[Federal Register Volume 59, Number 205 (Tuesday, October 25, 1994)] [Unknown Section] [Page 0] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 94-26352] [[Page Unknown]] [Federal Register: October 25, 1994] ======================================================================= ----------------------------------------------------------------------- ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [OH65-1-6498a; FRL-5080-9] Approval and Promulgation of Implementation Plans; Ohio AGENCY: Environmental Protection Agency. ACTION: Direct final rule. ----------------------------------------------------------------------- SUMMARY: Ohio submitted its Rule 3745-35-07, entitled ``federally Enforceable Limitations on Potential to Emit,'' for Federal approval. The rule would establish a mechanism for creating federally enforceable limitations that would reduce sources' potential to emit such that sources could avoid major source permitting requirements. This rulemaking conditionally approves this rule as satisfying the requirements, set forth in the Federal Register of June 28, 1989, and authorizes Ohio to issue federally enforceable State operating permits addressing both criteria pollutants (regulated under section 110 of the Clean Air Act) and hazardous air pollutants (regulated under section 112). DATES: This final rule will be effective December 27, 1994 unless notice is received by November 25, 1994, that someone wishes to submit adverse or critical comments. If the effective date is delayed, timely notice will be published in the Federal Register. ADDRESSES: Written comments should be addressed to: William L. MacDowell, Chief, Regulation Development Section, Air Enforcement Branch (AE-17J), United States Environmental Protection Agency, 77 West Jackson Boulevard, Chicago, Illinois 60604. Copies of the SIP revision request and USEPA's analysis are available for public inspection during normal business hours at the following addresses: United States Environmental Protection Agency, Region 5, Air and Radiation Division, 77 West Jackson Boulevard (AE-17J), Chicago, Illinois 60604; and Air Docket (6102), United States Environmental Protection Agency, 401 M Street, SW., Washington, DC 20460. FOR FURTHER INFORMATION CONTACT: John Summerhays, Air Enforcement Branch, Regulation Development Section (AE-17J), United States Environmental Protection, Region 5, Chicago, Illinois 60604, (312) 886- 6067. SUPPLEMENTARY INFORMATION: I. Review of State Submittal For many years, Ohio has been issuing permits for major new sources and for major modifications of existing sources. Throughout this time, Ohio has also been issuing permits establishing limitations on the potential emissions from new sources so as to avoid major source permitting requirements. This latter type of permitting has been the subject of various guidance from the United States Environmental Protection Agency (USEPA), most notably the memorandum entitled ``Guidance on Limiting Potential to Emit in New Source Permitting'' dated June 13, 1989. The operating permit provisions in title V of the Clean Air Act Amendments of 1990 have created interest in mechanisms for limiting sources' potential to emit, thereby allowing the sources to avoid being defined as ``major'' with respect to title V operating permit programs. A key mechanism for such limitations is the use of federally enforceable State operating permits (FESOPs). USEPA issued guidance on FESOPs in the Federal Register of June 28, 1989 (54 FR 27274). On April 20, 1994, Ohio submitted its newly adopted Rule 3745-35-07 to provide for FESOPs in Ohio. This rule would supplement the pre-existing mechanisms for establishing federally enforceable limitations on potential to emit (i.e., State rules, administrative orders, and in some cases new source permits). This rulemaking evaluates whether Ohio has satisfied the requirements for this type of federally enforceable limitations on potential to emit. As specified in the Federal Register of June 28, 1989, the first requirement for approval of a FESOP program is that the State must have approved operating permit regulations. Rule 3745-35-07 supplements other rules in Ohio Chapter 3745-35 rules, collectively entitled ``Air Permits to Operate and Variances.'' These other rules were approved on June 10, 1982 (at 47 FR 25144), and today's rulemaking approves Rule 3745-35-07. The second requirement is that sources have a legal obligation to comply with permit terms, and that USEPA may deem as ``not federally enforceable'' those permits which it finds fail to satisfy applicable requirements. Rule 3745-35-02 requires sources to obtain permits to operate, authorizes Ohio to establish terms and conditions in these permits ``to ensure compliance with [applicable requirements],'' and authorizes the State to suspend or revoke permits if the source violates the terms or conditions. Thus, this rule imposes a legal obligation on sources to comply with permit terms. An associated issue is whether Ohio's rules authorize USEPA to deem selected permits ``not federally enforceable.'' Rule 3745-35-07 provides explicitly that Ohio may not issue a FESOP if USEPA objects during the public comment period. Language inadvertently included in the adopted rule could be interpreted not to allow USEPA to object to a permit's enforceability after permit issuance. However, this interpretation does not reflect State intent, and USEPA instead interprets Rule 3745-35-07 to deem permits not federally enforceable after as well as before issuance. Nevertheless, on June 16, 1994, Ohio submitted a commitment to revise its regulation to include the language it had intended to adopt, which would remove the potential for the above misinterpretation. This commitment serves to support a conditional approval of the rule. While it is Ohio's intent that USEPA be authorized to deem permits not federally enforceable after permit issuance, Ohio also requested that USEPA make these determinations during Ohio's public comment period (prior to permit issuance) whenever possible. Although USEPA is authorized to deem permit conditions not federally enforceable at any later date, USEPA will strive to determine Federal enforceability during Ohio's public comment period. The third requirement for FESOPs is that the program require all limits to be at least as stringent as other applicable federally enforceable provisions. Rule 3745-35-02(D) provides for terms and conditions in permits ``as are necessary to ensure compliance with applicable [air pollution requirements].'' These rules contain no provisions authorizing terms and conditions any less stringent than the applicable requirements. The fourth requirement is that the permit provisions must be permanent, quantifiable, and otherwise enforceable as a practical matter. Permit ``permanence'' does not mean never providing for a modification, reissuance, or revocation, for these elements are fundamental in all air permit programs. Permanence instead is considered in terms of provisions having continuing mandates, i.e. that USEPA has assurance that the provisions are in effect through the life of the permit and that any reissued permit will continue the provisions in effect. In this case, the limitations on potential to emit will generally be sought by sources so as to be redefined from ``major'' to ``minor'' for permitting purposes. USEPA is assured that sources that obtain such limitations will keep these limitations in effect, so as never to be a ``major'' source violating the requirement for a ``major'' source permit. The requirement for permit provisions to be quantifiable and practically enforceable must be met on a permit-by- permit basis. Ohio's rules do provide in general for the issuance of enforceable permits. Thus, Ohio's rules provide for legally enforceable permits that USEPA may evaluate for practical enforceability. The fifth requirement is that the permits be subject to public notice and review. Rule 3745-35-07 (B)(2) provides that permits intended to establish federally enforceable limitations on potential to emit may not be issued without first providing opportunity for public comment, ``with concurrent notice and opportunity for comment given to [USEPA].'' The USEPA technical support document discusses a possible misinterpretation of Rule 3754-35-07 relating to emissions trading. The rule provides that federally enforceable limitations on potential to emit may be established through permits to install, permits to operate (i.e. FESOPs), or State rules or administrative orders, and provides for sources to request provisions allowing emissions trading in any of these vehicles for emissions limitations. USEPA identified the potential argument that this rule authorizes sources to require the State to adopt rules to provide trading on a broad scale. However, upon reconsideration, USEPA finds this interpretation implausible, and concludes that neither Ohio's statute nor this rule would dictate that a source could require the State to adopt such rules. Ohio has requested that USEPA authorize federally enforceable limitations on potential to emit both pollutants regulated under section 110 of the Act (``criteria pollutants'') and pollutants regulated under section 112 (``hazardous air pollutants'' or ``HAPs''). As discussed above, the June 28, 1989 Federal Register notice provided five specific criteria for approval of State operating permit programs for the purpose of establishing federally enforceable limits on a source's potential to emit. This notice, because it was written prior to the 1990 amendments, addressed only SIP programs to control criteria pollutants. Federally enforceable limits on criteria pollutants (especially volatile organic compounds (VOCs) and particulate matter) may have the incidental effect of limiting certain HAPs listed pursuant to section 112(b). This situation would occur when a pollutant classified as a HAP is also classified as a criteria pollutant (e.g., benzene).1 As a legal matter, no additional program approval by USEPA is required in order for these criteria pollutant limits to be recognized for this purpose. --------------------------------------------------------------------------- \1\USEPA intends to issue guidance addressing the technical aspects of how these criteria pollutant limits may be recognized for purposes of limiting a source's potential to emit of HAPs to below section 112 major source levels. --------------------------------------------------------------------------- USEPA has determined that the five approval criteria for approving FESOP programs into the SIP, as specified in the June 28, 1989, Federal Register notice, are also appropriate for evaluating and approving the programs under section 112(l). The June 28, 1989, notice does not address HAPs because it was written prior to the 1990 amendments to section 112 and not because it establishes requirements unique to criteria pollutants. Hence, the five criteria discussed above are applicable to FESOP approvals under section 112(l) as well as under section 110. In addition to meeting the criteria in the June 28, 1989, notice, a FESOP program for HAPs must meet the statutory criteria for approval under section 112(l)(5). This section allows USEPA to approve a program only if it: (1) Contains adequate authority to assure compliance with any section 112 standards or requirements; (2) provides for adequate resources; (3) provides for an expeditious schedule for assuring compliance with section 112 requirements; and (4) is otherwise likely to satisfy the objectives of the Act. USEPA plans to codify the approval criteria for programs limiting potential to emit HAPs in subpart E of part 63, the regulations promulgated to implement section 112(l) of the Act. USEPA currently anticipates that these criteria, as they apply to FESOP programs, will mirror those set forth in the June 28, 1989, notice, with the addition that the State's authority must extend to HAPs instead of, or in addition to, VOCs and particulate matter. USEPA currently anticipates that FESOP programs that are approved pursuant to section 112(l) prior to the subpart E revisions will have had to meet these criteria, and hence, will not be subject to any further approval action. USEPA believes it has authority under section 112(l) to approve programs to limit potential to emit HAPs directly under section 112(l) prior to this revision to subpart E. Section 112(l)(5) requires USEPA to disapprove programs that are inconsistent with guidance required to be issued under section 112(l)(2). This might be read to suggest that the ``guidance'' referred to in section 112(l)(2) was intended to be a binding rule. Even under this interpretation, USEPA does not believe that section 112(l) requires this rulemaking to be comprehensive. That is, it need not address all instances of approval under section 112(l). USEPA has already issued regulations under section 112(l) that would satisfy this requirement. Given the severe timing problems posed by impending deadlines under section 112 and title V, USEPA believes it is reasonable to read section 112(l) to allow for approval of programs to limit potential to emit prior to issuance of a rule specifically addressing this issue. Ohio's satisfaction of the criteria published in the Federal Register of June 28, 1989, has been discussed above. In addition, Ohio's FESOP program meets the statutory criteria for approval under section 112(l)(5). USEPA believes that Ohio has adequate authority to assure compliance with section 112 requirements since the third criteria of the June 28, 1989, notice is met, that is, since the program does not provide for waiving any section 112 requirement. Nonmajor sources would still be required to meet applicable section 112 requirements. Regarding adequate resources, Ohio has included in its request for approval under section 112(l) a commitment to provide adequate resources to implement and enforce the program, which will be obtained from fees collected under title V. USEPA believes that this mechanism will be sufficient to provide for adequate resources to implement this program, and will monitor the State's implementation of the program to assure that adequate resources continue to be available. Ohio's FESOP program also meets the requirement for an expeditious schedule for assuring compliance. A source seeking a voluntary limit on potential to emit is probably doing so to avoid a Federal requirement applicable on a particular date. Nothing in this program would allow a source to avoid or delay compliance with the Federal requirement if it fails to obtain the appropriate federally enforceable limit by the relevant deadline. Finally, Ohio's FESOP program is consistent with the objectives of the section 112 program since its purpose is to enable sources to obtain federally enforceable limits on potential to emit to avoid major source classification under section 112. USEPA believes this purpose is consistent with the overall intent of section 112. Accordingly, USEPA finds that Ohio's program satisfies applicable criteria for establishing federally enforceable limitations on potential to emit both criteria and hazardous air pollutants. II. Rulemaking Action USEPA finds that the criteria for Ohio to be able to issue FESOPs are essentially met, and is today approving Rule 3745-35-07. This approval is conditioned on fulfillment of Ohio's commitment to revise its rule to clarify USEPA's authority to deem permits unenforceable after issuance. This conditional approval authorizes Ohio to establish federally enforceable limitations on potential to emit both criteria pollutants and hazardous air pollutants. USEPA evaluated whether to defer Ohio's authority to issue FESOPs pending adoption and USEPA approval of Ohio's intended rule clarification. Although Ohio's rule inadvertently included language that could be read to imply otherwise, USEPA believes it has adequate assurances of its authority to make post-issuance determinations that State-issued permits are not federally enforceable. First, USEPA interprets Ohio's rule to provide this authority now. Second, this authority will be further clarified in the near future. USEPA believes that Ohio will revise its rule shortly to clarify this authority for individual permits, possibly even before any FESOP permits are issued; but if Ohio fails to make the expected rule revisions, today's conditional approval will revert to a disapproval, and all ``FESOP'' permit conditions will no longer be federally enforceable. If Ohio fulfills its commitment, this conditional approval would be converted to full approval and the FESOP permitting authority continued. If Ohio fails to satisfy its commitment within one year of today, the conditional approval will convert to a disapproval and Ohio's authority to issue federally enforceable limitations on potential to emit will be rescinded. In either alternative, USEPA's authority to deem permits not federally enforceable both before and after permit issuance will be further clarified. Consequently, this rulemaking authorizes Ohio to issue FESOPs commencing immediately upon the effective date of this rule, which will be December 27, 1994, unless in the meantime USEPA defers or rescinds the effective date at a commenter's request. This action is being taken without prior proposal because the changes are believed to be noncontroversial and USEPA anticipates no significant comments on them. This action will be effective December 27, 1994, unless notice is received by November 25, 1994, that someone wishes to submit adverse or critical comments. If the effective date is delayed, timely notice will be published in the Federal Register. Nothing in this action should be construed as permitting, allowing or establishing a precedent for any future request for revision to any SIP. USEPA shall consider each request for revision to the SIP in light of specific technical, economic, and environmental factors and in relation to relevant statutory and regulatory requirements. This action has been classified as a Table 2 action by the Regional Administrator under the procedures published in the Federal Register on January 19, 1989 (54 FR 2214-2225), as revised by an October 4, 1993 memorandum from Michael H. Shapiro, Acting Assistant Administrator for Air and Radiation. The OMB has exempted this regulatory action from Executive Order 12866 review. Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq., USEPA must prepare a regulatory flexibility analysis assessing the impact of any proposed or final rule on small entities. (5 U.S.C. 603 and 604.) Alternatively, USEPA may certify that the rule will not have a significant impact on a substantial number of small entities. Small entities include small businesses, small not-for-profit enterprises, and government entities with jurisdiction over populations of less than 50,000. SIP approvals under section 110 and subchapter I, part D of the CAA do not create any new requirements, but simply approve requirements that the State is already imposing. Therefore, because the Federal SIP- approval does not impose any new requirements, I certify that it does not have a significant impact on any small entities affected. Moreover, due to the nature of the Federal-State relationship under the CAA, preparation of a regulatory flexibility analysis would constitute Federal inquiry into the economic reasonableness of State action. The CAA forbids USEPA to base its actions concerning SIPs on such grounds. Union Electric Co. v. USEPA, 427 U.S. 246, 256-66 (S.Ct. 1976); 42 U.S.C. 7410(a)(2). Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by December 27, 1994. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).) List of Subjects in 40 CFR Part 52 Air pollution control, Carbon monoxide, Hydrocarbons, Incorporation by reference, Intergovernmental relations, Lead, Nitrogen dioxide, Ozone, Particulate matter, Sulfur oxides, Volatile organic compounds. Note: Incorporation by reference of the State Implementation Plan for the State of Ohio was approved by the Director of the Federal Register on July 1, 1982. Dated: September 19, 1994. Valdas V. Adamkus, Regional Administrator. Title 40 of the Code of Federal Regulations, chapter I, part 52, is amended as follows: PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS 1. The authority citation for part 52 continues to read as follows: Authority: 42 U.S.C. 7401-7671q. Subpart KK--Ohio 2. Section 52.1888 is added to subpart KK to read as follows: Sec. 52.1888 Operating permits. Emission limitations and related provisions which are established in Ohio operating permits as federally enforceable conditions in accordance with Rule 3745-35-07 shall be enforceable by USEPA. USEPA reserves the right to deem permit conditions not federally enforceable. Such a determination will be made according to appropriate procedures, and be based upon the permit, permit approval procedures or permit requirements which do not conform with the operating permit program requirements or the requirements of USEPA's underlying regulations. 3. Section 52.1919 is amended by adding paragraph (a)(2) to read as follows: Sec. 52.1919 Identification of plan-conditional approval. (a) * * * (2) On April 20, 1994, Ohio submitted Rule 3745-35-07, entitled ``federally Enforceable Limitations on Potential to Emit,'' and requested authority to issue such limitations as conditions in State operating permits. On June 16, 1994, Ohio submitted a commitment to revise Rule 3745-35-07 to clarify that the rule provides for USEPA objection to permits after issuance. The revisions are approved provided Ohio fulfills this commitment by October 25, 1995. (i) Incorporation by reference. (A) Rule 3745-35-07, adopted April 4, 1994, effective April 20, 1994. * * * * * [FR Doc. 94-26352 Filed 10-24-94; 8:45 am] BILLING CODE 6560-50-F