Document ID: EPA-R05-OAR-2010-0954-0057
Agency: epa
Document Type: Rule
Title: Final Approvals of Michigan Regional Haze State Implementation Plan (SIP) and Federal Implementation Plan (FIP)
Posted Date: 2012-12-03T05:00Z

[Federal Register Volume 77, Number 232 (Monday, December 3, 2012)]
[Rules and Regulations]
[Pages 71533-71551]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-29014]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R05-OAR-2010-0954; FRL-9757-3]

Approval and Promulgation of Air Quality Implementation Plans; 
Michigan; Regional Haze State Implementation Plan; Federal 
Implementation Plan for Regional Haze

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: EPA is finalizing action on a State Implementation Plan (SIP) 
submittal from the State of Michigan dated November 5, 2010, addressing 
regional haze for the first implementation period (ending in 2018). 
This action is being taken in accordance with the Clean Air Act and 
EPA's rules for states to prevent and remedy future and existing 
anthropogenic impairment of visibility in mandatory Class I areas 
through a regional haze program. EPA finds that Michigan meets several 
regional haze planning requirements, including identification of 
affected Class I areas, provision of a monitoring plan, consultation 
with other parties, and adoption of a long-term strategy providing for 
reasonable progress except to the extent Michigan's plan failed to 
require best available retrofit technology (BART). As part of this 
action, EPA finds that the State's submittal addressed BART for some 
sources but failed to satisfy BART for two sources, namely St. Marys 
Cement (SMC) and Escanaba Paper Company (Escanaba Paper). EPA is 
promulgating a Federal Implementation Plan (FIP) including nitrogen 
oxide (NOX) emission limits for these two sources in 
addition to sulfur dioxide (SO2) emission limits for SMC to 
satisfy these requirements.

DATES: This final rule is effective on January 2, 2013.

ADDRESSES: EPA has established a docket for this action under Docket ID 
No. EPA-R05-OAR-2010-0954. All documents are listed on the 
www.regulations.gov Web site. Although listed in the index, some 
information is not publicly available, i.e., Confidential Business 
Information (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 through www.regulations.gov or in hard copy at the 
Environmental Protection Agency, Region 5, Air and Radiation Division, 
77 West Jackson Boulevard, Chicago, Illinois 60604. This facility is 
open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding 
Federal holidays. We recommend that you telephone Charles Hatten, 
Environmental Engineer, at (312) 886-6031 before visiting the Region 5 
office.

FOR FURTHER INFORMATION CONTACT: Charles Hatten, Environmental 
Engineer, Control Strategies Section, at 312-886-6031, 
hatten.charles@epa.gov, regarding all elements of the action, or John 
Summerhays, Environmental Scientist, Attainment Planning and 
Maintenance Section, at 312-886-6067, summerhays.john@epa.gov, 
regarding issues relating to BART. Both contacts may be reached by mail 
at Air Programs Branch (AR-18J), Environmental Protection Agency, 
Region 5, 77 West Jackson Boulevard, Chicago, Illinois 60604.

SUPPLEMENTARY INFORMATION: This supplementary information section is 
arranged as follows:

I. Synopsis of Proposed Rule
II. Public Comments and EPA's Responses
III. What are EPA's final BART determinations?
    A. SMC
    B. Escanaba Paper
IV. What actions is EPA taking?
V. Statutory and Executive Order Reviews

I. Synopsis of Proposed Rule

    Michigan submitted a plan to address regional haze on November 5, 
2010. This plan was intended to address the requirements in Clean Air 
Act section 169A, as interpreted in EPA's Regional Haze Rule as 
codified in Title 40 Code of Federal Regulations (CFR) 51.308. The 
Regional Haze Rule was promulgated on July 1, 1999 (64 FR 35713), with 
further significant provisions promulgated on July 6, 2005 (70 FR 
39104), that provided guidance related to BART.
    On August 6, 2012 (77 FR 46912), EPA proposed action on Michigan's 
submittal addressing the Regional Haze Rule for the first 
implementation period, ending in 2018. That action described the nature 
of the regional haze problem and the statutory and regulatory 
background for EPA's review of Michigan's regional haze plan. The 
action also described at length the regional haze requirements, 
including requirements for mandating BART, consultation with other 
states in establishing goals representing reasonable further progress 
in mitigating anthropogenic visibility impairment, and adoption of 
limitations as necessary to implement a long-term strategy for reducing 
visibility impairment.
    EPA proposed to approve Michigan's identification of five non-
electric generating unit (non-EGU) sources as having sufficient impact 
to warrant being subject to emission limits representing BART. The five 
non-EGU BART-eligible sources included Lafarge Midwest, Inc.; SMC; 
Escanaba Paper (referenced in the proposed rulemaking as NewPage Paper 
Company); Smurfit Stone Container Corp.; and Tilden Mining Company.
    Michigan made source-specific determinations of BART for these non-
EGU sources. In the August 6, 2012 proposed rulemaking, EPA proposed to 
approve Michigan's BART requirements for some of the non-EGUs, based on 
a Federal consent decree requiring new controls for SO2 and 
NOX emissions for the Lafarge Midwest plant and based on 
existing limits at Smurfit Stone. EPA proposed to disapprove Michigan's 
plan for BART at SMC's facility in Charlevoix (SMC-Charlevoix) and at 
Escanaba Paper's facility in Escanaba. Specifically, EPA proposed to 
disapprove the NOX and SO2 BART determination for 
the cement kiln and associated equipment at SMC-Charlevoix and the 
NOX BART determination for Boiler 8 and 9 at Escanaba Paper. 
Further, EPA proposed a FIP to impose BART NOX and 
SO2 limits for the cement kiln and associated equipment for 
SMC-Charlevoix, and BART NOX limits for Boilers 8 and 9 at 
Escanaba Paper. EPA proposed no action regarding Tilden Mining, since 
that facility is a taconite plant that is being addressed in a separate 
action that also addresses taconite plants in Minnesota.

[[Page 71534]]

II. Public Comments and EPA's Responses

    The publication of EPA's proposed rule initiated a 30-day public 
comment period that ended on September 5, 2012. During this public 
comment period, EPA received comments from the United States National 
Park Service (National Park Service), the State of Michigan Department 
of Environmental Quality (MDEQ), Lafarge Midwest Inc., Escanaba Paper, 
SMC, and Cliffs Natural Resources Inc. (Cliffs).
    EPA also offered to hold a public hearing, upon request, to provide 
interested parties the opportunity to provide oral comments on the FIP 
proposal. As discussed below, one commenter requested a hearing in 
order to make comments not relevant to the FIP proposal for SMC-
Charlevoix or Escanaba Paper. EPA denied this request. As no commenter 
requested to make oral comments on the proposed FIP, EPA did not hold a 
public hearing. Following is a summary of the comments submitted and 
EPA's responses.

National Park Service

    Comment: National Park Service commented on EPA's proposed actions 
regarding BART for electric utilities. National Park Service noted that 
on June 7, 2012, EPA disapproved Michigan's regional haze plan (and 
several other states' plans) that relied on the Clean Air Interstate 
Rule (CAIR) to meet BART for electric utilities, and promulgated FIPs 
that relied on the Cross State Air Pollution Rule (CSAPR) to meet BART. 
National Park Service also noted the August 21, 2012, decision by the 
U.S. Court of Appeals for the District of Columbia to vacate CSAPR and 
to leave CAIR temporarily in place. ``Because EPA previously 
disapproved the state plans that relied on CAIR to meet BART, it 
appears that EPA cannot finalize the proposed approval of BART for 
electric utilities in Michigan.'' National Park Service recommended 
instead that Michigan evaluate BART for those electric utilities.
    Response: The rulemaking EPA is finalizing today does not address 
BART for EGUs in Michigan. As noted in our proposed rulemaking, 
published on August 6, 2012, EPA had already taken action on BART for 
EGUs in Michigan and a number of other states in a separate rulemaking, 
published on June 7, 2012 (77 FR 33642). Thus, the comment is not 
pertinent to this action.
    Comment: National Park Service commented that Michigan's reasonable 
progress goals based on the air quality modeling for Seney Wilderness 
Area appear to project that visibility on the 20 percent best days will 
be poorer in 2018 (7.7 deciviews (dv)) than in the 2000 to 2004 
baseline period (7.14 dv).
    Response: As discussed in section 5.2 of Michigan's submittal, 
best-days visibility in 2018 is projected to be modestly worse than 
visibility in 2000 to 2004. Notwithstanding this modeling result, EPA 
has several reasons to anticipate that visibility on the best days in 
2018 may in fact be better and not worse than baseline best-days 
visibility. First, as seen in the most recent air quality data, best-
days visibility in these areas has been improving, for example 
improving at Seney from a 2000 to 2004 average of 7.1 deciviews to a 
2005 to 2009 average of 6.4 deciviews. (See http://vista.cira.colostate.edu/improve/Publications/Reports/2011/PDF/Appendix_G.pdf, page G-109.) Second, as Michigan noted in its 
submittal, the projection that visibility on the best days will worsen 
reflects an uncertain estimate of increasing ammonia emissions. 
Emissions of the other emitted pollutants important to visibility, 
especially SO2 and NOX, have decreased 
significantly, and are expected to continue to decline. As Michigan 
noted, an alternate plausible assumption that ammonia emissions are not 
increasing would be expected to support a finding that visibility on 
best-visibility days will improve. Third, recent modeling that EPA has 
done in support of CSAPR showed that visibility on best visibility days 
at Seney is expected to improve by 2014 even without CAIR or CSAPR. 
Fourth, oftentimes the air mass on best visibility days in Northern 
Michigan originates in Canada, for which the emission inventories used 
in the air quality modeling for the SIP are less reliable. Finally, 
Michigan noted some unmodeled emission reductions, such as those from 
BART for non-EGUs, that would be expected to lead to better visibility 
in 2018 than that shown in its SIP. For these reasons, EPA expects that 
Michigan's plan will yield visibility on the best 20 percent of days at 
its Class I areas in 2018 that will be either the same as or better 
than during the baseline period.

MDEQ

    Comment: MDEQ objected to EPA's action proposing a FIP to mandate 
BART for SMC in Charlevoix and Escanaba Paper in Escanaba to meet 
regional haze visibility goals and simultaneously proposing disapproval 
of Michigan's plan for these sources. By doing so, Michigan commented, 
EPA is circumventing the process laid out in the Clean Air Act by not 
giving the State the opportunity to correct deficiencies in Michigan's 
BART SIP revision. Michigan references the August 12, 2012, opinion of 
the U.S. Court of Appeals for the D.C. Circuit in EME Homer City 
Generation, L.P. v. EPA (addressing CSAPR), an opinion that, in 
Michigan's view, concluded that a FIP-first process is not in 
accordance with the Clean Air Act.
    Response: EPA disagrees with this comment. Rather than 
circumventing the Clean Air Act, EPA is in fact complying with the 
Clean Air Act's requirements. Under section 110(c)(1) of the Clean Air 
Act, EPA must promulgate a FIP within 2 years of a finding of failure 
to submit a required SIP submittal. This requirement for FIP 
promulgation was triggered by a finding published on January 15, 2009 
(74 FR 2392), that Michigan and other states had failed to submit the 
required regional haze SIP. Michigan submitted its regional haze plan 
on November 5, 2010. EPA informed Michigan on multiple occasions that 
it did not expect to be able to approve the State's BART determinations 
for at least SMC and Escanaba Paper. Since Michigan did not submit a 
SIP with BART limits that EPA could approve as consistent with the 
Clean Air Act, EPA is obligated to promulgate FIP limits meeting BART 
requirements.
    This situation is different from the situation addressed by the 
court in the EME Homer City Generation opinion. In the EME Homer City 
Generation litigation, a key concern raised by the court was whether 
EPA had provided states suitable guidance on the pertinent requirement 
and thus whether the states had a meaningful opportunity to meet the 
requirement. In this case, EPA promulgated regulations defining the 
criteria for meeting the BART requirement in 2005, and so there can be 
no question that Michigan had adequate opportunity to meet the BART 
requirements, both in its initial submittal and after EPA expressed 
concern that Michigan's submittal appeared inadequate. Today's action 
is more than two years later than the State's submittal, so EPA did not 
apply a ``FIP-first process.'' The circumstances are very different and 
therefore EPA does not agree that the EME Homer City Generation opinion 
is relevant to EPA's proposed rule on August 6, 2012. However, EPA 
would welcome Michigan's submittal of a SIP to replace the FIP and will 
work with the State to approve expeditiously a SIP that suitably 
replaces the requirements EPA is promulgating today.

[[Page 71535]]

Lafarge Midwest Inc.

    Comment: Steve Kohl (Partner Warner Norcross & Judd LLP, Bodman 
Attorney & Associates) commented on behalf of his client, Lafarge 
Midwest Inc., that there was a typographic error in EPA's proposed 
approval of MDEQ's BART determination that compliance with the 
currently applicable Portland Cement--Maximum Achievable Control 
Technology (MACT) emission standard satisfies BART requirements for 
particulate matter (PM). EPA's proposal, as published, erroneously 
cites an emission standard of 0.030 pounds (lb) per ton of dry feed. 
The correct Portland Cement MACT emission standard is 0.30 lb per ton 
of dry feed.
    Response: EPA acknowledges the typographic error and agrees that 
the Portland Cement MACT PM emission standard is 0.30 lb per ton of dry 
feed.

Escanaba Paper

    EPA received a set of comments from Escanaba Paper addressing 
features of the proposed FIP for the Number 8 and Number 9 Boilers at 
the company's Escanaba facility.
    Comment: Escanaba Paper commented that on page 46922 of the 
preamble and all instances thereafter, all references to NewPage Paper 
should be corrected and revised to reflect the correct legal entity--
Escanaba Paper Company (EPC). The Escanaba Paper Company is the correct 
legal entity and is consistent with how the mill is identified in 
various business and Michigan regulatory programs (e.g., the Title V 
permit is issued to the Escanaba Paper Company).
    Response: Per the company's request, EPA has revised all references 
to identify the company that owns the pertinent facility as Escanaba 
Paper Company (or, as shorthand in this preamble, Escanaba Paper).
    Comment: Page 46922 of the preamble makes mention of the costs 
associated with controlling emissions on the Number 8 and Number 9 
Boilers at Escanaba Paper. Escanaba Paper noted that supplemental and 
updated information concerning control equipment costs were submitted 
to both MDEQ and EPA Region 5. Escanaba Paper believes that the 
supplemental and updated information confirm the conclusion that the 
addition of control equipment is unwarranted.
    Response: EPA notes the supplemental information, which supports 
EPA's proposed action, which proposed limits that EPA believes can be 
met without additional control beyond control Escanaba Paper has 
already installed.
    Comment: On page 46924 of the preamble, EPA stated that low 
NOX burners would achieve 40 percent reduction of emissions 
on the Number 8 Boiler and then uses this control efficiency to 
calculate cost effectiveness. Escanaba Paper noted that conversations 
with low NOX burner vendors did not confirm that an annual 
40 percent control efficiency is achievable, thus the cost 
effectiveness referenced by EPA could be higher.
    Response: EPA used estimates of costs and benefits of control to 
conclude that emission control relative to baseline emissions would be 
cost effective. Escanaba Paper has implemented controls similar to 
those that EPA judged to be cost effective, which, in absence of a 
limit requiring these controls, suggests that Escanaba Paper also finds 
these controls to be cost effective. Escanaba Paper does not suggest 
specific alternate cost effectiveness assumptions. EPA believes that 
low NOX burners can achieve 40 percent control, supporting 
EPA's cost effectiveness evaluation, but EPA could assume lesser 
control efficiency and higher costs per ton for a low NOX 
burner and would still find the limits it proposed to be cost 
effective.
    Comment: On pages 46924 and 46925 of the preamble, EPA Region 5 
stated that Escanaba Paper installed a flue gas recirculation system on 
the Number 8 Boiler to meet MDEQ ozone season NOX limits. 
Escanaba Paper noted that it can currently meet the ozone season 
NOX emission limits with or without operation of the flue 
gas recirculation system on the Number 8 Boiler.
    Response: EPA noted that Escanaba Paper had installed a flue gas 
recirculation system to point out that it gives the company an 
additional option for meeting the limit that EPA is promulgating for 
this boiler.
    Comment: Escanaba Paper noted that EPA references a ``worst-case'' 
annual NOX emission rate of 1,300 tons per year for the 
Number 8 Boiler. This annualized rate appears to be extrapolated by EPA 
and is unrepresentative of annual actual emissions. Escanaba Paper 
cannot verify the basis for this annualized NOX emission 
rate but notes that current 2011 NOX emissions of 33 tons 
are more than 1,200 tons less than those referenced by EPA.
    EPA guidance for conducting the BART visibility modeling is to use 
a worst-case, short-term emission rate (i.e., a 24-hour emission rate) 
for BART applicability determinations but to use annual actual 
emissions for assessing cost effectiveness. It is inappropriate to 
interchange these emission rates in these analyses. Further, Escanaba 
Paper believes that if current, worst-case short-term visibility 
impairing pollutant emission rates for all of the BART emission units 
at the mill were evaluated in a visibility modeling analysis, there 
would be no days that exceed a 0.5 dv level.
    Response: EPA agrees that the annualizing of a short-term worst 
case emission rate does not necessarily yield a realistic estimate of 
emissions for the facility being addressed here. While EPA is not 
speculating on the number of days that would exceed 0.5 dv impact at 
current worst case emission rates, EPA believes that the uncontrolled 
emissions are sufficiently high and the cost of controls sufficiently 
reasonable to warrant a determination that controls such as those that 
Escanaba Paper has added represent BART.
    Comment: EPA proposed to limit emissions from the Number 8 Boiler 
according to a weighted average of fuel specific emission limits, as 
discussed on page 46925 of the preamble. In lieu of these limits, 
Escanaba Paper believes that a single emission limit is preferable. 
Escanaba Paper proposed a NOX emission limit of 0.35 lb of 
NOX per million British Thermal Units (MMBtu). To support 
this NOX emission limit for the Number 8 Boiler, Escanaba 
Paper noted the following:

--The 0.35 lb NOX/MMBtu limit is more restrictive than the 
0.50 lbs NOX/MMBtu limit proposed for fuel oil,
--The 0.35 lb NOX/MMBtu limit will limit Escanaba Paper's 
use of fuel oil, which has higher SO2 and NOX 
emissions than natural gas,
--A single emission limit decreases Escanaba Paper's recordkeeping 
requirements and improves the efficiency of Escanaba Paper's monitoring 
and reporting, and
--The 0.35 lb NOX/MMBtu emission limit is consistent with 
EPA's approach to determining an emission limit based on continuous 
emission monitoring system (CEMS) data. As with the EPA approach used 
to establish a NOX emission factor for the SMC kiln, the 
Escanaba Paper CEMS data show that for non-idling periods, a 0.35 lb 
NOX/MMBtu emission factor is equivalent to the 95th 
percentile 30-day average CEMS value with a 5 percent compliance 
margin.

    Response: As recommended by Escanaba Paper, EPA is promulgating a 
fixed limit of 0.35 lb of NOX per MMBTU, in lieu of the 
proposed limit based on separate values for oil firing and gas firing 
(0.26 lb/MMBTU for gas firing and 0.50 lb/MMBTU for oil firing)

[[Page 71536]]

and calculated as an average weighted according to the heat input for 
each fuel. While this limit is less restrictive when the company is 
firing only gas, the limit is more restrictive when the company is 
firing substantial quantities of oil. Since oil firing tends to result 
in higher emissions, a fixed limit will provide incentive for the 
company to fire more natural gas and less oil. Finally, since this 
limit simply mandates control that is already being implemented, and 
there is no indication in the record that Escanaba Paper has any 
incentive to reduce the effectiveness of the existing controls system, 
EPA believes that the nature of the limit and its precise level in 
practice will not have a significant effect on actual emissions.
    Comment: On page 46925 of the preamble at footnote 2, EPA provided 
an assessment of NOX emission factors for the Number 8 
Boiler for the 2008/2009 and 2010/2011 periods. Escanaba Paper was 
unable to reproduce the 2008/2009 value cited by EPA.
    Response: In this footnote, EPA first cited 30-day average emission 
factors for 2010 and 2011, and then comments that ``Operation in 2008 
and 2009, during which the boiler was often oil-fired, yielded emission 
factors up to about 0.45 [lb]/MMBTU.'' As implied, this comment speaks 
to 30-day average emissions, and indeed the five highest average 
emission rates during 2008 and 2009 over 30 consecutive calendar days 
ranged from 0.44 to 0.48 lb/MMBTU. However, since Boiler Number 8 is 
operated to some degree as a backup to a larger (non-BART) boiler at 
the facility, it operates somewhat sporadically, so that 30 consecutive 
calendar days can include a substantial number of non-operating days. 
Therefore, EPA is expressing the limit in terms of 30 consecutive 
operating days. Using this method of calculating 30-day averages, the 
highest value in 2008 to 2009 was 0.36 lb/MMBTU.
    Comment: Escanaba Paper commented, ``The extrapolation of 
visibility impacts is not linear. It is not possible to determine what 
visibility impacts associated with the NOX emissions from 
the Number 9 Boiler would have occurred from improved combustion 
monitoring. Escanaba Paper also noted that emissions reported in 2002 
and 2004 were likely overstated. Escanaba Paper updated the 
NOX emission factor for the Number 9 Boiler in 2005 from the 
previous factors developed in 1992 and 1995.''
    Response: While deciviews are a logarithmic scale, a linear 
approximation is an appropriate means of estimating the impact of 
modest emission changes. In the analysis for this final rule, EPA has 
used the updated emissions information for the Number 9 Boiler.
    Comment: Contrary to the language in the preamble, Escanaba Paper 
does not believe that the NOX limits proposed at 40 CFR 
52.1183(i)(4) ``mandate the continued operation of the overfire air 
system that the company has installed on Boiler 9.'' Escanaba Paper 
wanted to confirm that there is no applicable requirement being imposed 
that tracks the operational status of the overfire air system on the 
Number 9 Boiler.
    Response: EPA confirms that no requirement is being imposed that 
directly mandates or tracks operation of the overfire air system on the 
Number 9 Boiler. Consistent with EPA's BART guidelines, EPA is setting 
an emission limit which requires emission control but is not mandating 
any particular means of meeting this limit. The statement in the 
preamble merely reflected EPA's expectation that the practical effect 
of setting the emission limit would be that Escanaba Paper would have 
to continue operating its overfire air system.
    Comment: Escanaba Paper requested clarification as to whether the 
requirements of 40 CFR 52.1183(i) should apply no later than five years 
after EPA approves the FIP per the compliance schedule contained in of 
40 CFR part 51 Appendix Y or ``upon the effective date of the 
rulemaking promulgating these limits.'' (See page 46925 of the preamble 
of the proposed rule.)
    Response: The Clean Air Act requires sources to meet BART limits as 
expeditiously as practicable. Escanaba Paper does not need to install 
any control devices to achieve the BART limit established in our FIP, 
and so EPA believes Escanaba Paper can meet the BART limits 
immediately. Therefore, ``expeditiously as practicable'' means 
immediate compliance for Escanaba Paper. Thus, the codification of 
these limits provides no delayed compliance date, and therefore the 
limits apply as soon as this final rule becomes effective.
    Comment: The reference to 40 CFR part 60 appendix B, performance 
specification 2, at 40 CFR 52.1183(i)(2) is not necessary. Escanaba 
Paper has already conducted the initial start-up of the NOX 
CEMS on the Number 8 Boiler and thus the reference to performance 
specification 2 is not appropriate. In fact, performance specification 
2 states that it is not for evaluating CEMS performance over a long 
period as seems to be the intention of this requirement. Escanaba Paper 
requests clarification or elimination of this specific requirement.
    Response: EPA agrees with Escanaba Paper's comment and in the final 
FIP is not requiring compliance with performance specification 2.
    Comment: The reference to 40 CFR part 60 appendix B performance 
specification 2 at 40 CFR 52.1183(i)(3) should be replaced with a 
reference to 40 CFR part 60 appendix F. Escanaba Paper requests 
clarification or modification of this specific requirement.
    Response: EPA agrees with Escanaba Paper's comment. Requirements 
for ongoing quality assurance of continuous emission monitors are 
specified in 40 CFR part 60 appendix F, not in 40 CFR part 60 appendix 
B performance specification 2. EPA is promulgating 40 CFR 52.1183(i)(3) 
with the recommended modification.
    Comment: Escanaba Paper requests that the procedures outlined in 40 
CFR part 60 appendix F be used to determine the 30-day rolling average. 
The use of appendix F would also be consistent with the guidance 
contained in 40 CFR part 51 appendix Y.
    Response: 40 CFR part 60 appendix F addresses quality assurance 
procedures, not procedures for 30-day averaging. Nevertheless, 
consistent with the apparent intent of this comment, and consistent 
with the guidance in 40 CFR part 51 appendix Y, EPA is setting the 
limit for the Number 8 Boiler based on the average of emissions for 30 
consecutive boiler operating days, where a day is defined as a boiler 
operating day if fuel is combusted at any time during the 24-hour 
period.
    Comment: Escanaba Paper requested that the phrasing ``Compliance 
stack test results'' be used to replace 40 CFR 52.1183(i)(6)(ii), which 
as proposed read ``All stack test results.'' In a separate comment, 
Escanaba Paper requested that the word ``compliance'' be inserted after 
``shall submit reports of any'' at 40 CFR 52.1183(i)(6)(v).
    Response: The first of these comments requests that Escanaba Paper 
only be required to keep records of emission tests mandated by EPA or 
the State for purposes of compliance assessment, and that Escanaba 
Paper not be required to keep records of tests conducted for the 
company's own purposes. The second of these comments requests that the 
company not be required to report the results of such tests to EPA. 
Consistent with its general practice, EPA in this final rule is 
requiring the company to keep records of such tests but is not 
requiring the company to report the results of such tests. If a 
subsequent compliance test, requested by the State or EPA, shows 
noncompliance, the retained record of the nonmandated test

[[Page 71537]]

would provide useful information, for example regarding the duration of 
noncompliance. (If a subsequent test shows compliance, the State and 
EPA would have little reason to inquire about nonmandated stack tests.) 
On the other hand, in the interests of encouraging Escanaba Paper to 
assess its compliance status whenever it has concerns about its 
emission rate, the final FIP does not require the company routinely to 
report results of emission tests that neither the State nor EPA 
requested, again consistent with its general practice. Thus, EPA has 
made the requested modification to 40 CFR 52.1183(i)(7)(v), but has not 
modified 40 CFR 52.1183(i)(6)(ii).
    Comment: Escanaba Paper requested that the phrase ``or when Boiler 
8 is not operating'' be inserted after ``except for zero and span 
adjustments and calibration check''. As the applicable requirement is 
currently written, if the CEMS is not operated because the Boiler 
Number 8 is not operating, a quarterly report must document this 
situation.
    Response: This final rule reflects the requested modification. EPA 
does not intend to require Escanaba Paper to document non-operation of 
its CEMS for times when its boiler is not operating.

SMC

    Cortney Schmidt, environmental manager at SMC-Charlevoix, submitted 
comments on the proposed rulemaking on September 4, 2012. These 
comments elaborated on comments in a separate letter that Mr. Schmidt 
sent on August 2, 2012. Mr. Schmidt further sent a letter on August 8, 
2012, responding to questions from EPA.\1\
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    \1\ EPA has had a number of meetings and discussions with SMC 
since proposing action on Michigan's regional haze plan and the FIP 
imposing BART limits on SMC and Escanaba Paper. On November 12, 
2012, SMC electronically submitted additional comments in which it 
asserts that the Charlevoix plant is not BART-eligible because 
construction that took place at the plant in 1979 constituted a 
``reconstruction'' for BART applicability purposes. This issue was 
not raised in Michigan's SIP submittal or in SMC's previous written 
comments. Nevertheless, EPA will carefully review the new comments 
and take any action warranted. However, because it did not receive 
the comments until it was in the last stages of preparing this final 
action, well after the close of the comment period, EPA could not 
consider the comments in taking this action.
---------------------------------------------------------------------------

    Comment: SMC found it unfortunate that EPA did not communicate 
directly with SMC much earlier in the process, because ``surprising SMC 
at the last minute'' foreclosed opportunities for ``more deliberate, 
collaborative action.''
    Response: EPA submitted comments to Michigan on June 23, 2010, 
stating, ``We disagree with MDEQ's assessment that a selective non-
catalytic reduction system is technically infeasible and not cost-
effective.'' EPA provided more detailed comments, including an 
assessment of the cost-effectiveness of a selective noncatalytic 
reduction system (SNCR), to Michigan by email on December 8, 2011. At 
EPA's request, Michigan forwarded these emailed comments to SMC. 
Finally, EPA sent comments to Michigan on May 24, 2012, and emailed a 
copy of the comment letter directly to SMC. Thus, EPA has ensured that 
SMC was aware of EPA's position and had opportunities to engage in 
discussions regarding the proposed BART determination for SMC-
Charlevoix.
    Comment: SMC quoted from three Federal circuit court opinions that, 
in SMC's view, demonstrate that EPA's proposal to disapprove ``the 
portion of Michigan's SIP related to BART requirements for [SMC-
Charlevoix],'' and ``to substitute EPA's own limits in their place, is 
impermissible under the Clean Air Act.'' Specifically, SMC asserted 
that the U.S. Court of Appeals for the D.C. Circuit in EME Homer City 
Generation, LP v. EPA, No. 11-1302 (D.C. Cir. August 21, 2012) and the 
U.S. Court of Appeals for the Fifth Circuit in Luminant Generation Co. 
v. EPA, 675 F.3d 917 (5th Cir. 2012) and Texas v. EPA, No. 10-60614 
(5th Cir. August 13, 2012) held that if a state plan meets the 
standards required by the Clean Air Act, EPA cannot force the states to 
adopt specific control measures.
    Response: These decisions address rulemakings that are unrelated to 
regional haze and circumstances that do not invoke the same 
relationship between state and federal action. Moreover, these courts 
acknowledge that EPA has a valid role in assessing whether a state 
submittal is compliant with the Clean Air Act. EPA proposed to find 
that Michigan's submittal was not compliant with the Clean Air Act, 
insofar (in part) as Michigan failed to require BART for SMC-
Charlevoix. SMC appears to be arguing that EPA may not disapprove a 
submittal that meets Clean Air Act requirements to force the State to 
adopt an alternative measure that EPA prefers, but EPA is not taking 
such an action here. Nor is EPA using the SIP process to force Michigan 
to adopt any particular control measure. Instead, EPA is simply 
fulfilling its responsibility to evaluate the State's submittal and, in 
the absence of a state submittal meeting applicable requirements, 
promulgating federal limits to meet these requirements.
    Comment: SMC noted EPA's finding that Michigan's SIP ``includes a 
reasonable set of measures that provide its appropriate share of 
reductions toward achieving reasonable progress goals.'' (See 77 FR 
46919.) SMC concluded that, because the emissions limits proposed by 
Michigan allow the State to meet the reasonable progress goals for 
improving visibility, ``EPA cannot * * * require emissions limits for 
SMC which would go beyond allowing the State to meet those progress 
goals.'' SMC stated that the BART requirements are included within the 
set of emission limits that EPA may require only as ``necessary to make 
reasonable progress.''
    Response: Clean Air Act section 169A(b)(2) provides that the 
measures that are necessary to provide for reasonable progress 
necessarily include measures representing BART. The fact that EPA 
codified BART requirements separately from the requirements for 
reasonable progress (in 40 CFR 51.308(e) versus 40 CFR 51.308(d)) 
supports an interpretation that BART requirements must be satisfied 
irrespective of whether reasonable progress goals are being met.
    Another possible reading of section 169A(b)(2) is that a plan that 
lacks BART measures by definition fails to include all the measures 
that this section mandates be part of the plan for achieving reasonable 
progress. That is, under this interpretation, BART is necessarily a 
reasonable measure, and a plan, such as Michigan's, that fails to 
require BART cannot be considered to provide for reasonable progress.
    In response to this comment, EPA is clarifying that, insofar as 
Michigan's plan fails to require BART on at least two facilities, 
Michigan's plan fails to include all reasonable measures. To that 
extent, Michigan's plan may be considered to fail to provide for 
reasonable progress, but EPA believes that the plan, in combination 
with the FIP (in conjunction with BART limits for Tilden Mining, being 
addressed separately), meets reasonable progress requirements.
    Comment: SMC cited six factors listed in the definition of BART at 
40 CFR 51.301 that are to be taken into consideration in determining 
BART. With respect to the first factor, the technology available, SMC 
believes that ``EPA did not properly evaluate the capabilities of 
technology available for NOX control at Charlevoix.'' SMC 
provided a review of the history of the SMC-Charlevoix kiln system 
design, including conversion in the late 1970s to a preheater/
precalciner design and installation of an indirect firing system.
    Response: EPA has considered the design of the SMC-Charlevoix kiln 
system in evaluating BART for this facility, as discussed more fully 
below.

[[Page 71538]]

    Comment: SMC maintained that ``the normal variability of 
NOX formation in cement kilns justifies the 6.5 pounds per 
ton NOX emission limit contained in Michigan's SIP.'' SMC 
provided a graph of emissions data for 2006 to 2008, and states that 
the ``average of [these] data is 4.56 pounds per ton, but there is a 
significant standard deviation of 0.64 pounds per ton, leading to a 
99.7 [percent] confidence number of 6.47 pounds per ton.''
    Response: EPA recognizes the variability in NOX 
formation at SMC-Charlevoix. EPA addressed this variability in its 
proposal in part by proposing a limit in the form of a 30-day average. 
Further discussion of the appropriate limit in the context of this 
variability is provided below.
    The statistic SMC cites as being the 99.7th percentile (the value 
three standard deviations above the mean) is in fact an even higher 
percentile, specifically the 99.87th percentile. Although EPA is basing 
its limits on the 95th percentile baseline emissions, this error is 
worth noting because EPA is avoiding the same error in estimating the 
95th percentile baseline emissions. This error presumably reflects 
confusion between two statistical values, one being the percent of 
values within three standard deviations both above and below the mean, 
and the other being the percent of values between zero and a value that 
is three standard deviations above the mean. The latter statistic is 
the appropriate statistic in finding percentiles, since a given 
percentile is the value that exceeds that percentage of the entire 
distribution, including values down to zero, not just the portion of 
the distribution down to another value for example three standard 
deviations below the mean. In a normal distribution, 49.87 percent of 
values are between the mean and three standard deviations above the 
mean, and the same 49.87 percent of values are between three standard 
deviations below the mean and the mean, for a total of 99.74 percent of 
values within three standard deviations of the mean. In contrast, in 
determining percentile values, one must sum the 49.87 percent of values 
that are below three standard deviations above the mean but above the 
mean together with the full 50 percent of values that are below the 
mean. Thus, the value three standard deviations above the mean in a 
normal distribution is the 99.87th percentile value, not the 99.74th 
percentile value. For similar reasons, EPA is estimating 95th 
percentile baseline emissions as the value 1.645 standard deviations 
above the mean, rather than the value 1.96 standard deviations above 
the mean that SMC's approach would suggest.
    Comment: SMC commented that it ``has put in place more modern 
technology than its competitors, such as Lafarge's Alpena plant.'' 
Elsewhere, SMC cited other plants with higher emission limits which, it 
claims have ``not been upgraded to the same degree as the Charlevoix 
plant,'' and noted that ``SMC already outperforms those [limits] with 
the improvements it already has put in place.''
    Response: With the consideration of source-specific factors, as 
required in determining BART at each facility, dissimilarities among 
facilities can yield dissimilarities in control requirements. Lafarge's 
Alpena facility has long wet kilns, a different design with inherently 
more NOX emissions than SMC-Charlevoix's preheater/pre-
calciner kiln. In fact, BART at Lafarge requires similarly effective 
SNCR there as at SMC-Charlevoix, and BART at Lafarge requires sulfur 
emission control that is not required at SMC-Charlevoix.
    Comment: SMC asserted that ``EPA will expect compliance with its 
emission limit every day, not just `on average' over several years. 
Therefore, EPA also was incorrect when it derived its proposed 
NOX emission limit of 2.3 [lb per ton] for the Charlevoix 
plant by applying a presumed 50 percent reduction against the plant's 
4.56 [lb per ton] average, which was achieved over several years. * * * 
An `average' value means that half of the actual performance is greater 
than that average. Therefore, any proposed reduction should not be 
applied to an average performance over several years, but instead must 
take into consideration the normal standard deviation from that 
average. This is the same rationale that was recently used by EPA in 
its agreement with Holcim's Montana Plant. Consequently, in this 
instance, if there was to be any reduction, it must be applied against 
the 6.5 [lb per ton] value which represents the 99.7 percent confidence 
value of SMC's actual performance.''
    Response: SMC is noting the variability in emissions at SMC-
Charlevoix, observing that a several year period will include many 
occasions with baseline emissions that are above average, and 
commenting that any emission limit should be based on those elevated 
baseline emission conditions. EPA addressed this concern in its 
proposed rulemaking. EPA proposed a limit that would require an average 
control of approximately 50 percent. In addition to defining the limit 
as a 30-day rolling average, EPA's notice of proposed rulemaking 
describes an examination of the variability of emissions at SMC-
Charlevoix and the feasibility of achieving the proposed limit even 
during periods with greater emissions formation. The proposed 
rulemaking states, ``According to 2006 to 2008 data from the facility, 
[the proposed limit] would require slightly under 60 percent control 
from St. Marys Cement's 95th percentile 30-day average emission rate, 
which the evidence from tests at St. Marys Cement's facility in Dixon, 
Illinois (SMC-Dixon) indicates is readily achievable, particularly 
since a limit of 2.30 lb per ton of clinker would only occasionally 
require this level of control.'' 77 FR 46924. Conversely, at the 5th 
percentile of the 30-day average emission rates, or 3.5 lb per ton, the 
proposed limit would require only about 35 percent control. In this 
sense, EPA proposed a limit that would sometimes require about 60 
percent control, sometimes require only about 35 percent control, and 
on average require slightly less than 50 percent control.
    Thus, EPA considered the variability of baseline emissions but also 
considered the variability of control effectiveness in determining its 
proposed emission limit. Nevertheless, as discussed below, EPA is 
modifying its view of achievable control efficiencies and is modifying 
its approach for determining appropriate limits accordingly.
    Comment: ``Although better performing than other old plants, unique 
Charlevoix design features increase NOX formation compared 
to the most modern kiln designs.'' SMC discussed the ratio of the kiln 
length to kiln diameter at SMC-Charlevoix, as well as the need to 
operate the kiln in an oxidizing atmosphere to minimize the likelihood 
of formation and buildup of calcium sulfate. SMC concluded that these 
factors raise the amount of energy needed to produce a kilogram of 
clinker from about 800 kilocalories to about 930 kilocalories, which 
raises expected NOX emissions per ton of clinker.
    Response: Average NOX emissions at SMC-Charlevoix are 
about 4.5 lb per ton of clinker. According to the Compilation of Air 
Pollution Emission Factors (AP-42), average emissions for a 
representative cement plant of the design of SMC-Charlevoix, i.e., a 
preheater/precalciner kiln, is 4.2 lb per ton of clinker. Thus, SMC-
Charlevoix has very typical NOX emissions for a facility of 
its type.
    While it may be true that NOX emissions at SMC-
Charlevoix are slightly higher than those at newer plants, EPA is also 
setting a higher limit for SMC-Charlevoix than we have set for

[[Page 71539]]

new cement plants. The new source performance standards for cement 
plants require NOX emission rates not to exceed 1.5 lb per 
ton of clinker. Were EPA to require similar rates for SMC-Charlevoix, 
but allow for the 16 percent increase in heat input noted in the 
comment, EPA would be imposing an emission limit of 1.74 lb per ton of 
clinker, rather than the 30-day average limit of 2.8 lb per ton of 
clinker finalized in this rule.
    Comment: ``EPA's conclusion that SNCR will allow a 50 percent 
reduction in NOX emissions from the Charlevoix plant is 
incorrect because the plant's design is incompatible with effective 
SNCR use.'' SMC argued that the achievement of emission rates as low as 
2.3 lb per ton requires kiln design features ``(e.g., proper kiln 
length to diameter dimensions and increased calciner retention time)'' 
that are not present at SMC-Charlevoix. SMC provided a figure 
identifying temperatures and residence times at various locations 
within the kiln system, and concludes that ``nowhere in the kiln riser 
or flash calciner regions of the system does the plant reach the 
optimum temperature profile to support an effective SNCR reaction.'' 
SMC also found that the ``residence time at Charlevoix is not adequate 
for use of SNCR.'' SMC provided a graph entitled ``SNCR Efficiency 
based on Residence Time (Lab Trial).'' SMC stated that at SMC-
Charlevoix, ``there is only a 0.11 second retention time between the 
reagent injection point and the time the system reaches the low end of 
efficiency point for the SNCR reaction.'' SMC further quotes EPA and 
other work suggesting that ``larger plants had lower efficiencies than 
smaller sized plants.''
    SMC stated, ``Actual test results demonstrate that SNCR will have 
only limited success in NOX control at Charlevoix.'' SMC 
presented results of trial urea injections conducted in 2005 to test 
the NOX reductions that an SNCR system might be expected to 
achieve. SMC described these tests as demonstrating that urea injection 
achieved less NOX reduction than expected. SMC provided 
results in a table that gives average NOX reduction 
percentages for four sets of tests, each conducted with urea injection 
at a different location in the kiln system and with a different urea 
injection rate. The table also gives urea injection rate in terms of 
the normalized stoichiometric ratio (NSR).\2\ ``In one test run, [with 
an NSR equal to 1.07], the reduction was 36.8 percent. * * * However, 
that was coupled with a significant amount of ammonia slip, based on 
the theoretical calculations from the NOX present. The time 
frames for this trial were short, roughly several 10 minute runs to 
consolidate the average, and thus SMC is not confident that these 
reductions are sustainable.'' SMC provided a photograph that it 
considers to document excess ammonia (ammonia slip) appearing as a 
visible detached plume occurring at SMC-Charlevoix.
---------------------------------------------------------------------------

    \2\ Normalized stoichiometric ratio expresses the ratio of the 
number of moles of ammonia equivalent to the pre-control number of 
moles of NOX. Each molecule of urea yields the equivalent 
of two molecules of ammonia. Thus, for example, if 0.6 moles of urea 
(yielding 1.2 moles of ammonia) are injected per mole of 
NOX, NSR = 1.2.
---------------------------------------------------------------------------

    SMC provided a report from DeNOX Technologies describing 
the urea trials. SMC quoted from this report: ``Typically, 
NOX reduction at a NSR of 1.0 is 40-60 percent; Charlevoix 
demonstrated 25-30 percent.'' In addition, SMC stated, 
``DeNOX's owner noted * * * that he had seen SNCR 
effectively solve NOX issues in multiple cement plants. 
However, he commented to SMC that he was amazed that SNCR is not as 
efficient in SMC's system, and he believed it must be because of 
Charlevoix's calciner design.''
    Response: EPA believes that the tests of SNCR at SMC-Charlevoix do 
not demonstrate that SNCR would be ineffective in reducing emissions, 
and in particular do not demonstrate that SMC could not meet the 
emission limits established in this final action. EPA notes that the 
tests SMC described were performed with urea rather than with ammonia, 
which is both more commonly used for this application and significantly 
more effective.
    SMC-Charlevoix's test results were the subject of ``SNCR emission 
control,'' published in the August 2006 edition of the journal 
International Cement Review (the Horton article).\3\ The article 
presents NOX reductions resulting from urea injection at 
``Plant B,'' which are the results found at SMC-Charlevoix. The article 
also includes contrasting results from testing at ``Plant A,'' a plant 
with the same type of design as SMC-Charlevoix, demonstrating that 
NOX reductions of more than 50 percent could be achieved 
with ammonia injection at an NSR as low as 0.56 (i.e., the injection of 
only 0.56 moles of ammonia per mole of NOX). The article 
includes a graph showing that use of ammonia achieves higher 
NOX reductions than urea and has maximum efficiency at lower 
temperatures than urea. EPA views the 50 percent reduction at Plant A 
as more representative of the level of emission reduction that a 
properly designed and operated SNCR at SMC-Charlevoix could achieve. In 
fact, at the temperatures at SMC-Charlevoix cited by SMC, use of 
ammonia is expected to provide at least 40 percent more, and possibly 
greater than twice as much, NOX reduction as is expected 
from use of urea. Thus, while SMC's concerns may apply to SNCR using 
urea, EPA believes that SMC can address these concerns by using 
ammonia.
---------------------------------------------------------------------------

    \3\ Joe Horton, Suwannee American Cement/Votorantim Cimentos 
North America, Al Linero, Florida Department of Environmental 
Protection, and F. MacGregor Miller, Cement Etc., Inc, ``SNCR 
Emission Control,'' International Cement Review, August 2006.
---------------------------------------------------------------------------

    EPA also believes that the DeNOX Technologies report 
cited by SMC demonstrates that SMC-Charlevoix can achieve significant 
NOX emission reductions even using urea. Table 1 presents 
relevant information derived from the DeNOX Technologies 
report. During these trials, urea was injected at three locations: (1) 
After the kiln but before the tertiary air inlet, (2) in a duct after 
the tertiary air but before the precalciner, and (3) after the first 
stage of the preheater that is after the precalciner. In Table 1, the 
reduction per mole of reagent (ammonia equivalent) is computed by 
dividing the NOX reduction percentage by the NSR.

                    Table 1--NOX Emission Reductions at SMC-Charlevoix From Injection of Urea
----------------------------------------------------------------------------------------------------------------
                                                                                                   Reduction per
                    Location                       Reagent rate         NSR        NOX reduction   mole reagent
                                                      (gph)                          (percent)       (percent)
----------------------------------------------------------------------------------------------------------------
Before Tertiary Air............................            145              0.38            15.8            41.6
Before Tertiary Air............................            314.3            1.07            36.8            34.4
After Tertiary Air.............................            282              0.72            28.9            40.1
After pre-calciner.............................            180.5            0.54            21.4            39.6
----------------------------------------------------------------------------------------------------------------

[[Page 71540]]

    These results suggest the relationship between the quantity of 
reagent and the NOX reduction. Notably, as increasing 
amounts of urea are injected, the resulting NOX reductions 
increase correspondingly. Examined in terms of NOX reduction 
per mole of ammonia equivalent injected, while some loss of efficiency 
is expected, the efficiency of urea utilization even at the highest 
urea injection rate is similar to the efficiency of urea utilization at 
the lowest urea injection rate. These results also suggest that the 
control efficiency is similar across several urea injection locations.
    EPA believes that these tests demonstrate that SNCR at SMC-
Charlevoix as it is currently configured can readily achieve at least 
30 to 37 percent NOX reduction. As discussed above, EPA 
believes that use of ammonia would provide significantly greater 
control than was found in the tests at SMC-Charlevoix using urea. The 
tests, being short tests, by definition did not test the sustainability 
of control, but SMC provides no evidence that these short-term results 
could not also be achieved over longer periods. In addition to the 
change in reagent, SMC has a range of options for optimizing SNCR 
effectiveness and addressing the potential operational issues arising 
from SNCR use. These include: Use of facility design modifications that 
either reduce NOX emissions directly or facilitate use of 
SNCR or both; use of reagent injection both before and after the 
calciner; use of lime injection; adjustment of air flows; and other 
changes in operating characteristics. SMC in its written comments and 
in discussion during meetings with EPA did not address the option of 
using ammonia, either to dispute the feasibility of its use or to 
provide evidence regarding its effectiveness at SMC-Charlevoix. Since 
the tests at SMC-Charlevoix used urea and are not indicative of the 
NOX reduction that can be achieved using ammonia, the most 
pertinent evidence regarding potential effectiveness of SNCR using 
ammonia is the results of tests at SMC-Dixon, corroborated by results 
of tests at ``Plant A'' in the Horton paper and elsewhere. This 
evidence indicates that the 50 percent NOX emission 
reduction required at other cement plants is also achievable at SMC-
Charlevoix.
    The issues raised in SMC's comments suggest that SMC may need more 
than three years to explore the various alternatives for reducing 
NOX emissions at SMC-Charlevoix. Therefore, EPA is 
promulgating a compliance deadline for SMC that is extended by one year 
from the compliance deadline that EPA proposed, requiring compliance 
within approximately four years from the date of this rulemaking.
    In response to this comment, EPA also reevaluated the appropriate 
NOX limits. While EPA proposed a limit based on 50 percent 
control on average, effectively requiring 60 percent control when 
emission rates are at the 95th percentile level, EPA is promulgating a 
limit that will require only 50 percent control when emission rates are 
at the 95th percentile level.
    EPA proposed a single limit, based on a 30-day average. 
Reconsidering the basis for determining the level of the limit, in 
particular considering a limit based on the 95th percentile emission 
level rather than based on the mean emission level, requires 
reconsidering the form of the standard. Whereas the proposed limit was 
intended to require a reasonable degree of control at all times, a 30-
day average limit derived from 95th percentile emissions would allow 
substantially less emission reduction on other occasions. For example, 
at SMC-Charlevoix, a limit requiring 50 percent reduction from 95th 
percentile emissions would only require about 20 percent emission 
reduction at the 5th percentile emission level.
    BART reflects controlling emissions at all times, not just on 
occasions with elevated emissions. For this reason, along with a 30-day 
average emission limit, EPA is also promulgating a limit on 12-month 
average emissions. In this pair of limits, the 30-day average limit 
ensures that days with high baseline emissions are well controlled, and 
the 12-month average limit ensures that BART control is achieved on 
days with lower baseline emissions as well.
    EPA used the most recent three years of emissions data available, 
from 2006 to 2008, to compute 30-day averages and 12-month averages. 
EPA is setting the 30-day average limit as a daily-rolling average 
limit, based on values recomputed every operating day to include the 
most recent 30 operating days, and EPA is setting the 12-month average 
as a block average, based on values recomputed at the end of each 
calendar month to include the preceding 12 calendar months. EPA used 
these averaging approaches to determine the distribution of 30-day and 
12-month averages of NOX emissions during the 2006 to 2008 
period. The 95th percentiles among these sets of values (more 
precisely, 1.645 standard deviations above the means, calculated 
assuming a normal distribution) are a 30-day average of 5.6 lb per ton 
of clinker and a 12-month average of 4.7 lb per ton of clinker. EPA is 
setting limits based on a 50 percent reduction from these values, which 
with rounding equal a 30-day average limit of 2.80 lb per ton of 
clinker and a 12-month average limit of 2.40 lb per ton of clinker.
    EPA had several reasons for selecting the 95th percentile of 
baseline emissions as the starting point for determining the limits. 
First, use of the 95th percentile is an approach that EPA commonly uses 
in setting emission limits for similar sources in other contexts. For 
example, the consent decree for Lafarge Cement, which requires BART at 
Lafarge's Alpena facility, mandates control at the 95th percentile 
level. That is, this approach is responsive to SMC's concerns about EPA 
providing equity in its regulation of SMC and Lafarge. (Lafarge is also 
subject to both a 30-day average limit and a 12-month average limit.) 
Second, EPA considers the 95th percentile an appropriate compromise 
between setting the limit based on too low a percentile, which creates 
a higher percentage of time when the limit is more difficult to meet, 
and setting the limit based on too high a percentile, which too 
infrequently requires the company to achieve fully effective emission 
control. Third, EPA believes that the variability of the emission rates 
after control is likely to be less than the current variability. This 
is in part because the emission control can be operated in a manner 
that minimizes the difference in emission rates between the upper and 
the lower end of the distribution, in part because emissions control 
tends to be more effective when emission rates are higher, and in part 
because the limit will give the company incentive to use its knowledge 
about operating parameters that influence emission rates to minimize 
emissions on occasions with higher emission rates. Fourth, since 
emission rates above the 95th percentile by definition rarely occur, 
any extra effort needed to achieve the limit on such occasions would 
rarely be needed.
    SMC cites the limit for a Holcim plant in Montana as precedent for 
basing a limit on an upper point on the distribution, and yet SMC 
recommends basing the limit for SMC-Charlevoix on a more extreme 
statistic than was used for Holcim in Montana. EPA set the 
NOX limit for Holcim by assuming a 58 percent reduction from 
the 99th percentile of baseline emissions. In that case, EPA had 
limited information on emissions of the facility; in particular, EPA 
did not have information on 95th percentile emissions. SMC does not 
explain why it seeks the use of a more extreme statistic (supposedly 
the 99.7th percent, but in fact the 99.87th

[[Page 71541]]

percentile), but the availability of more information allows EPA to use 
a more appropriate statistic (the 95th percentile) for SMC-Charlevoix.
    Comment: SMC stated that ``ammonia slip is a likely result of use 
of SNCR at Charlevoix.'' SMC quoted from EPA and the Portland Cement 
Association that use of SNCR under suboptimal conditions can result in 
unwanted ammonia emissions.
    Response: SMC does not demonstrate that proper use of SNCR at SMC-
Charlevoix would cause ammonia slip at problematic levels. The photo of 
a detached plume at SMC-Charlevoix provided by SMC in its comments does 
not demonstrate that ammonia concentrations in the plume were high, and 
SMC does not provide information about operating conditions at the time 
of the picture to be able to judge this and other potential 
explanations of a detached plume at the facility. A theoretical 
comparison of urea input to NOX levels does not establish 
the presence or absence of ammonia slip, because such an approach fails 
to consider other factors reducing ammonia levels such as oxidation. In 
addition, for reasons discussed in the Horton paper cited above, 
describing the relative merits of using ammonia rather than urea, 
evidence that ammonia slip occurred during injection of urea does not 
necessarily indicate that ammonia slip would occur with a properly 
designed and operated SNCR using ammonia. While SMC would have to 
design an SNCR system carefully to avoid causing excess ammonia 
emissions, many other cement plants have successfully implemented SNCR 
without ammonia slip problems, and SMC has provided no evidence that 
this would be a challenge that cannot be solved at SMC-Charlevoix. As 
discussed above, EPA anticipates that SMC will conduct a variety of 
trials to assess the most effective NOX control program, and 
EPA anticipates that one of the parameters to be addressed in these 
trials is to avoid emitting excess ammonia.
    Comment: SMC stated that the ``size of Charlevoix reduces its 
ability to control NOX using SNCR.'' SMC quoted an EPA 
report regarding NOX control at coal-fired electric utility 
boilers stating that ``whereas smaller boilers may be able to achieve 
>60 percent NOX reduction, larger boilers may be capable of 
achieving reductions of only ~30 percent.'' SMC comments that a study 
of cement kilns also noted a ``correlation between plant size and 
reduction efficiency.'' SMC provided a graph labeled ``SNCR Test 
Results based on Capacity.'' SMC concludes that SMC-Charlevoix ``should 
not be expected to have NOX reduction efficiencies of the 
smaller plants.''
    Response: SMC does not clarify its size in relation to the other 
facilities addressed in these studies. Since SMC-Charlevoix has lower 
heat input than many electric utility boilers, this comment would seem 
to suggest that SMC should be able to achieve the higher rather than 
the lower end of the range of utility boiler control efficiencies. The 
graph addressing cement plants that SMC provided is illegible, and so 
it is indeterminable from this graph how the size of SMC-Charlevoix 
compares to the size of other cement plants tested.
    However, EPA also examined the size of SMC-Charlevoix relative to 
the size of cement plants that have been subject to best available 
control technology determinations for new sources or major 
modifications in the last 6 years. These facilities have capacities 
quite similar to the capacity of SMC-Charlevoix. As seen in the EPA's 
RACT/BACT/LAER Clearinghouse, these facilities were typically issued 
permits that allowed 1.95 lb of NOX emissions per ton of 
clinker. Thus, even if smaller facilities are capable of even better 
NOX control, this evidence makes clear that the size of SMC-
Charlevoix should not prevent SMC from achieving the level of control 
that EPA proposed to require.
    Comment: SMC submitted several comments regarding the second factor 
to be considered in determining BART, namely the costs of compliance. 
The first of these comments reflected concerns about material buildup 
exacerbated by injection of urea and the costs that SMC would face in 
addressing that problem. SMC commented ``Both SMC and EPA recognize 
that there are potential solutions [to this problem.] * * * The most 
effective solution is an extensive modification to the flash calciner 
including geometry changes to the process ductwork.'' SMC estimated 
that a new in-line calciner would cost $18,000,000. SMC also discussed 
a second option in which SMC uses its existing kiln system 
configuration. In conjunction with criticism of EPA's cost estimates, 
SMC provided its own cost estimates for these two options.
    Response: EPA agrees that SMC has multiple options for implementing 
SNCR in a way that is both effective in reducing NOX 
emissions and workable in avoiding operational problems such as 
material buildup and ammonia slip. In addition to the option of a new 
in-line calciner and an option with the existing equipment using urea 
in the existing SNCR, other options include using ammonia with existing 
plant equipment and making other changes to improve flue gas chemistry. 
In addition to these four options, EPA believes that SMC has numerous 
variables that it can adjust and design features it can modify to 
maximize control efficiency and minimize NOX emissions.
    Specifically concerning material buildup, the Horton paper cited 
above provides useful insights from comparison of SNCR use at various 
cement plants. The article observes that urea decomposes into carbon 
moNOXide (CO) as well as ammonia, documents spikes in CO 
concentrations following urea injection, and evaluates the consequences 
of this CO. The article notes the propensity of the CO to consume 
hydroxyl radical that otherwise would help reduce nitric oxide to 
elemental nitrogen. The article concludes that urea is less effective 
in reducing NOX than ammonia at the temperatures found at 
SMC-Charlevoix. Further, CO from urea decomposition may well cause 
localized reducing environments, potentially causing sulfur 
volatilization, which in turn could cause the buildup of sulfates that 
could form material buildup within the kiln system. That is, injecting 
urea may be more prone to cause buildup problems than injecting 
ammonia. Many other cement plants with similar SO2 emissions 
have successfully operated SNCR without significant material buildup 
issues, and EPA believes that SMC too can find appropriate operational 
approaches (presumably involving use of ammonia as the NOX 
reducing reagent) that will provide successful NOX control 
without significant material buildup issues.
    Comment: SMC commented that installation of a new in-line calciner 
would be a redesign of the facility that is not intended to satisfy 
BART. SMC quotes EPA's BART guidance: ``We do not consider BART as a 
requirement to redesign the source when considering available control 
alternatives. For example, where the source subject to BART is a coal-
fired electric generator, we do not require the BART analysis to 
consider building a natural gas-fired electric turbine. * * * ''
    Response: EPA is not requiring any particular kiln system design at 
SMC-Charlevoix, nor does EPA believe that the limit it proposed 
indirectly mandates any particular design. EPA is promulgating limits 
that EPA believes SMC can meet in several ways. EPA is merely observing 
that replacement of the pre-calciner is one of several options SMC may 
choose to employ to meet the limits that EPA is promulgating.
    SMC-Charlevoix currently has a pre-calciner, and so EPA does not 
view the

[[Page 71542]]

modification of the facility to replace the existing pre-calciner with 
an improved pre-calciner, in conjunction with changes in air flow to 
reduce the likelihood of material buildup, as a ``redesign'' of the 
source. Indeed, unlike the example SMC cites, the replacement of the 
pre-calciner at SMC-Charlevoix would not change the fundamental design 
of the facility. Similarly, SMC may need to replace its SNCR system to 
meet EPA's limit, but EPA does not consider this to change the 
fundamental design of the facility either.\4\ Both before and after the 
modification, the facility would be described as a preheater/pre-
calciner type Portland cement plant.
---------------------------------------------------------------------------

    \4\ The existing SNCR was installed to provide an option to meet 
State limits on ozone-season NOX emissions. However, SMC 
asserts that it is able to meet the State limits without operating 
the SNCR, and EPA understands that SMC rarely if ever operates the 
SNCR, so that the SNCR has no significant effect on current 
emissions.
---------------------------------------------------------------------------

    SMC, in evaluating how best to meet BART limits, may in fact decide 
that the replacement of its calciner and associated air flow changes, 
would be ``the most effective solution'' to ``improve NOX 
control and address the buildup problem.'' Indeed, as discussed below, 
EPA developed cost estimates predicated on SMC installing both a 
replacement calciner and a new SNCR. Nevertheless, as SMC implicitly 
concedes, other approaches may also suffice for effective operation 
with SNCR. Again, EPA expects that its proposed limit will require 
installation and operation of a SNCR system and some set of 
modifications to accommodate the system and maintain efficient and 
effective operation, but EPA does not believe that its proposed limit 
requires any fundamental redesign of SMC-Charlevoix.
    Comment: SMC criticized EPA's estimated number of hours that heat 
input to the urea storage and handling system would be needed to assure 
that its urea would not crystallize, which SMC asserts would occur at 
48[deg] F. SMC objected to EPA's estimate that the ``cooler season'' 
includes 4,000 hours requiring heating; SMC asserts that review of 
local meteorological data finds that ``heat input would be required 
6,750 hours.''
    Response: EPA conducted its own analysis of Charlevoix 
meteorological data, available from the web site of the MDEQ. EPA's 
analysis considered actual heating needs each hour, reflecting the fact 
that an hour at 40[deg] F, for example, would require less heating than 
an hour at 20[deg] F. That is, EPA evaluated a heating degree hour 
metric, rather than SMC's simpler metric of the number of hours 
requiring heating.
    EPA reviewed the most recent three years of data provided, i.e., 
2008 to 2010. EPA examined the number of days below 50[deg] F. EPA's 
analysis assumed that SMC's envisioned 100 kW heating system would 
suffice down to -30[deg] F, and that warmer days would require 
proportionately less electricity. This analysis found an average of 
4,900 hours per year below 50[deg] F, and an average temperature among 
those hours of 31[deg] F. That is, the average heating needs among 
those hours is to achieve a temperature 19[deg] F above ambient 
temperature. At the company-estimated cost of $0.0732 per kilowatt-hour 
of electricity, this translates to an estimated electricity cost of 
$8,600 per year.
    Comment: SMC commented on the expected lifetime of SMC-Charlevoix. 
``SMC maintains that the EPA air pollution cost control manual allows 
for a 10 year equipment life schedule and that this would more closely 
match SMC's short and long-term plans.'' Consequently, SMC implicitly 
recommended amortizing capital costs of control equipment over 10 years 
rather than 15 or 20 years.
    Response: The EPA Air Pollution Control Cost Manual states at page 
1-37, ``an economic lifetime of 20 years is assumed for the SNCR 
system.'' A shorter amortization period would be appropriate only if 
SMC provided persuasive evidence that it will be shutting down its 
facility sooner. SMC has provided no such evidence. In particular, SMC 
does not appear to be subject to any enforceable orders to shut down 
within that period, nor has SMC expressed a desire to become subject to 
such an order. To the contrary, SMC has been investing in emission 
control and applied for a permit for other plant improvements (though 
SMC cancelled the project), suggesting that SMC expects its Charlevoix 
facility to be operating well more than 10 years into the future. 
Therefore, the most appropriate amortization period for capital costs 
of SNCR at SMC-Charlevoix is 20 years.
    Comment: SMC objected to EPA's urea cost estimates. SMC conceded 
that $450 is the cost per ton of (undiluted) urea at the Gulf of 
Mexico, but SMC provided a vendor quote to indicate a price per gallon 
in Michigan, equivalent to $814 per ton of actual urea ($366/ton of 45 
percent solution).
    Response: EPA asked the Institute of Clean Air Companies about urea 
prices and received a reply from a representative of Fuel Tech, Inc., a 
urea supplier. Fuel Tech replied that companies have the option to 
purchase pure, dry urea, at a price of $400 to $500 per ton, which the 
company could mix with water (using purchased mixing equipment) before 
use, but companies normally purchase 50 percent urea from a supplier. 
Fuel Tech quoted a price range for 50 percent urea solution in Central 
Michigan of $1.60 to $1.80 per gallon. The upper end of this range 
equates to about $758 per ton of urea. EPA has adjusted its urea-based 
cost estimates (discussed below) to use this urea cost. However, use of 
ammonia is cheaper and more effective, so the cost of urea was not a 
significant factor in EPA's evaluation of the cost effectiveness of 
SNCR.
    Comment: As noted above, SMC provided cost-effectiveness estimates 
for an option that may be labeled a ``replacement pre-calciner'' option 
and for an option that may be labeled an ``existing equipment'' option. 
These estimates were that NOX emission reduction would cost 
$6,767 and $6,249 per ton, respectively, which SMC considers too 
expensive to be found to be BART.
    Response: SMC's estimates include a number of elements that SMC 
includes without comment that nevertheless warrant review. SMC's cost 
estimates include a number of ancillary costs ostensibly related to 
installation of a purchased SNCR, including instrumentation, freight, 
foundations and supports, handling and erection, electrical equipment, 
piping, insulation, painting, engineering, construction and field 
expenses, contractor fees, start-up costs, performance test costs, and 
contingencies. These cost estimates are substantial, adding up to more 
than 150 percent of the purchased equipment cost, i.e. yielding a total 
capital cost that is more than two and a half times the cost of the 
equipment itself.
    While SMC cites the EPA Air Pollution Control Cost Manual as the 
basis for these cost estimates, SMC used an inappropriate method from 
this manual. The EPA Air Pollution Control Cost Manual recommends 
different cost estimation approaches for different types of control 
devices, and SMC appears to have used the approach recommended for 
estimating costs of gas absorbers \5\ rather than the approach 
recommended for SNCR. The approach recommended in the EPA Air Pollution 
Control Cost Manual for estimating costs of SNCR does not include all 
the costs listed above for gas absorbers. Instead, the Control Cost 
Manual recommends assuming only the following costs: A

[[Page 71543]]

general facilities cost (5 percent of SNCR purchase cost), engineering 
and home office fees (10 percent), process contingency cost (5 
percent), project contingency (15 percent of installed cost), pre-
production cost (2 percent of total plant cost), and inventory cost 
(cost of two weeks of reagent). These costs are estimated to add about 
42 percent to the purchase cost of the SNCR. Thus, the cost estimation 
approach used by SMC significantly overestimates SNCR installation 
costs.
---------------------------------------------------------------------------

    \5\ SMC's approach also resembles the approach recommended for 
several other control devices. Nevertheless, for simplicity, SMC's 
approach may be labeled the gas absorber approach.
---------------------------------------------------------------------------

    In using the cost estimation approach recommended for gas absorbers 
rather than the approach recommended for SNCR, SMC has also 
overestimated the annual cost of operating SNCR. Most significantly, as 
EPA noted in its proposed rulemaking notice, EPA recommends assuming 
that overhead for operating SNCR is negligible, unlike the 60 percent 
of labor and materials that the Control Cost Manual recommends for gas 
absorbers. Similarly, the Control Cost Manual recommends assuming 
administrative charges and insurance for SNCR (unlike for gas 
absorbers) are also negligible. This results in a significant 
difference in cost estimates: For the replacement pre-calciner option, 
for example, SMC estimates the sum of overhead, administrative charges, 
and insurance to be $4,397,697, whereas EPA finds these costs to be 
negligible.
    In addition, SMC inappropriately assumes that the multipliers used 
to estimate ancillary costs associated with installation of emission 
control systems based on emission control equipment purchase costs may 
also be applied to modifications of SMC's kiln system such as 
replacement of its pre-calciner. SMC provides no justification for 
applying these SNCR-related multipliers to the cost of a replacement 
pre-calciner, and EPA believes that installation of a replacement pre-
calciner would not require such costs.
    In many respects, the cost estimates EPA provided in its notice of 
proposed rulemaking also mistakenly used the gas absorber approach to 
estimate costs. Thus, EPA's proposed rule also substantially 
overestimated the costs of SNCR. An exception concerns overhead costs: 
The gas absorber approach recommends significant costs, but the notice 
of proposed rulemaking observed that the SNCR approach in the EPA Air 
Pollution Control Cost Manual recommends assuming that overhead costs 
are negligible. (SMC neglected this observation and continued in its 
comments to estimate substantial, unjustified overhead costs.)
    For this final rule, the primary basis of EPA's views on the cost 
effectiveness of SNCR at SMC-Charlevoix are revised cost estimates 
derived according to the approach recommended in the EPA Air Pollution 
Control Cost Manual for estimating costs of SNCR. Nevertheless, EPA for 
this final rule also prepared cost estimates using an approach that was 
similar to the approach used in its proposed rule. This approach 
resembled the gas absorber approach, except that the approach assumed 
negligible overhead costs, which the notice of proposed rulemaking 
observed is the recommended assumption for SNCR. These estimates 
assumed the use of ammonia as the reagent, based on information 
indicating that urea is a less effective reagent. While EPA believes 
this approach overstates likely costs, insofar as it includes 
significant estimated installation costs that should not be assumed to 
apply to SNCR installations, these cost estimates nevertheless provide 
further perspective on the likely cost effectiveness of SNCR at SMC-
Charlevoix.
    SMC is currently equipped with an SNCR system. SMC nevertheless 
includes the cost of new SNCR equipment (estimated as $1,371,630) in 
all of its cost estimates. SMC did not explain why it would be unable 
to use the existing equipment, except to say that $400,000 of the costs 
would provide for winter storage of reagent. One possibility is that 
the remaining $971,630 would be necessary to purchase a system that 
works more effectively than the system that is currently installed. 
Another possibility is that SMC will incur no such expense. EPA has 
evaluated cost effectiveness for both possibilities, to assess the 
range of cost effectiveness according to whether replacement SNCR 
equipment is necessary.
    A significant factor affecting the cost of SNCR is the quantity of 
reagent needed to achieve the expected emission reduction. The BART 
review that SMC provided to Michigan assumed that 180 gallons per hour 
of 40 percent urea solution, costing $1.06 per gallon, would be used 
for 8,000 hours and would reduce NOX emissions by 524 tons 
per year. Assuming 9.5 lb per gallon of urea solution, this translates 
to an estimate that 182,400 pound-moles of ammonia-equivalent \6\ would 
be needed to achieve a reduction of 22,800 pound-moles of 
NOX, i.e., that each mole of ammonia-equivalent achieves 
only 0.125 moles of NOX reduction. This efficiency is less 
than one third of the efficiency shown in the DeNOX 
Technology trials discussed above.
---------------------------------------------------------------------------

    \6\ The molecular weight of urea is 60. Each molecule of urea 
yields two molecules of ammonia. Therefore, 30 pounds of urea yields 
one pound-mole of ammonia. That is, 30 pounds of urea is one pound-
mole of ammonia equivalent.
---------------------------------------------------------------------------

    For all of its reagent cost estimates, EPA estimated reagent usage 
according to the targeted NOX reduction and the expected 
amount of reagent needed per mole of NOX reduction. EPA's 
expected NOX reduction for both the replacement calciner 
option and the existing system option differs substantially from SMC's 
values. SMC apparently used a peak allowable baseline (pre-control) 
NOX emission rate (5,741 tons per year), whereas EPA used a 
2006 to 2008 average actual baseline rate (2,518 tons per year).
    Based on comments regarding inefficient control at SMC-Charlevoix 
using urea, most of EPA's cost effectiveness estimates were based on 
the use of ammonia, though a few estimates were based on the use of 
urea. As discussed above, EPA assumed a urea cost of $758 per ton of 
urea. Based on information provided by Fuel Tech, EPA assumed an 
ammonia cost of $600 per ton.
    EPA then estimated reagent usage according to various estimates of 
the quantity of NOX reduced per mole of injected or created 
ammonia. One of these estimates used the results of the tests conducted 
at SMC-Dixon, in which injection of reagent at an NSR of 0.62 sufficed 
to reduce NOX emissions by 50 percent. These results suggest 
the need for greater use of reagent than is indicated in test results 
at ``Plant A'' in the Horton paper, which indicates on average that the 
NOX reduction is 92 percent of the amount of ammonia 
injection, so that an NSR of 0.54 would suffice to reduce 
NOX emissions by 50 percent. Another estimate used the 
average of the tests at SMC-Charlevoix using urea, i.e., that the 
number of moles of NOX reduced is 40 percent of the number 
of moles of ammonia that the injected urea creates.
    Table 2 shows cost effectiveness estimates for an option in which 
SMC uses largely its existing configuration and injects ammonia. This 
option is assumed at most to have only minor modifications, except for 
installation of a replacement SNCR system and except for installation 
of ammonia storage equipment, which is assumed to have the same cost as 
SMC's estimate for urea winter storage equipment. This table assumes 
the effectiveness of ammonia found at SMC-Dixon. This table assumes 
that sufficient ammonia is added to achieve a 12-month average limit of 
2.40 lb per ton of clinker (the limit in the final FIP), which is 
estimated on average to require a 47 percent emission reduction, a 
reduction from baseline

[[Page 71544]]

NOX emission levels of 1182 tons per year.

                      Table 2--Cost Effectiveness Using Ammonia With Existing Configuration
                                      [With replacement of the SNCR system]
----------------------------------------------------------------------------------------------------------------
             Capital costs               Percent        Cost                           Notes
----------------------------------------------------------------------------------------------------------------
SNCR..................................  .........      $1,371,630  Includes winterizing cost.
General facilities....................          5          68,582  .............................................
Engineering...........................         10         137,163  .............................................
Process contingency...................          5          68,582  .............................................
Project contingency...................         15         246,893  .............................................
                                                  --------------------------------------------------------------
    Subtotal SNCR.....................  .........       1,892,849  .............................................
Preproduction.........................          2          37,857  .............................................
Ammonia inventory.....................  .........          12,465  2 weeks inventory.
                                                  ==============================================================
        Total Capital cost............  .........       1,943,171  .............................................
Annual costs:
    Ammonia...........................  .........         324,970  .............................................
    Maintenance.......................        1.5          28,393  .............................................
    Electricity.......................  .........           8,600  .............................................
    Power loss........................  .........          16,427  .............................................
                                                  --------------------------------------------------------------
        Total direct Annual...........  .........         378,389  .............................................
        Capital recovery..............  .........         183,435  Amortizes over 20 years.
                                                  --------------------------------------------------------------
        Total.........................  .........         561,825  .............................................
    Cost per ton......................  .........             475  Reduction is 1182 tons/yr.
----------------------------------------------------------------------------------------------------------------

    This cost effectiveness estimate in Table 2 assumes that SMC will 
need to replace its existing SNCR. Alternatively, EPA estimated cost 
effectiveness for the possibility that SMC will be able to use its 
existing SNCR. This evaluation assumed the same estimate of ancillary 
costs (e.g., general facilities costs, engineering, and contingency 
costs) as are shown in Table 2 but assumed that the equipment purchase 
cost would only be $400,000 for a reagent winter storage system. This 
resulted in a cost effectiveness estimate of $398 per ton of 
NOX, somewhat below the $475 per ton of NOX 
estimated assuming the need for a replacement SNCR.
    Although EPA, consistent with the Horton paper, believes that 
ammonia would be considerably more efficient at reducing NOX 
than urea, EPA also estimated ammonia costs assuming that SMC achieved 
the same efficiency with ammonia as it achieved with urea. 
Specifically, these cost estimates assumed that each mole of ammonia 
reduced 0.4 moles of NOX. To achieve a reduction of 1182 
tons per year, this resulted in an estimate that ammonia costs would be 
$655,181, leading to a total annualized cost of $893,032, or $756 per 
ton of NOX reduced.
    These estimates reflect considerably less expense for using ammonia 
than for using urea. This is partly because ammonia is likely to be 
more effective, but this is also because ammonia is somewhat cheaper 
per ton and because the ammonia content of a ton of ammonia is almost 
twice the amount of ammonia yielded by a ton of urea. For the plant as 
currently configured, EPA did not estimate costs using urea.
    A second set of scenarios EPA evaluated reflect an option noted by 
SMC involving replacing the pre-calciner, which would provide 
conditions more suitable for use of urea for reducing NOX 
emissions. SMC estimated that this replacement would cost $18,000,000. 
Although SMC does not document the basis for this estimate, EPA 
nevertheless used SMC's estimate of this cost. EPA viewed this as an 
estimate of total installed cost. Therefore, EPA believes that the 
typical approach in the EPA Air Pollution Control Cost Manual, starting 
with the cost of purchasing control equipment and adding multipliers to 
account for various installation costs, would double count these 
installation costs.
    Arguably, much of the cost of replacing the pre-calciner at SMC-
Charlevoix would be offset by savings to the company through more 
efficient operation and ability to use cheaper fuels. Indeed, the fact 
that SMC applied for and received a permit to replace its pre-calciner 
but then cancelled the permit suggests that the company believed that 
this replacement would have had benefits that mostly but not entirely 
would have offset the costs of its implementation. To address this 
issue, EPA evaluated cost effectiveness both for a scenario in which 
none of the costs of a replacement pre-calciner are offset and for a 
scenario in which all of the costs are offset, in order to evaluate the 
range of cost effectiveness estimates according to the range of 
possible degrees to which the costs of a replacement pre-calciner would 
be offset by economic benefits to SMC. EPA estimated costs both for the 
use of ammonia and for the use of urea. EPA agrees with SMC's view that 
a redesigned pre-calciner would address the issues that SMC asserts 
make urea usage problematic under the current plant design, and so 
EPA's cost estimates for this option assumed that NOX 
removal efficiency under this option would match that found at SMC-
Dixon.
    The resulting estimates were that the option using a replaced pre-
calciner, with no cost offset, would cost $2,252 per ton of 
NOX removed using urea and $1,901 per ton using ammonia. 
With a full cost offset, using urea as the reagent, the cost was 
estimated to be $815 per ton of NOX removed. The derivation 
of these estimates is shown in more detail in a technical support 
document for this rulemaking.
    SMC's comments indicate that the replacement calciner will improve 
the efficiency of SMC-Charlevoix and reduce the baseline NOX 
emission rate to 3.9 lb per ton of clinker. This suggests that 
achievement of a limit of 2.4 lb per ton of clinker on average would 
require about a 40 percent NOX emission reduction rather 
than about a 50 percent reduction, requiring correspondingly

[[Page 71545]]

less reagent. EPA estimated reagent costs accordingly, yielding an 
estimate of $1,835 per ton of NOX removed using ammonia as 
the reagent.
    As discussed above, EPA believes that SMC has a variety of options 
for meeting the limits EPA is promulgating. Thus, EPA prepared 
additional cost estimates reflecting other scenarios that may be 
associated with achievement of the limits EPA is promulgating. One 
scenario involves various physical changes to the plant to facilitate 
use of SNCR, such as straightening flows to minimize the likelihood of 
problems from material buildup. EPA's proposed rulemaking reflected 
consideration of such an option, and SMC's comments include cost 
estimates for such an option as well. EPA and SMC assumed that these 
physical changes would require a capital expenditure equal to half the 
cost of the SNCR plus the urea winter storage system. (SMC commented 
that this cost estimate was unjustified, but SMC used this estimate 
nevertheless, and EPA believes that this cost estimate provides a 
useful indication of whether control options that involve varying 
degrees of plant modifications would be cost effective.) As proposed by 
SMC, the cost estimates for this scenario also assumed that the use of 
SNCR would result in the need for two additional days of shutdown to 
address material buildup, costing SMC $387,200 of production. As noted 
above, EPA believes that SMC can implement SNCR at SMC-Charlevoix 
without significant material buildup or production loss, particularly 
if it uses ammonia as the reagent, to achieve the successful SNCR 
operation that other companies have achieved. However, EPA prepared 
this estimate to assess whether such production loss would 
significantly alter the cost effectiveness of SNCR use. Finally, while 
this scenario could involve use of either urea or ammonia, EPA 
estimated costs for this scenario using ammonia because available 
evidence suggests that the promulgated emission limits are most likely 
to be met using ammonia. To obtain conservative cost estimates, EPA 
assumed the NOX removal efficiency found in the 
DeNOX Technologies tests at SMC-Charlevoix, even though EPA 
expects SMC to be able to achieve better efficiency through use of 
ammonia. As discussed in the technical support document, EPA estimated 
that this scenario would cost $1,138 per ton of NOX removed.
    Another scenario EPA examined involved lime injection. Material 
buildup is a function of the chemistry of the gases within the kiln 
system, and one option for addressing material buildup may be to inject 
lime at an appropriate point to minimize the sulfur concentration in 
the gases, to reduce the potential for sulfate formation. SMC has 
provided material to EPA suggesting that it already operates a bypass 
system to achieve this purpose. Nevertheless, EPA believes that it may 
be helpful to supplement this bypass system with lime injection, and in 
any case the costs for a scenario involving lime injection may be 
viewed as a representation of likely costs for a broad range of options 
(including, for example, the use of additional excess air) that may be 
warranted for optimizing gas chemistry to optimize SNCR effectiveness. 
This scenario involved capital costs of $300,000 to install a lime 
injection system and an annual cost of $300,000 for lime. (To the 
extent that SMC could use lime it produces itself without loss of 
production, the annual cost could be considerably lower.) Again, to 
obtain conservative cost estimates, EPA made these estimates assuming 
the NOX reduction efficiency found in the DeNOX 
Technologies tests, even though EPA anticipates that SMC will be able 
to obtain better efficiency. The resulting estimate, based on the use 
of ammonia, was that annualized costs would be $1,034 per ton of 
NOX removed.
    In discussions between SMC and EPA, SMC raised the possibility that 
it could achieve 10 percent reduction of NOX emissions 
through facility modifications and operational changes. These might 
include mid-kiln firing, other burner changes, water suppression, tire 
firing, and other changes that might reduce NOX formation. 
EPA did not attempt to estimate the costs of these approaches. 
Nevertheless, these approaches constitute additional options that SMC 
has to achieve the limits that EPA is promulgating. Some of these 
approaches may well be cheaper for SMC to implement than SNCR, in which 
case the use of the approaches would allow SMC to reduce NOX 
more cost effectively.
    As noted above, the cost effectiveness estimates underlying EPA's 
proposed rulemaking in most respects reflected the method recommended 
in the EPA Air Pollution Control Cost Manual for estimating costs of 
gas absorbers. The technical support document describes two cost 
estimates using this method, reflecting the efficiency found at SMC-
Dixon and the efficiency found using urea at SMC-Charlevoix, 
respectively. Both cost estimates amortize capital costs over 20 years, 
both use ammonia as the reagent, and both assume that new SNCR 
equipment will be needed. These resulting cost effectiveness estimates 
were $720 and $999 per ton of NOX removed, respectively. 
Thus, using the gas absorber method, like using the more appropriate 
SNCR method, leads to the conclusion that control using SNCR is cost 
effective.
    Comment: SMC stated, ``The economic impact of EPA's proposed 
NOX limit would be devastating to northern Michigan.'' SMC 
cited statistics regarding the employment and taxes paid by SMC-
Charlevoix. SMC commented on the fragile economy. ``In particular, the 
cement industry has been hit hard.'' SMC noted that it ``was forced to 
shift production from its Dixon, Illinois facility to Charlevoix * * * 
to make a return on its investment.'' SMC raised the possibility of SMC 
suspending or ceasing operations in Charlevoix, and comments on the 
devastating effect this would have on the northern Michigan economy.
    Response: EPA has thoroughly considered the expected costs of 
several available options for controlling NOX at SMC, 
evaluating SMC's estimates and information we gathered from vendors and 
analyses performed for other comparable facilities. SMC has not 
justified a statement that implementing a set of controls that many 
other facilities are currently implementing, and incurring the costs to 
do so, would make SMC-Charlevoix unprofitable to operate or otherwise 
cause SMC to suspend or cease operations. EPA believes further that the 
costs of control would be considerably lower than SMC estimates. EPA 
does not believe that meeting the BART limits in the FIP would lead to 
the shutdown of SMC-Charlevoix.
    Comment: SMC cited a third factor in determining BART, namely the 
energy and non-air quality environmental impacts of compliance. SMC 
commented that addition of urea would cause ammonia slip.
    Response: As stated above, SMC has not demonstrated that ammonia 
slip would be a problem at SMC-Charlevoix. Numerous cement plants are 
successfully operating SNCR in a manner that does not cause significant 
ammonia slip, and EPA believes that SMC would be able to operate SMC-
Charlevoix in a manner that avoids significant ammonia slip as well.
    Comment: SMC cited a fourth factor in determining BART, namely any 
pollution control equipment in use or in existence at the source. SMC 
noted that it has ``purchased and installed a state of the art fabric 
filter baghouse and has installed an Indirect Fire system which 
includes low NOX burners.''
    Response: EPA recognizes the presence of these control systems.

[[Page 71546]]

Indeed, the indirect fire system facilitates the achievement of lower 
NOX emissions, and EPA believes that this system in 
combination with SNCR is necessary to achieve the BART emission limit 
that EPA proposed. Given the availability and costs effectiveness of 
additional NOX controls, however, these existing controls 
alone do not meet the BART requirement.
    Comment: SMC cited a fifth factor in determining BART, namely the 
remaining useful life of the source. SMC repeated its statement, 
addressed above, that the EPA Control Cost Manual allows for 10 year 
equipment life schedules which more closely match SMC's short- and 
long-term plans.
    Response: EPA has addressed this comment above. The consolidation 
of cement production at SMC-Charlevoix, mentioned in SMC's comments, 
further suggests that SMC-Charlevoix is unlikely to be shut down in 10 
years.
    Comment: SMC commented, ``EPA is not empowered to substitute its 
judgment for that of the State of Michigan as to the appropriate BART 
limit.''
    Response: The Clean Air Act gives EPA the authority and 
responsibility to determine whether Michigan has met the applicable 
requirements. In selected circumstances, such as apply here, if the 
state plan does not meet the requirements, the Clean Air Act does 
empower EPA to promulgate limits in lieu of those proposed by the 
state. Further discussion of this topic is provided in response to a 
similar comment by Michigan. As noted above, however, EPA prefers SIPs 
to FIPs, and will work with Michigan if it wants to submit a SIP to 
replace the FIP.
    Comment: SMC cited a sixth factor in determining BART, namely the 
degree of improvement in visibility that a control option would yield. 
SMC did not dispute EPA's estimate of the benefit of SNCR but argues 
that a reduction of permitted emission levels would yield greater 
visibility benefits.
    SMC ``proposes to reduce its permitted emission levels to meet a 
30-day rolling average limit for NOX of 4.85 [lb per ton, 
which] represents a 25 percent reduction in potential NOX 
emissions.'' SMC also ``proposes that it meet a 30-day rolling average 
limit for SO2 of 7.5 [lb per ton, which] represents a 16 
percent reduction in potential SO2 emissions.'' Finally, 
``SMC proposes a cap on its clinker production,'' representing ``a 9.4 
percent reduction from its current maximum.''
    SMC conducted CALPUFF modeling to assess the visibility improvement 
associated with its proposed reduction in permitted emissions. ``The 
results show an improvement of 1.6 dv at Seney, which is significantly 
better than the 0.4 dv improvement EPA projected would be achieved with 
its proposed NOX limit.''
    Response: SMC proposes a reduction in permitted emissions, but its 
proposed limits would only require minimal actual emission reductions. 
According to emissions data for 2006 to 2008, which is the most recent 
detailed data that SMC has provided to EPA, most 30-day average 
emission levels are well below SMC's proposed limit. For the occasions 
in 2006 to 2008 in which the 30-day averages exceeded 4.85 lb per ton 
of clinker, the emission reductions that would have been needed to meet 
this limit are only about 3 percent of annual total emissions. EPA's 
proposed SO2 limit, which SMC proposes to apply on a 30-day 
average basis, expressly requires no actual emission reductions. SMC's 
proposed production cap is well above 2006 to 2008 production levels, 
and thus also would require no actual emission reductions.
    In contrast, EPA proposed a limit that would require approximately 
a 50 percent reduction in actual NOX emissions. EPA's 
assessment of the visibility benefits of BART was based on projected 
actual emission reductions. A comparable analysis of SMC's proposal 
would find no reductions and thus no benefits for the SO2 
limit or the production cap. SMC's proposal is estimated to require 
about a 3 percent NOX emission reduction, compared to EPA's 
approximately 50 percent, and so an assessment using EPA's methodology 
would likely estimate a real visibility benefit of about 0.02 dv.
    SMC does not explain why its proposal, which clearly requires less 
emission reduction than EPA's proposal, nevertheless would show 
significantly more visibility benefit. While SMC does not provide 
sufficient information about its modeling to make a complete 
comparison, the disparity reflects significant differences between the 
two benefit assessments, in particular including the fact that SMC 
compared its suggested limits to current allowable emissions, whereas 
EPA assessed the benefits of actual emission reductions that would be 
expected with imposition of EPA's proposed limits.

Cliffs

    Comment: Cliffs objected to EPA addressing Tilden Mining in a 
separate rulemaking focused on Michigan and Minnesota taconite 
facilities (August 15, 2012 rulemaking) rather than in the rulemaking 
addressing most of the rest of Michigan's plan. Cliffs commented ``EPA 
fails to provide an adequate basis for regulating Tilden separately.'' 
Cliffs acknowledged that EPA stated that this approach was ``to ensure 
that the Tilden Mining taconite plant and similar facilities in 
Minnesota are subject to similar requirements.'' However, Cliffs 
objected that EPA provided neither factual data nor explanation of its 
legal interpretations in support of this approach. Furthermore, Cliffs 
objected to EPA's rationale for rulemaking on Tilden Mining in 
conjunction with rulemaking on other taconite plants, arguing that the 
Regional Haze Rule requires case-by-case BART determinations.
    Response: The Clean Air Act requires that EPA complete rulemaking 
on Michigan's submittal but does not limit EPA's flexibility in 
choosing to conduct rulemakings on selected elements of the State's 
submittal, potentially in combination with similar elements of other 
states' submittals, even simply for EPA's administrative convenience. 
Cliffs provides no rationale to the contrary. Moreover, Cliffs 
identifies no basis for concluding that rulemaking on Tilden Mining 
along with the Minnesota taconite plants could be expected to yield an 
inappropriate conclusion regarding Tilden Mining or is otherwise 
harmful to Cliffs' interests. EPA believes that case-by-case review of 
sources should reach similar conclusions for similar facilities, but 
EPA need not find Tilden Mining similar to Cliffs' other taconite 
facilities to have the discretion to conduct rulemaking on all of the 
taconite facilities together.
    Comment: Cliffs stated, ``EPA does not give Michigan's [BART] 
determinations the requisite deference.'' Further, ``EPA can only 
disapprove a SIP where it fails to meet minimum Clean Air Act 
requirements.'' Cliffs noted its intent to identify its detailed 
concerns regarding BART for Tilden Mining in comments addressing the 
August 15, 2012, rulemaking that in fact prompts these concerns. 
Nevertheless, Cliffs commented that ``EPA improperly tries to 
substitute its own judgment for Michigan's.''
    Response: EPA has not tried in this rulemaking to ``substitute its 
own judgment for Michigan's'' with respect to Cliff's facility, because 
EPA is taking no action with respect to this facility in this 
rulemaking. More generally, this proposal was promulgated more than 
three years after EPA published a notice in which EPA found that 
Michigan failed to submit the required regional haze SIP. (74 FR 2392, 
January 15, 2009) In the absence of an adequate state submittal, more 
than two years after this finding, the Clean Air Act mandates that

[[Page 71547]]

EPA promulgate a federal plan. See Clean Air Act section 110(c). A more 
detailed response is provided in response to a similar comment by 
Michigan. To the extent that Cliffs' comment pertains to EPA's proposal 
on the separate rulemaking that promulgates federal limits for taconite 
plants including the Tilden Mining facility, this comment is not 
germane to this rulemaking.
    Comment: Cliffs requested that EPA hold ``the public hearing 
proposed for September 19, 2012. That hearing must be broad enough to 
address both comments on this Proposed Rule and concerns associated 
with EPA's related determinations for the Tilden taconite facility.'' 
Cliffs commented that a hearing with this alternate purpose ``is 
necessary * * * to allow local parties [in Michigan] to provide 
feedback on the proposed Tilden implementation plan.''
    Response: By letter dated September 14, 2012, EPA denied Cliffs' 
request because it related to matters addressed in the separate 
proposed rulemaking published August 15, 2012. Under Clean Air Act 
section 307(d), EPA must offer interested parties the opportunity for 
oral presentation of their comments on a proposed FIP but need not 
offer such opportunity for comments relevant to reviews of state plans, 
such as the proposed partial approval and partial disapproval of the 
Michigan SIP. Cliffs requested that EPA hold a public hearing in 
Michigan, but Cliffs urged that this hearing be held to provide Cliffs 
opportunity to provide extensive comments regarding Tilden Mining. 
Cliffs expressed no intent to comment on the proposed FIP elements for 
BART for SMC or Escanaba Paper. That is, Cliffs in its request did not 
demonstrate that it was an interested party with respect to the 
proposed federal limits for SMC or Escanaba Paper.
    Implicit in EPA's proposed rulemaking was that EPA was offering to 
hold a public hearing for purposes of receiving oral comments on its 
proposed federal limits for SMC and Escanaba Paper. This purpose was 
clarified in EPA's letter to Cliffs and in EPA's Web site announcing 
terms of the potential hearing, which stated, ``EPA is providing the 
public the opportunity to request a public hearing regarding its 
proposal to establish emission limits for two facilities in Michigan: 
St. Mary's Cement facility in Charlevoix, and NewPage Paper in 
Escanaba.''
    Finally, Cliffs has had multiple opportunities to provide oral 
comments on EPA's proposed actions regarding Tilden Mining and Cliffs' 
other taconite facilities and on any other issues Cliffs may have 
wished to address. These opportunities included a public hearing on 
August 29, 2012, in St. Paul, Minnesota (at which a Cliffs 
representative testified) and multiple meetings with EPA.

III. What are EPA's final BART determinations?

    As noted above, in absence of a state submittal that satisfies the 
BART requirements for SMC-Charlevoix and for Escanaba Paper's Escanaba 
facility, EPA is under an obligation to promulgate a FIP satisfying 
these requirements. The following summary reflects EPA's final 
evaluation of appropriate limits that satisfy the BART requirement for 
these facilities. As noted above, EPA is addressing Tilden Mining's 
facility near Ishpeming in a separate rulemaking.

A. SMC

    EPA proposed to determine that BART for SMC-Charlevoix includes 
operation of SNCR achieving an average of 50 percent reduction of 
NOX emissions. EPA continues to believe that BART for this 
facility includes operation of SNCR. SMC provided results of tests 
using urea showing achievement of only 30 to 37 percent reduction of 
NOX, which SMC believes reflect conditions that yield 
suboptimal results for use of urea. Available evidence suggests that 
use of ammonia is likely to be considerably more effective at SMC-
Charlevoix, and in fact most cement plants using SNCR use ammonia as 
the NOX control reagent. EPA finds this control to be cost 
effective, and a review of relevant factors supports the conclusion 
that effective implementation of SNCR is BART for this facility. EPA 
continues to believe that a requirement for 50 percent reduction in 
NOX emissions is warranted.
    However, the proposed limit would have required approximately 60 
percent NOX reduction on occasions when the emission rates 
equaled the 95th percentile of baseline emission rates. In response to 
comments, EPA is promulgating a limit that requires 50 percent control 
of such emissions, in order to provide increased confidence that the 
limit can be met. To limit peak emissions, EPA is promulgating a limit 
based on the rolling average emissions of 30 consecutive operating 
days. In addition, to ensure BART level control on days with typical 
emissions as well as on days with elevated emissions, EPA is also 
promulgating a limit on 12-month average emissions. These limits are 
2.8 lb of NOX per ton of clinker and 2.4 lb of 
NOX per ton of clinker, respectively. EPA is requiring that 
SMC comply with these limits by January 1, 2017, such that the 
averaging periods beginning on January 1, 2017, are the first periods 
for which emissions must be at or below the required level. This 
provides a four year period for compliance instead of three years as 
proposed, because EPA believes that four years represents the most 
expeditious schedule for SMC to install appropriate controls to meet 
the limit.
    EPA proposed to limit SO2 emissions at SMC-Charlevoix to 
7.5 lbs per ton of clinker, based on a view that add-on control is not 
warranted under current circumstances but would be warranted if higher 
sulfur feed materials were used. EPA's proposed rule cited estimated 
costs of $3,500 and $4,500 per ton of SO2 removed (estimated 
for emissions at permitted levels), but this proposal reflected 
consideration of a variety of factors that needed to be considered in 
assessing BART at SMC-Charlevoix, including the fact that at normal 
emission rates for this facility, costs per ton of SO2 
removed would be much higher. EPA is promulgating its proposed 
SO2 emission limit.

B. Escanaba Paper

    In its proposed rulemaking, EPA proposed to determine that BART for 
boilers 8 and 9 at Escanaba Paper's Escanaba facility included 
combustion control as a means of reducing NOX emissions. The 
notice of proposed rulemaking provides detailed discussion of 
particular control options and the cost effectiveness of these options. 
The notice of proposed rulemaking further observed that Escanaba Paper 
has already implemented improvements in its combustion control, such 
that EPA proposed to establish limits that merely mandated that 
Escanaba continue to maintain the current level of NOX 
emission control.
    No commenters objected to this proposed BART determination, and EPA 
has no reason to change its views regarding BART for Escanaba Paper. As 
discussed above, EPA received various comments from Escanaba Paper 
regarding the emission limits that are to be established to require 
BART and the test method, recordkeeping, and reporting requirements 
that are to be established. Pursuant to these comments, EPA is 
promulgating a modified form of the limit for Boiler Number 8, based on 
a fixed limit of 0.35 lb of NOX per MMBTU, rather than limit 
emissions based on the weighted average of separate limits for 
emissions from oil firing and for emissions from gas firing. The limits 
for Boilers Number 8 and Number 9 are effective

[[Page 71548]]

immediately upon the effective date of this rule, as proposed. As 
discussed above, EPA is also modifying assorted elements of the test 
methods, recordkeeping, and reporting requirements that will apply to 
Escanaba Paper.

IV. What actions is EPA Taking?

    EPA is finalizing approval of elements of Michigan's SIP submittal, 
submitted on November 5, 2010, addressing regional haze for the first 
implementation period. The submittal was intended to satisfy Clean Air 
Act and Regional Haze Rule requirements for states to remedy any 
existing anthropogenic and prevent future impairment of visibility at 
Class I areas.
    EPA finds that Michigan's submission satisfies BART requirements 
for some of the non-EGUs, based in part on existing SIP emission limits 
and most notably based on a Federal consent decree requiring new 
controls for SO2 and NOX emissions for the 
Lafarge plant. On the other hand, EPA is finalizing disapproval of the 
NOX and SO2 BART determination for the cement 
kiln and associated equipment at SMC-Charlevoix and of the 
NOX BART determination for boilers Number 8 and Number 9 at 
Escanaba Paper. Further, EPA is promulgating a FIP that imposes 
NOX and SO2 limits mandating BART for the cement 
kiln and associated equipment for the SMC-Charlevoix and NOX 
limits mandating BART for boilers Numbers 8 and 9 at Escanaba Paper.
    EPA is not addressing Michigan's BART determination for Tilden 
Mining taconite plant in this action. EPA has proposed separate action 
and plans separate final action regarding this facility in separate 
rulemaking action that also addresses taconite facilities in Minnesota.
    Michigan's submission provides an approvable analysis of the 
emission reductions needed to satisfy reasonable progress and other 
regional haze planning requirements. Michigan's submittal includes a 
long-term strategy that provides for reasonable progress except to the 
extent that the deficiencies with respect to BART for SMC and Escanaba 
Paper (and, according to a separate proposed rule, Tilden Mining) 
constitute shortfalls in the set of measures needed to provide 
reasonable progress. EPA is approving Michigan's submittal as meeting 
other regional haze planning requirements including identification of 
affected Class I areas, provision of a monitoring plan, and 
consultation with other parties.

V. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review and Executive 
Order 13563: Improving Regulation and Regulatory Review

    This action will promulgate requirements for two facilities and is 
therefore not a rule of general applicability. This type of action is 
exempt from review under Executive Orders 12866 (58 FR 51735, October 
4, 1993) and 13563 (76 FR 3821, January 21, 2011).

B. Paperwork Reduction Act

    This action does not impose an information collection burden under 
the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. 
Burden is defined at 5 CFR 1320.3(b). Because this FIP only applies to 
two facilities, the Paperwork Reduction Act does not apply.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to prepare a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements under the Administrative 
Procedure Act or any other statute unless the agency certifies that the 
rule will not have a significant economic impact on a substantial 
number of small entities. Small entities include small businesses, 
small organizations, and small governmental jurisdictions.
    For purposes of assessing the impacts of today's rule on small 
entities, small entity is defined as: (1) A small business as defined 
by the Small Business Administration's (SBA) regulations at 13 CFR 
121.201; (2) a small governmental jurisdiction that is a government of 
a city, county, town, school district or special district with a 
population of less than 50,000; and (3) a small organization that is 
any not-for-profit enterprise which is independently owned and operated 
and is not dominant in its field.
    After considering the economic impacts of this action on small 
entities, I certify that this action will not have a significant 
economic impact on a substantial number of small entities. The net 
result of this FIP action is that EPA is promulgating emission controls 
on selected units at only two facilities. The facilities in question 
are a large cement plant and a large paper mill that are not owned by 
small entities, and therefore are not small entities.

D. Unfunded Mandates Reform Act (UMRA)

    This rule does not contain a Federal mandate that may result in 
expenditures of $100 million or more for State, local, and tribal 
governments, in the aggregate, or the private sector in any one year. 
It is a rule of particular applicability that affects only two 
facilities in Michigan. Thus, this rule is not subject to the 
requirements of sections 202 or 205 of UMRA.
    This rule is also not subject to the requirements of section 203 of 
UMRA because it contains no regulatory requirements that might 
significantly or uniquely affect small governments. This rule only 
applies to two facilities in Michigan.

E. Executive Order 13132 Federalism

    This action does not have federalism implications. It will not have 
substantial direct effects on the states, on the relationship between 
the national government and the states, or on the distribution of power 
and responsibilities among the various levels of government, as 
specified in Executive Order 13132. This action addresses Michigan not 
meeting its obligation to adopt a SIP that meets the regional haze 
requirements under the Clean Air Act. Thus, Executive Order 13132 does 
not apply to this action. Although section 6 of Executive Order 13132 
does not apply to this action, EPA did consult with Michigan in 
developing this action.

F. Executive Order 13175

    This action does not have tribal implications, as specified in 
Executive Order 13175 (65 FR 67249, November 9, 2000), because the 
action EPA is taking neither imposes substantial direct compliance 
costs on tribal governments, nor preempts tribal law. It will not have 
substantial direct effects on tribal government. Thus, Executive Order 
13175 does not apply to this action. However, to the extent this rule 
will limit emissions, the rule will have a beneficial effect on tribal 
health by reducing air pollution.

G. Executive Order 13045: Protection of Children From Environmental 
Health Risks and Safety Risks

    EPA interprets EO 13045 (62 FR 19885, April 23, 1997) as applying 
only to those regulatory actions that concern health or safety risks, 
such that the analysis required under section 5-501 of the EO has the 
potential to influence the regulation. This action is not subject to EO 
13045 because it implements specific standards established by Congress 
in statutes. However, to the

[[Page 71549]]

extent this rule will limit emissions, the rule will have a beneficial 
effect on children's health by reducing air pollution.

H. Executive Order 13211: Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use

    This action is not subject to Executive Order 13211 (66 FR 28355 
(May 22, 2001)), because it is not a significant regulatory action 
under Executive Order 12866.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law 104-113, 12(d) (15 U.S.C. 272 note) 
directs EPA to use voluntary consensus standards in its regulatory 
activities unless to do so would be inconsistent with applicable law or 
otherwise impractical. Voluntary consensus standards are technical 
standards (e.g., materials specifications, test methods, sampling 
procedures, and business practices) that are developed or adopted by 
voluntary consensus standards bodies. NTTAA directs EPA to provide 
Congress, through OMB, explanations when the Agency decides not to use 
available and applicable voluntary consensus standards.
    This action does not involve technical standards. Today's action 
does not require the public to perform activities conducive to the use 
of voluntary consensus standards. Therefore, EPA did not consider the 
use of any voluntary consensus standards.

J. Executive Order 12898: Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations

    Executive Order 12898 (59 FR 7629, February 16, 1994), establishes 
federal executive policy on environmental justice. Its main provision 
directs federal agencies, to the greatest extent practicable and 
permitted by law, to make environmental justice part of their mission 
by identifying and addressing, as appropriate, disproportionately high 
and adverse human health or environmental effects of their programs, 
policies, and activities on minority populations and low-income 
populations in the United States.
    We have determined that this rule will not have disproportionately 
high and adverse human health or environmental effects on minority or 
low-income populations because it increases the level of environmental 
protection for all affected populations without having any 
disproportionately high and adverse human health or environmental 
effects on any population, including any minority or low-income 
population. This rule limits emissions from two facilities.

K. Congressional Review Act

    The Congressional Review Act, 5 U.S.C 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, which includes a copy of the rule, 
to each House of the Congress and to the Comptroller General of the 
United States. Section 804 exempts from section 801 the following types 
of rules (1) Rules of particular applicability; (2) rules relating to 
agency management or personnel; and (3) rules of agency organization, 
procedure, or practice that do not substantially affect the rights or 
obligations of non-agency parties. 5 U.S 804(3). EPA is not required to 
submit a rule report regarding today's action under section 801 because 
this is a rule of particular applicability.

L. Judicial Review

    Under section 307(b)(1) of the Clean Air Act, petitions for 
judicial review of this action must be filed in the United States Court 
of Appeals for the appropriate circuit by February 1, 2013. Pursuant to 
Clean Air Act section 307(d)(1)(B), this action is subject to the 
requirements of Clean Air Act section 307(d) as it promulgates a FIP 
under Clean Air Act section 110(c). Filing a petition for 
reconsideration by the Administrator of this final rule does not affect 
the finality of this action for the purposes of judicial review nor 
does it extend the time within which a petition for judicial review may 
be filed, and shall not postpone the effectiveness of such rule or 
action. This action may not be challenged later in proceedings to 
enforce its requirements. See Clean Air Act section 307(b)(2).

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by 
reference, Intergovernmental relations, Nitrogen dioxide, Particulate 
matter, Reporting and recordkeeping requirements, Sulfur oxides, 
Volatile organic compounds.

    Dated: November 26, 2012.
Lisa P. Jackson,
Administrator.
    Title 40, chapter I, of the Code of Federal regulations is amended 
as follows:

PART 52--[AMENDED]

0
1. The authority citation for part 52 continues to read as follows:

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

0
 2. Section 52.1170 is amended by adding a new entry at the end of the 
table in paragraph (e) for ``Regional Haze Plan'' to read as follows:

Sec.  52.1170  Identification of plan.

* * * * *
    (e) * * *

                                           EPA-Approved Michigan Nonregulatory and Quasi-Regulatory Provisions
--------------------------------------------------------------------------------------------------------------------------------------------------------
   Name of
nonregulatory       Applicable geographic or      State submittal date   EPA approved         Comments
SIP provision          nonattainment area                                    date
------------------------------------------------------------------------------------------------------------
 
                                                                      * * * * * * *
Regional Haze  statewide........................  11/5/2010...........       12/3/2012  Addresses all
    Plan                                                                  [Insert page   regional haze plan
                                                                          number where   elements except
                                                                          the document   BART emission
                                                                               begins]   limitations for
                                                                                         EGUs, St. Marys
                                                                                         Cement, Escanaba
                                                                                         Paper, and Tilden
                                                                                         Mining
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 71550]]

0
 3. Section 52.1183 is amended by adding paragraphs (g), (h), and (i), 
to read as follows:

Sec.  52.1183  Visibility protection.

* * * * *
    (g) The requirements of section 169A of the Clean Air Act are not 
met because the regional haze plan submitted on November 5, 2010, does 
not meet the best available retrofit technology requirements of 40 CFR 
51.308(e) with respect to emissions of NOX and 
SO2 from Saint Marys Cement in Charlevoix and NOX 
from Escanaba Paper Company in Escanaba. These requirements for these 
two facilities are satisfied by 40 CFR 52.1183(h) and 40 CFR 
52.1183(i), respectively.
    (h)(1) For the 30-day period beginning January 1, 2017, and 
thereafter, Saint Marys Cement, or any subsequent owner or operator of 
the Saint Marys Cement facility located in Charlevoix, Michigan, shall 
not cause or permit the emission of oxides of nitrogen (expressed as 
NO2) to exceed 2.80 lb per ton of clinker as a 30-day 
rolling average.
    (2) For the 12-month period beginning January 1, 2017, and 
thereafter, Saint Marys Cement, or any subsequent owner or operator of 
the Saint Marys Cement facility located in Charlevoix, Michigan, shall 
not cause or permit the emission of NOX (expressed as 
NO2) to exceed 2.40 lb per ton of clinker as a 12-month 
average.
    (3) Saint Marys Cement, or any subsequent owner or operator of the 
Saint Marys Cement facility located in Charlevoix, Michigan, shall not 
cause or permit the emission of SO2 to exceed 7.50 lb per 
ton of clinker as a 12-month average.
    (4) Saint Marys Cement, or any subsequent owner or operator of the 
Saint Marys Cement facility located in Charlevoix, Michigan, shall 
operate continuous emission monitoring systems to measure 
NOX and SO2 emissions from its kiln system in 
conformance with 40 CFR part 60 appendix F procedure 1.
    (5) The reference test method for assessing compliance with the 
limit in paragraph (h)(1) of this section shall be use of a continuous 
emission monitoring system operated in conformance with 40 CFR part 60, 
appendix F, procedure 1. A new 30-day average shall be computed at the 
end of each calendar day in which the kiln operates, based on the 
following procedure: First, sum the total pounds of NOX 
(expressed as NO2) emitted during the operating day and the 
previous twenty-nine operating days, second, sum the total tons of 
clinker produced during the same period, and third, divide the total 
number of pounds by the total clinker produced during the thirty 
operating days.
    (6) The reference test method for assessing compliance with the 
limit in paragraphs (h)(2) and (h)(3) of this section shall be use of a 
continuous emission monitoring system operated in conformance with 40 
CFR part 60, appendix F, procedure 1. A new 12-month average shall be 
computed at the end of each calendar month, based on the following 
procedure: First, sum the total pounds of NOX or 
SO2, as applicable, emitted from the unit during the month 
and the previous eleven calendar months, second, sum the total tons of 
clinker production during the same period, and third, divide the total 
number of pounds of emissions of NOX or SO2, as 
applicable, by the total clinker production during the twelve calendar 
months.
    (7) Recordkeeping. The owner/operator shall maintain the following 
records for at least five years:
    (i) All CEMS data, including the date, place, and time of sampling 
or measurement; parameters sampled or measured; and results.
    (ii) All records of clinker production, which shall be monitored in 
accordance with 40 CFR 60.63.
    (iii) Records of quality assurance and quality control activities 
for emissions measuring systems including, but not limited to, any 
records required by 40 CFR part 60, appendix F, Procedure 1.
    (iv) Records of all major maintenance activities conducted on 
emission units, air pollution control equipment, CEMS and clinker 
production measurement devices.
    (v) Any other records required by 40 CFR part 60, subpart F, or 40 
CFR part 60, appendix F, procedure 1.
    (8) Reporting. All reports under this section shall be submitted to 
Chief, Air Enforcement and Compliance Assurance Branch, U.S. 
Environmental Protection Agency, Region 5, Mail Code AE-17J, 77 W. 
Jackson Blvd., Chicago, IL 60604-3590.
    (i) The owner/operator shall submit quarterly excess emissions 
reports for SO2 and NOX BART limits no later than 
the 30th day following the end of each calendar quarter. Excess 
emissions means emissions that exceed the emissions limits specified in 
paragraph (h)(1), (h)(2), and (h)(3) of this section. The reports shall 
include the magnitude, date(s), and duration of each period of excess 
emissions, specific identification of each period of excess emissions 
that occurs during startups, shutdowns, and malfunctions of the unit, 
the nature and cause of any malfunction (if known), and the corrective 
action taken or preventative measures adopted.
    (ii) Owner/operator of each unit shall submit quarterly CEMS 
performance reports, to include dates and duration of each period 
during which the CEMS was inoperative (except for zero and span 
adjustments and calibration checks), reason(s) why the CEMS was 
inoperative and steps taken to prevent recurrence, and any CEMS repairs 
or adjustments.
    (iii) The owner/operator shall also submit results of any CEMS 
performance tests required by 40 CFR part 60, appendix F, Procedure 1 
(Relative Accuracy Test Audits, Relative Accuracy Audits, and Cylinder 
Gas Audits).
    (iv) When no excess emissions have occurred or the CEMS has not 
been inoperative, repaired, or adjusted during the reporting period, 
such information shall be stated in the quarterly reports required by 
paragraphs (h)(7)(i) and (ii) of this section.
    (i) Escanaba Paper Company, or any subsequent owner or operator of 
the Escanaba Paper Company facility in Escanaba, Michigan, shall meet 
the following requirements and shall not cause or permit the emission 
of NOX (expressed as NOX) to exceed the following 
limits:
    (1) For Boiler 8, designated as EU8B13, a rolling 30-day average 
limit of 0.35 lb per MMBTU.
    (2) A continuous emission monitoring system shall be operated to 
measure NOX emissions from Boiler 8 in conformance with 40 
CFR part 60, appendix F.
    (3) The reference test method for assessing compliance with the 
limit in paragraph (i)(1) of this section shall be a continuous 
emission monitoring system operated in conformance with 40 CFR part 60, 
appendix F. A new 30-day average shall be computed at the end of each 
calendar day in which the boiler operated, based on the following 
procedure: first, sum the total pounds of NOX emitted from 
the unit during the operating day and the previous twenty-nine 
operating days, second sum the total heat input to the unit in MMBTU 
during the same period, and third, divide the total number of pounds of 
NOX emitted by the total heat input during the thirty 
operating days.
    (4) For Boiler 9, also identified as EU9B03, a limit of 0.27 lb per 
MMBTU.
    (5) The reference test method for assessing compliance with the 
limit in paragraph (i)(4) of this section shall be a test conducted in 
accordance with 40 CFR part 60, appendix A, Method 7.
    (6) Recordkeeping. The owner/operator shall maintain the following

[[Page 71551]]

records regarding Boiler 8 and Boiler 9 for at least five years:
    (i) All CEMS data, including the date, place, and time of sampling 
or measurement; parameters sampled or measured; and results.
    (ii) All stack test results.
    (iii) Daily records of fuel usage, heat input, and data used to 
determine heat content.
    (iv) Records of quality assurance and quality control activities 
for emissions measuring systems including, but not limited to, any 
records required by 40 CFR part 60, appendix F, Procedure 1.
    (v) Records of all major maintenance activities conducted on 
emission units, air pollution control equipment, and CEMS.
    (vi) Any other records identified in 40 CFR 60.49b(g) or 40 CFR 
part 60, appendix F, Procedure 1.
    (7) Reporting. All reports under this section shall be submitted to 
the Chief, Air Enforcement and Compliance Assurance Branch, U.S. 
Environmental Protection Agency, Region 5, Mail Code AE-17J, 77 W. 
Jackson Blvd., Chicago, IL 60604-3590.
    (i) Owner/operator of Boiler 8 shall submit quarterly excess 
emissions reports for the limit in paragraph (i)(1) no later than the 
30th day following the end of each calendar quarter. Excess emissions 
means emissions that exceed the emissions limit specified in paragraph 
(i)(1) of this section. The reports shall include the magnitude, 
date(s), and duration of each period of excess emissions, specific 
identification of each period of excess emissions that occurs during 
startups, shutdowns, and malfunctions of the unit, the nature and cause 
of any malfunction (if known), and the corrective action taken or 
preventative measures adopted.
    (ii) Owner/operator of Boiler 8 shall submit quarterly CEMS 
performance reports, to include dates and duration of each period 
during which the CEMS was inoperative (except for zero and span 
adjustments and calibration checks or when Boiler 8 is not operating), 
reason(s) why the CEMS was inoperative and steps taken to prevent 
recurrence, and any CEMS repairs or adjustments.
    (iii) Owner/operator of Boiler 8 shall also submit results of any 
CEMS performance tests required by 40 CFR part 60, appendix F, 
procedure 1 (Relative Accuracy Test Audits, Relative Accuracy Audits, 
and Cylinder Gas Audits).
    (iv) When no excess emissions have occurred or the CEMS has not 
been inoperative, repaired, or adjusted during the reporting period, 
such information shall be stated in the quarterly reports required by 
paragraph (i)(7) of this section.
    (v) Owner/operator of Boiler 9 shall submit reports of any 
compliance test measuring NOX emissions from Boiler 9 within 
60 days of the last day of the test. If owner/operator commences 
operation of a continuous NOX emission monitoring system for 
Boiler 9, owner/operator shall submit reports for Boiler 9 as specified 
for Boiler 8 in paragraphs (i)(7)(i) to (i)(7)(iv) of this section.

[FR Doc. 2012-29014 Filed 11-30-12; 8:45 am]
BILLING CODE 6560-50-P