[Federal Register Volume 82, Number 212 (Friday, November 3, 2017)]
[Notices]
[Pages 51238-51250]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-23983]


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ENVIRONMENTAL PROTECTION AGENCY

[EPA-OAR-2016-0596; FRL-9970-36-OAR]
RIN 2060-AT22


Response to December 9, 2013, Clean Air Act Section 176A Petition 
From Connecticut, Delaware, Maryland, Massachusetts, New Hampshire, New 
York, Pennsylvania, Rhode Island and Vermont

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of final action on petition.

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SUMMARY: The Environmental Protection Agency (EPA) is denying a Clean 
Air Act (CAA) petition filed on December 9, 2013, by the states of 
Connecticut, Delaware, Maryland, Massachusetts, New Hampshire, New 
York, Pennsylvania, Rhode Island and Vermont. The petition requested 
that the EPA expand the Ozone Transport Region (OTR) by adding the 
states of Illinois, Indiana, Kentucky, Michigan, North Carolina, Ohio, 
Tennessee, West Virginia and the areas of Virginia not already in the 
OTR in order to address the interstate transport of air pollution with 
respect to the 2008 ozone national ambient air quality standards 
(NAAQS). As a result of this denial, the geographic scope and 
requirements of the OTR will remain unchanged. However, the EPA and 
states will continue to implement programs to address interstate 
transport of ozone pollution with respect to the 2008 ozone.

DATES: This final action is effective on November 3, 2017.

ADDRESSES: The EPA has established a docket for this action under 
Docket ID No. EPA-HQ-OAR-2016-0596. All documents in the docket are 
listed and publicly available at http://www.regulations.gov. Although 
listed in the index, some information is not publicly available, i.e., 
Confidential Business Information or other information whose disclosure 
is restricted by statute. Certain other material, such as copyrighted 
material, is not placed on the Internet and will be publicly available 
only in hard copy form. Publicly available docket materials are 
available either electronically in the docket or in hard copy at the 
Docket, EPA/DC, EPA West, Room 3334, 1301 Constitution Avenue NW., 
Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 
p.m., Monday through Friday, excluding legal holidays. The telephone 
number for the Public Reading Room is (202) 566-1744, and the telephone 
number for the Office of Air and Radiation Docket and Information 
Center is (202) 566-1742.

FOR FURTHER INFORMATION CONTACT: Ms. Gobeail McKinley, U.S. 
Environmental Protection Agency, Office of Air Quality Planning and 
Standards, Air Quality Policy Division, Mail code C539-01, Research 
Triangle Park, NC 27711, telephone (919) 541-5246; email at 
<a href="/cdn-cgi/l/email-protection#eb8688808285878e92c58c84898e8a8287ab8e9b8ac58c849d"><span class="__cf_email__" data-cfemail="d0bdb3bbb9bebcb5a9feb7bfb2b5b1b9bc90b5a0b1feb7bfa6">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:

I. General Information

    Throughout this document, wherever ``we,'' ``us,'' or ``our'' is 
used, we mean the U.S. EPA.

A. How is this action organized?

    The information in this Supplementary Information section of this 
preamble is organized as follows:

I. General Information
    A. How is this action organized?
    B. Where can I get a copy of this document and other related 
information?
    C. What acronyms, abbreviations and units are used in this 
preamble?
II. Executive Summary of the EPA's Decision on the CAA Section 176A 
Petition
III. Background and Legal Authority
    A. Ozone and Public Health
    B. Sections 176A and 184 of the CAA and the OTR Process
    C. Legal Standard for This Action
    D. The CAA Section 176A Petition and Related Correspondence
IV. The EPA's Decision on the CAA Section 176A Petition
    A. The CAA Good Neighbor Provisions
    B. The EPA's Interstate Transport Rulemaking Under the Good 
Neighbor Provision
    C. Additional Rules That Reduce NO<INF>X</INF> and VOC Emissions
    D. Summary of Rationale for the Decision on the CAA Section 176A 
Petition
V. Major Comments on the Proposed Denial
    A. Adequacy of the EPA's Rationale
    B. Effectiveness of Ozone Precursor Emissions Reductions
    C. Efficiency in Addressing Statutory Interstate Transport 
Requirements
    D. Equity Among States
    E. Statutory Intent of CAA Section 176A (or 184)
    F. Comments on the 2015 Ozone NAAQS
VI. Final Action to Deny the CAA Section 176A Petition
VII. Judicial Review and Determinations Under Section 307(b)(1) of 
the CAA
VIII. Statutory Authority

B. Where can I get a copy of this document and other related 
information?

    In addition to being available in the docket, an electronic copy of 
this action will be posted at https://www.epa.gov/ozone-pollution/2008-ozone-national-ambient-air-quality-standards-naaqs-section-176a-petitions.

C. What acronyms, abbreviations and units are used in this preamble?

APA Administrative Procedure Act
CAA or Act Clean Air Act
CFR Code of Federal Regulations
D.C. Circuit United States Court of Appeals for the District of 
Columbia Circuit
EGU Electric Generating Unit
EPA U.S. Environmental Protection Agency
FIP Federal Implementation Plan
FR Federal Register
NAAQS National Ambient Air Quality Standards

[[Page 51239]]

NEI National Emissions Inventory
NESHAP National Emission Standards for Hazardous Air Pollutants
NO<INF>X</INF> Nitrogen Oxides
NSPS New Source Performance Standard
NSR New Source Review
OMB Office of Management and Budget
OTAG Ozone Transport Assessment Group
OTC Ozone Transport Commission
OTR Ozone Transport Region
PM Particulate Matter
RACT Reasonably Available Control Technology
RTC Response to Comment
SIP State Implementation Plan
SO<INF>2</INF> Sulfur Dioxide
VOC Volatile Organic Compound

II. Executive Summary of the EPA's Decision on the CAA Section 176A 
Petition

    In December 2013, the petitioning states of Connecticut, Delaware, 
Maryland, Massachusetts, New Hampshire, New York, Pennsylvania, Rhode 
Island and Vermont (petitioners) submitted a petition under section 
176A of the CAA that requests the EPA to expand the OTR by adding nine 
states to the region.\1\ In January 2017, the EPA issued a proposal to 
deny the CAA section 176A(a) petition. The agency solicited comments on 
this proposal. The EPA received oral testimony from 17 speakers at a 
public hearing on the proposal on April 13, 2017. The EPA also received 
over 100 comments on the proposed denial. This final action addresses 
the major comments the agency received. The remaining comments are 
addressed in the Response to Comment (RTC) document available in the 
docket for this action.
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    \1\ The nine states are Illinois, Indiana, Kentucky, Michigan, 
North Carolina, Ohio, Tennessee, West Virginia and Virginia. The 
parts of northern Virginia included in the Washington, DC 
Consolidated Metropolitan Statistical Area are already in the OTR. 
The petition seeks to add the remainder of the state of Virginia to 
the OTR. See Response to December 9, 2013, Clean Air Act Section 
176A Petition From Connecticut, Delaware, Maryland, Massachusetts, 
New Hampshire, New York, Pennsylvania, Rhode Island and Vermont, 
Notice of Proposed Action on Petition, 82 FR 6509 (January 19, 
2017).
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    In this final action, the EPA is denying the petition to expand the 
OTR. In making this decision, the EPA reviewed the incoming petition, 
the public comments received, the relevant statutory authorities and 
other relevant materials. Section 176A of the CAA provides the 
Administrator with discretion to determine whether to expand an 
existing transport region. In light of existing control requirements 
both within and outside the OTR, the agency's ongoing implementation of 
the ``good neighbor'' provision (CAA section 110(a)(2)(D)(i)(I)) 
through updates to the Cross State Air Pollution Rule (CSAPR), and the 
emission reductions achieved pursuant to federal and state programs 
promulgated pursuant to these and other CAA authorities, which have 
improved, and will continue to improve, air quality in the OTR and 
throughout the United States (U.S.), the EPA denies the section 176A 
petition to add states to the OTR for the purpose of addressing 
interstate transport of the 2008 ozone NAAQS. The EPA believes that 
other CAA provisions (e.g., section 110(a)(2)(D)(i)(I)) provide a 
better pathway for states and the EPA to develop a tailored remedy that 
is most effective for addressing any remaining air quality problems for 
the 2008 ozone NAAQS identified by the petitioners. The states and the 
EPA have historically and effectively reduced ozone and the interstate 
transport of ozone pollution using these other CAA authorities. For 
purposes of addressing interstate transport with respect to the 2008 
ozone NAAQS, the EPA believes that continuing its longstanding and 
effective utilization of the existing and expected control programs 
under the CAA's mandatory good neighbor provision embodied in section 
110(a)(2)(D)(i)(I) is a more effective means of addressing regional 
ozone pollution transport for the areas within the OTR that must attain 
the NAAQS than expanding the OTR as requested. Furthermore, the EPA 
believes that reliance on these other CAA authorities is a more 
appropriate use of the agency's limited resources. In addition, in 
light of comments asking the agency to look more closely at the 
technical merits of the petition, the EPA has reassessed the technical 
information submitted in support of the petition, both by petitioners 
and commenters on the proposed denial, and finds there to be sufficient 
analytical gaps to justify this denial action. Accordingly, the EPA 
denies the CAA section 176A petition filed by the nine petitioning 
states.

III. Background and Legal Authority

A. Ozone and Public Health

    Ground-level ozone is not emitted directly into the air, but is a 
secondary air pollutant created by chemical reactions between oxides of 
nitrogen (NO<INF>X</INF>) and volatile organic compounds (VOCs) in the 
presence of sunlight. For a discussion of ozone-formation chemistry, 
interstate transport issues, and health effects, see 82 FR 6511.
    On March 12, 2008, the EPA promulgated a revision to the NAAQS, 
lowering both the primary and secondary standards to 75 parts per 
billion (ppb).\2\ On October 1, 2015, the EPA strengthened the ground-
level ozone NAAQS, based on extensive scientific evidence about ozone's 
effects on public health and welfare.\3\ As stated at proposal, this 
action does not address any CAA requirements with respect to the 2015 
ozone NAAQS.
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    \2\ See National Ambient Air Quality Standards for Ozone, Final 
Rule, 73 FR 16436 (March 27, 2008).
    \3\ See National Ambient Air Quality Standards for Ozone, Final 
Rule, 80 FR 65292 (October 26, 2015).
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B. Sections 176A and 184 of the CAA and the OTR Process

    Subpart 1 of title I of the CAA includes provisions governing 
general plan requirements for designated nonattainment areas. This 
subpart includes provisions providing for the development of transport 
regions to address the interstate transport of pollutants that 
contribute to NAAQS violations. In particular, section 176A(a) of the 
CAA provides that, on the Administrator's own motion or by a petition 
from the governor of any state, whenever the Administrator has reason 
to believe that the interstate transport of air pollutants from one or 
more states contributes significantly to a violation of the NAAQS in 
one or more other states, the Administrator may establish, by rule, a 
transport region for such pollutant that includes such states. The 
provision further provides that the Administrator may add any state, or 
portion of a state, to any transport region whenever the Administrator 
has reason to believe that the interstate transport of air pollutants 
from such state significantly contributes to a violation of the 
standard in the transport region.
    Section 176A(b) of the CAA provides that when the Administrator 
establishes a transport region, the Administrator shall establish an 
associated transport commission, comprised of (at a minimum) the 
following: Governor or designee of each state, the EPA Administrator or 
designee, the Regional EPA Administrator and an air pollution control 
official appointed by the governor of each state. The purpose of the 
transport commission is to assess the degree of interstate pollution 
transport throughout the transport region and assess control strategies 
to mitigate the interstate pollution transport.
    Subpart 2 of title I of the CAA includes provisions governing 
additional plan requirements for designated ozone nonattainment areas, 
including specific provisions focused on the interstate transport of 
ozone. In particular, subpart 2 includes section

[[Page 51240]]

184(a), which established a single transport region for ozone--the 
OTR--comprised of the states of Connecticut, Delaware, Maine, Maryland, 
Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode 
Island, Vermont and the Consolidated Metropolitan Statistical Area that 
includes the District of Columbia and certain parts of northern 
Virginia.
    Section 184(b) of the CAA established certain control requirements 
that each state in the OTR is required to implement within the state 
and which require certain controls on sources of NO<INF>X</INF> and VOC 
statewide. Section 184(b)(1)(A) of the CAA requires OTR states to 
include in their state implementation plans (SIPs) enhanced vehicle 
inspection and maintenance (I/M) programs.\4\ Section 184(b)(2) of the 
CAA requires OTR-state SIPs to subject major sources of VOC in ozone 
transport regions to the same requirements that apply to major sources 
in designated ozone nonattainment areas classified as moderate, 
regardless of whether the source is located in a nonattainment area. 
Thus, the state must adopt rules to apply the nonattainment new source 
review (NNSR) (pursuant to CAA section 173) and reasonably available 
control technology (RACT) (pursuant to section 182(b)(2)) provisions 
for major VOC sources statewide. Section 184(b)(2) of the CAA further 
provides that, for purposes of implementing these requirements, a major 
stationary source shall be defined as one that emits or has the 
potential to emit at least 50 tons per year of VOCs. Under CAA section 
184(b)(2), states must also implement Stage II vapor recovery programs, 
incremental to Onboard Refueling Vapor Recovery achievements, or 
measures that achieve comparable emissions reductions, for both 
attainment and nonattainment areas.\5\
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    \4\ Enhanced vehicle I/M programs are required in metropolitan 
statistical areas in the OTR with a 1990 Census population of 
100,000 or more regardless of ozone attainment status.
    \5\ See May 16, 2012, Air Quality: Widespread Use for Onboard 
Refueling Vapor Recovery and Stage II Waiver, 72 FR 28772 (May 16, 
2012).
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    Section 182(f) requires states to apply the same requirements to 
major stationary sources of NO<INF>X</INF> as are applied to major 
stationary sources of VOC under subpart 2. Thus, the same NNSR and RACT 
requirements that apply to major stationary sources of VOC in the OTR 
also apply to major stationary sources of NO<INF>X</INF>.\6\ While 
NO<INF>X</INF> emissions are necessary for the formation of ozone in 
the lower atmosphere, a local decrease in NO<INF>X</INF> emissions can, 
in some cases, increase local ozone concentrations, creating potential 
``NO<INF>X</INF> disbenefits.'' Accordingly, CAA section 182(f) may be 
exempt from certain requirements of the EPA's motor vehicle I/M 
regulations and from certain federal requirements of general and 
transportation conformity.\7\
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    \6\ See Nitrogen Oxides Supplement to the General Preamble, 57 
FR 55622 (November 25, 1992).
    \7\ As stated in the EPA's I/M rule (November 5, 1992; 57 FR 
52950) and conformity rules (November 14, 1995; 60 FR 57179 for 
transportation rules and November 30, 1993; 58 FR 63214 for general 
rules), certain NO<INF>X</INF> requirements in those rules do not 
apply where the EPA grants an areawide exemption under CAA section 
182(f).
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    Additionally, under section 184(c) of the CAA, the OTC may, based 
on a majority vote of the governors on the Commission, recommend 
additional control measures not specified in the statute to be applied 
within all or part of the OTR if necessary to bring any areas in the 
OTR into attainment by the applicable attainment dates. If the EPA 
approves such a recommendation, under CAA section 184(c)(5), then the 
Administrator must declare each state's implementation plan inadequate 
to meet the requirements of CAA section 110(a)(2)(D) and must order the 
states to include the approved control measures in their revised plans 
pursuant to CAA section 110(k)(5). If a CAA section 110(k)(5) finding 
is issued, then states have 1 year to revise their SIPs to include the 
approved measures.
    States included in the OTR by virtue of CAA section 184(b)(1) were 
required to submit SIPs to the EPA addressing these requirements within 
2 years of the 1990 CAA amendments, or by November 15, 1992. Section 
184(b)(1) of the CAA further provides that if states are later added to 
the OTR pursuant to CAA section 176A(a)(1), such states must submit 
SIPs addressing these requirements within 9 months after inclusion in 
the OTR. When the ozone NAAQS are updated, as occurred in 2008 and 
2015, the OTR states must submit RACT SIPs on the same timeframe as 
areas designated as nonattainment--classified as Moderate or above. For 
the 2008 ozone NAAQS, OTR RACT SIPs were due no later than 2 years 
following the effective date of area designations (i.e., the SIPs were 
due on July 20, 2014). \8\
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    \8\ 40 CFR 51.1116. See also 2008 Ozone NAAQS Implementation 
Rule, 80 FR 12264, 12282 (March 6, 2015).
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C. Legal Standard for This Action

    Section 176A(a)(1) of the CAA states that the Administrator may add 
a state to a transport region if the Administrator has reason to 
believe that emissions from the state significantly contribute to a 
violation of the NAAQS within the transport region. For the reasons 
discussed in this section, the use of the discretionary term ``may'' in 
CAA section 176A(a) means that the Administrator should exercise 
reasonable discretion in implementing the requirements of the CAA with 
respect to interstate pollution transport when determining whether or 
not to approve or deny a CAA section 176A petition.
    The Administrator's discretion pursuant to CAA section 176A(a) has 
been affirmed by the U.S. Court of Appeals for the District of Columbia 
Circuit (D.C. Circuit). In Michigan v. EPA, plaintiffs challenged 
whether the EPA may exercise its authority pursuant to CAA sections 
110(k)(5) and 110(a)(2)(D) of the statute to address interstate 
transport without first forming a transport commission pursuant to CAA 
section 176A(b). 213 F.3d 663, 672 (2000). The D.C. Circuit held that 
the agency is only required to establish a transport commission ``if 
the agency exercises its discretion to create a transport region 
pursuant to section 176A(a).'' Id. The court explained that ``EPA can 
address interstate transport apart from convening a 176A/184 transport 
commission as subsection (a) provides that EPA `may' establish a 
transport region . . . .'' Id. Thus, the court held that the discretion 
to create a transport region rests with the Administrator. So, too, 
does the discretion to add states to or remove states from a transport 
commission.
    Consistent with the Supreme Court's opinion in Massachusetts v. 
EPA, 549 U.S. 497 (2007), the D.C. Circuit has held that agencies have 
the discretion to determine how to best allocate resources in order to 
prioritize regulatory actions in a way that best achieves the 
objectives of the authorizing statute. In Defenders of Wildlife v. 
Gutierrez, the court rejected a challenge to the National Marine 
Fisheries Service's (NMFS) denial of a petition for emergency 
rulemaking to impose speed restrictions to protect the right whale from 
boating traffic pursuant to section 553(e) of the Endangered Species 
Act, which requires agencies to ``give an interested person the right 
to petition for the issuance, amendment, or repeal of a rule.'' 532 
F.3d 913 (DC Cir 2008). The NMFS denied the petition on the grounds 
that imposing such restrictions would divert resources from, and delay 
development of, a more comprehensive strategy for protecting the whale 
population. Id.at 916. The court determined that NMFS's explanation for 
the denial was a reasonable decision to focus its resources on a 
comprehensive strategy, which in light of the information before the 
NMFS at the

[[Page 51241]]

time, was reasoned and adequately supported by the record. Id. 
Similarly, in WildEarth Guardians v. EPA, the court reviewed the EPA's 
denial of a petition to list coal mines for regulation under CAA 
section 111(b)(1)(A). 751 F.3d 651 (D.C. Cir. 2014). Section 
111(b)(1)(A) of the CAA provides that, as a means of developing 
standards of performance for new stationary sources, the EPA shall, by 
a date certain publish ``(and from time to time thereafter shall 
revise) a list of categories of stationary sources.'' (emphasis added) 
The provision provides that the Administrator ``shall include a 
category of sources in such list if in his judgment it causes, or 
contributes significantly to, air pollution which may reasonably be 
anticipated to endanger public health and welfare.'' The EPA denied the 
petition, explaining that it must prioritize its actions in light of 
limited resources and ongoing budget uncertainties, and that denial of 
the petition was not a determination as to whether coal mines should be 
regulated as a source of air pollutants. 751 F.3d at 650. The EPA also 
noted as part of its denial that it might in the future initiate a 
rulemaking to do so. The D.C. Circuit held that the language in CAA 
section 111(b)(1)(A)--``from time to time'' and ``in his judgment''--
means that the Administrator may exercise reasonable discretion in 
determining when to add new sources to the list of source categories, 
and that such language afforded agency officials discretion to 
prioritize sources that are the most significant threats to public 
health to ensure effective administration of the agency's regulatory 
agenda. Id. at 651. In each of these cases previously discussed, the 
acting agency has been entitled to broad discretion to act on a pending 
petition so long as the agency provided a reasoned explanation. 
Notably, as each of these decisions focused on the case-specific 
circumstances relied upon by the acting agency to deny the pending 
petition, the courts did not speak to whether the agency might reach a 
different conclusion under different circumstances. Like the statutory 
provisions evaluated by the courts in these cases, the term ``may'' in 
CAA section 176A(a) means that the Administrator is permitted to 
exercise reasonable discretion in determining when and whether to add 
new states to a transport region. While the Administrator must 
adequately explain the facts and policy concerns he relied on in acting 
on the petition and conform such reasons with the authorizing statute, 
review of such a decision is highly deferential. Thus, the agency is 
entitled to broad discretion when determining whether to grant or deny 
such a petition.

D. The CAA Section 176A Petition and Related Correspondence

    On December 9, 2013, the states of Connecticut, Delaware, Maryland, 
Massachusetts, New Hampshire, New York, Rhode Island and Vermont 
submitted a petition under CAA section 176A requesting that the EPA add 
to the OTR the states of Illinois, Indiana, Kentucky, Michigan, North 
Carolina, Ohio, Tennessee, West Virginia and the portion of Virginia 
currently not within the OTR. On December 17, 2013, the petition was 
amended to add the state of Pennsylvania as a state petitioner.
    The petitioners submitted a technical analysis with their petition, 
which the petitioners contended demonstrates that the nine named upwind 
states significantly contribute to violations of the 2008 ozone NAAQS 
in the OTR. The petitioners acknowledged and included data used to 
support rulemakings promulgated by the EPA that addressed interstate 
transport with respect to both the 2008 ozone NAAQS, and prior ozone 
NAAQS, in order to further support their request to expand the OTR. 
Moreover, the petitioners identified those areas that are designated 
nonattainment with respect to the 2008 ozone NAAQS within and outside 
the OTR and conducted a linear extrapolation with preliminary 2012 
design values to the year 2015 to predict that certain areas outside 
the OTR will continue to be in nonattainment or will have difficulty 
maintaining attainment of the NAAQS after the EPA's 2008 ozone NAAQS 
final area designations in 2012. In addition, the petitioners included 
supplemental modeling, which was used to project ozone design values to 
the years 2018 and 2020. The petitioners' 2018 modeling purported to 
show that, with ``on-the-way'' OTR measures, areas within the OTR and 
within non-OTR states would continue to have problems attaining the 
2008 ozone NAAQS. Lastly, their 2020 modeling purported to show that 
even with a 58 percent NO<INF>X</INF> and 3 percent VOC anthropogenic 
emissions reduction over the eastern U.S., there would be one area in 
New Jersey that would continue to have trouble maintaining the NAAQS.
    The petitioners further noted that the OTR states have adopted and 
implemented numerous and increasingly stringent controls on sources of 
VOCs and NO<INF>X</INF> that may not currently be required for similar 
sources in the upwind states. Petitioners contended that expansion of 
the OTR to include these upwind states will help the petitioning states 
attain the 2008 ozone NAAQS. The petitioners included two case studies 
that identify the types of measures adopted throughout the current OTR, 
including mobile source and stationary source control measures that 
have been enacted to reduce emissions of NO<INF>X</INF> and VOCs. The 
petitioners contended that the expansion of the OTR is warranted so 
that the downwind states and the upwind states can work together to 
address interstate ozone transport for the 2008 ozone NAAQS. Also, the 
petitioners asserted that without immediate expansion of the OTR, 
attainment of the 2008 ozone NAAQS in many areas in the U.S. will 
remain ``elusive.''
    At the time the petition was submitted, the EPA's then most recent 
effort to address the interstate transport of ozone pollution (i.e., 
CSAPR) was subject to litigation in the D.C. Circuit. As discussed in 
more detail later in this notice, the EPA issued CSAPR pursuant to 
section 110(a)(2)(D)(i)(I) of the CAA in order to address interstate 
transport with respect to the 1997 ozone NAAQS, as well as the 1997 and 
2006 fine particulate matter (PM<INF>2.5</INF>) NAAQS. 76 FR 48208 
(August 8, 2011). On August 21, 2012, the D.C. Circuit issued a 
decision in EME Homer City Generation, L.P. v. EPA, 696 F.3d 7 (D.C. 
Cir. 2012), vacating CSAPR based on several holdings that would have 
limited the EPA's authority pursuant to section 110(a)(2)(D)(i)(I). The 
petitioners submitted the section 176A petition in December 2013. 
Thereafter, on April 29, 2014, the Supreme Court issued a decision 
reversing the D.C. Circuit's decision and upholding the EPA's 
interpretation of its authority pursuant to CAA section 110. EPA v. EME 
Homer City Generation, L.P., 134 S. Ct. 1584 (2014).
    Subsequent to the petition being filed, states and other 
stakeholders submitted additional information to the agency in support 
of, or, in opposition to, the petition. In the January 19, 2017, the 
proposed denial, the EPA summarized the correspondence it had received. 
These documents can be found in the docket for this action.

IV. The EPA's Decision on the CAA Section 176A Petition

    At proposal, the EPA explained its proposed basis for the denial of 
the CAA section 176A petition. The EPA described other authorities 
provided by the CAA for addressing the interstate transport of ozone 
pollution and the flexibilities those provisions provide.

[[Page 51242]]

The EPA noted its historical use of these authorities to address the 
interstate transport of ozone pollution and the advantages of those 
rulemakings for addressing current ozone nonattainment problems for the 
2008 ozone NAAQS. The EPA explained that it preferred to use these 
authorities to address the remaining interstate transport problems with 
respect to the 2008 ozone NAAQS because it believes these authorities 
allow the agency to develop a tailored remedy that is most effective 
for addressing any remaining air quality problems. Additionally, the 
EPA described other measures that have achieved, and will continue to 
achieve, significant reductions in emissions of NO<INF>X</INF> and VOCs 
resulting in lower levels of transported ozone pollution that impact 
attainment and maintenance of the 2008 ozone NAAQS. This section 
summarizes the major points setting forth the EPA's reasons for denial 
of the petition. The EPA's basis for denying the petition has not 
fundamentally changed from the proposal; we continue to believe that 
other CAA mechanisms are more flexible and effective than expanding the 
OTR (pursuant to section 176A) for addressing current interstate ozone 
transport issues with respect to the 2008 ozone NAAQS. In Section V of 
this notice, and in the RTC document included in the docket for this 
action, the agency provides additional supporting rationale for its 
conclusion in light of the public comments.

A. The CAA Good Neighbor Provisions

    The CAA provision that states and the EPA have primarily relied on 
to address interstate pollution transport is section 
110(a)(2)(D)(i)(I), often referred to as the ``good neighbor'' 
provision, which requires states to prohibit certain emissions from in-
state sources impacting the air quality in other states. Specifically, 
in keeping with the CAA's structure of shared state and federal 
regulatory responsibility, CAA section 110(a)(2)(D)(i)(I) requires all 
states, within 3 years of promulgation of a new or revised NAAQS, to 
submit SIPs that contain adequate provisions prohibiting any source or 
other type of emissions activity within the state from emitting any air 
pollutant in amounts which will contribute significantly to 
nonattainment in, or interfere with maintenance by, any other state 
with respect to any NAAQS. Thus, each state is required to submit a SIP 
that demonstrates the state is adequately controlling sources of 
emissions that would impact downwind states' air quality relative to 
the NAAQS in violation of the good neighbor provision.
    Once a state submits a good neighbor SIP, the EPA must evaluate the 
SIP to determine whether it meets the statutory criteria of the good 
neighbor provision, and then approve or disapprove, in whole or in 
part, the state's submission in accordance with CAA section 110(k). In 
the event that a state does not submit a required SIP addressing the 
good neighbor provision, the EPA is required under the CAA to issue a 
``finding of failure to submit'' that a state has failed to make the 
required SIP submission. If the EPA disapproves a state's SIP 
submission or if the EPA finds that a state has failed to submit a 
required SIP, then the action triggers the EPA's obligations under 
section 110(c) of the CAA, to promulgate a federal implementation plan 
(FIP) within 2 years, unless the state corrects the deficiency, and the 
EPA approves the plan or plan revision before the EPA promulgates a 
FIP. Thus, in the event that a state does not address the good neighbor 
provision requirements in a SIP submission, the statute provides that 
the EPA must address the requirements in the state's stead.
    Section 110(k)(5) of the CAA also provides a means for the EPA to 
require states to revise previously approved SIPs, including good 
neighbor SIPs, if the EPA determines that an approved SIP is 
substantially inadequate to attain or maintain the NAAQS, to adequately 
mitigate interstate pollutant transport, or to otherwise comply with 
requirements of the CAA. The EPA can use its authority under CAA 
section 110(k)(5) to call for revision of the SIP by the state to 
correct the inadequacies under CAA section 110(a)(2)(D)(i)(I), and if 
the state fails to make the required submission, the EPA can promulgate 
a FIP under CAA section 110(c) to address the inadequacies.
    Finally, section 126 of the CAA provides states with an additional 
opportunity to bring to the EPA's attention specific instances where a 
source or a group of sources in a specific state may be emitting in 
excess of what the good neighbor provision would allow. Section 126(b) 
of the CAA provides that any state or political subdivision may 
petition the Administrator of the EPA to find that any major source or 
group of stationary sources in upwind states emits or would emit any 
air pollutant in violation of the prohibition of CAA section 
110(a)(2)(D)(i).\9\ Petitions submitted pursuant to this section are 
referred to as CAA section 126 petitions. Section 126(c) of the CAA 
explains the impact of such a finding and establishes the conditions 
under which continued operation of a source subject to such a finding 
may be permitted. Specifically, CAA section 126(c) provides that it 
would be a violation of section 126 of the Act and of the applicable 
SIP: (1) For any major proposed new or modified source subject to a CAA 
section 126 finding to be constructed or operate in violation of the 
good neighbor prohibition of CAA section 110(a)(2)(D)(i); or (2) for 
any major existing source for which such a finding has been made to 
operate more than 3 months after the date of the finding. The statute, 
however, also gives the Administrator discretion to permit the 
continued operation of a source beyond 3 months if the source complies 
with emission limitations and compliance schedules provided by the EPA 
to bring about compliance with the requirements contained in CAA 
sections 110(a)(2)(D)(i) and 126 as expeditiously as practicable but no 
later than 3 years from the date of the finding. Where the EPA provides 
such limitations and compliance schedules, CAA section 110(a)(2)(D)(ii) 
further requires that good neighbor SIPs ensure compliance with these 
limitations and compliance schedules.\10\
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    \9\ The text of CAA section 126 codified in the U.S. Code cross 
references CAA section 110(a)(2)(D)(ii) instead of CAA section 
110(a)(2)(D)(i). The courts have confirmed that this is a 
scrivener's error and the correct cross reference is to CAA section 
110(a)(2)(D)(i), See Appalachian Power Co. v. EPA, 249 F.3d 1032, 
1040-44 (D.C. Cir. 2001).
    \10\ The EPA has received, but not yet acted upon, several CAA 
section 126 petitions from a number of the petitioning states 
regarding the contribution of specific electric generating units 
(EGUs) to interstate ozone transport with respect to the 2008 and 
2015 ozone NAAQS. Petitions have been submitted by Connecticut, 
Delaware, and Maryland. The list of EGUs identified in one or more 
of these petitions includes EGUs operating in Indiana, Kentucky, 
Ohio, Pennsylvania and West Virginia.
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    The flexibility provided by these statutory provisions is different 
from that provided by the requirements imposed upon states in the OTR. 
Generally, states in the OTR must impose a uniform set of requirements 
on sources within each state that meet the minimum requirements imposed 
by the statute. The good neighbor provision, by contrast, provides both 
the states and the EPA with the flexibility to develop a remedy that is 
tailored to a particular air quality problem, including the flexibility 
to tailor the remedy to address the particular precursor pollutants and 
sources that would most effectively address the particular downwind air 
quality problem. As described in the next section (Section IV.B. of 
this notice) and in the proposal, the EPA has previously promulgated 
four interstate transport rulemakings

[[Page 51243]]

pursuant to these authorities in order to quantify the specific 
emission reductions required in certain eastern states to comply with 
the requirements of CAA section 110(a)(2)(D)(i)(I) for downwind 
nonattainment and maintenance concerns with respect to the NAAQS for 
ozone and PM<INF>2.5</INF>.

B. The EPA's Interstate Transport Rulemakings Under the Good Neighbor 
Provision

    To address the regional transport of ozone pursuant to the CAA's 
good neighbor provision under section 110(a)(2)(D)(i)(I), the EPA has 
promulgated four regional interstate transport rules focusing on the 
reduction of NO<INF>X</INF> emissions, as the primary meaningful 
precursor to address regional ozone transport across state boundaries, 
from certain sources located in states in the eastern half of the U.S. 
<SUP>11 12</SUP> The four interstate transport rulemakings are the: 
NO<INF>X</INF> SIP Call,\13\ Clean Air Interstate Rule (CAIR),\14\ 
CSAPR \15\ and the CSAPR Update.\16\
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    \11\ For purposes of these rulemakings, the western U.S. (or the 
West) consists of the 11 western contiguous states of Arizona, 
California, Colorado, Idaho, Montana, Nevada, New Mexico, Oregon, 
Utah, Washington and Wyoming.
    \12\ Two of these rulemakings also addressed the reduction of 
annual NO<INF>X</INF> and sulfur dioxide (SO<INF>2</INF>) emissions 
for the purposes of addressing the interstate transport of 
particulate matter pollution pursuant to the good neighbor 
provision.
    \13\ 62 FR 57356 (October 27, 1998).
    \14\ 70 FR 25162 (May 12, 2005).
    \15\ 76 FR 48208 (August 8, 2011).
    \16\ 81 FR 74504 (October 26, 2016).
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    The EPA summarized the history and key provisions of each of these 
rulemakings in the January 19, 2017, proposed denial. See 82 FR 6516, 
6517, 6518 and 6519. The CSAPR Update, which directly relates to the 
2008 ozone NAAQS, is discussed in the next section. In each of these 
rulemakings, the EPA identified those sources and pollutants that, 
based on the available information at that time, were most effective in 
addressing the particular air quality problem identified by the EPA's 
analysis. This allowed the EPA to craft tailored remedies that provided 
efficient and effective means of addressing the particular air quality 
problem at issue. In each of the regional transport rules, the EPA's 
analyses demonstrated that NO<INF>X</INF> is the ozone precursor that 
is most effective to reduce when addressing regional transport of ozone 
in the eastern U.S. The EPA has also focused each rule on those sources 
that can most cost-effectively reduce emissions of NO<INF>X,</INF> such 
as electric generating units (EGUs) and, in one rule, certain large 
non-EGUs. These rulemakings demonstrate that the EPA has used and is 
continuing to use its authority under CAA section 110(a)(2)(D)(i)(I) to 
focus on those sources and precursors that most effectively address the 
particular interstate ozone transport problems in the eastern U.S.
The CSAPR Update To Address the 2008 Ozone NAAQS
    On October 26, 2016, the EPA published an update to CSAPR that 
addresses the good neighbor provision with respect to the 2008 ozone 
NAAQS. 81 FR 74504 (CSAPR Update). The CSAPR Update requires sources in 
22 states to reduce ozone season NO<INF>X</INF> emissions that 
significantly contribute to nonattainment or interfere with maintenance 
of the 2008 ozone NAAQS in other states. The EPA found that for each 
state included in the CSAPR Update, the state had failed to submit or 
the EPA had disapproved a complete SIP revision addressing the good 
neighbor provision for the 2008 ozone NAAQS. The EPA promulgated FIPs 
for each of the 22 states covered by the CSAPR Update. To accomplish 
implementation aligned with the applicable attainment deadline for the 
2008 ozone NAAQS, the FIPs require affected EGUs to participate in the 
regional allowance trading program to achieve emission reductions 
beginning with the 2017 ozone season (i.e., May-September 2017).
    The CSAPR Update analysis found that emissions from eight of the 
nine states named in the CAA section 176A petition to be added to the 
OTR, in addition to a number of other states, were linked to downwind 
projected air quality problems, referred to as nonattainment and/or 
maintenance receptors, in the eastern U.S. in 2017 with respect to the 
2008 ozone NAAQS. 81 FR 74506, 74538 and 74539. For one state named in 
the CAA section 176A petition, North Carolina, the EPA determined in 
the CSAPR Update that the state was not linked to any downwind air 
quality problems and, therefore, will not significantly contribute to 
nonattainment or interfere with maintenance of the 2008 ozone NAAQS in 
any other state pursuant to the good neighbor provision. 81 FR 74506, 
74537 and 74538.
    For those states linked to downwind air quality problems, the EPA 
next evaluated timely and cost-effective emissions reductions 
achievable by sources in each state in order to quantify the amount of 
emissions constituting each state's significant contribution to 
nonattainment and interference with maintenance of the standard 
pursuant to the good neighbor provision. The EPA focused its analysis 
on: (1) Emissions reductions achievable by 2017 in order to assist 
downwind states with meeting the applicable attainment deadline for the 
2008 ozone NAAQS (81 FR 74521); (2) reductions in only NO<INF>X</INF> 
emissions, consistent with past ozone transport rules (81 FR 74514); 
and (3) cost-effective NO<INF>X</INF> emissions reductions from EGUs. 
The EPA, therefore, calculated emissions budgets for each affected 
state based on the cost-effective NO<INF>X</INF> emissions reductions 
achievable from EGUs for the 2017 ozone season.
    The EPA concluded that the emissions reductions achieved by 
implementation of the budgets constitute a portion of most affected 
states' significant contribution to nonattainment or interference with 
maintenance of the 2008 ozone NAAQS at these downwind receptors. 81 FR 
74508, 74522.\17\ For most states, the EPA could not determine that it 
had fully addressed emissions reduction obligations pursuant to the 
good neighbor provision because certain states were projected to remain 
linked to downwind air quality problems in 2017 even after 
implementation of the quantified emissions reductions and because the 
EPA did not quantify further NO<INF>X</INF> reduction potential from 
EGUs beyond 2017 or any NO<INF>X</INF> reduction potential from non-
EGUs. In order to determine the level of NO<INF>X</INF> control 
stringency necessary to quantify those emissions reductions that fully 
constitute each state's significant contribution to downwind 
nonattainment or interference with maintenance, the EPA explained in 
promulgating the final CSAPR Update that it would likely need to 
evaluate further emission reductions from EGU and non-EGU control 
strategies that could be implemented on longer timeframes. The CSAPR 
Update represented a significant first step by the EPA to quantify 
states' emission reduction obligations under the good neighbor 
provision for the 2008 ozone NAAQS. Even though the CSAPR Update did 
not fully address most upwind states' emission reduction obligation 
pursuant to the good neighbor provision, the implementation of the 
emissions budgets quantified in that rule are helping to address or 
resolve projected air quality problems in the eastern U.S., including 
the

[[Page 51244]]

designated nonattainment areas within the OTR.
---------------------------------------------------------------------------

    \17\ For one state named in the CAA section 176A petition, 
Tennessee, the EPA determined that the emissions reductions required 
by the CSAPR Update would fully address the state's significant 
contribution to nonattainment and interference with maintenance of 
the 2008 ozone NAAQS in other states.
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    The EPA is actively continuing the work with states necessary to 
address any remaining obligations under the good neighbor provision 
with respect to the 2008 ozone NAAQS. The EPA is performing updated 
ozone transport air quality modeling and analysis to characterize 
interstate transport beyond 2017.\18\ The results of this analysis will 
provide updated information on any remaining ozone problems and 
linkages between states.
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    \18\ In January 2017, the EPA also shared preliminary 2023 
interstate transport data and solicited input from states on the 
EPA's interstate transport assessment for the 2015 ozone NAAQS. 82 
FR 1733 (January 6, 2017). The EPA included input and feedback 
received from the public submitted in response to the Notice of Data 
Availability in conducting the updated modeling.
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C. Additional Rules That Reduce NO<INF>X</INF> and VOC Emissions

    In addition to the significant efforts to implement the good 
neighbor provision for the 2008 and prior ozone NAAQS, there are also 
numerous federal and state emission reduction rules that have already 
been adopted, which have resulted or will result in the further 
reduction of ozone precursor emissions, including emissions from states 
named in the CAA section 176A petition and petitioning states. Many of 
these rules directly require sources to achieve reductions of 
NO<INF>X,</INF> VOC, or both, and others require actions that will 
indirectly result in such reductions. As a result of these emissions 
reductions, the interstate transport of ozone has been and will 
continue to be reduced over time.
    The majority of man-made NO<INF>X</INF> and VOC emissions that 
contribute to ozone formation in the U.S. comes from the following 
sectors: On-road and nonroad mobile sources, industrial processes 
(including solvents), consumer and commercial products, and the 
electric power industry. In 2014, the most recent year for which the 
National Emissions Inventory (NEI) is available, the largest 
contributors of annual NO<INF>X</INF> emissions nationally are on-road 
and nonroad mobile sources (accounted for about 56 percent) and the 
electric power industry (EGUs; accounted for about 13 percent). With 
respect to VOCs, the largest contributors of annual man-made emissions 
nationally are industrial processes (including solvents; accounted for 
about 48 percent) and mobile sources (accounted for about 27 
percent).<SUP>19 20</SUP>
---------------------------------------------------------------------------

    \19\ The VOC percentages are for anthropogenic VOCs only. 
Emissions from natural sources, such as trees, also comprise around 
70 percent of total VOC emissions nationally, with a higher 
proportion occurring during the ozone season and in areas with more 
vegetative cover.
    \20\ For more information, see the ``2014 NEI Summary 
Spreadsheet'' in the docket.
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    The EPA establishes emissions standards under various CAA 
authorities for numerous classes of automobile, truck, bus, motorcycle, 
earth mover, aircraft, and locomotive engines, and for the fuels used 
to power these engines. The pollutant reduction benefits from new 
engine standards increase each year as older and more-polluting 
vehicles and engines are replaced with newer, cleaner models. The 
benefits from fuel programs generally begin as soon as a new fuel is 
available. Further, the ongoing emission reductions from mobile source 
federal programs, such as those listed previously, will provide for 
substantial emissions reductions well into the future, and will 
complement state and local efforts to attain the 2008 ozone NAAQS.
    There are several existing national rules that continue to achieve 
emission reductions through 2025 and beyond with more protective 
emission standards for on-road vehicles that include: Control of Air 
Pollution from Motor Vehicles: Tier 3 Motor Vehicle Emission and Fuel 
Standards; \21\ Control of Air Pollution from New Motor Vehicles: Tier 
2 Motor Vehicle Emissions Standards and Gasoline Sulfur Control 
Requirements; \22\ Control of Air Pollution from New Motor Vehicles: 
Heavy-Duty Engine and Vehicle Standards and Highway Diesel Fuel Sulfur 
Control Requirements; \23\ Model Year 2017 and Later Light-Duty Vehicle 
Greenhouse Gas Emissions and Corporate Average Fuel Economy Standards; 
\24\ Model Year 2012-2016 Light-Duty Vehicle Greenhouse Gas Emission 
Standards and Corporate Average Fuel Economy Standards; \25\ Greenhouse 
Gas Emissions and Fuel Efficiency Standards for Medium- and Heavy-Duty 
Engines and Vehicles--Phase 2; \26\ Phase 1 Greenhouse Gas Emissions 
Standards and Fuel Efficiency Standards for Medium- and Heavy-Duty 
Engines and Vehicles \27\ and Control of Hazardous Air Pollutants from 
Mobile Sources.\28\
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    \21\ 81 FR 23414 (April 28, 2014).
    \22\ 65 FR 6698 (February 10, 2000).
    \23\ 66 FR 5002 (January 18, 2001).
    \24\ 77 FR 62624 (October 15, 2012).
    \25\ 75 FR 25324 (May 7, 2010).
    \26\ 81 FR 73478 (October 25, 2016).
    \27\ 76 FR 57106 (September 15, 2011).
    \28\ 72 FR 8428 (February 26, 2007).
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    Similarly, already adopted regulations for non-road engines and 
equipment that will achieve further reductions include: Control of 
Emissions of Air Pollution from Nonroad Diesel Engines and Fuel; \29\ 
Republication for Control of Emissions of Air Pollution from Locomotive 
Engines and Marine Compression-Ignition Engines Less Than 30 Liters per 
Cylinder; \30\ Control of Emissions from New Marine Compression-
Ignition Engines at or Above 30 Liters per Cylinder; \31\ the 
International Maritime Organization's Emission Control Area to Reduce 
Emissions from Ships in the U.S. Caribbean; Control of Air Pollution 
From Aircraft and Aircraft Engines; \32\ Emission Standards and Test 
Procedures; Control of Emissions from Nonroad Large Spark-Ignition 
Engines, and Recreational Engines (Marine and Land-Based); \33\ and 
Control of Emissions from Nonroad Spark-Ignition Engines and 
Equipment.\34\
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    \29\ 69 FR 38958 (June 29, 2004).
    \30\ 73 FR 37096 (June 30, 2008).
    \31\ 75 FR 22896 (April 30, 2010).
    \32\ 77 FR 36342 (June 18, 2012).
    \33\ 67 FR 68242 (November 8, 2002).
    \34\ 73 FR 59034 (October 8, 2008).
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    As a result of the rules and programs listed in this section, 
various other state programs and efforts, and wider economic trends, 
ozone levels across the nation and the OTR have been declining--e.g., 
down by more than 30 percent since 1980 nationwide. Ozone levels across 
the nation are expected to further decline over the next several years 
due to emissions controls already in place. The EPA's emissions 
projections in support of the 2015 ozone NAAQS modeling show declining 
emissions of NO<INF>X</INF> and VOCs between 2017 and 2025. In the 
states comprising the OTR plus the nine upwind states named in the CAA 
section 176A petition, total NO<INF>X</INF> emissions over the upcoming 
7-year period (2017-2025) are expected to decline by almost 20 percent 
on average and VOC emissions are expected to decline by more than 10 
percent on average over the same period.\35\
---------------------------------------------------------------------------

    \35\ For more information, see the ``2011, 2017 and 2025 NEI 
Summary Spreadsheet'' in the docket.
---------------------------------------------------------------------------

D. Summary of Rationale for the Decision on the CAA Section 176A 
Petition

    As proposed, the EPA is finalizing its denial of the CAA section 
176A petition because we believe that the statute provides other, more 
effective means of addressing the impact of interstate ozone transport 
on any remaining air quality problems within the OTR with respect to 
the 2008 ozone NAAQS. Continuing those existing efforts is a better use 
of the agency's limited resources. As described at proposal, the 
statute provides several provisions that

[[Page 51245]]

allow states and the EPA to address interstate ozone transport with a 
remedy better tailored to the nature of the particular air quality 
problem, focusing on those precursor emissions and sources that most 
directly impact downwind ozone nonattainment and maintenance problems 
and which can be controlled most cost effectively. The EPA and states 
are actively using these provisions, and numerous federal and state 
measures have reduced, and will continue to reduce, the VOC and 
NO<INF>X</INF> emissions that contribute to ozone formation and the 
interstate transport of ozone pollution. The EPA does not believe that 
it is necessary to add more states to the OTR at this time in order to 
effectively address transported pollution in the OTR relative to the 
2008 ozone NAAQS.
    While the CAA contains several provisions, both mandatory and 
discretionary, to address interstate pollution transport, the EPA's 
decision whether to grant or deny a CAA section 176A petition to expand 
an existing transport region is discretionary. Section 176A of the CAA 
states that the Administrator may add any state or portion of a state 
to an existing transport region whenever the Administrator has reason 
to believe that the interstate transport of air pollutants from such 
state significantly contributes to a violation of the standard in the 
transport region. The EPA does not dispute that certain named upwind 
states in the petition might impact air quality in one or more downwind 
states that are measuring violations of the 2008 ozone NAAQS. However, 
the EPA believes that states and the EPA can effectively address the 
upwind states' impacts on downwind ozone air quality through the good 
neighbor provision. The EPA has already taken steps to address 
interstate transport with respect to the 2008 ozone NAAQS through the 
promulgation of the CSAPR Update, which reduces emissions starting with 
the 2017 ozone season. The EPA used the authority of CAA sections 
110(a)(2)(D)(i)(I) and 110(c) to tailor a remedy focused on the 
precursor pollutant most likely to improve ozone levels (currently 
NO<INF>X</INF>) in downwind states and those sources that can most 
cost-effectively reduce emissions within a limited timeframe (i.e., 
EGUs). The EPA further implemented the remedy through an allowance 
trading program that achieves emission reductions while providing 
sources with the flexibility to implement the control strategies of 
their choice.
    We believe that the continued use of the authority provided by the 
good neighbor provision to address the interstate transport of ozone 
pollution plus other regulations that are already in place will permit 
the states and the EPA to achieve any additional mandatory reductions 
to address the 2008 ozone NAAQS without the need to implement the 
additional requirements that inclusion in the OTR would entail. As 
described in the proposal, this approach to address the interstate 
transport of ozone is a proven, efficient, and cost-effective means of 
addressing downwind air quality concerns that the agency has employed 
and refined over nearly two decades. However, the EPA notes that the 
addition of states to the OTR pursuant to the CAA section 176A 
authority--and the additional planning requirements that would entail--
could be given consideration as an appropriate means to address the 
interstate transport requirements of the CAA should the agency's 
approach or other circumstances change in the future.
    As described in this action, the CAA provides the agency and states 
with the authority to mitigate the specific sources that contribute to 
interstate pollution through implementation plans to satisfy the 
requirements of the good neighbor provision, CAA section 
110(a)(2)(D)(i)(I), and through the related petition process under CAA 
section 126. This authority gives the EPA and states numerous potential 
policy approaches to address interstate pollution transport of ozone, 
and the EPA has consistently and repeatedly used its authority under 
CAA section 110(a)(2)(D)(i)(I) to approve state plans for reducing 
ozone transport or to promulgate FIPs to specifically focus on the 
sources of ozone transport both within and outside the OTR. The 
NO<INF>X</INF> SIP Call, CAIR, CSAPR, CSAPR Update and numerous 
individual SIP approvals demonstrate that the EPA has a long history of 
using its CAA section 110 authority to specifically address interstate 
pollution transport in a tailored way that is specific to a NAAQS and 
set of pollution sources that are the primary contributors to 
interstate pollution transport. As described in Section IV.B of this 
notice, using the authority of the good neighbor provision has allowed 
the EPA to focus its efforts on pollution sources that are responsible 
for the largest contributions to ozone transport and that can cost-
effectively reduce emissions, and also enables the agency to focus on 
NO<INF>X</INF> as the primary driver of long range ozone transport--an 
approach the courts have found to be a reasonable means of addressing 
interstate ozone transport. Michigan v. EPA, 213 F.3d at 688 (``EPA 
reasonably concluded that long-range ozone transport can only be 
addressed adequately through NO<INF>X</INF> reductions''); see also EPA 
v. EME Homer City Generation, L.P., 134 S. Ct. at 1607 (affirming as 
``efficient and equitable'' the EPA's use of cost to apportion emission 
reduction responsibility pursuant to the good neighbor provision).
    As explained previously, adding states to an OTR under CAA section 
176A will not afford the states and EPA with the flexibility to focus 
on specific sources and ozone precursor emissions tailored to address 
the downwind state's current air quality problems and needed remedy to 
achieve attainment of the 2008 NAAQS. The statute prescribes a specific 
set of controls for a variety of sources to control emissions of both 
VOCs and NO<INF>X</INF>. CAA section 110(a)(2)(D)(i)(I), on the other 
hand, permits the EPA and the regulated community the flexibility to 
focus controls on specific sources and pollutants that most efficiently 
address the air quality problem being addressed. The EPA determined in 
the CSAPR Update that regional NO<INF>X</INF> emissions reductions are 
the most effective means for providing ozone benefits for areas in the 
eastern United States, including the OTR, currently violating the 2008 
ozone NAAQS, and that NO<INF>X</INF> reductions can be most efficiently 
achieved by focusing on those sources that can cost-effectively reduce 
emissions within a limited timeframe. Accordingly, the EPA does not 
believe that the requirements which would be imposed upon states added 
to the OTR would be the most effective means of addressing any 
remaining interstate transport concerns with respect to the 2008 ozone 
NAAQS.
    The implementation of controls within the OTR, when combined with 
the numerous federal and state emission reduction programs that have 
already been adopted that have resulted in the reduction of ozone 
precursor emissions either directly or as a co-benefit of those 
regulations, have helped to significantly reduce ozone levels. These 
programs will continue to reduce ozone precursor emissions and ozone 
concentrations both within and outside of the OTR over many years to 
come. The EPA believes the most efficient way to address any remaining 
2008 ozone NAAQS interstate transport problems is to continue to 
address any required reductions through a combination of tailored 
programs, including the implementation of the CSAPR Update, further 
development of implementation plans pursuant to section 110, 
development of local attainment plans, and, if appropriate, 
consideration of

[[Page 51246]]

additional emissions limitations resulting from action on CAA section 
126 petitions.
    The Administrator may exercise reasonable discretion in determining 
whether or not to approve or deny a CAA section 176A petition. The EPA 
has reviewed the request of the petitioners to add additional states to 
the OTR in light of required control strategies for ozone transport 
regions and the other statutory tools available to the agency and 
states to address the interstate transport of ozone pollution. The 
agency believes that continuing its longstanding and effective use of 
the existing and expected control programs under the CAA's mandatory 
good neighbor provision embodied in section 110(a)(2)(D)(i)(I), 
including implementation of the CSAPR Update beginning in 2017 and 
technical work now underway to fully address the good neighbor 
provision for the 2008 NAAQS, is a more effective approach for 
addressing regional interstate ozone transport problems relative to the 
2008 ozone standard.
    The EPA, therefore, denies the petitioners' request to add at this 
time additional states to the OTR for the purpose of addressing 
interstate transport of the 2008 ozone NAAQS. The agency will instead 
continue to use other authorities available within the CAA in order to 
address the long-range, interstate transport of ozone pollution. This 
response only considers the effectiveness of the OTR expansion to 
achieve appropriate emission reductions to address the 2008 ozone 
NAAQS. The EPA notes that, under different circumstances, the OTR 
provisions have been an effective tool for air quality management, and 
could be similarly effective in the future for addressing interstate 
transport of ozone pollution. Accordingly, nothing in this document 
should be read to limit states' ability to file a petition under CAA 
section 176A in the future or to prejudge the outcome of such a 
petition, if filed.

V. Major Comments on the Proposed Denial

    The EPA solicited comment on the proposed denial of the petition 
based on the EPA's preference for addressing interstate transport with 
respect to the 2008 ozone NAAQS pursuant to other CAA authorities. This 
section addresses significant comments received on the January 19, 
2017, proposed denial. Remaining comments are addressed in a separate 
RTC document found in the docket for this action.

A. Adequacy of the EPA's Rationale

    Commenters believed that the EPA's explanation for denial in the 
proposal was inadequate. Commenters stated that the EPA's explanation 
for the proposed denial of the petition failed to provide a technical 
review of the data submitted by the petitioners and instead focused on 
the availability of other CAA programs. Commenters asserted the EPA 
``must adequately explain the facts and policy concerns relied on in 
acting on the petition and conform such reasons with the authorizing 
statute.'' For example, they claimed, the EPA offered no analysis of 
relative costs of other tools and the efficiency of those approaches 
nor did the EPA propose to find the petition technically inadequate 
with respect to the air quality data presented in the technical support 
document (TSD) for the petition.\36\ Commenters stated that the agency 
failed to provide empirical evidence to support the basis for the 
proposed denial. Some commenters believed empirical data are required 
in order for the agency to respond to a CAA section 176A petition. Some 
commenters believed that the EPA's supporting technical data for the 
CAIR and CSAPR rules technically justify expansion of the OTR, pointing 
in particular to the Petition TSD. Commenters in support of the 
proposed denial claimed there are errors with the petitioners' 
supporting data. In addition, some commenters acknowledged that recent 
air quality measurements and emission reductions of ozone precursor 
pollutants show that air quality has improved. In contrast, some 
commenters opposed to the proposed denial encouraged the EPA to grant 
the petition in part based on data provided by petitioners that showed 
that some of the states outside the OTR were violating the NAAQS and 
believed the OTR requirements would also help those areas meet the 
NAAQS.
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    \36\ Technical Support Document for the Petition to the United 
States Environmental Protection Agency for the Addition of Illinois, 
Indiana, Kentucky, Michigan, North Carolina, Ohio, Tennessee, 
Virginia and West Virginia to the Ozone Transport Region (December 
9, 2013) (EPA-HQ-OAR-2016-0596-0002 docket number) (hereinafter 
``Petition TSD'').
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    Response: The EPA disagrees that it bears the burden of conducting 
extensive air quality or other empirical analysis in response to a CAA 
section 176A petition. Petitioners for administrative action generally 
should establish the merits of their petition in the first instance. 
See, e.g., Radio-Television News Dirs. Ass'n v. FCC, 184 F.3d 872, 881 
(D.C. Cir. 1999). While the agency has reviewed the technical 
information supplied in support of the petition, there have been 
significant changes to emissions levels, regulatory requirements, and 
ambient air quality that have occurred in the interim since the 
petition was submitted in December 2013. The EPA has taken into account 
this additional supporting air quality information, including current 
air quality conditions, some recent on-the-books control strategies, 
and significant changes in emissions inventories that have occurred 
over the past several years. In general, commenters did not call into 
question the EPA's view at proposal that ozone levels across the nation 
and the OTR have been declining and are expected to further decline 
over the next several years (82 FR 6520). As a separate matter, neither 
petitioners nor commenters provided information supporting the 
reasonableness of imposing the suite of section 184 of the CAA control 
strategies as a whole to address any remaining interstate air quality 
impact that states named in the petition would have with respect to the 
2008 ozone NAAQS. In its proposed denial, the agency emphasized its 
preference for continuing the more tailored, flexible, and cost-
effective approach of addressing interstate transport of ozone under 
CAA section 110(a)(2)(D)(i)(I). In response to comments asserting that 
the agency failed to more fully address the technical information 
underlying the petition, the agency will respond briefly regarding why 
it believes the information presented in support of the petition is 
insufficient given the totality of information the agency considered, 
including more recent air quality information.
    The air quality information relied upon, in part, by petitioners 
included the EPA's CAIR modeling from 2005, which is now over 10 years 
old, and the CSAPR base case modeling from 2011.\37\ These two sets of 
modeling do not capture the reductions in ozone precursors that have 
occurred as a result of the implementation of either the CSAPR, which 
went into effect in 2015, or the CSAPR Update, which went into effect 
for the 2017 ozone season and was specifically designed to address the 
2008 ozone NAAQS at issue in this petition. Petitioners' data also do 
not capture other changes in the emissions inventory and pollution 
control requirements that have occurred since that time. As the EPA 
noted in the proposal, 82 FR 6519, the modeling for the final CSAPR 
Update in 2016, the modeling currently underway to address states' 
remaining interstate transport obligations for the 2008 ozone NAAQS,

[[Page 51247]]

and recent air quality monitor design values provide a more current 
picture of air quality issues and projections.
---------------------------------------------------------------------------

    \37\ Petition TSD 4-14.
---------------------------------------------------------------------------

    The EPA acknowledges that the petitioners originally may have 
submitted information reflective of air quality prior to December 2013, 
but the EPA believes it is appropriate to consider all relevant 
information available at the time it takes action on the petition, not 
only the information provided in the petition, but more current 
information reflecting additional developments in federal regulations 
and changes in air quality. The EPA believes it would be unreasonable 
for the agency to consider OTR expansion and subject states to OTR 
requirements without considering the most recent information that is 
directly relevant to the 2008 ozone NAAQS air quality problems intended 
to be addressed by the petitioners. The EPA notes that at the time the 
petitioners submitted the petition in December 2013, the CSAPR 
implementation requirements had been vacated by the D.C. Circuit, and 
there was uncertainty regarding if and when the rule's emissions 
reductions would take effect. However, subsequent to the petitioners 
filing the petition, on April 29, 2014, the Supreme Court issued a 
decision reversing the D.C. Circuit's decision on the CSAPR and on 
October 23, 2014, the lower court granted the EPA's request to lift the 
stay on the CSAPR. In addition to the emissions reductions as a result 
of CSAPR, the EPA has issued the CSAPR Update which further reduces 
NO<INF>X</INF> emission during the ozone season for a number of eastern 
states. Because the data used by the petitioners are now dated, they do 
not reflect the sustained trend of declining emissions and improved air 
quality. As noted in the proposal, since 2013 when the petition was 
submitted, there has been a long-term trend of improving air quality in 
the eastern U.S. For instance, petitioners identified 2012 preliminary 
design values showing that the designated nonattainment areas of 
Charlotte-Rock Hill, NC-SC; Chicago-Naperville, IL-IN-WI; Cincinnati, 
IN-KY-OH; Cleveland-Akron-Lorain, OH; Columbus, OH; Knoxville, TN; 
Memphis, AR-MS-TN; and St. Louis-St. Charles-Farmington, IL-MO would be 
in violation of the 2008 ozone NAAQS. Further the petitioners 
extrapolated the 2012 design values to 2015 to project that the 
designated nonattainment areas of Chicago-Naperville, IL-IN-WI; 
Cincinnati, IN-KY-OH; Cleveland-Akron-Lorain, OH; and Columbus, OH 
would continue to violate the NAAQS. However, most of these areas are 
now measuring attainment of the NAAQS.\38\ Thus, the nature of the 
remaining 2008 ozone NAAQS nonattainment issues in the non-OTR states 
is not as severe in terms of the number of nonattainment areas as it 
appeared to be in the past.\39\ These improvements have been driven in 
part by CSAPR and other air pollution control programs and rules, see 
Section IV.C of this notice, as well as a well-documented, long-term 
trend of transition toward sources of electricity generation in the 
power sector that have lowered NO<INF>X</INF> emissions.\40\
---------------------------------------------------------------------------

    \38\ Status of Designated Areas for the Ozone-8Hr (2008) NAAQS, 
https://www3.epa.gov/airquality/urbanair/sipstatus/reports/ozone-8hr__2008__areabynaaqs.html (last visited September 20, 2017).
    \39\ Further, the statutory basis for granting a CAA section 
176A petition is tied to interstate transport of air pollutants. See 
42 U.S.C. 7506a(a). Intrastate air quality problems, in and of 
themselves, would not be a basis for granting this petition.
    \40\ Power Plant Emission Trends (NO<INF>X</INF> Tab), https://www3.epa.gov/airmarkets/progress/datatrends/index.html (last visited 
September 20, 2017).
---------------------------------------------------------------------------

    The EPA also observes an analytical gap in the information 
submitted in support of this petition as to the reasonableness of the 
remedy that would be imposed by application of the suite of 
requirements under CAA section 184 to address the air quality problems 
at issue. The EPA need not dispute now (nor did it at proposal) that 
the states named in the petition may impact air quality at downwind 
areas in states within the OTR, at least as of the time of the CSAPR 
Update modeling. See 82 FR 6518. In the agency's view, however, the air 
quality information submitted here, standing alone, does not 
automatically warrant expanding the OTR to this group of states at this 
time. Under the approach the EPA has historically taken to identify 
control measures to address regional interstate transport (in the 
NO<INF>X</INF> SIP Call, CAIR, CSAPR, and CSAPR Update), a linkage to a 
downwind air quality problem would not automatically result in 
imposition of mandatory controls, such as those that would be required 
under CAA section 184 if this petition were granted. Rather, the EPA 
has also historically considered the reasonableness of application of 
control strategies available within a linked state, usually by 
examining which precursors to ozone formation it would be most 
effective to control, as well as the costeffectiveness of those 
controls. Neither petitioners nor commenters in support of the petition 
supply an analysis regarding the reasonableness of applying the 
controls that would be required under CAA section 184 if the petition 
were granted, such as providing an analysis of their effectiveness in 
addressing the interstate transport problem at issue or the costs 
associated with those mandatory controls. As the EPA emphasized at 
proposal, 82 FR 6520 and 6521, application of appropriate controls 
through an examination of which precursors and sources to address and 
the cost effectiveness of available control strategies has been an 
integral principle of its efforts to address interstate transport of 
air pollution in federal regional transport rules.\41\ As discussed in 
Section V.B. of this notice, there are good grounds to question the 
reasonableness of application of at least some CAA section 184 
requirements in the non-OTR states in this petition. The agency is, 
therefore, well-justified in continuing to rely primarily on its CAA 
section 110(a)(2)(D)(i)(I) authority in transport rules to focus on the 
pollutants and the sources in a manner that most effectively and 
efficiently addresses long range ozone transport.
---------------------------------------------------------------------------

    \41\ See, e.g., EPA v. EME Homer City Generation, L.P., 134 S. 
Ct. 1584, 1606-07 (2014).
---------------------------------------------------------------------------

B. Effectiveness of Ozone Precursor Emissions Reductions

    Some commenters highlighted the benefits of the OTC, as well as the 
benefits of RACT, I/M, and NSR. Commenters believed the EPA's reliance 
on other CAA tools to justify denial is inadequate because the EPA has 
not analyzed the costs of those tools or acknowledged that the cost per 
ton of emission reduced is lower in the non-OTR states than in the OTR 
states. They asserted that the EPA is overestimating control cost and 
underselling the ability of sources to meet more stringent limits.
    Other commenters that support denial of the petition questioned the 
effectiveness of VOC emission reductions on air quality in areas within 
the OTR. The commenters claimed that VOC emissions from the states 
outside of the current OTR states are not effective and would not 
improve air quality or reduce the ozone concentrations in the 
Baltimore, Philadelphia, New York and Connecticut areas.
    Response: While the EPA acknowledges that the OTR has been an 
effective tool for addressing widespread and persistent ozone transport 
problems in the East, petitioners have not demonstrated that the suite 
of mandatory controls that would apply to new states added to the OTR 
would be a more effective means than its current approach under the 
good neighbor provision for addressing any remaining ozone transport 
problems with respect

[[Page 51248]]

to the 2008 ozone NAAQS. These existing efforts represent a better use 
of limited EPA and state resources. The EPA appreciates that the 
process provided by the OTR regulations, via the OTC, has fostered a 
collaborative process for current OTR states to address ozone transport 
issues. However, at this time, we do not believe that the benefits of 
this process outweigh the concerns that the mandatory requirements 
imposed in the OTR are not the measures best suited to addressing any 
remaining downwind air quality problems in the most reasonable manner, 
i.e., by focusing on those sources and precursor emissions most likely 
to lead to cost-effective downwind air quality benefits.
    For instance, the EPA has previously explained that ``authoritative 
assessments of ozone control approaches'' have concluded that VOC 
reductions are generally most effective for addressing ozone locally, 
including in dense urbanized areas and ``immediately downwind.'' See 
CSAPR Final Rule, 76 FR 48222; see also 82 FR 6517 (citing 63 FR 
57381). Yet granting this petition would require mandatory VOC controls 
pursuant to section 184(b) over a vast region that would not be local 
to or nearby the remaining ozone problems in the OTR that the petition 
aims to address. Petitioners have not connected these types of VOC 
reductions over such a wide region with specific air quality benefits 
within the existing OTR. The EPA continues to believe that 
NO<INF>X</INF> emission reductions strategies are more effective than 
VOC reductions in lowering ozone concentrations over longer distances. 
The EPA believes that regional ozone formation is primarily due to 
NO<INF>X,</INF> but VOCs are also important because VOCs influence how 
efficiently ozone is produced by NO<INF>X</INF>, particularly in dense 
urban areas. Reductions in anthropogenic VOC emissions will typically 
have less of an impact on the long-range transport of ozone, although 
these emission reductions can be effective in reducing ozone in nearby 
urban areas where ozone production may be limited by the availability 
of VOCs. Therefore, a combination of localized VOC reductions in urban 
areas with additional NO<INF>X</INF> reductions across a larger region 
will help to reduce ozone and precursors in nonattainment areas, as 
well as downwind transport across the eastern U.S. Further, 
NO<INF>X</INF> reductions will reduce peak ozone concentrations in 
nonattainment areas. As noted in the proposal, model assessments have 
looked at impacts on peak ozone concentrations after potential emission 
reduction scenarios for NO<INF>X</INF> and VOCs for NO<INF>X</INF>-
limited and VOC-limited areas. Specifically, one study \42\ concluded 
that NO<INF>X</INF> emission reductions strategies would be effective 
in lowering ozone mixing ratios in urban areas and another study showed 
NO<INF>X</INF> reductions would reduce peak ozone concentrations in 
nonattainment areas in the Mid-Atlantic (i.e., a 10 percent reduction 
in EGU and non-EGU NO<INF>X</INF> emissions would result in 
approximately a 6 ppb reduction in peak ozone concentrations in 
Washington, DC).\43\
---------------------------------------------------------------------------

    \42\ Jiang, G.; Fast, J.D. (2004) Modeling the effects of VOC 
and NO<INF>X</INF> emission sources on ozone formation in Houston 
during the TexAQS 2000 field campaign. Atmospheric Environment 38: 
5071-5085.
    \43\ Liao, K. et al. (2013) Impacts of interstate transport of 
pollutants on high ozone events over the Mid-Atlantic United States. 
Atmospheric Environment 84, 100-112.
---------------------------------------------------------------------------

C. Efficiency in Addressing Statutory Interstate Transport Requirements

    Commenters in support of granting the petition believed expansion 
of OTR is an efficient method to address interstate transport of 
pollution that could satisfy the intent of the good neighbor provision 
and give upwind states a successful coordination process for addressing 
ozone pollution. Some commenters believed the collaborative process 
inherent in the OTC's mission is efficient and uniquely suited to 
address transport and achieve timely attainment of the ozone NAAQS and 
clean air. They believed there are two important mechanisms in the OTR 
process that would reduce ozone levels: (1) The establishment of a 
minimum baseline for emissions control in the area, and (2) a framework 
for states to collaborate in the development and implementation of 
additional measures if necessary to solve the ozone problem. They also 
believed OTR expansion would obviate the need for future good neighbor 
FIPs and CAA section 126 petitions. They argue that the EPA has a 
history of ``inaction, delay, and failure'' to adequately address 
interstate transport under CAA sections 110(a)(2)(D)(i)(I) and 126. One 
commenter claimed that states have not taken the initiative to address 
interstate transport requirements until required by the EPA. In 
addition the commenter believes that they have to force EPA to fulfill 
its statutory obligations by litigation. They believed the CSAPR Update 
is inadequate because it addresses only a part of most states' 
interstate transport obligations. They further noted the EPA's delayed 
action on CAA section 126 petitions. The commenter asserted that these 
statutory tools are resource intensive and time-consuming. They 
believed the EPA should expand the OTR to include all the states that 
contribute materially to regional ozone levels because it will 
facilitate the development of a more efficient state-led response to 
address interstate ozone transport. Another commenter believed that the 
EPA cannot selectively choose not to use CAA section 176A as a tool 
because it prefers other provisions, and that this ignores the 
statutory goal that states attain the standard as expeditiously as 
practicable.
    Response: The EPA appreciates the time and resources needed for the 
agency and states to take action to address interstate transport 
obligations. However, the agency disagrees that expansion of the OTR 
would necessarily be a faster or more efficient method to address 
interstate ozone transport than continuing to work within the well-
established framework of the EPA's historical approach to addressing 
interstate transport pursuant to the good neighbor provision. Because 
addressing the good neighbor obligation is required of all states 
following NAAQS promulgation, and not just those areas that are 
eventually designated nonattainment, states are required to submit 
their plans for addressing their CAA section 110(a)(2)(D) obligations 3 
years after the promulgation of a NAAQS. 42 U.S.C. 7410(a). Thus, the 
CAA section 110(a)(2)(D)(i)(I) process on its face provides a faster 
timeframe for implementation of interstate transport requirements for a 
new NAAQS than application of OTR requirements, which run from the 
effective date of designations and are set under CAA section 182 
through a separate rulemaking process.
    In any case, both the OTR SIP process and the good neighbor process 
are state-driven in the first instance. States are expected to submit 
approvable implementation plans by the deadlines required in the 
statute and states can choose to submit plans--under either the good 
neighbor or OTR process--that achieve greater emission reductions 
faster than required by the CAA. Even though the EPA has sometimes been 
required to apply FIPs to address good neighbor obligations, which have 
in turn been litigated, the good neighbor provision process has proven 
to be successful historically. Moreover, given increasing experience 
applying the EPA's prior interstate transport rules and the fact that 
many interstate transport issues have already been addressed through 
litigation, the states and the EPA are increasingly positioned to 
implement this provision in a

[[Page 51249]]

timelier fashion. Lastly, it is important to note that, notwithstanding 
the fact that OTR states do have OTR control requirements, the EPA has 
generally (most recently via the CSAPR Update) had to seek additional 
emission reductions from OTR states through the good neighbor process 
to address interstate transport and help areas within and outside the 
OTR reduce ozone concentrations.
    Some commenters alleged that the EPA has delayed or failed to act 
on CAA section 126 petitions from states. All of the CAA section 126 
petitions submitted by the states in the OTR (i.e., Connecticut, 
Delaware and Maryland) for the 2008 ozone NAAQS were submitted in 2016, 
and the agency is continuing to review these petitions. Action on these 
petitions is beyond the scope of this action. However, the EPA observes 
that four of the six petitions the EPA has received from OTR states 
since 2016 concern sources within another OTR state, which tends to 
demonstrate limitations in some respects to the efficacy of the OTR 
process.

D. Equity Among States

    Commenters stated that the ``disparity'' between environmental 
performance of sources within the OTR and those outside the OTR has 
grown. One commenter estimated that the difference in cost of controls 
for further reductions from OTR sources could be in the range of 
$10,000 to $40,000 per ton, while in the non-OTR states it could be as 
low as $500 to $1,200 per ton. Commenters further stated that denial of 
the petition will continue to leave OTR states at a competitive 
disadvantage, as the control requirements within the OTR increase the 
costs to business and industry, while the non-OTR states are allowed to 
emit at far higher levels.
    Other commenters asserted in contrast that OTR control requirements 
are costly and burdensome. They claimed the mandatory requirements 
would impose a substantial cost burden upon both the permitting 
authorities and the regulated communities. One commenter asserted that 
the petitioners' notion of economic fairness as a basis for the 
petition is inappropriate and states that the EPA has no authority to 
require controls on that basis. This commenter suggested that OTR 
states should be required to address their requirements first before 
seeking an expansion. The commenter contended that OTR states are not 
fully implementing required OTR and other ozone controls, and, if they 
were, it may sufficiently control ozone to obviate the need for 
expansion of the OTR.
    Response: As an initial matter, the statutory basis for granting a 
CAA section 176A petition is tied to the interstate transport of air 
pollutants. See 42 U.S.C. 7506a(a). The EPA recognizes, however, that 
equity, or fairness, can play a role in apportioning responsibility for 
addressing air quality problems to which multiple states are 
contributing. These concerns have played a role in the legal analysis 
of the EPA's past rulemakings under CAA section 110(a)(2)(D)(i)(I). In 
EPA v. EME Homer City, the Supreme Court upheld the agency's approach 
in the CSAPR of eliminating amounts of air pollution that can cost 
effectively be reduced as an efficient and equitable solution to the 
allocation problem of the good neighbor provision. 134 S. Ct. 1584, 
1607 (2014). The Court noted that the EPA's approach was ``[e]quitable 
because, by imposing uniform cost thresholds on regulated states, EPA's 
rule subjects to stricter regulation those States that have done 
relatively less in the past to control their pollution.'' Id. Thus, the 
agency's approach to implementing the good neighbor provision 
explicitly considers the equity concerns raised by commenters when 
apportioning emission reduction responsibility among multiple upwind 
states. However, the agency does not believe Congress intended for it 
to exercise its discretion under CAA section 176A to resolve an alleged 
economic disparity or competitive disadvantage that is inherent in the 
creation of the OTR under CAA section 184 in a manner that is unrelated 
to the primary purpose of addressing interstate transport. Nor have 
petitioners provided meaningful information to substantiate that 
alleged disparity. Commenters' passing reference to the potential for 
obtaining reductions at costs-per-ton of $500 to $1,200 in the non-OTR 
states, rather than $10,000 to $40,000 per ton in the OTR states, was 
not submitted with supporting evidence. In any case, even if we assumed 
those numbers were true for some types of control measures, it is by no 
means clear (and is in fact highly doubtful) that all of the mandatory 
control requirements that would be required of a new OTR state under 
CAA section 184 would be at that level of cost effectiveness. By 
contrast, the EPA's approach under the good neighbor provision, as 
recognized by the Supreme Court, operates fairly by establishing 
control levels and apportioning responsibility among states based on a 
uniform level of control, represented by cost.

E. Statutory Intent of CAA Section 176A (or 184)

    Some commenters believe that the current geography of the OTR no 
longer reflects the region most relevant to the nature of interstate 
ozone pollution in the East as it is now understood; they point out 
that New England states (e.g., New Hampshire, Maine and Massachusetts) 
no longer exceed the NAAQS, and their sources contribute less at 
downwind receptors than the states requested to be added to the OTR. 
They asserted that Congress created CAA section 176A to address changes 
in the geographical distribution of the ozone problem by providing a 
process for adding or removing states from the OTR. Therefore, they 
claimed that the EPA must set the boundaries of the transport region 
based on the scientific evidence presented and its own related analyses 
to provide the proper forum for states to address their obligations 
with respect to ozone transport. The commenters concluded that each 
iteration of the EPA's own transport rules have identified a larger 
area.
    Response: As an initial matter, the agency does not have before it 
a petition to remove any states from the OTR. In addition, the EPA 
already adjusts good neighbor remedies in transport rules to capture 
the geographical distribution of states that are most effective in 
addressing each specific NAAQS ozone pollution issue. For example, 
states like Massachusetts, Rhode Island, and Connecticut were included 
in the NO<INF>X</INF> SIP Call to address the 1979 ozone NAAQS. In 
contrast, those three states were not included in the CSAPR, which 
addressed the 1997 ozone NAAQS. Furthermore, states like Texas and 
Oklahoma are included in the CSAPR Update that addresses the 2008 ozone 
NAAQS but were not included in the NO<INF>X</INF> SIP Call or CAIR to 
address prior ozone NAAQS issues.

F. Comments on the 2015 Ozone NAAQS

    A number of commenters raised concerns relating to the 2015 ozone 
NAAQS stating that: (1) The EPA should not limit the petition response 
to 2008 ozone NAAQS interstate transport issues, (2) if the EPA were to 
grant the petition, the OTR requirements would help states attain the 
2015 ozone NAAQS, and (3) the petition response should apply to any and 
all future ozone NAAQS. One commenter suggested that the EPA's response 
should be limited to the 2008 ozone NAAQS because the petitioners' data 
focuses on the 2008 NAAQS, interstate transport SIPs for the 2015 ozone 
NAAQS are not due yet, and

[[Page 51250]]

designations have not yet occurred for the 2015 ozone NAAQS.
    Response: Comments regarding the 2015 ozone NAAQS are outside the 
scope of this action. The petition requested the EPA to expand the OTR 
on the basis of alleged air quality problems associated with attaining 
and maintaining the 2008 ozone NAAQS. The December 2013 petition was 
submitted prior to the EPA strengthening the ozone NAAQS in 2015. 
Consequently, the EPA's proposal focused on the appropriate mechanism 
to address interstate transport issues relative to the 2008 ozone 
NAAQS--not the 2015 ozone NAAQS. The EPA is, therefore, limiting this 
final action to the 2008 ozone NAAQS. Comments on any determinations 
made in prior rulemaking actions to identify downwind air quality 
problems relative to the 2015 ozone NAAQS or to quantify upwind state 
emission reduction obligations relative to those air quality problems, 
including the EPA's decision to focus on certain precursor emissions or 
sources, are not within the scope of this action.

VI. Final Action To Deny the CAA Section 176A Petition

    Based on the considerations outlined at proposal, after considering 
all comments, and for the reasons described in this action, the EPA is 
denying the CAA section 176A petition submitted by nine petitioning 
states in December 2013. The EPA continues to believe an expansion of 
the OTR is unnecessary at this time and would not be the most efficient 
or effective way to address the remaining interstate transport issues 
for the 2008 ozone NAAQS in states currently included in the OTR. 
Additional local and regional ozone precursor emissions reductions are 
expected in the coming years from already on-the-books rules. The EPA 
believes its authority and the states' authority under other CAA 
provisions (including CAA section 110(a)(2)(D)(i)(I)) will allow the 
agency and states to develop a more effective remedy for addressing any 
remaining air quality problems for the 2008 ozone NAAQS identified by 
the petitioners.

VII. Judicial Review and Determinations Under Section 307(b)(1) of the 
CAA

    Section 307(b)(1) of the CAA indicates which Federal Courts of 
Appeal have venue for petitions of review of final actions by the EPA. 
This section provides, in part, that petitions for review must be filed 
in the Court of Appeals for the District of Columbia Circuit if (i) the 
agency action consists of ``nationally applicable regulations 
promulgated, or final action taken, by the Administrator,'' or (ii) 
such action is locally or regionally applicable, if ``such action is 
based on a determination of nationwide scope or effect and if in taking 
such action the Administrator finds and publishes that such action is 
based on such a determination.''
    This final action is ``nationally applicable.'' Additionally, the 
EPA finds that this action is based on a determination of ``nationwide 
scope and effect.'' This action makes a determination on a petition 
from nine states in the Northeast, which would impact another nine 
states in the Mid-Atlantic, Southern, and Midwestern areas of the U.S. 
These 18 states span five regional federal judicial circuits as well as 
the District of Columbia. The determinations on which this action is 
based rest in part on the scope and effect of certain other nationally 
applicable rulemakings under the CAA, including the CSAPR and the CSAPR 
Update. For these reasons, this final action is ``nationally 
applicable,'' and the Administrator also finds that this action is 
based on a determination of nationwide scope and effect for purposes of 
CAA section 307(b)(1).
    Pursuant to CAA section 307(b)(1), any petitions for review of this 
final action should be filed in the Court of Appeals for the District 
of Columbia Circuit within 60 days from the date this action is 
published in the Federal Register.

VIII. Statutory Authority

    42 U.S.C. 7401 et seq.

    Dated: October 27, 2017.
E. Scott Pruitt,
Administrator.
[FR Doc. 2017-23983 Filed 11-2-17; 8:45 am]
BILLING CODE 6560-50-P


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