Document ID: EPA-R03-OAR-2013-0816-0001
Agency: epa
Document Type: Proposed Rule
Title: Air Quality State Implementation Plans; Approval and Promulgation: Delaware; Nonattainment New Source Review; Emission Offset Provisions
Posted Date: 2015-05-26T04:00Z

[Federal Register Volume 80, Number 100 (Tuesday, May 26, 2015)]
[Proposed Rules]
[Pages 30015-30019]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-12487]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R03-OAR-2013-0816; FRL-9928-23-Region 3]

Approval and Promulgation of Air Quality Implementation Plans; 
Delaware; Nonattainment New Source Review; Emission Offset Provisions

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency (EPA) is proposing to 
disapprove a State Implementation Plan (SIP) revision submitted by the 
Delaware Department of Natural Resources and Environmental Control 
(DNREC) for the State of Delaware on October 15, 2013. EPA is proposing 
this action because the submittal does not satisfy the requirements of 
Clean Air Act (CAA) or the Federal implementing regulations, which 
establish the criteria under which the owner or operator of a new or 
modified major stationary source must obtain the required emission 
offsets ``from the same source or other sources in the same 
nonattainment area'' with limited exceptions, for Delaware's 
nonattainment New Source Review (NSR) preconstruction permitting 
program. In addition, EPA is proposing disapproval of the SIP revision 
because Delaware exercises authorities that are reserved for EPA under 
section 107 of the CAA. This action is being taken under the CAA.

[[Page 30016]]

DATES: Written comments must be received on or before June 25, 2015.

ADDRESSES: Submit your comments, identified by Docket ID Number EPA-
R03-OAR-2013-0816 by one of the following methods:
    A. www.regulations.gov. Follow the on-line instructions for 
submitting comments.
    B. Email: campbell.dave@epa.gov.
    C. Mail: EPA-R03-OAR-2013-0816, David Campbell, Associate Director, 
Office of Permits and Air Toxics, 3AP10, U.S. Environmental Protection 
Agency, Region III, 1650 Arch Street, Philadelphia, Pennsylvania 19103.
    D. Hand Delivery: At the previously-listed EPA Region III address. 
Such deliveries are only accepted during the Docket's normal hours of 
operation, and special arrangements should be made for deliveries of 
boxed information.
    Instructions: Direct your comments to Docket ID No. EPA-R03-OAR-
2013-0816. EPA's policy is that all comments received will be included 
in the public docket without change, and may be made available online 
at www.regulations.gov, including any personal information provided, 
unless the comment includes information claimed to be Confidential 
Business Information (CBI) or other information whose disclosure is 
restricted by statute. Do not submit information that you consider to 
be CBI or otherwise protected through www.regulations.gov or email. The 
www.regulations.gov Web site is an ``anonymous access'' system, which 
means EPA will not know your identity or contact information unless you 
provide it in the body of your comment. If you send an email comment 
directly to EPA without going through www.regulations.gov, your email 
address will be automatically captured and included as part of the 
comment that is placed in the public docket and made available on the 
Internet. If you submit an electronic comment, EPA recommends that you 
include your name and other contact information in the body of your 
comment and with any disk or CD-ROM you submit. If EPA cannot read your 
comment due to technical difficulties and cannot contact you for 
clarification, EPA may not be able to consider your comment. Electronic 
files should avoid the use of special characters, any form of 
encryption, and be free of any defects or viruses.
    Docket: All documents in the electronic docket are listed in the 
www.regulations.gov index. Although listed in the index, some 
information is not publicly available, i.e., CBI 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 www.regulations.gov or 
in hard copy during normal business hours at the Air Protection 
Division, U.S. Environmental Protection Agency, Region III, 1650 Arch 
Street, Philadelphia, Pennsylvania 19103. Copies of the State submittal 
are available at the Delaware Department of Natural Resources and 
Environmental Control, 89 Kings Highway, P.O. Box 1401, Dover, Delaware 
19903.

FOR FURTHER INFORMATION CONTACT: Amy Johansen, (215)814-2156, or by 
email at johansen.amy@epa.gov.

SUPPLEMENTARY INFORMATION:

I. Background

A. CAA Sections 172(c)(5) and 173(c)(1)

    Under section 172(c)(5) of the CAA, a SIP is required to include 
provisions which require permits for the construction and operation of 
new or modified major stationary sources anywhere in a nonattainment 
area in accordance with the requirements of section 173 of the CAA.\1\ 
Section 173, in turn, sets forth a series of requirements for the 
issuance of permits for the owners or operators of new or modified 
major stationary sources within nonattainment areas. Specifically, 
section 173 provides inter alia that construction and operating permits 
may only be issued if: (a) Sufficient offsetting emission reductions 
have been obtained to reduce total emissions from existing sources and 
the proposed source to the point where reasonable further progress 
towards meeting the ambient air standards is maintained; and (b) the 
proposed source is required to comply with the lowest achievable 
emission rate (LAER).\2\
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    \1\ A nonattainment area is the air quality control region 
designated by EPA under CAA section 107 as not attaining a 
particular National Ambient Air Quality Standard (NAAQS) for any of 
the six criteria air pollutants.
    \2\ See CAA section 171(3), 42 U.S.C. 7501(3) (defining LAER).
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    Relevant to Delaware's SIP revision, CAA section 173(c) spells out 
the offset requirements for the owners and operators of new or modified 
major stationary sources. Specifically, section 173(c)(1) requires 
``the owner or operator of a new or modified major source may comply 
with any offset requirement in effect under this part for increased 
emissions of any air pollutant only by obtaining emission reductions of 
such air pollutant from the same source or other sources in the same 
nonattainment area, except that the State may allow the owner or 
operator of a source to obtain such emission reductions in another 
nonattainment area if (A) the other area has an equal or higher 
nonattainment classification than the area in which the source is 
located and (B) emissions from such other area contribute to a 
violation of the national ambient air quality standard in the 
nonattainment area in which the source is located'' (emphasis added).

B. 40 CFR 51.165 and Appendix S to Part 51, the Emission Offsets 
Interpretive Ruling

    40 CFR 51.165 contains the SIP requirements for nonattainment NSR 
permit programs. Pursuant to 40 CFR 51.165(a)(3)(ii)(F), SIPs must 
contain provisions relating to the permissible location of offsetting 
emissions which are at least as stringent as those set out in appendix 
S, section IV.D. Appendix S sets forth EPA's interpretive ruling for 
preconstruction review requirements for stationary sources of air 
pollution under 40 CFR subpart I and section 129 of the CAA Amendments 
of 1977. Appendix S specifies that, ``a major new source or major 
modification which would locate in any area designated under section 
107(d) of the Act as attainment or unclassifiable for ozone that is 
located in an ozone transport region or which would locate in an area 
designated in 40 CFR part 81, subpart C, as nonattainment for a 
pollutant for which the source or modification would be major may be 
allowed to construct only if the stringent conditions . . . are met.'' 
The goal of this section is to ensure there is progress towards 
achievement of the National Ambient Air Quality Standard (NAAQS). 
Section IV.D of appendix S, ``Location of Offsetting Emissions,'' 
proscribes the acceptable areas from which a new or modified source can 
obtain the required emissions offsets. The offsets must come from the 
same source or other sources in the same nonattainment area. However, 
the section provides that reviewing authorities may allow sources to 
obtain offsets from other nonattainment areas provided that two 
conditions are met: The nonattainment area from which the offsets are 
obtained must be of equal or higher nonattainment classification, and 
emissions from the area in which the offsets are obtained must 
contribute to a violation of the NAAQS in the area in which the source 
is located. These requirements are identical to the requirements in CAA 
section 173(c).

[[Page 30017]]

    Delaware's SIP revision submittal, 7 DE Admin Code 1125 sections 
2.5.5 and 2.5.6, which were revised by Delaware effective September 11, 
2013, does not meet the requirements in CAA section 173(c), 40 CFR 
51.165(a)(3)(ii)(F) and appendix S, section IV.D.1, because the 
identified sections allow emissions offsets to be used from areas not 
designated by EPA pursuant to CAA section 107 as an area of equal or 
higher nonattainment classification for any ozone NAAQS and do not 
address contribution requirements in the CAA and its implementing 
regulations.

C. CAA Section 107

    Under CAA section 107(c), the Administrator of the EPA is given the 
authority to designate as an air quality control region any interstate 
area or major intrastate area which she deems appropriate for the 
attainment and maintenance of ambient air quality standards. CAA 
section 107(d) provides the process for the Administrator of EPA, with 
recommendations from Governors, to designate areas or portions of areas 
within states as nonattainment, attainment, or unclassifiable upon 
promulgation or revision of a NAAQS.
    Pursuant to section 107 of the CAA, New Castle and Sussex Counties, 
Delaware were designated by EPA for the 2008 8-hour ozone NAAQS as 
``marginal'' nonattainment under 40 CFR part 81, while Kent County was 
designated as ``unclassifiable/attainment.'' See 77 FR 30088 (May 21, 
2012). New Castle County is a portion of the Philadelphia-Wilmington-
Atlantic City marginal nonattainment area (Philadelphia Area) for the 
2008 8-Hour ozone NAAQS.
    Upon designation, a nonattainment area for ozone is required to 
meet the plan submission requirements under section 182 of the CAA (in 
subpart 2 of Part D of Title I of the CAA) for each nonattainment area 
classification (marginal, moderate, serious, severe, and extreme) as 
well as the general SIP planning requirements in sections 172 and 173 
of subpart 1 of Part D of Title I. The State of Delaware is unique 
because it is part of the Ozone Transport Region (OTR), as established 
in CAA section 184(a). Therefore, at a minimum, the entire State of 
Delaware is required to meet the plan submission requirements for a 
moderate nonattainment area classification as specified in CAA sections 
182(b) and 184(b). Moderate area classification plan requirements 
include the emissions offset provisions within section 173 of the CAA 
and within its implementing regulations.

D. Delaware's Approved 7 DE Admin. Code 1125--Requirements for 
Preconstruction Review

    For purposes of satisfying CAA sections 172 and 173, Delaware 
presently has a fully-approved nonattainment NSR preconstruction 
permitting program. See 77 FR 60053 (October 2, 2012). Typically, 
disapproval of a Part D NSR SIP revision would trigger sanctions under 
section 179 of the CAA and a requirement for EPA to impose a Federal 
Implementation Plan (FIP) in lieu of an approved SIP pursuant to 
section 110(c) of the CAA. However, in this case, Delaware's existing 
nonattainment NSR SIP is fully approved as meeting CAA requirements and 
there are no SIP deficiencies. Therefore, sanctions under CAA section 
179 and FIP provisions under CAA section 110(c) are not triggered by 
the disapproval of this SIP revision. Delaware remains obligated to 
implement its Federally-approved nonattainment NSR preconstruction 
permitting program in accordance with CAA section 173.

II. Summary of SIP Revision and EPA Analysis

    On October 15, 2013, DNREC submitted a proposed revision to 
Delaware's SIP to EPA for approval. The proposed revision is to 7 DE 
Admin. Code 1125, Requirements for Preconstruction Review, sections 
2.5.5 and 2.5.6, Emission Offset Provisions.\3\ EPA has reviewed 
Delaware's proposed SIP revision and determined that it does not comply 
with the requirements of CAA sections 172(c)(5) and 173(c)(1) or the 
Federal implementing regulations in 40 CFR 51.165 and part 51, appendix 
S, section IV.D for several reasons. In addition, in the proposed 
revisions to 7 DE Admin. Code 1125, sections 2.5.5 and 2.5.6, Delaware 
exercises authorities that are reserved solely for EPA in CAA section 
107 by treating certain areas as ozone nonattainment areas regardless 
of EPA's classification of those states for attainment of the ozone 
NAAQS, and therefore EPA proposes to disapprove this SIP revision 
submittal as not in accordance with the CAA.
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    \3\ DNREC's revised 7 DE Admin. Code 1125, section 2.5.5 and 
2.5.6 became effective September 11, 2013.
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    First, the revised regulation enables sources in Delaware seeking 
NSR permits to obtain emission offsets from sources located in other 
areas, including areas outside of the State of Delaware, irrespective 
of the area's nonattainment status as compared to Delaware's 
nonattainment status for the same NAAQS.\4\ CAA section 173 and its 
implementing regulations clearly require emission offsets for NSR 
permits to come from the same area where a source is located or from an 
area with the same or higher nonattainment classification as the area 
where a source is locating or located.
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    \4\ 7 DE Admin. Code 1125, section 2.5.5, as revised September 
11, 2013, provides that Delaware may consider certain states as 
having the same nonattainment classifications as the area of 
Delaware where offsets are to be used including Connecticut, 
Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, Missouri, 
New Jersey, New York, North Carolina, Ohio, Pennsylvania, Tennessee, 
Virginia, West Virginia and Wisconsin. EPA notes that several of 
these states have no areas classified by EPA under CAA section 107 
as nonattainment for the ozone NAAQS. In addition, several of the 
specified states are not part of the OTR established pursuant to CAA 
section 184 which would treat areas within those states as Moderate 
nonattainment of an ozone NAAQS.
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    Second, the revised regulation also permits sources seeking NSR 
permits in Delaware to obtain emissions offsets from areas without a 
determination that the other areas ``contribute to violation'' of the 
NAAQS in Delaware where a source seeking a NSR permit would be located 
as required in CAA section 173 and its implementing regulations. The 
language in section 2.5.6 in 7 DE Admin. Code 1125 provides that 
sources can obtain emission offsets ``in the nonattainment area which 
the source is located which shall specifically include any area in the 
States of Connecticut, Delaware, Illinois, Indiana, Kentucky, Maryland, 
Michigan, Missouri, New Jersey, New York, North Carolina, Ohio, 
Pennsylvania, Tennessee, Virginia, West Virginia and Wisconsin.'' \5\
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    \5\ Delaware's October 15, 2013 SIP revision claims contribution 
from these specified states to ozone nonattainment or interference 
with maintenance of ozone NAAQS in Delaware is supported by EPA 
modeling conducted for the Cross State Air Pollution Rule (CSAPR) 
(76 FR 48208 (August 8, 2011)). However, EPA notes that the EPA 
CSAPR modeling was conducted to determine contribution to 
nonattainment or interference with maintenance for the 1997 ozone 
NAAQS and the 1997 and 2006 fine particulate matter 
(PM2.5) NAAQS. Delaware's SIP revision did not include 
any information supporting ``contribution to violation'' for the 
2008 ozone NAAQS to meet requirements in section 173(c)(1) that 
emission offsets come from an area which contributes to violation of 
the NAAQS where the source seeking a permit is located.
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    Finally, the revised regulation language allows Delaware to 
exercise authorities that are reserved solely for EPA in CAA section 
107 by allowing ``the Department'' to determine the areas in which 
owners or operators can acquire emission offsets, regardless of the 
attainment status of the area. Specifically, Delaware is proposing 
language for the SIP that ``the Department may consider any area in the 
following states as having the same nonattainment classification as the 
area

[[Page 30018]]

of Delaware where the offsets are used: Connecticut, Delaware, 
Illinois, Indiana, Kentucky, Maryland, Michigan, Missouri, New Jersey, 
New York, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West 
Virginia and Wisconsin.'' See 7 DE Admin. Code 1125 section 2.5.5. As 
discussed in the Background Section of this proposal, under CAA section 
107(c), only the Administrator of the EPA is given the authority to 
designate as an air quality control region any interstate area or major 
intrastate area which she deems appropriate for the attainment and 
maintenance of ambient air quality standards. The State of Delaware has 
no such authority under the CAA to designate areas for nonattainment 
with the NAAQS to meet requirements in CAA section 173(c)(1) that 
emission offsets must be from areas in the same or higher attainment 
classification for a NAAQS. Therefore, Delaware's regulation does not 
meet the requirements in CAA 173(c)(1) or its implementing regulations 
in 40 CFR 51.165 and in appendix S as Delaware lacks authority to 
designate areas ``nonattainment'' for emission offset requirements.
    Thus, because Delaware's revised regulation 7 DE Admin. Code 1125, 
sections 2.5.5 and 2.5.6 does not comply with requirements in CAA 
section 172(c)(5) and 173(c)(1) and the implementing regulations in 40 
CFR 51.165 and appendix S, EPA finds the revision does not meet CAA 
requirements in the statute or in its implementing regulations. In 
addition, Delaware's revision to 7 DE Admin. Code 1125, section 2.5.5 
inappropriately allows Delaware to treat areas as nonattainment for 
emission offset requirements when only EPA possesses such authority 
under the CAA to designate areas nonattainment, and thus EPA 
additionally finds the revision does not meet requirements in the CAA. 
Therefore, EPA proposes to disapprove the October 15, 2013 SIP 
revision.

III. Proposed Action

    Pursuant to CAA section 110(k)(3), EPA is proposing to disapprove 
Delaware's October 15, 2013 SIP revision related to nonattainment NSR 
preconstruction permit program requirements for emission offsets. 
Specifically, Delaware's October 15, 2013 proposed SIP revision seeks 
to expand the geographical area in which owners and operators of new or 
modified major stationary sources may obtain emissions offsets, 
regardless of the area's attainment classification for the ozone NAAQS 
and without specific requirements that the area ``contribute to 
violation'' of the ozone NAAQS in the area in which a new or modified 
source is locating or located. EPA proposes to disapprove this SIP 
revision for two reasons: (1) Delaware's proposed emissions offset 
provision language does not comport with the specific requirements 
under CAA sections 172(c)(5) and 173(c)(1) or the Federal implementing 
regulations in 40 CFR 51.165 and appendix S; and (2) Delaware lacks 
legal authority to designate an area as nonattainment under CAA section 
107(c) and (d).
    Under CAA section 179(a)(2), final disapproval pursuant to CAA 
section 110(k) of a submission that addresses a requirement of a Part D 
Plan (CAA sections 171-193), starts a sanction clock. While Delaware's 
SIP revision addresses the Part D Plan requirement for a NSR permitting 
program, Delaware presently has a fully-approved NSR permit program. 
See 77 FR 60053. Thus, there is no deficiency in Delaware's SIP. 
Therefore, if EPA takes final action to disapprove this SIP submission, 
no sanctions under CAA section 179 will be triggered.
    The full or partial disapproval of a SIP revision in general also 
triggers the requirement under CAA section 110(c) that EPA promulgate a 
FIP no later than two years from the date of the disapproval unless the 
State corrects the deficiency, and the Administrator approves the plan 
or plan revision before the Administrator promulgates such FIP. As 
previously discussed, Delaware's SIP is not deficient as Delaware has a 
fully-approved NSR preconstruction permit program. Therefore, if EPA 
takes final action to disapprove this submission, no FIP requirements 
for EPA under CAA section 110(c) will be triggered.
    EPA is soliciting public comments only on the issues discussed in 
this document. These comments will be considered before taking final 
action. Sources in Delaware are reminded that they remain subject to 
the requirements of Delaware's Federally-approved nonattainment NSR 
preconstruction permit program in 7 DE Admin. Code 1125 (approved by 
EPA on October 2, 2012) and are subject to potential enforcement for 
violations of the SIP including failure to comply with NSR permit 
requirements and specifically with emission offset requirements in CAA 
section 173 and in the Federally-enforceable Delaware SIP. See EPA's 
Revised Guidance on Enforcement During Pending SIP Revisions (March 1, 
1991).

IV. Statutory and Executive Order Reviews

    Under the CAA, the Administrator is required to approve a SIP 
submission that complies with the provisions of the CAA and applicable 
Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in 
reviewing SIP submissions, EPA's role is to approve state choices, 
provided that they meet the criteria of the CAA. In this case, EPA is 
proposing to disapprove Delaware's October 15, 2013 SIP submittal 
because it does not meet Federal requirements. For that reason, this 
proposed action:
     Is not a ``significant regulatory action'' subject to 
review by the Office of Management and Budget under Executive Order 
12866 (58 FR 51735, October 4, 1993);
     does not impose an information collection burden under the 
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     is certified as not having a significant economic impact 
on a substantial number of small entities under the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.);
     does not contain any unfunded mandate or significantly or 
uniquely affect small governments, as described in the Unfunded 
Mandates Reform Act of 1995 (Pub. L. 104-4);
     does not have Federalism implications as specified in 
Executive Order 13132 (64 FR 43255, August 10, 1999);
     is not an economically significant regulatory action based 
on health or safety risks subject to Executive Order 13045 (62 FR 
19885, April 23, 1997);
     is not a significant regulatory action subject to 
Executive Order 13211 (66 FR 28355, May 22, 2001);
     is not subject to requirements of Section 12(d) of the 
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 
note) because application of those requirements would be inconsistent 
with the CAA; and
     does not provide EPA with the discretionary authority to 
address, as appropriate, disproportionate human health or environmental 
effects, using practicable and legally permissible methods, under 
Executive Order 12898 (59 FR 7629, February 16, 1994).
    In addition, this proposed rule, to disapprove Delaware's October 
15, 2013 SIP revision related to emission offset provisions, does not 
have tribal implications as specified by Executive Order 13175 (65 FR 
67249, November 9, 2000), because the SIP is not approved to apply in 
Indian country located in the state, and EPA notes that it will not 
impose substantial direct costs on tribal governments or preempt tribal 
law.

[[Page 30019]]

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Carbon monoxide, 
Incorporation by reference, Intergovernmental relations, Nitrogen 
dioxide, Ozone, Volatile organic compounds.

    Authority:  42 U.S.C. 7401 et seq.

    Dated: May 13, 2015.
Shawn M. Garvin,
Regional Administrator, Region III.
[FR Doc. 2015-12487 Filed 5-22-15; 8:45 am]
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