### Summary	of	Interagency	Working	Com ments	on	Draft	Language	under EO12866/13563	Interagency	Review.		Subject	to	Further	Policy	Re view.

1 Environmental Protection Agency (EPA): Final Rule

Review of National Ambient Ai r Quality Standards for Ozone

RIN 2060-AP38

General Comments

1. Reviewer recommends EPA conduct a review of health and welfare improvements achieved in meeting previous versions of the NAAQS in subsequent NAAQS setting efforts in order to provide a real-world context to EPA’s decision making. EPA’s historical and current approach has been quite experimental, theoretical, and statistical, without conducting a retrospective analysis of actual ozone concentration improvements to verify that the expected improvement in public health and welfare matches that which was achieved. EPA has revised the O 3 NAAQS a number of times since 1979, and there have been many areas that have achieved attainment and/or made progress toward achieving previous NAAQS. It would seem reasonable that EPA could incorporate information related to the air quality impr ovement and resulting improvement in public health and welfare to verify that the assu mptions and procedures used in setting the NAAQS actually make sense and accurately predict the actual improvement that has been observed. For example, EPA could l ook at a number of nonattainment areas for O 3 that have achieved the standard and answer the following: “We expected __ improvement in O 3 concentrations due to the implemen tation and attainment of a certain NAAQS level in area __ and thus we exp ected to achieve __ improvement in public health (choose various public health metrics used in set ting the standards, such as expected reduced mortalities, expected redu ced hospital visits, etc. ) and welfare (choose various public welfare metrics used in se tting the standards, such as expected improvement in biomass loss, expected impr ovement in crop yield loss, etc.). After implementing the regulations and achieving O 3 concentrations of __, we actually saw __ improvement in public health and welfare.” Conducting such an analysis would lend credibility and a valuable means of verifyi ng initial assumptions, as well as verifying those data obtained from chamber studies and other experimental work matched reality. 2. Reviewer recommends addressing the effects of the Ozone NAAQS on Outer Continental Shelf (OCS) oil a nd gas development. The rule does not currently address requirements for offshore oil and gas operators with respect to their emissions or the effects of offshore emissions to the onshore environment. It also does not appear to provide any additional inform ation or guidance regarding the treatment of OCS air quality plans or permits submitted to the EP A for such facilities. Reviewer also recommends discussing to what extent the EPA intends to address implications of offshore air pollutant emissions in 40 CFR parts 51 or 60 or to change the permitting requirements for OCS lessees and operators. 3. In order to establish appropr iate background concentrations for ozone and applicable precursors that could be used in conjunc tion with an analysis of potential impacts originating from facilities on the OCS, revi ewer recommends EPA establish guidelines or requirements for monitoring locations along the coasts, particularly for areas in the Gulf of Mexico that could be classified as potentially nonattain ment areas under this rule. Currently, the rule propos ed various guidelines for moni toring but does not list any

### Summary	of	Interagency	Working	Com ments	on	Draft	Language	under EO12866/13563	Interagency	Review.		Subject	to	Further	Policy	Re view.

2 specific or special requirements related to locating monitors along the coasts or in any locations that would be relevant to measuring ozone on the OCS. 4. Reviewer recommends considering that evaluati ons of air quality us ed to make welfare effects determinations should be based on creating a surface for each year and then averaging across years at each grid cell, rath er than be created from the three-year average at the monitor location. If a three-y ear average is used, re viewer recommends a lower level standard should be set to account for the greater variab ility in the shorter term numbers. 5. Reviewer recommends limiting grandfathering of PSD limits in time and not making them permanent for this rulemaking. Curre ntly, the proposed gra ndfathering provisions under either 40 CFR 52.21 or 51.166 would exempt certain pending PSD permit applications from having to address the re vised ozone NAAQS. The net result would be to put an excessive burden for achieving attainment on new applicants for PSD or NNSD approval. This could also have pot entially adverse effects on new economic development and would potentially ignore the disproportional impact caused by older facilities. Reviewer recommends at a mini mum that the final should make clear that applications for modifications to existing pe rmits would be required to comply with the new standards. 6. Reviewer recommends that the secondary stan dard be set independently of the primary standard based on an appropriate analysis of the welfare effects of ozone emissions, regardless of whether that standard ultimatel y ends up being higher, lower, or the same as the primary standard. 7. Reviewer recommends revising the major source criteria to include an evaluation of the location of the proposed major source in re lation to existing or likely nonattainment areas. Rather than using a fixed number, it may be more appropriate to establish a formula to determine whether the proposed faci lity emissions of precursors are likely to constitute a major source. 8. Reviewer recommends evaluating the potential for methane emissions within the new source review program. 9. Reviewer recommends updating the general conformity provisions as they appear to be largely out of date and should be updated eith er in conjunction with this rulemaking or as a separate but related effort. 10. Reviewer recommends that EPA add language indicating that simply moving from “good” to “moderate” Air Quality Index ( AQI) category should not necessitate the implementation of curtailment or management of emissions and activities given that the break between good and moderate has histori cally been significant for some planning purposes. In this ozone NAAQS preamble, EPA states on p. 276 that “An AQI value of 50 is set at 54 ppb”. This level was s eemingly determined (p. 273) because it is approximately 15 ppb below the level of the standard of 70 ppb in order to allow for having AQI categories “span ranges large enoug h to support accurate forecasting” and is “consistent with past practice of making a proportional adjustment to this AQI breakpoint, relative to an AQI value of 100 (i .e., 70 ppb)”. It should be noted that an AQI value of 50 is intended to be the breakpoint between the good and moderate categories, and that a level of 54 ppb is we ll below the lowest concentration (i.e., 60 ppb) that has been shown in controlled hum an exposure studies of healthy adults to

### Summary	of	Interagency	Working	Com ments	on	Draft	Language	under EO12866/13563	Interagency	Review.		Subject	to	Further	Policy	Re view.

3 cause moderate lung function decrements (i.e., FEV 1 decrements ≥ 10%, which could be adverse to people with lung disease) and airway inflammation in some people. 11. Reviewer recommends clarifying whether th e changes in the ozone monitoring season will impact the “attainment year” for SIP and conformity analysis. This is especially important for meeting conformity requirements (see 40 CFR 93.118).

Specific Comments

1. Page 16, footnote 5 – Reviewer recommends modifying the footnote to state the following to reflect the D.C. Circuit’s decision on remand in the Cross-State Air Pollution Rule case:

a. The Cross-State Air Pollution Rule was upheld by the Supreme Court in Environmental Protection Agency v. EME Homer City Generation

, L.P. , 134 S. Ct. 1584 (2014), and remanded to the D.C. Circuit for further proceedings. The D.C. Circuit issued its decision on remand from the Supreme Court on July 28, 2015, remanding CSAPR to EPA, without vacating th e rule, for EPA to reconsider certain emission budgets for certain States. EME Homer City Generation, L.P. v. Environmental Protection Agency , No. 11-1302, 2015 WL 4528137 (D.C. Cir. July 28, 2015). 2. Page 32 – Reviewer recommends retaining the effects of clim ate change described in the Endangerment Finding by the Administrator. Reviewer also recommends that more recent scientific findings should supplement th e current references, particularly the EPA CIRA report. 3. Pages 278-314 – In the discussion of the s econdary standard and effects of ozone on vegetation, EPA discusses the degradation of ecosystem services and the ability of ecosystems to sequester carbon with increase d ozone and climate change. Reviewer recommends EPA add specific mention that increased temperature, which is known to increase ozone levels, will also likely lead to increased wildfires, which will result in additional increases in emissions of ozone and especially ozone precursors (EPA could also reference the CIRA report). 4. Page 308 – Reviewer recommends using the phra se “restoration of desired fire regimes and fire-adapted ecosystems” instead of the term “fire regime stabilization.” The term “landscapes” could also be used in place of “fire-adapted ecosystems,” and implies a host of related ecological services and desirabl e ecological conditions. 5. Page 515-518 – Reviewer recomm ends noting that while it is the role of the States to proposed the designation of nonattainment areas , and that EPA evaluated these proposals, that federal agencies and non-federal stakehol ders are not precluded fr om participating in the designation process. 6. Page 522 – Reviewer recommending inserti ng at the end of the paragraph on EER:

a. A number of commenters expr essed concern regarding the new standards and use of prescribed fire. Currently pr escribed fires can be an exceptional event upon meeting the required criteria. EPA further intends to address these requirements surrounding use of the Exceptional Events Rule with regard to prescribed fires in its upcoming rulemaking. 7. The section on Implementation does not seem to utilize wording previously used in Implementation of the 2008 National Ambient Air Quality Standards for Ozone: State

### Summary	of	Interagency	Working	Com ments	on	Draft	Language	under EO12866/13563	Interagency	Review.		Subject	to	Further	Policy	Re view.

4 Implementation Plan Requirements, March 6, 2015 in 80 FR 12264 and other recent rules where wildland fire has been discussed. Ther efore, reviewer recommends the following changes:

a. Page 534 – add a new paragraph after para graph 1 and before the next paragraph starting with “If this is . . .” that states: i. Significant tracts of land under federal ma nagement may also be included in nonattainment area boundaries. The role of fire in these areas should be assessed and emissions budgets developed in concer t with those federal land management agencies. In such areas the EPA encourages states to consider in any baseline, modeling and SIP attainment inventory used and/or submitted to include emissions expected from projects subj ect to general conformity, including emissions from wildland fire that may be reasonably expect ed in the area. Where appropriate, states may consider developing plans for addre ssing wildland fuels in collaboration with land managers and owners. Information is available from DOI and USDA Forest Service on the ecological role of fire and on smoke management programs and basic smoke management practices. 1 b. Page 535 – add the following at the end of the 1 st paragraph: i. EPA intends to develop guidance to addr ess implementing the Exceptional Events Rule criteria for wildfires that could affect ambient ozone concentrations. Depending on the nature and scope of in terstate emission events affecting downwind air quality, the EPA may be able to assist states in developing approvable exceptional events demonstrations.

c. Page 537 – add the following at the end of the 3 rd paragraph before the examples paragraph: i. Depending on the nature and scope of intern ational emissions events affecting air quality in the U.S., the EPA may be able to assist stat es in developing approvable exceptional events demonstrations. More ge nerally, the EPA believes that the best approach for evaluating the potential impacts of international transport on nonattainment is for states to work w ith the EPA on a case-by-case basis to determine the most appropriate information and analytical methods for each area’s unique situation. The EPA will work with states that are developing attainment plans for which section 179B is relevant, a nd ensure the states have the benefit of the EPA's understanding of international transport of ozone and ozone precursors.

Regulatory Impact Analysis

1. Reviewer recommends providing uncertai nty bounds around the costs throughout the RIA. This would greatly help communicat e that there is uncertainty about these estimates in addition to the benefits estimat es, which have upper and lower bounds. This is particularly relevant for the unidentifi ed controls. The approaches discussed in Chapter 4 (e.g., regression, simulation) have confidence intervals around them, so there is even an analytical basis for including uncer tainty bounds. In addition to unidentified

1 USDA Forest Service and Natural Resources Conservation Service, Basic Smoke Management Practices Tech Note, October 2011, http://www.nrcs.usda.gov/Internet/FSE_DOCUMENTS/stelprdb1046311.pdf.

### Summary	of	Interagency	Working	Com ments	on	Draft	Language	under EO12866/13563	Interagency	Review.		Subject	to	Further	Policy	Re view.

5 controls, it is also relevant for identified te chnologies where there is clearly uncertainty in the cost curves. 2. Reviewer recommends listing more unidentifie d controls. While it may not be possible to quantify them, listing more potential unidentif ied controls seems essential. This is particularly important for California, wh ere it appears that 10 0% of the emission reductions are coming from unidentified NOx sources for the post-2025 period (see Table 3-10). Reviewer also recommends clarifyi ng how EPA expects California to comply. 3. Reviewer recommends confirming in the title for Table 4-9 that this is a 7% discount rate. 4. Reviewer recommends confirming in the title for Table 4-10 that th is is a 7% discount

rate. 5. Reviewer recommends clarifying what the benefi t is of including the 3% discount rate in some of the main tables, given that it can’t be included in most cases (e.g., Table 6-1). It is a bit confusing to see these numbers in some places, but then not see them in the headline numbers and really have no points for comparison. 6. Reviewer recommends clarifying why is there a “+ B” caveat in total benefits in tables 6-1 and 6-2, but not in the headline cost/benefit tables in the executive summary or in tables 8-1 and 8-2. Reviewer reco mmends being consistent. 7. The coefficients cited from the Smith and Za nobetti papers are the “national average” coefficients. However, in the table that has the baseline incidence and prevalence estimates (Table 6-4 in the RIA) it is stated that the baseline rates are age, cause, and county-specific. Does this imply that EP A used something other than the national coefficient from the studies, or did they use the national coefficient and apply it separately to each group? Reviewer recomme nds clarifying as the estimates are very difficult to replicate and veri fy without this information. 8. Reviewer recommends clarifying whether the damage function written out in Section 6.4.1 is the actual functional form that is used or is it meant to just be an example? In general, it would help to have further clarity on exactly how EPA applies the coefficients in the literature to estimate the benefits. 9. Reviewer recommends modifying Table 6-7 as the coefficients for Zanobetti et al. and Smith are flipped. 10. EPA states that they use a benefits-per-ton method to assess the PM benefits, but then also outlines a similar health-i mpact valuation to the one that is done for ozone. Do these map onto one another? If not, reviewer re commends clarifying which methodology is actually used and how they relate. 11. Reviewer recommends modifying Table 8- 1 as $15 - $15.5 = -$0.5, not -$1.0. Similarly for $14.5 versus the $14 that is in the table. If the difference is due to rounding, reviewer recommends providing that info rmation within the table. 12. Reviewer recommends modifying the impact to forest product facilities, which are described by EPA as most indirect, as there are direct impacts asso ciated with installing mandated emissions reductions technologies. Specifically, one commenter estimated the direct costs of the 70 ppb target to forest pr oduct facilities at $123M in capital costs and $24M in annual costs. For an affected facility and its local economy, the economic impacts of bringing a nonattainment area into compliance could be significant. 13. Reviewer recommends providing a quantitative analysis or qualitative discussion of differences between using the proposed Clean Power Plan versus the finalized Clean Power Plan for the RIA and how this may affect the baseline. Reviewer also

### Summary	of	Interagency	Working	Com ments	on	Draft	Language	under EO12866/13563	Interagency	Review.		Subject	to	Further	Policy	Re view.

6 recommends providing a quantitative analysis or qualitative discussion regarding the use of IPM v 5.14 instead of IPM v 5.15 that was used in the Clean Power Plan. 14. Reviewer recommends providing additional analysis or discussion in relation to a scenario where the intended regulations (e.g., Cross-State Air Pollution Rule, Clean Power Plan) do not provide the ozone reducti ons that are expected and how it would affect the benefits a nd costs of the rule. 15. Reviewer recommends providing additional ratio nale for the logic that the unidentified control costs would be based on the on the identified control co sts. As a sensitivity, EPA should assume that there is a steeper contro l curve for unidentified controls and that unidentified control costs would be higher. 16. Reviewer recommends providing additional clarification why the use of unidentified controls are not in the same ratio as identifie d controls within an area. For example, an area that is 40% NOx controls and 60% VOC controls for identified controls, should assume that 40% of unidentified controls are NOx controls and 60% of unidentified controls are VOC controls. Based on the logic presented as to why only unidentified NOx controls would be used could be made in relation to applying any identified VOC controls.