and (b) of this section shall apply to

any major stationary source or major

modification that would be major for the

pollutant (or precursors, where

applicable) for which the area is

designated nonattainment or a transport

region, if the stationary source or major

modification would be constructed

anywhere in the designated

nonattainment area or transport region.

A major stationary source or major

modification that is major for volatile

organic compounds is also major for

ozone.
38344 Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 / Proposed Rules

(f) The definitions in § 51.165(a) of

this chapter shall apply under this

section.

(g) At such time that a particular

source or modification becomes a major

stationary source or major modification

solely by virtue of a relaxation in any

enforceable limitation which was

established after August 7, 1980, on the

capacity of the source or modification

otherwise to emit a pollutant, such as a

restriction on hours of operation, then:

(1) If the construction moratorium

imposed pursuant to this section is still

in effect for the nonattainment area or

transport region in which the source or

modification is located, then the permit

may not be so revised; or

(2) If the construction moratorium is

no longer in effect in that area, then the

requirements of § 51.165(a) of this

chapter shall apply to the source or

modification as though construction had

not yet commenced on the source or

modification.

(h) This section does not apply to

major stationary sources or major

modifications locating in a clearly

defined part of a nonattainment area or

transport region (such as a political

subdivision of a State), where the EPA

finds that a plan which meets the

requirements of part D of title I of the

Act is in effect and is being

implemented in that part.

[FR Doc. 96–17544 Filed 7–22–96; 8:45 am]

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