Approval and Promulgation of Implementation Plans; Alabama Prevention of Significant Deterioration and Nonattainment New Source Review

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Proposed rule.

SUMMARY:

EPA is proposing to approve State Implementation Plan (SIP) revisions submitted by the State of Alabama on June 16, 2006. The proposed revisions modify Alabama's Prevention of Significant Deterioration (PSD) and Nonattainment New Source Review (NNSR) regulations in the SIP to address changes to the federal New Source Review (NSR) permitting regulations, which were promulgated by EPA on December 31, 2002, and reconsidered with minor changes on November 7, 2003 (collectively, these two final actions are called the “2002 NSR Reform Rules”). The proposed revisions include provisions for baseline emissions calculations, an actual-to-projected-actual methodology for calculating emissions changes, options for plantwide applicability limits (PAL), and recordkeeping and reporting requirements. The June 16, 2006, submittal also contained provisions to address the Clean Air Interstate Rule, on which EPA has already taken action. As requested by Alabama on December 3, 2007, at this time, EPA is not taking action on a proposed revision found in Rule 335-3-14-.04(2)(w)1, which establishes a significance threshold for all NSR regulated pollutants for which there is not a listed significance threshold.

DATES:

Comments must be received on or before February 25, 2008.

ADDRESSES:

Submit your comments, identified by Docket ID No. EPA-R04-OAR-2007-0532, by one of the following methods:

1. http://www.regulations.gov: Follow the online instructions for submitting comments.

2. E-mail: danois.gracy@epa.gov.

3. Fax: (404) 562-9019.

4. Mail: “EPA-R04-OAR-2007-0532,” Air Planning Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street, SW., Atlanta, Georgia 30303-8960.

5. Hand Delivery or Courier: Ms. Gracy R. Danois, Air Permits Section, Air Planning Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street, SW., Atlanta, Georgia 30303-8960. Such deliveries are only accepted during the Regional Office's normal hours of operation. The Regional Office's official hours of business are Monday through Friday, 8:30 to 4:30, excluding federal holidays.

Instructions: Direct your comments to Docket ID No. EPA-R04-OAR-2007-0532. EPA's policy is that all comments received will be included in the public docket without change and may be made available online at http://www.regulations.gov,, including any personal information provided, unless the comment includes information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Do not submit through http://www.regulations.gov or e-mail, information that you consider to be CBI or otherwise protected. The http://www.regulations.gov Web site is an “anonymous access” system, which means EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an e-mail comment directly to EPA without going through http://www.regulations.gov,, your e-mail address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you include your name and other contact information in the body of your comment and with any disk or CD-ROM you submit. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should avoid the use of special characters, any form of encryption, and be free of any defects or viruses. For additional information about EPA's public docket visit the EPA Docket Center homepage at http://www.epa.gov/epahome/dockets.htm.

Docket: All documents in the electronic docket are listed in the http://www.regulations.gov index. Although listed in the index, some information is not publicly available, i.e., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically in http://www.regulations.gov or in hard copy at the Regulatory Development Section, Air Planning Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street, SW., Atlanta, Georgia 30303-8960. EPA requests that if at all possible, you contact the person listed in the FOR FURTHER INFORMATION CONTACT section to schedule your inspection. The Regional Office's official hours of business are Monday through Friday, 8:30 to 4:30, excluding federal holidays.

FOR FURTHER INFORMATION CONTACT:

For information regarding the Alabama State Implementation Plan, contact Ms. Stacy Harder, Regulatory Development Section, Air Planning Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street, SW., Atlanta, Georgia 30303-8960. The telephone number is (404) 562-9042. Ms. Harder can also be reached via electronic mail at harder.stacy@epa.gov. For information regarding New Source Review, contact Ms. Gracy R. Danois, Air Permits Section, at the same address above. The telephone number is (404) 562-9119. Ms. Danois can also be reached via electronic mail at danois.gracy@epa.gov.

SUPPLEMENTARY INFORMATION:

Throughout this document, references to “EPA,” “we,” “us,” or “our,” are intended to mean the Environmental Protection Agency. The supplementary information is arranged as follows:

I. What action is EPA proposing?

II. Why is EPA proposing this action?

III. What is EPA's analysis of Alabama's NSR rule revisions?

IV. What action is EPA taking?

V. Statutory and Executive Order Reviews

I. What Action is EPA Proposing?

On June 16, 2006, the State of Alabama, through the Alabama Department of Environmental Management (ADEM), submitted revisions to the SIP. Specifically, the proposed SIP revisions include changes to ADEM Administrative Code (AAC) Division 3 Code (Air Division), Chapter 14, entitled “Air Permits.” ADEM submitted these revisions in response to EPA's December 31, 2002, revisions to the federal NSR program. EPA is now proposing to approve these SIP revisions with the exception of the requirements found in Rule 335-3-14-.04(2)(w)1, the portion of the definition of “significant” that establishes a significance threshold of 100 tons for all NSR regulated pollutants for which there is not a listed significant amount. On December 3, 2007, Alabama requested that this portion of the definition not be approved into the SIP. Additionally, the June 16, 2006, submittal also addressed the Clean Air Interstate Rule which EPA has already taken action on separately.

II. Why is EPA Proposing This Action?

On December 31, 2002 (67 FR 80186), EPA published final rule changes to 40 Code of Federal Regulations (CFR) parts 51 and 52, regarding the Clean Air Act's (CAA or Act) PSD and NNSR programs. On November 7, 2003 (68 FR 63021), EPA published a notice of final action on the reconsideration of the December 31, 2002 (67 FR 80186), final rule changes. In that November 7, 2003, final action, EPA added the definition of “replacement unit,” and clarified an issue regarding PAL. The December 31, 2002, and the November 7, 2003, final actions are collectively referred to as the “2002 NSR Reform Rules.” The purpose of this action is to propose to approve the SIP submittal from the State of Alabama, which addresses EPA's 2002 NSR Reform Rules.

The 2002 NSR Reform Rules are part of EPA's implementation of Parts C and D of title I of the CAA, 42 U.S.C. 7470-7515. Part C of title I of the CAA, 42 U.S.C. 7470-7492, is the PSD program, which applies in areas that meet the National Ambient Air Quality Standards (NAAQS)—“attainment” areas—as well as in areas for which there is insufficient information to determine whether the area meets the NAAQS—“unclassifiable” areas. Part D of title I of the CAA, 42 U.S.C. 7501-7515, is the NNSR program, which applies in areas that are not in attainment of the NAAQS—“nonattainment” areas. Collectively, the PSD and NNSR programs are referred to as the “New Source Review” or NSR programs. EPA regulations implementing these programs are contained in 40 CFR 51.165, 51.166, 52.24, and part 51, appendix S.

The CAA's NSR programs are preconstruction review and permitting programs applicable to new and modified stationary sources of air pollution regulated under the CAA. The NSR programs of the CAA include a combination of air quality planning and air pollution control technology program requirements. Briefly, section 109 of the CAA, 42 U.S.C. 7409, requires EPA to promulgate primary NAAQS to protect public health and secondary NAAQS to protect public welfare. Once EPA sets those standards, states must develop, adopt, and submit to EPA for approval, a SIP that contains emissions limitations and other control measures to attain and maintain the NAAQS. Each SIP is required to contain a preconstruction review program for the construction and modification of any stationary source of air pollution to assure that the NAAQS are achieved and maintained; to protect areas of clean air; to protect air quality related values (such as visibility) in national parks and other areas; to assure that appropriate emissions controls are applied; to maximize opportunities for economic development consistent with the preservation of clean air resources; and to ensure that any decision to increase air pollution is made only after full public consideration of the consequences of the decision.

The 2002 NSR Reform Rules made changes to five areas of the NSR programs. In summary, the 2002 Rules: (1) Provided a new method for determining baseline actual emissions; (2) adopted an actual-to-projected-actual methodology for determining whether a major modification has occurred; (3) allowed major stationary sources to comply with PAL to avoid having a significant emissions increase that triggers the requirements of the major NSR program; (4) provided a new applicability provision for emissions units that are designated clean units; and (5) excluded pollution control projects (PCPs) from the definition of “physical change or change in the method of operation.” On November 7, 2003, EPA published a notice of final action on its reconsideration of the 2002 NSR Reform Rules (68 FR 63021), which added a definition for “replacement unit” and clarified an issue regarding PALs. For additional information on the 2002 NSR Reform Rules, see, 67 FR 80186 (December 31, 2002), and http://www.epa.gov/nsr.

After the 2002 NSR Reform Rules were finalized and effective (March 3, 2003), industry, state, and environmental petitioners challenged numerous aspects of the 2002 NSR Reform Rules, along with portions of EPA's 1980 NSR Rules (45 FR 52676, August 7, 1980). On June 24, 2005, the U.S. Court of Appeals for the District of Columbia Circuit (DC Circuit Court) issued a decision on the challenges to the 2002 NSR Reform Rules. New York v. United States, 413 F.3d 3 (DC Cir. 2005). In summary, the D.C. Circuit Court vacated portions of the rules pertaining to clean units and pollution control projects, remanded a portion of the rules regarding recordkeeping, e.g., 40 CFR 52.21(r)(6) and 40 CFR 51.166(r)(6), and either upheld or did not comment on the other provisions included as part of the 2002 NSR Reform Rules.

On March 8, 2007, EPA responded to the Court's remand regarding the recordkeeping provisions by proposing two alternative options to clarify what constitutes “reasonable possibility” and when the “reasonable possibility” recordkeeping requirements apply (72 FR 10445). The “reasonable possibility” standard identifies for sources and reviewing authorities the circumstances under which a major stationary source undergoing a modification that does not trigger major NSR must keep records. On December 14, 2007, EPA issued a final rulemaking establishing that “reasonable possibility” applies where source emissions equal or exceed 50% of the CAA NSR significance levels for any pollutant. This rule will be effective 30 days after its publication in the Federal Register. For further information, see, http://www.epa.gov/nsr/documents/ReasPos_final.pdf .

On June 13, 2007, EPA took final action to revise the 2002 NSR reform rules to exclude the portions that were vacated by the D.C. Circuit Court (72 FR 32526). This proposed action is consistent with the decision of the D.C. Circuit Court because Alabama's June 2006 SIP submittal, now being proposed for approval, does not include any portions of the 2002 NSR Reform Rules that were vacated as part of the June 2005 decision.

The 2002 NSR Reform Rules require that state agencies adopt and submit revisions to their SIP permitting programs implementing the minimum program elements of the 2002 NSR Reform Rules no later than January 2, 2006. (Consistent with changes to 40 CFR 51.166(a)(6)(i), state agencies are now required to adopt and submit SIP revisions within three years after new amendments are published in the Federal Register.) State agencies may meet the requirements of 40 CFR part 51, and the 2002 NSR Reform Rules, with different but equivalent regulations.

On June 16, 2006, the State of Alabama submitted a SIP revision for the purpose of revising the State's NSR permitting provisions. These changes were made primarily to adopt EPA's 2002 NSR Reform Rules. As discussed in further detail below, EPA believes the revisions contained in the Alabama submittal are approvable for inclusion into the Alabama SIP.

III. What is EPA's Analysis of Alabama's NSR Rule Revisions?

Alabama currently has a SIP-approved NSR program for new and modified stationary sources. EPA is now proposing to approve revisions to Alabama's existing PSD program in the SIP. These revisions became State-effective on July 11, 2006, and were submitted to EPA on June 16, 2006, for incorporation into the Alabama SIP. Copies of the revised rules, as well as the State's Technical Support Document, can be obtained from the Docket, as discussed in the “Docket” section above. A discussion of the specific changes to the Alabama rules, proposed for inclusion in the SIP, follows.

ADEM Rule 335-3-14-.04 contains the preconstruction review program that provides for the prevention of significant deterioration of ambient air quality as required under Part C of title I of the CAA. The program applies to major stationary sources or modifications constructing in areas that are designated as attainment or unclassifiable with respect to the NAAQS. Alabama's PSD program was originally approved into the SIP by EPA on November 10, 1981, and has been revised several times since then. The current revisions to Rule 335-3-14-.04, which EPA is now proposing to approve into the SIP, were provided to update the existing provisions to be consistent with the current federal PSD rules, including the 2002 NSR Reform Rules. State agencies may meet the requirements of 40 CFR part 51, and the 2002 NSR Reform Rules, with different but equivalent regulations. In developing regulations consistent with the 2002 NSR reform rules, ADEM has made the following changes in its rules that are different but equivalent to the federal regulations:

1. Applicability provisions—Actual-to-Potential Test for Projects that Only Involve Existing Emissions Units (335-3-14-.04(1)(h))—As part of the 2002 NSR reform rules, EPA changed NSR applicability determinations to rely on a new definition of “baseline actual emissions” that supports the “actual-to-projected actual” methodology. In addition to adopting this new methodology for determining NSR applicability, ADEM has retained an optional “actual to potential” test for projects that only involve existing units. This approach utilizes the definition for “actual emissions” to determine past actual emissions. To allow facilities to continue to use the actual-to-potential test, some of the State definitions are slightly different from the federal rule. ADEM's definition of “Net Emissions Increase” in Rule 335-3-14-.04(2)(c) does not include the condition that “actual emissions” not be used in determining creditable emissions increases and decreases. Consistent with this approach, the definition of “actual emissions” in ADEM's Rule 335-3-14-.04(2)(u) does not include an exclusion for determining significant increases or decreases. Because the “actual to potential test” approach is optional for existing units and at least as stringent as the federal rules, this difference is approvable.

2. Definition of “Allowable Emissions” and “Enforceable”—ADEM's definitions in Rule 335-3-14-.04-(2)(p) and (q) contain provisions indicating that appropriate limitations from 40 CFR part 63 also can be considered in determining enforceable limitations. These changes do not have a substantive effect on the terms, but rather, serve to clarify these terms. As a result, the change is at least as stringent as the federal rules, and is approvable.

3. Definition of “Significant”—In the definition of “significant” found in Rule 335-3-14-.04(2)(w), ADEM excluded HF from being considered a fluoride. This change was prompted by the language included in the preamble for the NSR Reform regulations (67 FR 80240) which states that HF should not be considered as part of the fluorides. Therefore, this change is approvable.

4. Definition of Baseline Actual Emissions—ADEM's definition in Rule 335-3-14-.04(2)(uu)3, uses different trigger dates for new and existing units when establishing the period for establishing the baseline actual emissions for the unit. While this is different than the federal rule, ADEM's approach offers the requisite specificity and is at least as stringent as the federal rule.

5. Definition of Regulated NSR Pollutant—ADEM has included language in Rule 335-3-14-.04(2)(ww)4 to exclude compounds listed under section 112(r)(3) of the CAA from the definition of regulated NSR pollutant unless otherwise listed as an NSR pollutant in the federal NSR rules. Such compounds are excluded from the federal NSR rules pursuant to 40 C.F.R. 51.166(b)(49)(iv). ADEM's rule is therefore consistent with federal rules.

6. Reasonable Possibility Provisions—ADEM made the following changes to the reasonable possibility provisions in Rule 335-3-14-.04(17):

a. ADEM included language in Rule 335-3-14-.04(17)(d) to require additional recordkeeping requirements for those modifications “where there is not a reasonable possibility that a project is part of a major modification and that is not excluded from the definition of physical change or change in the method of operation.”

b. ADEM added language in Rule 335-3-14-.04(17)(e) to require that all sources meet the recordkeeping requirements of the electric utilities. In Rule 335-3-14-.04(17)(e)(2), ADEM proposed additional reporting requirements for sources with a project for which there is a reasonable possibility that the project could exceed the significance thresholds. As discussed earlier, on March 8, 2007 (72 FR 10445), EPA proposed changes to the reasonable possibility provisions in the 2002 NSR reform rules, and on December 14, 2007, EPA issued a final action responding to the D.C. Circuit's remand. ADEM's changes identified above are more stringent than the federal rule and are therefore approvable.

7. PAL Provisions—ADEM made the following changes to the Actuals PAL provisions in Rule 335-3-14-.04(23):

a. (23)(a)2—ADEM omitted the provision which allows facilities utilizing PAL to remove previously set synthetic minor PSD limitations. According to Alabama's submittal, it is ADEM's intent that previously set PSD synthetic minor limits remain intact, similar to how NSPS, SIP and BACT limits remain applicable when requesting and obtaining a PAL in a permit.

b. (23)(f)—ADEM changed the method of setting the PAL. The federal rules state that any unit constructed after the 24-month period chosen for setting the PAL shall have its allowable emissions added to the PAL. ADEM has changed the provision to only allow the inclusion of actual emissions during any 24-month period of operation for sources which have been in operation for greater than 24 months. According to Alabama's SIP submittal, it is ADEM's intent that the PAL be based upon true actual emissions. Allowing for the inclusion of allowable emissions for all sources built after the chosen 24-month period would not be consistent with this approach.

c. (23)(i)5—ADEM has added a provision which states that synthetic minor limits which existed prior to a PAL shall be retained by the source after the expiration of the PAL. According to Alabama's SIP submittal, it is ADEM's intention that previously set PSD synthetic minor limits remain intact, in the same fashion that NSPS, SIP and BACT limits remain effective.

d. (23)(n)1—ADEM has removed the requirement to submit a semi-annual report within 30 days of the end of the reporting period. Since the facility's title V permit would require these reports to be submitted, its inclusion in the PSD regulations is not necessary.

Although the changes to the PAL provisions identified above are different than the federal rule, ADEM's approach is as stringent as the federal rules and is approvable. Additional information regarding these changes, including ADEM's explanation, is available in the Docket for this proposed action.

As part of EPA's review of the June 2006 Alabama SIP submittal, EPA performed a line-by-line review of the proposed revisions, including the provisions summarized above which differ from the federal rule. EPA has determined that the rules included in the June 2006 submittal are consistent with the program requirements for the preparation, adoption and submittal of implementation plans for NSR set forth at 40 CFR 51.165 and 51.166.

Alabama's June 2006 SIP submittal did not include any revisions to its NNSR rules. The State of Alabama currently has two nonattainment areas for PM_2.5 and no nonattainment areas for ozone. At the time of the submittal by Alabama, EPA had not promulgated NSR implementations rules for PM_2.5. EPA proposed the NSR implementation rules for PM_2.5 on November 1, 2005. Once final, Alabama will be required to revise its SIP to update its NNSR rules.

IV. What Action is EPA Taking?

For the reasons discussed above, EPA is proposing to approve the changes made to Alabama's Rule 335-3-14-.04, as submitted by ADEM on June 16, 2006, as revisions to the Alabama SIP.

V. Statutory and Executive Order Reviews

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this proposed action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This proposed action merely proposes to approve state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this proposed rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). Because this rule proposes to approve pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4).

This proposed rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). This action also does not have Federalism implications because it does 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 (64 FR 43255, August 10, 1999). This action merely proposes to approve state rules implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the CAA. This proposed rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it is not economically significant.

In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the CAA. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. This proposed rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

List of Subjects in 40 CFR Part 52

• Environmental protection
• Air pollution control
• Carbon monoxide
• Intergovernmental relations
• Lead
• Nitrogen dioxide
• Ozone
• Particulate matter
• Reporting and recordkeeping requirements
• Sulphur oxides
• Volatile organic compounds

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