[Federal Register Volume 72, Number 157 (Wednesday, August 15, 2007)]
[Proposed Rules]
[Pages 45705-45712]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-16044]
=======================================================================
-----------------------------------------------------------------------
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 52 and 97
[EPA-R06-OAR-2007-0651; FRL-8455-1]
Approval and Promulgation of Implementation Plans; Louisiana;
Clean Air Interstate Rule Nitrogen Oxides Trading Programs
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: EPA is proposing to approve a revision to the Louisiana State
Implementation Plan (SIP) submitted by the State of Louisiana on July
12, 2007, as the Louisiana Clean Air Interstate Rule (CAIR) Nitrogen
Oxides (NOX) Trading Programs abbreviated SIP. We are
proposing to approve Louisiana's CAIR NOX Annual and Ozone
Season Abbreviated SIP revision in parallel with the Louisiana
Department of Environmental Quality's (LDEQ) rulemaking activities
(``parallel processing''). The abbreviated SIP revision includes the
Louisiana methodology for allocation of annual and ozone season
NOX allowances. EPA is proposing to determine that the
Louisiana CAIR NOX Trading Programs abbreviated SIP revision
satisfies the applicable requirements of a CAIR abbreviated SIP
revision. EPA is also proposing to approve revisions to the Louisiana
SIP that establish administrative reporting requirements for all
Louisiana CAIR programs; these revisions were submitted on September
22, 2006, as part of the Louisiana CAIR Sulfur Dioxide (SO2)
Trading Program SIP. EPA is also proposing that the Louisiana CAIR
NOX Annual and Ozone Season Abbreviated SIP will satisfy
Louisiana's Clean Air Act (CAA) Section 110(a)(2)(D)(i) obligations to
submit a SIP revision that contains adequate provisions to prohibit air
emissions from adversely affecting another State's air quality through
interstate transport.
The intended effect of this action is to reduce NOX
emissions from the State of Louisiana that are contributing to
nonattainment of the 8-hour ozone and PM2.5 National Ambient
Air Quality Standards (NAAQS or standard) in downwind states. This
action is being taken under section 110 of the CAA.
DATES: Comments must be received on or before September 14, 2007.
ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R06-
OAR-2007-0651, by one of the following methods:
(1) www.regulations.gov: Follow the on-line instructions for
submitting comments.
(2) E-mail: Mr. Jeff Robinson at [email protected]. Please
also cc the person listed in the FOR FURTHER INFORMATION CONTACT
paragraph below.
(3) U.S. EPA Region 6 ``Contact Us'' Web site: http://epa.gov/region6/r6coment.htm. Please click on ``6PD'' (Multimedia) and select
``Air'' before submitting comments.
(4) Fax: Mr. Jeff Robinson, Chief, Air Permits Section (6PD-R), at
fax number 214-665-6762.
(5) Mail: Mr. Jeff Robinson, Chief, Air Permits Section (6PD-R),
Environmental Protection Agency, 1445 Ross Avenue, Suite 1200, Dallas,
Texas 75202-2733.
(6) Hand or Courier Delivery: Mr. Jeff Robinson, Chief, Air Permits
Section (6PD-R), Environmental Protection Agency, 1445 Ross Avenue,
Suite 1200, Dallas, Texas 75202-2733. Such deliveries are accepted only
between the hours of 8:30 a.m. and 4:30 p.m. weekdays except for legal
holidays. Special arrangements should be made for deliveries of boxed
information.
Instructions: Direct your comments to Docket ID No. EPA-R06-OAR-
2007-0651. 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 the
disclosure of which is restricted by statute. Do not submit information
through http://www.regulations.gov or e-mail, if you believe that it is
CBI or otherwise protected from disclosure. The http://www.regulations.gov Web site is an ``anonymous access'' system, which
means that 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 along with any disk or CD-ROM
submitted. 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 and any form of encryption and should 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 docket are listed in the http://www.regulations.gov index. Although listed in the index, some
information is not publicly available, e.g., CBI or other information
the disclosure of which is restricted by statute. Certain other
material, such as copyrighted material, will be publicly available only
in hard copy. Publicly available docket materials are available either
electronically in http://www.regulations.gov or in hard copy at the Air
Permits Section (6PD-R), Environmental Protection Agency, 1445 Ross
Avenue, Suite 700, Dallas, Texas 75202-2733. The file will be made
available by appointment for public inspection in the Region 6 FOIA
Review Room between the hours of 8:30 a.m. and 4:30 p.m. weekdays
except for legal holidays. Contact the person listed in the FOR FURTHER
INFORMATION CONTACT paragraph below to make an appointment. If
possible, please make the appointment at least two working days in
advance of your visit. A 15 cent per page fee will be charged for
making photocopies of documents. On the day of the visit, please check
in at the EPA Region 6 reception area on the seventh
[[Page 45706]]
floor at 1445 Ross Avenue, Suite 700, Dallas, Texas.
The State submittal related to this SIP revision, and which is part
of the EPA docket, is also available for public inspection at the State
Air Agency listed below during official business hours by appointment:
Louisiana Department of Environmental Quality, Office of
Environmental Quality Assessment, 602 N. Fifth Street, Baton Rouge,
Louisiana 70802.
FOR FURTHER INFORMATION CONTACT: If you have questions concerning
today's proposal, please contact Ms. Adina Wiley (6PD-R), Air Permits
Section, Environmental Protection Agency, Region 6, 1445 Ross Avenue
(6PD-R), Suite 1200, Dallas, TX 75202-2733. The telephone number is
(214) 665-2115. Ms. Wiley can also be reached via electronic mail at
[email protected].
SUPPLEMENTARY INFORMATION: Throughout this document, wherever any
reference to ``we,'' ``us,'' or ``our'' is used, we mean EPA.
Table of Contents
I. What Action Is EPA Proposing?
II. What Is the Regulatory History of CAIR and the CAIR FIP?
III. What Are the General Requirements of CAIR and the CAIR FIP?
IV. What Are the Types of CAIR SIP Submittals?
V. What Is EPA's Analysis of Louisiana's CAIR NOX Annual
and Ozone Season Abbreviated SIP Revision?
A. State Budgets for NOX Annual and Ozone Season
Allowance Allocations
B. CAIR NOX Annual and Ozone Season Cap-and-Trade
Programs
C. Applicability Provisions for Non-EGU NOX SIP Call
Sources
D. NOX Annual and Ozone Season Allowance Allocations
E. Allocation of NOX Allowances From the Compliance
Supplement Pool
F. Individual Opt-In Units
VI. What Is EPA's Analysis of the Section 110(a)(2)(D)(i)
Requirements?
VII. Proposed Action
VIII. Statutory and Executive Order Reviews
I. What Action Is EPA Proposing?
On July 12, 2007, the State of Louisiana requested that EPA
parallel process an abbreviated revision to the Louisiana SIP in
conjunction with the LDEQ's rulemaking activities. The SIP revision
consists of new regulations that establish the NOX annual
and ozone season allocation methodologies that are to be used instead
of the Federal allocations in the Louisiana CAIR NOX Annual
and Ozone Season Federal Implementation Plans (FIP). The affected state
regulations that we are proposing to approve today as part of the
Louisiana CAIR NOX Trading Programs abbreviated SIP are
enacted at Louisiana Administrative Code, Title 33, Part III, Chapter
5, Sections 506(A) and (B) (LAC 33:III.506(A) and (B)). EPA is
proposing to determine that the Louisiana CAIR NOX Trading
Programs abbreviated SIP revision satisfies the applicable requirements
of a CAIR abbreviated SIP revision at 40 CFR 51.123(p)(1) and (ee)(2).
We are also at this time proposing to approve revisions to the
Louisiana SIP at LAC 33:III.506 (D) and (E), submitted September 22,
2006, that establish administrative reporting requirements germane to
all Louisiana CAIR programs. We had deferred action on these
subsections in the Louisiana CAIR SO2 rulemaking until we
had the opportunity to review and act upon the Louisiana CAIR
NOX programs (see 72 FR 39741).
The provisions of the Louisiana CAIR NOX Annual and
Ozone Season FIP at 40 CFR 52.984 require owners or operators of
NOX sources located in Louisiana to meet the Federal
NOX annual and ozone season trading programs found at 40 CFR
part 97. These Federal trading programs' rules include provisions at 40
CFR 97.144(a) and 97.343(a) that if EPA approves the Louisiana
abbreviated SIP revision for NOX annual and ozone season
allocation methodologies, then the Federal NOX annual and
ozone season allocation methodologies no longer apply. If EPA approves
the Louisiana NOX annual and ozone season allocation
methodologies into the Louisiana SIP, then EPA under 40 CFR 52.984,
97.144(a), and 97.343(a) will not make allocations for the CAIR
NOX sources in Louisiana; the LDEQ will allocate
NOX annual and ozone season allowances using the Louisiana
SIP rules.
Consequently, if EPA approves the Louisiana abbreviated SIP
revision, EPA is not required to take any rulemaking action to change
the Federal CAIR NOX Annual and Ozone Season trading
programs in 40 CFR part 97 or to change the Louisiana CAIR FIP for
NOX annual and ozone season emissions in 40 CFR 52.984.
Rather EPA, by ministerial action, will note in Appendix A.1. to
Subpart EE of 40 CFR Part 97, that Louisiana has an approved SIP
revision for NOX annual allowances. Similarly, EPA will note
in Appendix A to Subpart EEEE of 40 CFR Part 97, that Louisiana has an
approved SIP revision for NOX ozone season allowances. Since
the Federal CAIR NOX Annual and Ozone Season trading
programs' rules provide for automatic revision of the Louisiana CAIR
FIP for NOX annual and ozone season emissions upon approval
of such an abbreviated SIP revision, the Louisiana rules for
NOX annual and ozone season allowance allocations would
apply, rather than the Federal rules governing allocations, upon the
effective date of approval.
In addition, EPA is also proposing to approve a revision to
Louisiana's SIP to address the ``good neighbor'' provisions of section
110(a)(2)(D)(i) of the CAA. This section of the Act requires each State
to submit a SIP that prohibits emissions that could adversely affect
another State. The SIP must prevent sources in the State from emitting
pollutants in amounts which will: (1) Contribute significantly to
downwind nonattainment of the national ambient air quality standards
(NAAQS), (2) interfere with maintenance of the NAAQS, (3) interfere
with provisions to prevent significant deterioration of air quality,
and (4) interfere with efforts to protect visibility.
Why are we ``parallel processing'' and how does it work?
The Louisiana CAIR NOX Annual and Ozone Season FIP
includes a NOX allowance recordation deadline of September
30, 2007, at 40 CFR 97.153 and 97.353. As explained in the preamble of
our April 28, 2006, promulgation of the CAIR FIPs, EPA will only record
State allowance allocations if EPA has approved a full or abbreviated
SIP for the State which specifies the allocation methodology (see 71 FR
25354). The State of Louisiana requested parallel processing of the
Louisiana CAIR NOX Trading Program Abbreviated SIP revision
to expedite federal approval of the Louisiana NOX annual and
ozone season allocation methodology.
In order to expedite review, approval of this revision is being
proposed under a procedure called ``parallel processing'' whereby EPA
proposes rulemaking action concurrently with the State's procedures for
amending its regulations (40 CFR part 51, Appendix V, section 2.3). If
the State's proposed revision is substantially changed, EPA will
evaluate those subsequent changes and may publish another notice of
proposed rulemaking. If no substantial changes are made, EPA will
publish a final rulemaking on the revisions after responding to any
submitted comments. Final rulemaking action by EPA will occur only
after the SIP revision has been fully adopted by Louisiana and
submitted formally to EPA for incorporation into the SIP. In addition,
any action by the State resulting in undue delay in the adoption of the
rules may results in a re-proposal altering the approvability of the
SIP revision.
[[Page 45707]]
II. What Is the Regulatory History of CAIR and the CAIR FIP?
EPA promulgated the CAIR on May 12, 2005 (70 FR 25162). In this
rule, EPA determined that 28 States and the District of Columbia
contribute significantly to nonattainment and interfere with
maintenance of the national ambient air quality standards (NAAQS) for
fine particles (PM2.5) and /or 8-hour ozone in downwind
States in the eastern part of the country. As a result, EPA required
those upwind States to revise their SIPs to include control measures
that reduce emissions of SO2, which is a precursor to
PM2.5 formation, and/or NOX, which is a precursor
to both ozone and PM2.5 formation. For jurisdictions that
contribute significantly to downwind PM2.5 nonattainment,
CAIR sets annual State-wide emission reduction requirements (i.e.,
budgets) for SO2 and annual State-wide emission reduction
requirements for NOX. Similarly, for jurisdictions that
contribute significantly to 8-hour ozone nonattainment, CAIR sets
statewide emission reduction requirements for NOX for the
ozone season (defined at 40 CFR 97.302 as May 1st to September 30th).
Under CAIR, States may implement these emission budgets by
participating in the EPA-administered cap-and-trade programs or by
adopting and submitting for EPA approval any other control measures.
EPA found that Louisiana significantly contributed to nonattainment
of the 8-hour ozone standard in Texas and the PM2.5 standard
in Alabama, resulting in Louisiana being subject to the SO2,
NOX annual, and NOX ozone season requirements of
CAIR. Louisiana submitted a SIP revision addressing the SO2
requirements of CAIR on September 22, 2006. We approved this SIP
revision through a direct final action on July 20, 2007 (72 FR
39741).\1\ Today we are proposing to approve the abbreviated SIP
revision addressing the Louisiana NOX annual and ozone
season requirements of CAIR with this rulemaking. There are no punitive
consequences for Louisiana failing to submit SO2,
NOX Annual, and NOX Ozone Season CAIR SIPs.
---------------------------------------------------------------------------
\1\ Louisiana is subject to the CAIR SO2 Federal
Implementation Plan at 40 CFR 52.985 until EPA's final action
becomes effective on the Louisiana CAIR SO2 Trading
Program SIP revision. If no adverse comments are received on our
direct final action by August 20, 2007, the Louisiana CAIR
SO2 Trading Program will be effective on September 18,
2007. We are not accepting comments on the Louisiana CAIR
SO2 Trading Program in this action; if you would like to
comment on the Louisiana CAIR SO2 Trading Program please
follow the instructions at 72 FR 39741, Docket ID No. EPA-06-OAR-
2006-0849.
---------------------------------------------------------------------------
CAIR sets forth what must be included in SIPs to address the
requirements of section 110(a)(2)(D) of the Act with regard to
interstate transport for the 8-hour ozone and PM2.5 NAAQS.
EPA made national findings (70 FR 21147), effective May 25, 2005, that
the affected States had failed to submit SIPs meeting the requirements
of section 110(a)(2)(D). The SIPs were due in July 2000, 3 years after
the promulgation of the 8-hour ozone and PM2.5 NAAQS. These
May 25, 2005, findings started a 2-year clock for EPA to promulgate a
FIP to address the requirements of section 110(a)(2)(D), including the
``good neighbor provision'' at section 110(a)(2)(D)(i) which applies to
interstate transport of certain emissions. Under CAA section 110(c)(1),
EPA may issue a FIP anytime after such findings are made and must do so
within two years unless a SIP revision correcting the deficiency is
approved by EPA before the FIP is promulgated. On August 15, 2006, EPA
issued guidance for SIP submissions that states should use to address
the requirements of section 110(a)(2)(D)(i) for the 8-hour ozone and
PM2.5 NAAQS.
On April 28, 2006, EPA promulgated FIPs for all States covered by
CAIR in order to ensure the emissions reductions required by CAIR are
achieved on schedule. See 40 CFR 52.35 and 52.36. Each CAIR State is
subject to the FIP until the State fully adopts, and EPA approves, a
SIP revision meeting the requirements of CAIR. The CAIR FIPs require
certain EGUs to participate in the EPA-administered CAIR
SO2, NOX Annual, and NOX Ozone Season
trading programs, as appropriate, found at 40 CFR part 97. The CAIR
FIPs' SO2, NOX Annual, and NOX Ozone
Season trading programs impose essentially the same requirements as,
and are integrated with, the respective CAIR SIP trading programs. The
integration of the CAIR FIP and SIP trading programs means that these
trading programs will work together to create effectively a single
trading program for each regulated pollutant (SO2,
NOX annual, and NOX ozone season) in all States
covered by the CAIR FIPs' or SIPs' trading program for that pollutant.
The CAIR FIPs also allow States to submit abbreviated SIP revisions
that, if approved by EPA, will automatically replace or supplement the
corresponding CAIR FIP provisions (e.g., the methodology for allocating
NOX allowances to sources in the state), while the CAIR FIPs
remain in place for all other provisions. See 40 CFR 51.123(p)(1)-(3)
and (ee)(1)-(3), 71 FR 25328 and 25339 (April 28, 2006).
On April 28, 2006, EPA published two more CAIR-related final rules
that added the States of Delaware and New Jersey to the list of States
subject to CAIR for PM2.5 and announced EPA's final
decisions on reconsideration of five issues without making any
substantive changes to the CAIR requirements. On December 13, 2006, EPA
published minor, non-substantive revisions that serve to clarify CAIR
and the CAIR FIP.
III. What Are the General Requirements of CAIR and the CAIR FIP?
CAIR establishes State-wide emission budgets for SO2 and
NOX and is to be implemented in two phases. The first phase
of NOX reductions starts in 2009 and continues through 2014,
while the first phase of SO2 reductions starts in 2010 and
continues through 2014. The second phase of reductions for both
NOX and SO2 starts in 2015 and continues
thereafter. CAIR requires States to implement the budgets by either:
(1) Requiring EGUs to participate in the EPA-administered cap-and-trade
programs: or, (2) adopting other control measures of the State's
choosing and demonstrating that such control measures will result in
compliance with the applicable State SO2 and NOX
budgets.
The May 12, 2005, and April 28, 2006, CAIR rules provide model
rules that States must adopt (with certain limited changes, if desired)
if they want to participate in the EPA-administered trading programs.
The December 13, 2006, revisions to CAIR and the CAIR FIPs were non-
substantive and, therefore, do not affect EPA's evaluation of a State's
SIP revision.
With two exceptions, only States that choose to meet the
requirements of CAIR through methods that exclusively regulate EGUs are
allowed to participate in the EPA-administered trading programs. One
exception is for States that adopt the opt-in provisions of the model
rules to allow non-EGUs individually to opt into the EPA-administered
trading programs. The other exception is for States that include all
non-EGUs from their NOX SIP Call trading programs in their
CAIR NOX ozone season trading programs. Louisiana was not
subject to the NOX SIP Call; therefore, the second exception
is not applicable.
IV. What Are the Types of CAIR SIP Submittals?
States have the flexibility to choose the type of control measures
they will use to meet the requirements of CAIR. EPA anticipates that
most States will choose to meet the CAIR requirements
[[Page 45708]]
by selecting an option that requires EGUs to participate in the EPA-
administered CAIR cap-and-trade programs. For such States, EPA has
provided two approaches for submitting and obtaining approval for CAIR
SIP revisions. States may submit full SIP revisions that adopt the
model CAIR cap-and-trade rules. If approved, these SIP revisions will
fully replace the CAIR FIPs. Alternatively, States may submit
abbreviated SIP revisions. The provisions in the abbreviated SIP
revision, if approved into a State's SIP, will not replace that State's
CAIR FIP; however, the requirements for the CAIR FIPs at 40 CFR part 52
incorporate the provisions of the Federal CAIR trading programs in 40
CFR part 97. The Federal CAIR trading programs in 40 CFR part 97
provide that whenever EPA approves an abbreviated SIP revision, the
provisions in the abbreviated SIP revision will be used in place of or
in conjunction with, as appropriate, the corresponding provisions in 40
CFR part 97 of the State's CAIR FIP (e.g., the NOX allowance
allocation methodology).
A State submitting an abbreviated SIP revision, may submit limited
SIP revisions to tailor the CAIR FIP's cap-and-trade programs to the
state submitting the revision. An abbreviated SIP revision may
establish certain applicability and allowance allocation provisions
instead of or in conjunction with the corresponding provisions in the
CAIR FIP's rules in that State. Specifically, an abbreviated SIP
revision may:
(1) Include NOX SIP Call trading sources that are not
EGUs under CAIR in the CAIR FIP's NOX Ozone Season trading
program;
(2) Provide for allocation of NOX annual or ozone season
allowances by the State, rather than the Administrator, and using a
methodology chosen by the State;
(3) Provide for allocation of NOX annual allowances from
the CSP by the State, rather than by the Administrator, and using the
State's choice of allowed, alternative methodologies; or
(4) Allow units that are not otherwise CAIR units to opt
individually into the CAIR FIP's cap-and-trade programs under the opt-
in provisions in the CAIR FIP's rules.
With approval of an abbreviated SIP revision, the State's CAIR FIP
remains in place, as tailored to sources in that State by the approved
SIP revision.
Abbreviated SIP revisions can be submitted in lieu of, or as part
of, CAIR full SIP revisions. States may want to designate part of their
full SIP as an abbreviated SIP for EPA to act on first when the timing
of the State's submission might not provide EPA with sufficient time to
approve the full SIP prior to the deadline for recording NOX
allocations. This will help ensure that the elements of the trading
programs where flexibility is allowed are implemented according to the
State's decisions. Submission of an abbreviated SIP revision does not
preclude future submission of a CAIR full SIP revision. In this case,
Louisiana submitted an abbreviated SIP revision that addresses the
allocation methodology for the NOX Annual and Ozone Season
programs. Louisiana previously submitted a full SIP revision to address
the SO2 requirements of CAIR.
V. What Is EPA's Analysis of Louisiana's CAIR NOX Annual and
Ozone Season Abbreviated SIP Revision?
A. State Budgets for NOX Annual and Ozone Season Allowance Allocations
The CAIR NOX annual and ozone season budgets for
Louisiana were developed from historical heat input data for EGUs.
Using these data, EPA calculated annual and ozone season regional heat
input values, which were multiplied by 0.15 lb/mmBtu, for phase 1, and
0.125 lb/mmBtu, for phase 2, to obtain regional NOX budgets
for 2009-2014 and for 2015 and thereafter, respectively. EPA derived
the Louisiana NOX annual and ozone season budgets from the
regional budgets using Louisiana heat input data adjusted by fuel
factors.
The CAIR SIP requirements and the Louisiana CAIR NOX
Annual FIP establish the NOX annual budgets for Louisiana as
35,512 tons of NOX annual emissions for 2009-2014 and 29,593
tons of NOX annual emissions in 2015 and thereafter.
Louisiana's submitted rules at LAC 33:III.506(A)(2) establish that the
total amount of NOX annual allowances allocated per control
period shall not exceed the CAIR NOX annual budget at 40 CFR
97.140. Therefore, the annual budgets as listed in 40 CFR 51.123 and
97.140 (35,512 tons in 2009-2014 and 29,593 tons in 2015 and
thereafter) continue to apply.
The CAIR SIP requirements and the Louisiana CAIR NOX
Ozone Season FIP establish the NOX ozone season budgets for
Louisiana as 17,085 tons of NOX ozone season emissions for
2009-2014 and 14,238 tons of NOX ozone season emissions in
2015 and thereafter. Louisiana's rules at LAC 33:III.506(B)(2)
establish that the total amount of NOX ozone season
allowances allocated per control period shall not exceed the CAIR
NOX ozone season budget at 40 CFR 97.340. Therefore the
ozone season budgets as listed in 40 CFR 51.123 and 97.340 (17,085 tons
in 2009-2014 and 14,238 tons in 2015 and thereafter) continue to apply.
The Louisiana abbreviated SIP revision, being proposed today, does
not affect the budgets for the NOX annual and ozone season
programs. These budgets are total amounts of allowances available for
allocation for each year under the EPA-administered cap-and-trade
programs under the Louisiana CAIR NOX Annual and Ozone
Season FIPs. In short, the Louisiana abbreviated SIP revision only
affects allocations of NOX annual and ozone season
allowances under the established budgets.
B. CAIR NOX Annual and Ozone Season Cap-and-Trade Programs
The CAIR NOX Annual and Ozone Season FIPs for the States
largely mirror the structure of the NOX SIP Call model-
trading rule in 40 CFR part 96 subparts A through I. While the
provisions of the NOX Annual and Ozone Season FIPs are
similar, there are some differences. For example, the NOX
Annual FIPs provide for a compliance supplement pool (CSP), which is
discussed below and under which allowances may be awarded for early
reductions of NOX annual emissions.
EPA used the CAIR model trading rules as the basis for the
SO2, NOX annual, and NOX ozone season
trading programs incorporated by reference into the States' CAIR FIPs.
The CAIR FIPs' trading programs' rules are virtually identical to the
CAIR model trading rules, with changes made to account for federal
rather than state implementation. The CAIR model SO2,
NOX annual trading, and NOX ozone season trading
rules and the respective CAIR FIPs' trading programs are designed to
work together as integrated SO2, NOX annual, and
NOX ozone season trading programs.
Louisiana is subject to the CAIR FIPs for 8-hour ozone and
PM2.5. These CAIR FIPs for Louisiana, at 40 CFR 52.984 and
52.985, require owners or operators of each NOX and
SO2 CAIR source located in Louisiana to meet the
requirements of the Federal CAIR NOX Annual, NOX
Ozone Season, and SO2 trading programs in 40 CFR part 97.
Consistent with the flexibility given to States, States may submit
abbreviated SIP revisions that will replace or supplement, as
appropriate, certain provisions of its CAIR FIPs' trading programs. The
July 12, 2007, submission from Louisiana is such an abbreviated SIP
revision and is for the NOX annual and ozone season trading
programs. Louisiana submitted a full SIP revision
[[Page 45709]]
for the SO2 trading program on September 22, 2006.
C. Applicability Provisions for Non-EGU NOX SIP Call Sources
In general, the CAIR FIPs' trading programs apply to any
stationary, fossil-fuel-fired boiler or stationary, fossil-fuel-fired
combustion turbine serving at any time, since the later of November 15,
1990 or the start-up of the unit's combustion chamber, a generator with
nameplate capacity of more than 25 MWe producing electricity for sale.
Because Louisiana was not included in the NOX SIP Call
trading program, Louisiana does not have or need the option of
expanding the applicability provisions of the CAIR NOX Ozone
Season Trading Program to include non-EGU NOX SIP Call
sources.
D. NOX Annual and Ozone Season Allowance Allocations
Under the NOX allowance allocation methodology in the
CAIR model trading rules and in the CAIR FIPs' trading programs,
NOX annual and ozone season allowances are allocated to
units that have operated for five years, based on heat input data from
a three-year period that are adjusted for fuel type by using fuel
factors of 1.0 for coal, 0.6 for oil, and 0.4 for other fuels. The CAIR
model trading rules and the CAIR FIPs' NOX Annual and Ozone
Season trading programs also provide a new unit set-aside from which
units without five years of operation are allocated allowances based on
the units' prior year emissions.
The CAIR FIPs' provisions provide States with the flexibility to
establish a different NOX allowance allocation methodology
that will be used to allocate allowances to sources in a State if
certain requirements are met concerning the timing of submission of
units' allocations to the Administrator for recordation and the total
amount of allowances allocated for each control period. In adopting
alternative NOX allowance allocation methodologies, States
have flexibility with regard to:
(1) The cost to recipients of the allowances, which may be
distributed for free or auctioned;
(2) The frequency of allocations;
(3) The basis for allocating allowances, which may be distributed,
for example, based on historical heat input or electric and thermal
output; and
(4) The use of allowance set-asides and, if used, their size.
Consistent with the flexibility given to States in their CAIR FIPs'
provisions, Louisiana has chosen to replace the provisions of the
Louisiana CAIR NOX Annual and Ozone Season FIPs concerning
the allocation of NOX annual and ozone season allowances
with its own methodology. The LDEQ requested assistance from the
Louisiana Public Service Commission (LPSC) to determine the impact of
CAIR implementation on Louisiana electricity ratepayers. Through this
study and extensive stakeholder involvement, LDEQ developed and
approved regulations that will allocate NOX allowances at no
cost to the CAIR subject units in Louisiana. Accordingly, the LDEQ has
approved provisions establishing the NOX annual and ozone
season allocation methodologies at LAC Title 33, Part III, Chapter 5,
Sections 506 (A) and (B), respectively.
Section 506(A) establishes the allocation methodology for the
NOX annual allowances. This section replaces 40 CFR 97.141
and 97.142 as promulgated by EPA on April 28, 2006. All remaining
provisions of the Federal NOX Annual Trading Program at 40
CFR Part 97, Subparts AA-HH continue to apply to Louisiana CAIR
sources. Similarly, Section 506(B) establishes the allocation
methodology for the NOX ozone season allowances. Section
506(b) replaces 40 CFR 97.341 and 97.342 as promulgated by EPA on April
28, 2006. All remaining provisions of the Federal NOX Ozone
Season Trading Program at 40 CFR Part 97, Subparts AAAA-HHHH continue
to apply to CAIR-subject sources in Louisiana.
The Louisiana NOX annual and ozone season allocation
methodologies are structured identically. The CAIR units in Louisiana
are first divided into non-utility or utility unit categories. Non-
utility units are those electric generating units that have not been
certified by the LPSC or approved by a municipal authority, a process
under which the unit is certified as being in the public convenience
and necessity. Utility units are those units identified by the LPSC or
a municipal authority as electric generating units that produce power
for the public convenience and necessity. The utility unit category is
further subdivided based on number of years of operating data before
the allocation submittal deadline to EPA. The utility units without
three years of operating data prior to the allocation submittal
deadline to EPA are allocated allowances as certified units. All other
utility units with three or more years of operating data are allocated
allowances as utility units.
After determining the non-utility or utility status of a unit, the
LDEQ proceeds with the calculation of allowances; the non-utility unit
allocations are made first under both the annual and ozone season
trading programs. The allocation methodology for non-utility units is
found at sections 506(A)(2)(a) and 506(B)(2)(a). For the NOX
annual trading program, the non-utility unit NOX allowances
will equal the average of the actual NOX annual emissions of
the three calendar years immediately preceding the year in which the
allocations are submitted to EPA. For the NOX ozone season
trading program, the non-utility unit NOX allowances equal
the average of the actual NOX ozone season emissions of the
three calendar years immediately preceding the year that allocations
are submitted to EPA. The actual NOX emissions data used in
both the annual and ozone season trading programs is the emissions
inventory data reported pursuant to LAC 33:III.919; if emissions
inventory data is not available then data from the Acid Rain Program
will be substituted. The exception is that the allowances submitted to
EPA in 2007 will be based on emissions inventory data from 2002, 2003,
and 2004.
Once the non-utility unit allowances have been subtracted from the
total state budget identified in sections 506(A)(2) and (B)(2), the
utility units are allocated allowances proportionally based on heat
input data. Certified units (utility units with less than three years
of operating data before the allocation submittal deadline) are
allocated based on converted heat input as specified in section
506(A)(2)(b) and 506(B)(2)(b). A certified unit will be allocated
allowances for the control period in which the unit will begin
operation and for each successive control period for which no
NOX allowances have been previously allocated until three
years of operating data are available before the allocation submittal
deadline. The converted heat input for the certified unit is calculated
from the gross electrical output as stated in the documentation for the
LPSC or municipal authority certification process. Utility units (those
units with three or more years of operating data before the allocation
submittal deadline) are allocated allowances based on the adjusted heat
input according to sections 506(A)(2)(c) and 506(B)(2)(c). The
exception is that the allowances submitted to EPA in 2007 will use the
average of the control period adjusted heat input data from 2002, 2003,
and 2004. The unit's adjusted heat input is calculated by multiplying
the control period heat input for the unit by 100 percent if the unit
is coal-fired, by 60 percent if the unit is oil-fired, and by 40
percent if the unit is not coal- or oil-fired. A unit's control period
heat input,
[[Page 45710]]
status as coal-fired or oil-fired, and total tons of NOX
emissions during a control period are determined in accordance with 40
CFR Part 97 and reported pursuant to LAC 33:III.919.
Sections 506(A)(3) and (B)(3) establish the dates by which the LDEQ
must submit NOX annual and ozone season allocations to EPA
for recordation in CAIR compliance accounts. No later than April 30,
2007, the LDEQ submits to EPA the CAIR NOX annual and ozone
season allowance allocations for the control periods 2009, 2010, and
2011. By October 31, 2008, for the year 2012, and by October 31 of each
year thereafter, the LDEQ will submit to EPA the NOX annual
and ozone season allowance allocations for the control period in the
fourth year after the year of the applicable deadline for allocation
submission. LDEQ submitted NOX annual and ozone season
allowances for control periods 2009, 2010, and 2011 on April 27, 2007.
The Louisiana abbreviated SIP revision, being proposed today,
satisfies the requirements for abbreviated SIP allocation flexibility
at 51.123(p)(1) and (ee)(2). The provisions discussed above ensure that
the LDEQ will not allocate more than the state budget in any given
control period and that the allocations are submitted to EPA by the
allocation submittal deadline.
E. Allocation of NOX Allowances from the Compliance Supplement Pool
The CSP provides an incentive for early reductions in
NOX annual emissions. The CSP consists of 200,000 CAIR
NOX annual allowances of vintage 2009 for the entire CAIR
region, and a State's share of the CSP is based upon the State's share
of the projected emission reductions under CAIR; Louisiana's share of
the CSP is 2,251 NOX allowances. States may distribute CSP
allowances (one allowance for each ton of early reduction) to sources
that make NOX reductions during 2007 or 2008 beyond what is
required by any applicable State or Federal emission limitation. States
also may distribute CSP allowances based upon ademonstration of need
for an extension of the 2009 deadline for implementing emission
controls.
The CAIR and the Louisiana CAIR NOX Annual FIP's
provisions allocate 2,251 NOX allowances to the Louisiana
CSP (under 40 CFR 51.123 and 97.143) and establish specific
methodologies for allocations of CSP allowances. States may choose an
allowed, alternative CSP allocation methodology to be used to allocate
CSP allowances to sources in those States.
Consistent with the flexibility given to States in the CAIR FIPs,
Louisiana has chosen not to modify the CSP allocation methodology in
the CAIR NOX annual federal trading program. Therefore, EPA
will continue to administer the CSP allocations pursuant to the
methodology at 40 CFR 97.143.
F. Individual Opt-In Units
The opt-in provisions of CAIR and the States CAIR FIPs' provisions
allow for certain non-EGUs (i.e., boilers, combustion turbines, and
other stationary fossil-fuel-fired devices) that do not meet the
applicability criteria for a CAIR trading program to participate
voluntarily in (i.e., opt into) the CAIR trading programs. A non-EGU
may opt into one or more of the CAIR trading programs. In order to
qualify to opt into a CAIR trading program, a unit must vent all
emissions through a stack and be able to meet monitoring,
recordkeeping, and reporting requirements of 40 CFR part 75. The owners
and operators seeking to opt a unit into a CAIR trading program must
apply for a CAIR opt-in permit. If the unit is issued a CAIR opt-in
permit, the unit becomes a CAIR unit, is allocated allowances, and must
meet the same allowance holding and emissions monitoring and reporting
requirements as other units subject to that CAIR trading program. The
opt-in provisions provide for two methodologies for allocating
allowances for opt-in units, one methodology that applies to opt-in
units in general and a second methodology that allocates allowances
only to opt-in units that the owners and operators intend to repower
before January 1, 2015.
States have several options concerning the opt-in provisions. The
rules for each of the States' CAIR FIPs' trading programs include opt-
in provisions that are essentially the same as those in the respective
CAIR SIP model rules, except that the States' CAIR FIPs' opt-in
provisions become effective in a State only if the State's abbreviated
SIP revision adopts the opt-in provisions. The State may adopt the opt-
in provisions entirely or may adopt them but exclude one of the
allowance allocation methodologies. The State also has the option of
not adopting any opt-in provisions in the abbreviated SIP revision and
thereby providing for its CAIR FIP's trading programs to be implemented
in the State without the ability for units to opt into the programs.
Consistent with the flexibility given to States in the FIPs'
provisions, Louisiana has chosen not to allow non-EGUs to participate
in the Louisiana CAIR FIP NOX Annual and Ozone Season
trading programs.
VI. What Is EPA's Analysis of the Section 110(a)(2)(D)(i) Requirements?
The Louisiana CAIR NOX Trading Program abbreviated SIP
revision submitted on July 12, 2007, also addressed the requirements of
section 110(a)(2)(D)(i) of the CAA with respect to 8-hour ozone and
PM2.5. This SIP revision contains provisions that address
significant contribution, interference with maintenance, prevention of
significant deterioration, and protection of visibility by following
approaches described and explained in EPA's August 15, 2006 memorandum,
``Guidance for State Implementation Plan (SIP) Submissions to Meet
Current Outstanding Obligations Under Section 110(a)(2)(D)(i) for the
8-Hour Ozone and PM2.5 National Ambient Air Quality
Standards.''
Louisiana addresses the ``significant contribution'' and
``interference with maintenance'' requirements by complying with the
requirements of CAIR. EPA promulgated CAIR on May 12, 2005, and
concluded that the States will meet their section 110(a)(2)(D)(i)
obligations to address the ``significant contribution'' and
``interference with maintenance'' requirements by complying with the
CAIR requirements. Louisiana has addressed these first two elements by
requiring Louisiana CAIR sources to participate in the EPA-administered
NOX annual, NOX ozone season, and SO2
cap-and-trade programs; Louisiana incorporated by reference the CAIR
model rules for the SO2 Trading program and has submitted an
abbreviated SIP revision that establishes the NOX annual and
ozone season allocation methodologies for use in the Louisiana CAIR
NOX annual and ozone season FIP. Participation in the
NOX annual, NOX ozone season, and SO2
trading programs will reduce emissions from the state that would
contribute significantly to nonattainment or interfere with the
maintenance of the ozone and particulate matter NAAQS in any downwind
state.
Louisiana addresses the ``prevention of significant deterioration''
requirement through their Prevention of Significant Deterioration (PSD)
and New Source Review (NSR) programs. Section 110(a)(2)(D)(i)(II)
requires States to submit SIPs that contain adequate provisions
prohibiting ``any source or other type of emission activity within the
State from emitting any air pollutant in amounts which will * * *
interfere with measures required to be included in the applicable
implementation plan
[[Page 45711]]
for any other State * * * to prevent significant deterioration of air
quality.''
For ozone, Louisiana has confirmed that major sources in Louisiana
are subject to the approved PSD and NSR programs that implement the
ozone standard. Additionally, Louisiana has promulgated rule revisions
to address requirements of the Phase II Ozone Rule, and this rule is
included in the State's 2006 General SIP revisions proposed on April
20, 2007. For PM2.5 standards, Louisiana has confirmed that
major sources in Louisiana are subject to the approved PSD and NSR
programs implemented in accordance with EPA's interim guidance which
allows the use of PM10 as a surrogate for PM2.5
in the PSD and NSR programs.
Louisiana addresses the ``protection of visibility'' requirement
through the regional haze program. Section 110(a)(2)(D)(i)(II) contains
a requirement for all States to submit SIPs that contain adequate
provisions prohibiting ``any source or other type of emission activity
within the State from emitting any air pollutant in amounts which will
* * * interfere with measures required to be included in the applicable
implementation plan for any other State * * * to protect visibility.''
EPA has previously found that all States contain sources whose
emissions are reasonably anticipated to impact visibility adversely in
one or more Class I areas. Pursuant to this finding, States are
currently under an obligation to submit SIPs that contain measures to
address regional haze, including a long-term strategy to address
visibility impairment for each Class I area which may be affected by
emissions from a State. The States and Regional Planning Organizations
are currently engaged in the task of identifying those Class I areas
impacted by each State's emissions and developing strategies for
addressing regional haze to be included in the States' regional haze
SIPs. These SIP submissions are due no later than December 17, 2007.
Louisiana intends to submit a regional haze SIP by the submittal
deadline to satisfy its obligation to ``protect visibility'' under
section 110(a)(2)(D)(i).
As a result, EPA believes that it is currently premature to
determine whether State SIPs for 8-hour ozone or PM2.5
contain adequate provisions to prohibit emissions that interfere with
SIP measures in other States designed to protect visibility.
Accordingly, EPA believes that Louisiana does not need to make a
substantive SIP submission to address the ``protect visibility''
requirement of section 110(a)(2)(D)(i)(II) for the 8-hour ozone and
PM2.5 NAAQS at this point in time.
VII. Proposed Action
EPA is proposing to approve a revision to the Louisiana SIP, the
Louisiana CAIR NOX Trading Programs Abbreviated SIP
revision, submitted on July 12, 2007, by the State of Louisiana (LAC
33:III.506(A) and (B)). We are also proposing to approve revisions to
the Louisiana SIP establishing administrative reporting requirements
for all Louisiana CAIR programs; these revisions were submitted with
the Louisiana CAIR SO2 Trading Program on September 22, 2006
(LAC 33:III.506(D) and (E)). Louisiana is covered by the CAIR
NOX Annual and Ozone Season FIPs, which require
participation in the EPA-administered CAIR FIP cap-and-trade programs
for NOX annual and ozone emissions. Under this abbreviated
SIP revision and consistent with the flexibility given to Louisiana in
its CAIR NOX Annual and Ozone Season FIPs' provisions, the
Louisiana provisions for allocating allowances under the Louisiana CAIR
FIPs' NOX annual and ozone season trading program are
proposed as part of the Louisiana SIP. EPA has determined that the
abbreviated SIP revision meets the applicable requirements in 40 CFR
51.123(p)(1) and (ee)(2) with regard to NOX annual and ozone
season allowance allocations. EPA is not proposing any changes to the
Louisiana CAIR NOX Annual and Ozone Season FIPs' provisions,
except to the extent that if we finalize the proposed Louisiana CAIR
NOX Trading Programs abbreviated SIP, then EPA, by
ministerial action, will note in Appendix A.1. to Subpart EE of 40 CFR
Part 97, that Louisiana has an approved SIP revision providing for
NOX annual allowance allocations. Similarly, EPA will note
in Appendix A to Subpart EEEE of 40 CFR Part 97, that Louisiana has an
approved SIP revision providing for NOX ozone season
allowance allocations. Since 40 CFR part 97 provides for automatic
revision of the Louisiana CAIR FIP for NOX annual and ozone
season emissions (under 40 CFR 52.984) upon approval of such an
abbreviated SIP revision, the Louisiana rules for NOX annual
and ozone season allowance allocations would apply, rather than the
Federal rules governing allocations, upon the effective date of
approval.
EPA is also proposing that this revision adequately addresses the
required elements of 110(a)(2)(D)(i), with the exception of the protect
visibility requirement. This requirement will be re-evaluated after the
regional haze SIP revision is completed and submitted to EPA.
VIII. 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 and because this action will not have a
significant, adverse effect on the supply, distribution, or use of
energy, 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 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 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 proposed 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 indicates that approval will result in ministerial changes
to the appropriate appendices of the CAIR FIP's trading rules, and does
not alter the relationship or the distribution of power and
responsibilities established in the Act. The EPA interprets Executive
Order 13045, ``Protection of Children from Environmental Health Risks
and Safety Risks'' (62 FR 19885, April 23, 1997), as applying only to
those regulatory actions that concern health or safety
[[Page 45712]]
risks such that the analysis required under section 5-501 of the
Executive Order has the potential to influence the regulation. This
proposed rule is not subject to Executive Order 13045 because it would
approve a state rule implementing a Federal standard. Executive Order
12898 (59 FR 7629, February 16, 1994) establishes federal executive
policy on environmental justice. Because this proposed rule merely
approves a state rule implementing a Federal standard, EPA lacks the
discretionary authority to modify today's regulatory decision on the
basis of environmental justice considerations.
In reviewing SIP submissions, EPA's role is to approve state
choices, provided that they meet the criteria of the 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 Act. Thus, the requirements of section
12(d) of the National Technology Transfer and Advancement Act of 1995
(1 5 U.S.C. 272 note) do not apply. This 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
40 CFR Part 52
Environmental protection, Air pollution control, Intergovernmental
relations, Nitrogen dioxide, Ozone, Particulate matter, Reporting and
recordkeeping requirements, Sulfur oxides.
40 CFR Part 97
Environmental protection, Air pollution control, Administrative
practice and procedure, Intergovernmental relations, Nitrogen oxides,
Ozone, Reporting and recordkeeping requirements.
Authority: 42 U.S.C. 7401 et seq.
Dated: August 7, 2007.
Richard E. Greene,
Regional Administrator, EPA Region 6.
[FR Doc. E7-16044 Filed 8-14-07; 8:45 am]
BILLING CODE 6560-50-P