Revisions to the California State Implementation Plan, South Coast Air Quality Management District

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Proposed rule.

SUMMARY:

EPA is proposing to approve revisions to the South Coast Air Quality Management District (“SCAQMD”) portion of the California State Implementation Plan (SIP). These revisions concern oxides of nitrogen (NO_X) and oxides of sulfur (SO_X) emissions from facilities emitting 4 tons or more per year of NO_X and/or SO_X under the SCAQMD Regional Clean Air Incentives Market (“RECLAIM”). We are proposing to approve a local rule to regulate these emission sources under the Clean Air Act as amended in 1990 (CAA or the Act). We are taking comments on this proposal and plan to follow with a final action.

DATES:

Any comments must arrive by October 14, 2004.

ADDRESSES:

Send comments to Andy Steckel, Rulemaking Office Chief (AIR-4), U.S. EPA, Region IX, 75 Hawthorne Street, San Francisco, CA 94105-3901 or e-mail to steckel.andrew@epa.gov, or submit comments at http://www.regulations.gov.

You can inspect copies of the submitted SIP revisions, EPA's technical support document (TSD), and public comments at our Region IX office during normal business hours by appointment. You may also see copies of the submitted SIP revisions by appointment at the following locations:

California Air Resources Board, Stationary Source Division, Rule Evaluation Section, 1001 “I” Street, Sacramento, CA 95814.

South Coast Air Quality Management District, 21865 E. Copley Dr., Diamond Bar, CA 91765-4182.

A copy of the rule may also be available via the Internet at http://www.arb.ca.gov/drdb/drdbltxt.htm. Please be advised that this is not an EPA Web site and may not contain the same version of the rule that was submitted to EPA.

FOR FURTHER INFORMATION CONTACT:

Andy Steckel, EPA Region IX, (415)947-4115, steckel.andrew@epa.gov.

SUPPLEMENTARY INFORMATION:

Throughout this document, “we,” “us” and “our” refer to EPA.

Table of Contents

I. The State's Submittal

A. What Rule did the State Submit?

B. Are There Other Versions of This Rule?

C. What is the Purpose of the Submitted Rule Revisions?

II. EPA's Evaluation and Action

A. How is EPA Evaluating the Rule?

B. Does the Rule Meet the Evaluation Criteria?

C. Public Comment and Final Action

III. Statutory and Executive Order Reviews

I. The State's Submittal

A. What Rule Did the State Submit?

Table 1 lists the rule addressed by this proposal with the date that it was adopted by SCAQMD and submitted by the California Air Resources Board (CARB).

On August 10, 2004, this rule submittal was found to meet the completeness criteria in 40 CFR part 51, appendix V, which must be met before formal EPA review.

B. Are There Other Versions of This Rule?

We approved a version of Rule 2015 into the SIP on September 9, 2003.

C. What Is the Purpose of the Submitted Rule Revisions?

NO_X helps produce ground-level ozone, smog and particulate matter, which harm human health and the environment. Section 110(a) of the CAA requires states to submit regulations that control NO_X emissions. The RECLAIM program sets an emissions cap and declining balance for many of the largest NO_X and SOx facilities in the South Coast Air Basin. The program was designed to provide additional incentives for industry to reduce emissions and advance pollution control technologies. During our review of previously submitted versions of the RECLAIM program rules, EPA raised concerns regarding provisions that allowed facilities, under certain conditions, to not deduct excess emissions associated with equipment breakdowns from the facility's RECLAIM Trading Credit (“RTC”) Allocation. EPA notified SCAQMD that these provisions conflicted with the Clean Air Act as interpreted by a September 20, 1999 EPA policy that, where possible, requires mitigation of all excess emissions during equipment malfunctions, startup, and shutdown.

SCAQMD staff committed in a letter dated April 2, 2002 to address the issue of breakdown emissions under the RECLAIM program. On May 13, 2002, EPA proposed conditional approval of the May 2001 RECLAIM amendments into the SIP (67 FR 31998). The conditional approval was finalized on September 4, 2003 (68 FR 52512). Specifically, the conditional approval required that SCAQMD adopt amendments to RECLAIM which would establish a mechanism within the RECLAIM program to ensure mitigation of all excess emissions resulting from breakdowns. The commitment made in the April 2nd letter stipulated that SCAQMD would monitor and track excess emissions from breakdowns and compare the total amount of these excess emissions to unused RTCs each year for the entire RECLAIM program. If the yearly breakdown emissions from all RECLAIM sources exceeded the unused RTCs, programmatic reductions from RECLAIM allocations in the following year would be made to mitigate the excess emissions. The TSD has more information about these rules.

II. EPA's Evaluation and Action

A. How Is EPA Evaluating the Rule?

Generally, SIP rules must be enforceable (see section 110(a) of the Act), must require Reasonably Available Control Technology (RACT) for major sources in nonattainment areas (see section 182(a)(2)(A) and 182(f)), and must not relax existing requirements (see sections 110(l) and 193). The SCAQMD regulates an ozone nonattainment area (see 40 CFR part 81), so the RECLAIM program must fulfill RACT.

Guidance and policy documents that we used to help evaluate enforceability and RACT requirements consistently include the following:

1. “State Implementation Plans; Nitrogen Oxides Supplement to the General Preamble; Clean Air Act Amendments of 1990 Implementation of Title I; Proposed Rule,” (the NO_X Supplement), 57 FR 55620, November 25, 1992.

2. “Issues Relating to VOC Regulation Cutpoints, Deficiencies, and Deviations,” EPA, May 25, 1988 (the Bluebook).

3. “Guidance Document for Correcting Common VOC & Other Rule Deficiencies,” EPA Region 9, August 21, 2001 (the Little Bluebook).

4. Requirements applicable to emissions trading programs such as RECLAIM are contained in “Improving Air Quality with Economic Incentive Programs,” January 2001, Office of Air and Radiation, EPA-452/R-01-001 (“EIP Guidance”). This guidance applies to discretionary economic incentive programs (“EIPs”) and represents the agency's interpretation of what EIPs should contain in order to meet the requirements of the CAA. Because this guidance is non-binding and does not represent final agency action, EPA is using the guidance as an initial screen to determine whether approvability issues arise.

5. Excess emissions provisions are addressed by “State Implementation Plans: Policy Regarding Excess Emissions During Malfunctions, Startup and Shutdown,” EPA's Office of Air and Radiation and Office of Enforcement and Compliance Assurance, September 20, 1999 (“Excess Emissions Policy”).

B. Does the Rule Meet the Evaluation Criteria?

We believe this rule is consistent with the CAA as applied by relevant policy and guidance regarding emissions trading programs, excess emissions provisions, enforceability, RACT, and SIP relaxations. Specifically, the submitted rule amendments were found to fulfill the requirements of EPA's previous conditional approval of the RECLAIM program rules and to address all concerns raised therein with respect to our Excess Emissions Policy. The TSD has more information on our evaluation.

C. Public Comment and Final Action

Because EPA believes the submitted rule fulfills all relevant requirements, we are proposing to fully approve it as described in section 110(k)(3) of the Act. We will accept comments from the public on this proposal for the next 30 days. Unless we receive convincing new information during the comment period, we intend to publish a final approval action that will incorporate this rule into the federally enforceable SIP.

III. 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 a state rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. 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 Clean Air Act. 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 Clean Air Act. 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
• Intergovernmental relations
• Nitrogen dioxide
• Ozone
• Reporting and recordkeeping requirements

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