[Federal Register Volume 77, Number 164 (Thursday, August 23, 2012)]
[Proposed Rules]
[Pages 50973-50978]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-20777]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[EPA-R09-OAR-2010-1078; FRL-9717-7]
Revision to the South Coast Portion of the California State
Implementation Plan, CPV Sentinel Energy Project AB 1318 Tracking
System
AGENCY: Environmental Protection Agency (EPA).
ACTION: Supplemental Proposed Rule.
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SUMMARY: The Environmental Protection Agency (EPA) is supplementing our
prior proposal to approve a source-specific State Implementation Plan
(SIP) revision and requesting public comment on additional information
we are adding to our docket to revise the South Coast Air Quality
Management District (District or SCAQMD) portion of the California SIP.
This source-specific SIP revision is known as the CPV Sentinel Energy
Project AB 1318 Tracking System (``AB 1318 Tracking System''). We are
supplementing our proposed approval of this SIP revision to provide
additional information and request comment on three issues: (1) the
District's quantification of the offsets it transferred to the AB 1318
Tracking System; (2) the District's surplus adjustment of the offsets
in the AB 1318 Tracking System; and (3) which District Air Quality
Management Plan (AQMP) is appropriate for determining the base year to
evaluate the availability of offsets from shutdown sources.
DATES: Comments on this Supplemental Notice of Proposed Rulemaking
(NPRM) must be submitted no later than September 24, 2012.
ADDRESSES: Submit comments, identified by docket number EPA-R09-OAR-
2010-1078, by one of the following methods:
1. Federal eRulemaking Portal: www.regulations.gov. Follow the on-
line instructions.
2. Email: [email protected].
3. Mail or deliver: Gerardo Rios (Air-3), U.S. Environmental
Protection Agency Region IX, 75 Hawthorne Street, San Francisco, CA
94105-3901.
[[Page 50974]]
Instructions: All comments that EPA receives within the public
comment period will be included in the public docket without change and
may be made available online at www.regulations.gov, including any
personal information provided, unless the comment includes Confidential
Business Information (CBI) or other information where disclosure of the
information is restricted by statute. Information that you consider CBI
or otherwise protected should be clearly identified as such and should
not be submitted through www.regulations.gov or email.
www.regulations.gov is an ``anonymous access'' system, and EPA will not
know your identity or contact information unless you provide it in the
body of your comment. If you send email directly to EPA, your email
address will be automatically captured and included as part of the
public comment. 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.
Docket: The index to the docket for this action is available
electronically at www.regulations.gov and in hard copy at EPA Region
IX, 75 Hawthorne Street, San Francisco, California. While documents in
the docket are listed in the index, some information may be publicly
available only at the hard copy location (e.g., copyrighted material or
voluminous background documents), and some may not be publicly
available in either location (e.g., CBI). To inspect the docket, please
schedule an appointment during normal business hours with the contact
listed in the FOR FURTHER INFORMATION CONTACT section.
FOR FURTHER INFORMATION CONTACT: Laura Yannayon, EPA Region IX, (415)
972-3524, [email protected].
SUPPLEMENTARY INFORMATION: Throughout this document, ``we'', ``us'',
and ``our'' refer to EPA.
Table of Contents
I. Background
A. Facility Description and Background
B. Procedural History of Source Specific SIP Revision
C. Offsets in this Source-Specific SIP Revision
D. Appropriate AQMP for Determining the Base-Year
II. Evaluation of Source Specific SIP Revision
A. What is in the SIP revision?
B. What are the Federal Clean Air Act requirements?
C. What actions has EPA taken previously?
D. How is EPA supplementing its prior proposal now?
E. Section 110(l) Evaluation
F. Public Comment and Final Action
III. Statutory and Executive Order Reviews
I. Background
A. Facility Description and Background
For a detailed discussion of this topic, please refer to our
proposed rule at 76 FR 2294 (Jan. 13, 2011). In summary, the Sentinel
Energy Project is designed to be a nominally rated 850 Megawatt
electrical generating facility covering approximately 37 acres within
Riverside County, adjacent to Desert Hot Springs, California in the
Palm Springs area. The District determined that the Sentinel Energy
Project requires 118,120 pounds (``lbs'') of PM10 offsets
and 13,928 lbs of SOX offsets for the District to issue a
permit for construction and operation.
B. Procedural History of Source Specific SIP Revision
The District adopted the AB 1318 Tracking System on July 9, 2010.
The California Air Resources Board (CARB) submitted the AB 1318
Tracking System to EPA as a source specific SIP revision on September
10, 2010. EPA issued a completeness letter on October 27, 2010, finding
that the submittal met the completeness criteria in 40 CFR part 51
Appendix V. EPA proposed approval of the source specific SIP revision
on January 13, 2011. 76 FR at 2294. On April 20, 2011, EPA responded to
comments and finalized approval of the source specific SIP revision. 76
FR 22038.
California Communities Against Toxics (CCAT) and Communities for a
Better Environment (CBE) filed a petition for review with the United
States Court of Appeals for the Ninth Circuit. On July 26, 2011, CCAT
and CBE filed their Opening Brief. In the Brief, CCAT and CBE alleged
that EPA committed a procedural error by failing to post all of the
back-up documentation for the offset transactions on EPA's eDocket Web
site. EPA was not and is not obligated to post all of these voluminous
documents to the eDocket Web site. Copies of those documents were
available for inspection in EPA's offices. In addition, those documents
had been provided directly to the Petitioners several months earlier.
Id.
CCAT and CBE's Opening Brief set forth some detailed assertions
regarding the quantification and surplus adjustments of the offset
transactions in the AB 1318 Tracking System. The detailed arguments
that CCAT and CBE included in their Ninth Circuit Opening Brief were
not included in their comments on our proposed rulemaking.
On September 13, 2011, EPA requested that the Court remand the
rulemaking to EPA to supplement the record and provide additional
justification for our action. The Ninth Circuit summarily denied this
motion. Several months later after briefing and oral argument, the
Court remanded the rulemaking to EPA for additional justification. The
Court did not vacate the rule upon remand.
This Supplemental proposal on remand is seeking comment on three
specific issues: (1) The District's quantification of some of the
offsets in the AB 1318 Tracking System; (2) the District's surplus
adjustment of certain offsets; and (3) which District Air Quality
Management Plan is appropriate for determining the base year to
evaluate the availability of offsets from sources that shutdown. These
three issues are discussed in more detail below.
C. Offsets in This Source-Specific SIP Revision
When equipment or an entire facility is shutdown, it no longer
emits air pollutants. The CAA allows the emission reductions from
shutdown equipment or facilities to be used to offset the operation of
new or modified stationary sources provided the offsets meet the
requirements of CAA Section 173. See 40 U.S.C. 7503(a)(1)(A). Section
173 requires offsets to be permanent, enforceable, quantifiable, and
surplus. Id. 7503(c). This Supplemental proposal provides additional
information regarding EPA's prior determination that at least 118,120
lbs of PM10 and 13,928 lbs of SOX offsets meet
the requirements of Section 173 as transferred by the District into the
AB 1318 Tracking System. Because the briefs that CCAT and CBE filed
with the Ninth Circuit pointed to potential deficiencies with a small
number of offsets in the AB 1318 Tracking System, EPA is providing
additional information in this Supplemental proposal to identify the
specific offsets that we are determining meet all federal requirements.
Attachment A to the Technical Support Document (TSD) for this
Supplemental proposal includes two spreadsheets, one for
PM10 emissions and one for SOX emissions. These
spreadsheets list each source that has shut down and is no longer
operating resulting in offsets that the District transferred into the
AB 1318 Tracking System.
The offsets listed in Attachment A meet CAA Section 173's
requirements to be permanent and enforceable because the owner or
operator surrendered the permits to the District. It is illegal under
SCAQMD Rule 203 for any source to emit any amount of an air pollutant
without a valid permit, unless the source is specifically exempted from
this requirement under District Rule 219
[[Page 50975]]
(Equipment Not Requiring a Written Permit Pursuant to Regulation II).
The Federal government or local air agency may bring an enforcement
action against a source operating without a permit. Citizens may also
bring such actions because Rule 203 is included in the SIP. For these
reasons, when a source shuts down and surrenders its permit to the
District, its emissions reductions are permanent and enforceable. The
source would be required to apply for a new permit, and provide new
offsets, in order to operate again.
The offsets listed in Attachment A are also quantifiable as
required by Section 173. Each spreadsheet contains two sections,
Section I and II, each with two parts (Parts A and B). For all of the
sources listed in Section I, two years of actual emission data was used
to calculate an annual average. Section I.A. lists those sources where
District Annual Emissions Report (AER) data were used, and Section I.B.
lists sources where AER, Acid Rain or Emission Reduction Credit (ERC)
application data were used. Section II lists the sources where only one
year of AER data was reported. Section II.A. lists those sources where
only Year 2 data was reported and Section II.B. lists those sources
where only Year 1 data was reported. Quantification of the offsets for
which only one year of data is available is discussed in more detail
below in Section II.D.1.
The offsets listed in Attachment A are surplus in addition to being
quantifiable, permanent and enforceable. Our detailed discussion in
Section II.D.2. below provides our justification for finding that each
pound of offsets listed in Attachment A is surplus to the requirements
of the CAA.
In summary, the Sentinel Energy Project needed 118,120 lbs of
PM10 offsets and 13,928 lbs of SOX offsets. The
District transferred more than these amounts into the AB 1318 Tracking
System for the exclusive use of Sentinel Energy Project. EPA has
determined that each of the offsets listed in Attachment A meets all of
the creditability requirements of Section 173 of the CAA. The sum of
the offsets in Attachment A is 124,797 lbs of PM10 and
25,178 lbs of SOX, which exceeds the amount needed by
Sentinel. For any offset transactions the District included in the AB
1318 Tracking System that are not specifically listed in Attachment A,
EPA is not taking a position at this time on whether those offsets meet
the federal creditability requirements. Those offsets are not necessary
for the Sentinel Energy Project to comply with Section 173(a)(1) even
though the District transferred them to the AB 1318 Tracking System.
D. Appropriate AQMP for Determining the Base-Year
CCAT and CBE raised a third objection to our approval of the
source-specific SIP revision. CCAT and CBE claim the District is
prohibited from using any emission reductions from facilities that
shutdown equipment prior to the last day of 2002. 2002 is the base-year
in the 2007 Air Quality Management Plan (AQMP) that the District
adopted to demonstrate attainment with the federal PM2.5 and
8-hour Ozone National Ambient Air Quality Standards (NAAQS).
40 CFR 51.165(a)(3)(ii)(C)(1)(ii) provides that emissions
reductions from shutting down equipment may be used as offsets if
``[t]he shutdown or curtailment occurred after the last day of the base
year for the SIP planning process.'' The regulation also allows pre-
base year emissions reductions from shutdown equipment to be used ``if
the projected emission inventory used to develop the attainment
demonstration explicitly includes the emissions from such previously
shutdown or curtailed emission units.'' Id. Based on this regulation,
CCAT and CBE contend the District may not include emission reductions
from facilities shutting down equipment prior to the last day of 2002
in the AB 1318 Tracking System. In our prior rulemaking, EPA responded
to this comment by stating that the District had added the offsets into
the attainment demonstration in the 2007 AQMP for the PM2.5
and 8-hour Ozone NAAQS.
This Supplemental proposal changes our reasoning on this issue. EPA
has evaluated this issue further and determined that the District's
2003 AQMPs for PM10 for the South Coast and the Coachella
Valley Basins establish the correct base year. The base year in these
AQMPs is 1997. All of the emission reductions in the AB 1318 Tracking
System occurred after 1997, and therefore comply with 40 CFR
51.165(a)(3)(ii)(C)(1)(ii). This issue is discussed in more detail in
Section II.D.3. below.
II. Evaluation of Source Specific SIP Revision
A. What is in the SIP revision?
For a detailed discussion of the SIP revision package, please see
our proposed approval from January 13, 2011. 76 FR 2294.
The text of the proposed source-specific SIP revision, in relevant
part, is:
The Executive Officer of the South Coast Air Quality Management
District shall transfer sulfur oxides and particulate emission
credits from the CPV Sentinel Energy Project AB 1318 Tracking
System, attached hereto and incorporated by reference herein, to
eligible electrical generating facilities pursuant to Health and
Safety Code section 40440.14, as in effect January 1, 2010, (i.e.
the Sentinel Energy Project to be located in Desert Hot Springs, CA)
in the full amounts needed to issue permits to construct and to meet
requirements for sulfur oxides and particulate matter emissions.
Notwithstanding District Rule 1303, this SIP revision provides a
federally enforceable mechanism for transferring offsets from the
AQMD's internal accounts to the Sentinel Energy Project.
This SIP revision is intended to provide a federally approved and
enforceable mechanism for the District to transfer PM10 and
SOX offsets from the District's internal bank to the
Sentinel Energy Project and to account for the transferred offsets
through the AB 1318 Tracking System.
The District's SIP revision incorporates by reference each of the
offsets from the facilities that shutdown equipment. Based on EPA's
analysis, however, EPA is only proposing to approve that the
PM10 and SOX offsets listed in Attachment A of
our TSD meet the federal criteria for purposes of this source-specific
SIP revision. This proposal is not taking any action on offsets that
are not listed in Attachment A.
B. What are the Federal Clean Air Act requirements?
For a detailed discussion of these requirements, please refer to
our proposed approval. 76 FR 2294.
This Supplemental proposal focuses on three requirements. First,
the offsets that the District transferred to the AB 1318 Tracking
System must be quantifiable. Second, the offsets must be surplus. As
discussed in more detail in Section II.D. the offsets in Attachment A
meet those requirements. Third, offsets resulting from shutting down
emissions units must occur after the base year for the applicable SIP
attainment demonstration or otherwise be explicitly included in the
SIP's attainment demonstration. The offsets transferred into the AB
1318 Tracking System meet this requirement with respect to the 2003
AQMPs for PM10 and precursors for the South Coast and
Coachella Air Basins.
C. What actions has EPA taken previously?
Prior to our January 13, 2011 proposal to approve this SIP
revision, EPA reviewed the District's Offset Verification Forms and
attachments
[[Page 50976]]
provided for each source's offsets that the District had transferred to
the AB 1318 Tracking System. Our review determined that a sufficient
amount of the offsets met the requirements to offset the
PM10 and SOX emissions increases from the
operation of the Sentinel Energy Project. Specifically, the Project
required 118,120 lbs of PM10 and 13,928 lb of SOX
offsets. The District had transferred a total of 137,799 lbs of
PM10 and 25,346 lbs of SOX offsets into the AB
1318 Tracking System.
EPA has re-evaluated the creditability of some of the offsets in AB
1318 Tracking System. We are now listing the offsets we have determined
are creditable in Attachment A. For each source of offsets listed in
Attachment A, the District provided documentation demonstrating those
offsets meet the Section 173 requirements. Attachment A contains a
total of 124,797 lbs of PM10 and 25,178 lbs of
SOX, thereby exceeding the amount required for the Project.
Our prior rulemaking did not specifically identify the offsets that
we found met the Section 173 requirements. This Supplemental proposal
now specifically identifies the offsets that we have determined meet
the requirements of Section 173 and lists those offsets in Attachment
A. EPA is not taking any action on, and has not reached any conclusion
regarding the creditability of, any offsets the District transferred
into the AB 1318 Tracking System that are not listed in Attachment A.
D. How is EPA supplementing its prior proposal now?
This Supplemental proposal provides additional details concerning
EPA's determination that at least 118,120 lbs of PM10 and
13,928 lbs of SOX offsets transferred into the AB 1318
Tracking System meet the offset integrity requirements of Section 173.
See Attachment A to the TSD.
1. The District Has Demonstrated That at Least 118,120 lbs of
PM10 and 13,928 lbs of SOX Offsets Are Properly
Quantified
To determine if the offsets listed in Attachment A were properly
quantified, we reviewed the District's Offset Verification Forms and
additional documents. From these documents, we have listed the
following information in Attachment A: The type of equipment shutdown,
the year the equipment was shutdown, the year 1 (i.e. the year
immediately preceding the shutdown) and year 2 (i.e. the second year
prior to shutdown) data of pre-shutdown actual emissions, the annual
average of both years of pre-shutdown actual emissions (if available),
the amount of emissions reductions calculated by the District, the
amount calculated for this Supplemental proposal and the source of the
emissions data.
The offsets listed in Section I.A. of Attachment A rely on two
years of emissions data reported by the source in its AER. The offsets
listed in Section I.B. rely on two years of emissions data reported to
EPA's Acid Rain database (either solely or in addition to an AER), or
in one case, in an application for an ERC.\1\ These sources of
emissions data are reliable and inherently discourage inaccurate
reporting. The permittee must pay substantial fees to the District
based on the quantity of emissions reported in the AER, thereby
discouraging over-reporting. The Acid Rain database collects data
directly from Continuous Emission Monitors or throughput combined with
a well established emissions factor. Finally, the emission data used to
evaluate the Emission Reduction Credit application was based on actual
operating data and reported emissions.
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\1\ For one project, Seagull Sanitation, the source shutdown and
applied for ERCs. The District subtracted the amount of offsets
required to comply with Best Available Retrofit Technology at the
time of shutdown. Then the District subtracted the amount of offsets
that the source ``owed'' the District.
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The offsets from sources listed in Section II rely upon one year of
emissions data. Section 173 of the CAA does not define how to calculate
actual emissions for purposes of providing offsets. EPA's regulations
setting forth SIP requirements for offsets are also silent on this
issue. See 40 CFR 51.165(a)(3)(i)(C). EPA's Emissions Offset
Interpretative Ruling at 40 CFR Part 51, Appendix S, however, provides
guidance for calculating the ``baseline for determining credit for
emission and air quality offsets''. Appendix S provides:
When offsets are calculated on a tons per year basis, the
baseline emissions for existing sources providing the offsets should
be calculated using the actual annual operating hours for the
previous one or two year period (or other appropriate period if
warranted by cyclical business conditions).
Id. at IV.C. (emphasis added). Therefore, Appendix S contemplates
situations in which one year of emissions data is sufficient.
CCAT and CBE have asserted that the District must use two years of
actual emissions to calculate the actual emissions for offsets. This
assertion relies on the definition of ``actual emissions'' in 40 CFR
51.165(a)(1)(xii). This definition of ``actual emissions'' is not
provided for determining offset credit.
We do not need to resolve whether CCAT has relied on the incorrect
definition or whether 2 years of emissions data is required for
purposes of this proposal. For this proposal, the District either used
2 years of data or appropriately adjusted the single year data. Section
II.A. lists sources where we had only Year 2 data (i.e. data for the
second year prior to shutdown) and Section II.B. lists sources where
only Year 1 data (i.e. data for the year immediately preceding
shutdown) was available. For the offsets in Section II.A where the
source only reported AER data for Year 2, the District assumed that
Year 1 emissions data (the year immediately prior to shutdown) was
zero, and the Year 2 data was divided by two to calculate an annual
average. Therefore, the District's approach for the sources in II.A is
very conservative in calculating the lowest possible amount of offsets.
For the sources listed in Section II.B. where the source only
reported AER data for Year 1, then the District assumed that Year 2
data was not reported and the Year 1 data determined the quantity of
offsets. For this small fraction of the facilities, the baseline
emissions were calculated based on the emissions data from the year
immediately preceding the shutdown date. For these facilities, because
the data from the twelve month period immediately preceding the
shutdown was available, there was no possibility that the year one
emissions over estimated the actual emissions for the facility prior to
shutdown. There was also no information to indicate that the emissions
from the year immediately preceding shutdown were not representative.
Therefore, the one year of emissions are representative and not over
estimated.
Based on the requirement in 40 CFR part 51, Appendix S and 51.165,
EPA is proposing to determine that the District appropriately
quantified the offsets for those sources with only one year of
emissions data and that these emission reductions meet the requirement
of CAA section 173 and 40 CFR part 51 Appendix S and 51.165(a)(1)(C) to
be quantifiable.
2. Offsets From Aggregate Facilities and Cement Operations Are Surplus
When EPA proposed approval of the SIP revision in January 2011, we
received a comment from CBE and CCAT that contended generally that not
all of the offsets from aggregate facilities, spray booths and other
industrial sources were surplus. In our
[[Page 50977]]
response to comments, we stated that all of the emissions reductions
were surplus because ``[t]he District has not promulgated any new rules
or standards that would apply to these types of sources, and thus no
adjustments to the credits were required.'' 76 FR at 22038. After we
issued our response to comments and final rule, CBE and CCAT petitioned
for judicial review. In briefing to the Court, CBE and CCAT stated for
the first time that the District had adopted Rules 1156 and 1157 that
require reductions of emissions at cement plants and aggregate plants.
In this Supplemental proposal, EPA is adding information on the surplus
adjustment made for the offsets in the AB 1318 Tracking System subject
to Rule 1157 (PM10 Emission Reductions From Aggregate and
Related Operations).
It is important to note that the surplus adjustment of the offsets
was not required to be performed until the time the authority to
construct permit was issued because EPA requires the surplus adjustment
``at the time of use''. The permit was not issued until after the final
approval of our prior SIP action and was not included in the docket.
However, now that the permit has been issued, we have re-evaluated the
need to surplus adjust the offsets.\2\
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\2\ We considered the surplus adjustment at the time of our
prior approval, however, the District made some final surplus
adjustments before issuing the permit. This later adjustment does
not change our prior determination that the available offsets in the
AB 1318 Tracking System were more than required for the Sentinel
Energy Project.
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Rule 1156 does not apply to any of the offsets included in the AB
1318 Tracking System. Rule 1156 (Further Reduction of Particulate
Emissions from Cement Manufacturing Facilities) only applies to cement
manufacturers, not users of cement products.\3\ Two facilities in the
AB 1318 Tracking System, Elsinore Ready-Mix Co., Inc. and Oldcastle
Westile, Inc., use cement products but do not manufacture cement.
Therefore, Rule 1156 does not apply to those facilities and Rule 1156
does not require any surplus adjustment to the offsets from these
facilities or any others in the AB 1318 Tracking System.
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\3\ As stated in the District's Staff Report for Rule 1156, the
two facilities affected by Rule 1156 are TXI Riverside Cement and
Cal Portland Cement.
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Rule 1157, which applies to aggregate facilities, was also adopted
after the earliest date equipment was shutdown for any offsets included
in the AB 1318 Tracking System (i.e. 1999). Six aggregate facilities
are included in the AB 1318 Tracking System. Matthews International
Corp. is not subject to Rule 1157 because the rule only applies to
aggregate operations which are defined as ``operations that produce
sand, gravel, crushed stone, and/or quarried rocks.'' Since Matthews is
a foundry operation that uses, but does not produce sand, the facility
is not subject to Rule 1157.
Rule 1157 applies to the six aggregate facilities in the AB 1318
Tracking System. If any of these facilities were already operating in
compliance with the new standards in Rule 1157, then no surplus
adjustment was required to ensure the emission reductions were surplus
(i.e. went beyond the reductions required by the rule). In other words,
the emissions from these facilities were already equal to or less than
the emissions allowed by Rule 1157. The rule requires various
techniques to be used throughout the facility to minimize
PM10 emissions. These techniques include housekeeping
provisions such as cleaning spills on paved roads; control techniques
such as the application of water or dust suppressants, enclosures and
baghouses; and equipment and work standards to minimize track out of
materials. The District establishes emission factors based on the use
of these techniques as part of the rulemaking process for adopting Rule
1157. If the facility's total emissions are below the material
throughput multiplied by the applicable emissions factors, the facility
is in compliance with Rule 1157. In this case, no further surplus
adjustment is required unless the rule is amended to further reduce the
allowable emissions before the offsets are used. While Rule 1157 has
not been amended, the District has adopted revised emission factors for
the various operations subject to this rule,\4\ and therefore, further
adjustments were made to the offsets from these six aggregate
facilities. These further adjustments are discussed in more detail in
the TSD and shown in Attachment A.
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\4\ See letter from Barry R. Wallerstein to Malcolm C. Weiss,
Subject: Rule 1157--PM10 Emission Reductions from
Aggregate and Related Operations, dated December 15, 2006.
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3. The District Properly Transferred Offsetting Emission Reductions
From Sources that Shutdown in 1999-2002
The final issue for comment in this Supplemental proposal concerns
the appropriate SIP AQMP for the District and EPA to use to evaluate
whether the emissions reductions from shutdown units have been included
in the SIP's base year.
40 CFR part 51, Appendix S,\5\ at IV.3, provides: Emissions
reductions achieved by shutting down an existing source or
curtailing production or operating hours may be generally credited
for offsets if they meet the requirements in paragraphs IV.C.3.i.1
through 2 of this section.
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\5\ Appendix S has the same language that is used in 40 CFR
51.165.
Section IV.C.3.i.1 requires the emissions reductions to be surplus,
permanent, quantifiable and federally enforceable. Section IV.C.3.i.2
allows emission reductions from shutdown equipment or curtailed
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operations to be used provided:
The shutdown or curtailment occurred after the last day of the
base year for the SIP planning process. For purposes of this
paragraph, a reviewing authority may choose to consider a prior
shutdown or curtailment to have occurred after the last day of the
base year if the projected emissions inventory used to develop the
attainment demonstration explicitly includes the emissions from such
previously shutdown or curtailed emissions units.
In our final rulemaking, EPA responded to comments on this issue by
indicating our understanding that the District properly added pre-base
year credits into its 2007 PM2.5 AQMP which we concluded met
the requirements of the second sentence of the IV.3.C.i.2.
EPA has now determined that it would be more appropriate to rely on
the District's 2003 PM10 AQMPs, rather than their 2007
PM2.5 AQMP for two reasons. The reason for relying on the
2003 AQMPs is that the offsets the District transferred to the AB 1318
Tracking System are for PM10, not PM2.5. The
District has approved PM10 AQMPs for both the South Coast
Air Basin and the Coachella Valley that were adopted in 2003.
Therefore, the appropriate AQMP for EPA to reference when evaluating
PM10 offsets (and precursors including SOX) for
the AB 1318 Tracking System is the approved 2003 PM10 AQMPs.
The inventories in the 2003 PM10 AQMPs have a base year of
1997 for both the South Coast Air Basin and the Coachella Valley.\6\
None of the offsets transferred by the District were derived from
shutdowns occurring before the last day of 1997. Therefore all of the
offsets in the AB 1318 Tracking System resulting from shutdown
equipment were included in the base year for the 2003 PM10
AQMPs, including SOX as a precursor.\7\
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\6\ EPA also notes that we had not approved the 2007
PM2.5 AQMPs at the time the District transferred the
offsets to the AB 1318 Tracking System. EPA proposed approval of the
2007 PM2.5 AQMP in July 2011 and finalized approval on
November 9, 2011.
\7\ Although we are now relying on the 2003 PM10
AQMPs, EPA has not changed our determination that the District
explicitly added offsets into the inventories for the 2007 AQMP as
discussed in EPA's and the District's briefing to the Ninth Circuit.
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[[Page 50978]]
EPA is now proposing to approve the AB 1318 Tracking System because
all of the offsets for PM10 and the precursor SOX
occurred after the base year of 1997 in the PM10 AQMPs.
E. Section 110(l) Evaluation
Under section 110(l) of the CAA, EPA may not approve any SIP
revision that would interfere with attainment, reasonable further
progress (RFP) or any other CAA requirement.
We have determined that this SIP revision will not interfere with
attainment or RFP because the offsets in the AB 1318 Tracking System
are not relied on for attainment or RFP in the District's attainment
demonstrations. We are also not aware of this revision interfering with
any other CAA requirement. For example, this source-specific SIP
revision provides a new but equivalent mechanism to provisions in
Regulation XIII for satisfying the offset requirements of CAA Section
173 because the offsets the District is transferring from its internal
bank to the AB 1318 Tracking System meet all federal requirements. In
addition, the District supplied a copy of its air quality analysis for
the Sentinel Energy Project that shows that operation of the facility
will not interfere with the ability of the District to reach
attainment.
F. Public Comment and Final Action
Because EPA believes the submittal 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, addressing all public comments, which will incorporate
this submittal into the federally enforceable SIP.
III. Statutory and Executive Order Reviews
Under the Clean Air Act, the Administrator is required to approve a
SIP submission that complies with the provisions of the Act and
applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a).
Thus, in reviewing SIP submissions, EPA's role is to approve state
choices, provided that they meet the criteria of the Clean Air Act.
Accordingly, this action merely proposes to approve state law as
meeting Federal requirements and does not impose additional
requirements beyond those imposed by state law. For that reason, this
proposed action:
Is not a ``significant regulatory action'' subject to
review by the Office of Management and Budget under Executive Order
12866 (58 FR 51735, October 4, 1993);
Does not impose an information collection burden under the
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
Is certified as not having a significant economic impact
on a substantial number of small entities under the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.);
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);
Does not have Federalism implications as specified in
Executive Order 13132 (64 FR 43255, August 10, 1999);
Is not an economically significant regulatory action based
on health or safety risks subject to Executive Order 13045 (62 FR
19885, April 23, 1997);
Is not a significant regulatory action subject to
Executive Order 13211 (66 FR 28355, May 22, 2001);
Is not subject to requirements of Section 12(d) of the
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272
note) because application of those requirements would be inconsistent
with the Clean Air Act; and
Does not provide EPA with the discretionary authority to
address, as appropriate, disproportionate human health or environmental
effects, using practicable and legally permissible methods, under
Executive Order 12898 (59 FR 7629, February 16, 1994).
In addition, this proposed rule does not have tribal implications
as specified by Executive Order 13175 (65 FR 67249, November 9, 2000),
because the SIP is not approved to apply in Indian country located in
the state, and EPA notes that it will not impose substantial direct
costs on tribal governments or preempt tribal law.
List of Subjects in 40 CFR Part 52
Environmental protection, Air pollution control, Intergovernmental
relations, Particulate matter, Reporting and recordkeeping
requirements.
Authority: 42 U.S.C. 7401 et seq.
Dated: August 9, 2012.
Jared Blumenfeld,
Regional Administrator, Region IX.
[FR Doc. 2012-20777 Filed 8-22-12; 8:45 am]
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