[Federal Register Volume 73, Number 30 (Wednesday, February 13, 2008)]
[Rules and Regulations]
[Pages 8197-8200]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-2506]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[EPA-R05-OAR-2006-0976; FRL-8526-8]
Approval and Promulgation of Air Quality Implementation Plans;
Ohio; Oxides of Nitrogen Budget Trading Program
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
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SUMMARY: EPA is granting final approval to Ohio's request for the
retirement and withdrawal of 240 oxides of nitrogen (NOX)
allowances from the State's 2005 new source set aside. Retiring 240 new
source set aside allowances will provide surplus emission reductions to
help compensate for the discontinuation of Ohio's motor vehicle
inspection and maintenance program (known as ``E-Check'') in the
Cincinnati and Dayton areas for the year 2006. (Ohio is in the process
of seeking approval of the removal of E-Check as an active program from
the State Implementation Plan (SIP), which will be addressed in a
separate action.) EPA received adverse comments and one positive
comment on our proposed rulemaking on the allowance retirement. These
comments are addressed in this notice. As a result of this action, 240
NOX allowances from the State's 2005 new source set aside
will be withheld and permanently retired.
DATES: This final rule is effective on March 14, 2008.
ADDRESSES: EPA has established a docket for this action under Docket ID
No. EPA-R05-OAR-2006-0976. All documents in the docket 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,
[[Page 8198]]
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 Anthony Maietta, Life Scientist, at (312) 353-8777 before
visiting the Region 5 office.
FOR FURTHER INFORMATION CONTACT: Anthony Maietta, Life Scientist,
Criteria Pollutant Section, Air Programs Branch (AR-18J), Environmental
Protection Agency, Region 5, 77 West Jackson Boulevard, Chicago,
Illinois 60604, (312) 353-8777, [email protected].
SUPPLEMENTARY INFORMATION: Throughout this document whenever ``we,''
``us,'' or ``our'' is used, we mean EPA. This supplementary information
section is arranged as follows:
I. What did EPA propose?
II. What is EPA's response to comments?
III. What action is EPA taking today?
IV. Statutory and Executive Order Reviews
I. What did EPA propose?
On October 6, 2006, Ohio submitted revisions to Ohio Administrative
Code (OAC) Chapters 3745-72-01 and 3745-14-05. These rules provide a
revised start date for the use of low-volatility gasoline and provide
the necessary quantity of interim, surplus NOX emission
reductions through the permanent retirement of new source set aside
allowances from the State's NOX budget trading program.
Revisions to OAC 3745-72-01 were addressed in a separate rulemaking
published on May 25, 2007, at 72 FR 29269.
On September 13, 2007 (at 72 FR 52320), EPA proposed to approve the
revisions to OAC 3745-14-05. The revision to OAC 3745-14-05 permanently
withholds and retires 240 NOX allowances from Ohio's 2005
new source set aside.
By retiring these new source set aside allowances, Ohio guarantees
that these allowances will not be reallocated to participating Ohio
NOX SIP Call utilities and boilers the following year. This
action allows EPA to consider the corresponding reduction of 240 tons
of emissions of NOX to be surplus. These 240 tons of surplus
NOX emission reductions, corresponding to reductions
resulting from emission control devices installed on electrical
generation units in the Cincinnati and Dayton areas before 2006, can be
considered to provide 240 tons of NOX emission reduction in
compensation for the equivalent emission increase resulting from
discontinuation of the E-Check program in those areas in 2006.
II. What is EPA's response to comments?
EPA received both supportive and adverse comments in response to
our proposed rulemaking on OAC 3745-14-05. EPA received comments from
the Regional Air Pollution Control Agency (RAPCA) in support of our
proposed action on October 18, 2007.
Adverse comments were sent dated January 12, February 15, March 13,
and October 15, 2007, from Shumaker, Loop, and Kendrick, LLP, a law
firm representing the Ohio Electric Utility Institute as well as
various utilities in the State (hereafter described as ``the
Utilities''). Despite some comments being sent even before EPA had
published the proposed rulemaking, we are treating the early comments
as pertaining to today's action, and we address them in this action.
Comment: The Utilities believe that withholding and permanently
retiring 240 NOX allowances has not and will not create
emissions reductions in the Cincinnati and Dayton areas, specifically
because:
(a) NOX allowances are not emissions reductions;
(b) If an Ohio source wanted to emit more, it could purchase
allowances from outside the state, or it could transfer allowances from
a facility it owns in another state;
(c) If no Ohio sources needed the withheld allowances for the
purposes of compliance, then withholding and retiring the 240
allowances will not result in decreased emissions in the Ohio or
Cincinnati/Dayton areas; and,
(d) No evidence exists to support that withholding these allowances
resulted in reductions in the Cincinnati/Dayton areas.
Response: Under the cap and trade program known as the
NOX SIP Call, EPA issues a finite number of allowances and
allows each subject source an amount of emissions based on the quantity
of allowances the source holds. The quantity of allowances thus
corresponds to the total emissions allowed across the area covered by
the NOX SIP Call. Consequently, by retiring 240 allowances,
Ohio has unquestionably reduced the total allowable emissions across
the NOX SIP Call area by 240 tons of NOX
emissions. Ohio may use utility NOX emission reductions to
compensate for discontinuing E-Check only if the reductions are surplus
relative to existing requirements, and the retirement of 240 allowances
provides 240 tons of NOX emission reductions that are
surplus to the reductions mandated by the existing NOX SIP
Call.
EPA further believes that Ohio can reasonably claim that the 240
tons of surplus NOX emission reduction that they have
mandated compensates for 240 tons of NOX emission increase
(or the equivalent quantity of increase in volatile organic compound
emissions) resulting from discontinuation of E-Check. As stated in our
notice of proposed rulemaking, ``substantial emission reductions have
occurred in the Cincinnati/Dayton area,'' and ``EPA believes that Ohio
has latitude to attribute 240 tons of the 2006 NOX emission
reductions in the Cincinnati/Dayton area to its retirement of 240
allowances.''
The comments do not directly address the rationale for these views
that EPA provided in its notice of proposed rulemaking. The following
responds more directly to the submitted comments:
(a) Retirement of NOX allowances does mandate a net
emission reduction.
(b) Purchasing or transferring allowances from another location
reduces allowable emissions at that other location, retaining the net
emission reduction.
(c) EPA is concluding that 240 tons of the emission reductions that
are known to have occurred in the Cincinnati and Dayton areas can be
attributed to Ohio's retirement of 240 allowances. Ohio sources will
not need these allowances precisely because they have implemented
emission reductions mandated by the limited availability of allowances.
(d) Ohio provided for 240 tons of emission reduction, and Ohio can
reasonably attribute this reduction to a small fraction of the over
10,000 tons of NOX reductions that have occurred in the
Cincinnati and Dayton areas.\1\ The commenter seeks evidence of a
causal link between the allowance retirement and specific emission
reductions, which would presumably require that Ohio or EPA examine the
motivations underlying utility control decisions. EPA believes that
such a survey is unnecessary, and believes that Ohio has adequate basis
for associating the surplus reductions created by the rule revision
with 240 tons of reductions that
[[Page 8199]]
have occurred in the Cincinnati and Dayton areas.
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\1\ In a letter dated February 23, 2007, Ohio supplemented its
submittal with information regarding NOX emission
reductions that have occurred in the Cincinnati/Dayton area. This
letter identifies several actions that substantially reduced
NOX emissions starting from before the 2006 ozone season,
which include installation of selective catalytic reduction controls
at 3 units and installation of low NOX burners at 9 other
units. Ohio estimates that the total emission reduction from these
actions is over 10,000 tons per ozone season.
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Comment: The Utilities commented that Ohio's October 6, 2006,
submittal should be considered `incomplete' because it does not meet
the requirements of 40 CFR part 51, Appendix V, section 2.2, paragraphs
(c), (d), and (e). For each section, the Utilities comment that
statements by Ohio EPA personnel (provided in an appendix to the
comments) support their view.
40 CFR part 51, Appendix V section 2.2(c) requires ``Quantification
of the changes to the plan of allowable emissions from the affected
sources, estimates of changes in current actual emissions from affected
sources, or, where appropriate, quantification of changes in actual
emissions from affected sources through calculations of the differences
between certain baseline levels and allowable emissions anticipated as
a result of the revision.'' The Utilities comment that Ohio only
submitted the number of NOX allowances it plans to retire
(240). Further, the Utilities state that Ohio's submittal does not
quantify the ``allowable emissions'' from the Utilities under OAC 5745-
14-05(C)(7) because the retired allowances do not limit utilities'
allowable emissions. The Utilities in fact believe that it is
impossible for Ohio to calculate the allowable emissions from Ohio
utilities.
40 CFR part 51, Appendix V 2.2(d) requires ``The State's
demonstration that the National Ambient Air Quality Standards (NAAQS),
prevention of significant deterioration increments, reasonable further
progress demonstration, and visibility, as applicable, are protected if
the plan is approved and implemented.'' The Utilities comment that
Ohio's calculation of 240 allowances cannot, by itself, show that the
NAAQS are protected by OAC 3745-14-05(C)(7), despite anti-backsliding
being the impetus for Ohio's submittal.
40 CFR part 51, Appendix V 2.2(e) requires ``Modeling information
required to support the proposed revision, including input data, output
data, models used, justification of model selections, ambient
monitoring data used, meteorological data used, justification for use
of offsite data (where used), modes of models used, assumptions, and
other information relevant to the determination of adequacy of the
modeling analysis.'' The Utilities comment that Ohio's submittal does
not contain an equivalency demonstration or a modeling demonstration,
and that modeling is necessary when reductions are made from sources
outside the area. The Utilities believe Ohio EPA should have conducted
modeling to support their submittal yet did not.
Response: EPA disagrees with the Utilities' comments on both
substantive and process grounds. For the substance of 40 CFR part 51,
Appendix V section 2.2(c), Ohio has specified that the rule provides
240 tons of NOX emission reduction. This number is
completely specific and is precisely the type of information that EPA
seeks under this section of Appendix V. EPA believes that sections
2.2(d) and 2.2(e) are not relevant to this submittal. EPA uses Appendix
V to judge the completeness of a variety of submittals, and EPA must
apply only those criteria that are germane to EPA's ultimate decision
regarding approvability of the submittal. States routinely submit rules
that address control requirements (e.g., to provide reasonably
available control technology or, as here, to provide emission
reductions to avoid backsliding) which are judged independently of
whether the applicable areas are progressing satisfactorily toward
attainment or whether modeling has been done to estimate the ambient
impact. The factual statements by Ohio EPA personnel that were attached
to the Utilities' comments (e.g., that no modeling was performed in
support of the submittal) do not alter EPA's views that the submittal
was complete.
Furthermore, in absence of a completeness determination by EPA
within 6 months of receiving the submittal, Ohio's October 6, 2006,
submittal became complete 6 months thereafter, pursuant to section
110(k)(1)(B) of the Clean Air Act. EPA does not have the discretion now
to find the submittal incomplete.
Comment: The Utilities comment that Ohio's proposed revision to OAC
3745-14-05 does not meet the anti-backsliding requirements of 40 CFR
51.900-51.905. The Utilities state that Ohio did not provide
photochemical modeling. They also state that Ohio did not sufficiently
demonstrate a benefit to the Cincinnati and Dayton areas, nor can Ohio
demonstrate actual reductions in those areas. The Utilities state that
EPA Region 5 sent a letter to Ohio on September 20, 2005, in which EPA
said that Ohio could claim reductions outside the Cincinnati and Dayton
areas so long as they ``demonstrate'' that the reductions benefit the
Cincinnati and Dayton areas.
Response: EPA is satisfied with Ohio's demonstration that retiring
240 NOX allowances will make surplus 240 of the roughly
10,000 tons of NOX reductions made from Cincinnati and
Dayton area utilities by 2006, which clearly provides benefit to the
Cincinnati and Dayton areas. EPA does not require modeling to know that
creating 240 surplus allowances will allow the State to credit 240 of
the more than 10,000 tons of NOX emission reductions toward
compensation for loss of E-Check in 2006. Based on the information that
Ohio EPA has provided, EPA is satisfied that the retirement of 240
NOX allowances from the 2005 control period will benefit the
Cincinnati and Dayton areas.
Comment: The Utilities comment that today's action will undermine
the Utilities' pollution control strategies and confidence in the
NOX SIP Call rule. The Utilities state that ``random
confiscation'' of allowances undermines the market system in a way
similar to counterfeiting money.
Response: EPA believes that removing 240 allowances out of a pool
of about half a million allowances will not have an appreciable
negative effect on the functioning of the NOX SIP Call. The
deliberate process that Ohio and EPA have followed in retiring
allowances that had been set aside and not issued to any source
provided utilities ample opportunity to plan for not receiving any of
these allowances.
III. What action is EPA taking today?
EPA is approving OAC 3745-14-05(C) as submitted by Ohio on October
6, 2006. EPA is approving the withdrawal and permanent retirement of
240 NOX new source set aside allowances from the 2005
control period. This action adds a new paragraph (C)(7) to OAC 3745-14-
05, and re-orders the existing paragraphs from (C)(7) through (C)(9) to
(C)(8) through (C)(10).
IV. Statutory and Executive Order Reviews
Executive Order 12866: Regulatory Planning and Review
Under Executive Order 12866 (58 FR 51735, October 4, 1993), this
action is not a ``significant regulatory action'' and therefore is not
subject to review by the Office of Management and Budget.
Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
Because it is not a ``significant regulatory action'' under
Executive Order 12866 or a ``significant regulatory action,'' this
action is also not subject to Executive Order 13211, Actions Concerning
Regulations That Significantly ``Affect Energy Supply,
[[Page 8200]]
Distribution, or Use'' (66 FR 28355, May 22, 2001).
Regulatory Flexibility Act
This action merely approves 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.).
Unfunded Mandates Reform Act
Because this rule approves 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).
Executive Order 13175: Consultation and Coordination With Indian Tribal
Governments
This 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).
Executive Order 13132: Federalism
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 approves 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.
Executive Order 13045: Protection of Children From Environmental Health
and Safety Risks
This 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 approves a state rule implementing a
Federal Standard.
National Technology Transfer Advancement Act
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.
Paperwork Reduction Act
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.).
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. EPA will submit a report containing this rule and other
required information to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller General of the United States prior
to publication of the rule in the Federal Register. A major rule cannot
take effect until 60 days after it is published in the Federal
Register. This action is not a ``major rule'' as defined by 5 U.S.C.
804(2).
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 April 14, 2008. Filing a
petition for reconsideration by the Administrator of this final rule
does not affect the finality of this rule 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 Section 307(b)(2).)
List of Subjects in 40 CFR Part 52
Environmental protection, Air pollution control, Incorporation by
reference, Intergovernmental relations, Oxides of nitrogen, Oxides of
nitrogen budget trading program.
Dated: January 30, 2008.
Bharat Mathur,
Acting Regional Administrator, Region 5.
0
For the reasons stated in the preamble, part 52, chapter I, of title 40
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.
Subpart KK--Ohio
0
2. Section 52.1870 is amended by adding paragraph (c)(141) to read as
follows:
Sec. 52.1870 Identification of plan.
* * * * *
(c) * * *
(142) On October 6, 2006, Ohio submitted revisions to Ohio
Administrative Code (OAC) Chapter 3745-14-05 to permanently retire 240
new source set aside allowances from the State's oxides of nitrogen
budget trading program.
(i) Incorporation by reference.
(A) Ohio Administrative Code Rule 3745-14-05 ``NOX
Allowance Allocations,'' effective July 17, 2006.
[FR Doc. E8-2506 Filed 2-12-08; 8:45 am]
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