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### Technical Support Document for EP A Action on Amendments to Alaska’s Air Quality Control Regulations in 18 AAC 50

Table of Contents

I. Purpose

II. Background of Submittal

III. Editorial Changes

IV. Requested Sections to be Inco rporated by Reference into the SIP A. Description of Submittal B. Key Changes to 18 AAC 50 C. Summary of Action 1. Provisions Approved by EPA and Incorporated by Reference 2. Provisions Approved by EPA into the SIP, but not Incorporated by Reference 3. Provisions Not Approved by EPA

V. Requested Sections to be Removed from the SIP A. Description of Submittal B. Summary of Action

VI. Geographic Scope of SIP ApprovalJanuary 26, 2007

2 of 26 I. Purpose

The purpose of this Technical Support Docume nt (TSD) is to describe the substantive changes to Alaska’s Air Quality Control Regulations (i.e., 18 AAC 50) that have been submitted by the State of Alaska as revisions to its State Implementation Plan (SIP),

document EPA’s evaluation of how thes e rules comply with EPA’s minimum requirements for SIPs, and explain the ba sis for EPA’s proposed action. Although the

Alaska rules have been amended in several se parate State rulemakings since the EPA last approved revisions to the Alaska SIP, this TSD will not be discussing each individual rule adoption. This TSD will describe how the current Alaska rules differ from the current SIP and why EPA believe s the changes are approvable.

Note that, in general, this TSD discusses onl y the provisions of Alas ka’s air rules that

have been submitted as revisions to the Alaska SIP. SIP rules and standards are designed to attain and maintain the Nationa l Ambient Air Quality Standards (NAAQS). Several provisions or parts of Alaska’s air rules have not been submitted to EPA for approval as a revision to the Alaska SIP b ecause they are not designed to attain and maintain the NAAQS, but instead are designe d to implement other Clean Air Act (CAA) programs, such as the title V air opera ting permits program, New Source Performance Standards (NSPS), and National Emissions Standards for Hazardous Air Pollutants (NESHAPs), or are designed to implemen t other provisions of State law.

II. Background of Submittal

On May 6, 2005, the Commissioner of the Al aska Department of Environmental Conservation (ADEC) submitted a request to EP A to revise the Alaska SIP to include a completely revised version of the State of Alaska’s Air Quality Regulation in 18 AAC 50. These changes became effective as a matter of State law on January 29, 2005.

On June 30, 2006 the Commissioner of ADEC s ubmitted a request to EPA to revise the

Alaska SIP to include additional revisions to 18 AAC 50. The revised portions reflected in this submittal include adoption by refere nce of updated EPA rules and changes to the portable oil and gas drill rig regulations. Th ese changes became effective as a matter of State law on December 3, 2005. Included in the submittal was a request that EPA exclude from consideration for SIP approva l the portions of 18 AAC 50 affected by the June 24, 2005, United States Court of Appeals, District of Columbia Circuit decision which vacated portions of EPA’s new source re view rules pertaining to clean units and pollution control projects.

III. Editorial Changes

It is important to note that si nce the last EPA approval of th e Alaska rules, nearly every

section of the rules has been amended to so me degree. Many of these amendments are editorial, renumberings, change s to citations for cross-refe renced rules or statutes,January 26, 2007

3 of 26 changes in terminology with no change in m eaning (e.g., “air pollutant” instead of “air contaminant”), or grammatical corrections.

This TSD will not be describing or discussing these numerous editorial changes, renumberings, and recodifications. EPA has reviewed them and finds them to be approvable as revisions to the Alaska SIP.

IV. Requested Sections to be Incorporated by Reference into the SIP

A. Description of Submittal

The Alaska Department of Environmental Quality (ADEC) submitted revisions to the regulations in 18 AAC 50. The revisions woul d replace most of the current construction and operating permit programs to satisfy re visions in Alaska’s underlying statute.

The revised permitting program in Alaska consists of construction permits, title V operating permits, and minor permits. Cons truction permits include the major source permitting programs for prevention of signifi cant deterioration (PSD), nonattainment areas, and hazardous air pollutants (HAPs). The revised regulations adopt the Federal construction and operating permit programs by re ference to the extent practical. Where incorporation by reference of Fe deral law was not practical or was inconsistent with State law, ADEC included language dir ectly in the State regulations or included a reference to

the relevant State statute.

Alaska’s revised minor permit program is for new or relocated minor sources and changes at both major and minor stationary s ources that are not subject to Federal major source permitting requirements. It also a pplies to continued operation of stationary sources not subject to the title V permit pr ogram. The minor permit program includes a fast track permit issuance procedure for sour ces that qualify, and allows for development of general permits in the future for groups of sources with similar ch aracteristics. Once issued, the general permits would allow an ow ner or operator to construct and operate a stationary source with li ttle or no delay after s ubmitting an application.

B. Key Changes to 18 AAC 50

18 AAC 50.035 Documents, Procedures, and Methods Adopted by Reference ADEC revised paragraphs (a) and (b) in orde r to update the dates of their adoption by reference of Federal law, as well as State and Federal guidance documents. ADEC also

added three new documents to their adoption by reference:

 Meteorological Monitoring Guidance fo r Regulatory Modeling Applications;

 Ambient Monitoring Guidelines for Prev ention of Significant Deteriorations (PSD); and

 ADEC’s Summary Prepared by the Depart ment of Environmental Conservation of Coastal Area Boundaries Approved by the Coastal Policy Council (CPC) forJanuary 26, 2007

4 of 26 Coastal Resource Districts Excluded from the Portable Oil and Gas Operation Permit by Rule (18 AAC 50.390), as revised as of November 19, 2002.

Subparagraph (b)(4) contains emission sta ndards for 40 CFR part 63 sources. These types of provisions are inappr opriate for SIP approval because they are not related to the criteria pollutants regulated under section 110 of the CAA.

Paragraph (c) is a new provision which allows ADEC to use a test method other than one listed in 18 AAC 50.035(c) for a source-specifi c limit imposed in a permit. ADEC has clarified that this pr ovision does not authori ze ADEC to change a test method that is

established in a SIP limit or a Federal standard.

18 AAC 50.050 Incinerator Emission Standards and 18 AAC 50.055 Industrial Processes and Fuel-Burning Equipment ADEC revised the opacity standard for most sources from a three minute aggregate to a six minute average. The numeric value of the standard remains 20%. EPA has previously approved the use of a six minute average opacity standard for several source categories in Alaska in order to coincide with opacity limits in the Federal NSPS. In these latest revisions, ADEC has amended 18 AAC 50.050(2) and 18 AAC 50.055 (1)-(3) to similarly adopt a six minute average for more source categories. As explained in more detail in the justification provided by ADEC, AD EC made this change in the form of the

standard to address a defense to enforcem ent raised by industry with the three minute aggregate exception. ADEC further explained that, although there may be some limited

situations in which the revised standard could be less stringent than the previous standard (when there is a plume that is both high in opa city and intermittent), in the large majority of cases, the new standard is more stri ngent. In the one circumstance where ADEC expects that the three minute aggregate coul d be more stringent than the six minute average—soot blowing at coal fired power plants—ADEC has retained the opacity limit as an aggregate standard. Based on the information provided by ADEC, EPA concludes that changing the 20% opacity limit from a three minute exception to a six minute average in 18 AAC 50.050(2) and 18 AAC 50.05 5 (1)-(3) will continue to provide for attainment and maintenance of the NAAQS and other CAA standards and is thus approvable.

18 AAC 50.100 Nonroad Engines ADEC added this provision in January 1997 to address a change in the 1990 Clean Air Act by making clear that actual and potentia l emissions from nonroad engines are not considered when determining whether a statio nary source is subjec t to construction or operating permit programs in Alaska.

Before 1990, an internal combustion engine that qualified as a nonroad engine would have been considered a temporary source or a portable stationary source, and thus a stationary source, under Federal law. In 1990, EPA revised the CAA ’s definition of stationary source (sect ion 302(z)) to exclude emissions re sulting directly from internal combustion engines for transportation purposes , nonroad engines, and nonroad vehicles.January 26, 2007

5 of 26 Under subparagraph (2)(iii) in the defini tion of nonroad engine in 40 CFR 89.2, however, internal combustion engines that remain or will remain at a location for more than 12

consecutive months or a shorte r period of time for an engine located at a seasonal source do not meet the definition of nonroad engine a nd are thus considered to be stationary sources. By defining the term nonroad engine consistent with Federal law, ADEC’s adoption of 18 AAC 50.100 is consistent with Federal law for the treatment of nonroad engines under CAA permitting programs.

Note that 40 CFR part 89, appendix A to subpart A – State Regulation of Nonroad Internal Combustion Engines, sets forth EP A’s interpretation of the CAA regarding the authority of States to regulate the use and operation of nonroad engines.

18 AAC 50.215 Ambient Analysis Methods This provision was renumbered from 18 AAC 50.510(a) and revised to reflect a number of changes:

 Paragraph (a)(3) was added to allow ADEC to approve alternative reference test methods for collecting ambient monitoring da ta. As discussed below, EPA is not approving this provision because it provi des for unbounded director’s discretion.

 Paragraph (b)(2) was added to allow sources to exclude from ambient air quality analyses concentrations attributable to a temporary construction activity for a new

or modified source and increases in concentrations attributable to new sources

outside the United States over the concentr ations attributable to existing sources

included in the baseline concentration. Th is provision is consistent with 40 CFR 51.166(f)(1)(iii) and (iv) and Sectio n 163(c)(1)(C) and (D) of the CAA.

 Paragraph (c) allows substitution or modification of an air quality model, provided the source performs and submits a comparative analysis using a protocol developed using a specified proce dure, obtains ADEC approval of the comparative protocol, and, in the case of air quality analysis required by 18 AAC 50.306 (PSD), obtains EPA and ADEC appr oval of the substituted or modified model. 40 CFR 51.160(f), however, require s written approval from EPA for any

substitution or modification of a mode l used for minor and major new source review, including major new source review in nonattainment areas (NNSR).

ADEC has advised EPA that it erred in limiting the cross-reference in 18 AAC 50.215(c)(3) to 18 AAC 50.306 (PSD) and that ADEC fully intended to require and intends to obtain EPA approval of a model substitution or modification for minor NSR (18 AAC 50 .502-560) and major NNSR (18 AAC 50.311). ADEC has provided written assurance that ADEC will not allow a model substitution or modification if an ambient air quality an alysis is required by minor NSR (18 AAC 50.502-560) or major NNSR (18 AAC 50.311) without prior written approval

from EPA and that it will correct this error in their next rulemaking. EPA is approving this provision on that basis.

 Paragraph (d) was revised to include th e modeling Significant Impact Levels (SILs) that are set fort h in 40 CFR 51.165(b).

Except for subparagraph (a)(3), EPA is appr oving 18 AAC 50.215 as consistent with 40 CFR 51.160(f) with the understanding, however , that ADEC will obtain EPA approval ofJanuary 26, 2007

6 of 26 a model substitution or modification if an am bient air quality analysis is required by minor NSR, (18 AAC 50.502-560), major NNSR (18 AAC 50.311), or PSD (18 AAC 50.306).

18 AAC 50.225 Owner-Requested Limits ADEC proposes to include 18 AAC 50.225 in the SIP as a mechanism to establish source-specific Federally-enforceable limita tions that restrict a source’s allowable emissions or potential to emit of air pollu tants. 18 AAC 50.225 creates an approval process that is independent of the construc tion and operating permit programs. With this Federally-enforceable limitation in place, a s ource may be able to avoid some of the permit requirements or emission standards of 18 AAC 50.

EPA has issued criteria for determining wh en emission limits contained in non-title V operating permits and similar mechanisms ar e Federally enforceable. See 54 FR 27274 (June 28, 1989). The criteria include approva l of the State mechanism into the SIP, a legal obligation that the permittee adhere to the limits and other requirements, that the limits and other requirements be at least as stringent as any othe r applicable SIP or Federally enforceable requirements, that the limits and other requirements be permanent, quantifiable, and otherwise enforceable as a pr actical matter, and that the limits and other requirements be issued subject to public part icipation.

Owner-requested limits issued under 18 AAC 50.225 are issued only after notice and opportunity for public comment and are contai ned in a letter appr oval. Each approval issued to a source must include specif ic monitoring, recordkeeping, and reporting requirements to ensure compliance with the approved limitations and specifically requires a statement that the owner/operator agrees to be bound by the terms of the approval. The owner/operator can requ est that the limit be revoked but only after the owner/operator obtains any permits that were avoided by virtue of the owner-requested limit. EPA finds that 18 AAC 50.225 is consistent with EPA guidance regarding Federally-enforceable operating limits and that owner-requested limits issued pursuant to 18 AAC 50.225 are Federally-enforceable.

18 AAC 50.230 Preapproved Emission Limits ADEC proposes to include 18 AAC 50.230 [ex cept subparagraph (d)] in the SIP as another mechanism to establish Federally-enforc eable restrictions; this is an exclusionary rule that sets preapproved limits for NOx em issions from diesel engines. By operating under the Federally-enforceable limit to restri ct their potential to emit of NOx, a source may be able to avoid some of th e permit requirements of 18 AAC 50.

EPA has recognized that, for certa in classes of sources, such as fuel burning equipment, it is possible for States to establish enforceable emission limits that serve to limit potential to emit through exclusionary rules that apply to certai n source categories. See Memorandum from JD. Kent Berry, Acting Di rector, Air Quality Management Division, Office of Air Quality Planning and Standa rds (OAQPS) entitled “Guidance for State Rules for Optional Federally-Enforceable Em issions Limits Based on Volatile Organic Compound Use,” dated Octobe r 15, 1993; Memorandum from John Seitz, Director,January 26, 2007

7 of 26 OAQPS entitled “Approaches to Creating Federally-Enforceable Emission Limits,” dated November 3, 1993; Memorandum from John Seitz , Director, OAQPS, entitled “Potential To Emit Guidance for Specific Source Categories,” dated April 14, 1998. To be approvable, an exclusionary rule must be te chnically justified, requi re that the owner or operator specifically apply for coverage under the rule, require the applicant to comply with the limit in the rule, and provide that a viol ation of the rule is a violation of the SIP.

The preapproved limit for NOx emissions from diesel engines in ADEC’s exclusionary

rule is based on the amount of diesel fuel used by a source during the year. A source can limit their NOx emissions by limiting the amount of diesel fuel used during the year. ADEC has demonstrated that a facility that lim its their diesel fuel consumption to below 330,900 gallons per year limits their potential to emit of NOx to below 100 tons per year. This figure was developed by ADEC using the NOx emission factors contained in AP-42

Table 3.3-1.

ADEC has established specific procedures th at a source must follow to operate under a preapproved limit. To use one of the prea pproved limits, a source must submit to ADEC a request to operate under a specific limit, a nd they must provide the information required

for that limit. After this notificati on, each source must follow specific monitoring, recordkeeping, and reporting re quirements to ensure complian ce with the limit. EPA has

determined that 18 AAC 50.230 is consistent w ith EPA guidance for ex clusionary rules.

18 AAC 50.240 Excess Emissions The excess emission provision was revised to reflect changes in terminology. The current SIP-approved version of 18 AAC 50.240 was approved on November 18, 1998. As discussed in more detail below, EPA is not approving the ex cess emission provision

set forth in 18 AAC 50.240 because EPA doe s not believe it meets Clean Air Act requirements for such provisions.

18 AAC 50.250 Procedures and Criteria for Revising Air Quality Classifications This provision sets forth PSD ar ea reclassification procedures. This provision was renumbered from 18 AA C 50.600 and revised to require consultation with local governments as requi red by the Alaska Administrative Procedures Act (APA).

Article 3 Major Stationary Source Permits The revisions repealed most of the existi ng permit regulations in 18 AAC 50, Article 3 and replaced them with new regulations.

ADEC had three primary goals in drafting their new major source permitting rules:

1. Adopt the major permit programs that are the same as the Federal programs;

2. Allow the use of Federal guidance and case law; and

3. Allow interpretations of Federal gu idance that make sense for Alaska.

The newly revised regulations are intended to satisfy the first goal for major source permitting by generally adopting the Federal regulations by reference. ADEC revised 18 AAC 50.040 Federal Standards Adopted by Refe rence to include the adoption of theJanuary 26, 2007

8 of 26 appropriate portions of 40 CFR parts 51, 52, 63, and 71. 18 AAC 50.302 – 326 explains how applicants and ADEC must use the adopted sections. ADEC intends to address the second and third goals during the im plementation of the regulations.

18 AAC 50.301 Permit Conti nuity and 18 AAC 50.302 Co nstruction Permits These provisions were added to clarify permit co ntinuity and to specifically require that owners and operators obtain a construction permit before beginning actual construction of a new major stationary source, a major modification, or a PAL major modification. These requirements are consistent with Federal law.

18 AAC 50.306 Prevention of Significant Deterioration (PSD) Permits

Overview of Major New Source Review Program

Parts C and D of title I of the CAA, 42 U.S.C. 7470-7515, set forth preconstruction review and permitting programs applicable to ne w and modified stationary sources of air pollutants regulated under the CAA, known as “major New Source Review” or “major NSR.” The major NSR programs of the CAA include a combination of air quality planning and air pollution cont rol technology program requirements. States adopt major NSR programs as part of their SIP.

Part C of title I of the CAA, 42 U.S.C. 7470-7492, is the “Prevention of Significant Deterioration” or “PSD” program, which applies in areas that meet the NAAQS—

“attainment” areas—as well as in areas for wh ich there is insufficient information to determine whether the area meets the NAAQS—“ unclassifiable” areas. Part D of title I of the CAA, 42 U.S.C. 7501-7515, is called th e “Nonattainment New Source Review” or the “NNSR” program, which applies in areas that are not in atta inment of the NAAQS- “nonattainment areas.” EPA regulations im plementing these programs are contained in 40 CFR 51.165, 51.166, 52.21, 52.24, and part 51, appendix S.

On December 31, 2002, EPA published final rule changes to the PSD and NNSR programs. 67 FR 80186. On November 7, 2003, EPA published a notice of final action on the reconsideration of the December 31, 2002 final rule changes. 68 FR 63021. In that November 7th final action, EPA added the defi nition of “replacement unit,” and clarified an issue regarding plantwide applicability limitations (PALs). The December 31, 2002 and the November 7, 2003, final actions, are collectively referred to as the “2002 NSR

Reform Rules.”

The 2002 NSR Reform Rules made changes to five areas of the NSR programs. In summary, the 2002 Rules: (1) provide a ne w method for determining baseline actual emissions; (2) adopt an actual-to-projected -actual methodology for determining whether a major modification has occurred; (3) allow major stationary sources to comply with plant-wide applicability limits to avoid having a significant emissions increase that triggers the requirements of the major NS R program; (4) provide a new applicability provision for emissions units that are desi gnated clean units; and (5) exclude pollutionJanuary 26, 2007

9 of 26 control projects from the definition of “phys ical change or change in the method of operation.”

After the 2002 NSR Reform Rules were fina lized and effective (M arch 3, 2003), various petitioners challenged numerous aspects of the 2002 NSR Reform Rules, along with portions of EPA's 1980 NSR Rules (45 FR 5276, August 7, 1980). On June 24, 2005, the

DC Circuit Court issued a decision on the ch allenges to the 2002 NSR Reform Rules. See

New York v. United States , 413 F.3d 3 (DC Cir. 2005). In summary, the DC Circuit Court vacated portions of the 2002 NSR Reform Ru les pertaining to clean units and pollution control projects, remanded a portion of th e rules regarding recordkeeping (40 CFR 52.21(r)(6) and 40 CFR 51.166(r)(6)), and either upheld or did not comment on the other provisions included as part of the 2002 NSR Re form Rules. EPA has not yet responded to the Court's remand regarding th e recordkeeping provisions.

The 2002 NSR Reform Rules require that Stat e agencies adopt and submit revisions to their SIP permitting programs implementing the minimum program elements of the 2002 NSR Reform Rules no later than January 2, 2006

Alaska’s PSD Submittal

Alaska's PSD program was originally appr oved into the SIP by EPA on July 5, 1983, and has been revised several times. Newly revised 18 AAC 50.040( h) and 18 AAC 50.306 implement ADEC’s current PSD program. ADEC revised their PSD rules to essentially incorporate by reference the PSD rules in 40 CFR 52.21, including the applicable provisions of the 2002 NSR Reform Rules, w ith a few exceptions. In general, ADEC chose to incorporate by refere nce the Federal PSD rules in 40 CFR 52.21 rather than the comparable provisions in 40 CFR 51.166, which set forth what is required in a State’s plan, because 40 CFR 52.21 is written to direct ly state the requiremen ts of an owner or

operator.

In some cases, ADEC did adopt provisions of 40 CFR 51.166 rather than the comparable provisions of 40 CFR 52.21 because 40 CFR 51. 166 was a better fit for a SIP-approved PSD program. For example, ADEC adopted 51.166(q)(2) to describe the public participation procedures for PSD permits. The comparable provi sion in 40 CFR 52.21 refers to a large set of Fede ral administrative procedures in 40 CFR 124, which applies to water and other permits, and would be very cumbersome to try to adopt for Alaska’s purpose. ADEC also adopted 40 CFR 51.166(f), Exclusions from Increment Consumption, because these exclusions ar e not provided by 40 CF R 52.21, but they are allowed in a SIP-approved PSD program.

ADEC also made regulatory changes to clar ify how certain provisions of 40 CFR 52.21 would be implemented by ADEC. For exam ple, ADEC added text to 18 AAC 50.306 to clarify the term “administrato r” should be read to mean the department in certain instances. ADEC also added provisions for pe rmit content with respect to monitoring, recordkeeping, or reporting requirements. Th e language is similar to that in ADEC’s existing construction permit program and is in tended to allow ADEC to put in conditionsJanuary 26, 2007

10 of 26 when they are necessary so that the a pplicant and ADEC can know whether operations comply with standards.

ADEC has specifically asked EPA not to appr ove into the SIP the portions of the 2002 NSR Reform Rules that were recently vacate d by the DC Circuit Court relating to the clean unit provisions and the pollu tion control proj ects exclusion.

EPA is approving 18 AAC 50.040(h) and 18 AAC 50.306 as meeting the requirements for SIP-approved PSD programs in 40 CF R 51.166. ADEC’s revised rules address baseline actual emissions, act ual-to projected actual appli cability tests, and PALs and other currently appli cable provisions of the 2002 NSR Reform Rules. ADEC has not submitted for SIP approval portions of the PSD rules that were recently vacated by the DC Circuit Court, including the clean unit pr ovisions and the pollu tion control projects exclusion. As noted earlier, EPA has not ye t responded to the DC Circuit Court's remand of the recordkeeping provisions of EPA' s 2002 NSR Reform Rules. Alaska's rule contains recordkeeping requi rements that are essentially the same as the remanded Federal rule. While final action by EPA with regard to the remand may require EPA to take further action on this portion of Alaska's rules, at this ti me, the rules are the same as existing Federal law.

18 AAC 50.311 Nonattainment Area Ma jor Stationary Source Permits Alaska's major NNSR program was originally approved into the SIP by EPA on July 5, 1983, and has been revised several times. Newly revised 18 AAC 40.040(i) and 18 AAC 50.311 implement the major NNSR program in Alaska. ADEC revised their major NNSR program to essentially incorporate by re ference the provisions set forth in 40 CFR 51.165, including the 2002 NSR Reform Rules that were not vacated by the Court. Portions of 40 CFR 51.165 simply refers to re levant provisions in sections 172 and 173 of the CAA, including offsetting emissions and lo west achievable emission rates. Rather than adopting the language in the CAA stat ute by reference, 18 AAC 50.311 includes the

text of the relevant statutory language.

Similar to the PSD program in 18 AAC 50.306, ADEC also added provisions for permit content with respect to m onitoring, recordkeeping, or re porting requirements. The language is similar to that in ADEC’s ex isting construction permit program and is intended to allow ADEC to put in conditions when they are necessary so that the applicant and ADEC can know whether ope rations comply with standards.

ADEC’s major NNSR rule does not incorporate the portions of the Federal rules that were recently vacated by the DC Circuit C ourt relating to the clean unit provisions and the pollution control projects exclusion.

EPA is approving 18 AAC 40.040(i) and 18 AAC 50.311 as meeting the requirements for SIP-approved major NNSR programs in 40 CF R 51.165 and 40 CFR part 51, appendix S.

ADEC’s revised rules address baseline act ual emissions, actual- to projected actual applicability tests, and PALs and other currently applicab le provisions of the 2002 NSR Reform Rules. ADEC specifically did not s ubmit portions of the NNSR rules that wereJanuary 26, 2007

11 of 26 recently vacated by the DC Circuit Court, in cluding the clean unit provisions and the pollution control projects exclusion. As noted earlier, EPA has not yet responded to the

DC Circuit Court's remand of the recordk eeping provisions of EP A's 2002 NSR Reform Rules. Alaska's rule contains recordkeeping requirements that are essentially the same as

the remanded Federal rule. While final acti on by EPA with regard to the remand may require EPA to take further action on this portio n of Alaska's rules, at this time, the rules are the same as existing Federal law.

18 AAC 50.345 Construction and Operating P ermits: Standard Permit Conditions This new provision sets forth Standard Pe rmit Conditions that ADEC will include in operating permits and may include in constructi on permits. Paragraphs (a), (c)(1), (c)(2), and (d) through (o) were submitted by Alaska for inclusion into the SIP. Paragraphs (b) and (c)(3) were not submitted because they apply to title V permits and do not relate to

the SIP.

Paragraph (a) contains general provisions regarding the use of the standard conditions in title V and construction permits. Paragra phs (c) (1) and (2) are standard permit conditions requiring compliance with the terms of the permit and specify the consequences of violating the permit. Pa ragraphs (d) through (j) are other standard permit conditions that the Clean Air Act requires to be included in title V permits, such as provisions regarding inspections, severabilit y, certification of doc uments, and responding to requests for information. Such permit term s are equally appropriate for inclusion in construction permits. Paragraphs (k) through (o) are standard perm it conditions drafted by ADEC relating to source testing, such as c onducting other source te sts as requested by ADEC (k), extending source test deadlines es tablished by ADEC (l), providing source test plans for ADEC’s review (m), giving prior notice of source tests (n), and submitting final source test reports to ADEC (o). EPA believes provisions (k) and (m) through (o) are appropriate for inclusion in constructi on permits, provided ADEC makes clear in the construction permit that they are in addition to any source testing requirements in other applicable requirements, such as NSPS or NESHAPS. As explained in more detail below, EPA is not approving subparagraph (l) because, although it is appropriately limited to source test deadlines established by ADEC, it would allow permit terms to be changed without a permit revision.

18 AAC 50.346 Construction and Operating Permits: Other Permit Conditions This new provision contains additional Standard Permit Conditions that ADEC is required to include in operating permits a nd, in some cases, construction permits unless ADEC determines that emission unit-specific or stationary sour ce-specific conditions more adequately meet the requirements of 18 AAC 50 or that no comparable condition is appropriate for the stationary source or emission unit.

Only paragraph (a) was submitted for inclusion into the SIP. This paragraph incorporates Standard Operating Permit Condition II, whic h contains standard monitoring conditions for 18 AAC 50.110 Air Pollution Prohibited, a rule prohibiting emissions detrimental to human health or welfare, animal or plant life, or property, or wh ich would unreasonably interfere with the enjoyment of life or propert y. As discussed in more detail below, EPAJanuary 26, 2007

12 of 26 is not approving 18 AAC 50.346(a) into the SIP because it only requires corrective action after the permittee or ADEC determines a vi olation has occurred and thus cannot be construed as monitoring to assure compliance.

Paragraphs (b) and (c) were not submitted for EPA approval because they apply to title V permits and are not SIP-related.

Article 5 Minor Permits

18 AAC 50.502 Minor Permits fo r Air Quality Protection EPA regulations require all SIPs to contain le gally enforceable procedures to ensure that construction or modification of a stationary source will not cause a violation of a NAAQS or any applicable portions of the cont rol strategy. 40 CFR 51.160(a). For major stationary sources and major modifications to major stationary sources, the PSD and major NNSR programs satisfy this requirement . States are also required to have new source review programs for minor sources meeting the requirements of 40 CFR 51.160-

51.164.

Alaska's minor NSR program was originally approved into the SIP by EPA on July 5, 1983, and has been revised several times. In the SIP submission before EPA, ADEC has substantially revised its mi nor NSR program. Under ADEC’ s revised program, ADEC has expanded the categories of minor sour ces that must obtain a permit prior to

construction or modification.

18 AAC 50.502 specifies source categories and size th resholds that need a permit. The following stationary sources—regardle ss of emission rate—must obtain a minor permit before construction or relocation and, if the source is not requir ed to obtain a title V permit, before operation:

 An asphalt plant with a rated capacity of at least five tons per hour

 A thermal soil remediation unit with a rated capacity of at least five tons per hour

 A rock crusher with a rated capacity of at least five tons per hour

 One or more incinerators with a cu mulative rated capacity of 1000 pounds or more per hour

 A coal preparation plant

 A Port of Anchorage stationary source

In addition, a minor permit is required for cons truction of a new stationary source with a potential to emit greater than the following size thresholds:

 15 TPY PM-10

 40 TPY of nitrogen oxides (NOx)

 40 TPY of sulfur dioxides (SOx)

 0.6 TPY of lead

 100 TPY of carbon monoxide (CO) within 10 kilometers of a nonattainment areaJanuary 26, 2007

13 of 26 Other provisions govern when a source n eeds a minor permit for construction or relocation of a Portable Oil and Gas Operati on or an emission unit with a rated capacity of 10 million BTU or more per hour in a sulfur dioxide special protection area.

Finally, ADEC has established other threshol ds for determining when a source needs a minor permit before a modification. A minor pe rmit is required prior to a modification if (1) the stationary source al ready has a potential to emit of more than the emission

thresholds for construction of new minor sources requiring permits and (2) the modification would cause an increase greate r than 10 tpy of PM-10, 10 tpy of NOx, 10 tpy of SOx, or 100 tpy of CO. In applying the modificati on provisions, the owner or operator may choose either a potential emissions or actual emission test:

 Potential to Emit test: Compare potential to emit before and after the change

 Actual Emissions test: Compare baselin e actual emissions to projected actual

emission. Both of these terms are defi ned in 18 AAC 50.502(h). The owner or operator needs a permit if the emissions in crease is greater than 10 tpy, and the total changes for the pollutant over the c ontemporaneous period are also greater than 10 tpy. See the definition of net emissions increase in 18 AAC 50.502(h).

However, the ability to choose which test to us e is limited in two respect s. First, there is no hybrid test. The simple wording of the re gulation requires the use of one test or the other. Second, if there is a new emissions unit to be installed as part of the project, the owner or operator must use the potential to emit test. This is because the calculation of the actual emissions increase depends on the de finition of “projected actual emissions,” which is defined in part as “. . . the maximu m annual rate, in tons per year, at which an existing emissions unit is projected to emit . . . ” 18 AAC 50.502(h)(4) [emphasis added]. Therefore, an actual emissions increase ca nnot be calculated for a modification that includes a new emissions unit. Because most projects subject to minor permitting involve the addition of at least once new emissions unit, most projects will require the use of the potential to emit test. This is somewhat co mparable to the Federal PSD program, where the actual-to-projected actual te st is not used for new emission s units. It differs from the Federal PSD program, however, because, unl ike PSD, ADEC’s minor NSR program does not allow the use of a hybrid test.

If using these applicability criteria, the project would be subject to minor permitting under 18 AAC 50.502, the owner or operator ma y still avoid a permit by obtaining an enforceable limit on potential to emit. This could be done through either a PAEL under 18 AAC 50.230, an owner-requested limit under 18 AAC 50.225, an owner-requested limit under 18 AAC 50.508(5), or a revisi on to an avoidance limit under 18 AAC 50.508(6).

Note that several provisions in ADEC’s re vised minor NSR program were intended to implement provisions of the 2002 NSR Reform Rule, including provisions for clean units, pollution control projec ts, and plantwide applicabil ity limits. ADEC has asked

EPA to exclude from consideration for SIP approval those porti ons of its minor NSR rules affected by the June 24, 2005, Court deci sion which vacated the portions of theJanuary 26, 2007

14 of 26 2002 NSR Reform Rule pertaining to clean units and pollution c ontrol projects. Accordingly, as discussed in more detail below, EPA is not approving provisions of

ADEC’s minor NSR rules that relate to clea n units and pollution control projects, more specifically paragraphs (g)(1) and (g)(2).

18 AAC 50.508 Minor Permits Requested by the Owner or Operator This provision allows ADEC to issue a minor permit if requested by the owner or

operator to:

 Establish a plantwide app licability limit (PAL), a new feature under the 2002

NSR Reform Rule.

 Establish a limit to provide offsetting emissions to allow construction of a major source, major modification, or major PAL modification in a nonattainment area.

 Establish an owner requested limit to allow a stationary source to avoid a classification as a major or minor source.

 Revise or rescind existing perm it conditions in a title I permit

Again, several provisions in this section we re intended to implement provisions of the 2002 NSR Reform Rule, including provisions for clean units a nd pollution control projects and ADEC has asked EPA to exclude these provisions from consideration for SIP approval. Accordingly, as discussed in more detail below, EPA is not approving paragraphs (1) and (2) of this section.

18 AAC 50.509 Construction of a Pollution Control Project This provision relates to the pol lution control projects exclusi on that was recently vacated by the DC Circuit Court. ADEC has requested that EPA exclude this section from consideration for SIP approval and EP A is therefore not approving it.

18 AAC 50.540 Minor Permit: Application This provision contains application requirement s for each classification of minor permits. The section identifies what an applicant must submit by citing a Federal regulation where the required information is listed, describing what the applicant must show, or citing an applicable form. The forms specify the requ ired information. The purpose of each form

is to allow ADEC to make a determination c onsidering the approval cr iteria given in the permit review and issuance section (18 AAC 50.542).

Again, ADEC has asked EPA to exclude provisions relating to clean units and pollution control projects from consideration for SIP a pproval. Accordingly, as discussed in more detail below, EPA is not approving para graphs (f) and (g) of this section.

18 AAC 50.542 Minor Permit: Review and Issuance This provision has two administrative proced ures for issuing source-specific minor permits – a fast track procedure and a pro cedure that has a full 30-day public comment period.January 26, 2007

15 of 26 For both procedures, ADEC’s revised rules chan ge the method of public notice. Instead of publishing the notice in a newspaper, ADE C now posts the notice on the State “Online Public Notice System” website. ADEC still sends the notice by mail or email to anyone who requests to be on the State’s distribution list. EPA regulations require that public notice of minor NSR permits be given by prom inent advertisement in the area affected by the source, and do not require that public no tice be given in a ne wspaper. See 40 CFR 51.161(b)(3).

Under the fast track procedures of 18 AAC 50.542(b), ADEC gives the public 15 days to request a 30-day public comment period for certain types of pe rmits (i.e., 18 AAC 50.502) that meet specific requirements as define d in the rule. The department issues the permit within 30 days of receiv ing a complete application if:

 No one requested a public comment period; and

 The department did not find that the proj ect would be predicted to violate an ambient air quality standard.

Other types of permits specified in the rule have a 30-day public comment period, even if no one requests one. ADEC will provide a 30-day public comment period regardless of whether one was requested if:

 The stationary source is in a location th at is not eligible for the fast track procedure as set forth in 18 AAC 50.542(a)(1);

 The applicant does not provide an adequate analysis for the ambient air quality demonstration;

 The permit is issued under 18 AAC 50.508, Minor Permits Requested by the Owner or Operator. In addition, as discussed above, ADEC will provide a 30-day public comment period if a person requests a public comment pe riod under 18 AAC 50.542(b)(1), Fast-Track

Procedures.

This section also contains criteria for appr oval and denial of minor permits. Importantly, ADEC is required to deny an application for a minor permit if ADEC determines construction or operation of the source woul d violate an emission limit in ADEC’s rules or a NAAQS. The rule contains additional cr iteria for approval and denial of minor permits for sources in certain locations (e.g., Port of Anchorage) and certain types of minor permits (e.g., PAL permit, owner requested limit).

Subparagraph (b)(2) allows ADEC to require the owner/operator to submit their permit applications online. ADEC did not submit the appropriate documentation for us to evaluate the approvability of Alaska’s Onlin e System with respect to EPA’s Cross-Media Electronic Reporting Rule (CROMERR). See 70 FR 59848 (October 13, 2005). Therefore, EPA is not approving paragraph (b )(2) to allow for electronic submissions.

Again, ADEC has asked EPA to exclude provisions relating to clean units and pollution control projects from consideration for SIP a pproval. Accordingly, as discussed in moreJanuary 26, 2007

16 of 26 detail below, EPA is not approving paragraphs (f)(4), (f)(5), and—e xcept as related to PALs—(g)(1) of this section.

18 AAC 50.544 Minor Permits: Content This provision sets forth what a mi nor permit must contain, including:

 Information identifying the permittee;

 A requirement for payment of fees;

 Conditions required under 18 AAC 50.201, Am bient Air Quality Investigation;

 Owner requested limits issued under 18 AAC 50.225;

 Conditions necessary to ensure complianc e with any requirement in Alaska’s statute or regulations fo r stationary sources clas sified under 18 AAC 50.502;

 Conditions necessary to ensure complia nce with the NAAQS and certain other sections for stationary sources requiring minor permits due to the amount of their emissions;

 Content required by Federal law or regulation for PALs;

 For offsets, conditions to ensure permanent actual emission reductions; and

 Conditions required for owner requested li mits and requests to revise a permit.

Paragraph (d) sets forth a ne w condition requiring an owne r or operator to provide a periodic affirmation as to whether their or iginal application and minor permit accurately describe their stationary sour ce and whether any changes may have been made that would trigger the requirement for a new permit. St ationary sources do not need a minor permit affirmation if they ar e subject to title V.

Again, ADEC has asked EPA to exclude provisions relating to clean units and pollution control projects from consideration for SIP a pproval. Accordingly, as discussed in more detail below, EPA is not approvi ng paragraph (e) of this section.

18 AAC 50.546 Minor Permits: Revisions This provision sets forth the proc edures for revising minor permits.

In general, the procedures for revising a minor permit are the same procedures that apply to initial issuance of a minor permit.

Paragraph (b), however, gives ADEC discretion to revise “non -substantive” elements of a minor permit without further administrative pr ocedures. As discussed in more detail below, EPA is not approving paragraph (b) because it does not adequately define the

class of revisions that can be made without public review.

EPA has reviewed ADEC’s provisions for the issuance of minor permits and finds them to be consistent with the requirements for minor NSR permits in 40 CFR 50.160-50.164.

18 AAC 50.560 General Minor Permits This provision authorizes ADEC to issue gene ral minor permits to allow the construction or operation of a category of st ationary sources that involve the same or similar types of operation, involve the same type of emissions , and are subject to similar air qualityJanuary 26, 2007

17 of 26 control requirements. In issuing a general minor permit, ADEC will evaluate what permit conditions are necessary to assure compliance with each ambient standard or control strategy for that category of stationary source. An owner or operator would then have the choice of obtaining a source-specifi c permit or applying for coverage under the general minor permit. See 18 AAC 50.502(d). A general minor permit is subject to public notice and comment when initially i ssued by ADEC, but not when an individual source applies for coverage. The rule aut horizes ADEC to issue general minor permits that require a source applying for coverage to receive specific approval from ADEC before being authorized to construct or ope rate under the general permit, as well as general minor permits that authorize a source to cons truct or operate upon ADEC’s receipt of an application for coverage. The general minor permit will specify whether the source must wait for ADEC approval before c onstructing or operating under the general minor permit.

ADEC will issue an application or notifica tion form with each general minor permit, which will specify the information an applic ant must provide to be covered under the general minor permit. This informati on must include identifying information, information necessary to show the stati onary source qualifies for coverage under the general permit, identification of all equipment covered by th e general minor permit, and a certification by the applicant that the stationa ry source is capable of complying with all permit requirements.

The rule also specifies the content of gene ral minor permits. Importantly, general minor permits must meet the same permit conten t requirements of minor permits under 18 AAC 50.544, including terms and conditions to ensure that stationary sour ces constructing and operating under the general minor permit will not cause or contribute to a violation of the NAAQS. General minor permits can accommoda te portable sources, but permittees must notify ADEC of any change to a location not identified in the permit application.

EPA has reviewed ADEC’s provisions for th e issuance of general minor permits and

finds them to be consistent with the re quirements for minor NSR permits in 40 CFR

50.160-50.164.

18 AAC 50.990 Definitions

The definitions in 18 AAC 50.990 were revised in order to essentially incorporate by reference applicable definitions that are set fo rth in Federal rules. Where Alaska statutes define a term used in Federal rules by inco rporating the Federal ru le by reference, the definition of that term in 18 AAC 50.990 incorp orates by reference the term in the Alaska statute, which in turn incorporates by reference the Fe deral definition.

EPA has reviewed the Alaska definitions and found them to be cons istent with the 2002 NSR Reform Rules and other Federal requiremen ts set forth in 40 CF R 51, subpart I.

Again, ADEC has asked EPA to exclude provisions relating to clean units and pollution control projects from consideration for SIP a pproval. Accordingly, as discussed in moreJanuary 26, 2007

18 of 26 detail below, EPA is not approving definitio ns in 18 AAC 50.990 that relate to clean units and pollution control projects.

C. Summary of Action

1. Provisions Approved by EPA and Incorporated by Reference As described in more detail above, EPA has determined that the following sections are consistent with the requirements of title I of the Clean Air Act and proposes to approve them as part of the SIP and incorporat e them by reference into Federal law:

18 AAC 50.080 Ice Fog Standards; St ate effective January 18, 1997;

18 AAC 50.025 Visibility and Other Special Protection Areas; 18 AAC 50.070 Marine Vessel Visible Emission Standards, State effective June 21, 1998;

18 AAC 50.050 Incinerator Emission Sta ndards, State effective May 3, 2002;

18 AAC 50.005 Purpose of Chapter; 18 AAC 50.010 Ambient Air Quality Standards [except (7) and (8)]; 18 AAC 50.015 Air Qual ity Designations, Cl assifications, and Control Regions; 18 AAC 50.020 Baseline Date s and Maximum Allowable Increases, 18 AAC 50.045 Prohibitions; 18 AAC 50.055 Industrial Processes and Fuel-Burning Equipment [except (d)(2)(B)] ; 18 AAC 50.100 Nonroad Engines; 18 AAC 50.200 Information Requests; 18 AAC 50.201 Ambient Air Quality Investigation; 18 AAC 50.205 Certification; 18 AAC 50.215 Ambient Air Qualit y Analysis Methods [except (a)(3)]; 18 AAC 50.220 Enforceable Test Method s [except (c)(2)]; 18 AAC 50.245 Air Episodes and Advisories; 18 AAC 50.250 Procedures and Criteria for Revising Air Quality Classifications; 18 AAC 50.301 Permit Continuity ; 18 AAC 50.302 Construction Permits; 18 AAC 50.306 Prevention of Significant De terioration (PSD) Permits [except (b)(2) and (b)(3)]; 18 AAC 50.311 Nonattainment Area Majo r Stationary Source Permits; 18 AAC 50.345 Construction and Operating Perm its: Standard Permit Conditions [except (b), (c)(3), and (l)]; 18 AA C 50.508 Minor Permits Requested by the Owner or Operator [except (1) and (2)]; 18 AAC 50.546 Minor Permits: Revisions [except (b)]; 18 AAC 50.560 General Minor Permits; 18 AAC 50.900 Sma ll Business, State effective October 1, 2004;

18 AAC 50.542 Minor Permit: Review and Issuan ce [except (b)(2), (f)(4), (f)(5), and (g)(1) but only with respect to clean units and pollution cont rol projects], State effective December 1, 2004 ;

18 AAC 50.225 Owner-Requested Limits; 18 AAC 50.230 Preapproved Emission Limits [except (d)]; 18 AAC 50.544 Minor Permits: Cont ent [except (e)], State effective January 29, 2005;

18 AAC 50.035 Documents, Procedures, and Methods Adopted By Reference [except (b)(4)]; 18 AAC 50.040 Federal Standards Adopted by Reference [except (a), (b), (c), (d),January 26, 2007

19 of 26 (e), (g), (h)(17), (h)(18), (h)(19), (i)(7), (i)(8), (i)(9), and (j )]; 18 AAC 50.502 Minor Permits for Air Quality Protection [excep t (g)(1) and (g)(2)]; 18 AAC 50.540 Minor Permit: Application [except (f) and (g)] ;18 AAC 50.990 Definitions [except (21), and (77)], State effective December 3, 2005.

2. Provisions Approved by EPA into the SIP, but not Incorporated by Reference EPA is proposing to approve the following s ection as part of the SIP, but not to incorporate it by reference into Federal la w: 18 AAC 50.030 State Air Quality Control Plan, State effective October 1, 2004.

This provision does not regulate air emissions, but rather, de scribes general authorities such as procedural and enforcement author ities. Incorporation by reference of such provisions into Federal law is unnecessary a nd could potentially c onflict with EPA’s independent authorities. Therefore, EPA is proposing to not incorporate by reference 18 AAC 50.030 into the SIP and to remove the pr evious version of this regulation from Alaska’s incorporation by reference secti on of the Alaska SIP, as follows: 18 AAC 50.030 State Air Quality Control Plan, State effective September 21, 2001.

3. Provisions Not Approved by EPA EPA is proposing not to appr ove certain provisions of ADEC’s regulations, either because EPA believes such provisions are inconsistent with the requirements of the CAA or because ADEC has requested EPA not to approve such provisions into the SIP.

18 AAC 50.010 Ambient Air Quality Sta ndards, paragraphs (7) and (8). These contain

emissions standards for reduced sulfur compounds and ammonia. These types of provisions are inappropriate for SIP approval because they are not related to the criteria pollutants regulated under section 110 of the CAA.

18 AAC 50.035 Documents, Procedures, and Me thods Adopted by Reference, paragraph (b)(4). Paragraph (b)(4) contains emissions standards for 40 CFR part 63 sources. These types of provisions are inappr opriate for SIP approval because they are not related to the criteria pollutants regulated under section 110 of the CAA.

18 AAC 50.040 Federal Standards Adopted by Refere nce, paragraphs (a), (b), (c), (d), (e), (g), (h)(17), (h)(18), (h)(19), (i)(7), (i)(8), (i)(9), and (j). These provisions contain emission standards for 40 CFR parts 60, 61, 62, 63, 70, and 71 sources. These types of provisions are inappropriate for SIP approval because they are not related to the criteria pollutants regulated under section 110 of the CAA.

In addition, at ADEC’s request, we are not incorporating or ap proving into the SIP portions of the Federal 2002 Major NSR Reform Rules that were recently vacated by the DC Circuit Court relating to the clean unit provisions and the pollu tion control projects exclusion, more specifically pa ragraphs (h)(17), (h)(18), (h)(1 9), (i)(7), (i)(8), and (i)(9)

of this section.January 26, 2007

20 of 26 18 AAC 50.055 Industrial Processes and Fuel -Burning Equipment, paragraph (d)(2)(B). This paragraph contains em issions standards for hydrogen sulfide. These types of provisions are inappropriate for SIP approval because they are not related to the criteria pollutants regulated under section 110 of the CAA.

18 AAC 50.215 Ambient Air Quality An alysis Methods, paragraph (a)(3). This section sets forth requirements for air qu ality monitoring and analysis. Paragraphs (a)(1) and (a)(2) specify the procedures for obtaining air monitoring data, but paragraph (a)(3) authorizes ADEC to approve any alte rnative method that ADEC determines is “representative, accurate, verifiable, capable of replication.” In essence, this paragraph allows ADEC to modify requirements relied on to attain and maintain the NAAQS without going through a SIP revision. As such, it is not approvable.

Section 110(i) of the CAA specifically preclud es States from changing the requirements of the SIP except through SIP revisions approved by EPA. SIP revisions will be approved by EPA only if they meet all requi rements of section 110 of the CAA and the implementing regulations at 40 CFR part 51. See CAA section 110(l); 40 CFR 51.104. Section 51.104(d) specifically st ates that in order for a variance to be considered for approval as a SIP revision, the State must submit it in accordance with the requirements of 40 CFR 51.104, which includes the public no tice, comment and hearing provisions of

40 CFR 51.102.

The SIP revision requirements may be satisfied if the director’s discretion is constrained by sufficiently specific, objective, and replicable criteria to determine if the alternative method will, in fact, be at least as effectiv e as the required methods in terms of emission rates and ambient impacts. In this case, although the rule stat es that the alternative must be “representative, accurate, verifiable, capable of replication,” the rule does not contain procedures for ensuring that is the case. Therefore, it is not appropriate for EPA to approve this provisi on into the SIP.

18 AAC 50.220 Enforceable Test Methods, paragraph (c)(2). Paragraph 50.220(c)(1) specifies reference test methods to be used in source tests to determine compliance with applicable requirements. Paragraph (c)(2) authorizes ADEC to approve the use of an alternative method using the procedure specified in 40 CF R part 63, appendix A, method 301. In essence, paragraph (c )(2) authorizes ADEC to i ssue variances from regulatory requirements, including SIP, NSPS, and NE SHAP requirements. EPA approved this provision into the SIP on November 18, 1998 [63 FR 63983]. ADEC made minor changes to 18 AAC 50.220 and has submitted the entire provision for inclusion in the

SIP.

EPA believes that it erred when it approved this subparagraph as part of the SIP. As an initial matter, ADEC does not have author ity to approve alternatives to NSPS and NESHAP standards except to the extent EP A has delegated that authority to ADEC. EPA does not delegate to States authority to approve “major changes” to test methods for NSPS and NESHAP standards. In addition, as discussed above, section 110(i) of theJanuary 26, 2007

21 of 26 CAA specifically precludes States from changing the requirements of the SIP except through SIP revisions approved by EPA, and SI P revisions will be approved by EPA only if they meet all requirements of section 110 of the CAA and the implementing regulations at 40 CFR part 51. See CAA section 110(l); 40 CFR 51.104. Section 51.104(d) specifically states that in order for a vari ance to be considered for approval as a SIP revision, the State must submit it in accordan ce with the requirements of 40 CFR 51.104, which includes the public notice, comment and hearing provisions of 40 CFR 51.102.

Paragraph (c)(2) does not meet a ll of the requirements of section 110 of the CAA, such as ensuring attainment and maintenance of the NAAQS. As discussed above, SIP revision requirements may be satisfied if the director ’s discretion is constrained by sufficiently specific, objective, and replicab le criteria to determine if the alternative method will, in fact, be at least as effective as the requ ired methods in terms of emission rates and ambient impacts. In this case, although paragraph (c)(2) requires that ADEC use the procedure in 40 CFR part 63, appendix A, method 301 in evaluating whether to approve an alternative method, EPA does not believe that the procedures in method 301 are sufficiently replicable so as to ad equately constrain ADEC’s discretion.

In addition, there is nothing in this provision that would re quire alternatives to test methods required in a permit to be approved through appropriate revi sion procedures. For these reasons, it is not appropriate for EP A to approve this provi sion into the SIP.

Section 110(k)(6) of the CAA authorizes EP A, upon a determination that EPA's action approving, disapproving or promul gating any State implementation plan or plan revision (or any part thereof) was in error, to revise such action as appropriate in the same manner as the approval, disapproval or promulgati on. In making such a correction, EPA must provide such determination and the basis theref ore to the State and the public. EPA is by this proposal notifying ADEC and the public that EPA is rem oving 18 AAC 50.220(c)(2) from the SIP and from incorporati on by reference into Federal law.

It is important to emphasize that if ADEC approves the use of alternative methods in reliance on 18 AAC 50.220(c)(2) as an alternative to an ADE C regulation or permit that has been approved as part of the SIP, EPA is not precluded from enforcing the Federallyapproved SIP limit against the source. Th e granting of an alternative method of compliance by ADEC to a SIP requirement doe s not change the Federally-enforceable SIP requirement for that source unless and until the alternative has been approved by

EPA.

18 AAC 50.240 Excess Emissions EPA’s interpretation of the Clean Air Act for State excess emission provisions is set forth in, among other documents, Memorandum from Steven A. Herman, Assistant Administrator for Enforcement and Complia nce Monitoring, and Robert Perciasepe,

Assistant Administrator for Air And Radiati on, to the Regional Ad ministrators, entitled “State Implementation Plans: Policy Rega rding Excess Emissions During Malfunctions, Startup, and Shutdown” (September 20, 1999) (1999 Excess Emissions Policy). That policy indicates that because excess emissions might aggravate air quality so as toJanuary 26, 2007

22 of 26 prevent attainment and maintenance of the NAAQS or jeopardize the PSD increments, all periods of excess emissions are considered vi olations of applicable emission limitations. However, the 1999 Excess Emission Policy reco gnizes that in certain circumstances,

States and EPA have enforcement discretion to refrain from taking enforcement action for excess emissions. In addition, the policy also indicates that States can include in their SIPs provisions that would, in the context of an enforcement action for excess emissions, excuse a source from penalties (but not injunctive relief) if the source can demonstrate it meets certain objective criteria. This is in essence a limited affirmative defense to a penalty action. Finally, the Policy states that EPA does not intend to approve SIP revisions that would recognize a State director’s decision to ba r EPA’s or citizen’s ability to enforce applicable requirements.

Although ADEC has made only minor changes to 18 AAC 50.240 since it was approved by EPA in 1998, approval of the minor changes could be interpreted to imply that EPA

believed 18 AAC 50.240 was consis tent with the requirements of the Clean Air Act. EPA has reviewed 18 AAC 50.240, however, and does not believe it is consistent with EPA’s interpretation of the CAA regarding the type s of affirmative defense provisions we can approve into SIPS for several reas ons. First, an affirmative defense to a penalty action is not appropriate where a single so urce or small group of sources has the potential to cause an exceedance of the NAAQS or PSD increments. See 1999 Excess Emissions Policy, pp. 2-3, Attachment pp. 3 and 5. The Alaska regulation does not c ontain provisions to address this criterion. Second, an affirmativ e defense for excess emissions due to certain

unavoidable events cannot exte nd to State law provisions th at derive from Federally promulgated performance standards or em ission limits, such as NSPS or NESHAP standards and does not extend to PSD permits unless the excess emissions were accounted for in the modeling and in the BACT determination. Alaska’s excess emission rule does not appear to be so limited in scope . Third, Alaska’s excess emissions rule does not sufficiently address all of the criteria for ensuring that excess emissions due to startup, shutdown, and malfunction are trul y unavoidable and limited to the maximum extent possible in duration and impact on air quality. See 1999 Excess Emissions Policy, Attachment p. 3-6. Although a State need not adopt the precise language of the 1999 Excess Emissions Policy, State excess emissi on provisions must address the essential

elements of the criteria in the policy to be consistent with the Clean Air Act. Fourth, 18 AAC 50.240(e) provides an affirmative defens e for excess emissions due to scheduled maintenance provided certain criteria are met. This is inappropriate under the Clean Air

Act because sources should be able to schedul e maintenance that might otherwise lead to excess emissions to coincide with maintenance of production equipment or other facility shutdowns. In this regard, it is important to note that the 1999 Excess Emissions Policy does not discuss allowing an affirma tive defense for excess emissions during maintenance activities. This omission was intentional and based on EPA’s interpretation of the CAA that any excess emissions during maintenance activities should be addressed only through the exercise of enforcement di scretion and not through the provision of an affirmative defense to penalties. Fi nally, 18 AAC 50.240 does not make clear that

ADEC’s decision that the criteria for obtaini ng the affirmative defense from penalty are met is not binding on EPA or citizens. See 1999 Excess Emission Policy, pg. 3, Attachment pg. 2. In summary, although ADEC has made only minor changes to 18January 26, 2007

23 of 26 AAC 50.240, EPA is not approving the changes because to do so would imply that EPA

believes that 18 AAC 50.240 meets Clean Air Act requirements for SIP excess emission provisions.

18 AAC 50.306 Prevention of Significant Dete rioration (PSD) Permits, paragraphs (b)(2) and (b)(3) . At ADEC’s request, EPA is not in corporating or approving into the SIP portions of the Federal 2002 Major NSR Refo rm Rules that were recently vacated by the DC Circuit Court relating to the clean unit provisions and the pollution control projects exclusion, more specifically pa ragraphs 18 AAC 50.306( b)(2) and (b)(3).

18 AAC 50.316 Preconstruction Review for C onstruction or Reconstruction of Major

Source of Hazardous Air Pollutants . This provision contains emissions standards for 40 CFR part 63 sources. These types of provi sions are inappropriate for SIP approval because they are not related to the criteria pollutants regulated under section 110 of the

CAA.

18 AAC 50.345 Construction and Operating Permits: Standard Permit Conditions, paragraphs (b), (c)(3) and (l) . Paragraphs (b) and (c)(3) co ntain emissions standards for 40 CFR part 70 sources. These types of provi sions are inappropriate for SIP approval because they are not related to the criteria pollutants regulated under section 110 of the

CAA.

Paragraph (l) is a standard permit conditi on that gives ADEC disc retion to approve a request from the permittee to delay a source test deadline established by ADEC. Importantly, this provision does not give ADEC authority to extend source test deadlines established in requirements promulgated by EPA, such as NSPS or NESHAPS. In addition, EPA is not aware of any Alaska SI P provisions that impose a requirement to conduct a source test within a specified peri od of time so this provision appears to be

limited to source test deadlines established in permits issued by ADEC. EPA does not believe it can approve this provision, how ever, because it would give ADEC unbounded discretion to change the sour ce testing requirements of a Federally-enforceable permit without revising the permit

18 AAC 50.346 Construction and Operating Pe rmits; Other Permit Conditions, paragraph (a). This paragraph incorporates Standard Op erating Permit Condition II, which contains standard monitoring conditions for 18 AAC 50.110 Air Pollution Prohibited, a rule prohibiting emissions detrimental to human heal th or welfare, animal or plant life, or property, or which would unreasona bly interfere with the enjo yment of life or property. EPA is not approving 18 AAC 50.346(a) into th e SIP because it only requires corrective action after the permittee or ADEC determines a violation has occurred. EPA does not believe requiring corrective action after a vi olation has occurred can be construed as monitoring that reasonably assures comp liance with the underlying applicable requirement. To the extent a SIP requirement includes monitoring, the monitoring must be sufficient to reasonably assure compliance with the requirement.January 26, 2007

24 of 26 18 AAC 50.502 Minor Permits for Air Quality Pr otection, paragraphs (g)(1) and (g)(2). At ADEC’s request, EPA is not incorporating or approving in to the SIP portions of the Federal 2002 Major NSR Reform Rules that were recently vacated by the DC Circuit Court relating to the clean unit provisions and the polluti on control projects exclusion, more specifically paragraphs 18 AAC 50.502(g)(1) and (g)(2).

18 AAC 50.508 Minor Permits Requested by the Owner or Operator, paragraphs (1) and (2) . At ADEC’s request, EPA is not incorpora ting or approving into the SIP portions of the Federal 2002 Major NSR Reform Rules that were recently vacated by the DC Circuit Court relating to the clean unit provisions and the polluti on control projects exclusion, more specifically paragraphs 18 AAC 50.508(1) and (2).

18 AAC 50.509 Construction of a Polluti on Control Project Without a Permit . This provision relates to the pollution control projec ts exclusion that wa s recently vacated by the DC Circuit Court. Therefore, at ADE C’s request, EPA is not incorporating or approving this provision into the SIP.

18 AAC 50.540 Minor Permit: Application, paragraphs (f) and (g) . At ADEC’s request, EPA is not incorporating or approving into the SIP portions of the Federal 2002 Major NSR Reform Rules that were recently vacate d by the DC Circuit Court relating to the clean unit provisions and the pollution contro l projects exclusion, more specifically paragraphs 18 AAC 50.540(f) and (g).

18 AAC 50.542 Minor Permit: Review and Issuance, paragraphs (b)(2), (f)(4), (f)(5), and (g)(1) . Subparagraph (b)(2) allows ADEC to re quire the owner/operator to submit their permit applications online. ADEC did not su bmit the appropriate documentation for us to evaluate the approvability of Alaska’s Onlin e System with respect to EPA’s Cross-Media Electronic Reporting Rule (CROMERR). See 70 FR 59848 (October 13, 2005). Therefore, EPA is not approving paragraph (b )(2) to allow for electronic submissions.

At ADEC’s request, EPA is not incorporating or approving in to the SIP portions of the Federal 2002 Major NSR Reform Rules that were recently vacated by the DC Circuit Court relating to the clean unit provisions and the polluti on control projects exclusion, more specifically paragraphs 18 AAC 50.542(f )(4), (f)(5), and, w ith respect to the reference to clean units and pollu tion control project s only, (g)(1).

18 AAC 50.544 Minor Permits: Content, paragraph (e). At ADEC’s request, EPA is not incorporating or approving into the SIP por tions of the Federal 2002 Major NSR Reform Rules that were recently vacated by the DC Circuit Court relating to the clean unit provisions and the pollution control projects exclusion, more specifically paragraphs 18 AAC 50.544(e).

18 AAC 50.546 Minor Permits: Revisions, paragraph (b) . Paragraph (b) authorizes

ADEC to revise “non-substantive elemen ts of a minor permit without further administrative procedures.” The regulation, however, does not describe what type of changes will be considered “non-substantive. ” Although it may be appropriate to allowJanuary 26, 2007

25 of 26 some class of permit changes to be made administratively, this provision does not adequately describe the class of changes. Therefore, EPA does not believe this provision is sufficiently enforceable to meet the ba sic enforceability requirements for SIPs.

18 AAC 50.990 Definitions, paragraphs (21), an d (77). At ADEC’s request, EPA is not incorporating or approving into the SIP por tions of the Federal 2002 Major NSR Reform Rules that were recently vacated by the DC Circuit Court relating to the clean unit provisions and the pollution control projects exclusion, more specifically paragraphs 18 AAC 50.990(21) and (77).

V. Requested Sections to be Removed from the SIP

A. Description of Submittal Alaska has requested that EPA remove certain provisions from the SIP because they are not required elements of a SIP under title I of the CAA or because they have been previously repealed by ADEC.

B. Summary of Action EPA proposes to take the following action on the provisions which Al aska has requested

be removed from the SIP.

18 AAC 50.090 Ice Fog Limitations , State effective May 26, 1972 This provision was repealed by ADEC. The requirements of this provision are now

included in the new and revised section of 18 AAC 50.080 Ice Fog Standards. Removal

of 18 AAC 50.090 from the SIP does not make the SIP less stringent because 18 AAC 50.080 is being submitted for inclusion into the SIP. Therefore, EPA is removing from the SIP 18 AAC 50.090 Ice Fog Limitations.

18 AAC 50.300 Permit to Operate and 18 AAC 50.400 Application Review & Issuance of Permit to Operate, State effective July 21, 1991 and April 23, 1994; 18 AAC 50.520 Emissions and Ambient Monitoring, State effective July 21, 1991; and 18 AAC 50.530 Circumvention, State effective June 7, 1987 . These provisions were repealed by ADEC. The requirements of these provisions are now included in the new a nd revised provisions of Article 3, Major Stationary Source Permits and Article 5, Minor Permits. Removal of these now-repealed provisions from the SIP does not make the SIP less stringent because the provisions of Articles 3 and 5 are bei ng submitted for inclusion into the SIP. Therefore, EPA is removing from the SIP 18 AAC 50.300 Permit to Operate, 18 AAC 50.400 Application Review & Issuance of Pe rmit to Operate, 18 AAC 50.520 Emissions and Ambient Monitoring, and 18 AAC 50.530 Circumvention.

18 AAC 50.310 Revocation or Suspension of Permit, State effective May 4, 1980. This provision was repealed by ADEC. The requirements of this provision are now

included in the new and revised sections of 18 AAC 50.301 Permit Continuity and 18

AAC 50.546 Minor Permits: Revisions. Removal of this 18 AAC 50.310 from the SIP does not make the SIP less stringent becau se the provisions 18 AAC 50.301 and 18 AACJanuary 26, 2007

26 of 26 50.546 are being submitted for inclusion into th e SIP. Therefore, EPA is removing from

the SIP 18 AAC 50.310 Revocation or Suspension of Permit.

18 AAC 50.400 Permit Administration Fees, 18 AAC 50.420 Billing Procedures, and 18 AAC 50.430 Appeal Procedures, St ate effective January 18, 1997 . These provisions establish fees for issuance of permits and pe rmit-related actions. State fee provisions that are not economic incentive programs and are not designed to repl ace or relax a SIP emission limit are generally not appropriate for inclusion into the SIP. While it is appropriate for States to im plement fee provisions, for example, to recover costs for issuing permits, it is generally not appropria te to make State fee collection Federally enforceable. Therefore, EPA is re moving from the SIP 18 AAC 50.400 Permit Administration Fees, 18 AAC 50.420 Billing Procedures, and 18 AAC 50.430 Appeal

Procedures.

18 AAC 50.600 Reclassification Procedures & Criteria, St ate effective November 1,

1982 . This provision was repealed by ADEC. The requirements of this provision are

now included in the new and revised sections of 18 AAC 50.250 Procedures and Criteria for Revising Air Quality Cla ssifications. Removal of this provision from the SIP does not make the SIP less stringent because the provisions of 18 AAC 50.250 are being

submitted for inclusion into the SIP. Ther efore, EPA is removing from the SIP 18 AAC

50.600 Reclassification Pro cedures & Criteria.

18 AAC 50.620 State Air Quality Control Plan, State effective January 4, 1995. This provision was repealed by ADEC. The requirements of this provision are now

included in the new and revised sections of 18 AAC 50.030 State Air Quality Control

Plan. Removal of 18 AAC 50.620 from the SI P does not make the SIP less stringent because the provisions of 18 AA C 50.030 are being submitted for inclusion into the SIP. Therefore, EPA is removing from the SIP 18 AAC 50.620 State Air Quality Control Plan.

18 AAC 50.900 Definitions, State eff ective July 21, 1991 and January 4, 1995 This provision was repealed by ADEC. The requirements of this provision are now

included in the new and revised sections of 18 AAC 50.990 Definitions. Removal of 18

AAC 50.900 from the SIP does not make the SIP less stringent because the provisions of 18 AAC 50.990 are being submitted for inclusion into the SIP. Therefore, EPA is removing from the SIP 18 AAC 50.900 Definitions from the SIP.

VI. Geographic Scope of SIP Approval EPA’s approval of the SIP does not extend to sources or activities located in Indian Country, as defined in 18 U.S.C.1151. EP A will continue to implement the CAA in Indian Country in Alaska because ADEC has not adequately demonstrate authority over

sources and activities locate d within the exterior bounda ries of the Annette Island

Reserve and other areas of Indian Country in Alaska.