BOARD MEETING DATE: August 1, 2003
AGENDA NO. 23
Recommendation Regarding Comments to U.S. EPA on Proposed Rule to Implement the Eight-Hour National Ambient Air Quality Standard for Ozone
SYNOPSIS:
On June 2, 2003, U.S. EPA published a Proposed Rule to Implement the Eight-Hour Ozone National Ambient Air Quality Standard. The proposed rule addresses numerous issues related to implementation of the new eight-hour standard, including attainment deadlines, planning requirements, emission controls and other matters. Most significantly, the proposed rule would revoke the current one-hour standard—and its year 2010 attainment deadline for the South Coast District—and establish an attainment deadline for the eight-hour standard that could be as late as the year 2021. This agenda item presents staff’s recommendations regarding comments on the proposed rule. The comments support expeditious but reasonable attainment deadlines, and seek to maintain progress towards healthful air quality.
COMMITTEE:
Mobile Source, July 25, 2003
RECOMMENDED ACTION:
Approve the attached proposed comments regarding U.S. EPA’s Proposed Rule to Implement the Eight-Hour National Ambient Air Quality Standard for Ozone.
Barry R. Wallerstein, D.Env.
Executive Officer
Introduction
A primary responsibility of the SCAQMD and other air quality agencies is to develop programs to attain the primary National Ambient Air Quality Standard ("NAAQS") for ozone. The current ozone standard was established over 25 years ago, and programs to attain the standard are governed by emission control requirements and attainment deadlines stated in the 1990 Amendments to the federal Clean Air Act. In 1997, U.S. EPA adopted a revised ozone NAAQS that is intended to be more health-protective than the current standard. Implementation of the revised standard was delayed by years of litigation challenging its adoption, but these cases have now been resolved to a point where U.S. EPA has proposed a rule setting forth how the new standard must be implemented. The proposed rule addresses numerous issues related to implementation of the new standard. Of key importance is the manner in which the transition from the current to the new ozone standard would occur. The proposed rule would revoke the current standard—and its attainment deadlines—and establish attainment deadlines for the new standard that in some areas would be over ten years later than the current deadlines.
This proposal has profound implications for the SCAQMD’s air cleanup program. In particular, the proposal to revoke the current attainment deadlines—if not carried out with appropriate safeguards—could result in reduced pressure on federal and state agencies to control emissions from sources within their regulatory jurisdictions. In addition, extended attainment deadlines in areas around the country could exacerbate competitive disadvantages for businesses in the South Coast, and could diminish incentives to develop new emission control technologies.
The following is a description of the background of U.S. EPA’s proposed implementation rule, followed by staff’s recommendations regarding SCAQMD comments to U.S. EPA.
Background
The current federal ozone standard was adopted in 1979 and is set at 0.12 ppm, measured over one-hour. The 1990 Amendments to the federal Clean Air Act imposed emission control requirements and deadlines for attainment of this "one–hour" standard that vary from area to area based on the severity of pollution. "Extreme" nonattainment areas—of which the SCAQMD is currently the only one—must attain the standard by the year 2010.
On July 18, 1997, U.S. EPA promulgated a revised ozone standard of 0.08 ppm, measured over an eight-hour period. 62 Fed.Reg. 38856. According to U.S. EPA, the eight-hour standard is generally more protective of public health and is more stringent than the one-hour standard. U.S. EPA states that there are more areas that do not meet the eight-hour standard than there are areas that do not meet the one-hour standard. Due to the different form and averaging times of the one-hour and eight-hour standards, however, areas with significant one-hour problems may not have as significant an eight-hour problem, and vice versa. See 68 Fed.Reg. 32804, 32813 (June 2, 2003).
U.S. EPA stated in 1997 that it would implement the eight-hour standard under provisions of the Clean Air Act that allowed the agency discretion to establish attainment deadlines up to ten years after designation of an area as nonattainment for that standard. U.S. EPA also stated that the one-hour ozone standard would remain in effect—and one-hour nonattainment areas would remain subject to the control requirements specified in the Clean Air Act for such areas—until such areas attained the one-hour standard. See 62 Fed.Reg. 38856 (codified at 40 CFR § 50.9(b)).
Soon after the eight-hour standard was promulgated in 1997, a number of industry groups and states filed lawsuits challenging it. In 1999, the DC Circuit Court of Appeals issued a ruling that was adverse to U.S. EPA, and the agency filed a petition for review with the United States Supreme Court. In February 2001, the Supreme Court issued a decision that upheld adoption of the eight-hour standard, but disapproved of U.S. EPA’s implementation approach. Whitman v. American Trucking Assoc., 121 S.Ct. 903, 911-914 (2001). The Court stated that U.S. EPA, in utilizing provisions of the Clean Air Act that allowed it discretion to establish attainment deadlines, had impermissibly ignored provisions of the 1990 Amendments to the Act that establish the classification system for nonattainment areas ("Serious," "Severe," "Extreme" etc.), and that establish attainment deadlines and control requirements for such areas. Id. at 9181. The Court remanded the matter for U.S. EPA to develop a new implementation approach.
1 Specifically, at the time the eight–hour standard was adopted in 1997, EPA stated that it should be implemented under Subpart 1 of part D of title I of the Clean Air Act, rather than under the more specific requirements of Subpart 2. Subpart 1 contains general requirements for programs to control all regulated pollutants; Subpart 2 contains more specific requirements under which ozone nonattainment areas are classified as “marginal,” “moderate,” “serious,” etc.—with increasingly stringent control requirements specified for each higher classification. Implementing the new standard under Subpart 1 generally allowed EPA greater discretion to determine applicable emission control requirements.
June 2003 Proposed Implementation Rule
On June 2, 2003, U.S. EPA published its Proposed Rule to Implement the Eight-Hour Ozone National Ambient Air Quality Standard, 68 Fed. Reg. 32802 ("Proposed Implementation Rule"). The proposed rule is intended to resolve the deficiencies cited by the Supreme Court, and to provide certainty to states regarding their planning obligations so that they may commence development of state implementation plans ("SIPs") upon nonattainment designation for the eight-hour standard. Id. Such designation must occur by April 15, 2004 under a settlement agreement U.S. EPA has entered into with nine environmental groups. American Lung Association v. U.S. EPA (D.D.C. No. 1:02CV02239), see 68 Fed. Reg. 32808.
The proposed rule contains the following key provisions:
- Area Classifications. The proposed rule would classify areas based on
severity of eight-hour pollutant levels. The classification system would
result in most one-hour nonattainment areas being placed in lower
classifications for the eight-hour standard. For example, South Coast, which
is currently the only Extreme area, would likely be classified as “Severe.”
The Clean Air Act requires areas in higher classifications to adopt more
stringent emission control requirements than areas in lower classifications,
but allows areas in higher classifications more time to attain. Under U.S.
EPA’s proposal, South Coast’s attainment deadline for the eight-hour standard
would likely be the year 2021.
- Revocation of One–Hour Standard.
The proposed rule would
revoke the one-hour ozone standard in the year 2005. U.S. EPA would make no
further findings of failure to attain the one-hour standard by
currently-applicable deadlines (2010 in South Coast), and the statutory
consequences for failure to attain by that deadline would not be triggered.
Such statutory consequences include requirements to impose emissions fees and
contingency measures, and a requirement to submit a plan revision to correct
the deficiency. In addition, areas classified as Serious and below must be
"bumped up" to the next higher classification upon failure to timely attain.
- Progress and Control Requirements That Would Continue In Effect. The proposed rule would require continued compliance with certain progress and emission control requirements related to the one-hour standard, even after revocation of that standard. Such continuing requirements include "new source review" applicability thresholds (10 tons per year in South Coast), and the requirement to achieve three percent per year average regional emissions reductions. These continuing requirements would not, however, be sufficient by themselves to ensure attainment of the one-hour standard by currently-applicable deadlines. Thus, U.S. EPA’s proposal could allow slower progress to clean air than would occur if the requirement to attain the one-hour standard were retained.
Key potential impacts of the U.S. EPA proposal in South Coast include—
- Revocation of the one-hour standard would avoid the possibility of Clean Air Act consequences if South Coast fails to attain the one-hour standard by 2010.
- Revocation of one-hour standard, coupled with lower area classifications for the eight-hour standard, could allow nonattainment areas greater discretion to delay adoption of new control requirements, or to relax or delay existing requirements.
- Revocation of the one-hour standard could undermine the SCAQMD’s position that state and federal agencies must act to control sources within their regulatory jurisdictions. It could also reduce incentives for investment in development and commercialization of new emission control technologies.
- Revocation of the one-hour standard could allow relaxed "conformity" analyses for transportation and other projects that receive federal funding or approval.
- If other nonattainment areas are allowed to relax or delay adoption of emission controls, competitive disadvantages for sources within South Coast could be greater than would otherwise occur, and potential markets for new emission control technologies could be limited.
Attachment 1 to this letter further summarizes key provisions of the proposed rule that will affect areas with relatively high ozone concentrations such as South Coast. The attachment also includes proposed District comments to U.S. EPA. In crafting the proposed comments, staff sought to serve the following goals:
- expeditious but reasonable attainment deadlines for the new
eight-hour standard,
- continuing the progress that would be achieved by programs to
attain the one-hour standard,
- maintenance of control requirements around the country to avoid
competitive disadvantage to sources in South Coast, and to facilitate
commercialization of new control technologies,
- reasonable planning deadlines and administrative requirements, and
- maximum pressure on the federal and other governments to control emissions from sources within their jurisdiction.
The major proposed SCAQMD comments are as follows:
- Eight–Hour Standard Attainment Deadlines. Based on available
information, it is too early to tell if the year 2021 eight-hour standard
maximum attainment deadline for South Coast is reasonable. U.S. EPA must,
however, also ensure that all areas attain as expeditiously as
practicable. In implementing this requirement, U.S. EPA must require all
nonattainment areas to expeditiously adopt measures that have been
implemented in other areas, including South Coast, unless they can
demonstrate that such measures would be infeasible due to unique
circumstances.
- Area Classifications. In order to avoid backsliding from current
emission control obligations, U.S. EPA should modify its proposed
classification system for eight-hour nonattainment areas so as to avoid
placing most areas into lower classifications than under the one-hour
standard. Alternatively, U.S. EPA should require that control requirements
specified in the Clean Air Act for one-hour nonattainment areas continue
in effect at least until such areas attain the eight-hour standard.
- Revocation of One-Hour Standard. In order to maintain progress
toward clean air, and to maintain pressure on state and federal agencies
to control emissions sources within their jurisdictions, U.S. EPA should
not revoke the one-hour standard in a nonattainment area until the area
has attained the standard.
- Progress Requirements and SIP Relaxations. U.S. EPA should not allow a one-hour nonattainment area to relax or delay adoption or implementation of a control measure specified in its one-hour standard SIP, unless such action is necessary to avoid delaying attainment of the eight-hour standard, or unless implementation of such control measure is clearly infeasible.
U.S. EPA Rulemaking Process
The June 2, 2003 Proposed Implementation Rule states that comments must be received by U.S. EPA on or before August 1, 2003. 68 Fed.Reg. 32802 U.S. EPA states that after it receives and considers comment on the proposed options, but before publishing a final rule, it will issue proposed regulatory text. The June 2003 proposal does not contain regulatory text, primarily because a number of options are proposed, and U.S. EPA believes it would be better to obtain public comment on the options conceptually. U.S. EPA plans to issue a final rule by the end of 2003.
Recommendation
The Executive Officer recommends that the Board approve the attached proposed SCAQMD comments to U.S. EPA on the proposed eight-hour standard implementation rule.
Attachment
Proposed Eight-Hour Implementation Rule
Summary of Key Provisions, Issues
Proposed SCAQMD Comments
Attachment
Proposed U.S. EPA Eight-Hour Implementation Rule:
Summary of Key Provisions and Proposed SCAQMD Comments
1. Classification of Areas. U.S. EPA proposes that areas such as South Coast that currently exceed the one-hour standard would be classified as "Marginal," "Moderate," "Serious," "Severe-15," "Severe-17," or "Extreme" under the Clean Air Act. Such classifications would be based on eight-hour ozone levels rather than the one-hour levels that form the basis of the classification system stated in the Act. U.S. EPA proposes to adopt a regulation that would "translate" the Act’s classification system for use with the eight-hour standard, using the percentage by which each classification threshold stated in the Act exceeds the one-hour ozone standard. The proposed regulation would require nonattainment areas to comply with the emission control requirements specified in the Clean Air Act for each classification. 68 Fed.Reg. 32812.
Available data indicates that the proposed classification system will place a majority of ozone nonattainment areas into a lower classification for the eight-hour standard (e.g. a "Serious" area would likely become a "Moderate" area). 68 Fed.Reg. 32819. It is expected that no areas would fall into the Extreme classification. The proposal thus would likely result in South Coast being classified as Severe-17.
Potential Impacts
| (a) | As is described below, lower classifications could allow nonattainment areas to rescind nondiscretionary control measures required by the Clean Air Act for the higher one-hour classifications (e.g. stringent new source review thresholds) and convert such measures to contingency status upon attainment of the one-hour standard—even though the eight-hour standard has not yet been attained. Such reduction in stringency of rules in other areas could increase competitive disadvantages for sources in South Coast, and limit markets for—and incentives to develop—new control technologies. This subject is further discussed below under Issue 4, "Emission Control and Interim Progress Requirements That Would Continue After Revocation of One-Hour Standard." |
| (b) | If the SCAQMD is no longer classified as "Extreme," it may not be able to utilize authority explicitly granted to Extreme areas to employ SIP measures that anticipate development of new technologies. CAA § 182 (e)(5). Under this authority, U.S. EPA has approved measures that are not yet proven or that are defined with less specificity than it has required of other SIP provisions. An inability to use such measures in an attainment demonstration would limit the district’s options in fashioning new control measures, and could result in a need to resort to more disruptive and expensive control strategies. |
Proposed District Comments
| (a) | The classification system proposed by U.S. EPA
should be revised to result in area classifications that comport
more closely to those under the one-hour standard. In particular,
Congress could not have intended that adoption of a more
health-protective ozone standard would result in most areas being
placed into lower classifications. If anything, a more
health-protective standard should result in more areas being placed
in higher classifications so that where they would be subject to
less stringent emission control requirements. This is appropriate
because the current state of knowledge indicates that pollution in
such areas is a more serious health threat than previously thought.
We understand that U.S. EPA considered and rejected the view that
adoption of a more stringent standard should result in more areas
being included in higher classifications, but we find U.S. EPA’s
reasons for such rejection to be unpersuasive and not legally
supported by the Clean Air Act.1 We note, however, that higher classifications would also provide more time for such areas to attain—more time that in some cases may not be warranted. We thus believe that U.S. EPA’s final rule must ensure that every area has an attainment deadline that is "as expeditious as practicable," as specified in the Clean Air Act. This issue is further discussed in the next section. Finally, we do not propose any particular means of establishing the classification system. Our position is simply that the end result of such system should not place a large number of areas into lower classifications than under the one-hour standard. Due to U.S. EPA’s’ familiarity with projections of eight-hour ozone levels around the country, that agency is in a better position than a local district to develop a specific system to accomplish this goal. 1 See “Additional Options Considered for “Proposed Rule to Implement the 8-Hour Ozone National Ambient Air Quality Standard,” Proposed Rule Docket, at 4. EPA stated —
This rationale focuses almost entirely on the
Act’s maximum attainment deadlines, and gives virtually no
consideration to Congress’ manifest intent that the most polluted
areas be subject to the most stringent control requirements
specified in the Act, so that progress will occur as expeditiously
as practicable. The almost sole focus on maximum attainment
deadlines also fails to consider EPA’ statutory obligation to ensure
that attainment occurs as expeditiously as practicable, regardless
of the maximum attainment deadlines.
|
| (b) | If U.S. EPA decides to adopt the classification system in the Proposed Rule (which results in most one-hour areas being placed in lower classifications for the eight-hour standard), nondiscretionary control requirements specified in the Clean Air Act for one-hour nonattainment areas should continue in effect until such areas attain the eight-hour standard. This subject is further discussed below under Issue 4, below, "Emission Control and Interim Progress Requirements That Would Continue After Revocation of One-Hour Standard." |
| (c) | If U.S. EPA decides to adopt the classification system in the Proposed Rule (which results in most one-hour areas being placed in lower classifications for the eight-hour standard), the implementation rule should provide that "technology forcing" authority applicable to Extreme one-hour areas shall continue in effect in such areas until they attain the eight-hour standard. Thus, all of the provisions of section 182(e)(which specifies control requirements for Extreme areas, and which includes paragraph 182(e)(5) that explicitly allows technology-forcing measures) should remain applicable to such areas. Congress clearly intended that Extreme areas be subject to the most stringent control requirements, but that they also have available the additional tools allowed by section 182(e)(5). |
2. Attainment Deadlines. Deadlines for attainment of the eight-hour standard would be based on the amount of time specified in the Clean Air Act; i.e., three years for Marginal areas, six years for Moderate areas, nine years for Serious areas, 15 years for Severe-15 areas, 17 years for Severe-17 areas, and 20 years for Extreme areas. Such periods would run from 2004, the year that the eight-hour standard nonattainment designations will occur. Thus, if South Coast is classified as "Severe 17," it would have an attainment deadline 17 years after designation, or 2021.2
U.S. EPA proposes to require areas with relatively high ozone concentrations such as South Coast to, within three years after nonattainment designation (i.e. by 2007), submit a SIP revision that demonstrates how attainment will be achieved. 68 Fed.Reg. 32857.
2 By
comparison, under EPA’s 1997 rule, implementation of the eight-hour
standard would have been under Subpart 1, which provides that a SIP
must demonstrate attainment no later than five years after
designation, or ten years after designation if the severity of the
area’s air pollution and the availability and feasibility of
pollution control measures indicate such time is needed. §
172(a)(2)(A).
Potential Impacts
| (a) | The amount of time that will be required to attain the eight-hour standard in South Coast cannot yet be accurately predicted. If a five percent per year rate of reduction in NOx and VOC emissions is assumed, the eight-hour ozone standard would be attained prior to 2021. Current planning indicates that it should be possible to achieve a five percent per year rate during the next decade. Achieving such a rate in later years will be more difficult and uncertain—but likely would not be needed in every year to attain by 2021. Given these facts, and the technological advances that could occur between now and 2021, staff cannot conclude that an attainment deadline later than 2021 will be necessary. A deadline earlier than 2021 may be achievable, and would assist in maintaining pressure on involved governments to reduce emissions under their control. Given the technical uncertainties, however, staff cannot reasonably conclude that attainment at an earlier date is feasible.
Of course, the SCAQMD’s ability to attain the eight-hour standard by 2021 will be impeded if interim progress requirements are not sufficiently stringent to motivate continued and early development and commercialization of the improved emission control technologies that will be necessary for this area to attain. Many such technologies will require long lead times to develop, and could require significant time for introduction, e.g. the time needed for fleet turnover. As is described below, we do not believe that U.S. EPA’s proposed interim progress requirements are adequate. |
| (b) | The three-year time period to prepare an attainment demonstration should be adequate if U.S. EPA accepts the district’s position described above allowing use measures that anticipate development of new technologies. If U.S. EPA does not allow SIP credit for such measures, it may not be possible to identify sufficient approvable controls strategies within three years to make a complete attainment demonstration. |
Proposed District Comments
| (a) | Based on available data, staff cannot determine whether a year 2021 attainment deadline for South Coast appears is the best approach. In any event, staff believes pressure to achieve interim progress should be maintained as described below in Issue 4, "Emission Control and Interim Progress Requirements That Would Continue After Revocation of One-Hour Standard." |
| (b) | U.S. EPA’s eight-hour implementation rule must provide that U.S. EPA will rigorously enforce the Clean Air Act requirement that attainment occur "as expeditiously as practicable" in nonattainment areas throughout the country. Rigorous enforcement of this provision will be legally necessary because eight-hour standard attainment deadlines based
solely on the time periods stated in the Clean Air Act for attainment of the one-hour standard would be arbitrary. The Act’s attainment periods run from the date of enactment of the 1990 Amendments; they thus are not relevant to the time necessary to attain from the current point in time. In addition, the Act’s attainment periods could not be based on the time necessary to attain an eight-hour standard that was not even in existence when Congress established those periods. U.S. EPA cannot lawfully establish a requirement that is arbitrary or not in accordance with the Act, § 307(d)(9). U.S. EPA thus must ensure that every area has an attainment deadline that is "as expeditious as practicable" for that area. In fulfilling this obligation, U.S. EPA must, at a minimum, follow guidance that it issued in 1999 relating to expeditious attainment and "reasonably available control measures" ("RACM").3 The guidance states—
3
The Act states: This guidance states what clearly are minimum requirements to ensure attainment as expeditiously as practicable. We thus believe that every nonattainment area must be required to consider adoption of measures that have been implemented in other areas, including the SCAQMD, so as to achieve progress and attainment as expeditiously as practicable. An area should be allowed to reject such measures only upon a showing that they are not practicable due to specified unique circumstances. Given the importance of this issue to fair, expeditious and lawful implementation of the eight-hour standard, U.S. EPA’s final eight-hour standard implementation rule must explicitly require compliance with this guidance. |
| (c) | We support the three-year period to submit an attainment demonstration, as long as U.S. EPA agrees that areas that were classified as Extreme for the one-hour standard may continue to utilize measures that anticipate development of new technologies. |
3. Revocation of One-Hour Standard. U.S. EPA proposes to revoke the one-hour standard at a relatively early date in order to avoid the need for areas to perform "conformity" analyses for both the one-hour and eight-hour standards at the same time. Specifically, U.S. EPA proposes that the one-hour standard will be either totally or partially revoked in 2005, i.e. one year after area designations for the eight-hour standard. 68 Fed.Reg. 32819. U.S. EPA requests comment on whether the one-hour standard should be partially or fully revoked on that date, but states that, in either case, it would adopt regulations specifying that the same result would be achieved. We understand this to mean that the same emission control, progress, planning and other requirements would apply.
Potential Impacts
| (a) | Revocation of the one-hour standard in the year 2005 would eliminate the 2010 attainment deadline in South Coast and result in no ozone attainment deadline in this area until the year 2021. Other areas will also have longer times prior to an ozone attainment deadline. |
| (b) | Revocation of the year 2010 deadline will eliminate the potential for Clean Air Act consequences for failure to timely attain. In Severe and Extreme areas, the consequences for failure to timely attain include a $5,000 per ton emissions fee applicable to VOC sources. § 185. The fee must apply to emissions in excess of 80% of actual emissions in the attainment deadline year. In addition, failure to timely attain triggers requirements to implement contingency measures and an economic incentive program (e.g. a system of marketable permits or fees for polluting products or sources), as well as a requirement to submit a SIP revision to correct the failure to attain. §§ 172(c)(9), 182(c)(9), 182(g). Severe areas that fail to timely attain can be subject to additional requirements, including some control requirements applicable to Extreme areas. 181(b)(4). In areas classified as Serious or lower, failure to timely attain also results in "bump up" to the next higher classification, an action that triggers more stringent control requirements. § 181(b)(2). Finally, if an approvable SIP revision that will achieve attainment is not submitted after failure to timely attain, sanctions, including increased offset ratios and federal funding cutoffs, and imposition of a federal implementation plan ("FIP"), are required if the failure is not corrected within specified time periods. §§ 179(d), 110(c). |
| (c) | The elimination of the above-described potential consequences for failure to attain by 2010 would reduce pressure for source operators, developers of new control technologies, and governments at all levels to make expeditious progress in achieving emissions reductions.4
The lack of near-term consequences for failure to attain could also make it more difficult for the district to obtain cooperation from the federal government to regulate sources within its jurisdiction. With an enforceable, near-term deadline to achieve a specific carrying capacity, the district can persuasively argue that it has achieved all feasible emission reductions from sources within its jurisdiction, and that remaining reductions must come from relatively-unregulated sources subject to control by the federal government. If attainment deadlines are extended to 2021, the federal government could more easily take the position that it need not commit to do more because the district and state have time to attempt to obtain needed reductions from sources within their control.
4
California’s ambient air quality standards are an
indication of how the lack of an impending, enforceable
attainment deadline can result in limited effectiveness.
The state’s standards are more restrictive than their
federal counterparts, but they have lacked the impact on
regulatory programs that the federal standards have had
because the state standards carry no specific attainment
deadlines. Under state law, California’s ambient air
quality standards merely must be attained “by the
earliest practicable date.” Cal. Health & Saf. Code §
40913(a). |
| (d) | Other adverse impacts caused by revoking the one-hour standard could include reduced incentives to develop and commercialize new control technologies, due to extended attainment deadlines around the country. This impact may be offset to a degree by the greater number of areas expected to be nonattainment for the eight-hour standard. The latter factor will likely have only minimal impact, however, because areas that are newly nonattainment for ozone due to the eight-hour standard are not expected to require advanced controls to attain. |
| (e) | The later attainment deadlines will mean that other nonattainment areas will not be subject to ramifications under the Clean Air Act for failure to timely attain the one-hour ozone standard. Because such ramifications include being "bumped up" to a higher classification, competitive disadvantages for businesses in South Coast could be greater than would otherwise occur, and potential economies of scale relating to introduction of new control technologies could be further limited. |
| (f) | The later attainment deadline could allow the SCAQMD increased discretion to modify or relax control requirements that are not specifically mandated by the Clean Air Act. This could lead to increased pressure by emission sources to relax rules. This impact would be exacerbated if the backsliding and rate of progress requirements (discussed below) are inadequate. |
Proposed District Comments
| (a) | Staff believes that the potential benefit of revoking the one-hour standard prior to attainment is outweighed by the negative impacts of such revocation. The benefits of revocation would be (1) elimination of potential consequences for failure to attain, and (2) elimination of an obligation to conduct concurrent conformity analyses for both the one and eight-hour standards. With regard to elimination of potential consequences for failure to attain, it is staff’s assessment that attainment of the one-hour standard by the 2010 deadline, while extraordinarily challenging, is possible. The difficulty of meeting this deadline has been unexpectedly exacerbated by new mobile source emissions estimates, but it was always expected that as the attainment deadline approached, achieving emission reductions would become more difficult and costly. In our view, this is precisely the time that incentives to develop and achieve means to reduce emissions are most needed. Elimination of a key enforceable deadline at this juncture would undermine these incentives. It would also send contradictory signals to those who are investing in research and development to achieve technological advances that the district has advocated for years. We do not believe that these adverse effects could be adequately mitigated by adoption of stringent interim progress requirements. Such interim requirements would not overcome the predominant message that government has issued yet another in a long series of attainment deadline extensions that commenced in the mid-1970’s. A belief that the ozone attainment deadline will never be enforced would be understandable. In weighing these impacts against the impact of consequences for failure to attain, it is worth noting that the most immediate consequence—the $5,000 per ton fee—does not apply to NOx and, for VOC, only applies to emissions in excess of 80% of those during the attainment deadline year. This consequence is thus an economic incentive to reduce emissions. It can be entirely avoided if a source achieves a 20% emission reduction, or can at least be reduced through lesser emission reductions. The other consequences—contingency measures and economic incentive programs, can be fashioned by the District in its SIP to attempt to minimize adverse impacts. The final ramifications, sanctions and a FIP—are not required until 18 or 24 months after U.S. EPA makes a finding that the state has failed to submit a SIP revision adequate to remedy the lack of attainment. This provides the district an opportunity to avoid such consequences entirely.5 U.S. EPA’s primary, if not sole, reason for proposing to revoke the one-hour standard prior to its attainment is a desire to avoid the need to conduct conformity analyses for two standards. We do not consider this to be an adequate reason to take such a significant action. First, we note that in making its 1997 proposal, U.S. EPA itself apparently did not view the conformity issues to be sufficient to alter its proposal to retain the one-hour standard in an area until it attained that standard. Second, making findings with regard to two standards would be an added administrative burden, but should impose no substantive hurdle to conformity findings that would be greater than would have occurred under the one-hour standard. The primary burden would be to establish emissions budgets for both the one and eight-hour standards. Budgets for the one-hour standard will, however be created by the District as part of the current plan amendment process regardless of what happens in U.S. EPA’s eight-hour standard rulemaking. Third, under U.S. EPA’s proposal, revoking the one-hour standard in 2005 will leave a two-year period until attainment demonstrations are due in 2007 when there will not yet be any emissions budgets for the eight-hour standard. Such lack of budgets may result in a need to make conformity determinations through a relatively lenient "build/no-build" analysis, thereby effectively relaxing current conformity requirements. We believe that such a relaxation would be contrary to Congress’ intent in establishing Clean Air Act time periods by which conformity determinations must be made. §176. On balance, staff believes that the benefits of revoking the one-hour standard prior to its attainment are outweighed by the negative impacts of such revocation. We therefore propose that U.S. EPA not revoke one-hour standard until attainment of that standard is achieved.
5 Under the Act, EPA must first make a
finding that the area has failed to timely attain
the standard. EPA is required to make this
determination within six months following the
attainment deadline. CAA §§ 179(c)(1), 181(b)(4).
Upon making this determination, EPA must publish a
notice of such in the federal register. §
179(c)(2). Within one year after publication of
the notice, the state must submit a SIP revision
that meets the requirements of the Act and
includes such additional measures as EPA may
reasonably prescribe, including “all measures that
can be feasibly implemented.” § 179(d)(2). Offset
ratio and federal funding sanctions must be
imposed commencing 18 months after a failure to
submit an approvable plan revision (and, at EPA’s
discretion, can be imposed earlier). A FIP must be
adopted by EPA two years after such failure. §
110(c). |
| (b) |
U.S. EPA has failed to fulfill its obligation to adequately explain the legal basis for revoking the one-hour standard prior to attainment, and such revocation appears to be unsupportable under the Clean Air Act. While revoking the one-hour standard might theoretically be supportable if the revised standard was less stringent that the existing one, this is not the case here. The eight hour standard is considered by U.S. EPA to be more health-protective than the one-hour standard, more areas will be nonattainment for the eight-hour standard, and more stringent emission controls will generally be required to attain the eight-hour standard. Under these circumstances, there is no basis for U.S. EPA to take an administrative action that effectively nullifies the applicability of numerous fundamental requirements established by Congress for the one-hour standard. These requirements are stated in sections 181 and 182 of the Clean Air Act and include area classifications, attainment deadlines and control requirements. The fact that in some limited circumstances, a different mix of controls might be desired for attaining the eight-hour standard does not support revocation of the one-hour standard. In particular, U.S. EPA has not shown that requiring continued compliance with the Act’s provisions governing the one-hour standard would prevent attainment of the eight-hour standard. There is thus no legal basis to find a conflict between the standards that would justify interpreting that Act as allowing revocation of the one-hour standard prior to attainment. |
| (c) | If U.S. EPA decides to partially or fully revoke the one-hour standard in 2005, we prefer the partial revocation option. It is our understanding that resolution of this issue will not have any direct effects because U.S. EPA intends to by regulation require the same emission control requirements regardless of which option is chosen. We believe, however, that persons considering investing resources to develop new emission control technologies will not perceive as serious a rollback of attainment efforts if the standard is only partially revoked. |
4. Emission Control and Interim Progress Requirements That Would Continue After Revocation of One-Hour Standard. In order to minimize the potential for relaxation of air programs, U.S. EPA proposes to adopt a rule requiring that each eight-hour nonattainment area remain subject to certain obligations that applied by virtue of the area’s classification under the one-hour standard, where the area’s one-hour classification was higher than the area’s classification for the eight-hour standard. These obligations include "major source" thresholds, vehicle inspection and maintenance programs and fuel programs. 68 Fed.Reg. 32808. The continuing requirements would not have sunset dates, but U.S. EPA proposes two options for when the state may relegate these measures to contingency status: Option one—when the area attains the one-hour ozone standard (even if the area has not yet attained the eight-hour standard); Option 2—when the area attains the eight-hour standard (regardless of when, if ever, the area attains the one-hour standard). 68 Fed.Reg. 32809.
Also continued would be the Act’s "rate of progress" requirements. These generally mandate VOC emission reductions in the area averaging three percent per year. U.S. EPA would, however, establish a new baseline year of 2002. 68 Fed.Reg. 32833. It is our understanding that U.S. EPA proposes to require 3% progress from a year 2002 baseline until the eight-hour standard attainment deadline (2021 in South Coast), but would also retain the more stringent ROP requirement applicable under the one-hour standard (3% per year from a 1990 baseline), presumably until the one-hour standard attainment deadline (2010 in South Coast).
Finally, the proposed rule addresses modification of what U.S. EPA calls "discretionary" control measures—measures the state selected and adopted into the SIP for purposes of attainment, but which are not specifically mandated by the Clean Air Act. For purposes of the one-hour standard, states generally may rescind or modify such measures so long as they make a demonstration that such rescission or modification would not interfere with attainment of, or progress toward, the one-hour ozone standard (or any other requirement of the Act). Clean Air Act § 110(l). U.S. EPA proposes that for purposes of the eight-hour standard the same obligation would apply, except the State would need to make the demonstration with respect to the eight-hour standard instead of the one-hour standard. 68 Fed.Reg. 32821. We understand this to mean that states seeking to relax discretionary measures would no longer have to make a demonstration of interference with timely attainment of the one-hour standard.
Potential Impacts
| (a) | Rate of Progress. The proposed rate of progress requirements would lead to levels of emissions in 2010 and 2021 in South Coast that are significantly higher than the levels that would be necessary to attain the one-hour standard in 2010, or the eight-hour standard in 2021. Since these ROP requirements are not sufficient to achieve attainment of the one-hour standard in 2010, revoking the one-hour attainment deadline would allow higher emissions in 2010 and the following years. In South Coast, the difference in 2010 is over 280 tons of VOC per day. We believe that the situation is similar in other nonattainment areas, i.e. the rate of progress requirements generally are not sufficient to ensure timely attainment, and revoking the one-hour attainment deadline could thus allow higher emissions. |
| (b) | SIP Modifications and Backsliding. Allowing discretionary controls in the SIP to be modified based on a showing of non-interference with the eight-hour (rather than the one-hour) standard, could allow greater discretion to modify or relax control requirements. This is because the applicable attainment date will be many years later, and the new rate of progress requirements are not as stringent as needed for timely attainment in South Coast. Increased discretion to relax rules could delay air quality improvements and allow other potential impacts described above, i.e. competitive disadvantage for sources in South Coast, limited incentives to develop new technologies, and increased pressure to modify rules. |
| (c) | Contingency Status. The above-described adverse impacts would be exacerbated if other areas transform existing measures to contingency status upon attaining the one-hour standard. Such impacts could be particularly significant if important provisions such as new source review thresholds are allowed to be relaxed through conversion to contingency status.6 6 For example, Severe nonattainment areas are currently required to impose new source review requirements, i.e. Lowest Achievable Emission Rate (“LAER” or “BACT”) and emissions offset requirements, on new sources that emit 25 tons per year or more of NOx or VOC. Areas in the next lower classification—Serious—only have to impose such requirements on sources that emit more than 50 tons per year. §§ 182(c),(d). While areas in California may maintain more stringent requirements in order to support attainment, or due to requirements California statutes, many large metropolitan regions around the country are not subject to California law and may feel free to relax applicable requirements upon attaining the one-hour standard. The federal Severe classification includes the cities of Houston, Chicago, New York, Washington DC and Philadelphia. |
Proposed District Comments
| (a) | Rate of Progress, SIP Modifications and Backsliding. Since the proposed rate of progress requirements, in conjunction with elimination of the one-hour standard attainment deadline, would allow higher emissions in the one-hour attainment year, we believe that if the one-hour standard is revoked prior to attainment, additional protection against backsliding from progress that would have occurred under the one-hour SIP is required. We therefore propose that rate of progress milestones be established based generally on reductions that would have occurred under the approved one-hour SIP. Our rationale for this proposal is that progress toward, and attainment of, the one-hour standard can generally be considered interim steps toward attainment of the eight-hour standard. The types of measures needed to attain the one-hour standard will generally also achieve progress towards the eight-hour standard—although the mix of measures needed may differ in some circumstances.7 In addition, the eight-hour standard is expected to generally be more stringent and health-protective than the one-hour standard. It therefore is reasonable to consider attainment of the one-hour standard as an appropriate and health-protective "reasonable further progress" step toward attainment of the eight-hour standard, unless otherwise determined in specific situations. Thus, we propose that measures adopted to attain the one-hour standard should not be relaxed or modified if such modification would interfere with progress or attainment requirements set forth in the Clean Air Act for the one-hour standard, unless (1) continued implementation of such measures would clearly interfere with progress toward, or timely attainment of, the eight-hour standard (e.g. if the measure would create such a NOx/VOC ratio that eight-hour ozone levels would be higher than without the measure and there is no alternative mix of controls that could be adopted in time to avoid that impact), or (2) the state makes a clear and convincing demonstration that it is no longer feasible to implement such measures. Under this proposal, if the one-hour standard is revoked prior to attainment, the attainment deadlines stated in the Clean Air Act for the one-hour standard would not be directly enforceable, but they would be used in making a determination under section 110(l) regarding whether or not a proposed SIP modification will interfere with reasonable further progress. In our view, the term "reasonable further progress" should be interpreted in the present situation to include the progress toward attainment that would have occurred under the approved one-hour SIP, had the one-hour standard remained in effect. In essence, a combined reasonable further progress line should be developed based on the most stringent level of emissions reductions needed for progress toward, and attainment of, the one-hour and eight-hour standards. Any other interpretation would be unlawful because it would allow adoption of the new (supposedly more health-protective) ozone standard to actually delay progress and health benefits—a result that certainly would be contrary to Congress’ intent in establishing emission control, reasonable further progress and attainment requirements for the one-hour standard, and in establishing reasonable further progress requirements that apply to new NAAQS such as the eight-hour ozone standard. A final component of our proposal is that the above-described reasonable further progress requirements based on one and eight-hour attainment plans must be enforceable. We believe that the triennial milestones required by section 182(g) of the Act are an appropriate means to accomplish this. The Act requires monitoring of compliance with those milestones and, under section 182(c)(9), the SIP for a Serious and above area must include contingency measures to be implemented automatically upon failure to achieve a milestone. In addition, a requirement for an economic incentive program such as a fee system can also be triggered by failure to meet a milestone. § 182(g)(3),(4),(5).8 Finally, we note that the requirement to base milestones on progress that would have been achieved under the one-hour standard SIP should not require significant additional planning activities related to the one-hour standard, or divert resources from planning for the eight-hour standard. With few exceptions, one-hour attainment plans have already been submitted and approved. 7 Because of the statistical nature of the 8-hour ozone standard (i.e., average of 4th highest readings in 3 years), at this time, it would be difficult to estimate the optimum level of reductions needed for attainment demonstration. Compliance with the 8-hour ozone standard is expected to continue to be achieved through a mix of additional VOC and NOx emission reductions similar to the 1-hour ozone standard. However, the interaction between the 1-hour and 8-hour ozone standards is not fully understood at this time. In addition, there could be occasions that strategies developed for meeting the 1-hour ozone standard for non-attainment regions may potentially result in increase in the 8-hour ozone concentration in downwind subregions. This may occur due to the delay in the photochemical reaction that results when the emissions mix is NOx rich and scavenges near source ozone but later reacts to form ozone when the NOx source is eliminated or reduced. It may, however, be possible to avoid such impacts by altering the timing of measure implementation, or by adopting additional measures.
8 EPA has
authority to implement this proposal. Under Section 182(g), the
reductions that are to be used to determine the triennial milestone are
specified in Section 182(b)(1), among other provisions. Section
182(b)(1) requires the SIP for moderate and above areas to include
“specific annual reductions in emissions of volatile organic compounds
and oxides of nitrogen as necessary to attain the national primary
ambient air quality standard for ozone by the attainment date applicable
under this Act.” The attainment dates specified in the Act all are
prefaced by a requirement that attainment must be achieved “as
expeditiously as practicable.” See e.g. § 181(a). Thus, the milestones
should support attainment as expeditiously as practicable. See also §
172(c)(2)(requiring nonattainment plans to provide for “reasonable
further progress,” a term that is defined in section 171(1) to mean
“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.”) and §172 (requiring plans to provide for all reasonably
available control measures as expeditiously as practicable). |
| (b) | Contingency Status. We support Option 2 described above. This will maintain greater parity of rule stringency between South Coast and other areas because such other areas could only relegate measures to contingency status when they attain the eight-hour standard. Congress could not have intended that the mandatory control requirements specified in the Clean Air Act could be removed prior to attainment simply because U.S. EPA adopts a more health-protective ozone standard. |
| (c) | Additional More Stringent ROP Provision. We propose that the three percent annual reduction from a 1990 baseline ROP requirement that applies under the one-hour standard continue until attainment of the eight-hour standard. Various provisions of the Clean Air Act make clear that Congress considered this rate of progress to be reasonable for areas in the highest nonattainment classifications. Utilizing a year 2002 baseline, as proposed by U.S. EPA, will substantially reduce the required annual tonnage reduction. South Coast believes that this area can continue to meet the current rate of progress requirement even if it is extended until the eight-hour attainment deadline, particularly if U.S. EPA allows continued substitution of NOx reductions. The fact that South Coast expects to be able to continue to achieve the current rate of progress is a strong indication that other areas that are subject to the three percent ROP requirement—areas which in all cases have less stringent rules than South Coast—could also feasibly comply. The higher rate of progress thus should be required in order to achieve reasonable further progress and attainment as expeditiously as practicable, as well as to effectuate Congress’ clear intent. |
5. Requirements That Would Not Continue After Revocation of One-Hour Standard. U.S. EPA proposes that it would no longer make findings of failure to attain the one-hour standard. Ramifications for failure to timely attain thus would not be triggered. U.S. EPA states it’s belief that "areas should focus their resources on attainment of the eight-hour standard . . . it would be counterproductive to establish new obligations for States with respect to the one-hour standard after they have begun planning for the eight-hour standard." 68 Fed.Reg. 32824.
U.S. EPA states, however, that it must ensure that areas are continuing to make progress toward cleaner air. "If U.S. EPA determines that a State is not adequately implementing an approved SIP and achieving air quality reductions in a timely manner, U.S. EPA may enter into an informal process to ensure the State takes any necessary action or, alternatively, may take more formal action such as making a finding of failure to implement the SIP or issuing a SIP Call to require action." 68 Fed.Reg. 32824.
Potential Impacts
U.S. EPA would likely have greater discretion with regard to implementing an "informal process" to address deficiencies by states and local governments than it would have if the one-hour ozone standard were retained. Inadequate U.S. EPA response could lead to the impacts described above in "Revocation of One-Hour Standard."
Proposed District Comments
See "Revocation of One-Hour Standard," above.
6. Other Issues
Flexibility re NSR and Other Provisions. U.S. EPA proposes a number of provisions applicable to areas that have relatively low pollutant levels. Some of these provisions would relax or provide new flexibility for such areas in complying with new source review and other control requirements mandated by the Clean Air Act.
Potential Impacts and Proposed District Comments
Because such provisions do not directly affect South Coast or other areas that are likely to require use of advanced technologies in order to attain, the impacts of such provisions in South Coast are probably minimal. Nevertheless, we propose to comment to U.S. EPA that it re-propose this rule and seek public comment if it decides to apply such relaxed provisions to more highly polluted areas.
NSR option to encourage development patterns that reduce overall emissions–Clean Air Development Communities. U.S. EPA is considering proposals to encourage land use practices that reduce emissions via NSR program flexibility. U.S. EPA would define a community that changes its development patterns in such a way that air emissions within the non-attainment area are demonstrably reduced as a "Clean Air Development Community" (CADC). U.S. EPA proposes that areas that qualify as CADCs would obtain certain flexibilities in implementing Clean Air Act programs. The goals of the CADC option are to give communities a tool to achieve air quality benefits that can accrue from strategic location of new sources, and to allow communities an incentive for locating new sources and obtaining their associated economic growth.
U.S. EPA is considering two options. In the first, a CADC would have a more flexible NSR program by: 1) being subject to NSR provisions of the Clean Air Act that are relatively less stringent regarding offset ratios and other matters; 2) lowering stringency of NSR major source thresholds for these areas; and 3) allowing areas that meet certain development criteria to receive NSR offsets from offset pools created by the state taking action or requiring others to take actions to create offsets.
In the second, less ambitious, option, a CADC would be able to receive offset credits equal to the reduced emissions from new development patterns. Credits could be provided to any new or modified source in a "development zone" as offsets. The main advantage compared to option one is that the offset pool could start with considerable offset credits and, therefore, the credits would not have to be created through additional actions. The second option is also simpler since it does not make changes to NSR. Finally, unlike option one, it does not need communities to try to estimate the increased emissions that could result from changing NSR applicability—which U.S. EPA concedes would be difficult.
U.S. EPA has not decided to go forward with either of these options at this time, but is examining and requests comment on them. In particular, it requests comment and suggestions on possible legal rationales for supporting these options. U.S. EPA notes that Section 173(a)(1)(B) of the Clean Air Act replaces the traditional requirement that a new or modified stationary source in a nonattainment area obtain offsets with a growth allowance concept in specially designated zones to which "economic development should be targeted." U.S. EPA recognizes, however, that the CADC proposals differ in many respects from section 173.
Potential Impacts and Proposed Comment
While the goals of these proposals may be appropriate in some circumstances, the concepts have not been developed to the point where we can effectively comment upon them. At a minimum, U.S. EPA must re-propose these concepts—in far more specific form—if it decides to pursue them.
A number of issues are apparent that must be further considered and fleshed out in a subsequent proposal. These include air quality and environmental justice impacts, quantification, enforcement, and legal authority—none of which are significantly addressed in the proposal. With regard to environmental justice, we note that the CADC proposals could encourage urban infill and brownfield redevelopment. Such actions can be beneficial to air quality by reducing mobile source emissions, but infilling with major sources of air pollution could cause local increases in emissions. To then grant relaxed new source review requirements, as the CADC provisions would do, could exacerbate this adverse impact by allowing even higher levels of locally unmitigated or insufficiently mitigated emissions. Unfortunately, U.S. EPA has not provided any analysis of the environmental justice implications of these proposals. For these reasons, no rule that includes the "Clean Air Development Communities" concept should be finalized until the public has had a chance to comment on U.S. EPA's methodology and conclusions of a thorough investigation into the potential environmental justice impacts.
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