[Federal Register Volume 63, Number 143 (Monday, July 27, 1998)]
[Rules and Regulations]
[Pages 40041-40044]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-19931]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[IN75; FRL-6129-7]


Approval and Promulgation of Implementation Plan; Indiana

AGENCY: Environmental Protection Agency.

ACTION: Final rule.

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SUMMARY: The United States Environmental Protection Agency (USEPA) is 
approving Indiana's request to grant an exemption for the northwest 
Indiana (Lake and Porter Counties) severe ozone nonattainment area from 
the applicable Oxides of Nitrogen (NO<INF>X</INF>) transportation 
conformity requirements. The USEPA proposed approval on January 6, 
1998. The proposal was based on information the Indiana Department of 
Environmental Management (IDEM) submitted to the USEPA as a State 
Implementation Plan (SIP) revision request for an exemption under 
section 182(b)(1) of the Clean Air Act (Act). The technical basis for 
IDEM's request was the urban airshed modeling (UAM) conducted for an 
attainment demonstration for the Lake Michigan Ozone Study (LMOS) 
modeling domain.

DATES: This rule is effective August 26, 1998.

ADDRESSES: Copies of the SIP revision, public comments and USEPA's 
responses are available for inspection at the following address: United 
States Environmental Protection Agency, Region 5, 77 West Jackson 
Boulevard, Chicago, Illinois 60604. (It is recommended that you 
telephone Patricia Morris at (312) 353-8656 before visiting the Region 
5 Office.)

FOR FURTHER INFORMATION CONTACT: Patricia A. Morris, Regulation 
Development Section (AR-18J), Air Programs Branch, Air and Radiation 
Division, United States Environmental Protection Agency, Region 5, 77 
West Jackson Boulevard, Chicago, Illinois 60604, Telephone Number (312) 
353-8656.

SUPPLEMENTARY INFORMATION:

I. Background

    Clean Air Act section 176(c)(3)(A)(iii) requires, in order to 
demonstrate conformity with the applicable SIP, that transportation 
plans and Transportation Improvement Programs (TIPs) contribute to 
emissions reductions in ozone and carbon monoxide nonattainment areas 
during the period before control strategy SIPs are approved by USEPA. 
This requirement is implemented in 40 CFR 93.119, which establishes 
what is known as the ``build/no-build test.'' The conformity 
requirements of 176(c)(3)(A) are more fully explained in the notice of 
proposed rulemaking (63 FR 456, January 6, 1998).
    On July 13, 1994, the States of Illinois, Indiana, Michigan, and 
Wisconsin (the States) submitted to the USEPA a petition for an 
exemption from the requirements of section 182(f) of the Clean Air Act 
(Act). The States, acting through the Lake Michigan Air Directors 
Consortium (LADCo), petitioned for an exemption from the Reasonably 
Available Control Technology (RACT) and New Source Review (NSR) 
requirements for major stationary sources of NO<INF>X</INF>. The 
petition also asked for an exemption from the transportation and 
general conformity requirements for NO<INF>X</INF> in all ozone 
nonattainment areas in the Lake Michigan Modeling domain.
    On March 6, 1995, the USEPA published a rulemaking proposing 
approval of the NO<INF>X</INF> exemption petition for the RACT, NSR and 
transportation and general conformity requirements. A number of 
comments were received on the proposal. Several commenters argued that 
NO<INF>X</INF> exemptions are provided for in two separate parts of the 
Act, in sections 182(b)(1) and 182(f), but that the Act's 
transportation conformity provisions in section 176(c)(3) explicitly 
reference section 182(b)(1). In April 1995, the USEPA entered into an 
agreement to change the procedural mechanism through which a 
NO<INF>X</INF> exemption from transportation conformity would be 
granted (EDF et al. v. USEPA, No. 94-1044, U.S. Court of Appeals, D.C. 
Circuit). Instead of a petition under 182(f), transportation conformity 
NO<INF>X</INF> exemptions for ozone nonattainment areas that are 
subject to section 182(b)(1) now need to be submitted as a SIP revision 
request. The northwest Indiana ozone nonattainment area is classified 
as severe and, thus, is subject to section 182(b)(1). Thus, the 
NO<INF>X</INF> waiver for transportation conformity would have been 
granted in January 26, 1996, at the same time as the waiver for RACT, 
NSR and general conformity except for the technical correction to 
require a SIP revision request under 182(b)(1).
    The transportation conformity requirements are found at sections 
176(c)(2), (3), and (4) of the Act. The conformity requirements apply 
on an areawide basis in all nonattainment and maintenance areas. The 
USEPA's transportation conformity rule was amended on August 29, 1995 
(60 FR 44762) to reference section 182(b)(1) rather than 182(f) as the 
means for exempting areas subject to section 182(b)(1) from the 
transportation conformity NO<INF>X</INF> requirements.
    The May 24, 1996, SIP revision request from Indiana was submitted 
to meet the requirements in accordance with 182(b)(1). Public hearings 
on this SIP revision request were held on June 11, 1996.
    In evaluating the 182(b) SIP revision request, the USEPA considered 
whether additional NO<INF>X</INF> reductions would contribute to 
attainment of the standard in the northwest Indiana severe ozone 
nonattainment area and also in the downwind areas of the LMOS modeling 
domain. The USEPA granted a NO<INF>X</INF> waiver for RACT, NSR, and 
general conformity based on the submitted modeling on January 26, 1996, 
(61 FR 2428). At the same time and using the same technical support 
evaluation, the USEPA would have granted the transportation conformity 
waiver but for the technical correction to grant the waiver under 
182(b)(1) instead of 182(f). This rulemaking completes the efforts 
under this technical correction.
    On January 6, 1998, (63 FR 456), the USEPA proposed approval of 
Indiana's request to grant an exemption for the northwest Indiana 
severe ozone nonattainment area from the applicable NO<INF>X</INF> 
transportation conformity requirements.

II. Public Comments

    The USEPA received two sets of comments during the public comment

[[Page 40042]]

period, which ended on February 5, 1998. One set was in favor of the 
USEPA proposal, and one set was critical. The following are the 
critical comments on the proposal and USEPA's responses to the 
comments:
    Comment: Indiana has failed to establish a NO<INF>X</INF> budget 
for the ozone nonattainment area. Indiana has yet to develop and submit 
such a budget as required by November 1994. Until the attainment 
demonstrations, encompassing verifiable and allocated (biogenic, point, 
mobile, and area) NO<INF>X</INF> emission budgets, are submitted and 
complete, any determination that required control strategies are not 
necessary is premature and unfounded.
    Response: Approval of the transportation conformity NO<INF>X</INF> 
waiver does not eliminate the need for a NO<INF>X</INF> budget 
determination. As described in the background section, the waiver 
merely removes the requirement for the build/no-build test. It is 
anticipated that in the future, Indiana will submit a NO<INF>X</INF> 
transportation budget in its state implementation plan.
    Comment: The NO<INF>X</INF> waiver technical documentation is 
outdated, incomplete and inconsistent with USEPA's NO<INF>X</INF> SIP 
call.
    Response: USEPA's NO<INF>X</INF> SIP call proposal published 
November 7, 1997, (62 FR 60317) is based on modeling conducted by the 
Ozone Transport Assessment Group (OTAG). OTAG used information and 
ozone episodes contributed by LADCo and the State of Indiana. USEPA's 
NO<INF>X</INF> SIP call acknowledges the NO<INF>X</INF> ``disbenefit'' 
issue and specifically mentions the Lake Michigan states as an area 
where the modeling shows a disbenefit. A ``disbenefit'' from 
NO<INF>X</INF> is when reductions in NO<INF>X</INF> emissions create an 
increase in the concentrations of ozone. USEPA's NO<INF>X</INF> SIP 
call encourages local and regional modeling to determine the extent of 
the NO<INF>X</INF> disbenefit; and the appropriate control strategies 
to deal with the disbenefit. LADCo is currently conducting modeling to 
refine the NO<INF>X</INF> disbenefit and the State of Indiana, in 
cooperation with the other Lake Michigan states, intends to submit the 
modeling and analysis in response to the SIP call. Thus, there is 
nothing in the most recent modeling which contradicts the phenomenon of 
the NO<INF>X</INF> disbenefit in the Lake Michigan area.
    Comment: The Indiana submittal failed to demonstrate that low-level 
NO<INF>X</INF> reductions in the northwest Indiana area would not 
improve air quality. While the submittal did analyze domain-wide low-
level NO<INF>X</INF> reductions, no such analysis was performed for the 
specific Indiana counties. The State of Indiana, in coordination with 
LADCo, has the capabilities to model NO<INF>X</INF> emissions from 
mobile sources in these counties. Therefore, USEPA should require such 
a demonstration before taking final action on this rulemaking.
    Response: The LADCo analysis demonstrated that across-the-board 
reductions in NO<INF>X</INF> from point, area, and mobile sources 
generally showed a ``disbenefit'' in many areas of the modeling domain. 
Further, LADCo performed an analysis which focused on NO<INF>X</INF> 
reductions from point sources. This analysis showed a small increase in 
ozone formation. From this result, LADCo concluded that low level 
NO<INF>X</INF> controls, i.e. mobile and area sources, would be 
detrimental to air quality in the modeling domain. The LADCo analysis 
is consistent with the USEPA NO<INF>X</INF> waiver policy which 
requires consideration of modeling domain wide peak ozone 
concentrations.
    Comment: Indiana and Michigan counties now in violation of the 
ozone NAAQS will benefit from low-level NO<INF>X</INF> emissions 
reductions.
    Response: Regional modeling is currently being conducted to 
determine more precisely where NO<INF>X</INF> reductions give a 
disbenefit. The OTAG modeling demonstrated that elevated and low-level 
NO<INF>X</INF> reductions across many states will generally reduce 
transported ozone. The USEPA NO<INF>X</INF> SIP call proposed on 
November 7, 1997, proposed statewide budgets for NO<INF>X</INF>. The 
State has the ability to decide what NO<INF>X</INF> reductions would be 
most beneficial, after consideration of downwind benefits and local 
disbenefits. The States are currently conducting additional modeling in 
the Lake Michigan area to determine where NO<INF>X</INF> reductions are 
most beneficial. It is premature to subject transportation sources in 
Lake and Porter Counties to NO<INF>X</INF> reductions until this 
additional modeling is completed and USEPA finalizes the SIP call 
notice and Indiana submits its plan for NO<INF>X</INF> reductions.
    Comment: USEPA's PM<INF>2.5</INF> NAAQS requires an additional net 
air quality benefit analysis.
    Response: The USEPA timeline for implementation of the 
PM<INF>2.5</INF> NAAQS begins with setting up a monitoring network and 
collecting data for several years before designating areas under the 
new NAAQS. At this time, the USEPA does not know which areas will be 
designated nonattainment for PM<INF>2.5,</INF> nor are there any 
control strategies currently proposed for PM<INF>2.5.</INF> The 
transportation conformity requirement is to enable attainment of the 
one hour ozone standard. In this notice, USEPA is only waiving the 
transportation conformity build/no-build test, which requires 
reductions in NO<INF>X</INF> in ozone nonattainment areas.
    Comment: The USEPA has failed to adequately consider the net 
environmental benefits (such as acid rain reduction) of NO<INF>X</INF> 
emissions reductions in Lake and Porter Counties.
    Response: As stated above, the LADCo analysis demonstrated that 
across the board reductions in NO<INF>X</INF> from point, area, and 
mobile sources showed both benefits and disbenefits in the modeling 
domain. Further, the transportation conformity rule does not require 
the build/no-build test for NO<INF>X</INF> as an ozone precursor in 
ozone nonattainment areas where the Administrator determines that 
additional reductions of NO<INF>X</INF> would not contribute to 
attainment of the National Ambient Air Quality Standard (NAAQS) for 
ozone. A net benefit analysis for all environmental benefits is not 
required since this requirement is specific to ozone nonattainment.
    Comment: The USEPA and Indiana failed to perform the appropriate 
environmental justice analysis. The USEPA has failed to consider the 
spatial impact of where reductions could be anticipated and where 
increases might occur with and without NO<INF>X</INF> conformity 
compliance in northwest Indiana and southeast Chicago. The USEPA is 
expected to address the full range of environmental implications 
including: (1) Will the rulemaking increase already unacceptable levels 
of air toxics in these communities? (2) Will this rulemaking increase 
already unacceptable levels of fine particulate matter in these 
communities? (3) Will the sprawl included by the proposal--or the 
elevated speed limits allowed--disproportionately impact at-risk 
populations? (4) Will this proposal further exacerbate the difficulty 
of low income and unemployed citizens in the region commuting to 
employment opportunities?
    Response: As discussed in the January 6, 1998, proposed approval, 
the role that NO<INF>X</INF> emissions play in producing ozone at any 
given place and time is complex. Modeling shows that controlling low 
level NO<INF>X</INF> in northwest Indiana could in fact increase ozone 
concentrations in local urban areas particularly the minority areas in 
Lake County, Indiana and southeast Chicago. This disbenefit is caused 
by the reaction of nitrogen oxide with ozone, which locally reduces 
ozone concentrations, and is referred to as ozone scavenging. Since 
emissions of NO<INF>X</INF> from fuel combustion sources, whether 
internal combustion engines or stationary combustion sources, such as 
industrial boilers, contain significant

[[Page 40043]]

amounts of NO, it is expected that ozone concentrations immediately 
downwind of such NO<INF>X</INF> sources will be reduced through ozone 
scavenging. Therefore, reducing NO<INF>X</INF> emissions can lead to 
increased ozone concentrations in the vicinity of the controlled 
NO<INF>X</INF> emission sources, while causing a reduction in ozone 
concentrations further downwind. Reducing NO<INF>X</INF> emissions in 
VOC-limited areas (areas with low VOC emissions relative to 
NO<INF>X</INF> emissions) may produce minimal ozone reductions or even 
ozone increases. This pattern of NO<INF>X</INF> scavenging is 
demonstrated in the LADCo modeling. Therefore, controlling low level 
NO<INF>X</INF> in northwest Indiana could in fact increase ozone 
concentrations in local urban areas particularly the minority areas in 
Lake County, Indiana and southeast Chicago. This, in fact, is what the 
LADCo modeling demonstrated.
    As for the other environmental and social implications, this 
rulemaking addresses NO<INF>X</INF> reduction for meeting the ozone 
standard and merely waives the build/no-build reduction requirement for 
transportation sources. NO<INF>X</INF> from the transportation plan is 
not expected to increase significantly and thus will not increase air 
toxics or fine particulates. It is through the transportation planning 
process that transportation decisions are made.
    This transportation conformity waiver is not expected to adversely 
affect the transportation options of minority populations in northwest 
Indiana. In fact, letters from IDEM and Indiana Department of 
Transportation and the Northwestern Indiana Regional Planning 
Commission indicate that the NO<INF>X</INF> transportation waiver, will 
allow transportation planning to be simplified and allow federal 
funding of transportation improvements to proceed.
    Comment: The Indiana request utilizes the BEIS-I inventory for 
biogenic emissions. OTAG concluded that the BEIS-II inventory is the 
preferred inventory for UAM analyses.
    Response: The BEIS-I was the approved and most appropriate biogenic 
emissions inventory available to LADCo when the NO<INF>X</INF> modeling 
analysis was performed. Any subsequent modeling performed by LADCo will 
utilize the BEIS-II biogenic emissions inventory.
    Comment: OTAG concluded that both elevated and low level 
NO<INF>X</INF> reductions are effective in reducing ozone levels. These 
conclusions were based extensively on OTAG modeling, and are 
significant and relevant to USEPA's action on this rule. The modeling 
clearly demonstrated the efficacy of reducing low-level (mobile source) 
NO<INF>X</INF> in controlling ozone. The conclusions of the policy 
group were that such reductions were cost effective, and beneficial to 
reduce transport to downwind areas.
    Response: It should be noted that OTAG concluded that States must 
have the opportunity to conduct additional local and subregional 
modeling to assess appropriate, type, and timing of controls. OTAG 
further concluded that States can work together, in coordination with 
USEPA, toward developing local SIPs including an evaluation of possible 
local NO<INF>X</INF> disbenefits. In addition, OTAG modeling results 
demonstrated a significant potential for NO<INF>X</INF> control 
disbenefits in the Lake Michigan area.
    Comment: OTAG concluded that disbenefit analyses found ozone 
increases to be less frequent and severe than USEPA concluded based on 
the July 13, 1994 LADCo 182(f) NO<INF>X</INF> waiver submittal.
    Response: The OTAG fine grid analysis utilized a 12 km grid as 
compared to the LADCo fine grid of 4 km. This disparity in fine grid 
size can de-emphasize the NO<INF>X</INF> disbenefit at the local 
urbanized area. OTAG concluded that some areas will experience local 
NO<INF>X</INF> disbenefits at more frequent pronounced levels when 
finer grids are considered.
    Comment: In previous rulemakings on similar NO<INF>X</INF> waiver 
requests, USEPA committed to incorporate the OTAG findings in future 
USEPA rulemakings. OTAG recommendations are now complete, OTAG findings 
are clear, and USEPA has validated these OTAG findings in proposing its 
NO<INF>X</INF> SIP call. This proposal is inconsistent with and even 
undermines the USEPA NO<INF>X</INF> SIP call.
    Response: The summary of OTAG findings states that NO<INF>X</INF> 
reductions decrease and increase ozone: decreases occur domain wide; 
increases are confined to a few days in a few urban areas.
    The USEPA's recently proposed regional NO<INF>X</INF> rulemaking 
uses the OTAG findings to identify States which contribute 
significantly to ozone problem areas in other states. In addition, the 
proposed rulemaking establishes State wide NO<INF>X</INF> budgets for 
the year 2007.
    A section of the rulemaking also solicits comments on approaches 
that can be used to address the disbenefit issue in areas such as Lake 
Michigan. Subsequent modeling by the LADCo States will need to address 
the disbenefit issue as it pertains to the NO<INF>X</INF> budget, ozone 
transport, and attainment. It is premature at this time to require 
NO<INF>X</INF> reductions from transportation sources in northwest 
Indiana before completion of modeling, finalization of the 
NO<INF>X</INF> SIP call and preparation of the State implementation 
plan to address state NO<INF>X</INF> reductions.

IV. USEPA Action

    In this final action, USEPA is approving the transportation 
conformity NO<INF>X</INF> waiver SIP revision for the State of Indiana. 
In light of the modeling completed thus far and considering the 
importance of the Ozone Transport Assessment Group process and 
attainment plan modeling efforts the USEPA notes that it may reexamine 
the impact of this NO<INF>X</INF> waiver as future modeling becomes 
available. In the near future, USEPA intends to require appropriate 
States to submit SIP measures to achieve emissions reductions of ozone 
precursors needed to prevent significant transport of ozone. The USEPA 
will evaluate the States' submitted SIP measures and available refined 
modeling to determine whether the NO<INF>X</INF> waiver should remain 
in place, or whether USEPA will require a new plan revision.
    The USEPA also reserves the right to require NO<INF>X</INF> 
emission controls for transportation sources under section 110(a)(2)(D) 
of the Act if future ozone modeling demonstrates that such controls are 
needed to achieve the ozone standard in downwind areas.
    Nothing in this action should be construed as permitting, allowing 
or establishing a precedent for any future request for revision to any 
SIP. Each request for revision to the SIP shall be considered 
separately in light of specific technical, economic, and environmental 
factors and in relation to relevant statutory and regulatory 
requirements.

V. Administrative Requirements

A. Executive Order 12866

    The Office of Management and Budget has exempted this regulatory 
action from Executive Order 12866 review.

B. Executive Order 13045

    This final rule is not subject to Executive Order 13045, entitled 
``Protection of Children from Environmental Health Risks and Safety 
Risks,'' because it is not an ``economically significant'' action under 
Executive Order 12866.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to conduct a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements unless the agency certifies 
that the rule will not

[[Page 40044]]

have a significant economic impact on a substantial number of small 
entities. Small entities include small businesses, small not-for-profit 
enterprises, and small governmental jurisdictions.
    This final rule will not have a significant impactr on a 
substantial number of small entities because SIP approvals under 
section 110 and subchapter I, part D of the Act do not create any new 
requirements, but simply approve requirements that the State is already 
imposing. Therefore, because the Federal SIP approval does not impose 
any new requirements, I certify that this action will not have a 
significant economic impact on a substantial number of small entities. 
Moreover, due to the nature of the Federal-State relationship under the 
Act, preparation of a flexibility analysis would constitute Federal 
inquiry into the economic reasonableness of the State action. The Clean 
Air Act forbids EPA to base its actions concerning SIPs on such 
grounds. Union Electric Co. v. EPA., 427 U.S. 246, 256-66 (1976); 42 
U.S.C. 7410(a)(2).

D. Unfunded Mandates

    Under section 202 of the Unfunded Mandates Reform Act of 1995, 
signed into law on March 22, 1995, EPA must undertake various actions 
in association with any proposed or final rule that includes a Federal 
mandate that may result in estimated costs to state, local, or tribal 
governments in the aggregate; or to the private sector, of $100 million 
or more. This federal action does not impose any new federal 
requirements. Accordingly, no additional costs to state, local, or 
tribal governments, or the private sector, result from this action.

E. Submission to Congress and the Comptroller General

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, which includes a copy of the rule, 
to each House of the Congress and to the Comptroller General of the 
United States. EPA will submit a report containing this rule and other 
required information to the U.S. Senate, the U.S. House of 
Representatives, and the Comptroller General of the United States prior 
to publication of the rule in the Federal Register. This action is not 
a ``major rule'' as defined by 5 U.S.C. 804(2). This rule will be 
effective.

F. Petitions for Judicial Review

    Under section 307(b)(1) of the Act, petitions for judicial review 
of this action must be filed in the United States Court of Appeals for 
the appropriate circuit by September 25, 1998. Filing a petition for 
reconsideration by the Administrator of this final rule does not affect 
the finality of this rule for the purposes of judicial review nor does 
it extend the time within which a petition for judicial review may be 
filed, and shall not postpone the effectiveness of such rule or action. 
This action may not be challenged later in proceedings to enforce its 
requirements (see section 307(b)(2)).

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Intergovernmental 
relations, Oxides of Nitrogen, Ozone, Transportation-air quality 
planning, Transportation conformity.

    Authority: 42 U.S.C. 7401-7671q.

    Dated: July 15, 1998.
David A. Ullrich,
Acting Regional Administrator.

    Part 52, Chapter I, title 40 of the Code of Federal Regulations is 
amended as follows:

PART 52--[AMENDED]

    1. The authority citation for Part 52 continues to read as follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart P--Indiana

    2. Section 52.777 is amended by adding paragraph (t) to read as 
follows:


Sec. 52.777  Control strategy: Photochemical Oxidants (hydrocarbons).

* * * * *
    (t) Approval--On May 24, 1996, the Indiana Department of 
Environmental Management submitted a revision to the ozone State 
Implementation Plan for Lake and Porter Counties. The submittal 
pertained to a plan for the implementation of the Federal 
transportation conformity requirements in accordance with 40 CFR part 
51 subpart T--Conformity to State or Federal Implementation Plans of 
Transportation Plans, Programs, and Projects Developed, Funded or 
Approved Under Title 23 U.S.C. or the Federal Transit Act.
* * * * *
[FR Doc. 98-19931 Filed 7-24-98; 8:45 am]
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