[Federal Register Volume 81, Number 203 (Thursday, October 20, 2016)]
[Rules and Regulations]
[Pages 72529-72537]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-24657]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[EPA-R03-OAR-2013-0816; FRL-9953-90-Region 3]
Delaware; Disapproval of Air Quality Implementation Plan for
Nonattainment New Source Review; Emissions Offset Provisions
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
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SUMMARY: The Environmental Protection Agency (EPA) is disapproving a
State Implementation Plan (SIP) revision submitted by the Delaware
Department of Natural Resources and Environmental Control (DNREC) for
the State of Delaware on October 15, 2013. EPA is disapproving this
action because the submittal does not satisfy the requirements of the
Clean Air Act (CAA) or the federal implementing regulations, which
establish the criteria under which the owner or operator of a new or
modified major stationary source must obtain the required emission
offsets from the same source or other sources in the same nonattainment
area with limited exceptions under Delaware's nonattainment new source
review (NSR) preconstruction permitting program. In addition, EPA is
finalizing disapproval of the SIP revision because Delaware exercises
authorities that are reserved for EPA under section 107 of the CAA. EPA
is disapproving this revision to DNREC's SIP in accordance with the
requirements of the CAA.
DATES: This final rule is effective on November 21, 2016.
ADDRESSES: EPA has established a docket for this action under Docket ID
Number EPA-R03-OAR-2013-0816. All documents in the docket are listed on
the http://www.regulations.gov Web site. Although listed in the index,
some
[[Page 72530]]
information is not publicly available, e.g., 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 through
http://www.regulations.gov, or please contact the person identified in
the ``For Further Information Contact'' section for additional
availability information.
FOR FURTHER INFORMATION CONTACT: Amy Johansen, (215) 814-2156, or by
email at [email protected].
SUPPLEMENTARY INFORMATION:
I. Background
On May 26, 2015 (80 FR 30015), EPA published a notice of proposed
rulemaking (NPR) for the State of Delaware. At the request of a
commenter, EPA published a notice reopening the comment period for the
NPR on July 15, 2015 (80 FR 41449), which allowed the public to comment
on the May 26, 2015 NPR until August 14, 2015. In the NPR, EPA proposed
disapproval of DNREC's SIP revision because the submittal does not
satisfy the requirements of CAA sections 172(c)(5) and 173(c)(1) or the
federal implementing regulations in 40 CFR 51.165 and in 40 CFR part
51, appendix S,\1\ which establish the criteria under which the owner
or operator of a new or modified major stationary source must obtain
the required emission offsets ``from the same source or other sources
in the same nonattainment area'' with limited exceptions, for
Delaware's nonattainment NSR preconstruction permitting program. In
addition, EPA proposed disapproval of the SIP revision because Delaware
exercises authorities that are reserved for EPA under section 107 of
the CAA. The formal SIP revision was submitted by Delaware on October
15, 2013.
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\1\ 40 CFR 51.165(a)(3)(ii)(F) requires that ``[p]rocedures
relating to the permissible location of offsetting emissions shall
be followed which are at least as stringent as those set out in 40
CFR part 51 appendix S section IV.D.''
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II. Summary of SIP Revision
The SIP revision consists of changes to 7 DE Admin. Code 1125
(herein referred to as 7 DNREC 1125 or Regulation 1125), Requirements
for Preconstruction Review, sections 2.5.5 and 2.5.6, Emission Offset
Provisions. First, Delaware's revised regulation enables sources in
Delaware seeking NSR permits to obtain emission offsets from sources
located in other areas, including areas outside of the State of
Delaware, irrespective of the areas' nonattainment status as compared
to Delaware's nonattainment status for the same national ambient air
quality standard (NAAQS). Second, the revised regulation also permits
sources seeking NSR permits in Delaware to obtain emissions offsets
from areas without a determination that the other areas ``contribute to
a violation'' of the NAAQS in Delaware where a source seeking a NSR
permit would be located, as required in CAA section 173 and its
implementing regulations. The language in section 2.5.6 in 7 DNREC 1125
provides that sources can obtain emission offsets ``in the
nonattainment area which the source is located which shall specifically
include any area in the States of Connecticut, Delaware, Illinois,
Indiana, Kentucky, Maryland, Michigan, Missouri, New Jersey, New York,
North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia
and Wisconsin.''
Finally, the revised regulation language allows ``the Department''
to determine the areas in which owners or operators can acquire
emission offsets, regardless of the attainment status of those areas.
Specifically, Delaware proposed language for the SIP that ``the
Department may consider any area in the following states as having the
same nonattainment classification as the area of Delaware where the
offsets are used: Connecticut, Delaware, Illinois, Indiana, Kentucky,
Maryland, Michigan, Missouri, New Jersey, New York, North Carolina,
Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and Wisconsin.''
Other specific requirements of 7 DNREC 1125, Requirements for
Preconstruction Review, sections 2.5.5 and 2.5.6, Emission Offset
Provisions and the rationale for EPA's disapproval are explained in the
NPR and will not be restated here. See 80 FR 30015 (May 26, 2015). EPA
received three sets of comments on the NPR. A summary of the comments
and EPA's responses are provided in Section III of this document.
III. Public Comments and EPA Responses
During the reopened public comment period for the May 26, 2015
proposed rule, EPA received three sets of comments, which are
summarized and addressed here. The comments were submitted by DNREC
(herein referred to as Delaware), the New Jersey Department of
Environmental Protection (herein referred to as New Jersey), and the
Delaware State Chamber of Commerce (DSCC).
Comment 1: Generally, Delaware and New Jersey noted that unhealthy
levels of ground-level ozone continue to impact their states years
after the passage of the CAA and after they have implemented several
rounds of voluntary and required emissions reduction strategies. The
States allege ground-level ozone and precursor emissions are pervasive
and readily transported. Delaware and New Jersey stated that they
cannot attain the 75 parts per billion (ppb) ozone NAAQS due to
emissions from other states' pollution and not their own, as they have
done all they can to control large and small sources throughout their
States.
Response 1: EPA appreciates Delaware's and New Jersey's interest in
addressing interstate transport of ozone pollution and other air
quality concerns through implementation of the CAA requirements. While
it is not relevant to the approvability of Delaware's revisions to 7
DNREC 1125, sections 2.5.5 and 2.5.6, EPA recognizes both Delaware and
New Jersey have implemented various regulations to address the ozone
NAAQS in their respective States. Delaware's and New Jersey's
commitment, as well as other states' commitments, has had a beneficial
impact on the air quality in areas designated nonattainment for the
2008 ozone NAAQS including the Philadelphia-Wilmington-Atlantic City
Area, the PA-NJ-MD-DE Area (Philadelphia Area) and the Seaford, DE
Area, for example. Currently, the Philadelphia Area is meeting the 2008
ozone NAAQS of 75 ppb with preliminary 2013-2015 air quality monitoring
(AQM) data showing a design value of 75 ppb.\2\ Additionally, on May 4,
2016, EPA made a final determination that the Seaford, DE marginal
nonattainment area attained the 2008 ozone NAAQS by the applicable
attainment date of July 20, 2015, with a design value of 74 ppb,
pursuant to section 181(b)(2)(A) of the CAA and 40 CFR 51.1103. See 81
FR 26701.
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\2\ The 2008 ozone NAAQS is an 8-hour ozone standard that was
set at 75 ppb. See 73 FR 16436 (March 27, 2008).
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Comment 2: Delaware discussed efforts they have made to ``prod
EPA'' into addressing interstate transport through a petition under CAA
section 126 and a joint state petition asking EPA to enlarge the Ozone
Transport Region (OTR) under CAA section 176A. Delaware stated that EPA
has failed to respond to those petitions despite statutory deadlines.
[[Page 72531]]
Response 2: EPA acknowledges that Delaware previously submitted a
CAA section 126 petition seeking emissions reductions from large
electric generating units in a number of upwind states in order to
reduce the contributions from their emissions to fine particulate
matter (PM2.5) and ozone problems in Delaware. Additionally,
EPA acknowledges that a number of states, including Delaware, submitted
a petition under CAA section 176A requesting that the EPA add
additional states to the OTR that was established under section 184 of
the CAA. EPA is reviewing the petitions separately and is not acting on
those petitions in this action. Delaware's comments are not germane to
EPA's disapproval of the Delaware October 15, 2013 SIP revision and as
such no further response is provided.
Comment 3: Generally, Delaware and New Jersey noted their extensive
efforts to regulate sources in their respective states in order to
attain the NAAQS. As a result, commenters expressed concerns about
economic burdens imposed on their citizens, business, and industry
locating in both Delaware and New Jersey. More specifically, Delaware
asserted that it is more expensive for industry to locate in its State
versus nearby locations which EPA has classified as ``attainment/
unclassifiable'' despite evidence showing that those areas cause and
contribute to Delaware's nonattainment status. The DSCC also noted it
will become more expensive for new industry to locate within or to
expand within Delaware compared to locating or expanding business in
other areas that are attainment/unclassifiable especially as Delaware
is small and its sources are well controlled.
Response 3: EPA appreciates the commenters' continued efforts to
regulate sources in their States to meet NAAQS, as well as their
concerns with respect to economic burdens on citizens, business, and
industry; however, this comment is not germane to EPA's current action
disapproving Delaware's October 15, 2013 SIP revision. EPA evaluated
Delaware's October 15, 2013 SIP revision submittal in accordance with
requirements for NSR permitting programs in CAA sections 172 and 173
and in 40 CFR 51.165 and found the SIP revision submittal did not meet
those requirements as discussed in the NPR. EPA notes that the NAAQS
for each criteria air pollutant are established to provide protection
for the nation's public health and the environment. Additionally, EPA's
NSR program was specifically designed to allow for responsible economic
growth while at the same time allowing states to achieve and maintain
the NAAQS. As the comments are not germane to the reasons for EPA's
disapproval of this SIP, no further response is provided.
Comment 4: Delaware discussed design values at some Delaware air
quality monitors and stated that based in part upon EPA data, a large
group of upwind states create the pollution that is causing Delaware's
nonattainment and that those states should reduce their emissions in
order for Delaware to attain and maintain the NAAQS.
Response 4: As noted in a previous response to comment, Delaware
currently has areas attaining the 2008 ozone NAAQS, which would
indicate that emissions reductions have occurred and have had a
beneficial impact on Delaware's air quality.\3\ Nonetheless, EPA
readily acknowledges the role interstate transport of precursors to
ozone pollution plays in the efforts of downwind areas to attain and
maintain the NAAQS. To that end, EPA has taken a number of steps to
ensure implementation of CAA section 110(a)(2)(D), or the ``good
neighbor'' provision, which addresses interstate pollution, including
the NOX (oxides of nitrogen) SIP Call, the Clean Air
Interstate Rule (CAIR), and the Cross-State Air Pollution Rule (CSAPR).
Most recently, EPA promulgated an update to CSAPR specifically to
address interstate pollution with respect to the 2008 ozone NAAQS with
tightened NOX budgets designed to achieve emission
reductions in upwind states before the moderate area attainment date of
July 2018. See Cross-State Air Pollution Rule Update for the 2008 Ozone
NAAQS, Final Rule, (signed September 7, 2016, publication pending); \4\
Proposed Rule, 80 FR 46271 (August 8, 2015); and Notice of Data
Availability (NODA), 80 FR 75706 (December 3, 2015). As noted above,
however, comments regarding the interstate transport obligations of
other states are not germane to EPA's current action disapproving
Delaware's October 15, 2013 SIP revision.
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\3\ Currently, the Philadelphia Area (which includes portions of
Delaware) is meeting the 2008 ozone NAAQS of 75 ppb with preliminary
2013-2015 AQM data showing a design value of 75 ppb. Additionally,
on May 4, 2016, EPA made a final determination that the Seaford, DE
Marginal nonattainment area attained the 2008 ozone NAAQS by the
applicable attainment date of July 20, 2105 with a design value of
74 ppb. 81 FR 26701.
\4\ Available at https://www3.epa.gov/airmarkets/CSAPRU/Cross-State%20Air%20Pollution%20Rule%20Update%20for%20the%202008%20Ozone%20NAAQS%202060%20AS05%20FRM.pdf.
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Comment 5: Delaware noted that EPA went against the State's
designation recommendations and adopted smaller 2008 ozone
nonattainment areas that include parts of Delaware but not certain
upwind states, which triggered various provisions of the CAA in part D
of title I, including the applicability of nonattainment NSR
permitting, in each of the three counties in Delaware.
Response 5: As noted in our May 26, 2015 NPR, pursuant to section
107 of the CAA, New Castle and Sussex Counties, Delaware were
designated by EPA for the 2008 ozone NAAQS as ``marginal''
nonattainment under 40 CFR part 81, while Kent County was designated as
``unclassifiable/attainment.'' See 77 FR 30088 (May 21, 2012). New
Castle County is a portion of the Philadelphia Area for the 2008 ozone
NAAQS. Upon designation, a nonattainment area for ozone is required to
meet the plan submission requirements under section 182 of the CAA (in
subpart 2 of part D of title I of the CAA) for its nonattainment area
classification (marginal, moderate, serious, severe, or extreme) as
well as the general SIP planning requirements in sections 172 and 173
of subpart 1 of part D of title I. The State of Delaware is also part
of the OTR, as established in CAA section 184(a). Therefore, at a
minimum, the entire State of Delaware is required to meet the plan
submission requirements for a moderate nonattainment area
classification as specified in CAA sections 182(b) and 184(b),
regardless of the attainment classification for areas in the State.
Moderate area classification plan requirements include the emissions
offset provisions within section 173 of the CAA and within its
implementing regulations. Delaware's comment regarding the size of the
nonattainment area is irrelevant to whether Delaware's regulations for
NSR emissions offsets meet CAA requirements. The time for Delaware to
challenge EPA's ozone designations for the 2008 ozone NAAQS has passed.
As explained in the NPR, Delaware's revisions to 7 DNREC 1125, sections
2.5.5 and 2.5.6 on their face do not meet CAA requirements, and, thus,
no further response is provided.
Comment 6: Delaware asserted that EPA did not consider its October
15, 2013 SIP revision submittal because EPA did not refer to any of it
in the proposed disapproval. Delaware also stated its arguments in the
comments were largely repeating information presented in the October
15, 2013 SIP submittal. Delaware stated NSR was its only tool to
achieve further reductions of ozone within the state as Delaware has no
ability to regulate sources in other states.
[[Page 72532]]
Response 6: EPA does not agree with Delaware's characterization
that EPA did not consider or evaluate the October 15, 2013 SIP revision
submittal before publishing a NPR proposing disapproval of revisions to
7 DNREC 1125, Requirements for Preconstruction Review, sections 2.5.5
and 2.5.6, Emission Offset Provisions. While EPA did not cite to
specific language or provisions within the October 15, 2013 SIP
submission in the May 26, 2015 NPR, nothing in the CAA nor its
implementing regulations requires EPA to cite to the SIP submittal when
acting to approve or disapprove pursuant to section 110 of the CAA. See
80 FR 30015. EPA reviewed and evaluated all information submitted by
Delaware to EPA in the October 15, 2013 SIP submittal and compared that
information and the regulations to the requirements of the CAA and its
implementing regulations. As discussed in the NPR, EPA found that 7
DNREC 1125, sections 2.5.5 and 2.5.6 do not meet the clear requirements
of CAA sections 172(c)(5) and 173(c)(1) nor the federal implementing
regulations in 40 CFR 51.165 and part 51, appendix S, section IV.D for
offsets to come from areas with the same or higher attainment
classifications and from areas that contribute to nonattainment in the
area in which a source is locating.\5\ Additionally, as noted in the
NPR, EPA proposed to disapprove the Delaware SIP revision because
Delaware's regulations attempt to exercise authorities that are
reserved solely for EPA in CAA section 107 by treating certain upwind
areas as ozone nonattainment areas regardless of EPA's classification
of those areas for attainment of the ozone NAAQS. EPA is required to
fully consider a SIP revision submittal upon making a decision to
approve or disapprove a SIP submittal revision. Here, EPA considered
Delaware's submission but found the regulations clearly inconsistent
with CAA requirements in part D of title I of the CAA for offset
provisions. Regarding Delaware's comment about needing NSR to reach
attainment, the CAA provides many tools to assist states with attaining
and maintaining the NAAQS. EPA appreciates Delaware's in-state
implementation efforts, and EPA will continue to work with other states
to address interstate transport of emissions through SIPs and other
federal programs.
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\5\ 40 CFR 51.165(a)(3)(ii)(F) requires that ``[p]rocedures
relating to the permissible location of offsetting emissions shall
be followed which are at least as stringent as those set out in 40
CFR part 51 appendix S section IV.D.''
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Comment 7: Delaware asserted that EPA erroneously concluded that
Delaware's revised regulation does not comply with the requirements in
CAA sections 172(c)(5) and 173(c)(1) and the implementing regulations
in 40 CFR 51.165 and part 51, appendix S. Delaware stated that CAA
section 116 allows states to adopt rules that are not exactly the same
as the federal regulations, as long as they are not less stringent.
Delaware argues its regulations in 7 DNREC 1125, sections 2.5.5 and
2.5.6 are more stringent than EPA's requirements in CAA 172 and 173 and
in the implementing regulations based on emission reductions,
environmental outcomes, and environmentally beneficial economic growth.
Delaware further asserted the actual application of its regulations for
offsets results in greater reductions of criteria pollution than would
be the case if EPA's rules were applied.
In agreement with Delaware's stringency assertions, New Jersey
stated that EPA has no published guidance on procedures for
demonstrating that state-specific provisions are at least as stringent
as federal provisions. New Jersey asserts that a demonstration that the
implementation of state provisions results in air quality benefit over
a federal provision that is designed to ensure new source emissions are
controlled, that more offsetting emissions reductions will be obtained,
and that there will be more progress towards achievement of the NAAQS
is a reasonable basis to conclude that the state provision is at least
as stringent as the federal provisions.
Response 7: EPA disagrees that Delaware has established regulations
in 7 DNREC 1125, sections 2.5.5 and 2.5.6 that are more stringent than
the federal requirements for offsets in CAA section 173 and 40 CFR
51.165 based on the alleged greater emission reductions potential
offered by Delaware's revisions. While EPA may not have specific
guidance on procedures for demonstrating that state-specific provisions
are at least as stringent as federal provisions, neither Delaware nor
New Jersey provided a compelling argument as to why the changes in
Delaware's emission offset provisions are more beneficial to air
quality and more stringent. In summary, Delaware provided an example
from applying the current federally required (SIP) offset requirements
of a theoretical source which could locate in Delaware, where lowest
achievable emission rate (LAER) applies, which would need to acquire
emission offsets from local emitters at a high cost because offsets are
scarce. Delaware posits that such a source might thus choose to locate
instead in an attainment area in another state, which would
presumptively not otherwise require LAER (and presumptively not require
similar emission reductions as Delaware does) to avoid buying offsets
and would then potentially contribute its emissions to Delaware's
nonattainment. Under that scenario, Delaware foresees higher emission
of ozone precursors to impact the State. Delaware claimed that under
its revised regulation (7 DNREC 1125, sections 2.5.5 and 2.5.6)) such a
source could still locate in Delaware, apply LAER resulting in lower
emissions, and could obtain emission offsets from West Virginia at a
much lower cost because emission offsets are more affordable per ton in
some upwind states and Delaware asserts that EPA's 1997 ozone NAAQS
modeling demonstrates that West Virginia emissions contribute to
Delaware's nonattainment. Delaware relies on this example to support
its argument that its revised regulation for offsets could produce
greater reduction in ozone precursors and correspondingly be more
stringent than federal requirements (because such a hypothetical source
would apply LAER as well as buying offsets if locating in Delaware with
this revised regulation versus locating outside Delaware and neither
installing LAER nor purchasing offsets if federal rules for offsets
were applied). While EPA acknowledges that Delaware's hypothetical
example could plausibly result in the emissions reductions Delaware
claims, Delaware has not provided any evidence, argument, or facts to
support the contention that its revised regulation 7 DNREC 1125, as
presently written, would consistently result in greater reductions
impacting Delaware. It is equally plausible such sources could locate
in Delaware and purchase offsets within Delaware providing greater
reductions reducing ozone within Delaware as Delaware sources do impact
the State most directly. See 80 FR 46271 (EPA's NODA). Delaware has not
provided any evidence that its expanded offset program would always
yield greater ozone reduction within the State versus reductions
achieved from applying the federal offset requirements. While emissions
reductions from offsets obtained from upwind sources pursuant to
Delaware's revised regulation 7 DNREC 1125 may be equivalent in raw
tons to offsets obtained within Delaware, Delaware provided no evidence
that emission reductions from an upwind state would provide greater
ozone reducing benefits within Delaware especially if offsets are
[[Page 72533]]
obtained from upwind states a great distance from Delaware such as
Wisconsin (a state included within the revised regulation).
EPA is required by CAA section 110(k) and (l) to evaluate proposed
SIP revisions for compliance with the CAA and its implementing
regulations. While states may adopt regulations that differ from
federal requirements as long as they are as stringent per CAA section
116, Delaware made no such demonstration that its regulations are as
stringent as EPA's requirements nor provide any greater ozone reducing
benefit. In addition, Delaware's regulations at 7 DNREC 1125, sections
2.5.5 and 2.5.6 do not meet and are not equivalent to federal
requirements for offsets. As discussed in detail in the NPR, Delaware's
submittal does not on its face comport with the requirements of CAA
sections 172(c)(5) and 173(c)(1) and the implementing regulations in 40
CFR 51.165 and part 51, appendix S. Delaware's regulations allow the
acquisition of offsets from areas that may not be of the same or higher
nonattainment status and may not be from areas found to contribute to a
violation of the 2008 ozone NAAQS in Delaware.
Comment 8: Delaware stated its regulations allow the State to
determine that offsets can be acquired in areas that EPA has previously
determined significantly contribute to Delaware's nonattainment in
modeling for CSAPR for the 1997 ozone standard, thus allowing
economically-beneficial growth and additional reductions to out-of-
state impacts on Delaware's air quality. Delaware asserted EPA's
regulations for offsets deter environmentally beneficial economic
growth in Delaware and result in more emissions impacts on Delaware.
Response 8: As stated previously in response to a prior comment,
EPA's NSR program was designed to allow for responsible economic growth
while at the same time allowing states to achieve and maintain the
NAAQS. As stated in the NPR, Delaware's October 15, 2013 SIP revision
seeks to expand the geographical area in which owners and operators of
new or modified major stationary sources may obtain emissions offsets,
regardless of the area's attainment classification for the ozone NAAQS
and without specific requirements that the area ``contribute to
violation'' of the ozone NAAQS in the area in which a new or modified
source is locating or located. The contribution data calculated to
support the promulgation of CSAPR evaluated whether emissions from an
entire state, and from all source categories, would contribute to
projected nonattainment in downwind states, but the air quality
modeling did not separately evaluate contribution from nonattainment
areas in upwind states to downwind air quality problems. Thus,
regardless of the levels of contribution calculated from other states
to air quality in Delaware, the State's regulations do not satisfy the
minimum statutory criteria for demonstrating that emissions offsets (1)
are obtained from another nonattainment area of equal or higher
classification than the area in which the source is located, and (2)
that emissions from such other nonattainment area contribute to a
violation of the NAAQS in the nonattainment area where the new or
modified source is locating or located. Moreover, contrary to
Delaware's assertions, its regulations allow acquisition of offsets
from more states than just states that Delaware contends contribute to
ozone nonattainment in Delaware for the 1997 or 2008 ozone NAAQS based
on modeling conducted to support CSAPR. Even if some of the states
Delaware identified as contributing to its nonattainment for prior
ozone NAAQS, Delaware's regulations allow acquisition of offsets from
those states without requiring that the areas in which offsets may be
attained in those states to have the same or higher attainment
classification. In addition, the CSAPR modeling Delaware cites in its
comments was conducted in 2011 and does not consider subsequent changes
in emissions or contributions from sources in upwind states. As the
modeling is not based on current emissions or contribution levels from
other states, it cannot be used to meet the requirement for showing
contribution to nonattainment in Delaware at the time a source would be
seeking offsets for a NSR permit required under 7 DNREC 1125. EPA is
disapproving this SIP revision for two reasons: (1) Delaware's
emissions offset provision language does not comport with the specific
requirements under CAA sections 172(c)(5) and 173(c)(1) or the federal
implementing regulations in 40 CFR 51.165 and appendix S; and, (2)
Delaware lacks legal authority to designate an area as nonattainment
under CAA section 107(c) and (d). As stated previously, the economic
impacts are not relevant to whether Delaware's regulations meet CAA
requirements, and, thus, EPA provides no further response to that
issue.
Comment 9: Delaware asserted that EPA incorrectly concluded that
Delaware's SIP revision submittal did not include any information
supporting Delaware's determination that emissions in the area
specified in the regulation ``contribute to a violation'' for the 2008
ozone NAAQS. CAA section 173(c)(1) requires that all emissions offsets
must come from an area which contributes to a violation of the NAAQS
where the source seeking a permit is located. Delaware pointed to EPA
modeling that supported the CSAPR for the 1997 ozone NAAQS of 80 ppb
and in its evaluation asserted that there are minimal differences
between the 1997 and 2008 ozone NAAQS modeling. Delaware claimed it
evaluated EPA's 1997 modeling based on a threshold of 0.75 ppb, which
is 1 percent of the 2008 ozone NAAQS. The State notes that the level of
the ozone NAAQS standards have no bearing on the actual location of
emissions and the movement of the air, concluding that the 1997
modeling is pertinent and reliable.
Response 9: EPA disagrees with Delaware's hybrid use of EPA's CSAPR
modeling conducted to evaluate interstate transport for the 1997 ozone
NAAQS to support its revised rule language in 7 DNREC 1125 sections
2.5.5 and 2.5.6. As discussed earlier, the CSAPR modeling for
evaluating interstate transport with respect to the 1997 standard does
not consider present-day, current emission levels or contributions from
sources throughout the country. Moreover, the CSAPR modeling was also
not completed for a source-specific situation where, among other
things, a source needs to show that the particular emission offsets it
is obtaining contribute to a violation of the NAAQS in the
nonattainment area where the major new or modified source is currently
seeking to locate. Thus, Delaware cannot rely on this older modeling
which used emissions data prior to 2011 to support a ``contribution''
argument for a source seeking to use offsets for a NSR permit in the
future. Finally, even if the CSAPR modeling data was a relevant metric
by which to evaluate contribution for purposes of obtaining offsets, as
noted above, the Delaware regulations do not constrain sources to only
acquiring offsets from those states identified as impacting Delaware in
the modeling analysis or otherwise comply with the statutory
requirement that such offsets be obtained from an area with the same or
higher attainment classification.
Accordingly, Delaware's reliance on EPA's CSAPR modeling is
insufficient to support approval of its offset regulations, as the
State does not take into account the complexities that a full modeling
analysis requires to make the demonstration required by the statute;
does not consider present day emissions
[[Page 72534]]
and contributions from states where a potential new source may seek
offsets; and, does not meet the CAA requirements for an owner or
operator of a source requiring emission offsets as discussed in the NPR
and previous response to comments.
Comment 10: Delaware believes EPA erroneously concluded that
Delaware is trying to exercise authorities reserved for EPA under CAA
section 107(c) and (d) by treating certain areas as ozone nonattainment
areas regardless of EPA's classification of those states for attainment
of the ozone NAAQS and is therefore disapproving the SIP revision
because it's not in accordance with provisions of the CAA. Delaware
asserted that EPA misinterpreted its actions because CAA section 107(c)
and (d) are provisions in which EPA designates an area as nonattainment
(in doing so imposing substantive nonattainment requirements on that
area) and Delaware's revisions to its offset regulation do not impose
any such planning requirements on any other state. According to
Delaware, its regulations only identify ``other areas as areas where
Delaware sources can obtain emissions offsets, and which is the area
that Delaware demonstrated is more stringent than the minimum area
defined in the underlying federal requirements.''
Response 10: As noted in the NPR, EPA disagrees with Delaware's
attempt to treat entire states as an area of equal or higher
nonattainment classification for the ozone NAAQS, regardless of their
designation by EPA under CAA section 107, in an effort to allow sources
to obtain emission offsets from those states. Delaware's SIP revision
submittal of 7 DNREC 1125 sections 2.5.5 and 2.5.6 does not meet the
requirements in CAA section 173(c), 40 CFR 51.165(a)(3)(ii)(F) and
appendix S, section IV.D.1, because the identified sections allow
emissions offsets to be used from areas not designated by EPA pursuant
to CAA section 107 as an area of equal or higher nonattainment
classification for any ozone NAAQS and do not address contribution
requirements in the CAA and its implementing regulations. In an attempt
to broaden where sources can obtain emissions offsets, Delaware
essentially created a large multi-state area in which sources locating
in Delaware can automatically obtain emission offsets, without fully
evaluating the impacts on air quality. This action circumvents the
basic requirements of CAA section 173(c), 40 CFR 51.165(a)(3)(ii)(F)
and appendix S, section IV.D.1. The use of emissions offsets under a
state's NSR permit program should be evaluated on a case-by-case basis
whereby the major new or modified source ensures that offsets obtained
from one source, in a nonattainment area of equal or higher
nonattainment classification, are actually contributing to a violation
of the NAAQS in the nonattainment area where the major new or modified
source is locating. Delaware's attempts to treat more states as
nonattainment areas equal to Delaware's attainment classifications
regardless of how EPA has designated these other states is not in
accordance with the requirements of the CAA and the federal
implementing regulations, as EPA stated previously. Delaware cannot
avoid this improper exercise of designation authority under CAA 107
merely by saying its regulation treating areas as nonattainment does
not impose SIP planning obligations on these other states. Thus, EPA
disagrees with Delaware's argument it did not usurp authority under CAA
107 because Delaware's regulation attempts to exercise authorities that
are reserved solely for EPA in CAA section 107 by treating certain
upwind areas as ozone ``nonattainment areas'' to meet the requirement
of ``equal or higher nonattainment classification'' for emission offset
purposes regardless of EPA's classification of those areas for
attainment of the ozone NAAQS.
Comment 11: Delaware asserted that the state areas specified in its
revised regulation (7 DNREC 1125) are the primary cause of its ozone
problem and there is no substantive difference between the areas
indicated by Delaware and the areas EPA has designated as marginal
nonattainment for ozone as those areas still contribute to Delaware's
ozone issues. As an example, Delaware stated that EPA designated Queen
Anne's County, Maryland, as ``attainment/unclassifiable'' rather than
``moderate nonattainment'' even though reductions in ozone precursors
in that area would assist Delaware with attaining the NAAQS, because
the area is directly upwind of Sussex County, Delaware. Delaware also
stated that the only purpose of emission offsets is to reduce pollution
that impacts the nonattainment area and that there is no practical
reason not to accept reductions in these areas that directly impact and
cause Delaware's nonattainment problem with ozone.
Response 11: EPA appreciates Delaware's interest in regulating
sources in other states in order to meet the ozone NAAQS, so long as it
is done in accordance with the CAA; however, this comment is not
relevant to EPA's current action disapproving Delaware's October 15,
2013 SIP revision. CAA section 173(c) specifies offset requirements for
owners and operators of new or modified major stationary sources.
Specifically, section 173(c)(1) requires that: ``the owner or operator
of a new or modified major source may comply with any offset
requirement in effect under this part for increased emissions of any
air pollutant only by obtaining emission reductions of such air
pollutant from the same source or other sources in the same
nonattainment area, except that the State may allow the owner or
operator of a source to obtain such emission reductions in another
nonattainment area if (A) the other area has an equal or higher
nonattainment classification than the area in which the source is
located and (B) emissions from such other area contribute to a
violation of the national ambient air quality standard in the
nonattainment area in which the source is located (emphasis added).''
The CAA clearly establishes two separate criteria to permit a
source to obtain offsets in ``another nonattainment area.'' Delaware's
example of Queen Anne's County, Maryland, is inconsistent with the CAA
as the County is not even ``another nonattainment area'', much less a
nonattainment area that ``has an equal or higher nonattainment
classification than the area in which the source is located.'' Delaware
and other states can allow owners and operators to obtain emissions
offsets from any other nonattainment area, so long as the applicable
CAA requirements are met. Delaware cannot authorize owners and
operators of a source in the State to obtain emission offsets from any
area where Delaware decides it would attain some emissions reduction
benefit as it is in direct conflict with the clear requirements in the
CAA.
Comment 12: Delaware questioned EPA's legal rationale that a
disapproval of Delaware's SIP submission would not trigger a federal
implementation plan (FIP) obligation. Delaware amended its Regulation
1125, effective September 11, 2013, by replacing Regulation 1125
section 2.5.5 and adding a sentence to section 2.5.6 to effectuate the
modification to the offset provision. As the prior regulation which EPA
had approved for the SIP is no longer in place, Delaware stated it did
not understand EPA's legal rational to not issue a FIP.
Response 12: As previously noted in the NPR, under CAA section
179(a)(2), final disapproval pursuant to CAA section 110(k) of a
submission that addresses a requirement of a part D plan (CAA sections
171-193), starts a
[[Page 72535]]
sanction clock. Under CAA section 110(c)(1)(A), EPA also has an
obligation to promulgate a FIP where EPA finds the SIP does not meet
CAA criteria under CAA section 110(k)(1). Delaware's SIP revision
addresses a part D Plan requirement for a NSR permitting program, but
Delaware presently has a fully-approved NSR permit program in the
approved Delaware SIP. See 77 FR 60053 (October 2, 2012). Even though
Delaware's underlying State regulation is now different, the approved
Delaware SIP contained in 40 CFR 52.420 still contains the previously-
approved NSR program and will continue to do so until EPA approves a
SIP revision either replacing the program or removing it without
replacement (neither of which has occurred). Thus, at this time, there
is no deficiency in Delaware's SIP with regards to NSR permitting, and
Delaware's approved SIP continues to meet CAA NSR criteria. Therefore,
as a result of this final action to disapprove Delaware's October 15,
2013 SIP revision, no sanctions under CAA section 179 will be
triggered, and EPA has no obligation to promulgate a FIP under CAA
section 110(c). As stated in the NPR, EPA expects Delaware to implement
the EPA-approved NSR permitting program contained in the SIP, including
the offsets requirements in the previously-approved version of
Regulation 1125, and to revise its State provisions at section 2.0 of
Regulation 1125 accordingly to address CAA 173(c)(1), 40 CFR 51.165,
and part 51, appendix S, section IV.D for offsets.\6\
---------------------------------------------------------------------------
\6\ EPA approved Regulation 1125 for the Delaware SIP on October
2, 2012 (77 FR 60053) including the emission offset requirements
that address requirements in CAA 173(c)(1), 40 CFR 51.165, and part
51, appendix S, section IV.D. The State effective date of this
version of Regulation 1125 was February 11, 2012, and it is this
version of Regulation 1125 that EPA expects Delaware to implement.
---------------------------------------------------------------------------
Comment 13: Multiple comments were made in support of Delaware's
proposed SIP revision, urging EPA to approve Delaware's SIP revision
submittal, noting that it would encourage upwind states to reduce their
emissions and help states attain and maintain the federal 75 ppb ozone
NAAQS.
Response 13: EPA appreciates the commenter's support for Delaware
and the interest in improving air quality by reducing emissions from
upwind states; however, all states are required to have regulations in
place that meet the specific requirements of the CAA and federal
implementing regulations, as noted in our responses to comments and in
the NPR. EPA is disapproving Delaware's October 15, 2013 SIP revision
submittal because it does not meet the requirements of the CAA and
federal implementing regulations. Those requirements will not be
restated here. See 80 FR 30015. While EPA appreciates Delaware's
interest in securing upwind emission reductions, such concerns are not
relevant to our review of Delaware's regulations regarding acquisition
of offsets.
Comment 14: New Jersey asserted that expanding the geographical
area for offsets is good for air quality as it encourages reductions in
upwind emissions. New Jersey further noted that federal requirements
for offsets encourage a transported pollution burden on downwind states
to get worse and that new or modified major sources in New Jersey and
Delaware are required to install controls that represent LAER
technology and seek offsets from limited areas while sources in upwind
states would not be held accountable for their pollution transported to
downwind states. New Jersey asserted that EPA should allow sources to
obtain offsets from upwind states that trigger nonattainment and the
offset requirements in downwind states based on if the upwind state
significantly contributes to the downwind nonattainment, giving New
Jersey and Delaware a broader geographic area from which to obtain
emissions offsets, while removing emissions offsets from being used by
sources located in upwind states, making more offsets available for
economic growth in New Jersey and Delaware.
Response 14: EPA appreciates New Jersey's comments and its interest
in securing upwind reductions in ozone precursors as well as reductions
in ozone precursors within New Jersey and Delaware. EPA has explained
in the NPR and in prior responses to comment why Delaware's regulations
for offsets do not meet federal NSR requirements in the CAA and its
implementing regulations. While upwind reductions and additional
availability of offsets within Delaware are important concerns, they
are not relevant criteria for whether Delaware's regulations address
CAA NSR requirements. Thus, EPA provides no further response to these
comments.
Comment 15: New Jersey commented that current air monitoring data
shows that New Jersey and Delaware are in nonattainment and/or have
maintenance issues with the 75 ppb ozone NAAQS and New Jersey also has
one site in the northern New Jersey multi-state nonattainment area that
cannot attain the 84 ppb ozone NAAQS; therefore, New Jersey states it
is imperative that downwind states be able to reduce the amount of
offsets available in upwind states.
Response 15: EPA appreciates New Jersey's concern with attaining
and maintaining old and new ozone NAAQS and has recently promulgated
the CSAPR Update Rule specifically to address interstate transport with
respect to the 2008 ozone NAAQS with tightened ozone-season
NOX budgets designed to achieve emission reductions in
upwind states. In response to New Jersey's concern with attaining and
maintaining the ozone standards since publication of the NPR on May 26,
2015, we note that the Philadelphia Area is meeting the 2008 ozone
NAAQS of 75 ppb with preliminary 2013-2015 AQM data showing a design
value of 75 ppb. Additionally, on May 4, 2016, EPA made a final
determination that the Seaford, DE marginal nonattainment area attained
the 2008 ozone NAAQS by the applicable attainment date of July 20, 2015
with a design value of 74 ppb. See 81 FR 26701. EPA is working with the
states to address transport of ozone pollution so downwind states can
attain and maintain the ozone NAAQS.
Comment 16: DSCC referenced EPA's recently promulgated CSAPR,
effective January 1, 2015, noting that Delaware is not considered an
upwind contributor to downwind states, and, thus, is not even subject
to CSAPR.
Response 16: EPA thanks DSCC for its comment with respect to CSAPR
applicability. While DSCC's characterization of CSAPR applicability in
Delaware may be accurate, this comment is not relevant to EPA's
disapproval of Delaware's October 15, 2013 SIP revision submittal
revising 7 DNREC 1125, sections 2.5.5 and 2.5.6. It is noted that while
emission sources in Delaware are not subject to the requirements of
CSAPR, the State of Delaware is expected to experience improved air
quality as a result of its full implementation.
Comment 17: DSCC commented that, in 2008, EPA designated portions
of Delaware as marginal nonattainment for ground-level ozone, which
triggers nonattainment provisions of the CAA. DSCC claims Delaware is
left with a requirement to attain, but no ability to regulate the out-
of-state sources that cause its nonattainment problems.
Response 17: EPA agrees with DSCC's comment that in 2008 EPA
designated portions of Delaware as marginal nonattainment for ozone,
specifically as noted in the NPR disapproving Delaware's October 15,
2013 SIP submittal revising 7 DNREC 1125, sections 2.5.5 and 2.5.6 and
again in
[[Page 72536]]
these responses to comment. While EPA appreciates DSCC's concerns, such
concerns are not relevant to our disapproval of Delaware's regulations
regarding acquisition of offsets. Transport of ozone precursors from
one state to another is being addressed by states and EPA under other
provisions of the CAA.
IV. Final Action
Pursuant to CAA section 110(k)(3), EPA is disapproving Delaware's
October 15, 2013 SIP revision consisting of revisions to DNREC's
regulations related to nonattainment NSR preconstruction permit program
requirements for emission offsets in the State of Delaware.
Specifically, Delaware's revised Regulation 1125 which Delaware
submitted as a SIP revision sought to expand the geographical area in
which owners and operators of new or modified major stationary sources
may obtain emissions offsets, regardless of the area's attainment
classification for the ozone NAAQS and without specific requirements
that the area ``contribute to violation'' of the ozone NAAQS in the
area in which a new or modified source is locating or located. EPA is
disapproving this SIP revision for two reasons: (1) Delaware's proposed
emissions offset provision language does not comport with the specific
requirements under CAA sections 172(c)(5) and 173(c)(1) or the federal
implementing regulations in 40 CFR 51.165 and appendix S; and, (2)
Delaware lacks legal authority to designate an area as nonattainment
under CAA section 107(c) and (d).
VI. Statutory and Executive Order Reviews
Additional information about these statutes and Executive Orders
can be found at http://www2.epa.gov/laws-regulations/laws-and-executive-orders.
A. Executive Order 12866: Regulatory Planning and Review and Executive
Order 13563: Improving Regulation and Regulatory Review
This action is not a significant regulatory action and was
therefore not submitted to the Office of Management and Budget (OMB)
for review.
B. Paperwork Reduction Act (PRA)
This action does not impose an information collection burden under
the PRA because this action does not impose additional requirements
beyond those imposed by state law.
C. Regulatory Flexibility Act (RFA)
I certify that this action will not have a significant economic
impact on a substantial number of small entities under the RFA. This
action will not impose any requirements on small entities beyond those
imposed by state law.
D. Unfunded Mandates Reform Act (UMRA)
This action does not contain any unfunded mandate as described in
UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect
small governments. This action does not impose additional requirements
beyond those imposed by state law. Accordingly, no additional costs to
state, local, or tribal governments, or to the private sector, will
result from this action.
E. Executive Order 13132: Federalism
This action does not have federalism implications. It will 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.
F. Executive Order 13175: Coordination With Indian Tribal Governments
This action does not have tribal implications, as specified in
Executive Order 13175, because the SIP EPA is disapproving would not
apply on any Indian reservation land or in any other area where the EPA
or an Indian tribe has demonstrated that a tribe has jurisdiction, and
will not impose substantial direct costs on tribal governments or
preempt tribal law. Thus, Executive Order 13175 does not apply to this
action.
G. Executive Order 13045: Protection of Children From Environmental
Health Risks and Safety Risks
The EPA interprets Executive Order 13045 as applying only to those
regulatory actions that concern environmental health or safety risks
that the EPA has reason to believe may disproportionately affect
children, per the definition of ``covered regulatory action'' in
section 2-202 of the Executive Order. This action is not subject to
Executive Order 13045 because it does not impose additional
requirements beyond those imposed by state law.
H. Executive Order 13211: Actions That Significantly Affect Energy
Supply, Distribution, or Use
This action is not subject to Executive Order 13211, because it is
not a significant regulatory action under Executive Order 12866.
I. National Technology Transfer and Advancement Act (NTTAA)
Section 12(d) of the NTTAA directs the EPA to use voluntary
consensus standards in its regulatory activities unless to do so would
be inconsistent with applicable law or otherwise impractical. The EPA
believes that this action is not subject to the requirements of section
12(d) of the NTTAA because application of those requirements would be
inconsistent with the CAA.
J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Population
The EPA lacks the discretionary authority to address environmental
justice in this rulemaking.
K. Congressional Review Act (CRA)
This action is subject to the CRA, and the EPA will submit a rule
report to each House of the Congress and to the Comptroller General of
the United States. This action is not a ``major rule'' as defined by 5
U.S.C. 804(2).
L. Petitions for Judicial Review
Under section 307(b)(1) of the CAA, petitions for judicial review
of this action must be filed in the United States Court of Appeals for
the appropriate circuit by December 19, 2016. Filing a petition for
reconsideration by the Administrator of this final rule does not affect
the finality of this action 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 pertaining to disapproval of the Air Quality
Management portion of Delaware's Administrative Code, which revises the
regulations related to nonattainment NSR preconstruction permit program
requirements for emission offsets 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, Nitrogen dioxide, Ozone, Volatile organic compounds.
Dated: September 30, 2016.
Shawn M. Garvin,
Regional Administrator, Region III.
40 CFR part 52 is amended as follows:
[[Page 72537]]
PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS
0
1. The authority citation for part 52 continues to read as follows:
Authority: 42 U.S.C. 7401 et seq.
Subpart I--Delaware
0
2. In Sec. 52.420, the table in paragraph (c) is amended under the
heading ``1125 Requirements for Preconstruction Review'' by revising
the entry for ``Section 2.0'' to read as follows:
Sec. 52.420 Identification of plan.
* * * * *
(c) * * *
EPA-Approved Regulations and Statutes in the Delaware SIP
----------------------------------------------------------------------------------------------------------------
State
State regulation (7 DNREC 1100) Title/subject effective EPA approval date Additional
date explanation
----------------------------------------------------------------------------------------------------------------
* * * * * * *
----------------------------------------------------------------------------------------------------------------
1125 Requirements for Preconstruction Review
----------------------------------------------------------------------------------------------------------------
* * * * * * *
Section 2.0...................... Emission Offset 2/11/12 10/2/12, 77 FR 60053 Added Section 2.2.5,
Provisions (EOP) 2.4.3.3 and 2.5.7.
including sections
1.0 through 3.16.4.
Sections 2.5.5 and 9/11/2013 10/20/2016 [Insert Disapproval. See 40
2.5.6. Federal Register CFR 52.433(a).
citation].
* * * * * * *
----------------------------------------------------------------------------------------------------------------
* * * * *
0
3. Add Sec. 52.433 to read as follows:
Sec. 52.433 Nonattainment new source review.
(a) Disapproval. EPA is disapproving Delaware's October 15, 2013
submittal of revisions to 7 DNREC 1125, sections 2.5.5 and 2.5.6
because it does not meet Clean Air Act (CAA) requirements which
establish the criteria under which the owner or operator of a new or
modified major stationary source must obtain the required emission
offsets for the nonattainment new source review (NSR) preconstruction
permitting program and because Delaware exercises authorities that are
reserved for EPA under section 107 of the CAA. Delaware's Federally-
approved nonattainment NSR preconstruction program in 7 DNREC 1125,
sections 1.0 through 3.16.4, effective in Delaware on February 11,
2012, was fully-approved by EPA on October 2, 2012 and continues to
apply.
(b) [Reserved]
[FR Doc. 2016-24657 Filed 10-19-16; 8:45 am]
BILLING CODE 6560-50-P