Proposed Rule To Implement the Fine Particle National Ambient Air Quality Standards

[Federal Register: November 1, 2005 (Volume 70, Number 210)]
[Proposed Rules]
[Page 65983-66067]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01no05-26]
[[Page 65984]]

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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 51 and 52
[FRL-7969-1]
RIN 2060-AK74

Proposed Rule To Implement the Fine Particle National Ambient Air
Quality Standards

AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rulemaking.

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SUMMARY: This proposed rule and preamble describe the requirements that
States and Tribes must meet in their implementation plans for
attainment of the fine particle (PM_2.5) national ambient air
quality standards (NAAQS). The health effects associated with exposure
to PM_2.5 are serious, including premature death, aggravation
of heart and lung disease, and asthma attacks. Those particularly
sensitive to PM_2.5 exposure include older adults, people
with heart and lung disease, and children.
The EPA designated areas not attaining the PM_2.5
standards on December 17, 2004. The PM designations notice was
published in the Federal Register on January 5, 2005 (70 FR 944) and
became effective on April 5, 2005. On this same date, the Administrator
signed a supplemental notice making certain changes to the designations
based on 2002-2004 air quality data. The supplemental notice was
published in the Federal Register on April 14, 2005 (70 FR 19844). A
total of 39 areas with a population of 90 million were designated as
nonattainment.
Within 3 years, each State having a nonattainment area must submit
to EPA an attainment demonstration (and associated air quality
modeling), adopted State regulations to reduce emissions of
PM_2.5 and its precursors, and other supporting information
demonstrating that the area will attain the standards as expeditiously
as practicable. In order to address PM_2.5 problems, EPA
believes that States should implement a balanced program to reduce
emissions from regional sources [such as power plants emitting sulfur
dioxide (SO₂) and nitrogen oxides (NO_X)] and
local sources (such as cars, trucks, industrial sources, and various
other combustion or burning-related activities). States should take
into account national, State, and local emission reduction programs
that are already in place and projected to provide future air quality
benefits.

DATES: The comment period on this proposal ends on January 3, 2006.
Comments must be postmarked by the last day of the comment period and
sent directly to the Docket Office listed in ADDRESSES (in duplicate
form if possible).
One public hearing will be held prior to the end of the comment
period. The dates, times and locations will be announced separately.
Please refer to SUPPLEMENTARY INFORMATION for additional information on
the comment period and public hearings.

ADDRESSES: Comments may be submitted by mail to: Air Docket,
Environmental Protection Agency, Mail code: 6102T, 1200 Pennsylvania
Ave., NW., Washington, DC 20460, Attention Docket ID No. OAR-2003-0062.
Comments may also be submitted electronically, by facsimile, or
through hand delivery/courier. Follow the detailed instructions
provided under SUPPLEMENTARY INFORMATION.
Documents relevant to this action are available for public
inspection at the EPA Docket Center, located at 1301 Constitution
Avenue, NW., Room B102, Washington, DC between 8:30 a.m. and 4:30 p.m.,
Monday through Friday, excluding legal holidays. A reasonable fee may
be charged for copying.

FOR FURTHER INFORMATION CONTACT: Regarding PM_2.5
implementation issues, contact Mr. Richard Damberg, U.S. Environmental
Protection Agency, Office of Air Quality Planning and Standards, Mail
Code C504-02, Research Triangle Park, NC 27711, phone number (919) 541-
5592 or by e-mail at: damberg.rich@epa.gov. Regarding NSR issues,
contact Mr. Raj Rao, U.S. Environmental Protection Agency, Office of
Air Quality Planning and Standards, Mail Code C339-03, Research
Triangle Park, NC 27711, phone number (919) 541-5344 or by e-mail at:
rao.raj@epa.gov.

SUPPLEMENTARY INFORMATION: Section I of the preamble provides an
overview of the PM_2.5 standards, health effects associated
with PM_2.5, legal history, and EPA's overall strategy for
reducing PM_2.5 pollution. Section II provides an overview of
the pollutants and complex atmospheric chemistry that lead to
PM_2.5 formation, the sources of emissions, and a discussion
of policy options for addressing PM precursors in the PM_2.5
implemention program and the new source review (NSR) program.
Section III of the preamble describes the various core elements of
the PM_2.5 implementation program, based primarily on the
subpart 1 requirements of section 172 of the Clean Air Act (CAA).
Important topics discussed in section III include attainment dates,
attainment demonstrations and modeling, local emission reduction
measures [reasonably available control technology (RACT) and reasonably
available control measures (RACM)], and reasonable further progress
(RFP). Section III also includes a subsection describing options for
revising the NSR program to specifically address PM_2.5. A
number of other topics are presented for informational purposes in
section III, including innovative program guidance, emission inventory
requirements, addressing PM_2.5 under the transportation
conformity program, stationary source test methods for
PM_2.5, and approaches for reducing emissions through
improved monitoring techniques.
Section IV addresses the various statutory requirements and
executive orders applicable to this rule. The final section contains
proposed regulatory text for implementation of the PM_2.5
NAAQS, in the form of a proposed subpart Y amending 40 CFR part 51.

Public Hearing

The EPA will hold one public hearing on today's proposal during the
comment period. The details of the public hearing, including the time,
date, and location will be provided in a future Federal Register notice
and announced on EPA's PM_2.5 implementation Web site at
http://www.epa.gov/ttn/naaqs/pm/pm25_index.html.
The public hearing will provide interested parties the opportunity
to present data, views, or arguments concerning the proposed rule. The
EPA may ask clarifying questions during the oral presentations, but
will not respond to the presentations or comments at that time. Written
statements and supporting information submitted during the comment
period will be considered with the same weight as any oral comments and
supporting information presented at a public hearing.

How Can I Get Copies of This Document and Other Related Information?

Docket. The EPA has established an official public docket for this
action under Docket ID No. OAR-2003-0062. The official public docket
consists of the documents specifically referenced in this action, any
public comments received, and other information related to this action.
Although a part of the official docket, the public docket does not
include Confidential Business Information (CBI) or other information
whose disclosure is restricted by statute. The official public docket
is the collection of materials that is available

[[Page 65985]]

for public viewing at the Air Docket in the EPA Docket Center, (EPA/DC)
EPA West, Room B102, 1301 Constitution Ave., NW., Washington, DC. The
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p.m., Monday through Friday, excluding legal holidays. The telephone
number for the Public Reading Room is (202) 566-1744, and the telephone
number for the Air Docket is (202) 566-1742. A reasonable fee may be
charged for copying.
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An electronic version of the public docket is available through
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Although not all docket materials may be available electronically, you
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For public commenters, it is important to note that EPA's policy is
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For additional information about EPA's electronic public docket,
visit EPA Dockets online or see 67 FR 38102; May 31, 2002.

How and To Whom Do I Submit Comments?

You may submit comments electronically, by mail, by facsimile, or
through hand delivery/courier. To ensure proper receipt by EPA,
identify the appropriate docket identification number, OAR-2003-0062,
in the subject line on the first page of your comment. Please ensure
that your comments are submitted within the specified comment period.
Comments received after the close of the comment period will be marked
``late.'' The EPA is not required to consider these late comments. If
you wish to submit CBI or information that is otherwise protected by
statute, please follow the instructions below under, ``How Should I
submit CBI to the Agency?'' Do not use EPA Dockets or e-mail to submit
CBI or information protected by statute.
Electronically. If you submit an electronic comment as prescribed
below, EPA recommends that you include your name, mailing address, and
an e-mail address or other contact information in the body of your
comment. Also include this contact information on the outside of any
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cannot read your comment due to technical difficulties or needs further
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EPA will not edit your comment, and any identifying or contact
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of the comment that is placed in the official public docket, and made
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EPA Dockets. Your use of EPA's electronic public docket to submit
comments to EPA electronically is EPA's preferred method for receiving
comments. Go directly to EPA Dockets at http://www.epa.gov/edocket, and
follow the online instructions for submitting comments. To access EPA's
electronic public docket from the EPA Internet Home Page, select
``Information Sources,'' ``Dockets,'' and ``EPA Dockets.'' Once in the
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The system is an ``anonymous access'' system, which means EPA will not
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Disk or CD ROM. You may submit comments on a disk or CD ROM that
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By Mail. Send your comments to Air Docket (in duplicate if
possible), Environmental Protection Agency, Mail code: 6102T, 1200
Pennsylvania Ave., NW., Washington, DC, 20460, Attention Docket ID No.
OAR-2003-0062.
By Hand Delivery or Courier. Deliver your comments to: Air Docket,
Environmental Protection Agency, 1301 Constitution Avenue, NW., Room
B108, Mail code: 6102T, Washington, DC 20004, Attention Docket ID No.
OAR-2003-0062. Such deliveries are only accepted during the Docket's
normal hours of operation as identified above under Docket.

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By Facsimile. Fax your comments to (202) 566-1741, Attention Docket
ID. No. OAR-2003-0062.

How Should I Submit CBI to the Agency?

Do not submit information that you consider to be CBI
electronically through EPA's electronic public docket or by e-mail.
Send or deliver information identified as CBI only to the following
address: Roberto Morales, U.S. EPA, Office of Air Quality Planning and
Standards, Mail Code C404-02, Research Triangle Park, NC 27711,
telephone (919) 541-0880, e-mail at morales.roberto@epa.gov, Attention
Docket ID No. OAR-2003-0062. You may claim information that you submit
to EPA as CBI by marking any part or all of that information as CBI (if
you submit CBI on disk or CD ROM, mark the outside of the disk or CD
ROM as CBI and then identify electronically within the disk or CD ROM
the specific information that is CBI). Information so marked will not
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In addition to one complete version of the comment that includes
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not marked as CBI will be included in the public docket and EPA's
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the person identified in the FOR FURTHER INFORMATION CONTACT section.

What Should I consider as I Prepare My Comments for EPA?

You may find the following suggestions helpful for preparing your
comments:
1. Explain your views as clearly as possible.
2. Describe any assumptions that you used.
3. Provide any technical information and/or data you used that
support your views.
4. If you estimate potential burden or costs, explain how you
arrived at your estimate.
5. Provide specific examples to illustrate your concerns.
6. Offer alternatives.
7. Make sure to submit your comments by the comment period deadline
identified.
8. To ensure proper receipt by EPA, identify the appropriate docket
identification number in the subject line on the first page of your
response. It would also be helpful if you provided the name, date, and
Federal Register citation related to your comments.

Timing

In a number of places, this document refers to time periods (e.g.,
x number of years) after designation or after the designation date. By
this, we mean the number of years after the effective date of
PM_2.5 designations (April 5, 2005).

Table of Contents

I. What Is the PM_2.5 Problem and EPA's Strategy for Addressing It?
A. What are the fine particle standards and the health effects
they address?
B. What is the legal history of the PM_2.5 standards?
C. What was the process for designating PM_2.5
attainment and nonattainment areas?
D. What is the geographic extent of the PM_2.5 problem?
E. What is EPA's overall strategy for reducing PM_2.5 pollution?
1. The State implementation plan (SIP) system
2. National rules
II. Fine Particles: Overview of Atmospheric Chemistry, Sources of
Emissions, and Ambient Monitoring Data
A. Introduction
B. Concentration, composition and sources of fine PM
C. The role of ammonia in sulfate, nitrate & secondary organic
aerosol formation
D. Regional patterns of carbon, sulfate and nitrate, and
indications of transport
E. Policy for addressing PM_2.5 precursors
1. Legal Authority to Regulate Precursors
2. Proposed policy options for addressing PM_2.5
precursors in nonattainment plan programs.
III. What Are the Specific Elements of EPA's PM_2.5
Implementation Program?
A. What classification options are under consideration for
PM_2.5 nonattainment areas?
1. Background
2. Proposed options for PM_2.5 classifications
a. No classification system based on design values
b. Two-tiered classification system
c. Rural transport classification
B. When are PM_2.5 attainment demonstrations and SIPs
due, and what requirements must they address?
C. What are the attainment dates for PM_2.5 nonattainment areas?
1. Background
2. Consideration of existing measures in proposing an attainment date
3. Areas may qualify for two 1-year attainment date extensions
4. Areas may submit a SIP demonstrating that it is impracticable
to attain by the 5-year attainment date
5. Areas that fail to attain or do not qualify for an attainment
date extension
6. Determining attainment for the PM_2.5 standards
7. How do attainment dates apply to Indian country?
D. What are the incentives for achieving early reductions of
PM_2.5 and its precursors?
E. How should the States and EPA balance the need to address
long-range transport of fine particle pollution with the need for
local emissions reductions when implementing the PM_2.5 standards?
1. Clean Air Act provisions for achieving local and regional
emissions reductions
2. Regional emission reduction strategies
3. The role of local and State emission reduction efforts in
reducing health risks and achieving the PM_2.5 standards
4. Addressing regionally transported emissions in local area
attainment demonstrations
F. How will EPA address requirements for modeling and attainment
demonstration SIPs when implementing the 24-hour and annual average
PM_2.5 standards?
1. Introduction
2. Areas that need to conduct modeling
3. Modeling guidance
4. Modeled attainment test
5. Multi-pollutant assessments and one-atmosphere modeling
6. Which future year(s) should be modeled?
7. Mid-course review
G. What requirements for RFP apply under the PM_2.5
implementation program?
1. Background
2. What is the baseline year from which States will track
emission reductions for meeting RFP requirements?
3. How does EPA propose to address the pollutants associated
with PM_2.5 in these RFP requirements?
4. What areas must submit an RFP plan?
a. Areas projected to attain within 5 years of designation
b. Areas projected to attain more than 5 years from the date of
designation must submit a 2008 RFP plan
i. For purposes of the 2008 RFP plan, how should a nonattainment
area define its emission reduction milestones?
ii. For what pollutants must States reduce emissions?
iii. How should States assess the equivalence of alternative
combinations of pollutant emissions reductions?
iv. How would RFP be evaluated for a sample 2008 RFP plan?
v. What potential RFP requirements could apply for ``serious''
areas under the two-tiered classification option?
5. Other RFP issues
a. How should States account for regional control strategies in
evaluating RFP?
b. What geographic area should States address in RFP plans?
c. How should RFP be addressed in multi-state nonattainment areas?
d. How should States compile emission inventories for RFP plans?

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e. What RFP requirements apply in Tribal areas?
f. What must States submit to show whether they have met RFP
milestones?
H. What requirements for contingency measures should apply under
the PM2.5 implementation program?
I. What requirements should apply for RACM and RACT for PM2.5
nonattainment areas?
1. General background
2. Background for RACT
3. Emissions inventory analysis supporting RACT options
4. Which PM_2.5 precursors must be addressed by States
in establishing RACT requirements?
5. What are the proposed options for implementing the RACT requirement?
6. What factors should States consider in determining whether an
available control technology is technically feasible?
7. What factors should States consider in determining whether an
available control technology is economically feasible?
8. How should condensable emissions be treated in RACT determinations?
9. What are the required dates for submission and implementation
of RACT measures?
10. Under the PM_2.5 implementation program, does a
State need to conduct a RACT determination for an applicable source
that already has a RACT determination in effect?
11. What policies affect compliance with RACT for electric
generating units?
12. Is EPA developing PM_2.5 controlled technique guidelines?
13. Background for RACM
14. What is the proposed approach for implementing RACM?
15. What factors should States consider in determining whether
control measures are reasonably available?
16. What specific source categories and control measures should
a State evaluate when determining RACM for a nonattainment area?
17. What criteria should be met to ensure effective regulations
or permits to implement RACT and RACM?
J. What guidance is available to States and Tribes for
implementing innovative programs to address the PM_2.5 problem?
K. What aspects of transportation conformity and the
PM_2.5 standard are addressed in this proposal?
1. What is transportation conformity?
2. Why does transportation conformity apply to PM_2.5?
3. Why is EPA discussing transportation conformity in this proposal?
4. What revisions have been made to the transportation
conformity rule to address the PM_2.5 standard?
5. Does EPA plan to revoke the PM₁₀ standard?
6. Will some areas be demonstrating conformity for both
PM₁₀ and PM_2.5 at the same time?
7. When does transportation conformity apply to PM_2.5
nonattainment areas?
8. How does the 1-year grace period apply in metropolitan areas?
9. How does the 1-year grace period apply in ``donut'' areas?
10. How does the 1-year grace period apply in isolated rural areas?
L. What requirements for general conformity should apply to the
PM_2.5 standards?
1. What is the purpose of the general conformity regulations?
2. How is the general conformity program currently structured?
3. Who runs the general conformity program?
4. How does an agency demonstrate conformity?
5. General conformity regulation revisions for the PM_2.5 standards
a. What de minimis emission levels will be set for pollutants
that contribute to PM_2.5 concentrations?
b. What impact will the implementation of the PM_2.5
standards have on a State's general conformity SIP?
c. Are there any other impacts on the SIPs related to general
conformity based on implementation of the PM_2.5 standards?
6. Is there a 1-year grace period which applies to general
conformity determinations for the purposes of the PM_2.5 standards?
M. How will the NSR program address PM_2.5 and its precursors?
1. Background
2. What are the principal elements of the proposed major NSR
program for PM_2.5?
3. Should precursors to the formation of ambient concentrations
of PM_2.5 be subject to regulation under NSR?
a. Background
b. Should NSR cover precursor emissions in addition to direct
emissions of PM_2.5?
4. What is a major stationary source (major source) under the
major NSR program for PM_2.5?
a. Background
b. Proposed option
c. What is the effect of this proposed option?
5. What should the significant emissions rate be for direct
emissions of PM_2.5?
a. Background
b. Proposed options
6. What should be the significant emissions rates for PM_2.5 precursors?
a. Background
b. Proposed options
7. What is the role of condensible emissions in determining
major NSR applicability?
8. What are the requirements of the Prevention of Significant
Deterioration (PSD) program for attainment areas?
9. How should BACT be implemented?
10. What is EPA's plan for preventing significant deterioration
of air quality for PM_2.5?
11. How will the air quality analysis required under section
165(a)(3) be implemented?
12. How should the PSD pre-construction monitoring requirement
be implemented for PM_2.5?
a. Background
b. Options for PSD preconstruction monitoring
13. Nonattainment New Source Review (NA NSR) requirements
14. What are the offset requirements for NA NSR?
a. What is the required offset ratio for PM_2.5 direct emissions?
b. Which precursors shall be subject to the offset requirement?
c. What is the required offset ratio for PM_2.5 precursors?
d. Should EPA allow interprecursor trading to comply with the
offset requirement?
15. What are the implementation and transition issues associated
with this rule?
16. Implementation of PSD provisions during the SIP Development period
a. Background
b. Proposed options
c. Rationale
17. Implementation of the nonattainment NSR provisions during
the SIP development period
a. Background
b. Implementation of NSR under the Emissions Offset
Interpretative Ruling (40 CFR part 51, Appendix S) with revisions.
c. Legal basis for requiring States to issue nonattainment NSR
permits during the SIP-development period
18. NSR applicability to precursors during the interim period
19. Are there any Tribal concerns?
20. What must a State or local agency do about minor sources of PM_2.5?
21. Supplemental program option: rural transport areas
a. What flexible implementation options should be available for
Transport areas?
b. Which nonattainment areas would be eligible for the transport
program?
c. What would be the basic requirements of a transport
nonattainment NSR program?
N. How will EPA ensure that the 8-hour ozone standard will be
implemented in a way which allows an optimal mix of controls for
PM_2.5, ozone, and regional haze?
1. Could an area's PM_2.5 strategy affect its 8-hour
ozone and/or regional haze strategy?
2. What guidance has EPA provided regarding ozone,
PM_2.5 and regional haze interaction?
3. What is EPA proposing?
O. What emission inventory requirements should apply under the
PM_2.5 NAAQS?
P. What stationary source test methods should States use under
the PM_2.5 implementation program?
1. Will the existing stationary source test methods for
particulate matter (PM) be acceptable for use in PM_2.5 SIPs?
2. Why are the existing stationary source test methods for PM
deficient?
3. If the stationary source test methods are changed, will the
existing emission limitations incorporated in SIPs need to be changed?
4. The existing PM test methods and the emission limits based
upon these methods have been acceptable since 1971, why do they need
to be changed for PM_2.5?
5. What methods are available for measuring PM size and
condensable PM from stationary sources?
6. Why is a new dilution-based test method being developed by EPA?

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7. What types of sources should use the new dilution-based test method?
8. What are the main features of the new test method?
9. What is the schedule for finalization of the new test method?
10. How will use of this new method affect an areas emissions
inventory and the emissions inventory for individual sources?
11. How will use of this new method affect a State's
implementation program more broadly?
Q. How can potentially inadequate source monitoring in certain
SIP rules be improved?
1. How does improved PM_2.5 monitoring relate to title
V monitoring?
2. Are instrumental techniques more appropriate than visual
emissions (VE) techniques for monitoring compliance with PM
emissions limits, for some situations and applications?
3. What constitutes improved monitoring?
R. What guidance should be provided that is specific to Tribes?
S. Are there any additional requirements related to enforcement
and compliance?
T. What requirements should apply to emergency episodes?
U. What ambient monitoring requirements will apply under the
PM_2.5 NAAQS?
IV. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review
B. Paperwork Reduction Act
C. Regulatory Flexibility Act
D. Unfunded Mandates Reform Act
E. Executive Order 13132: Federalism
F. Executive Order 13175: Consultation and Coordination with
Indian Tribal Governments
G. Executive Order 13045: Protection of Children from
Environmental Health and Safety Risks
H. Executive Order 13211: Actions That Significantly Affect
Energy Supply, Distribution, or Use
I. National Technology Transfer Advancement Act
J. Executive Order 12898: Federal Actions to Address
Environmental Justice in Minority Populations and Low-Income Populations

I. What Is the PM_2.5 Problem and EPA's Strategy for
Addressing It?

A. What Are the Fine Particle Standards and the Health Effects They
Address?

Fine particles in the atmosphere are made up of a complex mixture
of components. Common constituents include: Sulfate (SO₄);
nitrate (NO₃); ammonium; elemental carbon; a great variety
of organic compounds; and inorganic material (including metals, dust,
sea salt, and other trace elements) generally referred to as
``crustal'' material, although it may contain material from other
sources. Airborne particulate matter (PM) with a nominal aerodynamic
diameter of 2.5 micrometers or less (a micrometer is one-millionth of a
meter, and 2.5 micrometers is less than one-seventh the average width
of a human hair) are considered to be ``fine particles,'' and are also
known as PM_2.5. ``Primary'' particles are emitted directly
into the air as a solid or liquid particle (e.g., elemental carbon from
diesel engines or fire activities, or condensable organic particles
from gasoline engines). ``Secondary'' particles (e.g., sulfate and
nitrate) form in the atmosphere as a result of various chemical
reactions. (See section II for a more detailed technical discussion on
PM_2.5, its precursors, formation processes, and emissions
sources.)
The health effects associated with exposure to PM_2.5 are
significant. Epidemiological studies have shown a significant
correlation between elevated PM_2.5 levels and premature
mortality. Other important effects associated with PM_2.5
exposure include aggravation of respiratory and cardiovascular disease
(as indicated by increased hospital admissions, emergency room visits,
absences from school or work, and restricted activity days), lung
disease, decreased lung function, asthma attacks, and certain
cardiovascular problems. Individuals particularly sensitive to
PM_2.5 exposure include older adults, people with heart and
lung disease, and children. On July 18, 1997, we revised the NAAQS for
particulate matter to add new standards for fine particles, using
PM_2.5 as the indicator. We established health-based
(primary) annual and 24-hour standards for PM_2.5 (62 FR
38652).\1\ The annual standard is a level of 15 micrograms per cubic
meter, based on the 3-year average of annual mean PM_2.5
concentrations. The 24-hour standard is a level of 65 micrograms per
cubic meter, based on the 3-year average of the 98th percentile of 24-
hour concentrations. The EPA established the standards based on
significant evidence and numerous health studies demonstrating that
serious health effects are associated with exposures to elevated levels
of PM_2.5. Estimates show that attainment of the
PM_2.5 standards would be likely to result in tens of
thousands fewer premature deaths each year, would be likely to prevent
tens of thousands of hospital admissions each year, and would be likely
to prevent hundreds of thousands of doctor visits, absences from work
and school, and respiratory illnesses in children annually. The
research on which EPA based the 1997 standards did not identify a
specific threshold concentration below which individuals have no PM-
related health effects, meaning that emissions reductions resulting in
reduced concentrations below the level of the standards may continue to
provide additional health benefits to the local population.\2\ At the
time we established the primary standards in 1997, we also established
welfare-based (secondary) standards identical to the primary standards.
The secondary standards are designed to protect against major
environmental effects of PM_2.5 such as visibility
impairment, soiling, and materials damage. The EPA also established the
regional haze regulations in 1999 for the improvement of visual air
quality in national parks and wilderness areas across the country.
Because regional haze is caused primarily by light scattering and light
absorption by fine particles in the atmosphere, EPA is encouraging the
States to integrate their efforts to attain the PM_2.5
standards with those efforts to establish reasonable progress goals and
associated emission reduction strategies for the purposes of improving
air quality in our treasured natural areas under the regional haze program.
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\1\ In the 1997 PM NAAQS revision, EPA also revised the standard
for particles with a nominal aerodynamic diameter of 10 micrometers
or less (also known as PM₁₀). The original
PM₁₀ standard was established in 1987. The revised
PM₁₀ standard was later vacated by the court, and thus
the 1987 PM₁₀ standard remains in effect. Today's
proposed implementation rule and guidance does not address PM₁₀.
\2\ Environmental Protection Agency. (1996) Air Quality Criteria
for Particulate Matter. Research Triangle Park, NC: National Center
for Environmental Assessment-RTP Office; report no. EPA/600/P-95/
001aF-cF. 3v.
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The scientific assessment that resulted in the establishment of the
PM_2.5 standards included a scientific peer review and public
comment process. We developed scientific background documents based on
the review of hundreds of peer-reviewed scientific studies. The Clean
Air Scientific Advisory Committee, a congressionally mandated group of
independent scientific and technical experts, provided extensive review
of these assessments, and found that EPA's review of the science
provided an adequate basis for the EPA Administrator to make a
decision. More detailed information on health effects of
PM_2.5 can be found on EPA's Web site at: http://www.epa.gov/
air/urbanair/pm/index.html. Additional information on EPA's scientific
assessment documents supporting the 1997 standards is available at:
http://www.epa.gov/ttn/oarpg (see headings for ``Staff Papers'' and
``Criteria Documents'').

[[Page 65989]]

B. What Is the Legal History of the PM_2.5 Standards?

After EPA promulgated the PM_2.5 and 8-hour ozone
standards in July 1997, several industry organizations and State
governments challenged EPA's action in the U.S. Court of Appeals for
the District of Columbia Circuit (the DC Circuit). This action
initiated a long legal process, ending with a March 2002 decision by
the DC Circuit upholding the standards and the authority on which they
were established.
On May 14, 1999, the three-judge panel of the DC Circuit held in a
split decision that the CAA, as applied by EPA in setting the 1997
standards for PM and ozone, was unconstitutional as an improper
delegation of legislative authority to EPA. The ruling did not question
the science or decision-making process used to establish the standards.
The Court remanded the PM_2.5 standards to EPA but did not
vacate them. In June 1999, the Department of Justice (DOJ) and EPA
petitioned the Court for a rehearing en banc with the entire DC Circuit
Court. On October 29, 1999, the Court denied the petition for rehearing.
The DOJ and EPA then filed a petition for certiorari with the
United States Supreme Court in December 1999 to appeal the decision of
the DC Circuit, and the Supreme Court issued its decision to hear the
appeal in November 2000. The Supreme Court issued its decision on the
merits of the appeal on February 27, 2001.\3\ In that decision, the
Supreme Court held that EPA's approach to setting the NAAQS in
accordance with the CAA did not constitute an unconstitutional
delegation of authority. The Supreme Court unanimously affirmed the
constitutionality of the CAA provision that authorizes the Agency to
set national air quality standards, stating that this provision ``fits
comfortably within the scope of discretion permitted by our
precedent.'' The Supreme Court also affirmed that the CAA requires EPA
to set standards at levels necessary to protect the public health and
welfare, without considering the economic costs of implementing the
standards. The Supreme Court remanded several other issues back to the
DC Circuit, including the issue of whether EPA acted arbitrarily and
capriciously in establishing the specific levels of the standards.
---------------------------------------------------------------------------

\3\ Whitman v. American Trucking Assoc., 121 S.Ct. 903, 911-914
(2001) (Whitman).
---------------------------------------------------------------------------

The DC Circuit heard arguments in this remanded case in December
2001, and issued its decision on March 26, 2002. The DC Circuit found
that the Agency had ``engaged in reasoned decision making,'' rejecting
the claim that the Agency had acted arbitrarily and capriciously in
setting the levels of the standards. This last decision by the DC
Circuit gave EPA a clear path to move forward with implementation of
the PM_2.5 standards.
The implementation rule we are proposing today provides specific
requirements for State, local, and Tribal \4\ air pollution control
agencies to address as they prepare implementation plans required by
the CAA to attain and maintain the PM_2.5 standards.\5\ Each
State with an area that is not attaining the PM_2.5 NAAQS
will have to develop, as part of its State implementation plan (SIP),
emission limits for appropriate sources and other requirements to
attain the NAAQS within the timeframes set forth in the CAA.\6\ Tribes
with jurisdiction over Indian country that is not attaining the
PM_2.5 NAAQS could voluntarily submit a Tribal implementation
plan (TIP) but are not required to do so. However, in cases where
Tribes elect not to submit a TIP, EPA, working with the Tribes, has the
responsibility for developing an implementation plan in those areas.
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\4\ The 1998 Tribal Authority Rule (TAR) (40 CFR part 49), which
implements section 301(d) of the CAA, provides for Tribes to be
treated in the same manner as a State in implementing sections of
the CAA. It gives Tribes the option of developing tribal
implementation plans (TIPs), but unlike States, Tribes are not
required to develop implementation plans. See section III.Q. for
further discussion of Tribal issues.
\5\ When the term ``State'' is used hereafter, it will refer to
States, local air agencies, and Tribal governments electing to be
treated as States for the purposes of implementing the CAA.
\6\ The CAA requires EPA to set ambient air quality standards
and requires States to submit plans designed to attain those standards.
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C. What Was the Process for Designating PM2.5 Attainment and
Nonattainment Areas?

We issued guidance in April 2003 \7\ and February 2004 \8\ on the
process for designating attainment and nonattainment areas for
PM_2.5 and on factors for States and Tribes to consider in
defining boundaries for nonattainment areas. The guidance states that
EPA believes the presumptive boundaries for nonattainment areas should
be equal to the 1999 Office of Management and Budget (OMB) definitions
of the combined metropolitan statistical area, where applicable, or the
metropolitan statistical area. We also recognized the fact that in June
2003, OMB released updated definitions of combined statistical areas
and core-based statistical areas. We communicated to the States and
Tribes that in evaluating potential nonattainment area boundaries, they
should include any additional counties that were added in 2003 to the
1999 metro area definitions, plus adjacent counties, in their review of
data associated with the nine technical factors discussed in EPA guidance.
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\7\ See ``Designations for the Fine Particle National Ambient
Air Quality Standard,'' memorandum from Jeffrey R. Holmstead,
Assistant Administrator, to EPA Regional Administrators, April 1,
2003. Available at: http://www.epa.gov/pmdesignations/guidance.htm.
\8\ See ``Additional Guidance on Defining Area Boundaries for
PM_2.5 Designations,'' memorandum from Lydia N. Wegman,
Director of Air Quality Strategies and Standards Division, EPA
Office of Air Quality Planning and Standards, to EPA Air Division
Directors, February 12, 2004. Available at:
http://www.epa.gov/pmdesignations/guidance.htm.

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States were required to submit their recommendations to EPA by
February 15, 2004.\9\ Tribes were encouraged, but not required, to
submit designation recommendations to EPA for their reservations or
other areas under their jurisdiction. In general, the recommendations
were based on the most recent 3 years of air quality data available
(e.g. 2001-2003). On June 29, we sent letters to the Governors and
Tribal leaders notifying them of any modifications we intended to make
to their recommendations. After considering additional comments and
information from States and Tribes, EPA issues final PM_2.5
designations on December 17, 2004. They were published in the Federal
Register on January 5, 2005 (70 FR 944).
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\9\ The Consolidated Appropriations Bill for FY2004 (Pub. L.
108-199), signed by President Bush on January 23, 2004, codifies the
required State submittal date (February 15, 2004) and the date for
EPA to finalize PM_2.5 designations (December 31, 2004)
that were originally included in EPA's April 2003 guidance on
PM_2.5 designations.
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The nonattainment designation for an area starts the process
whereby a State or Tribe must develop an implementation plan that
includes, among other things, a demonstration showing how it will
attain the ambient standards by the attainment dates required in the
CAA. Under section 172(b), States have up to 3 years after EPA's final
designations to submit their SIPs to EPA. These SIPs will be due in
April 2008, three years from the effective date of the designations.

D. What Is the Geographic Extent of the PM2.5 Problem?

The PM_2.5 ambient air quality monitoring data for the
2001-2003 period suggest that areas violating the standards are located
across much of the eastern half of the United States and in much of
central and southern California.

[[Page 65990]]

A total of 47 areas comprised of 224 counties and the District of
Columbia were designated as nonattainment in December 2004. In April
2005, EPA issued a supplemental notice which changed the designation
status of eight areas (with 17 counties) from nonattainment to
attainment based on newly updated 2002-2004 air quality data. In
addition, four areas previously designated as unclassifiable were
changed to attainment in this notice.
The population of the 39 PM_2.5 nonattainment areas is
significant--about 90 million, or more than 30% of the U.S. population.
Most areas violate only the annual standard, but a few violate both the
annual and 24-hour standards. The 2001-2003 data show that no area
violates just the 24-hour standard.\10\
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\10\ A listing of counties and associated PM_2.5 3-
year annual average concentrations, or ``design values,'' is
available on EPA's Web site at: http://www.epa.gov/airtrends/values.html.

---------------------------------------------------------------------------

The distribution of the 2001-2003 design values \11\ for the 39
nonattainment areas is shown in the table below:
---------------------------------------------------------------------------

\11\ The PM_2.5 design value for a nonattainment area
is the highest of the 3-year average concentrations calculated for
the monitors in the area, in accordance with 40 CFR part 50, appendix N.

------------------------------------------------------------------------
Percent of
Design value range for PM2.5 nonattainment areas Number of all areas
(in [mu]g/m3) areas (percent)
------------------------------------------------------------------------
15.1-16.0....................................... 10 26
16.1-17.0....................................... 12 31
17.1-18.0....................................... 12 31
18.1-19.0....................................... 1 3
19.1 +.......................................... 4 10
-------------
Total....................................... 39 100
------------------------------------------------------------------------

More than 40% of the nonattainment areas, including many major
metropolitan areas, have design values that are 2 [mu]g/m3
or more above the annual standard.
The EPA believes the PM_2.5 problem has a substantial
regional component because the formation and transport of secondarily
formed particles, such as sulfates and nitrates, extends over hundreds
of miles. The regional nature of PM_2.5 is in contrast to the
more localized nature of PM₁₀.
In addition, data suggests that ambient PM_2.5
concentrations tend to rise and fall in a consistent manner across very
large geographic areas. The transport phenomena associated with
PM_2.5 and its precursors has been well-documented for many
years. For example, one significant source of information on long-range
transport is the National Acid Precipitation Assessment Program (NAPAP)
research from the 1980's and its associated reports published in
1991.\12\ Additional studies and air quality modeling analyses since
that time have added to the body of information documenting the
regional nature of PM_2.5.\13\ Since the emissions from one
State may contribute significantly to PM_2.5 violations in
several other States, we believe that plans to attain the
PM_2.5 standards will need to include a combination of
national, regional, and local emission reduction strategies.
---------------------------------------------------------------------------

\12\ National Acid Precipitation Assessment Program. Acid
Deposition: State of the Science and Technology. Washington, DC.
1991. See also: Environmental Protection Agency. (2004) Air Quality
Criteria for Particulate Matter. Research Triangle Park, NC: Office
of Research and Development; report no. EPA/600/P-99/002a,bF.
October. The 2004 PM criteria document is available at:
http://www.epa.gov/ttn/naaqs/standards/pm/s_pm_cr_cd.html.
\13\ NARSTO (2004) Particulate Matter Assessment for Policy
Makers: A NARSTO Assessment. P. McMurry, M. Shepherd, and J.
Vickery, eds. Cambridge University Press, Cambridge, England. ISBN 0
52 184287 5. For more information, see http://www.cgenv.com/NARSTO.
See also supporting technical information for the Clear Skies Act,
http://www.epa.gov/clearskies/, and for the Clean Air Interstate Rule,
http://www.epa.gov/cleanairinterstaterule.

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E. What Is EPA's Overall Strategy for Reducing PM_2.5 Pollution?

Our overall strategy for achieving the PM_2.5 standards
is based on the structure outlined in the CAA. The CAA outlines
important roles for State and Tribal governments and for EPA in
implementing national ambient air quality standards.
States have primary responsibility for developing and implementing
SIPs that contain local and in-State measures needed to achieve the air
quality standards in each area. We assist States and Tribes by
providing technical tools, assistance and guidance, including
information on control measures. In addition, we set national emissions
limits for some sources such as new motor vehicles, certain categories
of major new sources, and existing stationary sources of toxic air
pollutants. Where upwind sources (such as coal-fired power plants)
contribute to downwind problems in other States or Tribes, we can also
ensure that the upwind States address these contributing emissions, or
we can put in place Federal regulations in situations where the upwind
States fail to address these sources. We intend to work closely with
States and Tribes to use an appropriate combination of national,
regional, and local pollution reduction measures to meet the standards
as expeditiously as practicable, as required by the CAA.
1. The State Implementation Plan (SIP) System
A SIP is the compilation of regulations and programs that a State
uses to carry out its responsibilities under the CAA, including the
attainment, maintenance, and enforcement of NAAQS. (Only certain air
quality programs and regulations implemented by States are required to
be part of the SIP, however.) States use the SIP process to identify
the emissions sources that contribute to the nonattainment problem in a
particular area, and to select the emissions reduction measures most
appropriate for that area, considering technical and economic
feasibility, and a variety of local factors such as population
exposure, enforceability, and economic impact. Under the CAA, SIPs must
ensure that areas reach attainment as expeditiously as practicable.
These plans need to take into consideration emission reductions
resulting from national programs (such as mobile source regulations,
the acid rain program, or maximum achievable control technology (MACT)
standards for air toxics) as well as from State or local programs not
directly mandated under the CAA.
The SIP system for nonattainment areas is an important component of
the CAA's overall strategy for meeting the PM_2.5 standards,
but it is not the only component. As noted below, the CAA also includes
requirements for national rules or programs that will reduce emissions
and help achieve cleaner air.
2. National Rules
For the States to be successful in developing local plans showing
attainment of standards, we must do our part to develop standards and
programs to reduce emissions from sources that are more effectively and
efficiently addressed at the national level. We also have the
responsibility to ensure that interstate transport is addressed through
SIPs or other means. As outlined below, we have issued final
regulations that will achieve important emissions reductions from power
plants, onroad and nonroad engine sources, and other sources that may
enable some areas to meet the PM_2.5 standards in the near
term and make it easier for others to attain.
The acid rain program, authorized under title IV of the 1990 CAA
amendments, was projected to reduce annual SO₂ emissions by
10 million tons from 1980 levels by 2010, and to reduce annual
NO_X emissions by 2 million tons from 1980 levels by 2010.
The EPA has implemented the acid rain

[[Page 65991]]

program in two phases: Phase I for SO₂ began in 1995 and
targeted the largest and highest-emitting coal-fired power plants.
Phase I for NO_X began in 1996. Phase II for both pollutants
began in 2000 and sets restrictions on Phase I plants as well as many
additional smaller coal-, gas-, and oil-fired plants. Over 2,000
sources (mostly electricity generating facilities) are now affected by
the Acid Rain Program. The acid rain emissions trading system had a cap
of 8.95 million tons on the total amount of SO₂ that may be
emitted by power plants nationwide, about half the amount emitted in
1980. Sulfate particles formed from SO₂ emissions and
nitrate particles formed from NO_X emissions contribute
significantly to total PM_2.5 mass in the eastern U.S.
(ranging from 30-50 percent), so the reductions already achieved under
the Acid Rain Program have led to improvements in PM_2.5
concentrations across the region.
Additional reductions in NO_X emissions from power plants
and large industrial sources were required by May 2004 under our rules
to reduce interstate transport of ozone pollution in the eastern U.S.
These rules are known as the NO_X SIP Call, published October
27, 1998 (63 FR 57356), and the Section 126 Rule, published May 25,
1999 (64 FR 28250). We estimate that when fully implemented, this
program will result in the reduction of more than one million tons of
summertime NO_X. While this program was established primarily
to address the ground-level ozone problem in the East, it will also
result in reduced ambient levels of nitrate, one of the main components
of PM_2.5.
The Administration has proposed nationwide legislation--the Clear
Skies Act \14\--to address health and environmental concerns associated
with power plant emissions of sulfur dioxide, nitrogen oxides, and
mercury. However, because passage of the CSA legislation is not
assured, EPA has established the Clean Air Interstate Rule (CAIR),\15\
a regulatory approach to address interstate transport of pollution
under section 110 of the CAA. Section 110 gives EPA the authority to
require SIPs to ``prohibit * * * any source or other type of emission
activity within the State from emitting any air pollutant in amounts
which will contribute significantly to nonattainment in, or interfere
with maintenance by, any other State with respect to'' any NAAQS, and
to prohibit sources or emission activities from emitting pollutants in
amounts which will interfere with measures required to be included in
State plans to prevent significant deterioration of air quality or to
protect visibility (such as the protection of 156 mandatory Federal
class I areas under the regional haze rule \16\).
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\14\ For more information on the proposed Clear Skies Act, see
EPA's website: http://www.epa.gov/clearskies/ \15\ See http://www.epa.gov/cair.
\16\ See 64 FR 35714, July 1, 1999.
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CAIR, issued by EPA on March 10, 2005, employs the same emissions
trading approach used to achieve cost-effective emission reductions
under the acid rain program. It outlines a two-phase program with
declining power plant emissions caps for 28 eastern states and the
District of Columbia: SO₂ caps of 3.6 million tons in 2010,
and 2.5 million in 2015; NO_X caps of 1.5 in 2009 and 1.3 in
2015; and NO_X ozone season caps of 580,000 tons in 2009 and
480,000 tons in 2015. Emission caps are divided into State
SO₂ and NO_X budgets. By the year 2015, the Clean
Air Interstate Rule will result in:
--$85 to $100 billion in annual health benefits, annually preventing
17,000 premature deaths, millions of lost work and school days, and
tens of thousands of non-fatal heart attacks and hospital admissions.
--Nearly $2 billion in annual visibility benefits in southeastern
national parks, such as Great Smoky and Shenandoah.
--Significant regional reductions in sulfur and nitrogen deposition,
reducing the number of acidic lakes and streams in the eastern U.S.
Current emissions standards for new cars, trucks and buses are
reducing motor vehicle emissions of volatile organic compounds (VOCs,
also referred to as hydrocarbons), NO_X, and direct PM
emissions (such as elemental carbon) as older vehicles are retired and
replaced. Other existing rules are reducing emissions from several
categories of nonroad engines. The Tier 2 motor vehicle emission
standards, together with the associated requirements to reduce sulfur
in gasoline, will provide additional benefits nationally beginning in
2004.\17\ When the new tailpipe and sulfur standards are fully
implemented, Americans will benefit from the clean-air equivalent of
removing 164 million cars from the road.
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\17\ See Tier II emission standards at 65 FR 6698, February 10, 2000.
---------------------------------------------------------------------------

These new standards require passenger vehicles to have emissions 77
to 95 percent cleaner than those on the road today and reduce the
sulfur content of gasoline by up to 90 percent. In addition, the 2001
heavy-duty diesel engine regulations \18\ will lead to continued
emissions reductions as older vehicles in that engine class are retired
and fleets turn over. New emission standards will begin to take effect
in model year 2007 and will apply to heavy-duty highway engines and
vehicles. These standards are based on the use of high-efficiency
catalytic exhaust emission control devices or comparably effective
advanced technologies. Because these devices are damaged by sulfur, the
level of sulfur in highway diesel fuel will be reduced by 97 percent by
mid-2006. We project a 2.6 million ton reduction of NO_X
emissions in 2030 when the current heavy-duty vehicle fleet is
completely replaced with newer heavy-duty vehicles that comply with
these emission standards. By 2030, we estimate that this program will
reduce annual emissions of hydrocarbons by 115,000 tons and PM by
109,000 tons. These emissions reductions are on par with those that we
anticipate from new passenger vehicles and low sulfur gasoline under
the Tier 2 program.
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\18\ See heavy-duty diesel engine regulations at 66 FR 5002,
January 18, 2001.
---------------------------------------------------------------------------

EPA also finalized national rules in May 2004 to significantly
reduce PM_2.5 and NO_X emissions from nonroad
diesel-powered equipment.\19\ These nonroad sources include
construction, agricultural, and industrial equipment, and their
emissions constitute an important fraction of the inventory for direct
PM_2.5 emissions (such as elemental carbon and organic
carbon), and NO_X. The EPA estimates that affected nonroad
diesel engines currently account for about 44 percent of total diesel
PM emissions and about 12 percent of total NO_X emissions
from mobile sources nationwide. These proportions are even higher in
some urban areas. The diesel emission standards will reduce emissions
from this category by more than 90 percent, and are similar to the
onroad engine requirements implemented for highway trucks and buses.
Because the emission control devices can be damaged by sulfur, EPA also
established requirements to reduce the allowable level of sulfur in
nonroad diesel fuel by more than 99 percent by 2010. In 2030, when the
full inventory of older nonroad engines has been replaced, the nonroad
diesel program will annually prevent up to 12,000 premature deaths, one
million lost work days, 15,000 heart attacks and 6,000 children's
asthma-related emergency room visits.
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\19\ For more information on the proposed nonroad diesel engine
standards, see EPA's website: http://www.epa.gov/nonroad/.

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[[Page 65992]]

II. Fine Particles: Overview of Atmospheric Chemistry, Sources of
Emissions, and Ambient Monitoring Data

A. Introduction

Particulate matter is a chemically and physically diverse mixture
of discrete solid particles and liquid droplets. It exists in the air
in a range of particle sizes, from submicrometer to more than 30
micrometers in size. The composition of particles varies throughout
this range of sizes, depending on the age of the particle, the nature
of the source of pollutant emissions, and the source's operating
characteristics.
This regulation focuses on reducing ambient concentrations of the
PM_2.5 size fraction of PM. The term PM_2.5 is used
to describe the fraction of particles whose nominal aerodynamic
diameter is less than or equal to 2.5 micrometers. PM_2.5 in
the ambient air is defined operationally as the set of particles
measured (and associated concentration) by the Federal Reference Method
sampling device. Since the cut point of this sampling device is not
perfectly sharp, some particles smaller than 2.5 micrometers are not
retained and some particles larger than 2.5 micrometers are captured by
sampling devices. This is important because there are two relevant
modes to the PM size distribution, fine PM (nominally PM_2.5)
and coarse PM (nominally from 2.5 to 10 micrometers aerodynamic
diameter). These modes overlap slightly, but they are generally
associated with distinctly different source types and formation processes.
Fine particles emitted directly into the air in a stable solid or
liquid chemical form are referred to as ``primary'' particles.
Particles formed near their source by condensation processes in the
atmosphere are also considered to be primary particles.
PM_2.5 that is formed by chemical reactions of gases in the
atmosphere is considered to be ``secondarily'' formed particulate matter.
PM_2.5 in the atmosphere is composed of a complex mixture
of constituents: Sulfate; nitrate; ammonium; particle-bound water;
black carbon (also known as elemental carbon); a great variety of
organic compounds; and miscellaneous inorganic material (sometimes
called ``crustal material,'' which includes geogenic dust and metals).
Atmospheric PM_2.5 also contains a large number of elements
in various compounds and concentrations. Some organic materials such as
pollen, spores, and plant detritus are also found in both the fine and
coarse particle modes but from different sources or mechanisms. Crustal
materials such as calcium, aluminum, silicon, magnesium, and iron are
found predominately in coarse mode particles. Nitrate is generally
found in the fine particle mode, but it is also found in the coarse
mode particles, coming primarily from the reaction of gas-phase nitric
acid with preexisting coarse particles.
Primary coarse particles are usually formed by mechanical
processes. This includes material emitted from such sources as wind-
blown dust, road dust, and particles formed by abrasion, crushing, and
grinding. Some combustion-generated particles such as fly ash and soot
also are found in the coarse mode. Primary PM_2.5 includes
soot from diesel engines, a wide variety of organic compounds condensed
from incomplete combustion or cooking operations, and compounds such as
arsenic, selenium, and zinc that condense from vapor formed during
combustion or smelting. The concentration of primary PM_2.5
in the air depends on source emission rates, transport and dispersion,
and removal rate from the atmosphere.
Secondary PM is formed by chemical reactions of gas-phase
precursors in the atmosphere. These reactions form condensable vapors
that either form new particles or condense onto other particles in the
air. Most of the sulfate and nitrate and a portion of the organic
compounds in the atmosphere are formed by such chemical reactions.
Secondary PM formation depends on numerous factors including the
concentrations of precursors; the concentrations of other gaseous
reactive species such as ozone, hydroxyl radicals, peroxy radicals, or
hydrogen peroxide; atmospheric conditions including solar radiation,
temperature, and relative humidity (RH); and the interactions of
precursors and pre-existing particles with cloud or fog droplets or in
the liquid film on solid particles. Several atmospheric aerosol
species, such as ammonium nitrate and certain organic compounds, are
semivolatile and are found in both gas and particle phases. Given the
complexity of PM formation processes, new information from the
scientific community continues to emerge to improve our understanding
of the relationship between sources of PM precursors and secondary
particle formation.
Certain particles, such as sulfates, nitrates, and certain
organics, readily take up water and are considered to be hygroscopic.
As a result of the equilibrium of water vapor with liquid water in
hygroscopic particles, many ambient particles contain some amount of
liquid water. When filter samples are weighed at lower relative
humidity levels according to the PM_2.5 Federal reference
method specifications, the filters are desiccated and much of this
water is removed, but some particle-bound water will be measured as a
component of the particle mass. Particle-bound water in the ambient air
increases with higher relative humidities. This phenomenon is important
because it affects the size of certain particles, and in turn, their
properties of light scattering and aerodynamics. Differences in
relative humidity can result in different measured particle size
distributions, mass concentrations, and resulting visibility impairment
levels. Regional emission reduction strategies to reduce
PM_2.5, particularly hygroscopic particles such as sulfates
and nitrates, should also provide significant visibility improvements,
both in urban areas and in federal class I areas (national parks and
wilderness areas).
The following discussion elaborates on the relationship between
source types and the composition of PM_2.5. More information
and references on the composition of PM may be found in the EPA 2004 PM
Air Quality Criteria Document.\20\
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\20\ Environmental Protection Agency. (2004) Air Quality
Criteria for Particulate Matter. Research Triangle Park, NC: Office
of Research and Development; report no. EPA/600/P-99/002a,bF.
October. The 2004 PM criteria document is available at:
http://www.epa.gov/ttn/naaqs/standards/pm/s_pm_cr_cd.html.

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B. Concentration, Composition and Sources of Fine PM

The relative contribution of PM_2.5 components varies
significantly by region of the country. Data on PM_2.5
composition primarily in urban areas is available from the EPA
Speciation Trends Network beginning in 2001. PM_2.5
composition data for primarily rural areas (e.g. national parks and
wilderness areas) is available from the IMPROVE visibility monitoring
network beginning in 1988. Speciation data from September 2001 to
August 2002 are summarized for urban and rural areas in nine regions in
table 2.
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This discussion focuses on the eastern U.S. and California since
most nonattainment areas will be located in those regions. In general,
urban areas have higher annual average PM_2.5 concentrations
than nearby rural areas. In the eastern U.S. urban areas, ammonium
sulfate and total carbon (comprised of black carbon and organic carbon)
are the dominant species, each accounting for 30-40 percent of total
reconstructed mass in most locations. (Reconstructed mass is the PM
mass calculated by adding together the mass from each of the main
components of PM as obtained from chemical composition monitoring.)
Nitrate plus associated ammonium ion is a more significant component of
PM mass in northern regions, such as the midwest and east coast, but is
a less significant fraction in the southeast. In California, the main
species contributing to urban PM_2.5 mass are ammonium
nitrate (35-40 percent) and total carbon (43 percent), while sulfate
and associated ammonium accounts for approximately 10-15 percent.
Table 3 compares chemical composition data for 13 pairs of urban
and nearby non-urban sites in order to identify the primary components
that make up the ``urban increment.'' To conduct this analysis, for
each species the PM_2.5 mass in the rural location is
subtracted from the species mass for the urban location. The amount by
which the urban site exceeds the nearby rural site is the ``urban
increment.'' \21\
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\21\ V. Rao, N. Frank, A. Rush, F. Dimmick, ``Chemical
Speciation of PM_2.5 in Urban and Rural Areas,'' In the
Proceedings of the Air & Waste Management Association Symposium on
Air Quality Measurement Methods and Technology, San Francisco,
November 13-15, 2002.

[[Page 65994]]

Table 3.--Urban Increment Analysis for 13 Urban/Rural Pairs
[All values in micrograms per cubic meter]
----------------------------------------------------------------------------------------------------------------
West (3 site pairs) East (10 site pairs)
Chemical species -----------------------------------------------------------
Min. Max. Avg. Min. Max. Avg.
----------------------------------------------------------------------------------------------------------------
Sulfate............................................. 0.2 0.7 0.5 -0.5 1.1 0.3
Est. Ammonium....................................... 0.2 2.2 1.2 0.1 0.8 0.4
Nitrate............................................. 0.6 6.9 3.7 0.4 1.4 0.8
Total Carbon........................................ 4.8 9.8 6.6 2.1 5.3 3.1
Crustal............................................. 0.1 0.6 0.4 -0.1 0.8 0.3
-----------
Total Excess.................................... 5.8 20.1 12.4 2.0 9.4 4.8
----------------------------------------------------------------------------------------------------------------

Carbonaceous mass is the largest contributor to urban increments in
all regions of the country. In east coast and midwestern urban areas,
carbon can account for as much as 70-90 percent of the total urban
increment. The highest local increment of carbon as calculated from
available data appears to be about 10 [mu]g/m3 in Fresno,
CA. Nonroad diesel, onroad diesel, gasoline highway vehicles, and fire
related activities are regarded to be important major contributors to
this urban excess of carbon. The relative amounts of primary versus
secondary organic compounds in the ambient air vary with location and
time of year. While it is difficult to generalize, it is clear that
both primary and secondary organic compounds are significant
contributors to ambient PM_2.5 mass in many parts of the country.
The urban increment for sulfate, on the other hand, appears to be
fairly low in most locations. Rural and urban sulfate levels are often
very similar, indicating that sulfate is a regional pollutant that can
be transported long distances. This is consistent with the fact that
power plants are the principal sources of SO₂, the precursor
to sulfate, and in general, these plants are located outside urban core
areas. In some eastern cities, the small estimated urban excess (up to
0.5 [mu]g/m3) may be attributed to a range of source types,
including power plants located within the metro area, the combustion of
sulfur-laden fuel oil used for commercial or institutional heating, and
fuel combustion by diesel and gasoline motor vehicles.
Excess nitrate concentrations are observed predominantly in
northern, midwestern, and western locations, comprising a larger local
contribution than sulfate or crustal material. Nitrate is particularly
high in the winter time partly because it is less volatile at colder
temperatures and partly because SO₂ is less prone to react
preferentially with ammonium in the winter as opposed to the summer.
Local sources of NO_X leading to excess urban nitrate likely
include mobile sources and other types of fuel combustion.
Some locations also show a small urban excess of crustal material
(e.g. inorganic material including metals, dust, sea salt, and other
trace elements). The estimation procedure used in the IMPROVE protocol
includes the measurement of iron and other trace elements. Therefore,
this difference also reflects oxidized particulate metals, some of
which may be attributed to road dust or industrial sources in urban areas.
We have developed a National Emissions Inventory (NEI) inventory
for use in analyzing trends in emissions, conducting various regulatory
analyses for PM, and for use in regional scale modeling.\22\ The NEI
covers all 50 States plus some of the U.S. territories, and includes
point, area, onroad and nonroad mobile sources, biogenic, and geogenic
emissions. Large stationary sources are located individually in the
inventory while county tallies are used for smaller stationary sources,
and area and mobile source category groups. Spatial, temporal and
compositional profiles are used to allocate these emissions to time-
resolved grids for chemical transport modeling. The inventory includes
emissions of SO₂, NO_X, VOC, NH₃,
PM₁₀, and PM_2.5. A brief discussion of each
particle type, their principal sources (based on the NEI), formation
mechanisms, and spatial and temporal patterns follows.
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\22\ USEPA, National Air Quality and Emissions Trends Report:
2003 Special Studies Edition, Report Number EPA-454/R-03-005,
Research Triangle Park, NC, September 2003. USEPA, National Air
Pollutant Emissions Trends, Report Number EPA-454/R-00-002, Research
Triangle Park, NC, March 2000. See also: http://www.epa.gov/ttn/chief/trends/.

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Primary PM (Crustal and Carbonaceous). This section addresses
inorganic and organic forms of primary PM. The main anthropogenic
sources of inorganic (or crustal) particles are: Entrainment by
vehicular traffic on unpaved or paved roads; mechanical disturbance of
soil by highway, commercial, and residential construction; and
agricultural field operations (tilling, planting and harvesting).
However, much of these emissions are coarse PM rather than fine PM.
Industrial processes such as quarries, minerals processing, and
agricultural crop processing can also emit crustal materials, but their
influence is most important close to the source and they are not
generally significant contributors to regional scale PM problems. Even
so, during certain high wind events, fine crustal PM has been shown to
be transported over very long distances. Satellite data and other
studies have shown that dust has been transported into the U.S. as a
result of Asian or African dust storms.
Emission estimates of mechanically suspended crustal PM from
sources within the U.S. are often quite high. However, this PM is often
released very close to the ground, and with the exception of windblown
dust events, thermal or turbulent forces sufficient to lift and
transport them very far from their source are not usually present.
Thus, as shown in table 1, crustal material is only a minor part of
PM_2.5 annual average concentrations.
Primary carbonaceous particles are largely the result of incomplete
combustion of fossil or biomass fuels. This incomplete combustion
usually results in emissions of both black carbon and organic carbon
particles. High molecular weight organic molecules (i.e., molecules
with 25 or more carbon atoms) are either emitted as solid or liquid
particles, or as gases that rapidly condense into particle form. These
heavy organic molecules sometimes are referred to as volatile organic
compounds, but because their characteristics are most like direct PM
emissions, they will be considered to be primary emissions for the
purposes of this regulation. Primary organic carbon

[[Page 65995]]

also can be formed by condensation of semi-volatile compounds on the
surface of other particles.
The main combustion sources emitting carbonaceous PM_2.5
are mobile sources (both onroad and nonroad), managed burning, wildland
fires, open burning of waste, residential wood combustion, certain
industrial processes, and coal and oil-burning boilers (utility,
commercial and industrial). Certain organic particles also come from
natural sources such as decomposition or crushing of plant detritus.
Most combustion processes emit more organic particles than black carbon
particles. A notable exception to this are diesel engines, which
typically emit more black carbon particles than organic carbon. Because
photochemistry is typically reduced in the cooler winter months for
much of the country, studies indicate that the carbon fraction of PM
mass in the winter months is likely dominated by direct PM emissions as
opposed to secondarily formed organic aerosol.
Particles from the earth's crust may contain a combination of
metallic oxides and biogenic derived organic matter. The combustion of
surface debris will likely entrain some soil. Additionally, emissions
from many processes and from the combustion of fossil fuels contain
elements that are chemically similar to soil. Thus, a portion of the
emissions from combustion activities may be classified as crustal in a
compositional analysis of ambient PM_2.5.
Secondary PM. Although some sulfate and nitrate salts (i.e. calcium
sulfate, calcium nitrate) and acids (i.e. sulfuric acid, nitric acid)
are directly emitted by sources under certain circumstances, sulfates
and nitrates are predominately formed as a result of chemical reactions
with ammonia and other compounds in the atmosphere. (See next sections
for more detail.) During combustion, very small combustion nucleation
particles (ultrafine particles, less than 0.1[mu]m) are produced. These
small particles act as nucleation sites where gases, water vapor, and
other nucleation particles can condense or coagulate and therefore
cause particle growth in both particle size and particle mass. Ammonium
sulfate, ammonium nitrate, and secondarily formed organic aerosols, as
well as agglomerating fine particles, all may use these ultrafine
particles in their formation and growth in the atmosphere. The
secondary organic aerosol (SOA) component of PM_2.5 is a
complex mixture of perhaps thousands of organic compounds. A brief
discussion of the sources of SO₂, NO_X,
NH₃, and organic gases (including VOC and semi-volatile
compounds), and the formation of sulfate, nitrate and secondary organic
aerosol follows. More detailed discussions of the formation and
characteristics of secondary particles can be found in the U.S. EPA
Criteria Document,\23\ and in the NARSTO Fine Particle Assessment,\24\
on which much of the following discussion is based.
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\23\ USEPA, 2003. Air Quality Criteria for Particulate Matter
(Fourth External Review Draft). EPA/600/P-99/002aD and bD. U.S.
Environmental Protection Agency, Office of Research and Development,
National Center For Environmental Assessment, Research Triangle Park
Office, Research Triangle Park, NC. June 2003. Available
electronically at http://cfpub.epa.gov/ncea/cfm/partmatt.cfm.
\24\ North American Research Strategy for Tropospheric Ozone and
Particulate Matter (NARSTO) (2004) Particulate Matter Assessment for
Policy Makers: A NARSTO Assessment. P. McMurry, M. Shepherd, and J.
Vickery, eds. Cambridge University Press, Cambridge, England. ISBN 0
52 184287 5. For more information, see http://www.cgenv.com/NARSTO.
See also supporting technical information for the Clear Skies Act,
http://www.epa.gov/clearskies/, and for the Clean Air Interstate Rule,
http://www.epa.gov/cleanairinterstaterule.

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Sulfate. SO₂ is emitted mostly from the combustion of
fossil fuels in boilers operated by electric utilities and other
industry. Less than 20 percent of SO₂ emissions nationwide
are from other sources, mainly from other industrial processes
including oil refining and pulp and paper production.
The formation of sulfuric acid from the oxidation of SO₂
is an important process for most areas in North America. There are
three different pathways for this transformation. First, gaseous
SO₂ can be oxidized by the hydroxyl radical (OH) to create
sulfuric acid. This gaseous SO₂ oxidation reaction occurs
slowly and only in the daytime. The hydroxl radical is an important
product of the atmospheric chemistry process that forms ozone through
the oxidation of NO_X to form nitric acid. It is also
involved in the formation of secondary organics.
Second, SO₂ can dissolve in cloud water (or fog or rain
water), and there it can be oxidized to sulfuric acid by a variety of
oxidants, or through catalysis by transition metals such as manganese
or iron. If ammonia is present and taken up by the water droplet, then
ammonium sulfate will form as a precipitant in the water droplet. After
the cloud changes and the droplet evaporates, the sulfuric acid or
ammonium sulfate remains in the atmosphere as a particle. This aqueous-
phase production process involving oxidants can be very fast; in some
cases all the available SO₂ can be oxidized in less than an hour.
Third, SO₂ can be oxidized in reactions in the particle-
bound water in the aerosol particles themselves. This process takes
place continuously, but only produces appreciable sulfate in alkaline
(dust, sea-salt) coarse particles.\25\ Oxidation of SO₂ has
been also observed on the surfaces of black carbon and metal oxide
particles. During the last twenty years, much progress has been made in
understanding the first two major pathways, but some important
questions still remain about the smaller third pathway. Models indicate
that more than half of the sulfuric acid in the eastern United States
and in the overall atmosphere is produced in clouds.\26\
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\25\ Sievering, H., Boatman, J., Gorman, E., Kim, Y., Anderson,
L., Ennis, G., Luria, M., Pandis, S.N., 1992. Removal of sulfur from
the marine boundary layer by ozone oxidation in sea-salt. Nature
360, 571-573.
\26\ McHenry, J.N., Dennis, R.L., 1994. The relative importance
of oxidation pathways and clouds to atmospheric ambient sulfate
production as predicted by the Regional Acid Deposition Model.
Journal of Applied Meteorology 33, 890-905. Also: Langner, J.,
Rodhe, H., 1991. A global three dimensional model for the
tropospheric sulfur cycle. Journal of Atmospheric Chemistry 13, 225-263.
---------------------------------------------------------------------------

The sulfuric acid formed from the above pathways reacts readily
with ammonia to form ammonium sulfate, (NH4)2SO₄. If there
is not enough ammonia present to fully neutralize the produced sulfuric
acid (one molecule of sulfuric acid requires two molecules of ammonia),
part of it exists as ammonium bisulfate, NH4HSO₄ (one
molecule of sulfuric acid and one molecule of ammonia) and the
particles are more acidic than ammonium sulfate. In extreme cases (in
the absence of sufficient ammonia for neutralization), sulfate can
exist in particles as sulfuric acid, H2SO₄. Sulfuric acid
often exists in the plumes of stacks where SO₂,
SO₃, and water vapor are in much higher concentrations than
in the ambient atmosphere, but these concentrations become quite small
as the plume is cooled and diluted by mixing.
Nitrate. The main sources of NO_X are combustion of
fossil fuel in boilers and onroad mobile sources. Together they account
for more than 60 percent of NO_X emissions in
PM_2.5 nonattainment areas (based on 2001 emission inventory
information), with stationary and mobile source fuel combustion each
accounting for about half of these emissions. Nitrates are formed from
the oxidation of oxides of nitrogen into nitric acid either during the
daytime

[[Page 65996]]

(reaction with OH) or during the night (reactions with ozone and
water).\27\
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\27\ Wayne, R.P., et al., 1991. The nitrate radical: physics,
chemistry and the atmosphere. Atmospheric Environment 25A, 1-203.27
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Nitric acid continuously transfers between the gas and the
condensed phases through condensation and evaporation processes in the
atmosphere. However, unless it reacts with other species (such as
ammonia, sea salt, or dust) to form a neutralized salt, it will
volatize and not be measured using standard PM_2.5
measurement techniques.\28\ The formation of aerosol ammonium nitrate
is favored by the availability of ammonia, low temperatures, and high
relative humidity. Because ammonium nitrate is not stable in higher
temperatures, nitrate levels are typically lower in the summer months
and higher in the winter months. The resulting ammonium nitrate is
usually in the sub-micrometer particle size range. Reactions with sea-
salt and dust lead to the formation of nitrates in coarse particles.
Nitric acid may be dissolved in ambient aerosol particles.
---------------------------------------------------------------------------

\28\Seinfeld, J.H., Pandis, S.N., 1998. Atmospheric Chemistry
and Physics: From Air Pollution to Climate Change. J. Wiley, New York.
---------------------------------------------------------------------------

Secondary Organic Aerosol (SOA). The organic component of ambient
particles is a complex mixture of hundreds or even thousands of organic
compounds. These organic compounds are either emitted directly from
sources (i.e. primary organic aerosol) or can be formed by reactions in
the ambient air (i.e. secondary organic aerosol, or SOA).
Volatile organic compounds\29\ are key precursors in both the SOA
and ozone formation processes. The lightest organic molecules (i.e.,
molecules with six or fewer carbon atoms) occur in the atmosphere
mainly as vapors and typically do not directly form organic particles
at ambient temperatures due to the high vapor pressure of their
products. However, they participate in atmospheric chemistry processes
resulting in the formation of ozone and certain free radical compounds
(such as the hydroxyl radical [OH]) which in turn participate in the
oxidation of semivolatile organic compounds to form secondary organic
aerosols, sulfates and nitrates. These VOCs include all alkanes with up
to six carbon atoms (from methane to hexane isomers), all alkenes with
up to six carbon atoms (from ethene to hexene isomers), benzene and
many low-molecular weight carbonyls, chlorinated compounds, and
oxygenated solvents. The relative importance of organic compounds in
the formation of organic particles varies from area to area, depending
upon local emissions sources, atmospheric chemistry, and season of the
year. Intermediate weight organic molecules (i.e., compounds with 7 to
24 carbon atoms) often exhibit a range of volatilities and can exist in
both the gas and aerosol phase. For this reason they are also referred
to as semivolatile compounds. Semivolatile compounds react in the
atmosphere to form secondary organic aerosols. These chemical reactions
are accelerated in warmer temperatures, and studies show that SOA
typically comprises a higher percentage of carbonaceous PM in the
summer as opposed to the winter.
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\29\ 29 As discussed earlier, high molecular weight organic
molecules (i.e., molecules with 25 or more carbon atoms) are either
emitted directly as particles or as liquids that rapidly condense
onto existing particles. Because these condensable emissions act
primarily as direct PM emissions, they are to be regulated as direct
PM_2.5 emissions, not as VOC precursors, for the purposes
of this regulation.
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The production of SOA from the atmospheric oxidation of a specific
VOC depends on four factors: Its atmospheric abundance, its chemical
reactivity, the availability of oxidants (O₃, OH,
HNO₃), and the volatility of its products. In addition,
recent work by Jang and others suggests that the presence of acidic
aerosols may lead to an increased rate of SOA formation.\30\
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\30\ Jang, M.; Czoschke, N.; Lee, S.; Kamens, R. Heterogenous
Atmospheric Aerosol Production by Acid-Catalyzed Particle-Phase
Reactions, Science, vol. 298, p. 814-817, October 25, 2002.
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Aromatic compounds such as toluene, xylene, and trimethyl benzene
are considered to be the most significant anthropogenic SOA precursors
and have been estimated to be responsible for 50 to 70 percent of total
SOA in some airsheds.\31\ As organic gases such as aromatics are
oxidized in the gas phase by species such as the hydroxyl radical (OH),
ozone (O₃), and the nitrate radical (NO₃) their
oxidation products accumulate. Some of these products have low
volatility and condense on available particles in an effort to
establish equilibrium between the gas and condensed phases. Man-made
sources of aromatics gases are mobile sources, petrochemical
manufacturing and solvents. The experimental work of Odum and others
\32\ showed that the secondary organic aerosol formation potential of
gasoline could be accounted for solely in terms of its aromatic fraction.
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\31\ Grosjean, D., Seinfeld, J.H., 1989. Parameterization of the
formation potential of secondary organic aerosols. Atmospheric
Environment 23, 1733-1747.
\32\ Odum, J.R., Jungkamp, T.P.W., Griffin, R.J., Flagan, R.C.,
Seinfeld, J.H., 1997. The atmospheric aerosol-forming potential of
whole gasoline vapor. Science 276, 97-99.
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Some of the biogenic hydrocarbons emitted by trees are also
considered to be important precursors of secondary organic particulate
matter. Terpenes ([alpha]- and [beta]-pinene, limonene, carene, etc.)
and the sesquiterpenes are expected to be major contributors to SOA in
areas with significant vegetation cover, but isoprene is not. Terpenes
are very prevalent in forested areas, especially in the southeastern
U.S. The rest of the anthropogenic hydrocarbons (higher alkanes,
paraffins, etc.) have been estimated to contribute 5-20 percent to the
SOA concentration depending on the area.

Table 4.--Role of Organic Gases in Secondary Organic Aerosol Formation
------------------------------------------------------------------------
SOA-forming organic Non SOA-forming
gases organic gases
------------------------------------------------------------------------
Anthropogenic............... --Aromatics (esp. --Lower alkanes < 6 C
toluene, xylenes, atoms, (ethane to
trimethyl-benzenes). hexane isomers).
--Higher alkanes (>6 --Benzene.
C atoms). --Lower MW
carbonyls,
chlorinated
compounds &
oxygenated
solvents.
Biogenic.................... --Terpenes (esp. --Isoprene.
[alpha]- and [beta]-
pinene, limonene,
carene).
--Sesquiterpenes....
------------------------------------------------------------------------

The contribution of the primary and secondary components of organic
aerosol to the measured organic aerosol concentrations remains a
controversial issue. Most of the research performed to date has been
done in southern California, and more recently in central California,
while fewer studies have been completed on other parts of North

[[Page 65997]]

America. Early studies suggested that the majority of the observed
organic particulate matter was secondary in nature. Later investigators
focusing on the emissions of primary organic material proposed that 80
percent or so of the organic aerosol in Southern California on a
monthly basis resulted from direct organic particle emissions.\33\ More
recent studies suggest that the primary and secondary contributions are
highly variable even during the same day. Studies of pollution episodes
indicated that the contribution of SOA to the organic particulate
matter varied from 20 percent to 80 percent during the same day.\34\
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\33\ Hildemann, L.M., Cass, G.R., Mazurek, M.A., Simoneit,
B.R.T., 1993. Mathematical modeling of urban organic aerosol
properties measured by high resolution gas-chromatography.
Environmental Science and Technology 27, 2045-2055.33
\34\ Turpin, B.J., Lim, H.J., 2000. Species contributions to PM
mass concentrations: Revisiting common assumptions for estimating
organic mass, Aerosol Science and Technology, vol. 35, no. 1, p. 602-610.
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Despite significant progress that has been made in understanding
the origins and properties of SOA, it remains the least understood
component of PM_2.5. The reactions forming secondary organics
are complex and the number of intermediate and final compounds formed
is voluminous. Some of the best efforts to unravel the chemical
composition of ambient organic aerosol matter have been able to
quantify the concentrations of hundreds of organic compounds
representing only 10-20 percent of the total organic aerosol mass. For
this reason, SOA continues to be a significant topic of research and
investigation.

C. The Role of Ammonia in Sulfate, Nitrate & Secondary Organic Aerosol
Formation

Ammonia (NH₃) is a gaseous pollutant that is emitted by
natural and anthropogenic sources. Emissions inventories for ammonia
are considered to be among the most uncertain of any species related to
PM. One recent estimate shows, however, that livestock (73 percent) and
fertilizer application (17 percent) are the two primary sources of
emissions.\35\ (Note that these estimates do not include natural
emissions from soil, which can be significant.)
---------------------------------------------------------------------------

\35\ Anderson, N., R. Strader, and C. Davidson (2003) Airborne
reduced nitrogen: Ammonia emissions from agriculture and other
sources, Environment International, 29: 277-286.
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Ammonia serves an important role in neutralizing acids in clouds,
precipitation and particles. In particular, ammonia neutralizes
sulfuric acid and nitric acid, the two key contributors to acid
deposition (acid rain). Deposited ammonia also can be an important
nutrient, contributing to problems of eutrophication in water
bodies.\36\ Ammonia would not exist in particles, if not for the
presence of acidic species with which it can combine to form a
particle. In the eastern U.S., sulfate, nitrate, and the ammonium
associated with them can together account for between roughly 30
percent and 75 percent of the PM_2.5 mass. The ammonium
itself roughly accounts for between 5 percent and 20 percent of the
PM_2.5.\37\
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\36\ Seinfeld, J.H., Pandis, S.N., 1998. Atmospheric Chemistry
and Physics: From Air Pollution to Climate Change. J. Wiley, New York.
\37\ NARSTO, 2003. Particulate Matter Science for Policy
Makers--A NARSTO Assessment. Parts 1 and 2. NARSTO Management Office
(Envair), Pasco, Washington. http://www.cgenv.com/NARSTO.

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The NARSTO Fine Particle Assessment indicates that sulfates form
preferentially over nitrates and that particle nitrate formation is
affected by a number of factors, including the availability of
sulfates, NO_X, ammonia, nitric acid and VOCs. The report
also notes that implementing decreasing ammonia emissions where sulfate
concentrations are high can reduce PM_2.5 mass
concentrations, but may also increase particle and precipitation
acidity.\38\ As noted above, this acidification of particles may result
in an increase in the formation of secondary organic compounds.
Moreover, the relationship between ammonia and sulfate-nitrate
equilibrium may also impact SOA formation, although this link is not
well understood. Recent studies of ammonia sources and possible
emission reduction measures indicate that ammonia controls are a
maturing science, but that ongoing research will greatly improve our
understanding of such control measures.
---------------------------------------------------------------------------

\38\ Ibid, at S-31 (table S.4).
---------------------------------------------------------------------------

The same can be said of our understanding of the role of ammonia in
aerosol formation. Based on the above information and further insights
gained from the NARSTO Fine Particle Assessment, it is apparent that
the formation of sulfate, nitrate and SOA compounds is a complex,
nonlinear process. The control techniques for ammonia and the
analytical tools to quantify the impact of reducing ammonia emissions
on atmospheric aerosol formation are both evolving sciences. Also,
there are indications that there may be considerable ambiguity
concerning the results of reducing ammonia emissions and in some cases,
there may be undesired consequences of ammonia reductions. Therefore,
based on our current understanding of ammonia's role in these complex
precursor interactions and emission reduction processes, it seems
prudent to continue research on ammonia control technologies and the
ammonia--sulfate--nitrate--SOA equilibrium before one undertakes broad
national programs to reduce ammonia emissions. However, as States and
EPA develop a greater understanding over the coming years about the
potential air quality effects of reducing ammonia emissions in specific
nonattainment areas, it may be appropriate for ammonia reduction
strategies to be included in future SIPs. At this time, however, we
believe that reducing SO₂ and NO_X will allow us
to move with greater certainty toward achieving our nation's air
quality goals. We encourage you to provide comments on the resolution
of this issue.

D. Regional Patterns of Carbon, Sulfate and Nitrate, and Indications of
Transport

Table 2 above shows that much of the eastern U.S., both urban and
non-urban areas alike, is subject to high PM_2.5
concentrations, with the highest concentrations occurring in urban
areas. Table 3 above compares the urban and rural concentrations of
sulfate, nitrate, and carbon particles. The data show that there are
high concentrations of sulfate across the region and that sulfate at
urban monitoring sites is only slightly higher than at nearby non-urban
sites. In contrast, the carbon mass at urban sites is significantly
higher than at the nearby non-urban sites. This seems to indicate that
sulfate is present on a much more regional scale and likely is
associated with significant pollutant transport. On the other hand, a
sizeable fraction of the carbonaceous mass seems to be more associated
with urban sources. Mobile sources are much more concentrated in urban
areas and may explain much of the elevated urban carbon concentrations.
However, black carbon and organic aerosols still make up a large
percentage of the non-urban air quality composition, indicating that
there is a regional background level of carbon that is enhanced in
urban areas by local sources.
The atmospheric lifetimes of particles and thus the distances they
can be transported vary with particle size. The regional nature of
PM_2.5 reflects the fact that fine particles can be
transported over long distances. Ultra-fine and fine particles rapidly
grow in size into a relatively stable size range, generally less than 2
[mu]m. These fine particles are kept suspended by normal air motions
and have very low deposition rates to surfaces. They can be transported

[[Page 65998]]

thousands of kilometers and remain in the atmosphere for a number of
days. Thus, they are important when considering regional PM transport.
Coarse particles can settle rapidly from the atmosphere within hours
and normally travel only short distances. However, when mixed high into
the atmosphere, as in some dust storms, the smaller-sized coarse-mode
particles may have longer lives and travel greater distances.
Meteorology also plays a role in the size and characteristics of
particles. High temperatures increase reaction rates, which may explain
why sulfate concentrations are generally greatest in the summer.
Conversely, lower temperatures result in a greater fraction of nitrates
being in the particle phase. Fine particles, especially particles with
a hygroscopic component, grow as the relative humidity increases, serve
as cloud condensation nuclei, and grow into cloud droplets. If the
cloud droplets grow large enough to form rain, the particles are
removed in the rain. Falling rain drops impact coarse particles and
remove them. Very fine particles are small enough to diffuse to the
falling drop, be captured, and be removed in rain. However, falling
rain drops are not nearly as effective in removing PM_2.5 as
the cloud processes mentioned above. Sulfuric acid, ammonium nitrate,
ammonium sulfates, and organic particles also are deposited on surfaces
by dry deposition. Therefore, reductions in SO₂ and
NO_X emissions will decrease both acidic deposition and PM
concentrations.

E. Policy for Addressing PM2.5 Precursors

1. Legal Authority To Regulate Precursors
The Clean Air Act authorizes the Agency to regulate criteria
pollutant precursors. The term `air pollutant'' is defined in section
302(g) to include ``any precursors to the formation of any air
pollutant, to the extent the Administrator has identified such
precursor or precursors for the particular purpose for which the term
'air pollutant' is used.''' The first clause of this second sentence in
section 302(g) explicitly authorizes the Administrator to identify and
regulate precursors as air pollutants under other parts of the Act. In
addition, the second clause of the sentence indicates that the
Administrator has discretion to identify which pollutants should be
classified as precursors for particular regulatory purposes. Thus, we
do not necessarily construe the Act to require that EPA identify a
particular precursor as an air pollutant for all regulatory purposes
where it can be demonstrated that various Clean Air Act programs
address different aspects of the air pollutant problem. Likewise, we do
not interpret the Act to require that EPA treat all precursors of a
particular pollutant the same under any one program when there is a
basis to distinguish between such precursors. For example, in a recent
rule addressing PM_2.5 precursors for purposes of
transportation conformity, we chose to adopt different approaches for
some precursors based on the degree to which the various precursors
emitted by transportation-related sources contributed to the
PM_2.5 air quality problem. 70 FR 24280 (May 6, 2005).
Other provisions of the Act reinforce our reading of section 302(g)
that Congress intended precursors to NAAQS pollutants to be subject to
the air quality planning and control requirements of the Act, but also
recognized that there may be circumstances where it is not appropriate
to subject precursors to certain requirements of the Act. Section 182
of the Act provides for the regulation of NO_X and VOCs as
precursors to ozone in ozone nonattainment areas, but also provides in
Section 182(f) that major stationary sources of NO_X (an
ozone precursor) are not subject to emission reductions controls for
ozone where the State shows through modeling that NO_X
reductions do not decrease ozone. Section 189(e) provides for the
regulation of PM₁₀ precursors in PM₁₀
nonattainment areas, but also recognizes that there may be certain
circumstances where it is not appropriate to apply control requirements
to PM₁₀ precursors. In providing that the Agency was to
issue guidelines for the control of PM₁₀ precursors, the
legislative history of Section 189(e) recognized the complexity behind
the science of precursor transformation into PM₁₀ ambient
concentrations and the need to harmonize the regulation of
PM₁₀ precursors with other provisions of the Act:

The Committee notes that some of these precursors may well be
controlled under other provisions of the Act. The Committee intends
that * * * the Administrator will develop models, mechanisms, and
other methodology to assess the significance of the PM₁₀
precursors in improving air quality and reducing PM₁₀.
Additionally, the Administrator should consider the impact on ozone
levels of PM₁₀ precursor controls. The Committee expects
the Administrator to harmonize the PM₁₀ reduction
objective of this section with other applicable regulations of this
Act regarding PM₁₀ precursors, such as NO_X.

See H. Rpt. 101-490, Pt. 1, at 268 (May 17, 1990), reprinted in S. Prt.
103-38, Vol. II, at 3292.
In summary, section 302(g) of the Act clearly calls for the
regulation of precursor pollutants, but the Act also identifies
circumstances when it may not be appropriate to regulate precursors and
gives the Administrator discretion to determine how to address
particular precursors under various programs required by the Clean Air
Act. Due to the complexities associated with precursor emissions and
their variability from location to location, we believe that in certain
situations it may not be effective or appropriate to control a certain
precursor under a particular regulatory program or for EPA to require
similar control of a particular precursor in all areas of the country.
In the following section II.E.2, we discuss our proposal for how
States should address PM_2.5 precursors for the majority of
the nonattainment program issues in PM_2.5 implementation
plans, such as RACT, RACM, reasonable further progress and most of the
other issues discussed in section III. This discussion is linked to
related discussions of precursor issues in the NSR section of this
package (see section III.M.), the transportation conformity program
(see section III.K. of this package, and the conformity regulations
\39\), and the general conformity program (see section III.L. of this
package. All of these programs take effect prior to approval of SIPs
for attaining the PM_2.5 NAAQS. In the case of NSR, the
program applies on the effective date of the nonattainment area
designation. In the case of transportation conformity and general
conformity, the program takes effect one year from the effective date
of designation of the nonattainment area (i.e., April 5, 2006). Thus,
for each of these programs there is an interim period between the date
the program becomes applicable to a given nonattainment area and the
date the State receives EPA approval of its overall PM_2.5
implementation plan. Options for addressing PM_2.5 precursors
in the NSR program are discussed in section III.M. below. For the
transportation conformity program, precursor policies are addressed in
the final rule on PM_2.5 precursors.\40\
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\39\ See the final transportation conformity rule (69 FR 40004;
July 1, 2004); the conformity rule amendments addressing
PM_2.5 precursors (70 FR 24280; May 6, 2005); and
transportation conformity regulations at 40 CFR Parts 51 and 93.
\40\ The final transportation conformity rule on
PM_2.5 precursors was published in the Federal Register on
May 6, 2005 at 70 FR 24280.

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[[Page 65999]]

2. Proposed Policy Options for Addressing PM_2.5 Precursors
in Nonattainment Plan Programs
This section discusses potential options for addressing the
PM_2.5 precursors SO₂, ammonia, NO_X and
volatile organic compounds in PM_2.5 nonattainment plan
programs other than NSR and transporation conformity. Several other
preamble sections in today's notice, including those on RFP, RACT,
RACM, and modeling and attainment demonstrations refer the reader to
this overall section. Our approach to precursors of PM_2.5 in
these areas will be decided after consideration of comments through
this rulemaking process and our policy for PM_2.5 precursors
will be stated in the final rule.
As an initial matter, it is helpful to clarify the terminology we
use throughout this notice to discuss precursors. We recognize
NO_X, SO₂, VOCs, and ammonia as precursors of
PM_2.5 in the scientific sense because these pollutants can
contribute to the formation of PM_2.5 in the ambient air.
However, the degree to which these individual precursors and pollutants
contribute to PM_2.5 formation in a given location is complex
and variable. This requires that we further consider in this action how
States should address these PM_2.5 precursors in their
PM_2.5 nonattainment plan programs. Thus, where we believe
that all states should address a given precursor of PM_2.5
under a specific PM_2.5 nonattainment plan requirement, we
refer to it more specifically as a ``PM_2.5 nonattainment
plan precursor, transportation conformity precursor, or NSR precursor.
We request comment on all aspects of the proposed options set forth below.
Sulfur dioxide. We believe the previous technical discussion and
analysis of speciated air quality data provides an appropriate basis
for requiring States to address sulfur dioxide as a PM_2.5
nonattainment plan precursor in all areas.\41\ The fact that sulfate is
a significant contributor (e.g. ranging from 9 percent to 40 percent)
to PM_2.5 nonattainment and other air quality problems in all
regions of the country is a critical piece of evidence supporting this
approach. The EPA requests comments on the requirement that
SO₂ is a PM_2.5 nonattainment plan precursor in
all nonattainment areas.
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\41\ As stated in the May 6, 2005 (70 FR 24282) final
transportation conformity rule on PM_2.5 precursors, on-
road emissions of sulfur dioxide would only be addressed in
conformity determinations if the state air agency or EPA Regional
Administrator found that the on-road emissions are a significant
contributor to the area's PM_2.5 problem or if the area's
SIP established a motor vehicle emissions budget for sulfer oxides.
---------------------------------------------------------------------------

Ammonia. In regard to ammonia, however, we believe there is
sufficient uncertainty about emissions inventories and about the
potential efficacy of control measures from location to location such
that the most appropriate approach for proposal is a case-by-case
approach. Ammonia reductions may be appropriate in selected locations,
but in others such reductions may lead to increased atmospheric
acidity, exacerbating acidic deposition problems. Each State should
evaluate whether reducing ammonia emissions would lead to
PM_2.5 reductions in their specific PM_2.5
nonattainment areas. Under this proposed policy, however, States are
not required to address ammonia as a PM_2.5 nonattainment
plan precursor, unless the State or EPA makes a technical demonstration
that ammonia emissions from sources in the State significantly
contribute to the PM_2.5 problem in a given nonattainment
area or to other downwind air quality concerns. As noted above, ammonia
reductions may be effective primarily in areas where nitric acid is in
abundance and ammonia is the limiting factor to ammonium nitrate
formation. Where the State or EPA has determined that ammonia is a
significant contributor to PM_2.5 formation in a
nonattainment area, the State would address ammonia emissions in its
nonattainment SIP due in 2008. From that point in time, the
implementation of the PM program and other associated programs (e.g.
the NSR program and transportation conformity program) in that area
would proceed in accordance with this determination.\42\ Ammonia will
be addressed under the transportation conformity program if the SIP
establishes a budget specifically for on-road ammonia emissions. The
EPA requests comments on this approach to addressing ammonia emissions
under the PM_2.5 program.
---------------------------------------------------------------------------

\42\ As stated in the May 6, 2005 (70 FR 24282) final
transportation conformity rule on PM_2.5 precursors, on-
road emissions of ammonia would also be addressed in conformity
determinations before a SIP is submitted and budgets are found
adequate or approved if the state air agency or EPA Regional
Administrator found that the on-road emissions of ammonia are a
significant contributor to the area's PM_2.5 problem.
---------------------------------------------------------------------------

Nitrogen oxides. Based on a review of speciated monitoring data
analyses, it is apparent that nitrate concentrations vary significantly
across the country. For example, in some southeastern locations, annual
average nitrate levels are in the range of 6 to 8 percent of total
PM_2.5 mass, whereas nitrate comprises 40 percent or more of
PM_2.5 mass in certain California locations. Nitrate
formation is favored by the availability of ammonia, low temperatures,
and high relative humidity. It is also dependent upon the relative
degree of nearby SO₂ emissions because ammonia reacts
preferentially with SO₂ over NO_X.
The sources of NO_X are numerous and widespread,
including motor vehicles, power plants, and many other combustion
activities. We believe the previous technical discussion and analysis
of speciated air quality data provides an appropriate basis for
presuming that states must evaluate and implement reasonable controls
on sources of NO_X in all nonattainment areas. Under this
policy, States are required to address NO_X under all aspects
of the program, unless the State and EPA makes a finding that
NO_X emissions from sources in the State do not significantly
contribute to the PM_2.5 problem in a given area or to other
downwind air quality concerns. An additional consideration is that the
majority of potential PM_2.5 nonattainment areas are already
designated as nonattainment for the 8-hour ozone standard. For
PM_2.5 areas that are also violating the 8-hour ozone
standard, strategies to reduce NO_X emissions will help
address both air pollution problems. The EPA requests comments on this
approach to addressing NO_X emissions under the PM_2.5 program.
Volatile Organic Compounds (VOC). Section II.B. discusses the main
categories of organic compounds with varying degrees of volatility:
Highly reactive, volatile compounds with six or fewer carbon atoms
which indirectly contribute to PM formation through the formation of
oxidizing compounds such as the hydroxyl radical and ozone; and
semivolatile compounds with between seven and 24 carbon atoms which can
exist in particle form and can readily be oxidized to form other low
volatility compounds. High molecular weight organic compounds (with 25
carbon atoms or more and low vapor pressure) are emitted directly as
primary organic particles and exist primarily in the condensed phase at
ambient temperatures. For this reason, these organic compounds will be
regulated as primary PM_2.5 emissions and not VOCs for the
purposes of the PM_2.5 implementation program.
Current scientific and technical information clearly shows that
carbonaceous material is a significant fraction of total
PM_2.5 mass in most areas, and that certain aromatic VOC
emissions such as toluene, xylene, and trimethyl-benzene are precursors
to the formation of secondary organic aerosol. Further, analyses of
ambient data

[[Page 66000]]

indicate that a considerable fraction of the total carbonaceous
material is likely from local as opposed to regional sources.
However, while significant progress has been made in understanding
the role of gaseous organic material in the formation of organic PM,
this relationship remains complex. We recognize that further research
and technical tools are needed to better characterize emissions
inventories for specific VOC compounds, and to determine the extent of
the contribution of specific VOC compounds to organic PM mass.
In light of the factors discussed above, EPA proposes that States
are not required to address VOC's as PM_2.5 nonattainment
plan precursors, unless the state or EPA makes a finding that VOC's
significantly contribute to a PM_2.5 nonattainment problem in
the State or to other downwind air quality concerns. In proposing this
policy, we are mindful of the fact that a majority of areas that have
been designated as nonattainment for PM_2.5 are already
designated as nonattainment for the 8-hour ozone standard. Thus, these
areas will already be required to evaluate VOC control measures for
ozone purposes. (The inventory of VOC as defined here, including
gaseous organic compounds, is essentially identical to the inventory of
VOC for ozone control purposes.) The few PM_2.5 areas not
designated as nonattainment for the 8-hour ozone standard will not be
required to regulate VOC emissions sources unless the State or EPA
makes a relevant technical finding. We request comments accompanied by
detailed technical supporting information on this proposed policy
approach for addressing VOC's under the PM_2.5 implementation
program.
In general. Any State or EPA technical demonstration to modify the
presumptive policy approach for ammonia, NO_X, or VOC should
be developed well in advance of the SIP submittal date. In addition,
the development of such a technical demonstration should include
consultation with appropriate State, local, and EPA technical
representatives representing air quality and transportation agencies.

III. What Are the Specific Elements of EPA's PM_2.5
Implementation Program?

A. What classification options are under consideration for PM2.5
nonattainment areas?

1. Background
Section 172 of subpart 1 contains the general requirements for SIPs
for all nonattainment areas. Section 172(a)(1) states that on or after
the date of designation, the Administrator may classify the area for
the purpose of applying an attainment date or for some other purpose.
Thus, a classification system is allowed under section 172, but is not
required for the purposes of implementing a national ambient air
quality standard.
If we choose to establish a classification system, the Act states
that we may consider certain factors in doing so, such as the severity
of nonattainment in such areas, and the availability and feasibility of
the pollution control measures that may be needed to achieve
attainment. We must publish a notice in the Federal Register announcing
any classifications and provide for at least 30 days for written
comment. Classifications are not subject to notice and comment
rulemaking requirements, however, nor are they subject to judicial
review until we take any action on plan submissions (under sections
110(k) or 110(l)), or sanctions in cases where the State fails to
submit a plan (under section 179).
2. Proposed Options for PM_2.5 Classifications
This section describes two implementation approaches for
classifying or not classifying PM_2.5 nonattainment areas.
The first and preferred option is to not have any classification
system. The second option would have a two-tiered classification
system, with areas classified as ``moderate'' or ``serious'' based on
specific criteria. These options are discussed below.
a. No Classification System Based on Design Values
In today's notice, our preferred option is to not have any system
for classifying PM_2.5 nonattainment areas or assigning
attainment dates and control strategy requirements based on the
severity of the nonattainment problem (e.g. the area's design value).
We believe that an advantage of this approach is that it will provide a
relatively simple implementation structure for state implementation of
the PM_2.5 standards. This approach also will allow
flexibility to determine attainment dates and control strategies
appropriate for each area under Clean Air Act requirements.
We believe that with the variable mix of sources contributing to
PM_2.5 concentrations in various regions of the country and
the variable set of appropriate control measures, it may not be
advantageous to have a classification system which automatically
requires a longer list of control strategies, and allows a later
attainment date, for areas with higher current levels of PM_2.5 pollution.
Under our proposed approach, the State will be required to submit
an attainment demonstration for each nonattainment area proposing an
attainment date that is as expeditious as practicable for each area.
(Attainment date issues are discussed in more detail in section III.C.)
In determining what attainment date is considered ``as expeditious as
practicable,'' the State will need to demonstrate that it is achieving
RFP (see section III.G.), and it will have to adopt rules to implement
the RACT and RACM requirements within the nonattainment area (see
section III.I.) in order to attain the standard as expeditiously as
practicable. In determining an expeditious attainment date, the State
will need to take into consideration the air quality improvements that
are expected due to other emission reduction programs at the national
level (e.g. Tier II vehicle standards, heavy-duty diesel program,
etc.), regional level reductions (e.g. NO_X SIP call), any
additional regional SO₂ or NO_X reductions that
may be achieved under a legislative or regulatory approach, and State
level (e.g. Clean Smokestacks legislation in North Carolina).
b. Two-Tiered Classification System
Another option on which we are seeking comment is a two-tiered
classification system. Under this approach, areas with higher
PM_2.5 levels (i.e. design values) would qualify for an
attainment date extension beyond April 2010 to no later than April
2015. In return, consistent with the approach in subpart 2, part D of
Title I for ozone, such areas would be required to include certain
mandatory measures in their SIPs.
Definition of serious and moderate areas. This option would
establish two nonattainment classification categories: ``moderate'' and
``serious.'' These categories could be based on the severity of
nonattainment (e.g., serious areas would be those with a design value
above a specific threshold), the attainment date for the area (e.g.,
serious areas would be those with attainment dates after April 2010),
or some other measure. We invite comment on appropriate ways to define
moderate and serious areas and request that any recommended approach be
accompanied by adequate supporting information.
Under a potential two-tiered classification system, all areas not
classified as ``serious'' would be classified as ``moderate.'' However, any

[[Page 66001]]

moderate area that needed an attainment date longer than five years
would be reclassified to serious. This would ensure that areas with a
more persistent PM_2.5 problem are subject to more stringent
requirements, even if they are not one of the areas with the highest
current design values. For such areas, the state would be required to
request reclassification and ensure that the 2008 attainment SIP
submission for the area includes all measures needed to meet serious
area requirements.
Serious area requirements. Serious areas would be required to meet
RACM and RACT requirements described elsewhere in this notice. The
attainment date would be as expeditiously as practicable, but no later
than 10 years after designation, depending on the year in which the
area would be projected to attain considering existing control
requirements and the effect of RACM, RACT and RFP.
Various approaches can be considered for outlining additional
requirements for serious areas beyond those required for all areas by
subpart 1. More stringent requirements for serious areas could be
established for RFP, RACT, and/or RACM.
For RFP, one approach could involve setting a more prescriptive or
higher RFP requirement for serious areas from the 2002 base year to the
attainment year. For example, the required rate could be a specific
annual percentage reduction in direct PM_2.5 and all
PM_2.5 precursors, analogous to the 3% per year reduction
requirement for the 1-hour ozone program in section 182 of the Act.
This approach is described among the options in the RFP section of this
proposal (see section III.G.5). Progress would be evaluated in 2008 and
every 3 years thereafter. An alternative could be to require a specific
weighted average annual reduction in direct PM_2.5 and all
precursors, based upon the PM_2.5 speciation profile for the
relevant urban area.
An additional requirement for serious areas could be to define a
lower emissions threshold for major sources for purposes of determining
applicability for RACT than would apply in moderate areas. Note that
the option of a lower threshold for RACT is consistent with only
options 1 and 3 proposed in the RACT section of this notice (see
section III.I.5). A discussion of possible thresholds is included in
that section.
Moderate area requirements. Under this option, ``moderate'' areas
would constitute all areas that are not categorized as ``serious.''
They would be required to submit 2008 plans that demonstrate attainment
of the standards as expeditiously as practicable, but not later than
April 2010.\43\ Attainment would be based on implementation of existing
measures (e.g. CAIR, mobile source rules, previously adopted state and
local measures) and any other measures necessary to meet the RACT,
RACM, RFP, and expeditious attainment requirements. (The scope of these
requirements will be determined based on which options for these
program elements are adopted in the final rule.) The area would be
required to provide a demonstration that it had adopted all reasonable
controls to ensure expeditious attainment, and that there was no
additional collection of reasonable controls (i.e. RACM and RACT)
available in the area that would advance the attainment date by at
least one year. EPA seeks comment on what would constitute adequate
information provided by the State to show that a moderate area has met
the RACT, RACM, and RFP requirements and cannot advance the attainment date.
---------------------------------------------------------------------------

\43\ Under this approach, attaining by April 2010 means that the
design value for 2007-2009 would attain the standards.
---------------------------------------------------------------------------

Failure to attain. Under the general authority in section 172(a)(1)
to establish a classification system, EPA proposes a process here that
is similar to the PM₁₀ process included in subpart 4 for
addressing areas that fail to attain. With this approach, EPA would
have the authority to make a finding of failure to attain within 6
months for any moderate area that fails to attain the standards by
April 2010. Once EPA issues such a finding, the area would be
automatically ``bumped-up'' to the serious category. The area would
then have one year to develop a revised implementation plan and RFP
plan in order to attain the standards as expeditiously as practicable,
but no later than April 2015.
Any serious area that fails to attain by its attainment date would
be subject to the requirements of sections 179(c) and (d) of the Act.
EPA would make a finding of failure to attain no later than 6 months
after the attainment date and publish a notice in the Federal Register.
The state would be required to submit an implementation plan revision
within one year after publication of the Federal Register notice
pursuant to section 179(d)(2) of the Act.
Voluntary Bump-Up. Under this option, any area wishing to
reclassify from moderate to serious may do so. The Administrator shall
publish a notice in the Federal Register of any such request and of the
action by the Administrator granting the request.
c. Rural Transport Classification
The 8-hour ozone implementation program includes a ``rural
transport classification'' for subpart 1 nonattainment areas. In this
section we discuss whether an area classification of this type would be
appropriate for the PM_2.5 implementation program in light of
the fact that no currently designated PM_2.5 nonattainment
area could meet criteria similar to those that apply to rural transport
areas under the ozone implementation program.
Under this potential concept, a PM_2.5 nonattainment area
would qualify for the ``rural transport'' classification if it met
criteria similar to those specified for rural transport areas for the
1-hour ozone standard under section 182(h). Section 182(h) defines
``rural transport'' areas as those areas that do not include, and are
not adjacent to, any part of a Metropolitan Statistical Area (MSA) or,
where one exists, a Consolidated Metropolitan Statistical Area (CMSA).
Because OMB issued revised metropolitan area definitions in 2003, EPA
suggests that if PM_2.5 rural transport areas are made
possible under the final rule, this geographic criterion would be
revised for PM_2.5 such that a rural transport area could not
include or be adjacent to any part of a core-based statistical area
(CBSA) or a consolidated statistical area (CSA). Section 182(h) further
limits the category to those areas whose own emissions do not make a
significant contribution to pollutant concentrations in those areas, or
in other areas.
In the event the ozone approach is followed, a State with a
PM_2.5 ``rural transport'' area would need to (1) demonstrate
that the area meets the above criteria, (2) demonstrate using EPA
approved attainment modeling that the nonattainment problem in the area
is due to the ``overwhelming transport'' of emissions from outside the
area, and (3) demonstrate that sources of PM_2.5 and its
precursor emissions within the boundaries of the area do not contribute
significantly to PM_2.5 concentrations that are measured in
the area or in other areas. Because this is a proposed rule, EPA
currently has not developed any modeling guidance for PM_2.5
rural transport demonstrations.
An area which qualifies for the ``rural transport'' classification
would only be required to adopt local control measures sufficient to
demonstrate that the area would attain the standard by its attainment
date ``but for'' the overwhelming transport of emissions emanating from
upwind States. RFP requirements under subpart 1 would

[[Page 66002]]

still apply to these areas (see section E of this notice).
As with other nonattainment areas, rural transport nonattainment
areas would be subject to NSR, transportation conformity, and general
conformity requirements. However, in section M of today's notice, we
are soliciting comment on whether it would be appropriate to establish
less burdensome NSR requirements in the event that a classification for
rural transport areas is adopted in the final rule.\44\ Regarding
transportation conformity, EPA has issued revised conformity
regulations to address the 8-hour ozone and PM_2.5 standards
in separate actions. In general under the current program,
nonattainment areas not part of a metropolitan planning organization
subject to transportation conformity already have less burdensome
requirements. For example, areas without a metropolitan planning
organization do not need to conduct emissions analyses for conformity
purposes until the time that a federal highway or transit project is
proposed within the area (see further discussion of transportation
conformity issues in section III.K. of this notice).
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\44\ The Agency is also considering the development of a
separate proposed rule on flexible implementation of nonattainment
NSR for any areas where transport is the primary cause of the area's
nonattainment for any criteria pollutant. Such a proposal would not
be dependent on the incorporation of a transport classification in a
classification system for a NAAQS.
---------------------------------------------------------------------------

Under this potential approach, a State applying for a rural
transport classification for an area would need to develop an
attainment demonstration that takes into consideration projected
emissions reductions from the implementation of local, regional, and
national control measures in order to show that it would reach
attainment as expeditiously as practicable. Because such an area would
need to rely on national or regional reductions to some degree, the
State or Tribe should take into consideration the attainment date of
contributing nonattainment areas that contribute to the affected area's
air quality problem, and the implementation schedule for any regional
reduction strategy (such as a regulation to address transported
emissions of SO₂ and NO_X), in developing its
attainment demonstration. The issues related to interstate transport
are also discussed elsewhere in this proposed rulemaking.
In reviewing the currently designated PM_2.5
nonattainment areas, it appears that all areas are within or adjacent
to a CBSA or CSA, and thus would not meet the criteria discussed above.
Because of this fact, EPA requests comment on whether this type of
classification option is needed at all under the PM_2.5
implementation program.

B. When are PM2.5 attainment demonstrations and SIPs due, and what
requirements must they address?

Part D of Title I of the Act sets forth the requirements for SIPs
needed to attain the national ambient air quality standards. Part D
includes a general subpart 1 which applies to all NAAQS for which a
specific subpart does not exist. Because the PM standards were not
established until 1997, the nonattainment plan provisions found in
section 172 of subpart 1 apply.
Section 172(b) of the Act requires that at the time the Agency
promulgates nonattainment area designations, the EPA must also
establish a schedule for states to submit SIPs meeting the applicable
requirements of section 172(c) and of section 110(a)(2) of the Act.
Nonattainment area designations were finalized in December 2004, and a
supplemental notice was issued in April 2005. Consistent with section
172(b) of the Act, section 51.1002 of the proposed rule requires the
State to submit its attainment demonstration and SIP revision within
three years, or by April 2008.
Section 51.1006 of the proposed rule addresses the situation in
which an area is initially designated as attainment/unclassifiable but
is later designated as nonattainment based on air quality data after
the 2001-2003 period. Under such circumstances, the SIP submittal date
would be three years from the effective date of the redesignation, and
the attainment date would be as expeditiously as practicable but no
later than five years from the effective date of the redesignation.
The section 172(c) requirements that States are to address under
section 172(c) (including RACT, RACM, RFP, contingency measures,
emission inventory requirements, and NSR) are discussed in later
sections of this notice. Section 110(a)(2) of the Act requires all
States to develop and maintain a solid air quality management
infrastructure, including enforceable emission limitations, an ambient
monitoring program, an enforcement program, air quality modeling, and
adequate personnel, resources, and legal authority. Section
110(a)(2)(D) also requires State plans to prohibit emissions from
within the State which contribute significantly to nonattainment or
maintenance areas in any other State, or which interfere with programs
under part C to prevent significant deterioration of air quality or to
achieve reasonable progress toward the national visibility goal for
federal class I areas (national parks and wilderness areas). In order
to assist States in addressing their obligations regarding regionally
transported pollution, EPA has finalized the CAIR to reduce
SO₂ and nitrogen oxide emissions from large electric
generating units (see section I.E.2. for further discussion).\45\
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\45\ More information on the Clean Air Interstate Rule is
available at: http://www.epa.gov/cair.

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To date, few states have submitted a SIP revision addressing the
section 110(a) requirements for the purposes of implementing the PM
standards. The EPA recognizes that this situation is due in part to the
fact that there were a series of legal challenges to the PM standards
which were not resolved until March 2002, at which time the standards
and EPA's decision process were upheld (see section I.B. for further
discussion of past legal challenges to the standards). To address the
States' continuing obligation to address the requirements of section
110(a), however, section 51.1002 of the proposed rule also requires
each State to address the required elements of section 110(a)(2) of the
Act in its nonattainment plan SIP revision, if it has not already done so.

C. What are the attainment dates for PM2.5 nonattainment areas?

1. Background
Section 172(a)(2)(A) states that the attainment date for a
nonattainment area must be ``as expeditiously as practicable, but no
later than 5 years from the date of designation for the area.'' Since
PM_2.5 designations were promulgated in December 2004 and
have an effective date of April 2005, the initial attainment date for
PM_2.5 areas would be no later than April 2010. For an area
with an attainment date of April 2010, EPA would determine whether it
had attained the standard by evaluating air quality data from the three
previous calendar years (i.e. 2007, 2008, and 2009).
Section 172 also states that if EPA deems it appropriate, the
Agency may extend the attainment date for an area for a period not
greater than 10 years from the date of designation, taking into account
the severity of the nonattainment problem in the area, and the
availability and feasibility of pollution control measures. (See
further discussion of attainment date extensions in section III.C.4.)
For any areas that are granted the full five year attainment date
extension, the attainment date would be no later than April 2015. For

[[Page 66003]]

such areas, EPA would determine whether they have attained the standard
by evaluating air quality data from 2012, 2013, and 2014. Section
51.1004 of the proposed regulations addresses the attainment date
requirement.
2. Consideration of Existing Measures in Proposing an Attainment Date
As part of their attainment demonstrations, States will need to
assess the effect of implementation of existing national and State
programs already in place (e.g. partial implementation of the CAIR
rule, final Acid Rain Program, motor vehicle tier II standards and
heavy-duty diesel engine standards, NO_X SIP call, State
legislation such as Clean Smokestacks bill in North Carolina), plus the
implementation of RACT and RACM in the nonattainment area, to determine
what is the most expeditious attainment date for the area. States in
this situation will need to first project the emissions reductions
expected by 2009 due to national standards, State regulations, and any
local measures already being implemented, and then conduct local-scale
modeling to project the estimated level of air quality improvement in
accordance with EPA's modeling guidance. These assessments and any
needed State emission reduction programs will need to be part of the
State's 2008 attainment demonstration.
3. Areas May Qualify for Two 1-Year Attainment Date Extensions
Subpart 1 provides for States to request 2 one-year extensions of
the attainment date for a nonattainment area under limited
circumstances. Section 172(a)(2)(C) of the Act provides that EPA
initially may extend an area's attainment date for one year, provided
that the State has complied with all the requirements and commitments
pertaining to the area in the applicable implementation plan, and
provided that the area has had no more than a minimal number of
``exceedances'' of the relevant standard in the preceding year. Because
the PM_2.5 standards do not have exceedance-based forms but
are based on 3-year averaging periods, we interpret the air quality
test in section 51.1005 to mean that the area would need to have
``clean data'' for the third of the three years that are to be
evaluated to determine attainment.\46\ By this we mean that for the
third year, the air quality for all monitors in the area as analyzed in
accordance with Appendix N to 40 CFR Part 50 each must have an annual
average of 15.0 [mu]g/m\3\ or less, and a 98th percentile of 24-hour
monitoring values of 65 [mu]g/m\3\ or less in order to qualify for a 1-
year extension. (Given the rounding provisions specified in 40 CFR Part
50, Appendix N, these criteria would be satisfied if the concentrations
before final rounding are less than an annual average of 15.05 [mu]g/
m\3\ and a 24-hour value of 65.5 [mu]g/m\3\.)
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\46\ See section 51.1005 of the proposed regulation.
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For example, suppose an area in violation of the annual standard
has an attainment date of April 2010, and its annual average for 2007
was 15.8 and for 2008 was 15.6. If the annual average for the area in
2009 is 14.9, then the 3-year average would be 15.4, and it would not
have attained the standard. We interpret section 172(a)(2)(C) as
allowing the area to submit a request to EPA for a one-year extension
of its attainment date to 2013 (provided the State has also complied
with its requirements and commitments) since the 14.9 ambient air
quality value in the third year (2009) met the test of being at or
below 15.0. Section 51.1005(a) of the proposed regulation addresses the
initial one-year attainment date extension.
The air quality measured in 2010 in conjunction with prior data
will determine if the area attains the standard, qualifies for a second
one-year extension, or does not attain the standard. For example, if
the area's annual average for 2011 is 14.3, then its 3-year average for
2009-2011 would be 14.9 and it would have met the annual standard.
If the area's annual average for 2011 is 14.9, however, then its 3-
year average for 2009-2011 would be 15.1. In this situation the area
would not have attained the standard, but the area would meet the air
quality test for the second of the 1-year extensions allowed under
section 172(a)(2)(C), because the 2011 annual average was at or below
15.0. Section 51.1005(b) of the proposed rule addresses the second one-
year attainment date extension. After obtaining a second one-year
extension, the State would evaluate whether the air quality values in
2012, in conjunction with 2010 and 2011 data, bring the area into
attainment.
Pursuant to section 172(a)(2)(C), States must submit additional
information to EPA to demonstrate that they have complied with
applicable requirements, commitments, and milestones in the
implementation plan. This information is needed in order for EPA to
make a decision on whether to grant a 1-year attainment date extension.
The EPA will not be inclined to grant a 1-year attainment date
extension to an area unless the State can demonstrate that it has met
important requirements contained in the area's implementation plan.
States must demonstrate that: (1) Control measures have been submitted
in the form of a SIP revision and substantially implemented to satisfy
the requirements of RACT and RACM for the area, (2) the area has made
emissions reductions progress that represents reasonable further
progress (RFP) toward attainment of the NAAQS, and (3) trends related
to recent air quality data for the area indicate that the area is in
fact making progress toward attainment of the standard. Any decision
made by EPA to extend the attainment date for an area will be based on
facts specific to the nonattainment area at issue, and will only be
made after providing notice in the Federal Register and an opportunity
for the public to comment.
If an area fails to attain the standard by the attainment date, EPA
would publish a finding to this effect in accordance with section 179
of the Act. The area then would be required, within 1 year of
publication of this finding, to develop a revised SIP containing
additional emission reduction measures needed to attain the standard as
expeditiously as practicable. See section III.C.5. below for further
discussion.
4. Areas May Submit a SIP Demonstrating That It Is Impracticable To
Attain by the 5-Year Attainment Date
As stated previously, under section 172(a)(2)(A), EPA may grant an
area an extension of the initial attainment date for a period of one to
five years. States that request an extension of the attainment date
under this provision of the Act must submit a SIP in 2008 that
includes, among other things, an attainment demonstration showing that
attainment within 5 years of the designation date is impracticable. It
must also show that the area will attain the standard by an alternative
date that is as expeditiously as practicable, but in no case later than
10 years after the designation date for the area (i.e. by April 2015
for an area with an effective designation date of April 2005). An
appropriate extension in some cases may be only 1 or 2 years--a five-
year extension is not automatic upon request.
The attainment demonstration must provide sufficient information to
show that attainment by the initial attainment date is impracticable
due the severity of the nonattainment problem in the area, the lack of
available or feasible control measures, and any other pertinent
information which shows that additional time is required for the area
to attain the standard. States requesting an extension of the
attainment date must also demonstrate that all local

[[Page 66004]]

control measures that are reasonably available and technically feasible
for the area are currently being implemented to bring about expeditious
attainment of the standard by the alternative attainment date for the
area. The State's plan will need to project the emissions reductions
expected due to federally enforceable national standards, State
regulations, and local measures such as RACT and RACM, and then conduct
modeling to project the level of air quality improvement in accordance
with EPA's modeling guidance. The EPA will not grant an extension of
the attainment date beyond the initial five years required by section
172(a)(2)(A) for an area if the State has not thoroughly considered the
implementation of all RACM and RACT local control measures for the area
(see section III.I for a more detailed discussion of RACT and RACM).
EPA also will examine whether the State has adequately considered
measures to address intrastate transport of pollution from sources
within its jurisdiction. In attainment planning, States have the
obligation and authority to address the transport of pollution from one
area of the state to another. Any decision made by EPA to extend the
attainment date for an area beyond its original attainment date will be
based on facts specific to the nonattainment area at issue and will
only be made after providing notice in the Federal Register and an
opportunity for the public to comment.
5. Areas That Fail To Attain or Do Not Qualify for an Attainment Date
Extension
Section 179 of the Act requires that EPA publish a finding in the
Federal Register for areas that fail to attain by their attainment
dates, or that fail to qualify for an attainment date extension. Within
one year of EPA's determination that the area failed to attain, the
State is then required to submit a SIP revision providing for
attainment of the standard as expeditiously as practicable in
accordance with section 172(a)(2) of the Act. Section 179(d)(3)
provides that the SIP revision must include any specific additional
measures as may be prescribed by EPA, including ``all measures that can
be feasibly implemented in the area in light of technological
achievability, costs, and any nonair quality and other air quality-
related health and environmental impacts.'' The EPA believes that in
considering the factors above, States that fail to attain the standard
initially should give greater weight to technologically feasible
measures despite the fact that these measures may be more costly than
those implemented under the previous plan.
6. Determining Attainment for the PM_2.5 Standards
The EPA has the responsibility for determining whether a
nonattainment area has attained the standard by its applicable
attainment date. Section 179(c)(1) of the Act requires EPA to make
determinations of attainment no later than 6 months following the
attainment date for the area. Under section 179(c)(2), EPA must publish
a notice in the Federal Register identifying those areas which failed
to attain by the applicable attainment date. The statute further
provides that EPA may revise or supplement its determination of
attainment for the affected areas based upon more complete information
or analysis concerning the air quality for the area as of the area's
attainment date.
Section 179(c)(1) of the Act provides that the attainment
determination for an area is to be based upon an area's ``air quality
data as of the attainment date.'' The EPA will make the determination
of whether an area's air quality is meeting the PM_2.5 NAAQS
by the applicable attainment date primarily based upon data gathered
from the air quality monitoring sites which have been entered into
EPA's Air Quality System (AQS) database. No special or additional SIP
submittal will be required from the State for this determination.
A PM_2.5 nonattainment area's air quality status is
determined in accordance with appendix N of 40 CFR part 50. To show
attainment of the 24-hour and annual standards for PM_2.5,
the most recent three consecutive years of data prior to the area's
attainment date must show that three-year average PM_2.5
concentrations are at or below the levels of the standards. A complete
year of air quality data, as described in part 50, Appendix N, is
comprised of all 4 calendar quarters with each quarter containing data
from at least 75 percent of the scheduled sampling days. The annual
standard for PM_2.5 is attained when the 3-year average
annual mean concentration is less than or equal to 15.0 [mu]g/
m3. The 24-hour standard for PM_2.5 is met when
the average of 98th percentile values for three consecutive calendar
years at each monitoring site is less than or equal to 65 [mu]g/m3.
The EPA will begin processing and analyzing data related to the
attainment of PM_2.5 areas immediately after the applicable
attainment date for the affected areas. Current EPA policy, under 40
CFR part 58, sets the deadline for submittal of air quality data into
the AQS database for no later than 90 days after the end of the
calendar year.
While EPA may determine that an area's air quality data indicates
that an area may be meeting the PM_2.5 NAAQS for a specified
period of time, this does not eliminate the State's responsibility
under the Act to adopt and implement an approvable SIP. If EPA
determines that an area has attained the standard as of its attainment
date, the area will remain classified as nonattainment until the State
has requested, and EPA has approved, redesignation to attainment for
the area.
In order for an area to be redesignated as attainment, the State
must comply with the five requirements listed under section
107(d)(3)(E) of the Act. Among other things, section 107(d)(3)(E)
requires that EPA determine that an area has met the PM_2.5
NAAQS and that the State has submitted a SIP for the area which has
been approved by EPA.
7. How Do Attainment Dates Apply to Indian Country?
The Tribal Authority Rule (TAR) at 40 CFR 49.9 provides guidelines
by which Tribes may implement air quality programs in a similar manner
as States. However, Tribes choosing to implement their own air quality
programs are not required to meet the same schedules and deadlines that
apply to States, including attainment dates for NAAQS.
In situations where a Tribe chooses to not implement its own air
quality program or any element thereof, EPA is required under the TAR
to develop a Federal Implementation Plan (FIP) as necessary and
appropriate. 40 CFR 49.11. Because public health considerations are of
utmost concern, we believe that any FIP for tribal lands should provide
for an attainment date that is as expeditious as practicable.
Therefore, EPA will work in consultation with the Tribes to ensure that
implementation of the standards is conducted as soon as possible taking
into consideration the needs of the Tribes, and to ensure that
attainment in other jurisdictions is not adversely affected.

D. What Are the Incentives for Achieving Early Reductions of PM2.5 and
Its Precursors?

There are significant regulatory incentives for achieving early
local area emissions reductions. Areas with design values just over the
level of the standard may be able to achieve reductions in the local
area or in the State so that, when their effect is considered in
combination with reductions achieved under national programs, they may
be sufficient to attain the standards before

[[Page 66005]]

SIPs are due in 2008. For example, if monitoring in a nonattainment
area shows that the air quality for 2004-2006 meets the standards, then
the area may be subject to reduced regulatory requirements and be
redesignated as ``attainment.'' EPA issued a ``Clean Data'' policy
memorandum in December 2004 describing possible reduced regulatory
requirements for areas that attain the standards early, but have not
yet been redesignated as attainment.\47\ For example, the area also
would be relieved of the requirements to implement the nonattainment
NSR program otherwise required for nonattainment areas, and instead
would implement the PSD program.
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\47\ Memorandum of December 14, 2004, from Steve Page, Director,
EPA Office of Air Quality Planning and Standards to EPA Air Division
Directors, ``Clean Data Policy for the Fine Particle National
Ambient Air Quality Standards.'' This document is available at:
http://www.epa.gov/pmdesignations/guidance.htm.

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Another regulatory incentive for early emissions reductions is
credit toward RFP requirements. We issued a guidance memorandum
designating 2002 as the base year for emissions inventories for
PM_2.5 and 8-hour ozone attainment plans and for regional
haze implementation plans.\48\ For PM_2.5, States therefore
can take credit for emissions reductions achieved after 2002 in meeting
their requirements for RFP. In addition, when developing attainment
demonstrations, States should account for these reductions when
establishing baseline control scenarios for assessing what additional
reductions might be needed to attain the standards.
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\48\ Memorandum of November 18, 2002, from Lydia Wegman and
Peter Tsirigotis, ``2002 Base Year Emission Inventory SIP Planning:
8-hr Ozone, PM_2.5 and Regional Haze Programs.'' This
document is available at the following web site:
http://www.epa.gov/ttn/oarpg/t1/memoranda/2002bye_gm.pdf .

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Examples of possible early reduction programs include efforts to
reduce diesel engine emissions (e.g. Clean School Bus USA, retrofits
for trucks, locomotives, construction equipment, and marine vessels
such as ferries, and diesel idling emissions programs); programs to
reduce auto emissions through reduced vehicle miles traveled and
improving maintenance of high emitting vehicles; implementation and
enforcement of regulations to reduce emissions from burning activities
(such as smoke management programs, wood stove retrofit programs, and
ordinances to ban open burning of waste or debris from land clearing);
energy conservation programs that can reduce demand from power plants;
improved emission controls on stationary sources; and improved
compliance assurance monitoring to ensure that stationary source
emissions are maintained at the levels demonstrated during emissions
performance tests. Additional discussion of possible emission reduction
strategies which could be introduced early is included in section
III.I. on RACM and RACT.

E. How Should the States and EPA Balance the Need To Address Long-Range
Transport of Fine Particle Pollution With the Need for Local Emissions
Reductions When Implementing the PM2.5 Standards?

1. Clean Air Act Provisions for Achieving Local and Regional Emissions
Reductions
Section I provides background on PM_2.5 monitoring data,
the geographic distribution of potential nonattainment areas, and the
estimated population affected. It also includes a discussion of the
regional nature of the PM_2.5 problem.
Section 172(a)(2) of the Act requires States to attain the
standards as expeditiously as practicable but within five years of
designation (i.e. attainment date of April 2010 based on air quality
data for 2007-2009), or within up to ten years of designation (i.e. to
2015) if the EPA Administrator extends an area's attainment date by 1-5
years based upon the severity of the nonattainment problem and/or the
feasibility of implementing control measures.
Virtually all nonattainment problems appear to result from a
combination of local emissions and transported emissions from upwind
areas. The structure of the CAA requires EPA to develop national rules
for certain types of sources which are also significant contributors to
local air quality problems, including motor vehicles and fuels. It also
provides for States to address emissions sources on an area-specific
basis through such requirements as RACT, RACM, and RFP.
We believe that to attain the PM_2.5 standards, it is
important to pursue emissions reductions simultaneously on the local,
regional, and national levels. As discussed in more detail in section
III.I. on RACM and RACT requirements, States will need to evaluate
technically and economically feasible emission reduction opportunities
at the local level and determine which measures can be reasonably
implemented within the nonattainment area. Local and regional emission
reduction efforts should proceed concurrently and expeditiously.
In addition, reductions in pollutants that contribute to
PM_2.5 can provide concurrent benefits in addressing a number
of air quality problems--such as ozone, regional haze, urban
visibility, and toxic air pollutant problems--by reducing common
pollutants. Such is the case with programs to reduce diesel emissions,
for example. While diesel engines collectively are large sources of
NO_X and direct PM emissions, they also emit significant
amounts of toxic air pollutants.\49\ Similarly, many sources and
activities which lead to direct emissions of organic and elemental
carbon (such as open burning and residential wood combustion) also are
key sources of toxic air pollutants (i.e. polycyclic aromatic
hydrocarbon emissions), and contribute to regional haze as well. Thus,
programs and strategies designed to reduce local emissions of PM and
its precursors can help reach attainment for the PM_2.5
standards and provide other air quality benefits as well.
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\49\ USEPA, 2002. Health Assessment Document for Diesel Engine
Exhaust. The EPA/600/8-90/057F. 01 May 2002. U.S. Environmental
Protection Agency, Office of Research and Development, National
Center for Environmental Assessment, Washington, DC. Available on
EPA's Web site: http://cfpub.epa.gov/ncea/.

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2. Regional Emission Reduction Strategies
As stated earlier in section II, the principal regional pollutants
contributing to downwind PM_2.5 concentrations in the eastern
U.S. are SO₂ and NO_X. Sulfate formed from
SO₂ accounts for about 30-50 percent of PM_2.5
mass in most eastern locations, while ammonium nitrate formed from
NO_X accounts for 6 percent to more than 20 percent in some
locations. The EPA implemented phase II of the Acid Rain Program in
2000, setting an emissions cap of 8.95 million tons of SO₂
and bringing the average emission rate for power plants to a level of
1.2 lbs per mmBTU. However, EPA analyses have shown that sulfate and
nitrate contribute to nonattainment problems significantly and will
remain a large percentage of PM_2.5 concentrations in the
eastern U.S. even after full implementation of the Acid Rain Program.
In order to address health and environmental problems associated with
PM_2.5, ozone, and mercury deposition, the President has
proposed the Clear Skies Act. [The Clear Skies Act of 2003 was
introduced in the U.S. House of Representatives (H.R. 999) and the U.S.
Senate (S. 485) on February 27, 2003.] It is designed to achieve
significant reductions in SO₂, NO_X, and mercury
emissions from power plants. (For more information, see section I.E.1.
above.)

[[Page 66006]]

Because it is uncertain whether the CSA will be enacted, EPA
established the CAIR under the existing CAA to achieve regional
reductions of SO₂ and NO_X. (See section I.E.2.
for a discussion of CAIR.) The CAA requires States to develop SIPs that
provide for attainment by deadlines in the CAA and requires States to
have implementation plans that prohibit emissions that contribute
significantly to nonattainment in other States. As described in the
Federal Register actions for the NO_X SIP call and section
126 rulemakings, EPA believes it has the authority under the CAA to
define what States need to do to address the interstate transport
requirements of section 110 in advance of the submission of
nonattainment area SIPs. The CAIR program will help many cities
throughout the region meet the PM_2.5 standards or make
significant progress toward attainment.
Air quality modeling analyses in support of the final CAIR rule
show that of the 36 areas currently designated nonattainment for
PM_2.5 in the eastern United States, 17 areas are projected
to attain the standards by 2010 with implementation of CAIR and other
existing federal and state measures. By 2015, 22 areas are projected to
attain the standards. While the air quality benefits from
implementation of CAIR and other programs are significant, it is also
evident that in some areas local emission reduction measures will serve
an important role in addressing the PM_2.5 nonattainment problem.
3. The Role of Local and State Emission Reduction Efforts in Reducing
Health Risks and Achieving the PM_2.5 Standards
As discussed above, the implementation of regional and national
strategies (such as CAIR and various mobile source programs) are
expected to provide significant air quality improvements for
PM_2.5 nonattainment areas. At the same time, analyses for
the final CAIR rule indicate that without implementation of local
measures, approximately 14 to 19 areas would be projected to remain in
PM_2.5 nonattainment status in the 2010-2015 timeframe. Thus,
EPA believes that local and State emission reduction efforts will need
to play an important role in addressing the PM_2.5 problem as
well. EPA intends to work closely with States, Tribes, and local
governments to develop appropriate in-state pollution reduction
measures to complement regional and national strategies to meet the
standards expeditiously and in a cost-effective manner.
Many types of emissions sources contribute to the PM problem, and
in many cases cost-effective measures are available to reduce their
emissions. Examples of possible local measures are discussed in the
previous section III.D. on early reductions, as well as in section
III.I. on RACT and RACM. The EPA has also provided grant funding to
STAPPA/ALAPCO to develop a ``menu of options'' document to provide
State and local agencies and the general public with additional
information on sources of emissions, potential control measures, and
their associated costs and air quality benefits.
EPA encourages States to implement technologically available and
economically feasible local measures expeditiously. States can adopt a
number of programs now, or expand their level of implementation of
existing programs, in order to achieve local area emissions reductions
in the near term. While regional emissions reductions may have a lower
cost per ton of emissions reduced than many local reductions, local
reduction opportunities may be more readily available, they may be more
feasible to implement in a shorter period of time than a broad regional
emissions trading program, and they may have high benefits per ton of
emission reduction. In addition, local emissions reductions can be
especially beneficial in reducing exposure to air pollution for dense
urban populations. Thus, by taking action in advance of the date that
regional reductions may be achieved, local communities can enjoy the
benefits of improved public health (including a reduction in health
care costs).
Preliminary EPA analyses \50\ show that if local emissions
reductions (e.g., including SO₂ and other local emissions)
were obtained only from sources located within metro areas projected to
be nonattainment, the average air quality improvement in these cities
would be 1.26 [mu]g/m\3\, and the number of counties projected to have
violating monitors in 2010 would decrease from 61 to 26. These analyses
also show that if local emissions reductions were limited to pollutants
other than SO₂, the average air quality improvement in these
cities would be 0.37 [mu]g/m\3\, and the number of counties projected
to have violating monitors in 2010 would decrease from 61 to 48. Thus,
these analyses support the conclusion that emissions reductions due to
regional and national programs such as CAIR and recently promulgated
national rules for mobile sources will make important contributions to
attainment for many eastern nonattainment areas. In the absence of
regional controls on upwind sources, downwind States would be forced to
obtain greater emissions reductions, and incur greater costs, to offset
the transported pollution from upwind sources. At the same time, this
preliminary analysis also illustrates that local emissions reductions
can be beneficial, and have the potential to bring a number of
metropolitan areas into attainment.
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\50\ See discussion of local control measures in the proposed
CAIR, 69 FR 4596-4599, and associated supporting information (docket
#OAR-2003-0053, item #OAR-2003-0053-0162, Technical
Support Document for the CAIR, Modeling Analyses).
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EPA believes that expeditiously achieving the PM_2.5
reductions that are available from reasonable local controls is
important because, as discussed in section I.A., the effects of
PM_2.5 on public health are serious. Estimates suggest that
each year tens of thousands of people die prematurely from exposure to
PM_2.5, and many hundreds of thousands more people experience
significant respiratory or cardiovascular effects. Even small
reductions in PM_2.5 levels may have substantial health
benefits on a population level. For example, in a moderate-sized
metropolitan area with a design value of 15.5 [mu]g/m\3\, efforts to
improve annual average air quality down to the level of the standard
(15.0 [mu]g/m\3\) may be expected to result in as many as 25-50 fewer
mortalities per year due to air pollution exposure. In a smaller city,
the same air quality improvement from 15.5 to 15.0 [mu]g/m\3\ still may
be expected to result in a number of avoided mortalities per year.
These estimates are based on EPA's standard methodology for calculating
health benefits as used in recent rulemakings.\51\
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\51\ These estimates are based on the relative risk for all-
cause mortality from the Pope et al. 2002 analysis of the American
Cancer Society cohort. The EPA standard methodology for estimating
health benefits has been used in developing regulatory impact
analyses for a number of regulations. Most recently, this
methodology was used in support of the CAIR (docket #OAR-2003-0053, item
#OAR-2003-0053-0175, Benefits of the Proposed CAIR, January 2004).
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The benefits of PM_2.5 control also are significant in
dollar terms. Depending on the particular emission controls on sources
of PM_2.5 precursor emissions, EPA has estimated that the
monetized health benefits of reducing emissions of pollutants that lead
to PM_2.5 formation exceed the costs by 3 to over 30 times.\52\
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\52\ U.S. EPA, 2005. Regulatory Impact Analysis for the Clean
Air Interstate Rule. EPA 452/-03-001. Prepared by Office of Air and
Radiation. Available at: http://www.epa.gov/interstateairquality/
tsd0175.pdf. See also: U.S. Environmental Protection Agency, 2004.
Final Regulatory Analysis: Control of Emissions from Nonroad Diesel
Engines. EPA420-R-04-007. Prepared by Office of Air and Radiation.
Available at http://www.epa.gov/nonroad-diesel/2004fr/420r04007.pdf.

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[[Page 66007]]

As discussed in more detail in section III.I. on RACM and RACT
requirements, States will need to evaluate technically and economically
feasible emission reduction opportunities at the local level and
determine which measures can be reasonably implemented within the
nonattainment area. To avoid the public health consequences of delayed
improvements in PM_2.5 concentrations, we believe that local
and regional emission reduction efforts should proceed concurrently and
expeditiously.
Although direct emissions may appear relatively small in tonnage
terms, States should not overlook reductions of direct local emissions,
particularly carbonaceous emissions. Monitoring data show that many
urban areas have higher levels of carbonaceous PM_2.5 than
rural areas. Based on information developed by EPA in support of
regulations on diesel engines, the population weighted impact per ton
of direct PM diesel emissions reduced is estimated to be about 9-14
times more effective in reducing health effects as compared to
SO₂ and NO_X reductions from the same sources.\53\
This analysis reflects the fact that by definition, all of the direct
fine particle emissions contribute to PM_2.5 concentrations,
but only a fraction of the SO₂ and NO_X emissions
undergo reactions in the atmosphere to become PM_2.5.
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\53\ ``Estimated NO_X, SO₂, and PM
Emissions Health Damages for Heavy-duty Vehicle Emissions.'' April
22, 2002. Memorandum by Bryan Hubbell, EPA Office of Air Quality
Planning and Standards, to docket A-2000-01, docket item IV-A-146.
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In addressing a nonattainment area having military training,
testing and operational activities occurring within it, the State
should not need to target these activities for emission reductions.
Regarding prescribed burning activities, EPA intends to continue
implementation of the Interim Air Quality Policy on Wildland and
Prescribed Fires.\54\
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\54\ USEPA, ``Interim Air Quality Policy on Wildland and
Prescribed Fires,'' memorandum from Richard Wilson, Acting Assistant
Administrator for Air and Radiation, to Regional Administrators, May
15, 1998.
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4. Addressing Regionally Transported Emissions in Local Area Attainment
Demonstrations
As discussed in section III.C., the CAA requires States with
PM_2.5 nonattainment areas to attain the standards as
expeditiously as practicable, but no later than within five years of
designation (e.g., April 2010). If the State provides an adequate
demonstration showing that it cannot attain the standards within five
years, based on the severity of the area's problem, the availability of
control measures, and the feasibility of implementing controls, then
EPA may grant the area an attainment date extension of one to five years.
Now that the multi-state CAIR emission reduction program has been
adopted well before the PM_2.5 SIPs are due, it will be
important for affected States to take into account the incremental
projected emissions reductions resulting from that program in assessing
the degree of air quality improvement that can be expected in the State
and the projected timetable for those reductions to be realized.
Experience with implementation of the cap-and-trade and emissions
banking provisions of the Acid Rain Program has shown that certain
sources likely will take steps to reduce emissions and ``bank''
emissions allowances prior to the date that compliance with the initial
emissions cap is required.
Under a trading program with an emissions banking provision, we
estimate that SO₂ emissions will be reduced on a steadily
decreasing glidepath rather than a stair step pattern. By 2009, the
last year prior to the 2010 attainment year, a portion of the total
regional SO₂ emissions reductions expected under CAIR would
be realized. In developing their SIPs, States should use existing
projections of the geographic distribution and magnitude of early
emissions reductions that are expected to be achieved by 2009 using
existing information from the IPM emissions projection model. They
should also assess the associated impact of these reductions on air
quality by using a regional air quality model. We encourage the States
to use existing analyses to the extent possible to project interim air
quality improvements from regional emissions reduction strategies, and
we commit to working with the States and regional planning
organizations to evaluate the expected air quality improvements from
CAIR. In addition, states must assess the effect of potential RACM,
including RACT, in determining an appropriate attainment date. We will
work with the States as they develop attainment demonstrations and SIPs
designed to attain the standards as expeditiously as practicable,
taking into account emissions reductions from broad regional programs
(such as the CAIR and NO_X SIP Call); national measures such
as new emissions standards for cars and trucks; and other cost
effective State and local strategies which may advance the attainment date.

F. How Will EPA Address Rrequirements for Modeling and Attainment
Demonstration SIPs When Implementing the 24-Hour and Annual Aaverage
PM2.5 Standards?

1. Introduction
Section 172(c) requires States with nonattainment areas to submit
an attainment demonstration. An attainment demonstration consists of:
(1) Technical analyses that locate, identify, and quantify sources of
emissions that are contributing to violations of the PM_2.5
NAAQS; (2) analyses of future year emissions reductions and air quality
improvement resulting from already-adopted national and local programs,
and from potential new local measures to meet the RACT, RACM, and RFP
requirements in the area; (3) adopted emission reduction measures with
schedules for implementation; and (4) contingency measures required
under section 172(c)(9) of the CAA. with a nonattainment area will have
to submit a SIP with an attainment demonstration that includes analyses
supporting the State's proposed attainment date. The State must show
that the area will attain the standards as expeditiously as
practicable, and it must include an analysis of whether implementation
of reasonably available measures will advance the attainment date.
2. Areas That Need To Conduct Modeling
Some areas having design values close to the standard may be
projected to come into attainment within five years based on modeling
analyses of national and regional emission control measures that are
scheduled to occur through 2009. Regional scale modeling for national
rules such as the Tier II motor vehicle standards, the Heavy-duty
Engine standards and the Nonroad Engine standards indicate major
reductions in PM_2.5 by 2010. A portion of these benefits
will occur in the 2004-2009 PM_2.5 attainment timeframe.
Experience with past ozone attainment demonstrations has shown that
the process of performing detailed photochemical grid modeling to
develop an attainment demonstration can be very resource intensive for
States. The EPA believes that it would be appropriate for States to
leverage resources by collaborating on modeling analyses to support SIP
submittals, or by making use of recent modeling analyses that have
already been completed. For this reason, EPA proposes that States may
use in a PM_2.5 attainment demonstration certain local,
regional and/or national modeling analyses that

[[Page 66008]]

have been developed to support Federal or local emission reduction
programs, provided the modeling meets the attainment modeling criteria
set forth in EPA's modeling guidance (described below). As with all
SIPs under subpart 1, the State must demonstrate that the area will
attain the PM_2.5 standards as expeditiously as practicable.
As part of this demonstration, the State must evaluate those
technically and economically feasible measures in the nonattainment
area in order to determine whether, if implemented together, these
measures would advance the attainment date. (This evaluation of local
measures may or may not involve additional modeling.) The EPA proposes
that if the State can rely on existing modeling analyses as part of its
attainment demonstration, it should reference appropriate reports on
that modeling which are readily available, or include the modeling
documentation in its submittal. In such situations, the State must
provide an explanation describing how it meets the criteria for
attainment-level modeling, and why the existing modeling is appropriate
for use as part of the attainment demonstration. The EPA requests
comment on this proposed approach for using existing air quality
modeling analyses in attainment demonstrations, where appropriate.
Nonattainment areas would be required to submit an attainment
demonstration SIP that includes new modeling showing attainment of the
standards as expeditiously as practicable. The new modeling will need
to include additional emissions controls or measures in order to
demonstrate attainment.
3. Modeling Guidance
Section 110(a)(2)(K)(i) states that SIPs must contain air quality
modeling as prescribed by the Administrator for the purpose of
predicting the effect of emissions on ambient air quality. The
procedures for modeling PM_2.5 as part of an attainment SIP
are contained in EPA's ``DRAFT Guidance for Demonstrating Attainment of
Air Quality Goals for PM_2.5 and Regional Haze.'' \55\ The
EPA welcomes public comments on the guidance at any time and will
consider those comments in any future revision of the document.
Comments submitted on the modeling guidance document should be
identified as such and will not be docketed as part of this rulemaking,
nor will a comment/response summary of these comments be a part of the
final PM_2.5 implementation rule since they will not affect
the rule itself. The final version of the guidance is scheduled for
release in 2005 and will be posted on EPA's web site
(http://www.epa.gov/ttn/scram/).

---------------------------------------------------------------------------

\55\ ``DRAFT Guidance for Demonstrating Attainment of Air
Quality Goals for PM_2.5 and Regional Haze'' can be found
at: http://www.epa.gov/scram001/guidance/guide/draft_pm.pdf.

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The draft modeling guidance describes how to estimate whether a
control strategy to reduce emissions of particulate matter and its
precursors will lead to attainment of the annual and 24-hour
PM_2.5 NAAQS. Part I of the guidance describes a ``modeled
attainment test'' for the annual and 24-hour PM_2.5 NAAQS.
Both tests are similar. The output of each is an estimated future
design value consistent with the respective forms of the NAAQS. If the
future design value does not exceed the concentration of
PM_2.5 specified in the NAAQS, the test is passed. The
modeled attainment test applies to locations with monitored data.
A separate test is recommended to examine projected future year
PM_2.5 concentrations in unmonitored locations.\56\
Interpolated PM_2.5 ambient data combined with modeling data
can be used to predict PM_2.5 concentrations in unmonitored
areas. The details of such an analysis will be contained in the final
modeling guidance.
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\56\ The unmonitored area attainment test will be limited to
locations which are appropriate to allow the comparison of predicted
PM_2.5 concentrations to the NAAQS, based on
PM_2.5 monitor siting requirements and recommendations.
---------------------------------------------------------------------------

States may use other analyses in addition to the modeled attainment
test and hot spot analysis to estimate whether future attainment of the
NAAQS is likely. Attainment is likely if a preponderance of evidence
suggests so. This procedure is called a ``weight of evidence
determination.''
Reliability of recommended tests for estimating future attainment
depends on having reliable data bases. The guidance identifies and
prioritizes key data gathering activities and analytical capabilities
which will increase credibility of analyses used to estimate if the air
quality goals for PM_2.5 will be met.
Part II of the guidance describes how to apply air quality models
to generate results needed by the modeled tests for attainment. This
includes developing a conceptual description of the problem to be
addressed; developing a modeling/analysis protocol; selecting an
appropriate model to support the demonstration; selecting appropriate
meteorological episodes or time periods to model; choosing an
appropriate area to model with appropriate horizontal/vertical
resolution; generating meteorological and air quality inputs to the air
quality model; generating emissions inputs to the air quality model;
evaluating performance of the air quality model; and performing
diagnostic tests. After these steps are completed, the model is used to
simulate effects of candidate control strategies.
EPA is not recommending a specific model for use in the attainment
demonstration for the PM_2.5 NAAQS. At present, there is no
single model which has been extensively tested and shown to be clearly
superior to other available models. The current modeling guideline, 40
CFR part 51, appendix W does not identify a ``preferred model'' for use
in attainment demonstrations of the NAAQS for PM_2.5. Thus,
States may choose from several alternatives. The EPA's draft modeling
guidance provides a set of general requirements which an air quality
model should meet to qualify for use in an attainment demonstration for
the PM_2.5 NAAQS. These include having received a scientific
peer review, being applicable to the specific application on a
theoretical basis, and having an adequate data base to support its
application.
In some cases, multiple models may need to be applied in the
attainment demonstration. In most cases, a photochemical grid model is
needed to treat secondary particulate matter. Photochemical grid models
can also be used to treat primary particulate. In high concentration
areas of primary particulate, however, a Gaussian plume model or puff
model may also be needed to more accurately represent steep
concentration gradients. The modeling guidance provides details and
recommendations on using multiple models.
The application of air quality models requires a substantial effort
by State agencies and EPA. Therefore, States should work closely with
the appropriate U.S. EPA Regional Offices in executing each step of the
modeling process. By doing so, it will increase the likelihood of EPA
approval of the State demonstration submitted at the end of the
modeling and overall SIP development process.
4. Modeled Attainment Test
The two modeled attainment tests for the annual and 24-hour
standards use monitored data to estimate current air quality. The
attainment test for a given standard is applied at each monitor
location within or near a designated nonattainment area for that
standard. There is also an additional attainment test to be performed
in unmonitored areas. Models are used in a relative sense to estimate
the response of

[[Page 66009]]

measured air quality to future changes in emissions. Future air quality
is estimated by multiplying current monitored values times modeled
responses to changes in emissions. Because PM_2.5 is a
mixture of chemical components, States should use current observations
and modeled responses of major components of PM_2.5 to
estimate future concentrations of each component. The predicted future
concentration of PM_2.5 is the sum of the predicted component
concentrations.
Direct application of the modeled attainment tests requires
speciated PM_2.5 ambient data co-located with FRM sites.
However, there will not be speciation monitors at every FRM site. In
fact, speciation monitors are only located at approximately 20 percent
of the FRM monitoring sites. Therefore EPA is developing a refinement
of the modeled attainment test that uses interpolated ambient
speciation data to calculate current values of PM_2.5 species
at all of the FRM monitoring sites. Gridded spatial fields of
interpolated speciated PM_2.5 data are created in order to
estimate the species fractions at each FRM site. This information,
combined with modeling results, may be used to calculate future air
quality at each FRM monitoring site.
An application of this methodology was employed and documented as
part of EPA's Clean Air Interstate Rule (CAIR). The final modeling
guidance will contain default recommendations for the disaggregation
and treatment of PM_2.5 species for the purpose of applying
the modeled attainment test.
5. Multi-Pollutant Assessments and One-Atmosphere Modeling
A multi-pollutant assessment, or one-atmosphere modeling, is
conducted with a single air quality model that is capable of simulating
transport and formation of multiple pollutants simultaneously. For
example, this type of model simulates the formation and deposition of
PM_2.5, ozone, and regional haze components, and it includes
algorithms simulating gas phase chemistry, aqueous phase chemistry,
aerosol formation, and acid deposition.
Multipollutant assessments are recommended for PM_2.5
attainment demonstrations because the formation and transport of
PM_2.5 is closely related to the formation of both regional
haze and ozone. The components of PM_2.5 account for the vast
majority of visibility impairment associated with regional haze. For
any given mass, fine particles are more efficient at scattering light
than particles larger than 2.5 micrometers in diameter, and certain
components of PM_2.5 are more efficient at scattering or
absorbing light than others. The most efficient light-scattering
particle types are secondary particulate species such as sulfates and
nitrates. Primary particles composed of crustal and other inorganic
material are less efficient at scattering light. Secondary particulate
matter comprises a significant fraction of measured PM_2.5 in
most parts of the country, and therefore is a significant contributor
to regional haze. The impact of fine particles on visibility is
enhanced still further by high relative humidity, which is especially
relevant in the Eastern U.S., because sulfates and nitrates commonly
absorb water and grow to sizes comparable to the wavelengths of visible
light.
There is often a positive correlation between measured ozone and
secondary particulate matter. Many of the same factors affecting
concentrations of ozone also affect concentrations of secondary
particulate matter. For example, similarities exist in sources of
precursors for ozone and secondary particulate matter. Emissions of
NO_X may lead to formation of nitrates as well as ozone.
Sources of VOC may be sources or precursors for both ozone and organic
particles. Presence of ozone itself may be an important factor
affecting secondary particulate formation. For example, as ozone builds
up, hydroxyl (OH) radicals do also as a result of equilibrium reactions
between ozone, water and OH in the presence of sunlight. Hydroxyl (OH)
radicals are instrumental in oxidizing gas phase SO₂ to
sulfuric acid, which is eventually absorbed by liquid aerosol and
converted to particulate sulfate in the presence of ammonia.
SO₂ also reacts with ozone and hydrogen peroxide (a
byproduct of photochemistry), in the aqueous phase, to form particulate
sulfate. Hydroxyl radicals and NO are also precursors for gas phase
nitric acid, which is absorbed by liquid aerosol and, in the presence
of ammonia, leads to particulate nitrate.
Strategies to reduce ozone can also affect formation of secondary
PM. Reducing VOC emissions could reduce ozone, OH, and/or hydrogen
peroxide. If sulfate or nitrate production is limited by lack of
availability of oxidizing agents, the ozone reduction strategy could
also reduce secondary PM. Recent research has also shown increased
secondary organic aerosol concentrations in the presence of acid
aerosols. Reductions in oxidizing agents may lead to lower
concentrations of sulfate and/or nitrate which may lead to reduced
levels of secondary organic aerosols. Control of certain VOCs \57\ may
also reduce secondary organic aerosols by reducing their semi-volatile
precursors. Reducing NO_X emissions diminishes one of the
precursors for nitric acid (i.e., NO₂ which results from
NO). Therefore, in the presence of sufficient ammonia, reducing
NO_X emissions could reduce particulate nitrate
concentrations. There are also more subtle interfaces between
strategies to reduce ozone and to reduce secondary particulate matter.
For example, reducing NO_X in the presence of substantial
particulate sulfates and lack of sufficient ammonia could in some cases
exacerbate the particulate sulfate problem, or reducing SO₂
in the presence of substantial NO_X and ammonia could in some
cases exacerbate the particulate nitrate problem.
---------------------------------------------------------------------------

\57\ Certain VOCs (especially aromatic compounds) with >6 carbon
atoms may form secondary organics aerosols.
---------------------------------------------------------------------------

Therefore, models and data analysis intended to address
PM_2.5 should also address visibility impairment. These
models also need to be capable of simulating transport and formation of
ozone. At a minimum, modeling should include previously implemented or
planned measures to reduce ozone, PM, and visibility impairment. An
integrated assessment of the impact controls have on ozone,
PM_2.5, and regional haze provides safeguards to ensure that
optimal emission reduction strategies are developed for the three
programs to the extent possible. States that undertake multi-pollutant
assessments as part of their attainment demonstration should assess the
impact of their PM_2.5 strategies on visibility and ozone, or
perform a consistent analysis for PM_2.5,visibility, and
ozone. To facilitate such an effort, EPA encourages States to work
closely with established regional haze Regional Planning Organizations
(RPOs) and the jurisdictions responsible for developing ozone
implementation plans.
6. Which Future Year(s) Should be Modeled?
The concept of simultaneously modeling control impacts on
PM_2.5, regional haze, and ozone may be further facilitated
by the alignment of the implementation process for ozone, regional
haze, and PM_2.5. To the extent that dates for attainment
demonstration SIPs coincide, the practicality of using common data
bases and analysis tools for all three programs becomes more viable and
encourages efficient use of resources.

[[Page 66010]]

In some cases the attainment dates for areas that are classified as
nonattainment for both the 8-hour ozone NAAQS and the PM_2.5
NAAQS will coincide. In other cases they may differ by one or more
years. The choice of the future modeling year should take into account
the local attainment dates for PM_2.5 and ozone as well as
the attainment dates of nearby nonattainment areas within the State
and/or nearby areas or regions. Where possible, future modeling years
should be coordinated so that a single year can be used for both
PM_2.5 and ozone modeling. This coordination will help to
reduce resources expended for individual modeling applications for
PM_2.5 and ozone and will facilitate simultaneous evaluation
of ozone and PM impacts.
Although there is some flexibility in choosing the future year
modeling time periods, unless the State believes it cannot attain the
standards within five years of the date of designation and must request
an attainment date extension, the choice of modeling years for
PM_2.5 cannot go beyond the initial five year attainment
period. For example, if a nonattainment area has an ozone nonattainment
date that is beyond the 5 year PM_2.5 period, the area cannot
show attainment of the PM_2.5 NAAQS by modeling the later
ozone attainment date. In this case, the State could model an earlier
year for both PM_2.5 and ozone.
Attainment date extensions will only be granted under certain
circumstances. Among other things, the State must submit an attainment
demonstration showing that attainment within 5 years of the designation
date is impracticable. Section III.C. includes further discussion on
attainment date issues.
Further details on choosing future modeling years is contained in
EPA's draft modeling guidance. Further revisions to the guidance are
expected to address the needed flexibility in choosing future modeling
years.
7. Mid-Course Review
A MCR is a process by which the State assesses whether a
nonattainment area is or is not making sufficient progress toward
attainment of the PM_2.5 standards, as predicted in its
attainment demonstration. Such a review would evaluate the most recent
monitoring and other data to assess whether the control measures relied
on in a State's attainment demonstration have resulted in adequate
improvement in air quality.
In reviewing each attainment demonstration, EPA will assess on a
case-by-case basis whether a MCR would be needed. EPA will consider a
number of factors in making this determination, including: The length
of time to the proposed attainment date; the supporting information
provided in the attainment demonstration; and uncertainties associated
with future projections of pollutant emissions, air quality levels, and
related information.
Where EPA finds that a MCR would be required, the approval of the
demonstration would be contingent on a commitment from the State to
conduct the MCR. For such cases, the EPA believes that a commitment to
perform a MCR is a critical element in an attainment demonstration that
employs a long-term projection period. Because of the uncertainty in
long term projections, EPA believes such attainment demonstrations
should contain provisions for periodic review of monitoring, emissions,
and modeling data to assess the extent to which refinements to emission
control measures are needed.
In reviewing individual attainment demonstrations, EPA will give
particular consideration to requiring a MCR for areas that are granted
an extension of their attainment date of two years or more beyond the
first five year period. For areas where the effective date of
designations is April 2005, the MCR requirement would then apply to
areas with attainment date extensions to April 2012 to April 2015. The
EPA would require submittal of the MCR within five years of the
effective date of designations.
The procedure for performing a MCR contains three basic steps: (1)
Demonstrate whether the appropriate emission limits and emission
reduction programs that were approved as part of the original
attainment demonstration and SIP submittal were adopted and
implemented; (2) analyze available air quality, meteorology, emissions
and modeling data and document relevant findings; and (3) document
conclusions regarding whether progress toward attainment is being made
using a weight of evidence determination. This determination may or may
not include new modeling analyses.
The EPA does not request that States commit in advance to adopt new
control measures as a result of the MCR process. Based on the MCR,
however, if EPA determines that sufficient progress has not been made,
EPA would determine whether additional emissions reductions are
necessary from the State or States in which the nonattainment area is
located, or from upwind States, or both. The EPA would then require the
appropriate State or States to adopt and submit the new measures within
a specified period. The EPA anticipates that these findings would be
made as calls for SIP revisions under section 110(k)(5), and therefore
the period for submission of the measures would be no longer than 18
months after the EPA finding. Thus, States must complete the MCR three
or more years before the applicable attainment date to ensure that any
additional controls that may be needed can be adopted in sufficient
time to reduce emissions by the attainment year.
A number of States previously participated in a consultative
process with EPA which resulted in the development of the 1-hour ozone
MCR guidance.\58\ If a MCR will be required for certain
PM_2.5 nonattainment areas, separate PM_2.5 MCR
guidance will be written to address the specific requirements of
PM_2.5 nonattainment areas.
---------------------------------------------------------------------------

\58\ Memorandum of March 28, 2002, from Lydia N. Wegman and J.
David Mobley, re: ``Mid-Course Review Guidance for the 1-Hour Ozone
Nonattainment Areas that Rely oin Weight-of-Evidence for Attainment
Demonstration.'' Located at URL: http://www.epa.gov/scram001/guidance/guide/policymem33d.pdf.

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G. What Requirements for RFP Apply Under the PM2.5 Implementation Program?

1. Background
Section 172(c)(2) provides that nonattainment area plans ``shall
require reasonable further progress.'' Section 171(1) defines
``reasonable further progress,'' as ``such annual incremental
reductions in emissions of the relevant air pollutant as are required
by this part or may reasonably be required by the Administrator for the
purpose of ensuring attainment of the applicable national ambient air
quality standard by the applicable date.'' This section presents how
EPA will implement the RFP requirement, and it proposes the criteria by
which EPA will judge State submittals addressing this requirement. The
approaches proposed here should ensure emissions reductions on a path
towards attainment which will yield an incremental improvement in air
quality, while being sufficiently flexible to accommodate the range of
control strategies necessary to address the complex mixtures of
pollutants comprising PM_2.5 in different areas.
EPA has previously described its interpretation of RFP requirements
applicable to particles with a nominal aerodynamic diameter of 10
micrometers and smaller (PM₁₀).\59\ The

[[Page 66011]]

guidance for serious PM₁₀ nonattainment areas included
extensive discussion of the need for incremental reductions to provide
RFP. According to the criteria described in that guidance,
PM₁₀ nonattainment areas are expected to implement an
ongoing series of measures providing steady progress toward attainment.
It is important that reductions needed to attain the standards not be
achieved only in the last year or two prior to the attainment date. The
EPA believes that these principles should also apply in achieving RFP
for the PM_2.5 standards.
---------------------------------------------------------------------------

\59\ EPA issued general guidance for moderate PM₁₀
nonattainment areas in the General Preamble on CAA Title I
provisions, published April 16, 1992, at 57 FR 13498. (See 57 FR
13539). Further guidance by EPA (published August 16, 1994 at 59 FR
41997) described RFP requirements for serious PM₁₀
nonattainment areas. (See 59 FR 42015.)
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2. What Is the Baseline Year From Which States Will Track Emission
Reductions for Meeting RFP Requirements?
EPA issued a memorandum identifying 2002 as the appropriate
emission inventory base year for purposes of addressing the RFP and SIP
planning requirements under the implementation programs for the 8-hour
ozone and the PM_2.5 standards.\60\ The EPA selected 2002 as
the appropriate inventory base year for RFP and attainment
demonstration purposes for several reasons. First, the inventory for
2002 will be the most recently available consolidated emissions
inventory available at the time EPA promulgates PM_2.5
designations. Under the ``Consolidated Emissions Reporting Rule'' (June
10, 2002, 67 FR 39602), emissions inventories are required every three
years, including the years 2002 and 2005.
---------------------------------------------------------------------------

\60\ Memorandum of November 18, 2002, from Lydia Wegman and
Peter Tsirigotis, ``2002 Base Year Emission Inventory SIP Planning:
8-hr Ozone, PM_2.5 and Regional Haze Programs.'' This
document is available at the following web site:
http://www.epa.gov/ttn/oarpg/t1/memoranda/2002bye_gm.pdf.

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Second, with a 2002 base year, States will receive credit for
reductions from the 2002 base year forward. The policy provides an
incentive for State and local agencies to achieve early emissions
reductions, and it gives appropriate credit for projected future
reductions from certain already-adopted national, regional, and local
measures. Third, EPA designated nonattainment areas based on air
quality data for the 2001 to 2003 period. Emissions inventories for
2002 should be representative of the period on which States and EPA
establish nonattainment area designations. For all these reasons, EPA
proposes that the base year inventory for attainment and RFP planning
should be 2002.
3. How Does EPA Propose to Address the Pollutants Associated With
PM_2.5 in these RFP Requirements?
Ambient PM_2.5 is a complex mixture containing multiple
components. In many areas more than half of the PM_2.5 mass
collected by speciation monitors arises not from direct particle
emissions but rather from emissions of precursors that undergo
atmospheric transformation into particles. Section II.E. takes comment
on options for addressing PM_2.5 precursors, and the
pollutants required to be addressed in RFP plans will be determined in
the final rule. As proposed, the pollutants that are to be addressed in
all RFP plans for PM_2.5 are direct PM_2.5
(including organic carbon, elemental carbon, and crustal material),
sulfur dioxide, and nitrogen oxides. Ammonia and/or VOCs should be
addressed in the RFP plan if ammonia and/or VOC emission reduction
strategies are included in the attainment demonstration.
4. What Areas Must Submit an RFP Plan?
Under this proposed RFP approach, an area's RFP requirement would
be considered to be met if its attainment demonstration (due by April
2008) shows that the area will attain the standards within 5 years of
its nonattainment designation (i.e. by April 2010). An area submitting
an attainment demonstration indicating that it will not attain by April
2010 must submit an RFP plan by April 2008 along with its attainment
demonstration. The RFP plan must show how the area will make reasonable
progress toward attainment with periodic 3-year milestones. Subsection
(a) discusses areas projected to attain by April 2010. Subsection (b)
discusses areas projected to attain after April 2010.
a. Areas Projected To Attain Within 5 Years of Designation
Under this option, an area that the State projects will attain
within five years of designation (i.e. April 2010) will be considered
to have met the RFP requirement through submission of all regulations
and emissions reductions necessary to demonstrate attainment as
expeditiously as practicable. For such areas, attainment-level
emissions must be achieved during 2009. It would be assumed that
adequate interim progress is already being made in the area since the
area would be projected to attain within a relatively short period of
time--only two years from the date of SIP submittal. This option
provides a flexible interpretation of RFP (``annual incremental
emission reductions'') in order to minimize additional regulatory
burden on State and local agencies. It is consistent with the approach
taken for ``subpart 1 areas'' in the implementation rule for the 8-hour
ozone program. How a State projects that an area will attain the
standards within five years is a critical issue in implementing this
approach and one on which EPA seeks comment. For example, should State
projections of attainment be based on regional modeling conducted for
major regulatory analyses (such as for CAIR), or should State
projections only be based on local modeling analyses performed with a
finer grid resolution and more refined local emission inventory inputs?
EPA proposes that States must follow the Agency's most recent modeling
guidance for PM_2.5 implementation in developing such
projections. Section III.F. includes an in-depth discussion about
modeling guidance and attainment demonstrations, and it requests
comment on a number of related issues.
b. Areas Projected To Attain More Than 5 Years From the Date of
Designation Must Submit a 2008 RFP Plan
Under this approach, EPA proposes that for any area for which the
State submits an attainment demonstration in April 2008 requesting an
attainment deadline extension beyond April 2010,\61\ the state also
must submit an RFP plan along with the area's attainment plan. This
2008 RFP plan must show that the area will achieve generally linear
progress according to emission reduction milestones the State
establishes for 2010 and every 3 years thereafter until the attainment
year. Just as attainment is determined by evaluating air quality data
for previous years, compliance with an RFP milestone would be
determined by evaluating emissions from the previous year. Thus, any
reference to an RFP milestone in this section refers to annual
emissions levels achieved during the previous year and prior to January
1 of the milestone year.
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\61\ Section 172(a)(2)(A) allows EPA to provide extensions of 1
to 5 years based on an adequate demonstration by the State.
Attainment deadline extensions under section 172(a)(2)(C), which
extend the attainment deadline by up to a total of 2 additional
years to confirm preliminary monitoring data indicating attainment,
would not trigger the requirement for the second RFP plan.
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The following sections III.G.4.b.i. through III.G.4.b.iv. describe
the proposed 2008 RFP plan option under a scenario where there is no
classification system. Section III.G.4.b.v. discusses a potential 2008
RFP plan approach for ``serious'' areas under a two-tiered
classification system. As described in

[[Page 66012]]

section III.A., a serious area would be one that could not demonstrate
that it would attain the standards within the first five years after
designation, or one with a design value above a particular threshold.
i. For purposes of the 2008 RFP plan, how should a nonattainment area
define its emission reduction milestones?
The deadline for submittal of the 2008 RFP plan is the same as the
deadline for submittal of the attainment plan, i.e. three years after
designations. In developing their RFP plans and emission reduction
targets for specific nonattainment areas, States should use the
emission inventories and air quality modeling they have completed for
attainment planning purposes. EPA expects the attainment plan would
define several elements of the 2008 RFP plan. First, the attainment
plan will define the pollutants that are to be reduced for attaining
the standards. Second, the attainment plan will define the relationship
between emissions reductions and air quality improvement, including
identifying the emissions reductions by pollutant which are needed to
attain the standard. Third, the attainment plan will define the
expected attainment year, thereby defining the number of years over
which the reductions leading to attainment must occur.
EPA proposes that the 2008 RFP plan must provide emission reduction
and program implementation milestones to be achieved by January 1, 2010
(based on the 2009 emissions year), and, if necessary, milestones to be
achieved by January 1, 2013 (based on the 2012 emissions year). As part
of the plan, the State also should include a motor vehicle emissions
budget for each milestone year. The motor vehicle emissions budget
should only apply to emissions attributed to vehicles in the
nonattainment area. (See section III.K. for further discussion of
transportation conformity issues.)
Under Section 172(a)(2)(A), EPA may extend the attainment deadline
to as late as April 2015 (for areas where the effective date of
designations is April 2005), based on an acceptable demonstration.
Thus, 2014 is the latest year in which attainment level emissions are
to be achieved. The EPA proposes to define RFP as emissions reductions
that would be estimated to provide generally linear progress toward
attainment from the 2002 base year emissions to the emissions year
prior to the attainment date. The States have flexibility in meeting
RFP goals with alternative emission reduction and air quality
improvement scenarios.
An important element of establishing appropriate RFP milestones for
addressing PM_2.5 is establishing the relative degrees of
control of various pollutants. The following subsection describes how
EPA proposes to assure that the plans provide for the necessary air
quality improvement and yet provide flexibility for addressing a
variety of situations of relative feasibility and significance of
controlling various pollutants.
ii. For what pollutants must States reduce emissions?
One approach for achieving RFP is to address all pollutants,
including direct PM and all precursors, on the same timetable. However,
EPA recognizes that different control measures address different
pollutants, and States can implement some measures more quickly than
others. Therefore, EPA's proposal for 2008 RFP plan requirements
includes two components: (1) A benchmark set of pollutant reductions
that establish the overall level of control that the 2010 milestones
must provide; and (2) an equivalency process that allows States the
flexibility to address different pollutants according to different
schedules so long as the EPA finds the net air quality improvements to
be equivalent.
The RFP benchmark reflects reductions only for those pollutants
that the State intends to reduce in the attainment plan, subject to EPA
approval. Pollutants that are not subject to control measures in the
attainment plan, either because of insignificant benefits in reducing
ambient PM_2.5 concentrations or because of availability or
feasibility of control, are not included in the RFP benchmark for 2008
RFP plan purposes.
EPA proposes that States should define RFP benchmark emission
reduction levels in each area to reflect generally linear progress
toward attainment. Consider an example for a particular area in which
the State proposes an April 2013 attainment date and thus would need to
achieve attainment level emissions in 2012. If the attainment plan
calls for a 20 percent reduction in SO₂ emissions from 2002
levels and a 10 percent reduction in PM_2.5 direct emissions,
then the RFP benchmark for SO₂ would reflect roughly a 2
percent reduction in SO₂ emissions per year, and the
benchmark level for PM_2.5 would be roughly a 1 percent
reduction per year. The 2010 milestones in this example would be about
a 14 percent reduction in annual SO₂ emissions and a 7
percent reduction in PM_2.5 direct emissions to be achieved
during 2009 (the emissions year prior to the January 1, 2010 milestone
date).
EPA proposes that States must provide 2010 RFP milestones that
provide air quality improvement equivalent to this RFP benchmark. The
next subsection describes the process EPA is proposing to use to assess
whether alternative timetables for controlling various pollutants are
equivalent.
iii. How should States assess the equivalence of alternative
combinations of pollutant emissions reductions?
EPA proposes to judge an alternative combination of pollutant
emissions reductions as being at least equivalent to the RFP benchmark
(e.g., emissions reductions to be achieved from 2002 to the January 1,
2010 milestone) if the State makes an adequate showing that the
alternative will provide estimated air quality improvements that are
roughly the same as those that the benchmark emission reductions would
provide. If the State elects to follow this approach, it must provide
in its 2008 RFP plan the information necessary to assess whether an
alternative set of emissions reductions is generally equivalent to the
RFP benchmark reduction levels. The attainment plan will define a set
of emissions reductions and analyze the corresponding expected air
quality improvements. For example, attainment plans that include
reductions in SO₂ emissions will include modeling and an
attainment demonstration which assess the corresponding reduction in
sulfate concentrations. States should use this information to evaluate
the equivalence of alternative combinations of pollutant emissions
reductions.
EPA recommends that States estimate air quality improvements
associated with intermediate emission control levels by assuming that
the same relationship between emissions and air quality applies at
intermediate levels as would apply at attainment plan levels. For the
purpose of developing their 2010 RFP milestones, States should assume
that by January 1, 2010, a given fraction of the emissions reductions
in the attainment plan (i.e. the fraction being the percent of
reductions to be achieved by the 2010 milestone) will achieve the same
fraction of the associated air quality benefits in the attainment plan.
An example in the next section further explains this point.
EPA recognizes that because atmospheric processes are quite
complex, a specific percent change in emissions typically does not lead
to an equivalent percent change in air quality. This non-linear
relationship introduces

[[Page 66013]]

uncertainties as to whether alternate RFP plans will in fact achieve
equivalent benefits. Nevertheless, EPA believes that it is important to
provide the flexibility to address different pollutants on different
timetables so long as the plan can reasonably be expected to achieve
the intended air quality benefits at the RFP benchmark level. In
general, EPA does not intend to require dispersion modeling
specifically to assess whether an alternative approach to meeting RFP
provides equivalent air quality benefits as the benchmark definition.
The attainment plan modeling addresses the nonlinearities at attainment
levels, and EPA believes for RFP plan purposes that the relationship
between emissions and air quality at attainment levels provides an
adequate approximation of the relationship at RFP levels.
EPA anticipates that RFP plans will generally only control
pollutants that are also controlled in the attainment plan. Therefore,
EPA expects the attainment plan to include information on the
emissions-air quality relationship for all pollutants included in the
RFP plan. If a case arises where the RFP plan reduces emissions for a
pollutant that is not reduced in the attainment plan, the State may
need to conduct additional modeling to assess the air quality benefit
of the relevant component of the RFP plan to support its demonstration
of equivalence with the RFP benchmark.
iv. How would RFP be evaluated for a sample 2008 RFP plan?
As an example, suppose that the attainment plan for ``Kleenare
City'' projects that the area will attain the standards with a 20
percent reduction in SO₂ emissions, 20 percent reduction in
nitrogen oxide emissions, and a 10 percent reduction in direct
PM_2.5 emissions. (For the purpose of simplifying this
example, assume that direct PM_2.5 emissions are principally
comprised of organic and elemental carbon.) The area's plan projects
that, consistent with the requirement to attain as expeditiously as
practicable, the area would attain by April 2013 based on reductions
achieved during 2012. Under EPA's proposal, the RFP benchmark levels
should reflect roughly \1/10\ of the emission reduction for each
pollutant each year. Thus, for the ten year period from 2002-2012, this
roughly equates to a 2.0 percent annual reduction in SO₂
emissions, 2.0 percent annual reduction in nitrogen oxide emissions,
and 1.0 percent annual reduction in direct PM_2.5 (carbon)
emissions per year. The January 1, 2010 milestones should then include
\7/10\ of the progress from 2002 conditions through 2009 (the emissions
year prior to the milestone). Thus, the 2010 RFP benchmark would have
emission levels reflecting a 14 percent reduction of SO₂
emissions, a 14 percent reduction of nitrogen oxide emissions, and a 7
percent reduction of direct PM_2.5 (carbon) emissions.
Unless the State sets RFP emission reduction milestones for 2010
identical to (or greater than) the RFP benchmark, the next step is to
assess the air quality improvement estimated for the RFP benchmark and
the air quality improvement estimated for the State's alternative
milestones. Both assessments would rely on the relationship between
emissions reductions and air quality improvement for the various
pollutants addressed in the attainment plan.
This example assumes that Kleenare City has the concentrations of
PM_2.5 constituents described in the above example, the
attainment plan described in the paragraph above, and the expectation
of achieving attainment level emissions by 2012 (i.e., a 2013
attainment deadline). Thus, the design value for the area is 17.0
[mu]g/m\3\, consisting of 7.0 [mu]g/m\3\ of ammonium sulfate, 6.0
[mu]g/m\3\ of carbonaceous PM (e.g. organic and elemental carbon), and
4.0 [mu]g/m\3\ of ammonium nitrate. Assume further that the attainment
plan as described just above demonstrates relative reduction factors
which indicate the following impacts: The 20 percent SO₂
emission reduction is expected to reduce ammonium sulfate
concentrations by 1.2 [mu]g/m\3\; the 10 percent reduction in direct
PM_2.5 emissions is expected to reduce direct
PM_2.5 concentrations (assume this component is primarily
organic and elemental carbon) by 0.4 [mu]g/m\3\; and the 20 percent
NO_X emission reduction is expected to reduce nitrate
concentrations by 0.6 [mu]g/m\3\.
As calculated above, the RFP benchmark levels for 2010 would
include \7/10\ of the emissions reductions planned through 2012, which
would be expected to achieve at least \7/10\ of the associated air
quality improvement expected in the attainment plan. Thus, the 2010 RFP
benchmark levels would be expected to reflect the following estimated
air quality improvement: the 20 percent SO₂ emission
reduction would yield an estimated [1.2 * (14 percent / 20 percent)] or
0.84 [mu]g/m\3\ ammonium sulfate reduction, the 8 percent direct
PM_2.5 (carbon) emission reduction would yield an estimated
[0.4 * (7 percent / 10 percent)] or 0.28 [mu]g/m\3\ carbon particle
reduction, and the 20 percent NO_X emission reduction would
yield an estimated [0.6 * (14 percent / 20 percent)] or 0.42 [mu]g/m\3\
ammonium nitrate reduction. The total air quality improvement of this
2010 benchmark plan would be estimated as (0.84 + 0.28 + 0.42), or 1.54
[mu]g/m\3\. Thus, for this example, the target air quality level for
the 2007-9 period would be approximately 15.5 [mu]g/m\3\ (17.0 - 1.54 =
15.46).
Now suppose that the State is considering phasing in emission
reduction strategies such that by the 2010 milestone date,
SO₂ emissions would be reduced by only 10 percent, direct
organic and elemental carbon particle emissions would be reduced by the
full 10 percent (as included in the attainment plan), and
NO_X emissions would be reduced by the full 20 percent. This
alternative would be estimated to achieve air quality improvement that
includes [1.2 * (10 percent / 20 percent)] or 0.6 [mu]g/m\3\ ammonium
sulfate reduction, [0.4 * (10 percent / 10 percent)] or 0.4 [mu]g/m\3\
carbon particle reduction, and [0.6 * (20 percent / 20 percent)] or 0.6
[mu]g/m\3\ ammonium nitrate reduction. The total air quality
improvement of this 2010 milestone alternative would be estimated to be
(0.6 + 0.4 + 0.6) or 1.6 [mu]g/m\3\ reduction in PM_2.5
concentrations. Since this estimated air quality improvement exceeds
the improvement estimated for the 2010 RFP benchmark level, EPA would
judge this set of milestones to be considered equivalent to the 2010
RFP benchmark levels.
v. What potential RFP requirements could apply for ``serious'' areas
under the two-tiered classification option?
As described in section III.A. on classification options, a serious
area would be one that could adequately demonstrate that attainment of
the standards ``as expeditiously as practicable'' would not be within
the first five years after designation, and therefore would receive an
attainment date extension of 1 to 5 years. Under the two-tiered
classification option, a serious area would be subject to more
stringent requirements in return for the attainment date extension. The
classifications section III.A. takes comment on possible ``more
stringent'' requirements for serious areas, including prescriptive RFP
requirements and/or lower thresholds for RACT review (under one RACT
option presented in section III.I.5 of this package).
One possible RFP approach contemplated in the classifications
discussion is a fixed percentage reduction of the emissions of direct
PM_2.5 and regulated PM_2.5 precursors to be
achieved in specified milestone years between the 2002 base year and the

[[Page 66014]]

attainment year proposed in the attainment demonstration. This approach
would be patterned after the rate of progress requirement in section
182 for ozone, which requires a 3 percent per year average emission
reduction of VOC for certain areas, with emission reduction targets to
be met every three years (i.e., a 9 percent reduction over three
years). The EPA could formulate this alternative either with the same 3
percent average annual emission reduction as specified in section 182
or with some other more appropriate percentage. Use of a fixed
percentage reduction target would be consistent with the congressional
intent behind the section 182 requirement to require additional
emission reduction actions in areas with more serious air quality problems.
This approach could require a strict percentage reduction of each
pollutant, or it could allow the States flexibility to employ a
different mix of pollutant reduction percentages in order to achieve an
equivalent air quality improvement as would be achieved under the fixed
percentage approach. Section III.G.5.b.iii. above provides guidance on
how to demonstrate equivalency in this type of situation.
Under this option, RFP plans would be submitted in April 2008 along
with attainment plans. RFP milestones would be established for 2010
and, in the case of areas with later attainment dates, 2013. The
application of the percent reduction concept is relatively straight
forward. For example, under a 3 percent per year RFP emission reduction
requirement for an area with an attainment date extension to 2015, the
area's 2010 emission reduction milestone would reflect a 21% reduction
(i.e. 3% per year x 7 years from 2002 through 2009) in emissions of
regulated PM_2.5 pollutants. For a 2013 milestone (e.g.
reductions through 2012), a 30% emission reduction would be required
(3% per year x 10 years from 2002 to 2012). The requirement for RFP
between 2013 and the attainment date would be satisfied by the
reductions needed for attainment.
As with the basic RFP approach proposed above, all emissions
reductions since 2002 from federal, regional, state and local measures
would be creditable toward meeting the RFP targets. These would
include, for example, substantial reductions from CAIR, federal motor
vehicle emissions standards and other federal rules. Overall, we
believe there would be merit in establishing a more stringent RFP
requirement under any option for serious areas. An advantage of the
fixed percentage approach may be that it would be easier to implement
and communicate to the public. EPA requests comment on the use of a
fixed percentage requirement for serious areas and on what is an
appropriate annual percentage reduction rate for PM_2.5 and
associated precursors.
5. Other RFP Issues
a. How should States account for regional control strategies in
evaluating RFP?
States should consider all adopted, enforceable control programs in
evaluating whether RFP is being achieved, including national measures,
regional measures, and local measures. National programs established by
EPA include the Clean Air Interstate Rule addressing SO₂ and
NO_X emissions in the eastern U.S., eastern NO_X
reductions from power plants and other sources to address the ozone
standards (the ``NO_X SIP call''), and a variety of motor
vehicle limitations, including the phase-in of emission limits as new
vehicles replace older vehicles through fleet turnover. More recent
mobile source rules include limits for new heavy-duty diesel engines
starting in 2004, considerably more stringent diesel engine limits
starting in 2007, emission limits for new gasoline vehicles (``Tier
II'') starting in 2004, limits on the sulfur content of gasoline and
diesel starting in 2004 and 2006, respectively, and limits on nonroad
vehicle emissions. Expressed more generally, States should base the
evaluation of RFP simply on the enforceable emissions for the area,
regardless of what mix of adopted control programs and other influences
lead to the applicable emissions level.
The guidance for PM_2.5 differs somewhat in this respect
from the guidance for ozone. For ozone, CAA section 182(b)(1)(D)
specifies several types of measures that may not be credited toward
achievement of the ozone rate of progress requirements. These
restrictions are only mandated by the statute with respect to pre-1990
controls for ozone. The Act does not provide any such requirement with
respect to controls for PM.
b. What geographic area should States address in RFP plans?
Another important issue is the geographic area to be addressed in
the RFP plan. As discussed above, EPA believes the CAA RFP provision
requires emissions reductions that will provide steady improvement in
air quality in the nonattainment area prior to its attainment date.
This suggests that RFP requirements should apply within a geographic
area from which emissions substantially affect air quality in the
nonattainment area. This geographic area may differ for different
pollutants that contribute to PM_2.5 levels. The EPA also
envisions approaching this issue differently for the reasons described
below.
EPA proposes an approach based on EPA's views of the typical
emissions area that most strongly correlates with associated components
of urban PM_2.5 concentrations. Since different prospective
nonattainment areas have different types of PM_2.5 problems,
some areas may warrant use of different geographic areas from the
defaults presented here. For example, a mountain valley area in which
concentrations are dominated by local emissions regularly trapped in
inversions should address all pollutants on a nonattainment area basis
and not on a statewide basis.
EPA is proposing default areas of consideration for emissions of
direct PM_2.5, NO_X, and SO₂. For direct
PM_2.5 emissions, including emissions of elemental carbon,
organic particles and inorganic particles such as metals and crustal
material, emissions from within the nonattainment area should be
considered for tracking compliance with RFP milestones. Particles that
originate from direct PM_2.5 emissions tend to be dominated
by nearby emissions. While the greatest impact at a monitoring location
may arise from sources within a few kilometers, a nonattainment area-
wide approach assures that the entire area is achieving RFP. A
nonattainment area-wide approach also will generally be easier to
administer in conjunction with other requirements such as RACT and
RACM. EPA does not believe that direct PM_2.5 emissions from
sources outside the nonattainment area should be considered for RFP
purposes.
The proposed approach for considering NO_X and
SO₂ emissions for RFP under the PM_2.5 program is
similar to the approach for addressing NO_X emissions in past
guidance for 1-hour ozone rate of progress plans.\62\ The ozone
guidance provides that in their RFP baseline inventories, States at a
minimum are required to include all

[[Page 66015]]

sources of NO_X and VOC emissions from within the
nonattainment area. The ozone guidance also provides that States may
include in RFP plans certain NO_X sources located up to 200
kilometers outside of an ozone nonattainment area and certain VOC
sources located 100 kilometers outside of an ozone nonattainment area
and take credit for emission reductions from these sources for RFP
purposes. EPA believes that for the PM_2.5 program, it would
be appropriate to allow for the possibility of crediting SO₂
and NO_X reductions outside the nonattainment area because
numerous technical studies have generally demonstrated the long-range
transport of sulfates and nitrates. (See section II on the technical
characterization of PM_2.5.) As with ozone, EPA believes that
ambient particle concentrations reflect a combination of effects from
local as well as regional NO_X and SO₂ emissions,
justifying an approach that focuses on nonattainment area
NO_X and SO₂ emissions but also gives incentive
for reductions outside the nonattainment area.
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\62\ Memorandum of December 29, 1997 from Richard D. Wilson to
Regional Administrators, Regions I-X re ``Guidance for Implementing
the 1-Hour Ozone and Pre-Existing PM₁₀ NAAQS.'' Located
at URL: http://www.epa.gov/ttn/oarpg/t1/memoranda/iig.pdf. This
policy recognized that VOC emissions up to 100 km and NO_X
emissions up to 200 km from the nonattainment area could be relied
on for RFP. The specified distances resulted from discussions of the
FACA Subcommittee on Ozone, PM, and Regional Haze Implementation
Programs. Because some stakeholders have expressed concerns about
this policy, EPA is in the process of subjecting this policy to a
technical review and may revise it in light of that review.
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However, because of various concerns expressed about such a policy
for RFP purposes, any State proposing to take credit for reductions by
any NO_X or SO₂ source located within 200
kilometers of the nonattainment area will need to include with its SIP
submittal appropriate documentation demonstrating that emissions from
the sources outside the nonattainment area contribute to fine particle
concentrations within the nonattainment area. Because of the
uncertainty associated with VOC contributions to PM_2.5
concentrations, we do not believe it would be appropriate to extend the
policy to VOC sources located 100 kilometers outside of a
PM_2.5 nonattainment area. If the State or EPA finds that VOC
are a significant contributor to an area's PM_2.5 problem,
RFP credit for VOC will be granted for reductions achieved within the
nonattainment area only.
As discussed earlier, the RFP plan should include a motor vehicle
emissions budget for each milestone year. Because the transportation
conformity program applies only within the nonattainment area, the RFP
plan cannot take credit for motor vehicle direct PM_2.5 and
applicable PM_2.5 precursor emissions reductions achieved
outside of the nonattainment area. (See section III.K. for further
discussion of transportation conformity issues.)
The EPA expects that analyses conducted as part of the attainment
demonstration will help identify the most appropriate geographic range
of interest for each pollutant. EPA believes that if an area concludes
that controls for a specific pollutant on an alternate geographic scale
are more appropriate for reaching attainment, the area should use that
same alternate geographic scale in assessing RFP. In particular, for
each pollutant addressed, the same geographic scale must be used in
analyzing the 2002 inventory, the attainment year inventory, and any
RFP milestone year inventories, in order to assure that the milestones
in fact represent RFP on a path to timely attainment.
EPA solicits comments on other alternatives for the geographic
coverage of NO_X and SO₂ inventories. The
principal alternatives of interest are to be either more or less
inclusive. EPA takes comment on (1) an approach that would allow the
State to include a broader set of sources \63\ located within 200
kilometers of the nonattainment area, and (2) an approach including all
nonattainment area sources but no additional sources outside the
nonattainment area.
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\63\ Under this option, sources outside the nonattainment area
would exclude on-road sources since under the transportation
conformity program, motor vehicle emissions budgets apply only
within the nonattainment area.
---------------------------------------------------------------------------

c. How should RFP be addressed in multi-state nonattainment areas?
In general, EPA seeks to ensure that nonattainment areas that
include more than one State meet RFP requirements as a whole. States
that share a nonattainment area should consult to assure that the
collective set of emission reduction milestones provide for adequate
emissions reductions to represent RFP for the area as a whole. The
States should work with the EPA region or regions that oversee the SIPs
for those States to confirm that their collective approach is
acceptable for RFP.
d. How should States compile emission inventories for RFP plans?
In general, States should prepare emission inventories for RFP
plans according to the same guidance that applies to emission
inventories for attainment plans. Similar guidance on assessment of
allowable emissions resulting from a new emission limit applies in both
cases. Emission inventories for RFP plans should be adequate to track
progress in meeting the annual standard in all areas. States should
also develop inventories adequate to ensure progress in meeting the 24-
hour standard for those areas that violate or are close to violating
this standard.
e. What RFP requirements apply in Tribal areas?
Under the Tribal Authority Rule (40 CFR 49.4), EPA found that it
was not appropriate to treat Tribes in a manner similar to a State with
regard to SIP schedules. This flexibility extends to submittal of plans
for the RFP requirement. Because there are typically limited emissions
in Tribal areas, this flexibility on RFP should not have significant
impact on surrounding jurisdictions in most instances. However, the TAR
also acknowledges that where the Tribes are unable to meet the
requirements of the CAA, EPA will implement the program where it is
``necessary and appropriate''. Therefore, in the event that flexibility
in the RFP deadline for Tribes jeopardizes RFP in surrounding
jurisdictions, EPA will work with the Tribes to ensure that emissions
on Tribal lands are appropriately addressed.
EPA guidance for nonattainment areas that include both State and
Tribal lands is similar to guidance for multi-State nonattainment
areas. States and Tribes that share a nonattainment area should consult
to assure that the collective set of emission reduction milestones for
the nonattainment area as a whole satisfy the requirements described
above and thus provide for the steady air quality improvement intended
under the CAA.
f. What must States submit to show whether they have met RFP
milestones?
The establishment of milestones implies subsequent reporting
demonstrating whether these milestones have been met. For example, the
establishment in a 2008 RFP plan of milestones reflecting 2009
emissions implies reporting in 2010 whether these milestones were met.
However, emissions for a given year are commonly not known until well
after the year has ended. The EPA is evaluating alternative approaches
to this issue and plans to issue guidance on this issue at a later date.

H. What requirements for contingency measures should apply under the
PM2.5 implementation program?

For PM_2.5, under Subpart I of the CAA, all nonattainment
areas must include in their SIPs contingency measures consistent with
section 172(c)(9). Contingency measures are additional control measures
to be implemented in the event that an area fails to meet RFP or fails
to attain the standards by its attainment date. These contingency
measures must be fully

[[Page 66016]]

adopted rules or control measures that are ready to be implemented
quickly upon failure to meet RFP or failure of the area to meet the
standard by its attainment date. The SIP should contain trigger
mechanisms for the contingency measures, specify a schedule for
implementation, and indicate that the measures will be implemented
without significant further action by the State or EPA. The contingency
measures should consist of other control measures for the area that are
not included in the control strategy for the SIP.
The April 16, 1992 General Preamble provided the following
guidance: ``States must show that their contingency measures can be
implemented with minimal further action on their part and with no
additional rulemaking actions such as public hearings or legislative
review. In general, EPA will expect all actions needed to affect full
implementation of the measures to occur within 60 days after EPA
notifies the State of its failure.'' (57 FR at 13512.) This could
include Federal measures and local measures already scheduled for
implementation.
The EPA has approved numerous SIPs under this interpretation--i.e.,
that use as contingency measures one or more Federal or local measures
that are in place and provide reductions that are in excess of the
reductions required by the attainment demonstration or RFP plan. (62 FR
15844, April 3, 1997; 62 FR 66279, December 18, 1997; 66 FR 30811, June
8, 2001; 66 FR 586 and 66 FR 634, January 3, 2001.) The key is that the
statute requires extra reductions that are not relied on for RFP or
attainment and that are in the demonstration in order to provide a
cushion while the plan is revised to meet the missed milestone. In
other words, contingency measures are intended to achieve reductions
over and beyond those relied on in the attainment and RFP
demonstrations. Nothing in the statute precludes a State from
implementing such measures before they are triggered. In fact, a recent
court ruling upheld contingency measures that were previously required
and implemented where they were in excess of the attainment demonstration
and RFP SIP. See LEAN v. EPA, 382 F.3d 575 5th Circuit, 2004.
One basis EPA recommends for determining the level of reductions
associated with contingency measures is the amount of actual
PM_2.5 emissions reductions required by the control strategy
for the SIP to attain the standards. The contingency measures are to be
implemented in the event that the area does not meet RFP, or attain the
standards by the attainment date, and should represent a portion of the
actual emissions reductions necessary to bring about attainment in
area. Therefore, the emissions reductions anticipated by the
contingency measures should be equal to approximately one year's worth
of emissions reductions necessary to achieve RFP for the area (See
section III.G. for more detail on RFP requirements.)
As stated previously, EPA believes that contingency measures should
consist of other available control measures beyond those required to
attain the standards, and may go beyond those measures considered to be
RACM for the area. It is, however, important that States make decisions
concerning contingency measures in conjunction with their determination
of RACM for the area, and that all available measures needed in order
to demonstrate attainment of the standards must be considered first;
all remaining measures should then be considered as candidates for
contingency measures. It is important not to allow contingency measures
to counteract the development of an adequate control strategy demonstration.
Contingency measures must also be implemented immediately after EPA
determines that the area has either failed to meet RFP, or attain the
standard by its attainment date. The purpose of the contingency measure
provision is to ensure that corrective measures are put in place
automatically at the time that EPA makes its determination that an area
has either failed to meet RFP or failed to meet the standard by its
attainment date. The EPA is required to determine within 90 days after
receiving a State's RFP demonstration, and within 6 months after the
attainment date for an area, whether these requirements have been met.
The consequences for states which fail to attain or to meet RFP are
described in section 179 of the Act.

I. What requirements should apply for RACM and RACT for PM2.5
nonattainment areas?

1. General Background
Subpart 1 of section 172 of the Act includes general requirements
for all designated nonattainment areas. Section 172(c)(1) requires that
each nonattainment area plan ``provide for the implementation of all
reasonably available control measures as expeditiously as practicable
(including such reductions in emissions from existing sources in the
area as may be obtained through the adoption, at a minimum, of
reasonably available control technology), and shall provide for
attainment of the national primary ambient air quality standards.''
States are required to implement RACM and RACT in order to attain the
standards ``as expeditiously as practicable.'' \64\ A RACM
demonstration should show that there are no additional reasonable
measures available that would advance the attainment date by at least
one year or contribute to RFP for the area.\65\
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\64\ Under the TAR, requirements for RACT and RACM may be
considered to be severable elements of implementation plan
requirements for Tribes.
\65\ In the context of the PM₁₀ NAAQS, EPA has
concluded, based upon the annual form of the standard, that
``advancement of the attainment date'' should mean an advancement of
at least one calendar year. See: State Implementation Plans; General
Preamble for the Implementation of Title I of the CAA Amendments of
1990; Proposed Rule.'' April 16, 1992 (57 FR 13498). See also Sierra
Club v. EPA, 294 F.3d 155 (DC Cir. 2002).
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This section first discusses issues associated with RACT,
traditionally considered to be an independent stationary source control
requirement, and then addresses issues associated with RACM.
2. Background for RACT
EPA's historic definition of RACT has been the lowest emissions
limitation that a particular source is capable of meeting by the
application of control technology that is reasonably available,
considering technological and economic feasibility. Because RACT is a
control technology requirement and modeling techniques were not precise
in the past, RACT has been considered to be independent of the need to
demonstrate attainment.
Section 172 (subpart 1) does not include specific applicability
thresholds for the size of sources that should be the minimum starting
point for RACT analysis, as are provided in subpart 2 (ranging from 100
to 10 tons per year for ozone, depending on the level of nonattainment)
or subpart 4 (either 100 or 70 tons per year for PM₁₀
depending on the level of nonattainment). Subpart 1 also does not
include a specific list of stationary source categories for which
control techniques guidelines are to be developed. For PM₁₀,
the Act provided particular emphasis for specific sources of area
emissions, but did not highlight specific stationary sources for the
purposes of RACT. (Section 190 of the Act required EPA to develop RACM
guidance documents for residential wood combustion, prescribed burning
for forest management and agricultural activities, and for urban
fugitive dust control.) Under subpart 2 for ozone, EPA has more
specifically identified RACT for certain source categories through
issuance of a number of control techniques guidelines (CTGs) and

[[Page 66017]]

alternative control techniques (ACTs) documents.
3. Emissions Inventory Analysis Supporting RACT Options
As supporting information for developing options for RACT for
PM_2.5, we have reviewed the 2001 National Emissions
Inventory to examine both the size range of stationary sources and the
types of sources that emit PM_2.5 and its precursors. Because
the statutory requirements for both PM₁₀ and ozone are such
that the RACT applicability threshold cannot be higher than a potential
to emit 100 tons per year, we began our analysis by evaluating the
national emissions inventory to identify sources of PM_2.5 or
any precursor which exceeded this threshold. Because information in the
national emission inventory is expressed in terms of actual emissions
rather than ``potential'' emissions, we used actual emissions
information in this analysis as a surrogate for potential emissions
thresholds.
Our analysis of the national emissions inventory indicates that the
mix of source categories responsible for PM_2.5 and precursor
emissions in potential PM_2.5 nonattainment areas varies
greatly. Contributing sources include stationary sources such as
electricity generating units, industrial boilers, and oil refineries,
as well as smaller mobile and area sources, such as diesel engines,
solvent usage, and various types of burning activities.
The analysis of point source emissions for stationary sources
located in PM_2.5 nonattainment areas shows that for each of
the five main pollutants associated with PM_2.5 (direct
PM_2.5, SO₂, NO_X, VOC, and ammonia),
individual facilities with actual emissions greater than 100 tons per
year of one of these pollutants account for a significant amount of the
total emissions for all facilities in these areas. When the potential
70 and 50 ton per year thresholds are compared to the 100 ton per year
threshold, the additional emissions coverage increases by 2 percent or
less for PM_2.5, NO_X, SO₂, and ammonia.
For VOC, the emissions coverage increases modestly, by about 9 percent.
In contrast, the number of facilities potentially covered at the 70
and 50 ton thresholds increase more significantly. When the number of
facilities exceeding the 100 ton threshold for each pollutant is
compared to the number of facilities exceeding the 70 ton threshold,
the numbers of facilities increase from 10 percent (ammonia) to 44
percent (VOC). When the number of facilities exceeding the 100 ton
threshold for each pollutant is compared to the number of facilities
exceeding the 50 ton threshold, the numbers of facilities increase by
24 percent (SO₂) to 90 percent (VOC).
4. Which PM_2.5 precursors must be addressed by States in
establishing RACT requirements?
As discussed earlier in this section on RACT and RACM and in the
technical overview section, the precursors of PM_2.5 are
SO₂, NO_X, VOC, and ammonia. In section II.E., we
discuss options for addressing these precursors under the PM
implementation program. The EPA will finalize its precursor policy for
PM implementation after considering public comment received on this
proposal.
5. What are the proposed options for implementing the RACT requirement?
This section describes the approaches EPA is considering for
implementation of the RACT requirement of section 172(c)(1), to insure
that States consider and adopt RACT measures for stationary sources in
a way that is consistent with the overarching requirement to attain the
standards as expeditiously as practicable, yet provides flexibility for
States to focus regulatory resources on those sources of emissions that
contribute most to local PM_2.5 nonattainment. The RACT
requirement will apply both to sources of direct PM_2.5
emissions and to sources of PM_2.5 precursors in the given
nonattainment area. The EPA will require States to demonstrate that
they have adopted all appropriate RACT measures in the attainment
demonstrations that States must submit to EPA in early 2008.
EPA is proposing three basic approaches to implementing the RACT
requirement. The first alternative would simply require States to
conduct a RACT analysis and require reasonably available controls for
all affected stationary sources in the nonattainment area, comparable
to the implementation of RACT provided in subpart 4 governing
implementation of the PM₁₀ NAAQS and subpart 2 governing
implementation of the 1-hour ozone NAAQS. Under this alternative for
RACT, EPA is also proposing to limit the universe of sources for which
States must conduct a RACT analysis and impose RACT controls, based
upon the amount of emissions potentially emitted by the sources. (See
discussion later in this section on potential emissions thresholds
applicable under the first alternative.) The second alternative would
likewise require States to conduct a RACT analysis and require
reasonably available controls on stationary sources, but would allow
States to decline to impose controls that would not otherwise be
necessary to meet RFP requirements or to attain the PM_2.5
NAAQS as expeditiously as practicable.\66\
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\66\ Note that States are required to implement RACT only within
the nonattainment area while it is proposed elsewhere in today's
proposal that States may use reductions from selected sources
outside the nonattainment area to meet RFP milestones.
---------------------------------------------------------------------------

The third alternative would be a combination of the first two and
is consistent with the RACT approach adopted in the final
implementation rule for the 8-hour ozone program. It would require
States to conduct a RACT analysis and require reasonably available
controls for all affected stationary sources in the nonattainment area
only for areas with attainment dates more than five years from the date
of designation. For areas with an attainment date within five years of
designation (e.g. by April 2010 for areas designated in late 2004),
RACT would be required as under the second alternative, in which States
could decline to impose controls that would not otherwise be necessary
to meet RFP requirements or to attain the PM_2.5 NAAQS as
expeditiously as practicable. The EPA seeks comment on the three
alternative approaches for RACT discussed below, and on the options
presented for a RACT source emissions threshold applicable under the
first and third options.
First proposed alternative for RACT. Under the first alternative,
EPA would require States to conduct RACT determinations and require
RACT controls for all stationary sources located in nonattainment
areas, subject to any size threshold as discussed in the options below.
In this approach, covered sources would be required to apply
technically and economically feasible controls and there would be no
opportunity for States to excuse major stationary sources from control
on the basis that the emissions reductions from those controls would
not be necessary for RFP or to expedite attainment. The EPA believes
that this first alternative would be consistent with the approach set
forth in the CAA in subpart 4 governing PM₁₀ nonattainment
areas and in subpart 2 governing 1-hour ozone nonattainment areas
wherein all stationary sources with at least a given amount of
potential annual emissions are subject to RACT controls. The logic
behind requiring RACT for all such sources in subpart 2 and subpart 4
was presumably that large stationary sources are a significant source
of emissions in nonattainment areas and that States

[[Page 66018]]

necessarily need to control them as part of an effective SIP.
EPA believes that requiring RACT for all large sources may also be
appropriate for implementation of the RACT requirement for
PM_2.5 for a number of reasons. First, as with ozone problem
areas, sources located across a broad region appear to contribute to
PM_2.5 nonattainment problems. As such, implementing the RACT
requirement for all major sources located in nonattainment areas will
``level the playing field'' from one area to another. Controls on
sources subject to RACT will improve air quality in the nonattainment
area in which the facility is located, and in many cases will also
improve air quality in nearby nonattainment areas.
Second, like ozone and to a lesser extent PM_10,
PM_2.5 nonattainment in many areas appears to be largely a
product of secondarily formed particles that result from emissions of
precursors that react in the atmosphere. While we understand the basic
processes and mechanisms that cause PM_2.5 formation, we
likewise recognize that sorting out the various sources and their
impacts on local and regional nonattainment is a difficult and resource
intensive process, subject to some uncertainty. Requiring RACT controls
for all large stationary sources under subpart 2 (for ozone) and
subpart 4 (for PM₁₀) greatly simplified the SIP development
process by requiring the analysis for and imposition of RACT controls
for these sources, and thereby foreclosed the need to divert State
resources to demonstrate conclusively the need for RACT controls for
large stationary sources or to explore plan options that would permit
excusing certain sources from control, perhaps at the cost of
regulating other smaller sources less central to the nonattainment problem.
Third, EPA notes that the rule to implement the new 8-hour ozone
NAAQS also sought comment on an option that would require RACT for all
large stationary sources in subpart 1 areas with design values greater
than 91 parts per billion (ppb). Given that some of the
PM_2.5 and 8-hour ozone nonattainment areas will overlap and
that PM and ozone have common precursors, EPA anticipates that many of
the same large stationary sources will be subject to RACT in connection
with the ozone NAAQS in any case. Thus, requiring RACT on all large
sources will also ``level the playing field'' among sources located in
ozone or PM_2.5 nonattainment areas, and will help to
alleviate unintended consequences of an inconsistent approach.
Notwithstanding the practical and policy arguments in favor of
requiring RACT for all large stationary sources, EPA recognizes that in
other contexts concerning other NAAQS, RACT has been interpreted
alternatively as a component of the general RACM requirement in section
172(c)(1). Nevertheless, EPA believes that the health impacts of
PM_2.5 nonattainment and the similarities between the
PM_2.5, PM_10, and ozone problems (e.g., cause by
many and various sources, regional in nature) may justify consideration
of a comparable RACT approach. The EPA specifically solicits comment on
this alternative in which RACT is required for all large sources above
a particular tonnage threshold, without regard to RFP or attainment needs.
Options for a RACT emissions threshold under the first proposed
alternative. Under the first proposed alternative in which States are
required to impose RACT controls on stationary sources, EPA recognizes
that it may not be reasonable for States to require RACT controls
regardless of the amount of the emissions from the individual sources
in question. Section 172(c)(1) does not provide an explicit cutoff for
the size of sources that States should subject to RACT controls, but
there are such cutoffs elsewhere in the statute.
For example, in section 182(b)(2) governing nonattainment areas for
the one-hour ozone NAAQS, the CAA requires RACT for those sources
covered by preexisting control techniques guidelines or for other
``major stationary sources,'' i.e., those sources with emissions above
a specified number of tons per year, which varies depending upon the
area's nonattainment classification. In subpart 4 governing
PM₁₀ nonattainment areas, section 189(b)(3) defines a
``major source'' as one stationary source (or a group of such sources
contiguously located and under common control) that emits or has the
potential to emit at least 70 tons of PM₁₀ per year, thereby
altering the otherwise applicable 100 ton definition of major source in
``moderate'' PM₁₀ nonattainment areas and imposing greater
control requirements on smaller sources in areas that are ``serious''
nonattainment for PM_10. The logic behind such emissions
thresholds is presumably that requiring RACT controls for small sources
may not achieve the same degree of reductions that may be possible
through focusing regulatory resources on relatively larger sources.
Given the significance of the health impacts that result from
PM_2.5 nonattainment, EPA considered proposing that there
should be no size threshold for sources that States must address in a
RACT analysis, thereby considering even small emissions sources for
RACT controls and implementing those controls as appropriate.
Ultimately, however, EPA has concluded that under the first proposed
alternative for RACT, requiring RACT analyses for all stationary
sources, regardless of the amount of annual potential emissions, may
divert resources and attention from the necessary RACT analyses for
larger, more significant sources of direct PM_2.5 and
PM_2.5 precursors. Moreover, EPA expects States to consider
controls for smaller stationary sources as part of the RACM analysis
discussed below, so EPA does not anticipate that the creation of a RACT
threshold based upon the amount of emissions will serve to exempt
smaller stationary sources completely from all consideration of controls.
In short, EPA finds that under the first proposed alternative, it
may not be reasonable to require RACT controls for all stationary
sources regardless of size, and EPA is proposing to interpret section
172(c)(1) to allow EPA to define the universe of sources for which
States should consider the need to impose RACT, based upon the
potential annual emissions of the sources affected. For the first
overall RACT alternative discussed above, EPA is proposing three sub-
options for thresholds for implementing the RACT requirement that would
limit the universe of sources for which States must conduct a RACT
analysis, based upon the potential emissions from each source.
The first sub-option would require States to conduct RACT
determinations, at a minimum, for all existing stationary sources \67\
located in nonattainment areas and which have the potential to emit 100
tons per year or more of direct PM_2.5 or any individual
precursor to PM_2.5. (See the following subsection for a more
detailed discussion of precursor emissions covered under RACT.) A
source would be subject to this requirement if its plant-wide potential
emissions exceeded the 100 ton threshold for PM_2.5 or any
individual precursor in the baseline year of 2002 or later. We would
require States to adopt RACT rules covering those sources above this
threshold for which control

[[Page 66019]]

measures are technically and economically feasible. As discussed in the
previous section, the number of sources with emissions over 100 tons
per year of direct PM_2.5 or any precursor pollutant make up
a fairly small percentage of all stationary sources, but on a
pollutant-by-pollutant basis, they are responsible for 70-90+ percent
of the emissions in many nonattainment areas. Thus, this proposed
approach to RACT would provide a mechanism by which States can address
large emissions sources in all contributing source categories while
evaluating a relatively small number of sources for consideration of
RACT and implementation of RACT, as compared to the entire inventory of
emissions sources.
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\67\ A stationary source, as defined in various EPA regulations,
is any building, structure, facility or installation which emits or
may emit any pollutant regulated under the CAA, and for which all of
the pollutant-emitting activities belong to the same industrial
grouping, are located on one or more contiguous or adjacent
properties, and are under the control of the same person (or persons
under common control).
---------------------------------------------------------------------------

Under the second proposed sub-option on emissions thresholds, we
would require States to conduct RACT determinations for all existing
stationary sources located in nonattainment areas which have potential
emissions of 50 tons per year or more of direct PM_2.5 or any
individual precursor to PM_2.5. Under this option, States
would conduct RACT determinations for a larger universe of stationary
sources responsible for a larger fraction of direct PM_2.5
and precursor emissions. This sub-option would provide a lower
threshold for RACT that would require States to address smaller sources
and a broader range of sources under the RACT requirement.
As a third suboption for a RACT emissions threshold under the first
alternative, EPA is considering creation of a scaled RACT threshold
based upon the severity of pollution in the nonattainment area. Under
this approach, most PM areas would have a 100-ton threshold, but areas
with a more serious PM problem would have a 50-ton threshold. As a
variation, another tier (e.g., 25 tons or 10 tons) could be created for
areas with the highest PM levels.
The CAA imposes a tiered RACT approach for ozone in subpart 2, and
EPA believes that the approach has been helpful to assure more
expeditious attainment of the ozone NAAQS. The EPA has not yet
determined what design values might be appropriate as cut points for
lower thresholds, and we specifically request comments and supporting
analyses on this issue, as well as on the overall approach in general.
Under all three sub-options for the RACT threshold, the specified
potential-to-emit threshold would be the minimum starting point for
RACT analyses. The EPA would not preclude a State from conducting an
analysis to assess the suitability of RACT controls for sources with
emissions below the applicable threshold, particularly in areas having
more serious air quality problems, in order to apply available control
technology to those existing sources in the nonattainment area that are
reasonable to control in light of the attainment needs of the area and
the feasibility of installing such controls.\68\ For example, States
may find that selected source categories can apply controls cost-
effectively at smaller sources than EPA's baseline applicability threshold.
---------------------------------------------------------------------------

\68\ This approach is consistent with EPA's historical RACT
policy outlined in the 1992 general preamble (57 FR 13541).
---------------------------------------------------------------------------

Second proposed alternative for RACT. Under the second proposed
alternative for RACT, EPA also would require States to conduct a RACT
analysis and to require RACT for stationary sources, but would allow
States to decline to impose controls that would otherwise be required
as RACT if they are not necessary to meet RFP requirements or to attain
the PM_2.5 NAAQS as expeditiously as practicable. In
connection with other NAAQS, EPA has previously interpreted section
172(c)(1) to provide that a State must adopt at a minimum those RACM
measures that are necessary for the nonattainment areas in that State
to meet RFP requirements and to attain the standards as expeditiously
as practicable. Under this second proposed alternative, the imposition
of RACT controls on stationary sources would derive from the same
statutory provision and impose the same requirement.\69\ The EPA has
also interpreted section 172(c)(1) to allow a State to decline to adopt
certain technically and economically feasible measures, if adoption of
those measures would not advance the attainment date by at least a year
for the nonattainment area. Under this alternative interpretation, EPA
would take the position that the RACT requirement for the
PM_2.5 standards should be subject to that limitation as
well.\70\
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\69\ Subpart 1 of part D of the CAA includes the general
provision that States must adopt plans for nonattainment areas which
require implementation of RACM and RACT. The EPA has interpreted the
provision to require States to include RACM and RACT measures to the
extent that such measures will meet RFP requirements and will
expedite attainment. In Subpart 2 specifically governing one-hour
ozone nonattainment areas, however, the Act requires States to
implement RACT on certain stationary sources independent of the
emissions reductions needed to attain the applicable standard.
\70\ A recent decision by the U.S. Court of Appeals for the
District of Columbia has upheld this interpretation for RACM. The
Court agreed with EPA's view that the statute does not require a
State to adopt reasonably available control measures without regard
to whether they would facilitate RFP or would expedite attainment.
See Sierra Club v. EPA, 294 F.3d 155 (DC Cir. 2002).
---------------------------------------------------------------------------

In the context of the PM₁₀ NAAQS, EPA has concluded,
based upon the annual form of the standard, that ``advancement of the
attainment date'' should mean an advancement of at least one calendar
year.\71\ Similarly, given that the annual PM_2.5 standard is
considered to be the ``controlling'' standard (as opposed to the 24-
hour standard), and the fact that all sites violating the
PM_2.5 standards are violating the annual standard rather
than only the 24-hour standard, EPA believes that, under this option,
advancement of the attainment date by at least one calendar year is
likewise the proper test for assessing whether RACM (including RACT
under this option) would advance the attainment date for purposes of
the PM_2.5 NAAQS.
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\71\ ``State Implementation Plans; General Preamble for the
Implementation of Title I of the CAA Amendments of 1990; Proposed
Rule.'' April 16, 1992 (57 FR 13498). See also Sierra Club v. EPA,
294 F.3d 155 (DC Cir. 2002).
---------------------------------------------------------------------------

EPA's second proposed RACT alternative, therefore, would require
that all States must adopt such RACT measures for stationary sources as
are necessary to meet RFP requirements and to attain the
PM_2.5 standards as expeditiously as practicable. Under this
approach, determination of RACT would be part of the broader RACM
analysis and identification of all measures--for stationary, mobile,
and area sources--that are technically and economically feasible, and
that would collectively contribute to advancing the attainment date.
Because RACT and RACM are considered together under this alternative,
we are not proposing emissions threshold options for evaluation of
stationary source RACT as are included under the first proposed
alternative. In addition, under the second alternative, areas cannot
avoid the imposition of either available RACT or RACM measures without
a demonstration showing that there is no combination of such declined
RACT and RACM measures that would advance the date of attainment by one
year.
EPA presumes that many States with PM_2.5 nonattainment
areas will conclude that RACT standards are necessary for many of the
major stationary sources of emissions within the boundaries of such
nonattainment areas in order to meet RFP and to expedite attainment of
the standards. Nevertheless, there may be nonattainment areas in which
a requirement for RACT controls on certain stationary sources would not

[[Page 66020]]

advance attainment by at least one year. For example, there may be
nonattainment areas that are within a few tenths of a microgram of the
standard and the State may determine that other local measures are
adequate to bring the area into attainment as expeditiously as
practicable, and that the absence of such controls will not
significantly impact downwind States. In such areas, EPA believes that
it might be reasonable to forego the requirement of RACT controls on
certain stationary sources. Under this second alternative, each State
would make that determination through its own fact specific RACT
analysis in the attainment demonstration it submits to the Agency. EPA
proposes that the RACT analysis under this option would not need to be
a source-specific analysis, and instead could be conducted on a source-
category basis. This alternative would provide greater flexibility for
States to design local control programs for such areas.\72\ EPA
requests comment on all aspects of the second proposed option for RACT.
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\72\ EPA must initially rely on the States to provide the
necessary analysis and documentation to show whether RACT measures
would advance the attainment date at least one year. It should be
noted that although the court upheld EPA's interpretation of Sec.
172(c)(1) in Sierra Club v. EPA, supra, the court also concluded in
that case that neither the local government authority nor EPA had
provided an adequate analysis to support the determination that
certain control measures were not in fact capable of advancing the
attainment date for that area.
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Third proposed alternative for RACT. The third proposed alternative
for RACT would be a combination of the first two and is consistent with
the RACT approach adopted in the final implementation rule for the 8-
hour ozone program. Because of the importance EPA places on providing
consistent policies between the ozone and PM_2.5 implementation
programs, we propose this alternative as our preferred option.
The third proposed alternative would require States to conduct a
RACT analysis and impose reasonably available controls for all affected
stationary sources in the nonattainment area, only for those
nonattainment areas with attainment dates more than five years from the
date of designation. The same proposed suboptions with respect to the
size of sources for consideration discussed under the first alternative
would be included under this alternative as well.
For areas with an attainment date within five years of designation
(e.g. by April 2010 for areas designated in late 2004), RACT would be
required as described under the second alternative, in which States
could decline to impose controls that would not otherwise be necessary
to meet RFP requirements or to attain the PM_2.5 NAAQS as
expeditiously as practicable.
EPA believes that this alternative, which is in effect a ``hybrid''
of the first two, provides important policy advantages. First, it
recognizes that certain areas are projected to attain the standards
within five years of designations predominantly due to federal emission
reduction programs. This alternative enables such areas to decline to
impose controls on certain categories of sources if their
implementation would not provide for an advancement of the attainment
date. Second, it recognizes that those areas that need an attainment
date extension due to more serious nonattainment problems should be
required to impose RACT controls on affected sources in return for
receiving the extension. This alternative is consistent with the
overall approach taken in the 1990 Clean Air Act amendments, such as
subpart 2 for ozone, under which areas with more severe air quality
problems are required to implement a broader range of control
requirements, in conjunction with attainment dates that are farther
into the future. EPA requests comment on all three proposed RACT
alternatives presented above.
Factors to consider in determining RACT. States should consider a
number of factors in analyzing whether or not RACT controls will help a
given area to meet RFP requirements or to attain the standard as
expeditiously as practicable, and in determining what would constitute
RACT for a given source category. First, our understanding of
PM_2.5 formation indicates that ambient pollutant levels are
the result of emissions from a large number of varied sources of direct
PM_2.5 and PM_2.5 precursors. Accordingly, each
State should examine closely the universe of emissions sources in each
nonattainment area and evaluate carefully whether RACT controls are
appropriate for some or all of these sources, given the specific nature
of the nonattainment problem in such area. We anticipate that States
may decide upon RACT controls that differ from State to State, but that
are the most effective given the relevant mixture of sources and
potential controls in the respective nonattainment areas. So long as
each State can adequately demonstrate that its chosen RACT approach
will provide for meeting RFP requirements and for attainment of the
NAAQS as expeditiously as practicable, we anticipate approving plans
that may elect to control a somewhat different mix of sources or to
implement somewhat different controls as RACT. Nevertheless, States
should consider and address RACT measures developed for other areas or
other States as part of a well reasoned RACT analysis. The EPA's own
evaluation of State SIPs for compliance with the RACT and RACM
requirements will include comparison of measures considered or adopted
by other States.
Second, implementation of the PM_2.5 NAAQS is in its
initial stages, and many of the designated PM_2.5
nonattainment areas are not current or former PM₁₀
nonattainment areas. Thus, some existing stationary sources in these
areas may currently be uncontrolled or undercontrolled for PM or PM
precursors. Further, emissions controls for existing sources in these
areas may focus primarily on particulate matter that is filterable at
stack temperatures and thus may not adequately control condensable
emissions. In addition, States should bear in mind that the controlled
sources may have installed emission controls 15 years ago or more, and
now there may be cost-effective opportunities available to reduce
emissions further through more comprehensive and improved emissions
control technologies, or through production process changes that are
inherently lower in emissions.
Moreover, improved monitoring methods may enhance the ability of
sources to maintain the effectiveness of installed emissions controls
and to reduce emissions by detecting equipment failures more quickly.
For example, State imposition of requirements for more frequent
monitoring (e.g., continuous opacity monitors, PM continuous emissions
monitors, etc.) may provide greater assurance of source compliance and
quicker correction of inadvertent upset emissions conditions than
existing approaches.
Third, even in former or current PM₁₀ nonattainment
areas, existing requirements for controlling direct PM emissions (e.g.,
with a baghouse or electrostatic precipitator) may not have been
revised significantly since the 1970's. When EPA established the
PM₁₀ standards in 1987, we stated in the General Preamble
that it was reasonable to assume that control technology that
represented RACT for total suspended particulates (TSP) should satisfy
the requirement for RACT for PM₁₀. The rationale for this
provision was that controls for PM₁₀ and TSP would both be
focused on reducing coarse particulate matter, and specifically that
fraction of particulate matter that is solid (rather than gaseous or
condensable) at typical stack

[[Page 66021]]

temperatures. However, emission controls to capture coarse particles in
some cases may be less effective in controlling PM_2.5. For
this reason, there may be significant opportunities for sources to
upgrade existing control technologies \73\ and compliance monitoring
methods to address direct PM emissions contributing to fine particulate
matter levels with technologies that have advanced significantly over
the past 15 years.
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\73\ For example, see past EPA guidance on PM_2.5
control technologies: Stationary Source Control Techniques Document
for Fine Particulate Matter (EPA-452/R-97-001), EPA Office of Air
Quality Planning and Standards, October 1998.
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Fourth, it will be important for States to conduct RACT
determinations for stationary sources of PM_2.5 precursors as
well as direct PM_2.5 emissions. A significant fraction of
PM_2.5 mass in most areas violating the standards is
attributed to secondarily-formed components such as sulfate, nitrate,
and carbonaceous PM, and EPA believes that certain stationary sources
of these precursors in nonattainment areas currently may be poorly
controlled. Accordingly, to address these precursors, States should
review existing sources for emission controls or process changes that
could be reasonably implemented to reduce emissions from activities
such as fuel combustion, industrial processes, and solvent usage.
Finally, EPA believes that the proper and timely implementation of
RACT by the States is a relevant criterion in assessing State requests
for any attainment date extension of the applicable attainment date.
Because EPA anticipates that most States will conclude that RACT
controls are appropriate and consistent with meeting RFP requirements
and with expeditious attainment of the standards, EPA assumes that
States will include a detailed RACT analysis in connection with any
extension request. The EPA proposes that any State that seeks an
attainment date extension of 1 to 5 years beyond the initial 5-year
attainment date provided in section 172(a)(2) must, among other things,
submit a demonstration satisfactory to EPA showing that the State has
implemented all RACT for the appropriate sources in that State in order
to meet RFP requirements and to provide for attainment of the
PM_2.5 standards as expeditiously as practicable.
EPA requests comment on all aspects of the proposed alternatives
and guidance for implementing the RACT requirement discussed above.
6. What factors should States consider in determining whether an
available control technology is technically feasible?
The technological feasibility of applying an emission reduction
method to a particular source should consider factors such as the
sources's process and operating procedures, raw materials, physical
plant layout, and any other environmental impacts such as water
pollution, waste disposal, and energy requirements. For example, the
process, operating procedures, and raw materials used by a source can
affect the feasibility of implementing process changes that reduce
emissions and the selection of add-on emission control equipment. The
operation of, and longevity of, control equipment can be significantly
influenced by the raw materials used and the process to which it is
applied. The feasibility of modifying processes or applying control
equipment also can be influenced by the physical layout of the
particular plant. The space available in which to implement such
changes may limit the choices and will also affect the costs of control.
Reducing air emissions may not justify adversely affecting other
resources by increasing pollution of bodies of water, creating
additional solid waste disposal problems or creating excessive energy
demands. An otherwise available control technology may not be
reasonable if these other environmental impacts cannot reasonably be
mitigated. For analytic purposes, a State may consider a
PM_2.5 control measure technologically infeasible if,
considering the availability (and cost) of mitigative adverse impacts
of that control on other pollution media, the control would not, in the
State's reasoned judgment, provide a net benefit to public health and
the environment. In many instances, however, PM_2.5 control
technologies have known energy penalties and adverse effects on other
media, but such effects and the cost of their mitigation are also known
and have been borne by owners of existing sources in numerous cases.
Such well-established adverse effects and their costs are normal and
assumed to be reasonable and should not, in most cases, justify
rejection of the potential PM_2.5 control technology. The
costs of preventing adverse water, solid waste and energy impacts will
also influence the economic feasibility of the PM_2.5 control
technology.
EPA recommends that States evaluate alternative approaches to
reducing emissions of particulate matter by reviewing existing EPA
guidance \74\ and other sources of control technology information. In
EPA's 1998 guidance, the design, operation and maintenance of general
particulate matter control systems such as electrostatic precipitators,
fabric filters, and wet scrubbers are presented. The filterable
particulate matter collection efficiency of each system is discussed as
a function of particle size. Information is also presented regarding
energy and environmental considerations and procedures for estimating
costs of particulate matter control equipment. Secondary environmental
impacts are also discussed. Because control technologies and monitoring
approaches are constantly being improved, the State should also
consider more updated or advanced technologies not referenced in this
1998 guidance when conducting a RACT determination. Emissions
reductions may also be achieved through the application of monitoring
and maintenance programs that use critical process and control
parameters to verify that emission controls are operated and maintained
so that they more continuously achieve the level of control that they
were designed to achieve.\75\
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\74\ Stationary Source Control Techniques Document for Fine
Particulate Matter (EPA-452/R-97-001), EPA Office of Air Quality
Planning and Standards, October 1998. See also: Controlling
SO₂ Emissions: A Review of Technologies (EPA/600/R-00/
093), EPA Office of Research and Development, November 2000.
\75\ See EPA's website for more information:
http://www.epa.gov/ttn/emc/monitor.html.

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7. What factors should States consider in determining whether an
available control technology is economically feasible?
Economic feasibility considers the cost of reducing emissions and
the difference between the cost of the emissions reduction approach at
the particular source and the costs of emissions reduction approaches
that have been implemented at other similar sources. Absent other
indications, EPA presumes that it is reasonable for similar sources to
bear similar costs of emission reduction. Economic feasibility for RACT
purposes is largely determined by evidence that other sources in a
source category have in fact applied the control technology or process
change in question.
The capital costs, annualized costs, and cost effectiveness of an
emission reduction technology should be considered in determining its
economic feasibility. The EPA Air Pollution

[[Page 66022]]

Control Cost Manual \76\ describes procedures for determining these
costs for stationary sources. The above costs should be determined for
all technologically feasible emission reduction options.
---------------------------------------------------------------------------

\76\ EPA Air Pollution Control Cost Manual--Sixth Edition (EPA
452/B-02-001), EPA Office of Air Quality Planning and Standards,
Research Triangle Park, NC, Jan 2002.
---------------------------------------------------------------------------

States may give substantial weight to cost effectiveness in
evaluating the economic feasibility of an emission reduction
technology. The cost effectiveness of a technology is its annualized
cost ($/year) divided by the emissions reduced (i.e., tons/year) which
yields a cost per amount of emission reduction ($/ton). Cost
effectiveness provides a value for each emission reduction option that
is comparable with other options and other facilities.
In considering what level of control is reasonable, EPA is not
proposing a fixed dollar per ton cost threshold for RACT. We believe
that what is considered to be a reasonable control level should vary
based on the severity of the nonattainment problem in the area. In
addition, we believe that in determining what are appropriate emission
control levels, the State should also consider the collective health
benefits that can be realized in the area due to projected improvements
in air quality. The health benefits associated with reducing
PM_2.5 levels are significant. Using estimation techniques
reviewed and deemed reasonable by the National Academy of Sciences,
national monetized health benefits resulting from reductions in PM
concentrations are estimated to exceed emission control costs by a
factor of three to thirty times, depending on the particular controls
on sources of PM precursor emissions.\77\ This approach is consistent
with EPA's view that RACT may be related to what is needed for
attainment. That is, for options where RACT is met where an area
demonstrates timely attainment and areas with more severe air quality
problems typically will need to adopt more stringent controls, RACT
level controls in such areas will require controls at higher cost
effectiveness levels ($/ton) than areas with less severe air quality
problems.
---------------------------------------------------------------------------

\77\ U.S. EPA, 2003 Technical Support Package for Clear Skies;
U.S. EPA, 2003. See also: Draft Regulatory Impact Analysis: Control
of Emissions from Nonroad Diesel Engines. United States
Environmental Protection Agency Office of Air and Radiation EPA420-
R-03-008, April 2003.
---------------------------------------------------------------------------

Areas with more serious air quality problems typically will need to
obtain greater levels of emissions reductions from local sources than
areas with less serious problems, and it would be expected that their
residents could realize greater health benefits. For this reason, we
believe that it will be reasonable and appropriate for areas with more
serious air quality problems and higher design values to impose
emission reduction requirements with generally higher costs per ton of
reduced emissions than the cost of emissions reductions in areas with
lower design values.
If a source contends that a source-specific RACT level should be
established because it cannot afford the technology that appears to be
RACT for other sources in its source category, the source should
support its claim with such information regarding the impact of
imposing RACT on:
1. Fixed and variable production costs ($/unit),
2. Product supply and demand elasticity,
3. Product prices (cost absorption vs. cost pass-through),
4. Expected costs incurred by competitors,
5. Company profits, and
6. Employment costs.
8. How should condensable emissions be treated in RACT determinations?
Certain commercial or industrial activities involving high
temperature processes (fuel combustion, metal processing, cooking
operations, etc.) emit gaseous pollutants into the ambient air which
rapidly condense into particle form. The constituents of these
condensed particles include, but are not limited to, organic material,
sulfuric acid, and metals. In general, condensable emissions are taken
into account wherever possible in emission factors used to develop
national emission inventories, and States are required under the
consolidated emissions reporting rule (CERR) \78\ to report condensable
emissions in each inventory revision. Currently, some States have
regulations requiring sources to quantify condensable emissions and to
implement control measures for them, and others do not. In 1990, EPA
promulgated Method 202 in Appendix M of 40 CFR Part 51 to quantify
condensable particulate matter emissions.
---------------------------------------------------------------------------

\78\ The consolidated emissions reporting rule was published in
the Federal Register on June 10, 2002, pages 39602-39616.
---------------------------------------------------------------------------

EPA is in the process of developing detailed guidance on a new test
method which quantifies and can be used to characterize the
constituents of the PM_2.5 emissions including both the
filterable and condensable portion of the emissions stream. (See
section III.P for more information.) When a source implements either of
these test methods addressing condensable emissions, the State will
likely need to revise the source's emissions limit to account for those
emissions that were previously unregulated. For the purposes of
determining RACT applicability and establishing RACT emission limits,
EPA intends to require the State to adopt the new test method once EPA
issues its detailed guidance for use by all sources within a
PM_2.5 nonattainment area that are required to reduce
emissions as part of the area's attainment strategy. The EPA requests
comment on this proposal with respect to addressing condensable
emissions in PM_2.5 RACT determinations.
9. What are the required dates for submission and implementation of
RACT measures?
States must submit adopted RACT rules to EPA within three years of
designation, at the same time as the attainment demonstration due in
April 2008. States should also implement any measures determined to be
RACT expeditiously, as required by section 172. Implementation of RACT
measures should start no later than the beginning of the final year of
the three-year period on which attainment is to be assessed. (See
section I.11. for a discussion of RACT for sources subject to CAIR.)
For example, if an area has an attainment date of April 2010, then any
required RACT measures should be in place and operating no later than
the beginning of 2009, so that their effect will be reflected in the
air quality levels for calendar year 2009. (See related-discussion in
section I.11. on the interaction of CAIR and RACT.) If the area has
recorded air quality levels above 15.1 [mu]g/m3 for the first two years
of the three-year period, then it is possible that implementation of
the emission controls in the third year could enable the area to have
improved air quality below 15.1 and thereby be eligible to receive a
one-year attainment date extension.
While EPA expects that States will implement required RACT controls
by January 2009 in most situations, there may be cases where additional
implementation time is needed to implement an innovative control
measure or to achieve a greater level of reduction through a phased
approach. If an area has provided an adequate demonstration showing
that an attainment date extension would be appropriate, then the area
may consider phasing-in certain RACT controls after January 2009.
Implementation of

[[Page 66023]]

selected RACT controls after January 2009 would only be allowable if
the state can show why additional time is needed for implementation,
and still would need to be on a schedule that provides for expeditious
attainment. In no event could the area wait to implement RACT controls
until the last few years prior to the attainment date. EPA requests
comments on this approach for RACT implementation.
10. Under the PM_2.5 implementation program, does a State
need to conduct a RACT determination for an applicable source that
already has a RACT determination in effect?
In PM_2.5 nonattainment areas, States are required to
implement the RACT requirement to reduce emissions of direct
PM_2.5 and PM_2.5 precursors from applicable
sources. Under this proposal, RACT would need to be addressed for
emissions of SO₂ and NO_X in all areas. For VOC
and ammonia, this proposal would require RACT to be addressed only in
those areas for which EPA or the State provides a determination that
the pollutant is a significant contributor to the local PM_2.5 problem.
The sources subject to RACT in a particular nonattainment area will
depend on which RACT option described in section III.I.5 is adopted in
the final rule. Under EPA's preferred option, an area projected to
attain within five years after designations (by April 2010) according
to the attainment demonstration would need to impose RACT controls only
on those sources as necessary to attain as expeditiously as
practicable. An area projected to attain in more than five years would
be required to conduct RACT determinations for all sources exceeding a
particular emissions threshold.
EPA anticipates that for a number of sources located in a
PM_2.5 nonattainment area, the State would have previously
conducted RACT determinations for VOC or NO_X under the 1-
hour ozone standard, or for direct PM₁₀ emissions under the
PM₁₀ standards. Some of the RACT determinations established
under these other programs would have been made more recently, while
other determinations will be more than ten years old. In some cases, a
new RACT determination would call for the installation of similar
control technology as the initial RACT determination because the
relevant pollutant was addressed, the same emission points were
reviewed, and the same fundamental control techniques would still have
similar costs. In other cases, a new RACT analysis could determine, for
example, that better technology has become available, and that cost-
effective emission reductions are achievable.
For these reasons, EPA recommends that the State should closely
review any existing RACT determinations established under another NAAQS
program. We believe States must consider new information that has
become available since the original RACT determination. EPA proposes
that where major sources or source categories were previously reviewed
and sources subsequently installed controls to meet the RACT
requirement for the pollutant(s) in question, States would be allowed
to accept the initial RACT analysis as meeting RACT for purposes of the
PM_2.5 program, provided that the State submits as part of
its SIP revision a certification with appropriate supporting
information that it previously met the RACT requirement for these
sources as part of its prior SIP revision, and that the previous
determination currently represents an appropriate RACT level of control
for PM_2.5. In the alternative, the State should revise the
SIP to reflect a modified RACT requirement for specific sources or
source categories.
In any case where additional information on updated control
technologies is presented as part of notice-and-comment rulemaking,
including a RACT SIP submittal for sources previously controlled,
States (and EPA) must consider the additional information as part of
that rulemaking. In cases where the State's RACT analysis previously
concluded that no additional controls were necessary, we propose that a
new RACT determination is required for that source. The new RACT
determination is needed to take into account that newer, cost-effective
control measures may have become available for sources that were not
previously regulated. EPA believes it may not always be sufficient for
a State to rely on technology guidance that is several years old in
conducting new RACT determinations. States should take into account
appropriate information about updated control technologies as well as
any additional information obtained through public comments when
conducting RACT determinations for PM_2.5.
EPA requests comment on the policy approach described above for
taking existing RACT determinations into account, and on the following
questions: (1) Should new RACT determinations be required for all
existing determinations that are older than a specified amount of time
(such as 10 years old)?; (2) what supporting information should a state
be required to submit as part of its certification to demonstrate that
a previous RACT analysis meets the RACT requirement currently for
purposes of the PM_2.5 program?
Prior BACT/LAER/MACT determinations. In many cases, but not all,
best available retrofit technology (BACT) or lowest achievable emission
rate (LAER) provisions for new sources would assure at least RACT level
controls on such sources. The BACT/LAER analyses do not automatically
ensure compliance with RACT since the regulated pollutant or source
applicability may differ and the analyses may be conducted many years
apart. States may, however, rely on information gathered from prior
BACT or LAER analyses for the purposes of showing that a source has met
RACT to the extent the information remains valid. We believe that the
same logic holds true for emissions standards for municipal waste
incinerators under CAA section 111(d) and NSR/PSD settlement
agreements. Where the State is relying on these standards to represent
a RACT level of control, the State should present their analysis with
their determination during the SIP adoption process.
In situations where the State has determined VOC to be a
significant contributor to PM_2.5 formation in an area,
compliance with MACT standards may be considered in VOC RACT
determinations. For VOC sources subject to MACT standards, States may
streamline their RACT analysis by including a discussion of the MACT
controls and relevant factors such as whether VOCs are well controlled
under the relevant MACT air toxics standard, which units at the
facility have MACT controls, and whether any major new developments in
technologies or costs have occurred subsequent to the MACT standards.
We believe that there are many VOC sources that are well controlled
(e.g., through add-on controls or through substitution of non-VOC non-
HAP materials for VOC HAP materials) because they are regulated by the
MACT standards, which EPA developed under CAA section 112. Any source
subject to MACT standards must meet a level that is as stringent as the
best-controlled 12 percent of sources in the industry. Examples of
these HAP sources that may effectively control VOC emissions include
organic chemical plants subject to the hazardous organic NESHAP (HON),
pharmaceutical production facilities, and petroleum refineries.\79\ We
believe

[[Page 66024]]

that, in many cases, it will be unlikely that States will identify
emission controls more stringent than the MACT standards that are not
prohibitively expensive and thus unreasonable. We believe this will
allow States, in many cases, to rely on the MACT standards for purposes
of showing that a source has met VOC RACT.
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\79\ However, there are some MACT categories for which it may
not be possible to determine the degree of VOC reductions from the
MACT standard without additional analysis; for example, the
miscellaneous metal parts and products (40 CFR part 60, subpart
MMMM) due to the uncertainty of the compliance method that will be
selected.
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Year-round controls. In some cases, sources subject to
NO_X RACT for PM will also be subject to controls under the
NO_X SIP Call. We proposed in the 8-hour ozone implementation
rule that certain sources which have installed emission controls to
comply with the NO_X SIP call would be deemed to meet
NO_X RACT for the purposes of the 8-hour ozone implementation
program. Some of these sources subject to the NO_X SIP call
may choose to control NO_X emissions only or primarily during
the ozone season. For purposes of PM, however, EPA believes that the
operation of emission controls only or primarily during the ozone
season would not constitute RACT for PM purposes. Instead, EPA believes
that RACT for PM should be year-round operation of controls because PM
concentrations are a year-round problem and NO_X emissions
have a more significant role in PM formation in cooler temperatures.
As described above, the PM RACT determination is made on a case-by-
case basis. For sources subject to both the NO_X SIP call and
NO_X RACT for PM, we believe that, in most cases, the
additional costs of running the NO_X SIP call controls year-
round would be feasible and the cost effectiveness would be lower than
the average cost effectiveness for many other sources subject to PM
RACT. For example, if a source that has installed selective catalytic
reduction to comply with the NO_X SIP call extends operation
of the control equipment from just during the ozone season to year-
round, it would only incur additional operating costs but would achieve
substantial additional emissions reductions. Thus, where sources have
installed controls to meet the NO_X SIP call, we believe that
in most cases, RACT for PM would require running the emission controls
year-round.
11. What policies affect compliance with RACT for electric generating
units?
Overview. The Clean Air Interstate Rule (CAIR) (70 FR 25162)
provides for a cap-and-trade mechanism that States may choose to use to
achieve the emissions reductions required by CAIR. Under the cap-and-
trade program, electric generating units (EGUs) \80\ must collectively
reduce their emissions of SO₂ and NO_X across a
multi-state area in order to comply with emissions caps for these
pollutants. A source subject to a cap-and-trade program such as the
CAIR trading program generally has the option of installing emissions
control technology, adopting some other strategy (such as using lower
sulfur coal) to control its emissions, or purchasing emissions
allowances and thereby effectively paying another source covered by the
cap to reduce its emissions. The initial CAIR NO_X cap is
effective in 2009, and the initial CAIR SO₂ cap is effective
in 2010. However, EPA analysis shows that sources covered by the
SO₂ trading program will make significant reductions in
their SO₂ emissions well before 2010 because they are able
to ``bank'' these early reductions. EPA also expects some early
NO_X reductions due to the opportunity for states to use
their portion of the compliance supplement pool to award credit for
early annual NO_X reductions.
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\80\ Under CAIR, states may allow other units to opt into the
trading program.
---------------------------------------------------------------------------

Although we expect that many EGUs that will be subject to mandatory
requirements under the cap-and-trade program under CAIR will not be
located in PM_2.5 nonattainment areas, some of these units
will be located in nonattainment areas and thus will be subject to RACT
requirements for large stationary sources. As discussed elsewhere in
this section, RACT is one of the basic subpart 1 control requirements
for nonattainment areas. Under the Clean Air Act, a source subject to
CAIR that is located within a nonattainment area is also subject to the
nonattainment RACT provisions for emissions of PM_2.5 and
nonattainment plan precursors (including SO₂ and, in the
absence of a finding that NO_X is not a significant
contributor, NO_X).
In this rulemaking, EPA is proposing to determine that in states
that fulfill their CAIR emission reductions entirely through emission
reductions from EGUs, CAIR would satisfy SO₂ RACT
requirements for EGU sources in eastern PM_2.5 nonattainment
areas covered by CAIR. EPA is proposing a similar finding for
NO_X RACT for EGUs, subject to a requirement that existing
SCRs in those nonattainment areas be operated year-round beginning in
2009. The EPA believes that the SIP provisions for those sources meet
the ozone Nox RACT requirement. A State that is relying on this
conclusion for the affected sources should document this reliance in
its RACT SIP.
SO2 RACT. As stated elsewhere in this proposal, RACT controls in
PM_2.5 nonattainment areas should be in place and operational
by the beginning of 2009 unless an attainment date extension is
obtained. As discussed more fully in the CAIR final rulemaking notice,
EPA has set the 2009 and 2010 CAIR caps at a level that will require
EGUs to install emission controls on the maximum total capacity on
which it is feasible to install emission controls by those dates.
Although the actual SO₂ cap does not become effective until
2010, we have designed ``banking'' provisions in CAIR so that covered
EGUs will begin to reduce their SO₂ emissions almost
immediately after CAIR is finalized, and will continue steadily to
reduce their emissions in anticipation of the 2010 cap and the more
stringent cap that becomes effective in 2015. The 2015 SO₂
and NO_X caps are specifically designed to eliminate all
SO₂ and NO_X emissions from EGUs that are highly
cost effective to control (the first caps represent an interim step
toward that end). In general, we expect that the largest-emitting
sources will be the first to install SO₂ and NO_X
control technology and that such control technology will gradually be
installed on progressively smaller-emitting sources until the ultimate
cap is reached.
We do not believe that requiring source-specific RACT controls on
EGUs in nonattainment areas will reduce total SO₂ and
NO_X emissions from sources covered by CAIR below the levels
that would be achieved under CAIR alone. In fact, if states chose to
require smaller-emitting sources in nonattainment areas to meet source-
specific RACT requirements by 2009, they would likely use labor and
other resources that would otherwise be used for emission controls on
larger sources. Because of economies of scale, more boiler-makers may
be required per megawatt of power generation for smaller units than
larger units. In this case, the imposition of source-specific RACT on
smaller emitting sources by 2009 could actually reduce the amount of
``banking'' that would otherwise occur and result in higher
SO₂ emissions in 2009 as compared to the level that would
result from CAIR alone.
In any event, the imposition of source-specific control
requirements on a limited number of sources also covered by a cap-and-
trade program would not reduce the total emissions from sources subject
to the program. Under a cap-and-trade program such as CAIR, there is a
given number of

[[Page 66025]]

allowances that equals a given emission level. Source-specific control
requirements may affect the temporal distribution of emissions (by
reducing banking and thus delaying early reductions) or the spatial
distribution of emissions (by moving them around from one place to
another), but it does not affect total emissions. If source-specific
requirements were targeted at the units that can be controlled most
cost-effectively, then the imposition of source-specific controls would
likely achieve the same result as the cap-and-trade program. If not,
however, the imposition of source-specific requirements would make any
given level of emission reduction more costly than it would be under
the cap-and-trade program alone. Thus, the imposition of source-
specific RACT on EGUs covered by CAIR would not reduce total emissions,
but would likely achieve the same total emission reductions in a more
costly way.
We recognize that the RACT provisions are an important tool to help
nonattainment areas come into attainment. However, neither EPA nor the
States have determined what would constitute SO₂ and
NO_X RACT on EGUs for the purpose of the PM_2.5
implementation program. Therefore, it is not possible to determine at
this time whether, for any particular PM_2.5 nonattainment
area, CAIR or the imposition of RACT on EGUs located in that area would
achieve greater emissions reductions from those specific EGUs. We are
confident, however, that CAIR will provide substantial SO₂
emissions reductions in most nonattainment areas in the CAIR region, as
well as substantial SO₂ reductions in attainment areas,
which together will substantially improve air quality in
PM_2.5 nonattainment areas in the CAIR region. EPA requests
comment on this option in which EGUs located within PM_2.5
nonattainment areas would be considered to meet their SO₂
RACT requirements through participation in the CAIR trading program.
NO_X RACT. With respect to NO_X, we propose to
find that, for EGUs subject to CAIR SIPs, CAIR satisfies NO_X
RACT in PM_2.5 nonattainment areas, except that in addition,
the state's SIP must ensure that any source that has selective
catalytic reduction (SCR) technology for summertime NO_X
control will operate the SCR year-round, starting by the beginning of
2009. In the CAIR final rulemaking notice, EPA found that the operation
of existing SCRs on a year-round basis, instead of operating them only
during the ozone season, could achieve NO_X reductions at low
cost relative to other available NO_X controls for EGUs or
for other sectors. EPA projected that power generators would employ
this control measure for CAIR compliance. Based on this control
opportunity, EPA estimated the average cost of non-ozone-season
NO_X control at $500/ton. These considerations support a
finding that RACT should include year-round operation of existing SCRs
that are located in PM_2.5 nonattainment areas. ``Existing''
SCR would be defined to include those in place by the date of proposal
of this rule; using the proposal date rather than the final rule date
would avoid creating a potential incentive to delay installation of new
SCR. Because all areas violate the annual form of the PM_2.5
standard and public health can be affected by high PM_2.5
levels in the winter as well as the summer, we believe that year-round
operation of existing SCR in nonattainment areas will provide
additional health benefits for relatively low dollar cost per ton of
pollutant reduced.
The Act requires RACT to be implemented as expeditiously as
practicable (and, in the case of areas without an attainment date
extension, no later than 2009). EPA has considered the following
factors in proposing January 1, 2009, as the compliance date for year-
round operation of existing SCR. Depending on the source, year-round
operation of existing SCR involves either no alteration or relatively
minor alteration of existing equipment. For EGUs where these
alterations are needed, we expect the work to be conducted during a
routine outage at a unit, which typically occurs one or more times a
year. Finally, a year-round operation requirement would not be legally
applicable to individual sources until the RACT SIP is adopted. We note
that all EGUs in PM_2.5 nonattainment areas would be on
notice from the date this rule is finalized that RACT SIPs must require
year-round operation of existing SCRs. Taking these factors into
account, EPA believes that a January 1, 2009, implementation date would
provide ample lead time to enable existing SCRs in PM_2.5
nonattainment areas to be operated year-round, including those SCRs for
which physical alterations are necessary. EPA requests comment on the
proposal to find that for an EGU located in a PM_2.5
nonattainment area in the CAIR region and having selective catalytic
reduction control technology to reduce NO_X emissions,
compliance with CAIR satisfies NO_X RACT, provided the
State's SIP ensures that the source operates the SCR year-round,
starting no later than the beginning of 2009.
RACT for sources in states requiring non-EGU reductions for CAIR
compliance or allowing non-EGUs to ``opt into'' CAIR. Under CAIR, a
State may elect to meet its state caps for SO₂ and
NO_X emissions by requiring emissions reductions from
SO₂ and NO_X sources that are not electric
generating units. A second, separate option allowed under CAIR is that
the state may elect to allow non-EGU sources to voluntarily enter the
EPA-administered CAIR trading program through an opt-in provision in
the CAIR model rule. If only part of a state's CAIR reductions are
achieved by EGUs, and the balance of the reductions obtained from non-
EGU sources, then the stringency of CAIR EGU control would be
diminished to some extent (an amount that cannot be determined until
the State submits a SIP indicating which sources are participating in
the program). Therefore, in these cases, the above rationale for our
judgment that CAIR satisfies RACT would not apply. For this reason, a
state selecting either of the above non-EGU options in implementing
CAIR would need to conduct RACT analyses for EGUs in its
PM_2.5 nonattainment areas (either on an individual basis, or
using the averaging approach within the nonattainment area) to
determine whether the lesser EGU reductions satisfy RACT.
For clarity, it should be noted that a State has authority to
conduct its own RACT analysis for any source. Also, the proposed
approach to CAIR and RACT would not prevent a state from requiring
beyond-RACT controls to provide for expeditous attainment.
RACT averaging concept. In addition to the option above relating to
EGU compliance with CAIR and RACT for PM_2.5, we propose to
provide states with a nonattainment area RACT averaging option for
EGU's previously available in the ozone program. We also propose to
make this option available to non-EGU categories for which
accountability of an averaging system could be assured.
The EPA's NO_X RACT guidance (NO_X General
Preamble at 57 FR 55625) under the ozone program encourages States to
develop NO_X RACT programs for EGU's that are based on
``areawide average emission rates.'' Thus, EPA's 1992 policy for ozone
RACT provides for States to submit a demonstration as part of their
RACT submittal showing that the weighted average emission rate from EGU
sources in the nonattainment area subject to RACT--including sources
reducing emissions to meet the NO_X SIP Call or CAIR
NO_X requirements--meet RACT requirements. Under this
approach, emission reductions within the nonattainment area must be at
least

[[Page 66026]]

equivalent to the emission reductions that would result from collective
application of source-specific RACT within the nonattainment area.
We envision that the state would first identify presumptive RACT
for a set of emissions sources, as EPA has not issued guidance on RACT
for PM_2.5 purposes. The state would then propose a program
that would assure collective emissions reductions equivalent or greater
than the emissions reductions that would be achieved if the presumptive
RACT level were met by each individual source.
EPA proposes that the approach described above be available as a
way for states to show that EGUs in PM_2.5 nonattainment
areas comply with RACT for NO_X and SO₂.
Similarly, EPA proposes that this option be available to non-EGUs. As
with other economic incentive programs, an approvable program would be
required to ensure emissions reductions that are quantifiable, surplus,
enforceable and permanent, and provide an environmental benefit.\81\
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\81\ Economic incentive program guidance, ``Improving Air
Quality With Economic Incentive Programs,'' January 2001.
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We generally solicit comment on whether RACT averaging should be
permitted in PM_2.5 areas for EGUs and non-EGUs, and which
non-EGU source categories have adequate monitoring methods available to
provide for accountability in an emissions trading program. In
addition, we solicit comment on the following topics:
? Whether RACT averaging in PM_2.5 nonattainment
areas, if permitted for both EGUs and non-EGUs, should be separate for
EGUs and for non-EGUs, or whether averaging among EGUs and non-EGUs
should be permitted
? Whether a collective approach to RACT should be
implemented through a rate-based approach (mass of emissions per
activity level) involving weighted average emission rates (e.g., pounds
of NO_X per MMBtu of heat input), or through a cap-and-trade
approach that controls total emissions regardless of activity level.
? The appropriate averaging period for showing compliance
with RACT for PM_2.5 purposes
12. Is EPA developing PM_2.5 control techniques guidelines
for specific source categories?
To date, EPA has not developed a series of control techniques
guidelines for specific source categories for the purposes of
PM_2.5 implementation. However, there are a number of sources
of information on recent control technologies and other approaches for
reducing PM_2.5 and precursor emissions from stationary
sources that are available to States and Tribes and can be helpful in
making RACT determinations on a source category or source-specific
basis. These sources of information include EPA's 1998 guidance
document on stationary source control measures, a 1996 particulate
matter ``Menu of Options'' document by STAPPA/ALAPCO,\82\ and the EPA's
Clean Air Technology Center website.\83\ The Clean Air Technology
Center website includes a wide variety of control technology
information, including summaries of previous RACT determinations for
other NAAQS programs, as well as assessments for best available control
technology (BACT) and lowest achievable emissions rate (LAER) under the
NSR and prevention of significant deterioration programs.
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\82\ Controlling Particulate Matter Under the Clean Air Act: A
Menu of Options, STAPPA/ALAPCO, July 1996.
\83\ See EPA's website at http://www.epa.gov/ttn/catc for the
Clean Air Technology Center and RACT/BACT/LAER Clearinghouse.
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Under the implementation program for the 1-hour ozone standard, a
number of control techniques guidance (CTG) and alternative control
technology (ACT) documents have been developed for sources of
NO_X and VOC over the past 25 years. (CTGs include a
presumptive RACT level while ACTs do not. However, ACTs are intended to
help States in making RACT determinations.) Over a five year period,
1991-94, EPA issued nine alternative control technique guideline
documents for large stationary sources of NO_X. In 2000,
updates to the NO_X ACT documents were completed for
stationary internal combustion engines and cement kilns. In addition,
EPA issued a number of CTGs in the 1980's for various source categories
of NO_X and VOC.
As discussed in section III.I.10 above, EPA recognizes that control
technology guidance for certain source categories has not been updated
for many years. Section 183(c) of the CAA, which addresses control
technologies to address ozone nonattainment problems, requires EPA to
``revise and update such documents as the Administrator determines
necessary.'' As new or updated information becomes available States
should consider the new information in their RACT determinations. A
State should consider the new information in any RACT determinations or
certifications that have not been issued by the State as of the time
such updated information becomes available.\84\
---------------------------------------------------------------------------

\84\ Available at: http://www.epa.gov/air/caaac/aqm.html#library
in response to the recent National Research Council report on Air
Quality Management in the United States (January 2004) [available
for sale; individual pages available for viewing at
http://www.nap.edu/books/0309089328/html].

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In addition, EPA is considering related recommendations from the
Air Quality Management Work Group to the Clean Air Act Advisory
Committee (CAAAC) dated January 2005. One of the recommendations to the
CAAAQ is that ``for the SIPs States are required to submit over the
next several years, EPA and States, locals, and Tribes should promote
the consideration of multipollutant impacts, including the impacts of
air toxics, and where there is discretion, select regulatory approaches
that maximize benefits from controlling key air toxics, as well as
ozone, PM_2.5 and regional haze.'' As part of this effort,
EPA intends in the future to develop updated technology guidance with
respect to source categories emitting multiple pollutants in large
amounts. At this time, however, we think it is unlikely that updated
technology guidance will be available prior to 2006. The EPA also
intends to maintain an updated list of references for new
PM_2.5 control technology options. We request that commenters
submit any additional references for PM_2.5 control
technology information that may be useful for state program
implementation efforts.
We also have provided STAPPA/ALAPCO with funding to update its 1996
Particulate Matter Menu of Options document with additional information
regarding control measures to reduce PM_2.5 and its
precursors. STAPPA/ALAPCO will be able to draw on the information and
experience of its broad national membership in developing this updated
guidance document for PM_2.5. While we anticipate that this
guidance document will provide very useful updated information for
regulatory agencies and affected sources, the specifications in this
privately-issued document will not be binding on States, sources, or EPA.
13. Background for RACM
The proposed approach for implementing the RACM requirement for
PM_2.5 is generally consistent with the approach followed
under other NAAQS implementation programs. Under this approach, the
State is required to provide a demonstration in its SIP that it has
adopted all reasonably available measures needed to meet RFP and to
attain the standard as expeditiously as

[[Page 66027]]

practicable. The demonstration should show that there are no additional
reasonable measures available that would advance the attainment date by
at least one year or contribute to RFP for the area. Reasonable
measures are those measures that are technologically and economically
feasible within the nonattainment area.
Under section 172, the attainment date for a nonattainment area is
presumed to be within five years or less after the effective date of
designation of the area (e.g., no later than April 2010 for the final
designations December 2004). Each State is required to evaluate all
RACM in the area to determine if any such measures could contribute to
RFP or attainment as expeditiously as practicable. If this evaluation
of all RACM finds that the State will not be able to demonstrate
attainment within five years of designation based on the severity of
the problem or the availability or feasibility of implementing
controls, then the State may request an attainment date extension. The
EPA may extend the attainment date for a period of 1 to 5 years,
provided the State has presented an adequate demonstration showing they
will implement all RACT and RACM as expeditiously as practicable, and
still need additional time to attain.
14. What is the proposed approach for implementing RACM?
The State should begin the process of determining RACM by
identifying all available control measures in the nonattainment area.
RACM can apply to mobile sources, area sources, and stationary sources
not already subject to PM_2.5 RACT requirements. If the State
receives substantive public comment demonstrating through appropriate
documentation that other specific control measures may be available for
existing emissions sources or activities in the area, then the State or
local agency must also closely review those additional control measures
and determine if they are reasonably available for the area in light of
local circumstances.
After the universe of available measures have been identified for
the sources in the area, the State should evaluate them to determine
whether implementation of such measures is technically and economically
feasible, and whether the measure will contribute to advancing the
attainment date. The State should consider the feasibility of partial
implementation of certain measures when ``full'' implementation would
be infeasible. For example, if a State is considering diesel retrofits
of school buses to be RACM for an area, it may not be feasible to
retrofit all school buses in the nonattainment area, but it may be
feasible to retrofit buses for specific school districts. The burden is
with the State to provide a demonstration to EPA containing the
justification and supporting documentation describing which measures it
has determined to be RACM, and which it has not.
Because the local circumstances for each area (e.g., design value,
variety of emissions sources, contribution of each PM_2.5
precursor to overall PM_2.5 mass) will be different, the set
of measures that constitute RACM are expected to vary from area to
area. We anticipate that what may be considered RACM in one area may
not be considered RACM in another. For example, certain transportation
control measures, such as high occupancy vehicle (HOV) lanes, may be
appropriate in a densely populated urban area with a significant
commuting population, whereas HOV lanes may not be appropriate in a
less densely populated suburban county.
In any case, the State or local agency will have the initial
responsibility for demonstrating to EPA that the area has adopted all
reasonably available measures so that the area will achieve RFP and
attain the standards as expeditiously as practicable, in accordance
with applicable policy and guidance for attainment demonstrations and
modeling. In reviewing the State's selection of measures for RACM, or
determination that certain measures are not RACM, EPA may supplement
the rationale of the State or provide an alternative reason for
reaching the same conclusion as the State, where appropriate.
In the past under other SIP programs, there have been instances
where a State proposed to reject a single measure under consideration
as RACM because the emission reduction benefits from that measure alone
would not advance the attainment date by one year. The EPA does not
believe this approach is appropriate under section 172. In the past,
EPA has historically interpreted the RACM requirement as requiring the
collective evaluation of measures and the assessment of whether they
will advance the attainment date when taken together. EPA believes this
approach is appropriate for implementing the PM_2.5 program.
In a RACM assessment, the State should not reject an individual
measure unless the State can show that it has evaluated the collective
effect of that measure plus all other available control measures to
determine whether implementing those measures together would advance
the attainment date. The State's analysis should provide a reasoned
justification for rejecting any available control measures. The
supporting information must show why each rejected measure, including
any measure raised as part of the State's public hearing or public
comment process, is infeasible or unreasonable, or will not contribute
to advancing attainment by one year.
If, for example, a State determines that there are six available
control measures that are technically and economically feasible, yet
when implemented together they would not contribute to RFP or advance
the attainment date, then the state would not be required to adopt the
measures as RACM. On the other hand, suppose a State determines that
there are ten available control measures that are technically and
economically feasible and collectively these measures would advance the
attainment date by more than a year but less than two years. If the
State determines that the collective implementation of only seven of
the measures would still advance the attainment date by at least one
year, then the state only would be required to adopt the seven measures
and not all ten.
EPA emphasizes the importance for States to provide credible and
thorough RACM analyses as part of their SIP demonstrations, complete
with adequate supporting information and rationale supporting the
State's inclusion or rejection of control measures. Recent experience
with other SIP programs has shown that members of the public may bring
legal challenges against the State if the State fails to provide an
adequate technical analysis and supporting information for RACM. We
believe it is essential that the public have the benefit of reviewing
credible State RACM analyses in order to be sure that emissions
reductions will be achieved expeditiously and all requirements for RFP
and timely attainment will be achieved.
In the CAIR rulemaking (May 12, 2005 (70 FR at 25221 et seq.), EPA
found that the control installations projected to result from the CAIR
NO_X and SO₂ caps in 2009 and 2010 would be as
much as feasible from EGUs across the CAIR region by those dates. EPA
concluded that the CAIR compliance dates represent an aggressive
schedule that reflects the limitations of the labor pool, and
equipment/vendor availability, and need for electrical generation
reliability for installation of emission controls. States should
recognize these constraints in developing their own compliance
schedules for emission controls in meeting their CAIR and

[[Page 66028]]

RACT responsibilities. However, the CAIR trading program did not
specify which sources should install emissions control equipment or
reduce emissions rates to a specific level in order to meet the
SO₂ and NO_X caps under CAIR.
Based on our experience developing the NO_X SIP call,
CAIR, and the proposed Clear Skies legislation, we believe that many
power companies will develop their strategies for complying with CAIR
based, in part, on consultations with air quality officials in the
areas in which their plants are located. Because power plants are
generally major emission sources, the operators of those plants
typically have ongoing relationships with state and local officials
that will be involved in developing air quality plans. We are aware
that, in the past, companies have worked with air quality officials to
meet their emission control obligations under a cap-and-trade approach
such as the NO_X SIP call while also addressing the concerns
of air quality officials about the air quality impacts of specific
plants. This has led to controlling emissions from power plants located
in or near specific ozone nonattainment areas. A number of companies
have indicated that such collaboration will be even more important as
the States where they are located address multiple air quality goals
(e.g., visibility, interstate air pollution, local attainment).
EPA expects similar consultations between States and power sector
companies on the location of plants to be controlled under CAIR,
considering local PM_2.5 and ozone attainment needs in
planning for CAIR compliance. This consultation might reveal
opportunities to provide improved air quality earlier for large numbers
of people. Power companies may identify economic advantages in
situating CAIR controls to help the local area attain; for example, it
might need to control fewer facilities for the area to reach
attainment. These benefits may outweigh any additional marginal costs
the company might incur by forgoing controls on another more distant
plant. In any event, the intent of these consultations would not be to
upset market behavior or incentives. Rather, we anticipate that these
consultations will affect individual control decisions for certain
PM_2.5 areas. In this regard, EPA notes that CAIR SIPs will
be due in 2006, while local attainment plans are proposed to be due in
April 2008. EPA suggests that consultations on location of CAIR
controls would be timely during state development of the CAIR SIP.
15. What factors should States consider in determining whether control
measures are reasonably available?
Once the State has identified measures that are available for
implementation in the nonattainment area, then it must evaluate those
measures to determine whether implementation of such measures would be
technically and economically feasible, and would collectively advance
attainment. Many of the factors that the State should take into
consideration in determining technical and economic feasibility are
described earlier in sections 6 and 7 for RACT. Since RACM applies to
area and mobile sources as well as stationary sources, the State should
consider other factors as well in conducting its RACM analysis. For
example, in many cases obtaining emissions reductions from area and
mobile sources is achieved not by adding control technology to a
specific emissions source, but by reducing the level of activity of a
fleet of vehicles or by modifying a type of commercial process. In
these situations, the State should also consider issues such as the
social acceptability of the measure; local circumstances such as
infrastructure, population, or workforce; and the time needed to
implement the measure in light of the attainment date.
In regard to economic feasibility, EPA is not proposing a fixed
dollar per ton cost threshold for RACM, just as it is not doing so for
RACT. We believe that what is considered to be a reasonable emission
reduction level can vary based on the severity of the nonattainment
problem in the area and existing control measures in place. Where the
severity of the nonattainment problem makes reductions more imperative
or where essential reductions are more difficult to achieve, the
acceptable cost of achieving those reductions could increase. In
addition, we believe that in determining what are economically feasible
emission reduction levels, the State should also consider the
collective health benefits that can be realized in the area due to
projected improvements in air quality. Areas with more serious air
quality problems typically will need to obtain greater levels of
emissions reductions from local sources than areas with less serious
problems, and it would be expected that their residents could realize
greater health benefits from such reductions. For this reason, we
believe that it will be reasonable and appropriate for areas with more
serious air quality problems and higher design values to impose
emission reduction requirements with generally higher costs per ton
than the cost of emissions reductions in areas with lower design
values. In areas with existing control measures in place for the
purpose of attaining the PM₁₀ standards, the RACM analysis
should evaluate the cost-effectiveness of additional control measures
beyond those already being implemented.
Some nonattainment areas with 2001-2003 design values relatively
close to the standard may be able to demonstrate through existing
modeling analyses that they are projected to attain the standard within
five years of the date of designation, based on the implementation of
existing federally enforceable national and State measures alone (e.g.,
CAIR, national mobile source measures such as Tier II standards).
EPA believes that while areas projected to attain within five years
of designation as a result of existing national measures should still
be required to conduct a RACM analysis, such areas may be able to
conduct a limited RACM analysis that does not involve additional air
quality modeling. A limited analysis of this type could involve the
review of available reasonable measures, the estimation of potential
emissions reductions, and the evaluation of the time needed to
implement these measures. If the State could not achieve significant
emissions reductions by the beginning of 2008 due to time needed to
implement reasonable measures or other factors, then it could be
concluded that reasonably available local measures would not advance
the attainment date. In lieu of conducting air quality modeling to
assess the impact of potential RACM measures, existing modeling
information could be considered in determining the magnitude of
emissions reductions that could significantly affect air quality and
potentially result in earlier attainment. If the State, in consultation
with EPA, determines from this initial, more limited RACM analysis that
the area may be able to advance its attainment date through
implementation of reasonable measures, then the State must conduct a
more detailed RACM analysis, involving air quality modeling analyses,
to assess whether it can advance the attainment date.
16. What specific source categories and control measures should a State
evaluate when determining RACM for a nonattainment area?
Section 172 does not provide a specific list of source categories
and control measures that must be evaluated for RACM for
PM_2.5. In order to provide further guidance to States in the
form of a starting list of source categories to

[[Page 66029]]

consider in a RACM analysis, we reviewed 2001 national emission
inventory information for the more than 200 counties comprising
PM_2.5 nonattainment areas. We have identified the detailed
stationary, mobile, and area source categories that are major
contributors to total emissions of PM_2.5 and its precursors
in these counties.\85\ Based on our review of this emission inventory
data and air quality monitoring data from the speciation trends
network, we recognize that a wide variety of source categories
contribute to PM_2.5 concentrations in nonattainment areas
across the country. We have also reviewed a wide variety of information
sources to identify available control measures for many of these
categories. Based on this analysis, a list of potential RACM measures
is included at the end of this section.
---------------------------------------------------------------------------

\85\ ``Emission inventory analysis for 39 PM_2.5
Nonattainment Areas,'' memo by Richard Damberg to docket OAR-2003-0062.
---------------------------------------------------------------------------

Emission reduction measures constituting RACM should be determined
on an area-by-area basis. We believe that a State should consider each
of the measures listed in this section to determine if each measure is
reasonably available in the applicable nonattainment area. However,
under current EPA policy we do not presume that each of these measures
is reasonably available in each nonattainment area.
We propose that each State use the list of source categories in
this section as a starting point for identifying potentially available
control strategies for a nonattainment area. States are encouraged and
expected to add other potentially available measures to the list based
on its knowledge of the particular universe of emissions sources in the
area and comments from the general public. We expect that, depending on
the potential measure being analyzed, the State's degree of evaluation
will vary as appropriate.
Stationary Source Measures
--Stationary diesel engine retrofit, rebuild or replacement, with
catalyzed particle filter
--New or upgraded emission control requirements for direct
PM_2.5 emissions at stationary sources (e.g., installation or
improved performance of control devices such as a baghouse or
electrostatic precipitator; revised opacity standard; improved
compliance monitoring methods)
--New or upgraded emission controls for PM_2.5 precursors at
stationary sources (e.g., SO₂ controls such as wet or dry
scrubbers, or reduced sulfur content in fuel)
--Energy efficiency measures to reduce fuel consumption and associated
pollutant emissions (either from local sources or distant power providers)
Mobile Source Measures
--Onroad diesel engine retrofits for school buses \86\ and trucks using
EPA-verified technologies
--Nonroad diesel engine retrofit, rebuild or replacement, with
catalyzed particle filter \87\
--Diesel idling programs for trucks, locomotive, and other mobile
sources \88\
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\86\ See Clean School Bus USA program at http://www.epa.gov/cleanschoolbus/.
See also: ``What You Should Know About Diesel
Exhaust and School Bus Idling'', (June 2003, EPA420-F-03-021) at
http://www.epa.gov/otaq/retrofit/documents/f03021.pdf.
\87\ See EPA's voluntary diesel retrofit program web site at
http://www.epa.gov/otaq/retrofit/overfleetowner.htm.
\88\ See EPA's voluntary diesel retrofit program web site at
http://www.epa.gov/otaq/retrofit/idling.htm.

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--Transportation control measures (including those listed in section
108(f) of the CAA as well as other TCMs), as well as other
transportation demand management and transportation systems management
strategies \89\
---------------------------------------------------------------------------

\89\ See EPA's website on transportation control measures at
http://www.epa.gov/otaq/transp/traqtcms.htm.

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--Programs to reduce emissions or accelerate retirement of high
emitting vehicles, boats, and lawn and garden equipment
--Emissions testing and repair/maintenance programs for onroad vehicles
--Emissions testing and repair/maintenance programs for nonroad heavy-
duty vehicles and equipment \90\
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\90\ See EPA's web site on nonroad engines, equipment, and
vehicles at http://www.epa.gov/otaq/nonroad.htm.

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--Programs to expand use of clean burning fuels
--Prohibitions on the sale and use of diesel fuel that exceeds a high
sulfur content
--Low emissions specifications for equipment or fuel used for large
construction contracts, industrial facilities, ship yards, airports,
and public or private vehicle fleets
--Opacity or other emissions standards for ``gross-emitting'' diesel
equipment or vessels
--Reduce dust from paved and unpaved roads
Area Source Measures
--New open burning regulations and/or measures to improve program
effectiveness
--Smoke management programs to minimize emissions from forest and
agricultural burning activities
--Programs to reduce emissions from woodstoves and fireplaces
--Controls on emissions from charbroiling or other commercial cooking
operations
--Reduced solvent usage or solvent substitution (particularly for
organic compounds with 7 carbon atoms or more, such as toluene, xylene,
and trimethyl benzene)
--Reduce dust from construction activities and vacant disturbed areas

We request comment on the specific sources and potential control
measures recommended for RACM analysis on this list. Commenters
supporting the inclusion or exclusion of measures for this list should
provide detailed supporting information as part of their comments.
17. What criteria should be met to ensure effective regulations or
permits to implement RACT and RACM?
After the State has identified a RACT or RACM measure for a
particular nonattainment area, it must then implement that measure
through a legally enforceable mechanism (e.g., such as a regulation or
a permit provision). The regulation or permit provision should meet
four important criteria.
First, the baseline emissions from the source or group of sources
and the future year projected emissions should be quantifiable so that
the projected emissions reductions from the sources can be attributed
to the specific measures being implemented. It is important that the
emissions from the source category in question are accurately
represented in the baseline inventory so that emissions reductions are
properly calculated. In particular, it is especially important to
ensure that both the filterable and condensable components of
PM_2.5 are accurately represented in the baseline since
traditional Federal and State test methods have not included the
condensable component of particulate matter emissions and have not
required particle sizing of the filterable component.
Second, the control measures must be enforceable. This means that
they must specify clear, unambiguous, and measurable requirements. When
feasible, the measurable requirements for larger emitting facilities
should include periodic source testing to establish the capability of
such facilities to achieve the required emission level. Additionally,
to verify the continued performance of the control measure,

[[Page 66030]]

specific monitoring programs appropriate for the type of control
measure employed and the level of emissions must be included to verify
the continued performance of the control measure. The control measures
and monitoring program must also have been adopted according to proper
legal procedures.
Third, the measures should be replicable. This means that where a
rule contains procedures for interpreting, changing, or determining
compliance with the rule, the procedures are sufficiently specific and
nonsubjective so that two independent entities applying the procedures
would obtain the same result.
Fourth, the control measures should be accountable. This means, for
example, that source-specific emission limits should be permanent and
must reflect the assumptions used in the SIP demonstration. It also
means that the SIP must contain a mechanism (such as a title V
operating permit) to track emission changes at sources and provide for
corrective action if emissions reductions are not achieved according to
the plan.

J. What guidance is available to States and Tribes for implementing
innovative programs to address the PM2.5 problem?

EPA recognizes that, in order to address their fine particle
problems, States, Tribes, and local agencies may need to approach
certain categories of contributing emissions sources in non-traditional
and innovative ways. EPA has developed several guidance documents on
innovative programs and policies that may be useful to States and
Tribes in developing implementation plans for attaining the
PM_2.5 standards, and these are available at
http://www.epa.gov/ttn/airinnovations/policy.html.
Many of these guidance documents and policies provide information
on approaches that could be used for achieving reductions in emissions
of PM_2.5 and its precursors. In 2001, EPA released guidance
on the development and implementation of nontraditional measures. This
guidance, entitled ``Improving Air Quality with Economic Incentive
Programs,'' provides factors to use to select the right emissions
control program, as well as guidance on writing nontraditional
regulations that can be approved into a SIP.
EPA has also developed policy documents that provide guidance on
attaining credit in SIPs for voluntary measures which reduce emissions
from stationary sources \91\ and from mobile sources.\92\ Current SIP
policy requires that, in order for an emission reduction measure to be
approved, the emissions reductions must be quantifiable, surplus to
other program requirements, enforceable, and permanent. These
``voluntary measures'' policies address situations in which reductions
will be achieved despite the lack of any directly enforceable
requirement on the sources of emissions. Under these policies, the
State would receive credit toward its SIP obligations, and it would be
responsible for assuring that the emissions reductions credited in the
SIP actually occur. The State would make an enforceable commitment to
monitor, assess and report on the emissions reductions resulting from
the voluntary measures, and to remedy any shortfalls from forecasted
emissions reductions in a timely manner. An example of stationary
source measures that could be considered under this policy are no-burn
days for wood stoves, voluntary woodstove change-out programs, or
energy conservation programs. Examples of voluntary mobile source
measures include ozone action plans, reduced switchboard locomotive
idling, and trip reduction strategies.
---------------------------------------------------------------------------

\91\ ``Incorporating Emerging and Voluntary Measures in a State
Implementation Plan,'' EPA Office of Air Quality Planning and
Standards, Air Quality Strategies and Standards Division, Research
Triangle Park, NC, September 2004. For further information, see:
http://www.epa.gov/ttn/oarpg/t1/memoranda/evm_ievm_g.pdf.
\92\ ``Guidance on Incorporating Voluntary Mobile Source
Emission Reduction Programs in State Implementation Plans (SIPs),''
memorandum from Richard D. Wilson, Acting Assistant Administrator
for Air and Radiation, to EPA Regional Administrators, October 24,
1997. For further information, see
http://www.epa.gov/otaq/transp/vmweb/vmpoldoc.htm.

---------------------------------------------------------------------------

The emerging and voluntary measures policy also addresses
situations where quantification of projected emissions reductions from
certain measures may be difficult to assess. The policy enables a State
to receive provisional credit for implementing hard-to-quantify
measures and sets forth procedures by which the State should evaluate
program effectiveness.
Request for Comment on the Integrated Local Emission Reduction
Program Concept. While significant environmental gains will be achieved
through the Title IV SO₂ Acid Rain Program, the
NO_X SIP Call Program, the Mobile Source Control Program, and
future implementation of the Clean Air Interstate Rule (CAIR), they are
not designed to solve every nonattainment problem. Residual
nonattainment areas will continue to exist after implementation of
these programs, and EPA believes that it may be useful to provide
incentives that would stimulate innovative programs to focus additional
emission reduction efforts designed to help bring these remaining
nonattainment areas into attainment.
In particular, it may be useful to provide real incentives for the
emissions-generating community to help design additional approaches on
their own initiative that could achieve further environmental benefits
outside of the sources and emissions subject to these rules.
EPA is interested in ideas that could create a system which
satisfies regional reduction obligations through targeted reduction
strategies for designated nonattainment areas. These ideas and
incentives could be designed and administered by individual States, or
groups of States to be incorporated as part of their State and local
attainment planning process for developing SIPs. We believe that, for
any such program to be successful, it would need to balance
accountability and flexibility, as well as respond to the needs and
concerns of air pollution control agencies and regulated sources.
To support the concept of the ILERP, EPA solicits comment on the
development and application of factors or criteria for the States and
the emissions-generating community that would take into account the
unique needs of specific nonattainment areas. We also seek comment on
approaches that would provide incentives for improved monitoring and
characterization of emissions, e.g., using different factors based on
the technical rigor and reliability of emissions verification methods.
Potential mechanisms could range from basic financial incentives to
more aggressive and innovative approaches. In its simplest form, the
emissions-generating community could choose to complement or expand
existing control measures, or perhaps fund new ones. Under the latter
approach, a specific value could be applied to a ton of local emissions
to be reduced depending on one or more specific criteria such as: The
accuracy and technical validity of emissions monitoring used to
characterize emissions or demonstrate compliance, seasonal timing or
location of the reductions, population exposure, or other
considerations.
For example, reducing PM_2.5 from a sector in a
nonattainment area might receive a greater value than reductions from a
sector that is upwind of the nonattainment area most of the year, due
to the relative effectiveness of the measures at reducing population
exposure and monitoring of PM_2.5.

[[Page 66031]]

Another example could be one in which the emissions-generating facility
receives an incentive in exchange for reductions in other pollutants
causing PM_2.5, based on using technically appropriate air
quality models to demonstrate superior environmental results.
We seek comment, consistent with the philosophy of State
implementation planning, on various approaches that could incorporate
these ideas to allow the States to implement such a program that would
result in greater emissions reductions and greater environmental
results beyond the reductions achieved by the aforementioned existing
programs.

K. What aspects of transportation conformity and the PM2.5 standard are
addressed in this proposal?

1. What is transportation conformity?
Transportation conformity is required under section 176(c) of the
CAA (42 U.S.C. 7506(c)) to ensure that federally supported highway and
transit project activities are consistent with (``conform to'') the
purpose of a SIP. Conformity to the purpose of the SIP means that
transportation activities will not cause new air quality violations,
worsen existing violations, or delay timely attainment of the NAAQS.
Transportation conformity applies in nonattainment areas and
maintenance areas. The EPA's transportation conformity rule, 40 CFR
part 93, establishes the criteria and procedures for determining
whether transportation activities conform to the State air quality
plan. It also establishes criteria and procedures for determining
whether transportation activities conform in areas where no SIP
containing mobile source emissions budgets yet exists.
EPA first published the transportation conformity rule on November
24, 1993 (58 FR 62188) and has amended the rule several times. On
August 15, 1997, a comprehensive set of amendments was published that
clarified and streamlined language from the 1993 transportation
conformity rule (62 FR 43780). On July 1, 2004 the rule was amended to
address conformity requirements in 8-hour ozone and PM_2.5
nonattainment and maintenance areas (69 FR 40004). The July 1, 2004
final rule also incorporated revisions related to a March 1999 court
decision and further clarified and streamlined language in the previous
version of the rule. On May 6, 2005, EPA finalized a rule on
requirements for addressing PM_2.5 precursors in
transportation conformity determinations (70 FR 24280). These
rulemakings, as well as other relevant conformity materials such as
guidance documents, policy memoranda, the complete text of the
conformity rule, and conformity research can be found at EPA's
transportation conformity Web site, at http://www.epa.gov/otaq/transp.htm
(once at the site, click on ``Transportation Conformity.'')
2. Why does transportation conformity apply to PM_2.5?
Transportation conformity will apply to PM_2.5 because
EPA has evidence to indicate that motor vehicle emissions are
significant contributors to the air quality problem in most, if not
all, PM_2.5 nonattainment areas. Gasoline and diesel vehicles
emit fine particulate matter as well as PM_2.5 precursors
such as volatile organic compounds (VOCs), NO_X, sulfur
oxides (SO₂) and ammonia (NH₃). Travel on paved
and unpaved roads results in re-entrained road dust which may
contribute to measured PM_2.5 violations. Also, in some areas
transportation-related construction activities may also result in the
creation of significant amounts of dust.
3. Why is EPA discussing transportation conformity in this proposal?
We are not proposing changes to the transportation conformity rule
in today's proposal. Instead, we are discussing transportation
conformity in this notice in order to provide affected parties with
information on when transportation conformity will be implemented under
the PM_2.5 standard. Affected parties may include State and
local transportation and air quality agencies, metropolitan planning
organizations (MPOs) and the U.S. Department of Transportation (DOT).
To determine whether this discussion affects your organization, you
should carefully examine the applicability requirements in 40 CFR
93.102 of the transportation conformity rule.
4. What revisions have been made to the transportation conformity rule
to address the PM_2.5 standard?
The July 1, 2004, transportation conformity rule revisions contain
a number of provisions that apply to PM_2.5 nonattainment and
maintenance areas. For example, the July 1, 2004, rule contains
requirements for: regional conformity tests in PM_2.5 areas;
considering direct emissions of PM_2.5 (i.e., exhaust, brake
and tire wear and re-entrained dust) in regional emissions analyses;
considering re-entrained road dust and construction-related fugitive
dust in regional emissions analyses and compliance with
PM_2.5 SIP control measures.
In addition to the July 1, 2004 rule, EPA published a final rule on
May 6, 2005 (70 FR 24280) that established requirements for addressing
PM_2.5 precursors in regional emissions analyses. EPA also
published a supplemental notice of proposed rulemaking \93\ requesting
comment on a number of options for consideration of localized emissions
impacts of individual transportation projects in PM_2.5
nonattainment and maintenance areas. We intend to finalize requirements
for localized emissions analyses in PM_2.5 nonattainment and
maintenance areas as expeditiously as possible.
---------------------------------------------------------------------------

\93\ 69 FR 72140 (December 13, 2004).
---------------------------------------------------------------------------

5. Does EPA plan to revoke the PM₁₀ standard?
No, we are not planning to revoke the PM₁₀ standards at
this time. We are in the process of reviewing the PM NAAQS, and as part
of that process we are considering whether the current scientific
literature would support the establishment of coarse particle
standards. (Coarse particles are those which have an aerodynamic
diameter between 2.5 and 10 micrometers.)
6. Will some areas be demonstrating conformity for both PM₁₀
and PM_2.5 at the same time?
Yes, since the PM₁₀ standard is being retained, a small
number of areas will be required to determine conformity to both air
quality standards. PM₁₀ nonattainment and maintenance areas
should continue to make PM₁₀ conformity determinations
according to the conformity regulation. By the end of the one-year
grace period, conformity of metropolitan plans and transportation
improvement programs (TIPs) must be determined, reflecting the
metropolitan area and any associated donut areas (defined below).
7. When does transportation conformity apply to PM_2.5
nonattainment areas?
Transportation conformity applies to PM_2.5 nonattainment
areas one year after the effective date of an area's designation. This
one-year grace period is found in the CAA at 42 U.S.C. 7506(c)(6).
Specifically, this section of the CAA provides areas, when they are
first designated nonattainment for a given air quality standard, with a
one-year grace period before the conformity regulation applies with
respect to that standard. Since the PM_2.5 standard is a
different standard from the PM₁₀ standard, every area that
is designated nonattainment for the PM_2.5 standard will have
a one-year grace period before

[[Page 66032]]

conformity applies for the PM_2.5 standard, regardless of
whether conformity applies in the area for the PM₁₀
standard.
For more information, please see the proposed and final rulemaking
entitled, ``Transportation Conformity Rule Amendments: Minor Revision
of 18-Month Requirement for Initial SIP Submissions and Addition of
Grace Period for Newly Designated Nonattainment Areas,'' published
October 5, 2001, (66 FR 50954), and August 6, 2002, (67 FR 50808),
respectively for additional discussion of the one-year grace period for
newly designated areas. (The proposed and final rule can be found on
EPA's transportation conformity website mentioned above.)
8. How does the 1-year grace period apply in metropolitan areas?
A one-year grace period for implementation of the conformity
program applies in metropolitan areas that have an established
metropolitan planning organization (MPO) that is responsible for
transportation planning per 23 U.S.C. 134. In these areas, the one-year
grace period means that, one year after the effective date of an area's
designation as nonattainment for the PM_2.5 standard, the
area must have a conforming transportation plan and transportation
improvement program (TIP) \94\ in place to fund or approve
transportation projects. (For the discussion of which projects can
proceed after the end of the grace period if a conformity determination
has not been made by the MPO and U.S. DOT, please see the July 1, 2004
final rule (69 FR 40037), DOT's January 2, 2002, guidance, published
February 7, 2002, at 67 FR 5882; and EPA's May 14, 1999, conformity
guidance. All of these documents can be found on EPA's transportation
conformity Web site.)
---------------------------------------------------------------------------

\94\ When used only in this section on transportation
conformity, the acronym ``TIP'' refers to ``transportation
improvement program.'' In all other sections of this preamble, the
acronym ``TIP'' stands for ``tribal implementation plan.''
---------------------------------------------------------------------------

9. How does the 1-year grace period apply in ``donut'' areas?
For the purposes of conformity, a donut area is the geographic area
outside a metropolitan planning area boundary, but inside the boundary
of a designated nonattainment/maintenance area. The conformity
requirements for donut areas are generally the same as those for
metropolitan areas, and the MPO would include any projects occurring in
the donut area in its analysis of the metropolitan transportation plan
and TIP. A donut area is not an isolated rural area for the purposes of
the conformity process. Therefore, the one-year grace period applies to
donut areas in much the same way that it applies to metropolitan areas.
That is, within one year of the effective date of an area's
designation, a donut area's projects must be included in an MPO's
conformity determination for the metropolitan plan and TIP for those
projects to be funded or approved. If, at the conclusion of the one-
year grace period, the donut area's projects have not been included in
the MPO's conformity determination, new ``nonexempt'' projects and
project phases could not be approved in the metropolitan area or the
donut area.
10. How does the 1-year grace period apply in isolated rural areas?
For the purposes of conformity, isolated rural nonattainment and
maintenance areas are areas that do not contain or are not part of any
metropolitan planning area designated under the transportation planning
regulations. Isolated rural areas do not have federally required
metropolitan transportation plans or TIPs and do not have projects that
are part of the emissions analysis of any MPO's transportation plan or
TIP. Isolated rural areas are distinguished from ``donut'' areas which
are geographic areas outside a metropolitan planning area boundary, but
inside the boundary of a nonattainment or CAA section 175A maintenance
plan area that is dominated by a metropolitan area(s).
Because isolated rural areas do not have federally required
metropolitan transportation plans and TIPs, a conformity determination
need only be done in an isolated rural area when that area has a
transportation project or projects that need approval. Therefore,
isolated rural areas also have a one-year grace period before
conformity applies under the PM_2.5 standard, but at the end
of that grace period, the area does not have to have made a conformity
determination. An isolated rural area would be required to do
conformity only at the point when a new transportation project needs
approval. This point may occur significantly after the one-year grace
period has ended. (Conformity requirements for isolated rural areas can
be found at 40 CFR 93.109(g).)

L. What requirements for general conformity should apply to the
PM_2.5 standards?

1. What is the purpose of the general conformity regulations?
Section 176(c) of the CAA requires that before a Federal entity
takes an action, it must make a determination that the proposed action
will not interfere with the SIP or the State's ability to attain and
maintain the NAAQS. In November 1993, EPA promulgated two sets of
regulations to implement section 176(c). One set, known as the
Transportation Conformity Regulations (described above) deals with
approval and funding of highway and mass transit project. The other
set, known as the general conformity regulations, deals with all other
Federal activities. Besides ensuring that Federal actions will not
interfere with the SIP, the general conformity program also fosters
communications with State/local air quality agencies, allows for public
participation in the review of air quality impacts from Federal
actions, and allows for air quality review of individual projects. In
1995, Congress limited the application of section 176(c) to
nonattainment and maintenance areas only.
2. How is the general conformity program currently structured?
Due to the very broad definition of ``Federal action'' in the
statute and the number of Federal agencies subject to the conformity
requirement, the number of individual conformity decisions could have
been on the order of a thousand or more per day. To avoid creating an
unreasonable administrative burden, EPA established de minimis
emissions levels and exempted certain actions. In addition, the
regulations allow Federal agencies to develop their own list of actions
which are presumed to conform. For non-exempt actions that increase
emissions above the de minimis levels, the Federal agency must
demonstrate that the action will conform with the SIP or will not cause
or contribute to any new violation of any standard in any area;
interfere with provisions in the applicable SIP for maintenance of any
standard; increase the frequency or severity of any existing violation
of any standard; or delay timely attainment of any standard or any
required interim emissions reductions or other milestone. We are
currently reviewing the general conformity program and, in a separate
action, may revise the regulations as appropriate, with respect to the
PM_2.5 standards.

[[Page 66033]]

3. Who runs the general conformity program?
Each Federal agency is responsible for determining if the action it
takes is subject to the conformity regulations and, if so, whether the
action conforms to the SIP. Each Federal agency's approach to the
conformity evaluation differs depending upon the actions being taken.
Agencies that permit or fund actions subject to the conformity rules
generally require the applicant to develop the technical support for
the conformity determination, although some agencies undertake the
complete evaluation themselves.
4. How does an agency demonstrate conformity?
Depending upon the pollutant and the specific situation, Federal
agencies have several options for demonstrating conformity. For actions
in PM_2.5 nonattainment and maintenance areas, the Federal
agency can demonstrate that the project/action is specifically
identified and accounted for in the SIP, obtain documentation from the
State that the emissions are included in the SIP, have the State commit
to include the emissions in the SIP, or mitigate the emissions or
offset the emissions from emissions reductions within the same
nonattainment or maintenance area.
5. General Conformity Regulation Revisions for the PM_2.5
Standards
a. What de minimis emission levels will be set for pollutants that
contribute to PM_2.5 concentrations?
As discussed in the technical overview section, the key pollutants
contributing to PM_2.5 concentrations in the atmosphere are
direct PM_2.5 emissions, SO₂, NO_X, VOC,
and ammonia. Section II.E. proposes policy options for addressing each
of these precursors under the PM_2.5 implementation program.
After consideration of public comment, EPA will finalize precursor
requirements for the PM_2.5 implementation program. When
finalized, these precursor requirements will also apply under the
general conformity program.
In another rulemaking action, we will propose to establish de
minimis emission levels for federal projects or actions covered by the
general conformity program. It is expected that the proposed levels
will be identical to the nonattainment area major source levels for the
NSR program. Under this approach, PM_2.5 nonattainment areas
would have de minimis emission levels for general conformity purposes
of 100 tons per year for all PM_2.5 pollutants. These levels
are also consistent with the levels proposed for VOC and NO_X
emissions in subpart 1 areas under the 8-hour ozone implementation
strategy.\95\
---------------------------------------------------------------------------

\95\ See 68 FR 32843.
---------------------------------------------------------------------------

b. What impact will the implementation of the PM_2.5
standards have on a State's general conformity SIP?
Since we are not now proposing to make specific revisions to the
general conformity regulations in this proposal, States should not need
to revise their general conformity SIPs, unless they need to do so to
ensure the regulations apply in the appropriate areas.
c. Are there any other impacts on the SIPs related to general
conformity based on implementation of the PM_2.5 standards?
Currently, we are developing a revision to the general conformity
regulations through a separate rulemaking action, but we are not
proposing any general conformity revisions in today's action. However,
as areas develop SIPs for the PM_2.5 standards, we recommend
that State and local air quality agencies work with major facilities
which are subject to the general conformity regulations (e.g.,
commercial airports and large military bases) to establish an emission
budget for each facility in order to facilitate future conformity
determinations. Such a budget could be used by Federal agencies in
determining conformity or identifying mitigation measures.
6. Is there a 1-year grace period which applies to general conformity
determinations for the purposes of the PM_2.5 standards?
Yes, the 1-year grace period for implementation of conformity
requirements after area designations are completed applies to both
transportation and general conformity.\96\ Therefore, the general
conformity requirements would not apply to federal actions or projects
in newly designated nonattainment areas until 1 year after the
effective date of the PM_2.5 area designation. The effective
date of the PM_2.5 designations was April 2005. Thus, general
conformity requirements would apply in April 2006. As discussed
earlier, the PM_2.5 standards are new and the grace period
applies to all the areas designated nonattainment for that standard.
The general conformity regulations specify requirements for actions/
projects in areas without an approved SIP. Those requirements would
apply to PM_2.5 nonattainment areas until the SIP is approved
by EPA.
---------------------------------------------------------------------------

\96\ See section 42 U.S.C. 7506(c)(6).
---------------------------------------------------------------------------

M. How will the NSR program address PM2.5 and its precursors?

1. Background
The existing regulations require both major and minor New Source
Review (NSR) programs to address any pollutant for which there is a
national ambient air quality standard (NAAQS) and any precursors to the
formation of that pollutant when identified for regulation by the
Administrator. We are proposing to amend the NSR regulations to clarify
how States, local agencies and Tribes must implement NSR for the
PM_2.5 standard. This proposal also explains how the existing
rules will be implemented with respect to PM_2.5 during the
State Implementation Plan (SIP) development period.
The NSR program is a preconstruction permitting program that
applies when a source is constructed or modified. The NSR program is
composed of three different programs:
? Prevention of Significant Deterioration (PSD);
? Nonattainment NSR (NA NSR); and,
? Minor NSR.

We often refer to the PSD and Nonattainment NSR program as the major
NSR program because these programs regulate only major sources.\97\
---------------------------------------------------------------------------

\97\ The Act uses the terms ``major emitting facility'' to refer
to sources subject to the PSD program, and ``major stationary
source'' to refer to sources subject to Nonattainment NSR. CAA
Sections 169 and 302(j). For ease of reference, we use the term
``major source'' to refer to both terms.
---------------------------------------------------------------------------

The PSD program applies when a major source, that is located in an
area that is designated as attainment or unclassifiable for any
criteria pollutant, is constructed or undergoes a major
modification.\98\ The NA NSR program applies when a major source that
is located in an area that is designated as nonattainment for any
criteria pollutant is constructed or undergoes a major modification.
The minor NSR program addresses both major and minor sources that
undertake construction or modification activities that do not qualify
as major, and it applies regardless of the designation of the area in
which a source is located.
---------------------------------------------------------------------------

\98\ In addition, the PSD program applies to most noncriteria
regulated pollutants.
---------------------------------------------------------------------------

The national regulations that apply to each of these programs are
located in the Code of Federal Regulations (CFR) as shown below:

[[Page 66034]]

------------------------------------------------------------------------
Applicable regulations
------------------------------------------------------------------------
PSD................................ 40 CFR 52.21, 40 CFR 51.166, 40 CFR
51.165(b).
NA NSR............................. 40 CFR 52.24, 40 CFR 51.165, 40 CFR
Part 51, Appendix S.
Minor NSR.......................... 40 CFR 51.160-164.
------------------------------------------------------------------------

The PSD requirements include but are not limited to:
? Installation of Best Available Control Technology (BACT),
? Air quality monitoring and modeling analyses to ensure
that a project's emissions will not cause or contribute to a violation
of any NAAQS or maximum allowable pollutant increase (PSD increment),
? Notification of Federal Land Manager of nearby Class I areas, and
? Public comment on the permit.
Nonattainment NSR requirements include but are not limited to:
? Installation of Lowest Achievable Emissions Rate (LAER)
control technology,
? Offsetting new emissions with creditable emissions reductions,
? Certification that all major sources owned and operated in
the State by the same owner are in compliance with all applicable
requirements under the Act,
? An alternative siting analysis demonstrating that the
benefits of the proposed source significantly outweigh the
environmental and social costs imposed as a result of its location,
construction, or modification,
? Public comment on the permit.
Minor NSR programs must meet the statutory requirements in Section
110(a)(2)(c) of the Act which requires ``* * *regulation of the
modification and construction of any stationary source* * * as
necessary to assure that the [NAAQS]
are achieved.''
This proposed rule on the implementation of NSR for
PM_2.5 does not supersede existing PM₁₀ NSR
requirements. EPA is not planning to revoke the original
PM₁₀ standards at this time. Accordingly, sources are
subject to NSR for both PM₁₀ and PM_2.5.
2. What are the principal elements of the proposed major NSR program
for PM_2.5?
The table below summarizes the main elements of the existing major
NSR program that EPA is proposing to address for PM_2.5 as a
regulated NSR pollutant. The EPA's proposal for each element, or where
appropriate, explanation of implementation under existing regulations,
is explained in detail in the referenced sections of this preamble.

------------------------------------------------------------------------
Major NSR program element EPA proposal Section
------------------------------------------------------------------------
PSD Major Source Threshold.. 100/250 TPY (no IV.M.4.
change).
NA NSR Major Source 100 TPY (no change). IV.M.4.
Threshold.
Significant Emissions Rate.. PM2.5 Direct IV.M.5 & 6.
Emissions--10 TPY;
SO2--40 TPY.
If other precursors
are included:.
NOX--40 TPY (no
change).
VOC & Ammonia--
determined by SIP.
Control technology: BACT and Applies for PM2.5 IV.M.9 & 13.
LAER. direct, SO2 and
other precursors,
if included.
Air quality impact analysis. Applies for PM2.5... IV.M.11.
Preconstruction monitoring.. Applies for PM2.5... IV.M.12.
Proposing five
options to address..
NA NSR Statewide compliance. Applies for PM2.5 IV.M.13.
direct and
precursors, if
included.
NA NSR offsets.............. Applies for PM2.5 IV.M.14.
direct.
Considering for
precursor emissions.
Interprecursor Offsetting... Allowed with IV.M.14.c.
modeling
demonstration (no
change).
Transition for PSD.......... Continues to apply IV.M.16.
with limited
provisions for use
of PM10 as a
surrogate.
Transition for NA NSR....... Applies at IV.M.17.
designation through
an approved SIP or
through 40 CFR part
51, appendix S.
Minor NSR................... Clarifies that State IV.M.20.
and local
regulatory programs
must include PM2.5
requirements for
minor sources.
NSR Transport Option........ Flexible IV.M.21.
implementation for
areas granted a
transport
classification.
------------------------------------------------------------------------

The proposed provisions of the PM_2.5 major NSR program
will be codified in the regulatory text as revisions to 40 CFR 51.165;
51.166; 52.21; and 40 CFR part 51, Appendix S. We have made two
assumptions in developing the proposed regulatory text for this rule.
The first assumption is that the ozone phase II rule will be
promulgated prior to the promulgation of this proposed PM_2.5
rule. Thus, this proposed PM_2.5 rule includes language
related to ozone precursors and offsets that make the format of the
ozone rule consistent with the PM_2.5 language. The ozone
provisions contained in the regulatory text set forth below are
consistent with what we expect to finalize in the ozone rule, and this
PM_2.5 proposal is not intended to alter the substance of the
ozone phase II rule. To the extent there are changes to the ozone phase
II regulatory language when promulgated or the ozone rule is not
promulgated prior to the final PM_2.5 rule, we would need to
make changes to the proposed regulatory text in this PM_2.5
rule at promulgation.
The paragraphs in the revisions to appendix S of this proposed
PM_2.5 rule have not been numbered at this time, based on the
second assumption that both of the appendix S rule revisions, appendix
S changes in the ozone phase II rule (incorporating the 1990
amendments) and the revisions to appendix S (incorporating NSR reform),
will be promulgated prior to the final PM_2.5 rule. Depending
on the status of these appendix S rule revisions at the time of
promulgation of the PM_2.5 rule, the paragraphs would be
numbered accordingly.
3. Should precursors to the formation of ambient concentrations of
PM_2.5 be subject to regulation under NSR?
a. Background
Certain NAAQS pollutants such as ozone and PM_2.5, are
partially or entirely formed by precursors. Precursors are currently
regulated under parts C and D of the Act based on either statutory
presumptions or a scientific determination that the pollutants must be
regulated to achieve attainment. The following table shows precursors
that we have identified for regulation under the NSR program because of
their ability

[[Page 66035]]

to cause or contribute to violations of the ozone NAAQS.

------------------------------------------------------------------------
Criteria pollutant Precursor pollutants
------------------------------------------------------------------------
Ozone:
Nonattainment Areas................ Volatile Organic Compounds
(VOC) and Nitrogen Oxides
(NOX).
Attainment Areas................... VOC \99\.
------------------------------------------------------------------------

Individual SIPs may identify additional precursors as regulated NSR
pollutants.
---------------------------------------------------------------------------

\99\ We have proposed to amend the PSD regulations to expressly
include NO_x as an ozone precursor. 68 FR 32802 (June 2, 2003).
---------------------------------------------------------------------------

Scientific research has shown that various pollutants can
contribute to ambient PM_2.5 concentrations, including the
following:
? PM_2.5 (direct emissions)
? SO₂ (as a precursor)
? NO_X (as a precursor)
? VOC (as a precursor)
? Ammonia (as a precursor)
b. Should NSR cover precursor emissions in addition to direct emissions
of PM_2.5?
Contribution of precursors to PM_2.5 nonattainment. As
discussed in Section II, precursors contribute significantly to ambient
PM_2.5 concentrations, producing approximately half of the
concentration. In most areas of the country, PM_2.5 precursor
emissions are the major contributors to ambient PM_2.5
concentrations. However, it is technically difficult to determine
impacts of source-specific precursor emissions on ambient air quality
levels. The relative contribution to ambient PM_2.5
concentrations from each of these pollutants varies by area. The
relative effect of reducing emissions of these pollutants is also
highly variable.
PM_2.5 precursors already addressed under NSR. Some
PM_2.5 precursors are already subject to major NSR under
other NAAQS as shown below:

PM2.5 precursor........................ Existing Program coverage for
major NSR applicability.
NOX.................................... NA NSR for NO2 and Ozone PSD
for NO2.
SO2.................................... NA NSR and PSD for SO2.
VOC.................................... NA NSR and PSD for Ozone.
Ammonia................................ No coverage for NSR (Some areas
regulate ammonia for other air
quality purposes.)

The PM_2.5 NSR program could include some, all or none of
these precursors of PM_2.5.
Legal Authority. As discussed earlier in section II.E. of this
preamble, we interpret the Clean Air Act to provide explicit authority
for EPA to regulate precursors but also to grant the Administrator
discretion to determine how to address precursors for particular
regulatory purposes. This reading is based on section 302(g) of the
Clean Air Act which defines the term ``air pollutant'' to include ``any
precursors to the formation of any air pollutant, to the extent the
Administrator has identified such precursor or precursors for the
particular purpose for which the term `air pollutant' is used.'' The
Administrator's discretion to determine how to address precursors under
specific programs is also supported by the language in sections 182(f)
and 189(e) which identifies circumstances where the Administrator may
determine that it is not appropriate to regulate certain precursors. We
discuss these provisions in more detail in section II.E.
Thus, we interpret section 302(g) of the Act to require that the
Administrator consider how to address precursors under the NSR program.
The term ``air pollutant'' is incorporated into the NSR provisions for
various purposes. Sections 182(f) and 189(e) apply to State
implementation plan provisions and control requirements, which include
NSR programs.
With regard to PSD, Section 165(a)(3) of the Act states that new or
modified major sources must demonstrate that emissions ``will not
cause, or contribute to, air pollution in excess of any * * * NAAQS in
any air quality control region.'' A source could not reasonably make
this demonstration without considering precursors that the Agency has
identified for this purpose. Section 165(a)(4) of the Act states that a
new or modified source must apply the Best Available Control Technology
(BACT) ``for each pollutant subject to regulation under this Act
emitted from, or which results from, such facility.'' The phrase
``emitted from, or which results from'' indicates that the statute is
not limited to direct emissions, but rather extends to precursors as well.
With regard to nonattainment NSR, Sections 172(c)(4) and 173
require States to demonstrate, among other things, that emissions from
new or modified major sources are consistent with the achievement of
``reasonable further progress.'' Reasonable further progress is further
defined as reductions of the relevant air pollutant, which is defined
in Section 302(g) to include precursors identified by the Agency as
subject to regulation for that purpose. Treatment of Precursors for
Purposes of NSR. As discussed in section II.E., where there is a basis
to do so, we believe EPA may treat precursors of the same pollutant
differently under the same program. In this action, we propose
different approaches for addressing the individual precursors to
PM_2.5 under the Act's NSR provisions. Generally, where the
scientific data and modeling analyses provide reasonable certainty that
the pollutant's emissions from stationary sources are a significant
contributor to ambient PM_2.5 concentrations, we believe that
pollutant should be identified as a ``regulated NSR pollutant'' and
subject to the PM_2.5 NSR provisions. Conversely, where the
effect of a pollutant's emissions from stationary sources on ambient
PM_2.5 concentrations is subject to substantial uncertainty,
such that in some circumstances, the pollutant may not result in
formation of PM_2.5, or control of the pollutant may have no
effect or may even aggravate air quality, we generally believe it is
unreasonable to establish a nationally-applicable presumption that the
pollutant is a regulated NSR pollutant subject to the requirements of
NSR for PM_2.5. We also request comment on whether, despite
reasonable scientific certainty associated with the effect of a

[[Page 66036]]

pollutant's emissions from stationary sources on ambient
PM_2.5 concentrations, there are circumstances that would
support a finding that the Administrator should not identify the
pollutant as a precursor for the purposes of the NSR program even if
the pollutant is so identified for other programs.
For the purposes of the NSR program, the EPA proposes the following
options for addressing SO₂, NO_X, VOCs, and
ammonia as precursors to PM_2.5, and requests comment on
these options. Commenters should provide detailed technical information
supporting their comments. Sulfur Dioxide. We are proposing to regulate
SO₂ as a precursor to PM_2.5 for purposes of NSR
in all attainment, unclassifiable and nonattainment areas. We believe
that the technical discussion and analysis of speciated air quality
data described in Section II provide an appropriate basis for requiring
States to address SO₂ as a precursor to PM_2.5 for
NSR purposes. The fact that sulfate is a significant contributor (e.g.
ranging from 9 percent to 40 percent) to PM_2.5 nonattainment
and other air quality problems in all regions of the country is a
critical piece of evidence supporting this approach. Additionally,
sulfates are a major contributor to ambient PM_2.5
concentrations in the Eastern United States, roughly equaling the
concentration of carbonaceous particles.
EPA does not believe that regulating SO₂ as a precursor
to PM_2.5 is likely to add a major burden to sources as
SO₂ is already regulated in these programs as part of the
NSR program for the SO₂ NAAQS. The EPA requests comments on
this approach to regulate SO₂ as a precursor to
PM_2.5 and a ``regulated NSR pollutant'' for purposes of NSR
in all attainment, unclassifiable and nonattainment areas[boxur]
Nitrogen Oxides. We are proposing to regulate NO_X as a
precursor to PM_2.5 for the NSR program. Under this approach,
a State or EPA would presume that NO_X is a significant
contributor to an area's ambient PM_2.5 concentration. This
presumption is warranted based on the well-known transformation of
NO_X into nitrates, as discussed in more detail in Section
II. Nitrates are a significant component of PM_2.5 mass in
northern regions, such as the Midwest and East Coast, and are a main
contributor to urban PM_2.5 mass in California (35-40
percent). However, as described in Section II, nitrate concentrations
vary significantly in other regions of the country.
Thus, a State could exempt NO_X from its PM_2.5
NSR program in a specific area by demonstrating to the Administrator's
satisfaction that NO_X emissions from stationary sources in
that area are not a significant contributor to that area's ambient
PM_2.5 concentrations and the area is not in a State
identified by EPA as a source of a PM_2.5 interstate
transport problem. Hence, for such an area, the State would not need to
regulate construction and modification of stationary sources that
increase emissions of NO_X in that area to assure that these
emissions do not interfere with reasonable further progress or the
ability of that area to attain or maintain the PM_2.5 NAAQS.
Otherwise, this option would make NO_X a precursor for the
PSD, NA NSR and minor source programs for PM _2.5. EPA does
not believe that this is likely to add a major burden to sources as
NO_X is already a regulated NSR pollutant. This is because
NO_X is an identified precursor for the ozone NAAQS and an
indicator for the NO₂ NAAQS.
Volatile Organic Compounds. The consideration of VOC for NSR
applicability is complicated by the variations in reactions of the
different species of VOC in the atmospheric transformation into
PM_2.5. Scientific analysis demonstrates that, while the
transformation of VOC into particles is a complex and uncertain
process, all VOC potentially play a role in the formation of
PM_2.5. However some specific compounds play a more direct
role than others. These transformations are discussed in Section II. In
light of the complexity in assessing the role of VOC in PM
_2.5 formation, we are not proposing to regulate VOC as a
precursor to PM_2.5 for the NSR program.
However, if a State demonstrates to the Administrator's
satisfaction that VOC emissions from stationary sources in a specific
area are a significant contributor to that area's ambient
PM_2.5 concentrations, then the State would regulate VOC (or
a subset of VOC) as a PM_2.5 precursor for the NSR program in
that area. Therefore, for such an area, the State would need to
regulate construction and modification of stationary sources that
increase emissions of VOC in that area to assure that these emissions
do not interfere with reasonable further progress or the ability of
that area to attain or maintain the PM_2.5 NAAQS. Under
either scenario, as discussed in Section II, we would still regulate
high molecular weight VOC (with 25 carbon atoms or more and low vapor
pressure) as PM_2.5 direct emissions because they are emitted
directly as primary organic particles and exist primarily in the
condensed phase at ambient temperatures.
Ammonia. As discussed in section II.E., in some areas of the
country, ammonia plays a significant role in the formation of ambient
PM_2.5 concentrations. In other areas, ammonia plays a less
significant role. Our understanding of emissions inventories, and the
impact that reducing ammonia emissions has on ambient PM_2.5
concentrations, is evolving. In some cases, undesired consequences may
result from reductions of ammonia, such as increased acidity levels for
particles and deposition. For these reasons, EPA proposes that ammonia
would only be identified as a precursor to PM_2.5 NAAQS in a
nonattainment area for purposes of NSR on a case-by-case basis. If the
State demonstrates to the Administrator's satisfaction that ammonia
emissions from stationary sources in a specific nonattainment area are
a significant contributor to that area's ambient PM_2.5
concentrations, then the State would regulate ammonia as a
PM_2.5 precursor under the NSR program in that nonattainment
area. Therefore the State would need to regulate construction and
modification of stationary sources that increase emissions of ammonia
in that area to assure that these emissions do not interfere with
reasonable further progress or the ability of that area to attain or
maintain the PM_2.5 NAAQS. However, in other nonattainment
areas, we would not require States to include ammonia in their NSR
programs. We are not proposing to identify ammonia as a regulated NSR
pollutant for purposes of PSD in any attainment or unclassifiable areas.
The EPA requests comments on this approach for addressing ammonia
emissions under the NSR programs.
4. What is a major stationary source (major source) under the major NSR
program for PM_2.5?
a. Background
The major NSR program applies to construction of major stationary
sources and major modifications at major stationary sources. A
stationary source is a ``major source'' if its actual emissions or its
potential to emit for a specific pollutant equals or exceeds the major
source threshold for that pollutant established in the CAA. Different
pollutants are not summed to determine applicability.
b. Proposed Option
Sections 169 and 302(j) of the Act contain definitions of ``major
emitting facility'' and ``major stationary source'' that apply to
programs implemented under part C and subpart 1 of part D of the Act.
Accordingly, we are proposing to follow these definitions for purposes
of defining a major emitting facility or

[[Page 66037]]

major stationary source that would be subject to major NSR based on
direct PM_2.5 emissions or emissions of pollutants identified
as PM_2.5 precursors for the NSR program. This approach is
also consistent with how we treat other criteria pollutants that are
covered by subpart 1 of part D of the Clean Air Act and thus are not
subject to a tiered classification system such as the one required for
ozone nonattainment areas under subpart 2 of the Clean Air Act. EPA
does not interpret subpart 4 of part D of the Act (creating ``serious''
and ``moderate'' classifications for PM₁₀ nonattainment
areas) to apply to PM_2.5.
This means the major source thresholds would be:

PSD............................... 100 tpy for source categories listed
in 40 CFR 51.166(b)(1)(i)(a) and
52.21(b)(1)(i)(a).
250 tpy for all other source
categories.
NA NSR............................ 100 tpy for all source categories.

Thus, no regulatory change would be required. See Sec. Sec.
51.165(a)(1)(iv)(a); 51.166(b)(1)(i); 52.21(b)(1)(i); Appendix S,
Section II.A.4.
We request comment on this approach for establishing the major
source threshold for purposes of the major NSR program for the
PM_2.5 NAAQS. We also request comment on whether the
definitions in Section 169 and 302(j) are controlling for purposes of
establishing the definition of major stationary source for the
PM_2.5 NAAQS, which is being implemented under part C and
subpart 1 of part D of the Act.
c. What is the effect of this proposed option?
Although our proposed approach is consistent with Sections 169 and
302(j) and Subpart 1 of part D of the Act, this approach results in a
higher major source threshold in PM_2.5 nonattainment areas
than the major source threshold that applies in some PM₁₀
nonattainment areas under Subpart 4 of part D of the Act. This is
because Section 189(b) of the Act establishes a 70 tpy major source
threshold for ``serious'' PM₁₀ nonattainment areas while
``moderate'' PM₁₀ nonattainment areas apply a 100 tpy major
source threshold based on the definition in section 302(j). We do not
believe the Act gives us the discretion to promulgate a lower major
source threshold for pollutants such as PM_2.5 that are only
subject to Subpart 1 of part D of the Act.
Nevertheless, we do not believe this situation will adversely
impact attainment of the PM_2.5 NAAQS. Data from EPA's
emissions inventory indicate that a significant number of sources have
actual PM_2.5 emissions in the 100 to 250 tpy range.
Additionally, the more current inventory data shows that the number of
sources that would be covered as major sources by a lower major source
threshold would not increase substantially unless the threshold were
lowered to 20 tpy or below. Thus, even if EPA had the discretion to
adopt a 70 tpy major source threshold for PM_2.5
nonattainment areas, we do not believe that many additional sources
would be subject to the major NSR program in PM_2.5
nonattainment areas.
States should consider this information in developing their own
SIP-approved NSR programs. For example, if construction of
PM_2.5 sources emitting 99 tpy with no major NSR controls and
without mitigation would undermine a State's ability to achieve
reasonable further progress or attain the PM_2.5 NAAQS, then
the State should consider imposing emissions controls or other
requirements on these sources through the State's minor NSR program.
5. What should the significant emissions rate be for direct emissions
of PM_2.5?
a. Background
The determination of what should be classified as a modification
subject to major NSR is based, in part, on a significant emissions
rate.\100\ The NSR regulations define this term as a rate above which a
net emissions increase will trigger major NSR permitting requirements
if such increase results from a major modification. Sources are exempt
from major NSR requirements if an emissions increase resulting from a
modification is below this rate because EPA considers such lower
emissions increase to be de minimis for purposes of the NSR program.
The significant emissions rates for criteria pollutants are given below:
---------------------------------------------------------------------------

\100\ For additional background on EPA's interpretation of
modification and rationale for including significant emissions rates
in defining major modifications, see 61 FR 38253-54 (Dec. 31, 2002).

------------------------------------------------------------------------
Criteria pollutant Significant emissions rate (tpy)
------------------------------------------------------------------------
Ozone............................. VOC: Any increase--40 tpy (dependent
on NA classification).
NOX: Any increase--40 tpy (dependent
on NA classification).
NO2............................... NOX: 40 tpy.
PM10.............................. 15 tpy.
CO................................ 100 tpy.
SO2............................... 40 tpy.
Lead.............................. .6 tpy.
------------------------------------------------------------------------

The significant emissions rates listed in the above table apply to
the direct and precursor pollutants listed in the table in section
III.M.3.a. Significant emissions rates for additional pollutants that
are subject to the PSD program are contained in the following
provisions of our regulations:
? 40 CFR 51.166(b)(23) and
? 40 CFR 52.21(b)(23)
The EPA performed some preliminary modeling analyses to determine
an appropriate significant emissions rate for direct emissions of
PM_2.5. Several typical stack heights (ranging from 5 to 200
meters in height) were modeled using meteorological data from
Pittsburgh and Oklahoma City. Modelers ran ISCST (Industrial Source
Complex Short Term model) to assess the impact of emissions increases
on ambient PM_2.5 concentrations. EPA ran models for a
variety of source types with varying meteorology, release heights,
building shapes, and receptor locations.
The modeling produced the following results that we considered
further in developing the options below:
? Shorter stacks had much more impact in the local area than
taller stacks.
? Increases of about 5 tons per year from facilities with
short stacks were shown to cause a measurable increase in ambient
PM_2.5 concentrations.
? Emissions increases from tall stacks, 100 meters or
greater, were associated with a small increase in ambient
PM_2.5 concentrations in the immediate area.
b. Proposed Options
Preferred option 1: For direct emissions of PM_2.5, EPA
is proposing to define the significant emissions rate as 10 tons per
year. This proposal is based fundamentally on the same approach as we
used in setting the significant emissions rate for total suspended
particulate matter (TSP) and PM₁₀.
Historically, the significant emissions rate for TSP (equal or
exceeding 25 tons per year) was set by analyzing the source size that
would be unlikely to cause impacts above 4 percent of the standard (4
percent of 260 [mu]g/m3 or 10.4 [mu]g/m3 as a 24-
hour average). Although a range of source configurations can yield a
wide range of impacts per ton per year of emissions, EPA reviewed
typical configurations of major TSP sources and concluded that a major
modification that increased emissions by 25 tons per year or more would
be unlikely to increase 24-hour average TSP concentrations by more than
10.4 [mu]g/m3.
When EPA set the significant emissions rate for PM₁₀, we
first determined the ratio between the

[[Page 66038]]

controlling standards for PM₁₀ and TSP, i.e. (150 [mu]g/
m3)/(260 [mu]g/m3) or about 3/5. Both of these
standards are based on a year's second highest 24-hour average
concentration. The EPA then set the PM₁₀ significant
emissions rate at about 3/5 of 25 tons per year, which (with rounding)
is 15 tons per year. This reflects the fact that a source emitting 25
tons of TSP per year that has an impact of 4 percent of the TSP
standard would show an impact from 15 tons PM₁₀ per year of
approximately 4 percent of the PM₁₀ standard (i.e., 6 [mu]g/
m3).
Conceptually, EPA is proposing a significant emissions rate for
PM_2.5 based on the same approach. However, the comparison of
the PM_2.5 standard with earlier particulate matter standards
is complicated by the difference in the averaging times of the
controlling standards, which are 24-hour average values for TSP and
PM₁₀ but an annual average value for PM_2.5.
Because the annual standard is the generally controlling standard for
lowering both short-term and long-term ambient PM_2.5
concentrations (62 FR at 38669), EPA proposes using the annual standard
to determine the significant emissions rate.
We conducted additional modeling using the ISC3 model to compare
annual average and 24-hour average impacts of a fixed emissions rate
for a variety of source configurations. Several typical stack heights
(ranging from 5 to 200 meters in height) were modeled using
meteorological data from Pittsburgh and Oklahoma City and both with and
without downwash from different building types.
Our analysis of these modeling results shows that a major
modification that increases direct PM_2.5 emissions by less
than 10 tons per year would be unlikely to increase annual average
ambient PM_2.5 concentrations by more than 4 percent of the
annual PM_2.5 standard. This finding relies on EPA's
comparison of annual average versus 24-hour average concentrations. As
noted above, EPA previously concluded that a source that increases
PM₁₀ emissions by 15 tons per year would likely cause an
increase in the 24-hour average PM₁₀ concentration by 6
[mu]g/m3 or less. Based on the ratios between annual and 24-
hour average concentrations found in EPA's recent modeling, a source
having that impact would typically increase annual average
PM₁₀ concentrations by about 0.8 [mu]g/m3 or
less. The EPA is using a target PM_2.5 impact of 4 percent of
the annual PM_2.5 standard or 0.6 [mu]g/m3. This
target impact is (0.6 [mu]g/m3)/(0.8 [mu]g/m3) or
3/4 of the potential impact of a 15 ton per year emissions increase.
This suggests a significant emissions rate of 3/4 of 15 tons per year.
By rounding the result, we determined that an emissions increase below
10 tons per year increase in direct PM_2.5 emissions would be
unlikely to increase ambient PM_2.5 concentrations by more
than 4 percent of the annual PM_2.5 standard.
Option 2: The EPA recognizes that a range of source configurations
can have a range of impacts, that the PM_2.5 source
population differs in some respects from the TSP and PM₁₀
source population and that the acceptable stationary source impact on
ambient PM_2.5 concentrations may warrant being defined
differently from the acceptable impact for TSP or PM₁₀. The
EPA specifically solicits comments on a range of potential thresholds
ranging from 5 to 15 tons per year for the significant emissions rate
for PM_2.5 direct emissions. The upper bound is a set rate of
15 tons per year because that is the significant emissions rate for
PM₁₀. The lower bound is a set rate of 5 tons per year
because our modeling indicates that an increase in ambient
PM_2.5 concentrations above the target de minimis impact
level can occur where facilities with short stacks have
PM_2.5 emissions increases of about 5 tons per year.
We solicit comments on the proposed significant emissions rate
level and on any other approaches for determining this value.
6. What should be the significant emissions rates for PM_2.5
precursors?
a. Background
It is difficult to determine the ambient air quality effects that
result from a single source of emissions of PM_2.5
precursors. There are conservative screening models for predicting
impacts of large NO_X and SO₂ sources on ambient
PM_2.5 concentrations. We conducted a range of modeling
analyses to determine the amount of PM_2.5 precursor
emissions needed to show an increase in ambient PM_2.5
concentrations. These analyses showed that precursor emissions probably
have some localized impacts, but that most impact is farther downwind
as precursors have the time to convert to PM_2.5. In
addition, the modeling available at this time does not provide
sufficient information to estimate impacts of single source emissions
of ammonia and VOC on ambient PM_2.5 concentrations.
Although we have not finally determined which pollutants (if any)
will be regulated as PM_2.5 precursors under the NSR program,
we are proposing significant emissions rates in the event that the
precursors under consideration are identified as such for the major NSR
program. In the event that EPA adopts an ``opt-in'' approach--that is,
the presumption that a precursor is not subject to NSR unless a State
demonstrates to the Administrator's satisfaction that it should be
included--the State opting in would be required to adopt the
significant emissions rate for the precursor as set forth below, in the
absence of demonstrating that another significant emissions rate is
more appropriate.
b. Proposed Options
Preferred Option 1: The EPA proposes the use of existing
significant emissions rates for those pollutants already included in
major NSR programs as shown below:

------------------------------------------------------------------------
Significant emissions rate (equal
Pollutant or exceeding)
------------------------------------------------------------------------
NOX............................... 40 tpy.
SO2............................... 40 tpy.
VOC............................... 40 tpy.
------------------------------------------------------------------------

The use of existing significant emission rates where the
PM_2.5 precursor is also regulated under NSR for a separate
criteria pollutant harmonizes the NSR program for PM_2.5 with
the NSR programs for those other criteria pollutants. This enables a
source to determine the NSR impacts of proposed modifications by
reference to a single significant emissions rate for each pollutant,
and enables streamlining of determinations regarding the applicable
control technology and analysis of air quality impacts into a single
and comprehensive decision making process for both PM_2.5 and
other criteria pollutants that also cover PM_2.5 precursors.
This also follows precedent. When ozone became a criteria pollutant EPA
used the NO_X significant emissions rate from the
NO₂ program.
EPA has never set a significant emissions rate for ammonia to
determine major NSR applicability. A necessary component of our
approach to NSR applicability for ammonia is that those States who
determine in their SIPs that control of ammonia is necessary will set
the significant emissions rate for ammonia based on the information
presented in each attainment demonstration.
Option 2: Set the precursor levels at the same level as the
significant emission rate for PM_2.5 direct emissions, that
is, 10 TPY. This would make more modifications subject to
PM_2.5 permitting requirements and therefore could provide
more protection to the environment. This does not, however, follow the
precedent in the ozone NSR program. Having several different
significant emissions rates for the same

[[Page 66039]]

pollutant would add additional complexity to an already complex program
without necessarily providing additional environmental benefits.
We request comment on the options listed above and on any other
approaches for establishing precursor significant emissions rates.
7. What is the role of condensible emissions in determining major NSR
applicability?
Condensible emissions commonly make up a significant component of
PM_2.5 emissions. As discussed in Sections IV.I. and IV.P,
certain sources utilizing high temperature processes emit gaseous
pollutants into the ambient air which rapidly condense into particle
form. The constituents of these condensed particles include, but are
not limited to, organic material, sulfuric acid, nitrates, and metals.
The EPA has issued guidance clarifying that PM₁₀
includes condensible particles and that, where condensible particles
are expected to be significant, States should use methods that measure
condensible emissions.\101\ States are already required under the
consolidated emissions reporting rule to report condensible emissions
in each inventory revision (see 67 FR 39602, June 10, 2001), and Method
202 in Appendix M of 40 CFR part 51 quantifies condensible particulate
matter.
---------------------------------------------------------------------------

\101\ Memo. from Thompson G. Pace, Acting Chief, Particulate
Matter Programs Branch, to Sean Fitzsimmons, Iowa Department of
Natural Resources, (Mar. 31, 1994) (copy avaiable at
http://www.epa.gov/Region7/programs/artd/air/nsr.nsrmemos/cpm.pdf).

---------------------------------------------------------------------------

However, because of the flexibility incorporated into EPA's
approach to the issue and the inconsistent implementation of the
existing guidance, there have been some misconceptions as to whether
condensible emissions must be included in a source's PM₁₀
emissions under the PM₁₀ standard in determining NSR
applicability. The rules at 40 CFR 51.100 define ``PM emissions'' and
``PM₁₀ emissions'' by reference to the PM measured by
applicable reference methods, an equivalent or alternative method
specified in part 51, or by a test method specified in an approved SIP.
See 40 CFR 51.100(pp), (rr), and Sec. 52.01 (incorporating Sec.
51.100 definitions by default). As discussed in Section III.P.,
different test methods measure condensible emissions with varying
levels of accuracy. In addition, sources often project their emissions
increases from new construction and modifications based on emissions
factors, such as AP-42 factors, that in some cases have not accounted
for condensible emissions. Sources have used other methods to project
their PM emissions that do not account for condensible emissions (e.g.,
projecting PM₁₀ impacts based on an analysis of existing TSP
limits without adding condensible emissions).
We are proposing to clarify in this rule that condensible emissions
must be included when determining whether a source is subject to the
major NSR program. The inclusion of condensible emissions in a source's
PM_2.5 emissions is of increasing importance with the change
in the indicator for particulate matter to PM_2.5.
Condensible emissions are essentially fine particles, and thus are a
larger fraction of PM_2.5 emissions than of TSP or
PM₁₀ emissions. Condensible emissions commonly make up a
significant component of PM_2.5 emissions, and the failure to
include them may result in adverse consequences to the environment.
While EPA has always included condensible emissions in its
definition of particulate matter emissions, insofar as these emissions
are measured by applicable test methods or included in emissions
factors, we believe that the greater significance of condensible
emissions in addressing PM_2.5 warrants greater emphasis on
including these emissions in implementing the major NSR program. A key
aspect of this issue is the development of the new test method
discussed in Section III.P., which quantifies and can be used to
characterize the constituents of PM_2.5 emissions, including
both the filterable and condensible portion of the emissions stream.
8. What are the requirements of the Prevention of Significant
Deterioration (PSD) program for attainment areas?
Background. Sources subject to PSD must:
? Install Best Available Control Technology (BACT),
? Conduct air quality modeling analyses to ensure that the
project's emissions will not cause or contribute to:
? A violation of any NAAQS or maximum allowable pollutant
increase (PSD increment),
? Any impact on any Class I area air quality related value,
and
? As required, perform preconstruction monitoring.

Each of these elements is discussed below.
9. How should BACT be implemented?
We are not proposing any change to our current policy for
implementing BACT requirements at a major source that is subject to the
requirements of the PSD program. Accordingly, if a physical or
operational change at the source will result in a significant emissions
increase and a significant net emissions increase of a regulated NSR
pollutant, then the major source must apply BACT (for that pollutant)
to the emissions unit(s) that will be physically or operationally
changed as a part of that project. Under the PM_2.5 major NSR
program, BACT will be required at an emissions unit if a physical or
operational change at the unit causes a significant emissions increase
and significant net emissions increase of PM_2.5 direct
emissions, or a PM_2.5 precursor, if applicable at the major
stationary source.
10. What is EPA's plan for preventing significant deterioration of air
quality for PM_2.5?
Background. The PSD provisions of the CAA limit the degradation of
ambient air concentrations of certain pollutants. The CAA does not
dictate the mechanism to achieve this result for pollutants other than
PM₁₀ and SO₂. One mechanism involves a system of
``increments'' and area classifications that define significant
deterioration for individual pollutants. The PSD increments are the
maximum allowable increase in ambient air concentrations above a
baseline concentration for a criteria pollutant. The current increments are:

----------------------------------------------------------------------------------------------------------------
Pollutant/averaging time Class I Class II Class III
----------------------------------------------------------------------------------------------------------------
PM10
Annual average................... 4 [mu]g/m3 17 [mu]g/m3 34 [mu]g/m3
8-Hour average................... 8 [mu]g/m3 30 [mu]g/m3 60 [mu]g/m3
SO2
Annual average................... 2 [mu]g/m3 20 [mu]g/m3 40 [mu]g/m3
24-hour average.................. 5 [mu]g/m3 91 [mu]g/m3 182 [mu]g/m3
3 Hour Average................... 25 [mu]g/m3 512 [mu]g/m3 700 [mu]g/m3

[[Page 66040]]

NO2--Annual Average.............. 2.5 [mu]g/m3 25 [mu]g/m3 50 [mu]g/m3
----------------------------------------------------------------------------------------------------------------

We are in the process of developing an approach for preventing
significant deterioration of air quality which may include
PM_2.5 increments. The EPA has placed this action on a
separate administrative track due to the additional time necessary to
fully develop any potential proposal. In the interim period, States
must continue to implement the PM₁₀ increments in 40 CFR
51.166, 52.21 and/or their SIPs, as applicable.
11. How will the air quality analysis required under section 165(a)(3)
be implemented?
Scope of the Requirement. All sources subject to PSD review must
perform an ambient air quality impact analysis to show that the
emissions from the source do not cause or contribute to a PSD increment
or NAAQS violation. See CAA Section 165(a)(3); 40 CFR 51.166(k),
52.21(k). Accordingly, sources will be required to perform this
analysis for the PM_2.5 NAAQS. Such analyses would consider
how a source impacts air quality at existing PM_2.5 monitor
locations as well as at other locations which are appropriate to allow
the comparison of predicted PM_2.5 concentrations to the
NAAQS, based on PM_2.5 monitor siting requirements and
recommendations.
Sources also will remain under an obligation to perform the air
quality impact analysis for the PM₁₀ increments and the
PM₁₀ NAAQS.
Plan for Development of Significant Impact Levels for PM2.5. The
Agency has had a practice of exempting sources from the cumulative air
quality impact analyses where their level of contribution is below a
significant impact level (SIL). If the maximum ambient impacts from the
proposed project are less than a SIL, the source
? Is presumed to not cause or significantly contribute to a
PSD increment or NAAQS violation, and
? Is not required to perform multiple source cumulative
impact assessments.
The EPA has long interpreted the ``significant contribution'' test
set forth in Sec. 51.165(b)(2) to apply to the PSD program since the
provision applies to major new sources and major modifications located
in attainment and unclassifiable areas. We have proposed codifying this
exemption in the PSD regulations in a separate Federal Register notice.
See 61 FR 38249, 38293 (July 23, 1996). This exemption is based on the
de minimis nature of the source's contribution.
The SIL (in [mu]g/m3) have been established for other
criteria pollutants with PSD increments and are given below:

----------------------------------------------------------------------------------------------------------------
Class I SIL
[mu]g/m3
Criteria pollutant Averaging time (proposed 7/23/ Class II and III
96, not SIL [mu]g/m3
promulgated)
----------------------------------------------------------------------------------------------------------------
SO2........................................ 3 hour........................ 1.0 25.0
24-hour....................... .2 5.0
Annual........................ .1 1.0
CO......................................... 1 hour........................ N/A 2000
8 hours....................... N/A 500
NO2........................................ Annual........................ .1 1.0
PM10....................................... 24-hour....................... .3 5.0
Annual........................ .2 1.0
----------------------------------------------------------------------------------------------------------------

Because the SIL benefits the NSR permitting program by exempting
sources with de minimis impacts from the cumulative air quality
analysis, EPA is considering establishing PM_2.5 SIL for
emissions of PM_2.5 direct. This would enable sources with
impacts below the SIL to avoid the cumulative air quality impact
analysis with respect to their potential contribution to a
PM_2.5 NAAQS violation, and create a de minimis ``cause or
contribute'' definition for violations. Direct PM_2.5
emissions can be evaluated with current models. Therefore, the
development of SIL for impact evaluations of direct PM_2.5
emissions is technically achievable. The EPA is soliciting comments on
this question and on methods for the development of PM_2.5 SIL.
The limited capabilities of existing models make it difficult to
establish and implement SIL for PM_2.5 precursors. Current
models are only able to accurately address individual source impacts
associated with direct PM_2.5 emissions and, to a lesser
degree, SO₂ and NO_X. They can not accurately
predict single source impacts on ambient PM_2.5
concentrations from other precursors. Without including formation of
PM_2.5 from precursor emissions, the complete impact cannot
be assessed.
EPA solicits comments and ideas on the direction to take and
possible approaches to setting PM_2.5 SIL for direct and
precursor emissions. The EPA intends to use these comments in
developing SIL on a separate administrative track.
12. How should the PSD pre-construction monitoring requirement be
implemented for PM_2.5?
EPA solicits comment on what preconstruction monitoring
requirements should be required by the PM_2.5 PSD program.
a. Background
Sources subject to PSD are subject to pre-construction ambient air
quality monitoring requirements. See Sections 165(a)(7) and 165(e) of
the CAA and 40 CFR 51.166(m), Sec. 52.21(m). The PSD permitting
requirements currently provide that continuous pre-construction ambient
air quality monitoring must be conducted for any criteria pollutant
emitted in significant amounts. Under 40 CFR 51.166(i)(5), and 40 CFR
52.21(i)(5) the reviewing authority has the discretion to exempt an
applicant from this monitoring requirement if:
? The maximum modeled concentration for the applicable
averaging period caused by the proposed significant emissions increase
(or net emissions increase) is less than

[[Page 66041]]

the prescribed significant monitoring concentration (SMC); or
? The existing monitored ambient concentrations are less
than the prescribed SMC. The following are the SMC for criteria pollutants:

------------------------------------------------------------------------
Ambient
Pollutants concentration Averaging period
([mu]g/m3)
------------------------------------------------------------------------
CO................................ 575 8 hours.
NO2............................... 14 Annual.
SO2............................... 13 24 hours.
PM10.............................. 10 24 hours.
------------------------------------------------------------------------

A source may also use existing data as a surrogate for pre-
construction monitoring if the existing monitored data record is
determined to be representative of the project's location. For
information on representative monitoring see ``Ambient Monitoring
Guideline for Prevention of Significant Deterioration (PSD),'' EPA-450/
4-87-007. Under the current regulatory approach, the need for pre-
construction monitoring by an applicant depends on the spatial and
temporal coverage of the current monitoring program. The expected
gradients of concentration between existing monitors also need to be
considered in deciding whether there is a need for pre-construction
ambient monitoring.
The PM_2.5 ambient monitoring data are used in the PSD
program to:
? Establish current PM_2.5 NAAQS compliance status
in the project's impact area;
? Determine a representative background ambient
PM_2.5 concentration which will be included with modeled
estimates to assess NAAQS compliance.
The PM_2.5 ambient monitoring measurements include
particulate matter from PM_2.5 direct emissions and those
formed by PM_2.5 precursors. If required of a particular
source, pre-construction monitoring could add one year to the
permitting process and increase the cost of the permit. Such a
requirement could have the effect of delaying or preventing sources
from undertaking environmentally beneficial projects. Accordingly,
today, we are reconsidering our current approach for satisfying the
pre-construction monitoring requirements for the purposes of the
PM_2.5 standard. While we are proposing to retain the current
approach, we are also soliciting comments on innovative options that
could provide better solutions for satisfying the preconstruction
monitoring requirements.
b. Options for PSD Preconstruction Monitoring
Preferred Option 1: Require preconstruction monitoring for all
major sources of PM_2.5 direct and the precursors identified
as regulated NSR pollutants for PM_2.5, but on a case-by-case
basis allow sources to satisfy this requirement by demonstrating the
existing PM_2.5 network is sufficient. This option will
provide information on effects of new construction on the
PM_2.5 NAAQS and increments. This option would not require a
change to the preconstruction monitoring regulations. Concerns about
this option include:
? It is challenging to find an appropriate location for any
monitor because PM_2.5 direct emissions typically affect
nearby locations while precursor emissions affect areas farther away.
? The existing monitors can either measure total
PM_2.5 mass or can provide data on the mass of different
PM_2.5 components. The latter type, a speciation monitor, is
more expensive to operate but provides useful information on the
contribution of sources of precursor and PM_2.5 direct emissions.
In cases where ambient PM_2.5 concentration gradients
between existing monitors are small with little likelihood of local
site-specific ``hot spots,'' interpolation between existing monitored
values may be appropriate for determining that the existing
PM_2.5 monitoring network is sufficient. We request comment
on this approach.
Option 2: Exempt all PM_2.5 sources from doing monitoring
by determining the existing PM_2.5 network is sufficient.
The use of the acquired PM_2.5 monitored data record in
place of applicant performed pre-construction monitoring would follow
the current trend in PSD permitting activities. This procedure would
have the advantage of reducing the time required for permit preparation
and reduce the costs of the permit application. If ambient
PM_2.5 concentration gradients between monitoring stations
are small there may be little need for additional monitoring data. The
need to make discretionary decisions on whether to perform pre-
construction monitoring would be eliminated.
However, EPA favors the continued use of the case-by-case
determination as to the need to perform ambient PM_2.5 pre-
construction monitoring because of the following limitations to using
the existing PM_2.5 monitoring data record:
? The PM_2.5 monitoring data record would require
spatial interpolation between monitors for the determination of
appropriate concentrations at the project's location.
? Use of existing monitored data will not increase the
PM_2.5 monitoring data record to confirm or contradict
conventional perceptions.
? The PM_2.5 monitoring data record assumes that
local hot spots of high PM_2.5 concentrations do not exist or
are already being monitored, which may not be true in all cases.
? Automatic acceptance of existing measurements does not
follow EPA's current policy that a case-by-case determination needs to
be made to determine whether pre-construction ambient monitoring is
necessary.
? When used with the impact modeling, separate
concentrations of direct and precursor formed particulate matter is needed.
Because of these limitations, existing PM_2.5 monitoring
data must be reviewed for applicability and representativeness before
being judged appropriate for use in lieu of project acquired ambient
data. The current PM_2.5 network may not be sufficient for
all applicants. The EPA is soliciting comments and suggestions on this
issue.
Option 3: Use Significant Monitoring Concentrations (SMC) to exempt
sources from pre-construction monitoring requirements. The reviewing
authority has the discretion to exempt an applicant from the pre-
construction monitoring requirement if the modeled impacts from the
proposed source are less than the prescribed SMC.
Similar to the significant impact levels used in modeled impact
analysis, the PSD process will become simpler through the use of SMC.
It provides a definitive means for applicants with little impact to opt
out of the resource intensive, costly, and time consuming pre-
construction ambient air quality monitoring requirement. Therefore, it
is an important component of the PSD program.
The form of the SMC will be defined by the form of the impact
modeling. SMC must be developed for direct PM_2.5 emissions
if the impact modeling only addresses direct emissions of
PM_2.5. This may require different direct and precursor SMC.
Because of the advantages SMC provide to the NSR permitting
program, EPA is considering the development of PM_2.5 SMC.
The EPA is soliciting comments on the development and use of
PM_2.5 SMC in the PSD program. This option could be used in
combination with the other options described.
Option 4: Use of the available large PM₁₀ data record,
combined with the recent PM_2.5 acquired ambient
measurements, may provide a monitoring data base that is sufficiently
distributed to provide representative

[[Page 66042]]

ambient measurements for most applicants. This would alleviate the need
for pre-construction monitoring and make the PSD program less
burdensome. This would also provide an interim means to estimate
ambient PM_2.5 concentrations until more extensive monitoring
data record can be developed.
However, the differences in characteristics between
PM_2.5 and PM₁₀, and our limited understanding of
their relationships, presents a problem.
? PM₁₀ conversion factors may not sufficiently
reflect important industry specific and spatially related
characteristics of PM_2.5.
? Removing the obligation to provide pre-construction
ambient monitoring data would eliminate industry's contribution to the
ambient PM_2.5 data record.
This may not be a viable substitute to satisfy the need to provide
representative PM_2.5 ambient measurements. The EPA requests
comments on these options on pre-construction monitoring.
Option 5: Existing Sec. 52.21(i)(5)(ii) and Sec.
51.166(i)(5)(iii) could be interpreted to allow a reviewing authority
to exempt an applicant from pre-construction monitoring for any
pollutant for which we have not established a SMC. These provisions
state that a source may be exempted from preconstruction monitoring
``if * * * the pollutant is not listed in'' the list of pollutants for
which SMC have been set.\102\ The original rationale for this exemption
is based on the lack of adequate methods for measuring ambient
concentrations of pollutants not on the list. 45 FR at 52709, 52723-
52724. We request comment on this interpretation and any other legal or
policy rationale that could support applying the text of these
provisions to exempt sources from preconstruction monitoring if we do
not define a SMC for PM_2.5.
---------------------------------------------------------------------------

\102\ These sections actually cross-reference the list at Sec.
51.166(i)(8)(i) and 52.21(i)(8)(i), however we renumbered those
sections to subsection (i)(5)(i) of those provisions in December
2002 and inadvertently overlooked correcting the cross-references in
subsections (i)(5)(ii) and (i)(5)(iii). See 67 FR 80186. It is
apparent from the rule as originally promulgated in 1980 that
subsection (i)(5)(i) is now the correct cross-reference. See 45 FR
52676, 52739 (Aug. 7, 1980). We propose to correct this misnumbering
and others in this section when we finalize today's proposal.
---------------------------------------------------------------------------

13. Nonattainment New Source Review (NA NSR) Requirements
Background. Sources subject to NA NSR must:
? Install Lowest Achievable Emissions Rate (LAER) control technology;
? Offset new emissions with creditable emissions reductions.
? Certify that all sources owned and operated by the same
owner within the State are in compliance; and,
? Conduct an alternative siting analysis demonstrating that
the benefits of the proposed source significantly outweigh the
environmental and social costs.
14. What are the offset requirements for NA NSR?
Background. Under Section 173 of the Act, all major sources and
major modifications at existing sources within a nonattainment area
must obtain emissions reductions to offset any emissions increases
resulting from the project in an amount that is at least equal to the
emissions increase, and that is consistent with reasonable further
progress towards attainment. In addition, these offsets must be:
? From the same nonattainment area or a different
nonattainment area that impacts the area where the source is located
(as long as the other area has the same or higher classification);
? Federally enforceable; and
? Affect air quality in the area where the emissions
increases from the new major source or modification are occurring.
We refer to the proportional difference between the amount of the
required offsets to the amount of emissions increase as the ``offset
ratio.'' The offset ratios for the other criteria pollutants are:

------------------------------------------------------------------------
Pollutant Offset ratio
------------------------------------------------------------------------
Ozone..................................... At least 1:1 to 1.5:1
depending on ozone
nonattainment
classification.
PM10...................................... At least 1:1.
NOX....................................... At least 1:1.
SO2....................................... At least 1:1.
Lead...................................... At least 1:1.
CO........................................ At least 1:1.
------------------------------------------------------------------------

a. What is the required offset ratio for PM_2.5 direct emissions?
The Act specifies an offset ratio for several situations. In ozone
nonattainment areas subject to subpart 2, the ratio is set between
1.1:1 and 1.5:1 depending on the area's level of classification
pursuant to subpart 2 of the Act. For other nonattainment areas, the
Act establishes a minimum offset ratio of 1:1 pursuant to Subpart 1 of
the Act. Since the PM_2.5 program is being implemented under
subpart 1, the applicable ratio is at least 1:1 on a mass basis. We
request comment on establishing a required offset ratio of at least
1:1, and on any other option for establishing the required offset ratio
for PM_2.5 direct emissions.
b. Which precursors shall be subject to the offset requirement?
If we identify a precursor as a regulated NSR pollutant in our
final action, then that pollutant will be subject to the offset
requirement. Accordingly, consistent with our preferred approach for
identifying SO₂ as a national precursor and NO_X
as a presumptive national precursor, we propose that SO₂ and
NO_X would be subject to the offset requirement. VOCs and
ammonia would be subject to the offset requirement if we designated
these pollutants as PM_2.5 precursors for the purposes of
major NSR. If we adopt an approach under which the precursors are
presumptively excluded from major NSR unless and until a State NA NSR
program specifically includes such a pollutant, then the precursor
would not be subject to the offset requirement until such time.
c. What is the required offset ratio for PM_2.5 precursors?
The Act requires that a source obtain offsets for emissions
increases that occur in a nonattainment area. As with PM_2.5
direct emissions, the minimum offset ratio permitted under the Act
would be at least 1:1. We believe this ratio should apply where a
source seeks to offset an increase in emissions of a PM_2.5
precursor with creditable reductions of the same precursor. We request
comment on requiring an offset ratio of at least 1:1 for any precursor
identified by the Administrator as a regulated NSR pollutant for
PM_2.5 nonattainment areas. We also request comment on
whether this mandatory offset ratio should apply to any other precursor
identified by a State for regulation through its SIP-approved
nonattainment major NSR program, or whether the State should have the
option to establish a different offset ratio for such pollutant.
d. Should EPA allow interprecursor trading to comply with the offset
requirement?
Because several different pollutants contribute to ambient
PM_2.5 concentrations, we are proposing to allow flexibility
in how major sources may satisfy the offset requirement. Specifically,
we are proposing to allow increases in emissions of direct
PM_2.5 to be offset by a decrease in PM_2.5
precursor emissions; and we are proposing to allow an increase in a
PM_2.5 precursor to be offset by a decrease in emissions of a
different PM_2.5 precursor or with PM_2.5 direct

[[Page 66043]]

emissions. However, such trades would only be permissible if the State
shows that the trade is beneficial in reducing overall ambient
concentrations of PM_2.5, and the Administrator approves of
the trade.
This additional flexibility might make it difficult to ensure that
the ambient air concentration of PM_2.5 continues to
decrease. It may also be administratively difficult to manage.
Nonetheless, we are proposing to allow interprecursor trading to
generate creditable emissions reductions for use as offsets, because we
believe that reductions of a different PM_2.5 precursor may
have an equal or better impact in reducing ambient PM_2.5
concentrations if an appropriate offset ratio is determined.
Additionally, interprecursor trading may provide a reliable source of
offset emissions in areas where availability may otherwise be limited.
There are several ways in which interprecursor trading for offsets
could be implemented. Under one approach, a State would develop its own
interprecursor trading rule for inclusion in its SIP, based on a
modeling demonstration for a specific nonattainment area. The EPA would
review a State interprecursor trading rule during the SIP approval
process. Once approved, the State could follow this approach on all
future NSR permits issued. Another approach would be to review
individual trades as part of the major NSR permitting process. The EPA
and the public would have an opportunity to comment on whether the
modeling or other technical evidence presented by a particular State is
sufficient to support interprecursor offsets for that specific permit
application. Under either approach, a State could not allow
interprecursor trading without EPA approval. The EPA is requesting
comment on whether, States should be required to demonstrate the
adequacy of offset ratio(s) using modeling as part of a State rule, in
demonstrations for specific nonattainment areas, and/or on a permit-by-
permit basis, and/or on some other basis. While EPA believes that such
interprecursor trading flexibility is more appropriate for offsets
which are statutorily required, we are seeking comment on whether this
flexibility should also apply to netting analysis for a source.
15. What are the implementation and transition issues associated with
this rule?
Implementation. Implementation of NSR for PM_2.5 is
dependent on:
? Who implements the program and
? What regulations are used to implement NSR.
The components of the NSR programs are implemented by the following:
? PSD: States or EPA
? Nonattainment NSR: State or EPA
? Minor NSR: States only
? NSR in Indian country: Tribes or EPA
Transition. The requirements applicable to NSR SIPs for and the
obligation to subject sources to NSR permitting for PM_2.5
direct and precursor emissions are codified in the existing federal
regulations, and can be implemented without specific regulatory
changes. The existing regulations require NSR for any NAAQS pollutant
for which an area is designated attainment or nonattainment. See 40 CFR
51.160(b); 51.165(a)(2)(i); 51.166(a)(7); 52.21(a)(2); 52.24(k); 40 CFR
part 51, Appendix S, Section IV. A. Thus, the obligation to implement
PSD for the NAAQS was triggered upon the effective date of the NAAQS,
as explained in prior guidance.\103\ (In that guidance, EPA also
explained that PSD permitting for PM₁₀ would be accepted as
a surrogate approach for this obligation, as discussed in more detail
below.) For nonattainment areas, permits must comply with the
nonattainment NSR requirements for PM_2.5, either in a
State's approved part D program or, where that is lacking, as set forth
in 40 CFR part 51, Appendix S, pursuant to Sec. 52.24(k). To clarify
how these requirements are to be implemented for PM_2.5, we
are proposing to add provisions to:
---------------------------------------------------------------------------

\103\ See ``Interim Implementation for New Source Review
Requirements for PM_2.5,'' J. Seitz, EPA (Oct. 23, 1997).
---------------------------------------------------------------------------

? 40 CFR 51.166--implementation plan requirements for major
new or modified sources in attainment or unclassifiable areas;
? 40 CFR 51.165--implementation plan requirements for
addressing major new or modified sources in nonattainment areas and
sources located in attainment or unclassifiable areas that would impact
a nonattainment area;
? 40 CFR 52.21--the federal implementation plan for areas
lacking an approved SIP or TIP program to regulate construction or
modification of major stationary sources in an attainment or
unclassifiable area.
? 40 CFR part 51, Appendix S--provisions for issuing permits
before a State has an approved implementation plan regulating
construction or modification of major stationary sources.
16. Implementation of PSD provisions during the SIP Development period
a. Background
On October 23, 1997, we issued a guidance document entitled
``Interim Implementation for the New Source Review Requirements for
PM_2.5,'' John Seitz, EPA. As noted in that guidance, Section
165 of the Act suggests that PSD requirements become effective for a
new NAAQS upon the effective date of the NAAQS. Section 165(a)(1) of
the Act provides that no new or modified major source may be
constructed without a PSD permit that meets all of the Section 165(a)
requirements with respect to the regulated pollutant. Moreover, Section
165(a)(3) provides that the emissions from any such source may not
cause or contribute to a violation of any NAAQS. Also, Section
165(a)(4) requires BACT for each pollutant subject to PSD regulation.
The 1997 guidance stated that sources would be allowed to use
implementation of a PM₁₀ program as a surrogate for meeting
PM_2.5 NSR requirements until certain difficulties were
resolved, primarily the lack of necessary tools to calculate the
emissions of PM_2.5 and related precursors, the lack of
adequate modeling techniques to project ambient impacts, and the lack
of PM_2.5 monitoring sites. As discussed in this preamble,
those difficulties have been resolved in most respects, and where they
have not been, the proposal contains appropriate provisions to account
for it. These issues will be finally resolved by the Agency upon
promulgation of these proposed revisions. When final, these revisions
will take effect immediately on the effective date in States that issue
permits under a delegation from EPA. However, States with a SIP-
approved PSD program requiring amendments to incorporate these rule
changes will need additional time to incorporate the final NSR rule
change for PM_2.5 into their SIPs. For example, a State may
need to amend their existing regulations to add the specific
significant emissions rate for PM_2.5 or a designated
precursor. We propose to require that States with SIP-approved PSD
programs submit revised PSD programs for PM_2.5 at the same
time that they must submit nonattainment NSR programs for
PM_2.5 (April 5, 2008).\104\ However, during the SIP-

[[Page 66044]]

development period, the PM_2.5 NAAQS must still be protected
under the PSD program in such States.
---------------------------------------------------------------------------

\104\ We note that we requested that States submit
certifications that their SIPs were adequate with respect to certain
infrastructure elements, including PSD, for the PM_2.5
NAAQS, by July 2000, consistent with Section 110(a)(1) and (2). See
Re-issue of the Early Planning Guidance for the Revised Ozone and
Particulate Matter (PM) National Ambient Air Quality Standards
(NAAQS) (June 16, 1998). In accordance with a Consent Decree in
Environmental Defense and American Lung Ass'n v. Johnson, No.
1:05CV00493 (D.D.C. June 15, 2005), EPA must determine by October 4,
2008 whether each State has submitted SIP revisions for
PM_2.5 required under section 110(a)(2) of the Clean Air Act.
---------------------------------------------------------------------------

b. Proposed Options
Upon promulgation of this rule, States that accept delegation would
implement the PM_2.5 program in 40 CFR 52.21 from the
effective date of this rule. However, for SIP-approved States, we seek
comment on the following options to address implementation of the PSD
program from the time this rule is final until EPA approves a State's
PSD program for PM_2.5:
Option 1--Continue Implementing the 1997 Guidance To use
PM₁₀ Program as a Surrogate for PM_2.5
We are proposing that if a SIP-approved State is unable to
implement a PSD program for the PM_2.5 NAAQS upon
promulgation of these proposed revisions, then the State may continue
to implement a PM₁₀ program as a surrogate to meet the PSD
program requirements for PM_2.5 pursuant to the 1997 guidance
mentioned above. However, to assure that use of PM₁₀ is
protective of the PM_2.5 NAAQS, the State must assure that
two requirements are met. First, States must require sources to
demonstrate that emissions from construction or operation of the
facility will not cause or contribute to a violation of the
PM_2.5 NAAQS. We believe that States have the authority to
implement this requirement through existing SIP-approved programs.
Second, States will be required to include condensible particulate
matter emissions in determining major NSR applicability and control
requirements. As discussed elsewhere, PM₁₀ already includes
condensible emissions, but many States have not regulated condensible
emissions in implementing the PM₁₀ NAAQS because EPA has not
consistently implemented its guidance on this issue. Because
condensible emissions are essentially fine particles and a larger
fraction of PM_2.5 emissions in comparison to
PM₁₀, EPA believes inclusion of condensible emissions during
the SIP development period for PSD programs is necessary to ensure that
the PM₁₀ indicator acts as an adequate surrogate for PM_2.5.
Option 2--Update the 1997 Guidance to Include Proposed Provisions of
this Rule or Amend 40 CFR part 51, Appendix S to State That 40 CFR
52.21 Would Apply
Another option would be to update the 1997 guidance to reflect the
provisions in this proposed rule and allow States to run a
PM_2.5 program pursuant to this updated guidance.
Alternatively, we would amend Appendix S and 40 CFR 52.24 so that the
PSD requirements of 40 CFR 52.21 would govern the issuance of major NSR
permits during the period between the time we finalize this
implementation rule and when we approve changes to the State's PSD
program to include PM_2.5 as a regulated NSR pollutant. This
provision would not apply to sources located in Indian Country because
they are already directly subject to the requirements of 40 CFR 52.21.
If a State does not believe it has the authority to issue PSD
permits consistent with Appendix S, then EPA would issue the permit. We
specifically seek comment on whether we should update the 1997 guidance
or amend Appendix S to allow States to run a PSD program for
PM_2.5 in attainment areas during the SIP development period.
Option 3--State Requests Delegation of 40 CFR 52.21
A third option would be for EPA to allow a State to request
delegation of just the federal PM_2.5 program (reflected in
Sec. 52.21 of our regulations) in that State. A State that otherwise
has a SIP-approved PSD program could request delegation for
PM_2.5 by informing EPA that it does not intend to submit a
PSD SIP for PM_2.5 in the immediate future.
After promulgation of a new NAAQS, EPA may allow States up to three
years to submit a State implementation plan containing a PSD program
for that pollutant. 42 U.S.C. 7410(a). EPA's PSD regulation at Sec.
51.166 gives SIP-approved States up to three years to submit a revision
to their PSD program after EPA amends Sec. 51.166. (Sec.
51.166(a)(6)). Under section 110(c) of the Act, EPA must promulgate a
federal implementation plan (FIP) upon finding that a State has failed
to make a required plan submission or that a required submission is
inadequate.
If a State notifies EPA prior to the close of the customary three-
year period that the State does not intend to submit a PSD SIP for
PM_2.5 in the immediate future and requests delegation, we
believe EPA could find that the State has failed to submit the
requisite PSD SIP for PM_2.5, promulgate a PSD FIP for
PM_2.5 based on 40 CFR 52.21, and delegate implementation of
the federal PSD program to the State. The State would then be able to
implement a PSD program for PM_2.5 in accordance with the
terms of section 52.21, as amended in this rulemaking action. However,
such a State would still have the option to obtain EPA approval of a
PSD SIP for PM_2.5 if it submitted the SIP revision at a
later date.
c. Rationale
We believe option 1 is reasonable for the following reasons. First,
PM₁₀ will act as an adequate surrogate for PM_2.5
in most respects, because all new major sources and major modifications
that would trigger PSD requirements for PM_2.5 would also
trigger PM₁₀ requirements because PM_2.5 is a
subset of PM₁₀. The one situation where this would not be
true is where a source emitted significant amounts of condensible
emissions that would not otherwise be counted under a State's
PM₁₀ PSD program. This is the reason EPA would ensure that
States include condensible emissions in determining major NSR
applicability as a condition of using PM₁₀ as a surrogate.
Second, both of the precursors proposed for regulation in this
preamble--SO₂ and NO_X--are already regulated
under State NSR programs for other criteria pollutants. Thus, those
precursors will be subject to NSR through those other programs. Third,
requiring immediate implementation of the Section 165(a)(3) air quality
analysis for the PM_2.5 NAAQS will adequately cover the
remaining gap that results from using PM₁₀ as a surrogate
for PM_2.5.
Upon promulgation of these rules, except in SIP-approved States
which would be running a PM₁₀ program as a surrogate for a
PM_2.5 program as stated in option 1 above, a
PM_2.5 program would apply in attainment areas of delegated
States and in nonattainment areas. Hence to avoid this imbalance, we
are seeking comment on option 2 which addresses whether there is a need
to update the 1997 interim policy to reflect these rules in SIP-
approved States or whether we should amend Appendix S to allow these
States to run a PM_2.5 program for PSD based on the
requirements of 40 CFR 52.21 during the SIP development period in
attainment areas.
Option 3 would also address this imbalance by allowing a State to
request delegation of only the PSD program for PM_2.5 prior
to the deadline for submitting a PSD SIP for PM_2.5. (April
5, 2008 as discussed in the background discussion of section M16.)
Because we need to allow a State enough time to submit a PSD SIP for
PM_2.5, we do not

[[Page 66045]]

believe we can unilaterally issue a FIP for the PSD PM_2.5
program right away. However, if a State informs EPA prior to April 5,
2008 that it does not intend to submit a PM_2.5 SIP, we would
then have cause to issue a FIP addressing the PSD program for
PM_2.5 and then delegate that program to the State.
17. Implementation of the Nonattainment NSR Provisions During the SIP
Development Period
a. Background
EPA interprets section 172(c)(5) of the Clean Air Act to require
that States issue major NSR permits for construction and major
modifications of major stationary sources in any nonattainment area.
Thus, since the PM_2.5 nonattainment designations became
effective on April 5, 2005, States are now required to issue major NSR
permits that address the Section 173, nonattainment major NSR
requirements for PM_2.5. On the date that the
PM_2.5 non-attainment designations took effect (April 5,
2005), we issued a guidance to address implementation of the NA NSR
program pending the completion of this action to develop implementation
rules for PM_2.5. See memorandum from Stephen D. Page,
Director, Office of Air Quality Planning and Standards to Regional Air
Directors, ``Implementation of New Source Review Requirements in
PM_2.5 Nonattainment Areas'' (Apr. 5, 2005).
Our current guidance permits States to implement a PM₁₀
nonattainment major NSR program as a surrogate to address the
requirements of nonattainment major NSR for the PM_2.5 NAAQS.
A State's surrogate major NSR program in PM_2.5 nonattainment
areas may consist of either the implementation of the State's SIP-
approved nonattainment major NSR program for PM₁₀ or
implementation of a major NSR program for PM₁₀ under the
authority in 40 CFR part 51, Appendix S. Appendix S generally applies
where a State lacks a nonattainment major NSR program covering a
particular pollutant.
Once this PM_2.5 implementation rule is finalized, States
will have the necessary tools to implement a major NSR program for
PM_2.5 States will no longer be permitted to implement a
nonattainment major NSR program for PM₁₀ as a surrogate for
the PM_2.5 nonattainment major NSR program. Most States will
then need to implement a transitional PM_2.5 nonattainment
major NSR program under Appendix S (as amended in this rulemaking
action) until EPA approves changes to a State's SIP-approved major NSR
program to reflect the requirements of this rule.
The NA NSR provisions in a State's existing SIP-approved NA NSR
program would only apply in areas designated nonattainment for the
PM_2.5 NAAQS if the SIP-approved regulations contain a
generic requirement to issue part D permits in areas designated as
nonattainment for any criteria pollutant and do not otherwise need to
be amended to incorporate the changes proposed in this rule. In the
situations described below, the States will need to revise their NA NSR
regulations and submit them to EPA for incorporation into the SIP by
the date the new implementation plans for PM_2.5 are due
(April 5, 2008):
? States that have nonattainment regulations that need to be
amended to incorporate the new PM_2.5 requirements.
? States that have newly designated nonattainment areas for
PM_2.5 and nonattainment NSR regulations that specifically
list the areas in which NA NSR applies (i.e., the list does not include
the newly designated areas).
? States that currently have no nonattainment areas but have
newly designated nonattainment areas for PM_2.5.
States in the categories listed above will have to implement a
transitional major NSR permitting program for PM_2.5 pursuant
to 40 CFR 52.24(k) and Appendix S until their existing part D SIPs are
revised to meet these new PM_2.5 NSR regulations.
b. Implementation of NSR Under the Emissions Offset Interpretative
Ruling (40 CFR part 51, Appendix S) With Revisions
In general, Appendix S requires new or modified major sources to
meet LAER and obtain sufficient offsetting emissions reductions to
assure that a new major source or major modification of an existing
major source will not interfere with the area's progress toward
attainment. Readers should refer to 40 CFR part 51, Appendix S for a
complete understanding of these and other existing Appendix S
requirements. In this action, we propose to revise Appendix S to
include provisions necessary to implement a transitional major NSR
program for PM_2.5, including significant emissions rates
applicable to major modifications for PM_2.5 and, as
appropriate, precursors.\105\
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\105\ In a separate Federal Register notice, we will be revising
Appendix S to incorporate changes that conform Appendix S with the
minimum requirements for implementation plans that are set forth in
40 CFR 51.165.
---------------------------------------------------------------------------

As currently written, Appendix S applies directly to major
stationary sources. In accordance with the requirements of Section
110(a)(2)(c) of the Act, we believe that the majority of States have
the legal authority to issue permits consistent with these requirements
under an existing SIP-approved permitting program. Nonetheless, at
least one State has reported that it lacks the legal authority to issue
permits implementing the requirements of Appendix S under its existing
permitting rules. If a State is unable to apply the requirements of
Appendix S, EPA will act as the reviewing authority for the relevant
portion of the permit.
We believe that it is appropriate for EPA to issue the pre-
construction permits in such circumstances. As discussed earlier,
Congress amended the Act in 1990 to remove the requirements that would
have applied a construction ban in area's that lacked a SIP-approved
part D permit program. Thus, we believe that it is consistent with
Congressional intent that either the State or EPA issue permits to
construct during the interim period.
c. Legal Basis for Requiring States To Issue Nonattainment NSR Permits
During the SIP-Development Period
Section 110(a)(2)(C) of the CAA establishes a general duty on
States to include a program in their SIP that regulates the
modification and construction of any stationary source as necessary to
assure that NAAQS are achieved. This general duty exists during all
periods, including before a State has an approved NA NSR permit program.
Section 110(a)(2)(c) of the Act does not define specific
requirements States must follow for issuing major source permits during
the period between nonattainment designation and EPA approval of a
nonattainment NSR SIP (the ``SIP-development'' period). However, EPA
has historically recognized that the SIP development period provided
under Section 172(b) of the CAA leaves a gap in part D major NSR
permitting and has determined that this gap is to be filled, in
general, with a transitional major NSR program that includes the LAER
and offset requirements from part D. 57 FR 18070, 18076 (Apr. 28,
1992). This transitional NSR program has been implemented, to date,
through the Emissions Offset Interpretative Ruling at 40 CFR part 51,
Appendix S. The EPA's regulations at 40 CFR 52.24(k) require that
Appendix S govern permitting during this time.\106\

[[Page 66046]]

In addition, Congress indicated in the 1977 CAA Amendments that major
NSR permitting should apply during the SIP development period. See
Public Law 95-95, section 129(a), 91 Stat. 685 (1977). Specifically, in
1977, when Congress enacted a moratorium on construction in any area
lacking an approved part D SIP, with a delayed effective date of July
1, 1979, Congress directed that Appendix S govern permitting of sources
constructing in such areas prior to that date. Id. section 108(b),
section 129(a).
---------------------------------------------------------------------------

\106\ EPA has interpreted this requirement to require States to
issue permits that are consistent with the requirements in Appendix
S. We believe that many States have the authority to issue permits
that are consistent with Appendix S for example, through State minor
NSR permit programs. However, if a State lacks authority to issue a
permit, then EPA will issue the permit.
---------------------------------------------------------------------------

The EPA subsequently codified the use of Appendix S as the
transitional major NSR program in 40 CFR 52.24(k), reasoning (in the
context of implementing a delay in the construction ban for then-
recently designated nonattainment areas) that Congress had directed
that Appendix S remain in effect to protect air quality while State
plans were being designed. 45 FR 91604 (Oct. 2, 1980). When Congress
removed the construction ban (except as provided in Section 110(n)(3)),
it left 40 CFR 52.24(k) in place, implementing the transitional major
NSR program under Appendix S.
The continued application of appendix S through Sec. 52.24(k) is
also supported by one of the purposes of the Clean Air Act ``to protect
and enhance the quality of the Nation's air resources so as to promote
the public health and welfare and the productive capacity of its
population.'' 42 U.S.C. 7401(b)(1). This provision was the basis for
the original judicial finding that the Act imposed an obligation to
prevent significant deterioration in areas that meet the NAAQS, prior
to Congress' enactment of the PSD program at part C of the Act.\107\
This policy of nondegradation applies with even greater force in areas
that fail to meet the NAAQS. Thus, we believe that an interim major NSR
program for the SIP development period--as codified at appendix S and
updated to reflect CAA amendments and the promulgation of the
PM_2.5 NAAQS--is supported by section 110(a)(2)(C), section
101(b)(1), Congressional intent, and our gap-filling authority under
section 301(a).
---------------------------------------------------------------------------

\107\ See Alabama Power Co. v. Costle, 636 F.3d 323, 346-047 (DC
Cir. 1980) (discussing Sierra Club v. Ruckelshaus, 344 F. Supp. 253
(D.D.C. 1972), aff'd per curiam 4 ERC 1815 (DC Cir. 1972), aff'd by
an equally divided court, sub nom Fri v. Sierra Club, 412 U.S. 541 (1973).
---------------------------------------------------------------------------

Although EPA omitted Sec. 52.24(k) from the regulatory text
accompanying a proposed rulemaking in 1996 (see 61 FR 38250, 38305
(July 23, 1996)), the preamble indicated that the change was intended
only to update and clarify the regulation with regard to the changes to
the construction ban made by the 1990 Amendments.\108\ The proposal did
not in any manner indicate that EPA believed that NSR permits complying
with Appendix S, or otherwise satisfying Section 110(a)(2)(C), were not
required during the interim period. We have discussed the continued
applicability of Sec. 52.24(k) and Appendix S in implementation of the
8-hour ozone NAAQS. 68 FR at 32846.
---------------------------------------------------------------------------

\108\ The actual language at 40 CFR 52.24(k) arguably allows
States to issue permits under Appendix S for a maximum period of 18
months after designation. After this time, if the nonattainment area
does not have an approved NA NSR permit program, a construction ban
would apply. However, in 1990, Congress altered the provisions of
the construction ban such that it would not apply when a State/Local
lacked an approved NA NSR permit program in the future. The EPA
believes that Congress' removal of the construction ban from the Act
supersedes the regulatory language at 52.24(k) and EPA has
reinterpreted this language to allow States to issue permits under
Appendix S from designation until the SIP is approved even if this
exceeds 18 months. See 1991 memo, ``New Source Review (NSR) program
Transitional Guidance, John S. Seitz, March 11, 1991. The EPA
anticipates revising the language at section 52.24(k) to properly
reflect this interpretation.
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18. NSR Applicability to Precursors During the Interim Period
As discussed in Section M.2, EPA has proposed several options for
NSR applicability to the potential PM_2.5 precursors
(SO₂, NO_X, VOC, and ammonia). EPA has proposed
that SO₂ is a national precursor to PM_2.5. EPA
has also proposed that if NO_X emissions are subject to NSR
as PM_2.5 precursor, States could exempt NO_X from
its PM_2.5 NSR program in a specific area by demonstrating
that NO_X emissions from stationary sources in that area are
not a significant contributor to that area's ambient PM_2.5
concentrations and the area is not in a State identified by EPA as a
source of a PM_2.5 interstate transport problem. However,
during the SIP development period, States face substantial hurdles in
making such a demonstration because they are in the initial stages of
gathering information and analyses necessary to prepare their
attainment demonstrations. Thus, during this period, a presumption that
a precursor is a regulated NSR pollutant for PM_2.5 may
amount to an irrebuttable presumption for many States. Because of the
challenges posed by the SIP development period, EPA is considering
whether NSR applicability to precursors should be stayed for one or
more precursors during the SIP development period. The EPA is
soliciting comments on the applicability of NSR to precursors during
the SIP development period.
19. Are there any Tribal concerns?
We expect that some Tribal areas will be designated as
nonattainment in part because of pollution that is transported from
surrounding State lands. Tribal representatives have advocated for
additional flexibility to address nonattainment problems caused by
transported pollution, such as the provision of NSR offset set-asides
(which we expect would come from State offset pools or banks), because
they have limited ability to generate offsets on their own. Tribal
representatives have raised these and other concerns in discussions on
implementation of the 8-hour ozone and PM_2.5 standards, and
in comments on the 8-hour ozone implementation rule.\109\ We request
comment on whether emissions offset set-asides, possibly generated by
innovative measures to promote additional emissions reductions, are an
appropriate method to help level the playing field for the Tribes and
support economic development in Tribal areas. We also request comment
on ways in which States may help provide the Tribes access to offsets
from non-Tribal areas.
---------------------------------------------------------------------------

\109\ 109 Letter from Bill Grantham, National Tribal
Environmental Council, to docket 2003-0079, providing comments on
the proposed 8-hour ozone implementation rule (66 FR 32802).
---------------------------------------------------------------------------

In addition, to address these and other issues related to
implementation of the NSR program in Indian country, EPA is evaluating
the impact of the NSR program on Tribes in Indian country. The EPA
plans to address these concerns in a future Tribal NSR rule.
20. What must a State or local agency do about minor sources of PM_2.5?
Pursuant to Section 110(a)(2)(C), States must have a minor source
permitting program. This applies to new and modified stationary sources
that are not considered major for a criteria pollutants or a precursor
for a criteria pollutant. At this time States must include the
following pollutants in their minor NSR program:
? VOC,
? SO₂,
? NO_X,
? CO,
? PM₁₀, and
? Lead (Pb)
States must now amend their minor source programs to include
? PM_2.5 direct emissions, and
? Precursor emissions as included in PM_2.5 major NSR.

[[Page 66047]]

21. Supplemental Program Option: Rural Transport Areas
a. What flexible implementation options should be available for
Transport areas?
EPA is considering flexible implementation for Nonattainment NSR
for areas that qualify for the transport classification. These areas
are designated nonattainment due to overwhelming transport, for
example, areas where pollution is from surrounding jurisdictions but
where there are few or no sources of PM_2.5 in the area.
Under the current program no flexibility is available under NA NSR for
sources in these areas overwhelmed by transport. As mentioned earlier,
in this rule, we are proposing a transport classification to provide
some flexibility to address some of the fairness issues associated with
transport. This transport classification can be used by States and
Tribes if they meet the criteria discussed below. If there is no
transport classification then this option will not be available in the
near-term. However, EPA intends to develop a separate proposed rule on
flexible implementation of nonattainment NSR for areas designated
nonattainment for any criteria pollutant, where transport is the
primary cause of the area's nonattainment. Such a proposal would not be
dependent on the incorporation of a transport classification in a
classification system for a NAAQS.
b. Which nonattainment areas would be eligible for the transport program?
In order to be eligible for the transport option the State/Local
with jurisdiction over a nonattainment area must:
(1) Have submitted an attainment plan which demonstrates, through
modeling, that the area is designated nonattainment due to overwhelming
transport from an upwind area(s); and
(2) Have submitted an attainment plan containing any additional
local control measures needed for attainment of the PM_2.5
standard; and
(3) Have submitted the attainment plan that commits the State/Local
to implement a program that meets the requirements for transport areas
discussed below.
As described earlier in the classification section, an area will
not be reclassified as a ``transport'' area until after the SIP is
approved by the Regional Office. A transport area could apply for
single or multi-state/Local nonattainment areas. Such areas will not be
able to implement the nonattainment NSR transport program until the
area is reclassified as a ``transport'' area. Until an area is
reclassified, States must continue to apply the nonattainment NSR program.
c. What would be the basic requirements of a transport nonattainment
NSR program?
EPA is requesting comment on what type of regulatory flexibility
would be beneficial for transport areas while providing equal
environmental protection. Specific examples of needed flexibility for
areas which the commenter suggests would qualify as transport areas
would be helpful. As noted above, we anticipate proposing a separate
rulemaking on the details of the NSR requirements.

N. How will EPA ensure that the 8-hour ozone standard will be
implemented in a way which allows an optimal mix of controls for PM2.5,
ozone, and regional haze?

1. Could an area's PM_2.5 strategy affect its 8-hour ozone
and/or regional haze strategy?
Based on current data, many areas are violating both the 8-hour
ozone and the PM_2.5 NAAQS. Thus, many cities will have ozone
and PM_2.5 nonattainment areas with overlapping boundaries.
Requirements for regional haze apply to all areas. Each State is
responsible for developing SIP revisions to meet all the requirements
relevant to each nonattainment area for each pollutant as well as
developing a regional haze plan. In some cases, ozone control measures
may also be useful for a PM_2.5 control strategy or a
regional haze plan. Similarly, controls for PM_2.5 may lead
to reductions in ozone or regional haze. For example, considered in
isolation, a metropolitan area's ozone strategy might be based on
additional VOC emissions reductions; if the area needs NO_X
reductions for PM_2.5 attainment, however, an optimal
approach might include a more complex ozone strategy using both
NO_X and VOC reductions. We believe integration of ozone and
PM_2.5 attainment planning will reduce overall costs of
meeting multiple air quality goals.
Many of the factors affecting concentrations of ozone also affect
concentrations of PM_2.5. Emissions of NO_X and/or
VOC will lead to formation of organic particles and the precursors of
particulate nitrate, as well as ozone. The presence of ozone is an
important factor affecting PM_2.5 formation; as ozone builds
up, so do hydroxyl (OH-) radicals which are instrumental in
oxidizing gas phase SO₂ to sulfuric acid. The sulfuric acid
may be converted to sulfate particles, increasing the PM_2.5
concentration. Further, the local ozone concentrations may be decreased
by the reaction of ozone with nitric oxide; thus, in some large urban
areas, a decrease in local NO_X emissions can result in
higher local ozone concentrations, leading to higher OH radical
concentrations and increases in secondary PM_2.5. Because the
precursors for ozone and PM_2.5 may be transported hundreds
of kilometers, regional scale impacts must also be considered.
2. What guidance has EPA provided regarding ozone, PM_2.5 and
regional haze interaction?
States must develop 8-hour ozone and PM_2.5 attainment
demonstrations for most nonattainment areas. General criteria for
attainment demonstrations are contained in 40 CFR part 51, appendix W
(i.e., ``EPA's Guideline on Air Quality Models''). The EPA's May 1999
draft ``Guidance on the Use of Models and Other Analyses in Attainment
Demonstrations for the 8-Hour Ozone NAAQS'' provides a set of general
requirements that an air quality model should meet to qualify for use
in an attainment demonstration for the 8-hour ozone NAAQS. The draft
guidance encourages States to integrate PM_2.5 control
strategies with strategies designed to attain the 8-hour ozone NAAQS
and to meet reasonable progress goals for regional haze. In addition,
the draft guidance presents some modeling/analysis principles to help
States develop databases and capabilities for considering joint effects
of control strategies for ozone, PM_2.5 and regional haze.
Because emissions and meteorological conditions vary seasonally, the
guidance recommends assessing the effects of an ozone control strategy
on annual PM_2.5 concentrations by estimating effects on mean
PM_2.5 for each season and using the resulting information to
estimate annual impacts. Emission estimates for VOC, NO_X,
primary PM_2.5, SO₂ and ammonia will be needed. In
addition, the modeling should separately estimate the effects of the
ozone strategy on the major components of PM_2.5: Mass
associated with sulfates, nitrates, organic carbon, elemental carbon,
and all other species. We believe that this approach is adequate to
ensure that the 8-hour ozone standard will be implemented by States in
a way that allows an optimal mix of controls for ozone,
PM_2.5, and regional haze.
Similarly, EPA's draft attainment demonstration guidance for
PM_2.5 and regional haze states that models intended to
address secondary PM problems should also be capable of simulating
ozone formation and transport (January 2, 2001 (draft),

[[Page 66048]]

``Guidance for Demonstrating Attainment of Air Quality Goals for
PM_2.5 and Regional Haze''). The formation and transport of
secondary PM are closely related to processes that are important in the
formation and transport of ozone. Thus, it makes sense for programs
designed to control ozone to be cognizant of programs to reduce
PM_2.5 and improve visibility and vice versa. The
PM_2.5 guidance suggests conducting a ``mid-course review''
of an approved PM_2.5 plan to review changes in air quality
resulting from implementation of plans to reduce PM_2.5,
regional haze, and ozone (see section E).
3. What is EPA proposing?
Today, we propose to continue the policy of encouraging each State
with a PM_2.5 nonattainment area which overlaps, is near to,
or otherwise affects an 8-hour ozone nonattainment area to take all
reasonable steps to coordinate the required control measures needed to
attain the standards in nonattainment areas and meet reasonable
progress goals for regional haze. Specifically, States conducting
modeling analyses for PM_2.5 should evaluate the concurrent
effects of control strategies on estimated ozone levels. In addition,
we encourage States conducting modeling analyses for ozone to estimate
separately the effects of ozone control strategies on PM_2.5
and its precursors.

O. What emission inventory requirements should apply under the PM2.5 NAAQS?

Emission inventories are critical for the efforts of State, local,
tribal and federal agencies to attain and maintain the NAAQS that EPA