[Federal Register Volume 61, Number 98 (Monday, May 20, 1996)]
[Proposed Rules]
[Pages 25173-25175]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-12627]



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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 55

[FRL-5507-7]
RIN 2060-AG40 and AG39


Outer Continental Shelf Air Regulations Delegation Remand

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The EPA is proposing revision to the outer continental shelf 
(OCS) regulations in response to a voluntary remand from the U.S. Court 
of Appeals for the District of Columbia Circuit. These regulations 
establish air pollution control requirements for certain sources 
located on the OCS.
    In response to the requirements of section 328 of the Clean Air Act 
(Act), on September 4, 1992, EPA promulgated the OCS regulations 
setting up two regimes for controlling air pollution from OCS sources 
for the purposes of attaining and maintaining Federal air quality 
standards and to comply with certain Act requirements for 
preconstruction review of new and modified major sources. Sources 
located within 25 miles of the States' seaward boundaries (the 25-mile 
limit) must comply with regulations which are, in most respects, the 
same as the regulations for similar sources located on shore. Sources 
beyond the 25-mile limit are required to comply with Federal new source 
performance standards (NSPS), requirements for the prevention of 
significant deterioration (PSD), and national emission standards for 
hazardous air pollutants (NESHAP) related to attainment and maintenance 
of ambient air quality standards or the requirements of part C of title 
I of the Act. The Federal operating permits program and enhanced 
compliance monitoring regulatory requirements will also be incorporated 
into part 55 when they are promulgated. In promulgating the OCS 
regulations, EPA provided for delegation to State and local agencies 
the authority to implement and enforce the regulations for sources 
within the 25-mile limit. However, EPA did not provide for delegation 
of the authority to implement and enforce the regulations for sources 
located beyond the 25-mile limit. The Santa Barbara County Air 
Pollution Control District (APCD) filed a petition for review of the 
regulations on several issues, including the issue of delegation beyond 
the 25-mile limit. Upon EPA's request for a voluntary remand, the court 
remanded the delegation issue to EPA for reconsideration.
    By this action, EPA is revising the OCS regulations to provide for 
delegation to State and local agencies the authority to implement and 
enforce the OCS regulations beyond the 25-mile limit. Delegation of the 
program to any specific State or local agency will be under separate 
action.

DATES: Written comments on the proposed action must be received by EPA 
at the address below on or before June 19, 1996.

ADDRESSES: Comments should be submitted to the public docket for this 
action is available for public inspection and copying between 8:00 a.m. 
and 4:00 p.m., Monday through Friday, at the Air and Radiation Docket 
and Information Center (6102), Attention Docket A-95-07, South 
Conference Center, Room 4, 401 M Street, SW, Washington, DC 20460. A 
reasonable fee for copying may be charged.

FOR FURTHER INFORMATION CONTACT: Mr. David Stonefield, U.S. EPA, MD-15, 
Research Triangle Park, NC 27711, telephone (919) 541-5350.

Supplementary Information:

I. Background and Purpose

A. Introduction

    The Clean Air Act Amendments of 1990 (Pub. L. 101-549, 104 Stat. 
2399 (1990)) added section 328 to the Act and transferred authority to 
regulate sources on part of the OCS from the Department of the Interior 
(DOI) to EPA. The DOI retained the authority to regulate OCS sources in 
the Gulf of Mexico west of 87.5 degrees longitude. As to the remaining 
portions of the OCS--the Atlantic, Pacific, and Arctic coasts and the 
Gulf of Mexico east of 87.5 degrees--section 328 requires EPA to 
establish requirements for the control of air pollution from OCS 
sources to attain and maintain Federal and State ambient air quality 
standards and to comply with the provisions of part C (for the 
prevention of significant deterioration) of title I of the Act. For 
sources within 25 miles of the States' seaward boundaries, those 
requirements must be the same as would be applicable if the source were 
located in the corresponding onshore area (COA). For sources beyond the 
25-mile limit, the Administrator had discretion in determining the 
requirements. The EPA proposed (56 FR 63774, December 5, 1991) and 
promulgated (57 FR 40792, September 4, 1992) regulations to implement 
the requirements of section 328. The regulations require, among other 
things, that sources located beyond 25 miles of States' seaward 
boundaries meet applicable Federal pollution control requirements which 
include PSD, NSPS and NESHAP regulations to the extent that they are 
rationally related to protection of air quality standards or part C of 
title I of the Act (40 CFR 55.13). In addition, EPA stated in the 
preamble to the final rule that it would incorporate into the OCS rules 
the requirements of the Federal operating permits regulations (40 CFR 
part 71) and the enhanced monitoring regulations, when promulgated (57 
FR 40803).

B. Delegation Authority

    Section 328(a)(3) of the Act permits States adjacent to an OCS 
source to adopt and submit to EPA regulations for implementing and 
enforcing the requirements of that section. It requires that:

    [I]f the Administrator [of EPA] finds that the State regulations 
are adequate, the Administrator shall delegate to that State any 
authority the Administrator has under this Act to implement and 
enforce such requirements.

    Therefore, in the OCS regulations, EPA included Sec. 55.11 which 
authorizes the delegation of the implementation and enforcement 
authority to State and local agencies for OCS sources that are located 
within the 25-mile limit. However, in the preamble to the proposed and 
final rules, EPA stated that it would retain the authority to implement 
and enforce the OCS regulations for sources located beyond the 25-mile 
limit for two reasons. First, since the sources located beyond the 25-
mile limit are subject only to Federal requirements, the State would 
have to adopt two OCS programs, one for sources within the 25-mile 
limit and one for sources beyond the limit. Second, it may be difficult 
to determine the appropriate agency to receive delegation for sources 
located beyond the 25-mile limit (56 FR 63784 and 57 FR 40801-802). 
Therefore, in the final

[[Page 25174]]

rule, EPA did not provide for the delegation of the implementation and 
enforcement authority for sources beyond the 25-mile limit.

C. Judicial Review

    On November 2, 1992, the Santa Barbara County APCD filed a petition 
for review of the OCS regulations with the U.S. Court of Appeals for 
the District of Columbia Circuit (Santa Barbara County Air Pollution 
Control District v. EPA, 31 F. 3rd 1179 (D.C. Cir., 1994)). One of the 
issues that the Santa Barbara County APCD raised was EPA's failure to 
provide for delegation of the authority to implement and enforce the 
OCS regulations for sources located beyond 25 miles from a State's 
seaward boundary.<SUP>1 In reviewing the issue, EPA determined that 
section 328 of the Act requires it to delegate any authority the EPA 
has under the Act to implement and enforce the requirements of section 
328(a) if it determines that the State government has adequate 
regulations. Therefore, EPA requested the court to remand this issue to 
it for reconsideration.
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    \1\ Another issue raised by the Santa Barbara County APCD 
petition involved EPA special offset provisions for OCS sources. On 
August 12, 1994, the court vacated that portion of the OCS 
regulations and remanded it to EPA for further consideration. 
Elsewhere in today's Federal Register, EPA is promulgating an 
interim final regulation revising the OCS regulation in accordance 
with the court's instructions.
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II. Revisions to the Regulations

    The OCS regulations contain three references to the delegation 
authority beyond the 25-mile limit. The EPA is proposing in each case 
to revise the language of the OCS regulations to make clear that EPA 
may delegate the authority to implement and enforce the OCS regulations 
for the OCS sources beyond the 25-mile limit. Specific regulatory 
changes are proposed for Secs. 55.3(c), 55.6(d), and 55.11(a). In 
addition, to allow for the delegation of authority for sources beyond 
the 25-mile limit, revisions in the wording of other sections are 
necessary to clarify the regulations. The specific regulatory changes 
proposed include revisions to Sec. 55.2 (definition of nearest onshore 
area) and the addition of Sec. 55.11(j).
    Section 55.3 establishes the applicability of the regulations for 
OCS sources. Section 55.3(c) relates to sources located beyond the 25-
mile limit and excludes those sources from the requirements of 
Sec. 55.11, which specifically deals with the delegation of the 
authority for implementation and enforcement within the 25-mile limit. 
The EPA proposes to delete the reference in Sec. 55.3(c) that provides 
that the delegation requirements of Sec. 55.11 do not apply for sources 
located beyond the 25-mile limit.
    Section 55.6 establishes permit requirements for OCS sources. 
Section 55.6(d) relates to sources located beyond the 25=mile limit, 
and paragraph (2) states that the Administrator will retain the 
authority to implement and enforce the OCS regulations for those 
sources. The proposed revisions would delete the existing paragraph (2) 
and replace it with a new paragraph (2) which defines the permit 
requirements for sources if the program is delegated. The new 
provisions prohibit the issuance of permits to operators that have not 
demonstrated compliance with all applicable requirements of the OCS 
regulations. This new paragraph is identical to the paragraph in 
Sec. 55.6(c) for sources located within the 25-mile limit.
    Section 55.11 currently establishes the requirements for the 
delegation of the implementation and enforcement of the OCS regulations 
within the 25-mile limit. The EPA proposes to revise Sec. 55.11(a) to 
clarify that the State can request delegation for sources beyond the 
25-mile limit, as well as for sources located within the 25-mile limit.
    The existing definition of ``nearest onshore area'' (NOA) only 
applies to sources within 25 miles of States' seaward boundaries. Under 
the existing regulatory scheme for OCS sources in which EPA retained 
all authority for sources beyond the 25-mile limit, the definition was 
only needed for sources located within 25 miles of States' seaward 
boundaries. However, in delegating the authority to implement and 
enforce the regulations for sources beyond the 25-mile limit, it will 
be necessary to determine the NOA for the source. Therefore, EPA is 
proposing to expand the NOA definition by deleting the limitation to 
sources within 25 miles of the States' seaward boundaries.
    A new subsection ``(j)'' is proposed for Sec. 55.11 to define the 
exercise of authority over OCS sources. The delegated agency in the COA 
for sources located within the 25-mile limit and the delegated agency 
in the NOA for sources located beyond the 25-mile limit will exercise 
all delegated authority. If there is no delegated agency in the COA or 
NOA, EPA will issue permits and implement and enforce the OCS 
regulations. This language mirrors that of Sec. 55.5(c)(4), which 
discusses the exercise of authority for sources within the 25-mile 
limit.
    Section 328(a)(4)(B) of the Act and Sec. 55.5 of the OCS 
regulations establish a procedure for areas other than the NOA to be 
designated as the COA for sources within the 25-mile limit. Pursuant to 
Sec. 55.5, for an area other than the NOA to be designated as the COA, 
it must demonstrate, among other things, that it has more stringent air 
pollution control regulations than the NOA. Since sources located 
beyond the 25-mile limit are subject only to Federal regulations, as 
identified in Sec. 55.13, any delegated State or local agency would be 
enforcing the same regulations. Therefore, for sources beyond the 25-
mile limit, EPA will delegate the authority to implement and enforce 
the OCS regulations only to the State or local agency that is 
responsible for the NOA, assuming that the requirements for delegation 
are met (Sec. 55.5(b)).
    The EPA is also rescinding that preamble language which 
specifically states that delegation beyond the 25-mile limit is 
unacceptable (57 FR 40794, 40797, 40801, and 40802).

III. Administrative Requirements

A. Executive Order 12866

    Under Executive Order 12866, the Agency must determine whether the 
regulatory action is significant and therefore subject to the Office of 
Management and Budget (OMB) review and the requirements of the 
Executive Order. The Order defines significant regulatory action as one 
that is likely to result in a rule that may:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, productivity, 
competition, jobs, the environment, public health or safety or State, 
local, or tribal governments or communities;
    (2) create a serious inconsistency or otherwise interfere with an 
action taken or planned by another Agency;
    (3) materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    Pursuant to the terms of Executive Order 12866, OMB has determined 
that the revisions to the OCS rules are ``significant'' because the OCS 
sources would be regulated by two Federal agencies, EPA and DOI. As 
such, this action was submitted to OMB for review. Changes made in 
response to OMB suggestions or recommendations are documented in the 
public record.

B. Unfunded Mandates Act

    Section 202 of the Unfunded Mandates Act of 1995 requires that EPA 
prepare a budgetary impact statement

[[Page 25175]]

before promulgating a rule that includes a Federal mandate that may 
result in expenditures by State, local, and tribal governments, in 
aggregate, or by the private sector, of $100 million or more in any 1 
year. Section 203 requires EPA to establish a plan for obtaining input 
from, informing, educating, and advising any small governments that may 
be significantly or uniquely affected by the rule.
    Under section 205 of the Unfunded Mandates Act, EPA must identify 
and consider a reasonable number of regulatory alternatives before 
promulgating a rule for which a budgetary impact statement must be 
prepared. The EPA must select from those alternatives the least costly, 
most cost-effective, or least burdensome alternative that achieves the 
objective of the rule, unless EPA explains why a particular alternative 
is not selected or the selection of a particular alternative is 
inconsistent with law.
    Because this proposed rule does not impose any new mandates on 
State, local, or tribal governments, and the rule is estimated to 
result in the expenditures by State, local, and tribal governments or 
the private sector of less that $100 million in any 1 year, EPA has not 
prepared a budgetary impact statement or specifically addressed the 
selection of the least costly, most cost-effective, or least burdensome 
alternative. Because small governments will not be significantly or 
uniquely affected by this rule, EPA is not required to develop a plan 
with regard to small governments. However, EPA will work with eligible 
State and local air pollution control agencies to assist them in 
requesting delegation of authority to implement and enforce the OCS 
regulations.

C. Paperwork Reduction Act

    These rule revisions do not contain any information collection 
requirements subject to review by the OMB under the Paperwork Reduction 
Act of 1980, 44 U.S.C. Sec. 3501, et seq.

D. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) of 1980 requires Federal 
agencies to identify potentially adverse impacts of Federal rules upon 
small entities. Small entities include small businesses, organizations, 
and governmental jurisdictions. In instances where significant economic 
impacts are possible on a substantial number of these entities, 
agencies are required to perform a regulatory flexibility analysis. 
Furthermore, EPA Guidelines for Implementing the Regulatory Flexibility 
Act, issued on April 9, 1992, require the Agency to determine whether 
regulations will have any economic impacts on small entities. These 
revisions to the OCS regulations do not, in themselves, impose any 
requirements on small entities, nor require or exclude small entities 
from meeting the requirements of the OCS regulations. As a result, EPA 
has determined that these revisions will not have a significant impact 
on a substantial number of small entities.
    Therefore, as required under Sec. 605 of the RFA, 5 U.S.C. 605, I 
certify that these revisions do not have a significant impact on a 
substantial number of small entities.

List of Subjects in 40 CFR Part 55

    Environmental protection, Administrative practice and procedures, 
Air pollution control, Continental shelf, Intergovernmental relations, 
Nitrogen oxides, Ozone, permits, Reporting and recordkeeping 
requirements, Sulfur oxides.

    Dated: May 13, 1996.
Carol M. Browner,
Administrator.

    For reasons set out in the preamble, 40 CFR part 55 is proposed to 
be amended as set forth below.

PART 55--OUTER CONTINENTAL SHELF AIR REGULATIONS

    1. The authority citation for part 55 continues to read as follows:

    Authority: Section 328 of the Clean Air Act (42 U.S.C. 7401 et 
seq.) as amended by Public Law 101-549.


Sec. 55.2  [Amended]

    2. In Sec. 55.2 the introductory text of the definition of 
``Nearest Onshore Area'' is proposed to be amended by adding a comma 
after ``OCS source'' and removing the words ``located within 25 miles 
of the States' seaward boundary,'' which follows.
    3. Section 55.3 is proposed to be amended by revising paragraph (c) 
to read as follows:


Sec. 55.3  Applicability.

* * * * *
    (c) The OCS sources located beyond 25 miles of States' seaward 
boundaries shall be subject to all the requirements of this part, 
except the requirements of Secs. 55.4, 55.5, 55.12 and 55.14 of this 
part.
* * * * *
    4. Section 55.6 is proposed to be amended by revising paragraph 
(d)(2) to read as follows:


Sec. 55.6  Permit requirements.

* * * * *
    (d) * * *
    (1) * * *
    (2) The Administrator or delegated agency shall not issue a permit 
to operate to any existing OCS source that has not demonstrated 
compliance with all the applicable requirements of this part.
* * * * *
    5. Section 55.11 is proposed to be amended by revising paragraph 
(a) and by adding paragraph (j) to read as follows:


Sec. 55.11  Delegation.

    (a) The governor or the governor's designee of any State adjacent 
to an OCS source subject to the requirements of this part may submit a 
request, pursuant to section 328(a)(3) of the Act, to the Administrator 
for the authority to implement and enforce the requirements of this OCS 
program (i) within 25 miles of the State's seaward boundary and/or 
beyond 25 miles of the State's seaward boundary. Authority to implement 
and enforce Secs. 55.5, 55.11, and 55.12 of this part will not be 
delegated.
* * * * *
    (j) Delegated Authority.
    The delegated agency in the COA for sources located within 25 miles 
of the State's seaward boundary or the delegated agency in the NOA for 
sources located beyond 25 miles of the State's seaward boundary will 
exercise all delegated authority. If there is no delegated agency in 
the COA for sources located within 25 miles of the State's seaward 
boundary, or in the NOA for sources located beyond 25 miles of the 
State's seaward boundary, the EPA will issue the permit and implement 
and enforce the requirements of this part. For sources located within 
25 miles of the State's seaward boundary, the Administrator may retain 
the authority for implementing and enforcing the requirements of this 
part if the NOA and COA are in different States.

[FR Doc. 96-12627 Filed 5-17-96; 8:45 am]
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