[Federal Register Volume 77, Number 230 (Thursday, November 29, 2012)]
[Proposed Rules]
[Pages 71140-71145]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-28908]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[EPA-R01-OAR-2010-0198, FRL-9755-7]
Approval and Promulgation of Air Quality Implementation Plans;
Connecticut; NOX Emission Trading Orders as Single Source
SIP Revisions
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
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SUMMARY: The EPA is proposing to approve a State Implementation Plan
(SIP) revision submitted by the State of Connecticut. This revision
allows facilities to create and/or use emission credits to comply with
the NOX emission limits required by Regulations of
Connecticut State Agencies (RCSA) section 22a-174-22 (Control of
Nitrogen Oxides) using NOx Emission Trading Orders (trading orders).
The intended effect of this action is to propose approval of the
individual trading orders to allow facilities to determine the most
cost-effective way to comply with the state regulation. This action is
being taken in accordance with the Clean Air Act.
DATES: Written comments must be received on or before December 31,
2012.
ADDRESSES: Submit your comments, identified by Docket ID Number EPA-
R01-OAR-2010-0198 by one of the following methods:
1. www.regulations.gov: Follow the on-line instructions for
submitting comments.
2. Email: [email protected].
3. Fax: (617) 918-0657
4. Mail: ``Docket Identification Number EPA-R01-OAR-2010-0198'',
[[Page 71141]]
Donald Dahl, U.S. Environmental Protection Agency, EPA New England
Regional Office, Office of Ecosystem Protection, Air Permits, Toxics,
and Indoor Programs Unit, 5 Post Office Square--Suite 100, (Mail code
OEP05-2), Boston, MA 02109-3912.
5. Hand Delivery or Courier. Deliver your comments to: Donald Dahl,
Air Permits, Toxics, and Indoor Programs Unit, Office of Ecosystem
Protection, U.S. Environmental Protection Agency, EPA New England
Regional Office, 5 Post Office Square, 5th floor, (OEP05-2), Boston, MA
02109-3912. Such deliveries are only accepted during the Regional
Office's normal hours of operation. The Regional Office's official
hours of business are Monday through Friday, 8:30 to 4:30 excluding
legal holidays.
Instructions: Direct your comments to Docket ID No. EPA-R01-OAR-
2010-0198. EPA's policy is that all comments received 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 information claimed to be Confidential
Business Information (CBI) or other information whose disclosure is
restricted by statute. Do not submit through www.regulations.gov, or
email, information that you consider to be CBI or otherwise protected.
The www.regulations.gov Web site is an ``anonymous access'' systems,
which means EPA will not know your identity or contact information
unless you provide it in the body of your comment. If you send an email
comment directly to EPA without going through www.regulations.gov your
email address will be automatically captured and included as part of
the comment that is placed in the public docket and made available on
the Internet. If you submit an electronic comment, EPA recommends that
you include your name and other contact information in the body of your
comment and with any disk or CD-ROM you submit. If EPA cannot read your
comment due to technical difficulties and cannot contact you for
clarification, EPA may not be able to consider your comment. Electronic
files should avoid the use of special characters, any form of
encryption, and be free of any defects or viruses.
Docket: All documents in the electronic docket are listed in the
www.regulations.gov index. Although listed in the index, some
information is not publicly available, i.e., CBI or other information
whose disclosure is restricted by statute. Certain other material, such
as copyrighted material, is not placed on the Internet and will be
publicly available only in hard copy form. Publicly available docket
materials are available either electronically in www.regulations.gov or
in hard copy at Office of Ecosystem Protection, U.S. Environmental
Protection Agency, EPA New England Regional Office, 5 Post Office
Square, Suite 100, Boston, MA. EPA requests that if at all possible,
you contact the contact listed in the FOR FURTHER INFORMATION CONTACT
section to schedule your inspection. The Regional Office's official
hours of business are Monday through Friday, 8:30 to 4:30 excluding
legal holidays.
In addition to the publicly available docket materials available
for inspection electronically in the Federal Docket Management System
at www.regulations.gov, and the hard copy available at the Regional
Office, which are identified in the ADDRESSES section of this Federal
Register, copies of the state submittals are also available for public
inspection during normal business hours, by appointment at the State
Air Agency. The Bureau of Air Management, Department of Environmental
Protection, State Office Building, 79 Elm Street, Hartford, CT 06106-
1630.
FOR FURTHER INFORMATION CONTACT: Donald Dahl, Air Permits, Toxics, and
Indoor Programs Unit, Office of Ecosystem Protection, U.S.
Environmental Protection Agency, EPA New England Regional Office, 5
Post Office Square, Suite 100, (OEP05-2), Boston, MA 02109-3912, phone
number (617) 918-1657, fax number (617) 918-0657, email
[email protected].
SUPPLEMENTARY INFORMATION: Throughout this document whenever ``we,''
``us,'' or ``our'' is used, we mean EPA.
Table of Contents
I. Background and Purpose
II. What action is EPA proposing in today's notice?
III. What facilities are affected by today's action?
IV. Do these trading orders allow new facilities to use emission
credits to comply with RACT?
V. How did EPA review and evaluate these trading orders?
A. What is EPA's analysis of the fundamental principle of
integrity?
1. Integrity Element One--Surplus
2. Integrity Element Two--Enforceable
3. Integrity Element Three--Quantifiable
4. Integrity Element Four--Permanent
B. What is EPA's analysis of the fundamental principle of
equity?
1. Equity Element One--General Equity
2. Equity Element Two--Environmental Justice
C. What is EPA's analysis of the fundamental principle of
environmental benefit?
D. What is EPA's analysis regarding the RACT sources?
E. Conclusion
VI. Proposed Action
VII. Statutory and Executive Order Reviews
I. Background and Purpose
On August 18, 2000, December 12, 2002, July 1, 2004, and January
13, 2006, the State of Connecticut submitted formal revisions to its
State Implementation Plan (SIP). These SIP revisions consist of 149
source-specific trading orders that allow 50 sources to trade emission
credits in order to comply with state regulations for reducing nitrogen
oxide (NOX) emissions. We previously approved source-
specific trading orders issued by Connecticut under this program on
September 28, 1999 (64 FR 52233) and March 23, 2001 (66 FR 16135).
II. What action is EPA proposing in today's notice?
Today, EPA is proposing to approve 149 NOX Emission
Trading Orders that will allow facilities in Connecticut to generate
and or use emission credits for compliance with the NOX
emission limits that were established as part of Connecticut's strategy
to lower ozone levels, also known as reasonable available control
technology (RACT). EPA is not taking action on some of the orders
included in the July 1, 2004 submittal: Trading Order 8021 issued to
Pfizer, Trading Order 8246 issued to Sikorsky Aircraft, Trading Order
8110A issued to Yale University and Consent Order 7019A issued to
Hamilton Sundstrand Corporation. EPA is also not taking action on the
Creation Notice Nos. NJ-1, NJ-2, and NJ-4 included in the August 18,
2000 submittal. EPA will take action on these orders and creation
notices at a later date. Lastly, EPA is not taking action on Trading
Orders 8115, Modification 1 and 8115A issued to University of
Connecticut in Mansfield because these trading orders were superseded
by Trading Order 8115B which was included in the July 1, 2004
submittal.
III. What facilities are affected by today's action?
EPA is proposing to approve NOX emission trading orders
for the facilities listed in the table below.
[[Page 71142]]
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Trading Order No(s). Name of facility Facility location
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1494A, 8116 Modification, 8116A, Connecticut Hartford.
8116B. Resources
Recovery
Authority.
1494 Modifications 2, 3, 4, 5, Connecticut Light Branford,
and 6. and Power. Greenwich,
Hartford,
Montville,
Middletown,
Milford, Preston,
Norwalk, and
Torrington.
8154 Modifications 1, 2, and 3, Combustion Windsor.
8154A. Engineering.
1626, 1626 Modification 1, 8247. Borough of Naugatuck.
Naugatuck.
8159, 8181, 8181A, 8181A Connecticut Light Milford.
Modification 1, 8219, 8219A, and Power/Devon
8219A Modification 1, 8251, Power LLC.
8251 Modification 1.
8109............................ Hamilton Windsor Locks.
Sundstrand.
8093A, 8093B, 8093C, 8093C Pfizer............ Groton.
Modification 1, 8136, 8136A.
8119 Modification, 8119A, 8119A City of Norwich, Norwich.
Modification 1. Department of
Public Utilities.
8092 Modification, 8103 United Bridgeport.
Modifications 1 and 2, 8177 Illuminating/
Modification 1, 8241, 8241 Wisvest-
Modification 1, 8242, 8243, Connecticut LLC/
8244, 8244 Modification 1, PSEG Power
8253, 8253 Modification 1. Connecticut LLC.
8115 Modification 2, 8115B...... University of Storrs.
Connecticut.
8107 Modifications 1 and 2, Northeast Nuclear Waterford.
8152, 8152 Modification, 8152A, Energy/Dominion
8221, 8221A, 8222, 8222A. Nuclear.
8180, 8180 Modification 1, Connecticut Jet Branford,
8180A, 8180A Modification 1. Power. Greenwich, and
Torrington.
8114 Modifications 1 and 2, CYTEC Industries.. Wallingford.
8114A.
8117, 8117A, 8117B.............. Sprague Paperboard Versailles.
8157, 8160, 8162, 8182, 8182A, Connecticut Light Middletown.
8182A Modification 1, 8213, and Power/
8213A, 8213A Modification 1, Middletown Power
8214, 8214A, 8214A Modification LLC.
1, 8215, 8215A, 8215A
Modification 1, 8227, 8227A,
8227A Modification 1.
8156, 8161, 8183, 8183A, 8183A Connecticut Light Montville.
Modification 1, 8216, 8216A, and Power/
8216A Modification 1, 8217, Montville Power
8217A, 8217A Modification 1. LLC.
8158, 8184, 8184A, 8184A Connecticut Light Norwalk.
Modification 1, 8218, 8218A, and Power/Norwalk
8218A Modification 1. Power LLC.
8134, 8134A, 8248............... United East Hartford.
Technologies.
8175, 8175 Modification 1, Northeast Berlin.
8175A, 8175A Modification 1. Generation
Company.
8102 Modification, 8153, 8176 United New Haven.
Modification 1, 8240, 8240 Illuminating/
Modification 1, 8243. Wisvest-
Connecticut LLC/
PSEG Power
Connecticut LLC.
8220, 8220A, 8220A Modification Bristol Meyers Wallingford.
1. Squibb.
8124, 8124A..................... Stone Container... Uncasville.
8120, 8120A..................... Sikorsky Aircraft. Stratford.
8137 Modifications 1 and 2, AlliedSignal and Stratford.
8137A. U.S. Army Tank.
8188............................ Allegheny Ludlum.. Wallingford.
8112, 8112A, 8112A Modification United States Groton.
1, 8201CC. Naval Submarine
Base.
8230............................ Jacobs Vehicle Bloomfield.
Systems.
8110 Modification............... Yale University... New Haven.
8123 Modification, 8123A........ Algonquin Gas Cromwell.
Transmission.
8250, 8261...................... Algonquin Windsor Windsor Locks.
Locks.
8249, 8249 Modification 1....... Capitol District Hartford.
Energy Center.
8094 Modification............... Ogden Martin...... Bristol.
8095 Modification............... American Ref-Fuel. Preston.
8100 Modification............... Bridgeport Resco.. Bridgeport.
8101 Modification............... Connecticut Middletown.
Department of
Mental Health and
Addiction
Services.
8111 Modification............... Uniroyal Chemical. Naugatuck.
8118 Modification............... South Norwalk Norwalk.
Electrical Works.
8130 Modification............... Connecticut Newtown.
Department of
Public Works.
8132 Modification............... Bridgeport Bridgeport.
Hospital.
8141 Modification............... Town of Wallingford.
Wallingford,
Department of
Public Utilities.
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IV. Do these trading orders allow new facilities to use emission
credits to comply with RACT?
Most of the trading orders being approved today allow the same
facilities in Connecticut to continue to create or use emission credits
that were approved into the SIP on September 28, 1999 (64 FR 52233) and
March 23, 2001 (66 FR 16135). Facilities that are having their trading
orders approved for the first time are: Hamilton Sundstrand in Windsor
Locks, Borough of Naugatuck in Naugatuck, Bristol Meyers Squibb in
Wallingford, Capital District Energy Center in Hartford, Combustion
Engineering in Windsor, Stone Container in Uncasville, and Sprague
Paperboard in Versailles.
V. How did EPA review and evaluate these trading orders?
EPA issued a guidance document ``Improving Air Quality With
Economic Incentive Programs'' (EIP Guidance). (See EPA-452/R-01-001,
January 2001). This guidance applies to discretionary
[[Page 71143]]
emission trading programs (EIPs) that are submitted to EPA for approval
as a revision of the State Implementation Plan to attain national
ambient air quality standards for criteria pollutants. This guidance
does not require review of previously approved programs and is not
EPA's final action on these discretionary emission trading programs.
EPA's final action on these discretionary emission trading programs
occurs when EPA acts on a State's request to revise the SIP. The EIP
Guidance is non-binding.
Fundamental principles that apply to all EIPs are integrity
(meaning that credits are based on emission reductions that are
surplus, enforceable, quantifiable, and permanent), equity, and
environmental benefit. These fundamental principles can apply to an EIP
in its entirety (the programmatic level) or to individual sources (the
source-specific level). In addition, EIPs that allow sources to
purchase credits to demonstrate compliance with reasonable available
control technology (RACT) need to meet additional requirements
specified in section 16.13 of the EIP Guidance. EPA evaluated the
Connecticut trading orders against these three fundamental principles,
additional requirements for sources subject to RACT, and applicable
Clean Air Act requirements. Connecticut's trading orders are fully
consistent with these fundamental principles and the requirements for
sources subject to RACT, and EPA is approving these trading orders as
part of Connecticut's SIP.
A. What is EPA's analysis of the fundamental principle of integrity?
The fundamental principle of integrity consists of the qualities of
being surplus, enforceable, quantifiable, and permanent.
1. Integrity Element One--Surplus
Emission reductions are surplus if the reductions are not presently
relied upon in any other air quality-related programs such as the SIP,
SIP-related requirements such as transportation conformity, other
adopted state measures not in the SIP, Federal rules that focus on
reducing precursors of criteria pollutants such as new source
performance standards, or a consent decree. Emission reductions
measured by sources on a retrospective basis are surplus if the
source's actual emissions are below its baseline allowable or
historical actual emissions, whichever is lower, and the retrospective
inventories reflect actual emission information as appropriate.
Each source-specific trading order Connecticut submitted creates
emission reduction credits (ERCs), establishes a baseline of 1990, and
sets emission limits based on the most stringent applicable emission
rate. Credits are only generated when a permitted facility's emissions
are below the emission rate and the baseline. Therefore the credits
produced are in addition to reductions from other requirements of the
Clean Air Act.
2. Integrity Element Two--Enforceable
Emission reductions use, generation, and other required actions in
the EIP are enforceable on a programmatic basis if they are
independently verifiable, define program violations, and identify those
liable for violations. For enforceability, both the State and EPA
should have the ability to apply penalties and secure appropriate
corrective actions where applicable. Citizens should also have access
to all the emissions-related information obtained from the source so
that citizens can file suits against sources for violations. Required
actions must be practicably enforceable in accordance with other EPA
guidance on practicable enforceability. At the source- specific level,
the source must be liable for violations, the liable party must be
identifiable, and the State, the public, and EPA must be able to
independently verify a source's compliance. The EIP Guidance outlines
enforcement elements common to all trading EIPs in Chapter 6.0.
Each facility participating in trading NOX credits has
been issued a source-specific trading order containing enforceable
conditions for quantifying, recording, and reporting ERCs. Each trading
order establishes the monitoring/testing protocol, quantifying
emissions based on either a periodic stack test for developing an
emission rate or continuous emission monitors that directly measure
NOX emissions. Each trading order establishes reporting
requirements which includes emissions based upon the approved
monitoring/testing protocol, the number of credits the source
generated, if any, and credits the source previously banked or
purchased to cover its emissions. The State also reviews all of the
sources subject to trading orders to determine which sources did not
meet the specific conditions of their trading orders. Connecticut has
authority to enforce the trading orders and the underlying RACT
requirements of Regulations of Connecticut State Agencies (RCSA)
section 22a-174-22 pursuant to RCSA section 22a-174-12. By approving
these source-specific trading orders, they will become part of the SIP
and be enforceable by both EPA and citizens.
3. Integrity Element Three--Quantifiable
The generation or use of emission reductions by a source is
quantifiable on a source-specific basis if the source can reliably
calculate the amount of emissions and/or emission reductions occurring
during the implementation of the program, and replicate the
calculations. The EIP Guidance further states that when quantifying
results, sources must use the same methodology used to measure baseline
emissions, unless there are good technical reasons that this approach
is not appropriate. Common elements for quantifying results of an EIP
are included in Chapter 5.0 of the EIP Guidance. All EIPs should
incorporate provisions for predicting results, addressing uncertainty,
approving quantification protocols, and emission quantification
methods. For a reduction to be certified as an ERC, the reduction must
be real, quantifiable, and surplus at the time the ERC is generated.
Each source-specific trading order contains a protocol for
quantifying emissions. Continuous Emission Monitors (CEMs) are used to
quantify emissions at electric generating units that are creating ERCs.
CEMs at these facilities are also used to determine if the source needs
to use ERCs to comply with NOX RACT. For sources without
CEMs, the protocol requires the source to determine a NOX
emission rate through stack testing. The source is also required to
maintain fuel use records. Each trading order contains an equation that
calculates NOX emissions on a mass basis using the results
from the most recent stack test, CEMs data and/or fuel records. The
generation and use of credits is therefore quantifiable.
4. Integrity Element Four--Permanent
To satisfy the EIP Guidance expectations for permanence,
Connecticut's trading program must ensure that no emission increases
(compared to emissions if there was no EIP) occur over the time defined
in the SIP. On a source-specific basis, the permanence expectations are
met if the sources participating in the EIP commit to actions or
achieve reductions for a future period of time as defined in the EIP.
Each source-specific trading order expires five years from the
issuance date. This allows Connecticut to determine every five years if
emission trading is still the best mechanism for reducing
NOX emissions at an individual source. Issuing new trading
orders every five years also allows the
[[Page 71144]]
State to take into account any new CAA requirements that become
effective after the initial trading order was issued.
On an annual basis, sources must report to Connecticut all ERCs
generated and used. The State reviews each credit generated and assigns
an identification number to each credit. The annual reports allow the
State to determine both the generator and user of each credit. Because
each credit generated receives an individual identification number, the
State can reliably track their use.
B. What is EPA's analysis of the fundamental principle of equity?
The equity principle is composed of two elements--general equity
and environmental justice.
1. Equity Element One--General Equity
General equity means that an EIP ensures all segments of the
population are protected from public health problems and no segment of
the population receives a disproportionate share of a program's
disbenefits. EIPs should specifically protect communities from
disproportionate impacts from emission shifts and foregone emission
reductions.
Connecticut has determined the majority of emission credits are
generated at a few electric generating units and some other large
industrial boilers that have continuous emission monitors. These
sources are large emitters that can economically decrease emissions on
a large scale. However, sources using emission credits are much smaller
emitters of NOX and are spread throughout the State.
Therefore, while the benefit of emissions reductions may be higher in
certain geographic areas, the impact from sources using credits will
not severely impact one geographic area over another.
2. Equity Element Two--Environmental Justice
The environmental justice (EJ) element applies if the EIP covers
VOCs and could disproportionately impact communities populated by
racial minorities, people with low incomes, and/or Tribes. The
Connecticut trading program does not allow emission trading of VOC
credits. Therefore, today's actions allowing the trading of
NOX emission credits does not create an EJ issue.
C. What is EPA's analysis of the fundamental principle of environmental
benefit?
All EIPs must be environmentally beneficial and can demonstrate
this principle through more rapid emission reductions or faster
attainment than would have occurred without the EIP.
The discrete emission reduction credit (DERC) EIP meets the
expectations for the environmental benefit principle. The ability to
generate DERCs provides an incentive for early compliance and more
rapid emission reductions. Connecticut sources that create emission
credits through their respective trading orders must discount the
actual credits generated by 10%. In addition, Connecticut discounts the
credits generated or used at some sources depending on certain
conditions, such as an additional 10% discount rate for sources using
stack tests in lieu of continuous emission monitors. These various
discount rates result in greater emission reductions then would
otherwise be achieved without trading, resulting in an environmental
benefit.
D. What is EPA's analysis regarding the RACT sources?
Sources must use the presumptive RACT limit in the baseline
calculation. Sources are not allowed to use an alternative RACT limit
in determining the baseline emission rate.
Connecticut's trading orders use the lower of actual emissions in
1990 or the RACT emission limit established for the specific source
category, whichever is less. The source-specific trading orders do not
use an alternative RACT emission rate.
The EIP Guidance also contains guidance for RACT emission limits
with long averaging times and prohibits emission credits generated
outside of the ozone season from being used during the ozone season.
Connecticut's trading orders limit sources requiring credits for
excess emissions during ozone season to only use credits generated
during ozone season.
E. Conclusion
EPA reviewed the source-specific trading orders with respect to the
expectations of the EIP Guidance and the requirements of the Clean Air
Act. EPA has concluded after review and analysis of the source-specific
trading orders that they are approvable.
VI. Proposed Action
EPA is proposing to approve the Connecticut SIP revision for the
NOX trading orders, which were submitted on August 18, 2000,
December 12, 2002, July 1, 2004, and January 13, 2006. EPA is
soliciting public comments on the issues discussed in this notice or on
other relevant matters. These comments will be considered before taking
final action. Interested parties may participate in the Federal
rulemaking procedure by submitting written comments to the EPA New
England Regional Office listed in the ADDRESSES section of this Federal
Register.
The Agency has reviewed this request for revision of the Federally-
approved State implementation plan for conformance with the provisions
of the 1990 amendments enacted on November 15, 1990. The Agency has
made the determination that the SIP revision is approvable because it
is in accordance with the CAA and EPA regulations.
VII. 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 proposed action merely approves 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
[[Page 71145]]
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 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, Carbon monoxide,
Incorporation by reference, Intergovernmental relations, Nitrogen
dioxide, Reporting and recordkeeping requirements.
Dated: November 14, 2012.
H. Curtis Spalding,
Regional Administrator, EPA New England.
[FR Doc. 2012-28908 Filed 11-28-12; 8:45 am]
BILLING CODE 6560-50-P