[Federal Register Volume 61, Number 241 (Friday, December 13, 1996)]
[Proposed Rules]
[Pages 65504-65508]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-31705]


40 CFR Part 52

[TX76-1-7324; FRL-5664-7]

Approval and Promulgation of Extension of Temporary Section 
182(f) and Section 182(b) Exemption to the Nitrogen Oxides (NOx) 
Control Requirements for the Houston/Galveston and Beaumont/Port Arthur 
Ozone Nonattainment Areas; Texas

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.


SUMMARY: The EPA proposes to extend the temporary exemption from the 
NOx control requirements of sections 182(f) and 182(b) of the 
Clean Air Act (the Act) for the Houston/Galveston (HGA) and Beaumont/
Port Arthur (BPA) ozone nonattainment areas. The State of Texas 
submitted a petition to EPA requesting the extension to permit 
additional time to complete Urban Airshed Modeling (UAM). A temporary 
NOx exemption was granted by EPA because preliminary photochemical 
grid modeling shows that reductions in NOx would be detrimental to 
attaining the National Ambient Air Quality Standards for ozone in these 
areas. Approval of the petition will extend the temporary exemption 
from the NOx requirements for NOx Reasonably Available 
Control Technology (RACT), New Source Review (NSR), Vehicle Inspection/

[[Page 65505]]

 Maintenance (I/M), and conformity by one year to December 31, 1997, 
and the implementation date for NOx RACT by two years to May 31, 

DATES: Comments on this proposed action must be received in writing on 
or before January 13, 1997.

ADDRESSES: Written comments on this action should be addressed to Mr. 
Thomas H. Diggs, Chief, Air Planning Section, at the EPA Regional 
Office listed below. Copies of the documents relative to this action 
are available for public inspection during normal business hours at the 
following locations. Interested persons wanting to examine these 
documents should make an appointment with the appropriate office at 
least 24 hours before the visiting day.

Environmental Protection Agency, Region 6, Air Planning Section, 1445 
Ross Ave, Suite 1200, Mailcode 6PD-L, Dallas, TX 75202
Texas Natural Resource Conservation Commission, 12100 Park 35 Circle, 
PO Box 13087, Austin, Texas 78711-3087

Planning Section (6PD-L), Multimedia Planning and Permitting Division, 
Environmental Protection Agency, Region 6, 1445 Ross Avenue, Suite 
1200, Dallas, Texas 75202. The telephone number is 214-665-7237.


I. Background

    NOx are precursors to ground level (tropospheric) ozone, or 
urban ``smog.'' When released into the atmosphere, NOx will react 
with volatile organic compounds (VOC) in the presence of sunlight to 
form ozone. Tropospheric ozone is an important contributor to the 
nation's urban air pollution problem.
    The Act made significant changes to the air quality planning 
requirements for areas that do not meet the ozone standard. Subparts 1 
and 2 of part D, title I of the Act contain the air quality planning 
requirements for ozone nonattainment areas. Title I includes new 
requirements to control NOx emissions in certain ozone 
nonattainment areas and ozone transport regions. Section 182(f) 
requires States to apply the same control requirements to major 
stationary sources of NOx as are applied to major stationary 
sources of VOC. Section 182(c) NOx requirements are RACT and 
nonattainment NSR. In addition, there are new NOx requirements 
under the conformity provisions of section 176(c). A 182(f) exemption 
would also relieve certain NOx requirements of the vehicle I/M 
rule. This approval would temporarily extend the current exemption for 
the areas from the section 182(f) NOx RACT, NSR, I/M, and general 
conformity requirements (see the NOx Supplement to the General 
Preamble 57 FR 55620), and pursuant to section 182(b)(1) from the 
NOx ``build/no build'' and ``less-than-1990 emissions'' tests of 
the transportation conformity rules (60 FR 57179).
    The HGA area was designated nonattainment for ozone and classified 
as severe pursuant to sections 107(d)(4) and 181(a) of the Act, and has 
an attainment deadline of 2007. The HGA nonattainment area includes the 
cities of Houston and Galveston, and consists of the following eight 
counties: Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, 
Montgomery, and Waller. The BPA area was initially classified as a 
serious nonattainment area, but EPA corrected the classification to 
moderate on June 3, 1996 (61 FR 14496), and BPA now has an attainment 
deadline of 1996. The BPA nonattainment area includes the cities of 
Beaumont and Port Arthur, and consists of the following three counties: 
Hardin, Jefferson, and Orange. See 56 FR 56694 (November 6, 1991, 
codified for Texas at title 40 of the Code of Federal Regulations (CFR) 
in Sec. 81.344).
    On August 17, 1994, the Texas Natural Resource Conservation 
Commission (TNRCC) submitted to EPA a petition pursuant to section 
182(f) which requested that the HGA and BPA nonattainment areas be 
temporarily exempted by EPA from the NOx control requirements of 
section 182(f) of the Act. The State based its petition on the use of a 
UAM demonstration showing, pursuant to EPA guidelines, that NOx 
reductions would not contribute to attainment in either area because 
the decrease in ozone concentrations resulting from VOC reductions 
alone is equal to or greater than the decrease obtained from NOx 
reductions or a combination of VOC and NOx reductions.
    The petition for the temporary exemption was approved by EPA and 
published at 60 FR 19519 (April 19, 1995). The approval was granted on 
a temporary basis because TNRCC had planned to complete additional UAM 
modeling that would be a basis for re-evaluating the contributions of 
NOx reductions to attainment between November of 1995 and May of 
1996 using the results of an intensive 1993 field study, the Coastal 
Oxidant Assessment for Southeast Texas (COAST). The data collected 
through the COAST study consist of hourly point source emissions, 
gridded typical summer day on-road mobile source emissions, hourly air 
quality data, and detailed meteorological data for specific ozone 
exceedance episodes in the HGA/BPA domain. Because it is intended to be 
the most comprehensive data set available, it should result in greater 
accuracy in the modeling and therefore in the attainment control 
strategy. Since the modeling was expected to be completed by May of 
1996, TNRCC requested only a temporary NOx exemption. The EPA 
granted the exemption until December of 1996 and established that, if 
warranted, NOx RACT compliance should be as expeditious as 
practicable, but no later than May 31, 1997. The exemption applied to 
NOx RACT, NSR, I/M, and general conformity. The exemption also 
applied to transportation conformity since, at that time, the 
transportation conformity rule cited section 182(f) as the appropriate 
authority for granting such relief. The transportation conformity rule 
was later amended to reference section 182(b)(1) for areas subject to 

II. Applicable EPA Guidance

    The Act specifies in section 182(f) that if one of the conditions 
listed below is met, the new NOx requirements would not apply:
    1. In any area, the net air quality benefits are greater without 
NOx reductions from the sources concerned;
    2. In a nontransport region, additional NOx reductions would 
not contribute to ozone attainment in the nonattainment area; or
    3. In a transport region, additional NOx reductions would not 
produce net ozone benefits in the transport region.
    In addition, section 182(f)(2) states that the application of the 
new NOx requirements may be limited to the extent that any portion 
of those reductions are demonstrated to result in ``excess reductions'' 
of NOx. The previously-described NOx provisions of the 
conformity rules would also not apply in certain areas that are granted 
a section 182(f)(3) or 182(b)(1) exemption (60 FR 57179). In addition, 
certain NOx provisions of the I/M rule would not apply in an area 
that is granted a section 182(f) exemption (57 FR 52989).
    The EPA's Guideline for Determining the Applicability of Nitrogen 
Oxides Requirements under Section 182(f) (December 1993), and 2 
revisionary memoranda signed by John S. Seitz, Director of the EPA 
Office of Air Quality Planning and Standards, dated May 27, 1994, and 
February 8, 1995, describe how the EPA will interpret the NOx 
exemption provisions of section 182(f). As described more fully in the 

[[Page 65506]]

memoranda, petitions submitted under section 182(f)(3) are not required 
to be submitted as State Implementation Plan (SIP) revisions. 
Consequently, the State is not required under the Act to hold a public 
hearing in order to petition for an area-wide NOx exemption 
determination. Similarly, it is not necessary to have the Governor 
submit the petition.
    The application of section 182(f) NOx waivers to certain 
NOx requirements of the transportation conformity rule is no 
longer appropriate. The EPA has revised the transportation conformity 
rule to ensure consistency with section 176(c) (60 FR 57179). This rule 
revision makes it clear that areas that are subject to section 
182(b)(1) (moderate and above) must submit transportation conformity 
NOx exemption requests as revisions to the SIP. Because HGA is 
classified as severe and BPA is classified as moderate, the revision 
addressing 182(b)(1) must be submitted as a revision to the SIP. The 
state adopted the proposal through public notice, hearing, and comment, 
and submitted it as a SIP revision with the petition.

III. State Submittal

    On March 6, 1996, the State of Texas submitted a petition to EPA 
which requests that the HGA and BPA nonattainment areas be granted an 
extension to the temporary exemption from NOx control requirements 
of sections 182(f) and 182(b) of the Act. The State's petition was 
transmitted by a letter from George W. Bush, Governor, State of Texas, 
to Jane Saginaw, Regional Administrator of EPA Region 6. The petition 
was accompanied by the records of public hearing on the petition to 
satisfy the requirements of section 182(b). The petition requests an 
extension of one year, from December 31, 1996, to December 31, 1997, 
for the exemption and an extension of the NOx compliance date from 
May 31, 1997, to May 31, 1999. The petition was subjected to public 
notice on September 5, 1995, and hearing on October 2, 1995. Since the 
petition for extension went through the State's public participation 
procedures prior to submittal, EPA considers it to be submitted as a 
revision to the SIP and, thus meets the requirements of section 182(b).
    The State based its petition on needing additional time to complete 
UAM modeling using data from the COAST study. The preliminary modeling 
showed that NOx reductions would not contribute to attainment in 
either area because domain-wide predicted maximum ozone concentrations 
are lowest when only VOC reductions are modeled. The schedule submitted 
in the State's original section 182(f) petition was determined based on 
completion of the UAM COAST modeling for attainment demonstration 
purposes by May 31, 1996. The additional year extension would allow for 
UAM using COAST data to accommodate recent improvements in the modeling 
process. These improvements will allow the development of better 
substantiated control programs and minimize the possibility that 
earlier modeling could result in unnecessary or counterproductive 
control programs, particularly if NOx controls are detrimental. 
The petition also includes a description of the improvements in data 
quantity and quality which will result from the additional time to 
conduct UAM.
    Some of the advantages of taking additional time to conduct the 
modeling are: (1) The use of the UAM, version V, which is an improved 
model over the UAM, version IV, previously used, particularly in the 
reduced use of national defaults; (2) the development of more detailed 
emissions inventory data; (3) the use of additional monitored data; and 
(4) the use of more refined meteorological data. The current modeling 
effort is estimated by the State to be an order of magnitude increase 
over that for the preliminary modeling, with an attendant increase in 
the quality-assurance effort required. Because of the large economic 
impact of the future ozone control strategy on the Texas Gulf Coast 
Region, it is essential that the modeling be based on the best 
available science and the most complete, quality assured data possible.
    Also submitted with the petition was a revision to previously-
adopted NOX RACT rules (30 TAC 117) which would extend the 
compliance dates from May 31, 1997, to May 31, 1999. The State first 
submitted the NOX RACT rules to EPA on December 6, 1993.
    A revision to the Texas (Nonattainment) New Source Review rule (30 
TAC section 116.150), adopted on October 11, 1995, temporarily extends 
the suspension of the NOX NSR requirements in HGA and BPA through 
December 31, 1997. This rule revision was submitted to EPA on November 
1, 1995, and was not resubmitted with the petition.

IV. Analysis of State Submittal

    The petition requests an extension of the exemption previously 
approved by EPA which was based on preliminary UAM modeling indicating 
that VOC controls would be more effective than NOX controls. Since 
the technical basis for the original extension and this extension is 
the same (i.e., preliminary modeling demonstrated that there would be 
more ozone reduction with VOC only controls through 1999), EPA is 
proposing to approve the extension. Please refer to the original 
extension notice (60 FR 19515) and the accompanying technical support 
document for details of the technical basis for the exemption.
    The current request also seeks to extend the NOX RACT 
compliance implementation date for 2 years, until May 31, 1999. This is 
based on the fact that the schedule previously proposed in August 1994, 
for completing the modeling has been displaced by as much as 15 months, 
until March 1997, to allow time for analysis of the COAST data before 
input to the model. Texas has indicated that if this modeling shows 
NOX reductions are beneficial in controlling ozone, specific 
modeling sensitivity analyses, to be completed by March 1997, would be 
performed which simulate various reductions required to attain the 
ozone standard. As further indicated by the State, the additional time 
needed for documenting model results, holding public hearings, and 
taking action by TNRCC adds 4 to 6 months to the process before 
industry will have the information needed to proceed with rule 
implementation. Since industry has to budget for control equipment and 
set implementation dates to coincide with equipment scheduled outages, 
which usually have annual or longer time frames, a two-year extension 
beyond the May 1997 compliance date in the original submittal is 
necessary. This two-year extension is also consistent with the two-year 
lead time originally requested by Texas (59 FR 64641).
    In summary, approval of the petition would permit the State to 
improve the UAM. Moreover, the demonstration that was based on the 
original modeling showed that NOX controls through 1999 would not 
be beneficial, and thus, would also support the one-year extension to 
December 31, 1997. Also, the requested compliance date extension is 
consistent with the original lead time considered reasonable for 
implementation. Therefore, EPA believes that the extension requests 
contained in the petition are reasonable.

V. Proposed Rulemaking Action

    In today's action, EPA proposes to approve the petition submitted 
by the State of Texas requesting an extension of the temporary NOX 
exemption for the HGA and BPA ozone nonattainment areas. The extension, 
if granted, will expire on December 31, 1997, without further notice 
from EPA. The extension

[[Page 65507]]

applies to NOX RACT, NSR, I/M, general and transportation 
conformity requirements.
    The State had previously adopted and submitted to EPA complete 
NOX RACT, NSR, I/M, and conformity rules. Along with the exemption 
extension submittal, NOX RACT rules providing for extending the 
current implementation date, were resubmitted. During the extension of 
the temporary exemption period, EPA will not act upon the State's 
NOX RACT rules. The EPA plans to act upon the State's NOX, 
NSR, I/M, and general and transportation conformity provisions in 
separate rulemaking actions because those provisions are contained in 
broader rules that also control VOC emissions.
    Upon the expiration of the extension to the temporary exemption on 
December 31, 1997, the State is required to either; (1) have received 
an additional extension to the temporary NOX exemption or a 
permanent exemption from EPA prior to that time, or (2) begin 
implementing the State's NOX RACT, NSR, I/M, general and 
transportation conformity requirements, with NOX RACT compliance 
required as expeditiously as practicable but no later than May 31, 
1999. The EPA will begin rulemaking on the NOX RACT SIP upon the 
expiration of the extension to the temporary exemption if the State has 
not received an additional temporary extension or a permanent exemption 
by that time.
    Since the original temporary exemption and this temporary exemption 
is based on preliminary modeling, and additional time is being granted 
to allow for conducting modeling with improved data from the COAST 
study, any future petition for an extension of the temporary exemption 
or contingent exemption must be accompanied by UAM modeling based on 
the COAST data, as stated in the petition. Preliminary modeling cannot 
be used as a basis for any further extensions or a contingent 
exemption. It is technically insufficient to support a second extension 
or a contingent exemption. In addition, a further two-year extension of 
the NOX RACT compliance date based on the preliminary modeling 
would not be possible since it would extend the date beyond 1999, the 
last year included in the preliminary modeling.
    Other specific requirements that would reapply upon expiration are: 
(1) Any NSR permits that had not been deemed complete prior to January 
1, 1998, must comply with the NOX NSR requirements, consistent 
with the policy set forth in the EPA's NSR Supplemental Guidance memo 
dated September 3, 1992, from John Seitz, Director, EPA's Office of Air 
Quality Planning and Standards; (2) any conformity determination (for 
either a new or revised transportation plan and Transportation 
Improvement Program) made after January 1, 1998 must comply with the 
NOX conformity requirements; and (3) any I/M vehicle inspection 
made after January 1, 1998, must comply with the I/M NOX 
    The EPA requests comments on all aspects of this proposal. 
Therefore, as indicated at the beginning of this action, EPA will 
consider any comments received by January 13, 1997.
    Nothing in this action should be construed as permitting or 
allowing or establishing a precedent for any future request for 
revision to any SIP. Each request for revision to the SIP shall be 
considered separately in light of specific technical, economic, and 
environmental factors and in relation to relevant statutory and 
regulatory requirements.

VI Administrative Requirements

A. Executive Order (E.O.) 12866

    This action has been classified as a Table 1 action for signature 
by the Administrator under the procedures published in the Federal 
Register on January 19, 1989 (54 FR 2214-2225), as revised by a July 
10, 1995, memorandum from Mary Nichols, Assistant Administrator for Air 
and Radiation. The Office of Management and Budget has exempted this 
regulatory action from E.O. 12866 review.

B. Regulatory Flexibility Act

    Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq., EPA 
must prepare a regulatory flexibility analysis assessing the impact of 
any proposed or final rule on small entities. See 5 U.S.C. 603 and 604. 
Alternatively, EPA 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 
    The SIP approvals under section 110 and subchapter I, part D of the 
Act 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 Act, 
preparation of a flexibility analysis would constitute Federal inquiry 
into the economic reasonableness of State action. The Act forbids EPA 
to base its actions concerning SIPs on such grounds. See Union Electric 
Co. v. U.S. EPA, 427 U.S. 246, 255-66 (1976); 42 U.S.C. 7410(a)(2).

C. Unfunded Mandates

    Under section 202 of the Unfunded Mandates Reform Act of 1995 
(Unfunded Mandates Act), signed into law on March 22, 1995, EPA must 
prepare a budgetary impact statement to accompany any proposed or final 
rule that includes a Federal mandate that may result in estimated costs 
to State, local, or tribal governments in the aggregate; or to private 
sector, of $100 million or more. Under section 205, EPA must select the 
most cost-effective and least burdensome alternative that achieves the 
objectives of the rule and is consistent with statutory requirements. 
Section 203 requires EPA to establish a plan for informing and advising 
any small governments that may be significantly or uniquely impacted by 
the rule.
    The EPA's proposed action relieves requirements otherwise imposed 
under the Act and, hence, does not impose any federal intergovernmental 
mandates, as defined in section 101 of the Unfunded Mandates Act. This 
action will also not impose a mandate that may result in estimated 
costs of $100 million or more to either state, local, or tribal 
governments, in the aggregate, or the private sector. Since this action 
will not significantly impact any small governments, EPA is not 
required to establish a plan pursuant to section 203.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Hydrocarbons, 
Intergovernmental Relations, Nitrogen dioxide, Ozone, Volatile Organic 

    Dated: December 6, 1996.
Carol M. Browner,

    40 CFR part 52 is proposed to be amended as follows:


    1. The authority citation for part 52 continues to read as follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart SS--Texas

    2. Section 52.2308 is amended by adding paragraph (e) to read as 

Sec. 52.2308  Area-wide nitrogen oxides (NOX) exemptions.

* * * * *

[[Page 65508]]

    (e) The TNRCC submitted to EPA on March 6, 1996, a petition 
requesting that the Houston/Galveston and Beaumont/Port Arthur ozone 
nonattainment areas be granted an extension to a previously-granted 
temporary exemption from the NOX control requirements of sections 
182(f) and 182(b) of the Clean Air Act. The temporary exemption was 
granted on April 19, 1995. The current petition is based on the need 
for more time to complete UAM to confirm the need for, and the extent 
of, NOX controls required. On December 6, 1996, EPA approved the 
State's request for an extension to the temporary exemption. The 
temporary extension automatically expires on December 31, 1997, without 
further notice from EPA. Upon expiration of the extension, the 
requirements pertaining to NOX RACT, NSR, I/M, general and 
transportation conformity will become applicable, except that the 
NOX RACT compliance date shall be implemented as expeditiously as 
practicable, but no later than May 31, 1999, unless the State has 
received a contingent NOX exemption from the EPA prior to that 

[FR Doc. 96-31705 Filed 12-12-96; 8:45 am]