82_FR_6521 82 FR 6509 - Response to December 9, 2013, Clean Air Act Section 176A Petition From Connecticut, Delaware, Maryland, Massachusetts, New Hampshire, New York, Pennsylvania, Rhode Island and Vermont

82 FR 6509 - Response to December 9, 2013, Clean Air Act Section 176A Petition From Connecticut, Delaware, Maryland, Massachusetts, New Hampshire, New York, Pennsylvania, Rhode Island and Vermont

ENVIRONMENTAL PROTECTION AGENCY

Federal Register Volume 82, Issue 12 (January 19, 2017)

Page Range6509-6522
FR Document2017-01097

The Environmental Protection Agency (EPA) is proposing to deny the Clean Air Act (CAA or Act) petition filed on December 9, 2013 (and amended on December 17, 2013), by the states of Connecticut, Delaware, Maryland, Massachusetts, New Hampshire, New York, Pennsylvania, Rhode Island and Vermont. The petition requested that the EPA add the states of Illinois, Indiana, Kentucky, Michigan, North Carolina, Ohio, Tennessee, West Virginia and Virginia to the Ozone Transport Region (OTR). As a result of this denial, the geographic scope or requirements of the OTR will remain unchanged.

Federal Register, Volume 82 Issue 12 (Thursday, January 19, 2017)
[Federal Register Volume 82, Number 12 (Thursday, January 19, 2017)]
[Notices]
[Pages 6509-6522]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-01097]


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ENVIRONMENTAL PROTECTION AGENCY

[EPA-OAR-2016-0596; FRL-9958-48-OAR]
RIN 2060-AT22


Response to December 9, 2013, Clean Air Act Section 176A Petition 
From Connecticut, Delaware, Maryland, Massachusetts, New Hampshire, New 
York, Pennsylvania, Rhode Island and Vermont

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of proposed action on petition.

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SUMMARY: The Environmental Protection Agency (EPA) is proposing to deny 
the Clean Air Act (CAA or Act) petition filed on December 9, 2013 (and 
amended on December 17, 2013), by the states of Connecticut, Delaware, 
Maryland, Massachusetts, New Hampshire, New York, Pennsylvania, Rhode 
Island and Vermont. The petition requested that the EPA add the states 
of

[[Page 6510]]

Illinois, Indiana, Kentucky, Michigan, North Carolina, Ohio, Tennessee, 
West Virginia and Virginia to the Ozone Transport Region (OTR). As a 
result of this denial, the geographic scope or requirements of the OTR 
will remain unchanged.

DATES: Comments. Comments must be received on or before February 21, 
2017.
    Public Hearing. If anyone contacts us requesting to speak at a 
public hearing by January 30, 2017, we will hold a public hearing. 
Additional information about the hearing would be published in a 
subsequent Federal Register notice. For updates and additional 
information on a public hearing, please check the EPA's Web site for 
this notice at https://www.epa.gov/implementation-2008-national-ambient-air-quality-standards-naaqs-ozone-state.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2016-0596, at http://www.regulations.gov. Follow the online 
instructions for submitting comments. Once submitted, comments cannot 
be edited or removed from Regulations.gov. The EPA may publish any 
comment received to its public docket. Do not submit electronically any 
information you consider to be Confidential Business Information (CBI) 
or other information whose disclosure is restricted by statute. 
Multimedia submissions (audio, video, etc.) must be accompanied by a 
written comment. The written comment is considered the official comment 
and should include discussion of all points you wish to make. The EPA 
will generally not consider comments or comment contents located 
outside of the primary submission (i.e., on the Web, Cloud, or other 
file sharing system). For additional submission methods, the full EPA 
public comment policy, information about CBI or multimedia submissions, 
and general guidance on making effective comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT: Questions concerning this proposed 
notice should be directed to Ms. Gobeail McKinley, U.S. Environmental 
Protection Agency, Office of Air Quality Planning and Standards, Air 
Quality Policy Division, Mail code C539-01, Research Triangle Park, NC 
27711, telephone (919) 541-5246; email at [email protected].
    To request a public hearing or information pertaining to a public 
hearing on this document, contact Ms. Pamela Long, U.S. Environmental 
Protection Agency, Office of Air Quality Planning and Standards, Air 
Quality Policy Division, (C504-01), Research Triangle Park, NC 27711; 
telephone number (919) 541-0641; fax number (919) 541-5509; email at: 
[email protected] (preferred method of contact).

SUPPLEMENTARY INFORMATION:

I. General Information

    Throughout this document wherever ``we,'' ``us,'' or ``our'' is 
used, we mean the U.S. EPA.
    The information in this Supplementary Information section of this 
preamble is organized as follows:

I. General Information
    A. Where can I get a copy of this document and other related 
material?
    B. What acronyms, abbreviations and units are used in this 
preamble?
II. Executive Summary of the EPA's Proposed Decision on the CAA 
Section 176A Petition
III. Background and Legal Authority
    A. Ozone and Public Health
    B. Sections 176A and 184 of the CAA and the OTR Process
    C. Legal Standard for this Action
    D. The CAA Section 176A Petition and Related Correspondence
IV. The EPA's Proposed Decision on the CAA Section 176A Petition
    A. The CAA Good Neighbor Provisions
    B. The EPA's Interstate Transport Rulemakings under the Good 
Neighbor Provision
    C. Additional Rules that Reduce NOX and VOC Emissions
    D. Rationale for the Proposed Decision on the CAA 176A Petition
V. Judicial Review and Determinations Under Section 307(b)(1) of the 
CAA
VI. Statutory Authority

I. General Information

A. Where can I get a copy of this document and other related 
information?

    In addition to being available in the docket, an electronic copy of 
this document will be posted at https://www.epa.gov/implementation-2008-national-ambient-air-quality-standards-naaqs-ozone-state.

B. What acronyms, abbreviations and units are used in this preamble?

APA Administrative Procedures Act
CAA or Act Clean Air Act
CFR Code of Federal Regulations
CH4 Methane
D.C. Circuit United States Court of Appeals for the District of 
Columbia Circuit
EGU Electric Generating Unit
EPA U.S. Environmental Protection Agency
FIP Federal Implementation Plan
FR Federal Register
NAAQS National Ambient Air Quality Standard
NEI National Emissions Inventory
NESHAP National Emission Standard for Hazardous Air Pollutants
NOX Nitrogen Oxides
NSPS New Source Performance Standard
NSR New Source Review
OMB Office of Management and Budget
OTAG Ozone Transport Assessment Group
OTC Ozone Transport Commission
OTR Ozone Transport Region
PM Particulate Matter
RACT Reasonably Available Control Technology
SIP State Implementation Plan
SO2 Sulfur Dioxide
UMRA Unfunded Mandates Reform Act
VOC Volatile Organic Compound

II. Executive Summary of the EPA's Proposed Decision on the CAA Section 
176A Petition

    The EPA is proposing to deny a petition filed pursuant to CAA 
section 176A(a) that requests the states of Illinois, Indiana, 
Kentucky, Michigan, North Carolina, Ohio, Tennessee, West Virginia and 
Virginia \1\ (the upwind states) be added to the OTR, which was 
established pursuant to section 184 of the CAA. The petitioning states 
of Connecticut, Delaware, Maryland, Massachusetts, New Hampshire, New 
York, Pennsylvania, Rhode Island and Vermont (the petitioning states, 
downwind states, or petitioners) submitted a technical analysis 
intended to demonstrate that these nine upwind states significantly 
contribute to violations of the 2008 ozone national ambient air quality 
standard (NAAQS) in one or more of the current OTR states.
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    \1\ The parts of northern Virginia included in the Washington, 
DC Consolidated Metropolitan Statistical Area are already in the 
OTR. The petition seeks to add the remainder of the state of 
Virginia to the OTR as well.
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    Section 176A(a) of the CAA provides the Administrator with the 
authority to develop interstate transport regions for particular 
pollutants where the Administrator determines that interstate transport 
of air pollutants from one or more states contributes significantly to 
violations of air quality standards in other states. The creation of 
such an interstate transport region requires the establishment of a 
transport commission with representatives from each state that make 
recommendations for the mitigation of the interstate pollution. 
Congress created one such transport region by statute in CAA section 
184(a) in 1990 in order to address the interstate transport of ozone 
pollution, referred to as the OTR. The statute establishes certain 
minimum control requirements that apply to sources of emissions in each 
state in the OTR intended to address transported ozone pollution and 
provides the Ozone Transport Commission (OTC), comprised of 
representatives of each state in the OTR, with the authority to 
recommend

[[Page 6511]]

additional controls within the region. The downwind states' petition 
seeks to expand the OTR to include additional states and would thereby 
subject sources in those states to the requirements applicable in the 
OTR.
    The CAA provides other provisions for addressing the interstate 
transport of ozone pollution besides sections 176A and 184. In 
particular, the Act includes a specific provision addressing how the 
EPA and the states are to mitigate the specific sources of emissions 
that contribute to interstate ozone pollution transport. Section 
110(a)(2)(D)(i)(I) of the CAA, also referred to as the ``good 
neighbor'' provision, requires that states develop state implementation 
plans (SIPs) to prohibit emissions that will ``contribute significantly 
to nonattainment in, or interfere with maintenance by, any other 
state'' with respect to a NAAQS. Pursuant to this provision, states 
have the primary responsibility for reducing the interstate transport 
of pollutants, including ozone. Should the states fail to fulfill this 
responsibility, the EPA is obligated to develop federal implementation 
plans (FIPs) to ensure that appropriate emissions reductions are 
achieved and that the air quality standards downwind are attained and 
maintained. The CAA also contains a provision in section 126(b) that 
permits states and political subdivisions to petition the Administrator 
for a finding that any major source or group of stationary sources 
emits in violation of the prohibition in the good neighbor provision. 
In response to such a finding, the EPA may promulgate additional limits 
on such sources, and these limits must then be included in a state's 
good neighbor SIP pursuant to CAA section 110(a)(2)(D)(ii). This 
provision provides a means for the EPA to mediate disputes between the 
states regarding the compliance of specific sources with the 
requirements of the good neighbor provision. As described in detail 
later in this document, states and the EPA have historically used their 
authority under CAA sections 110(a)(2)(D)(i)(I) and section 126 to 
develop SIPs and FIPs that target specific sources of ozone precursor 
emissions to address interstate ozone transport across the U.S., 
including with respect to air quality concerns stemming from interstate 
transport of ozone within the OTR.
    Pursuant to these and other CAA authorities, the EPA and states 
within and outside the OTR have taken significant actions independently 
and in collaboration for many years to address ozone pollution problems 
by reducing precursor emissions (i.e., nitrogen oxides (NOX) 
and volatile organic compounds (VOC)) that contribute to the formation 
of ozone. The EPA and states have promulgated a number of rules that 
have already or are expected in the future to result in reductions in 
ozone concentrations that will help areas attain the 2008 ozone NAAQS. 
Several of these rules were developed specifically to address the 
interstate transport of ozone pollution. With respect to the 2008 ozone 
NAAQS, the EPA recently promulgated FIPs to address the requirements of 
CAA section 110(a)(2)(D)(i)(I) to specifically address interstate 
transport of ozone pollution in the eastern U.S. from power plants 
during the ozone season.\2\ Other rules reduce ozone precursor 
emissions to address other ozone pollution challenges (e.g., ozone 
attainment demonstrations) and impact the interstate transport of ozone 
pollution as a co-benefit. Further, several other state and federal air 
quality regulations reduce emissions of other air pollutants, such as 
rules targeted to reduce air toxics from industrial boilers, which 
often also result in the reduction of ozone precursors (e.g., 
NOX) and thereby reduce interstate ozone transport as a co-
pollutant benefit.
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    \2\ See 81 FR 74504, October 26, 2016, Cross-State Air Pollution 
Rule Update for the 2008 Ozone NAAQS.
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    Section 176A of the CAA provides the Administrator with discretion 
to determine whether to establish a new transport region or expand an 
existing transport region. The EPA has reviewed the request of the 
petitioners in light of the control requirements that apply to sources 
located in states now included in the OTR and that would apply to 
states if they were added and the other statutory authorities provided 
for addressing the interstate transport of ozone pollution. The EPA 
proposes to deny the CAA section 176A petition to add states to the OTR 
for the purpose of addressing the interstate ozone transport problem 
with respect to the 2008 ozone NAAQS. The EPA believes that, based on 
the reasons fully described in Section IV of this document, other CAA 
provisions (e.g., CAA sections 110 or 126) provide a better alternative 
pathway for states and the EPA to develop a targeted remedy to address 
interstate ozone transport that focuses on the precursor pollutants and 
sources most effective at addressing the nature of the downwind air 
quality problems identified by the petitioning states. The states and 
the EPA have historically and effectively reduced ozone and the 
interstate transport of ozone pollution using these CAA authorities to 
implement necessary emissions reductions. For purposes of addressing 
interstate transport of ozone with respect to the 2008 ozone NAAQS, the 
EPA believes that continuing its longstanding and effective utilization 
of the existing and expected control programs under the CAA's mandatory 
good neighbor provision embodied in CAA section 110(a)(2)(D)(i)(I) is a 
more effective means of addressing regional ozone pollution transport 
with respect the 2008 ozone NAAQS for the areas within the OTR that 
must attain the NAAQS. Thus, the EPA believes that regulation pursuant 
to these other CAA authorities together with the implementation of 
existing EPA and state rules expected to further reduce precursor 
pollutant emissions that contribute to the interstate transport of 
ozone are the more effective means for addressing the interstate ozone 
transport problem with respect to the 2008 ozone NAAQS. Accordingly, 
the EPA is proposing to deny the CAA section 176A petition filed by the 
petitioning states. This proposed denial is specific to the 2008 ozone 
NAAQS, but the EPA notes that under different circumstances the OTR 
provisions have been an effective tool for air quality management, and 
could be similarly effective in the future. The EPA requests comment on 
the proposed denial of the petition based on the EPA's preferred 
approach to addressing interstate transport with respect to the 2008 
ozone NAAQS pursuant to these other CAA authorities.

III. Background and Legal Authority

A. Ozone and Public Health

    Ground-level ozone causes a variety of negative effects on human 
health, vegetation, and ecosystems. In humans, acute and chronic 
exposure to ozone is associated with premature mortality and a number 
of morbidity effects, such as asthma exacerbation. In ecosystems, ozone 
exposure causes visible foliar injury, decreases plant growth, and 
affects ecosystem community composition. Ground-level ozone is not 
emitted directly into the air, but is a secondary air pollutant created 
by chemical reactions between NOX, carbon monoxide (CO), 
methane (CH4), and non-methane VOCs in the presence of 
sunlight. Emissions from electric generating utilities (EGUs), 
industrial facilities, motor vehicles, gasoline vapors, and chemical 
solvents are some of the major anthropogenic sources of ozone 
precursors. The potential for ground-level ozone formation increases 
during periods with warmer temperatures and stagnant air masses;

[[Page 6512]]

therefore ozone levels are generally higher during the summer 
months.\3\ Ground-level ozone concentrations and temperature are highly 
correlated in the eastern U.S. with observed ozone increases of 2-3 
parts per billion (ppb) per degree Celsius reported.\4\ Increased 
temperatures may also increase emissions of volatile man-made and 
biogenic organics and can indirectly increase anthropogenic 
NOX emissions as well (e.g., through increased electricity 
generation to power air conditioning).
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    \3\ Rasmussen, D.J. et al. (2011) Ground-level ozone-temperature 
relationship in the eastern US: A monthly climatology for evaluating 
chemistry-climate models. Atmospheric Environment 47: 142-153.
    \4\ Bloomer, B.J., J.W. Stehr, C.A. Piety, R.J. Salawitch, and 
R.R. Dickerson (2009), Observed relationships of ozone air pollution 
with temperature and emissions, Geophysical Research Letters, 36, 
L09803.
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    Precursor emissions can be transported downwind directly or, after 
transformation in the atmosphere, as ozone. Studies have established 
that ozone formation, atmospheric residence, and transport occurs on a 
regional scale (i.e., hundreds of miles) over much of the eastern U.S., 
with elevated concentrations occurring in rural as well as metropolitan 
areas. As a result of ozone transport, in any given location, ozone 
pollution levels are impacted by a combination of local emissions and 
emissions from upwind sources. The transport of ozone pollution across 
state borders compounds the difficulty for downwind states in meeting 
the health-and-welfare based NAAQS. Numerous observational studies have 
demonstrated the transport of ozone and its precursors and the impact 
of upwind emissions on high concentrations of ozone pollution.
    While substantial progress has been made in reducing ozone in many 
urban areas, regional-scale ozone transport is still an important 
component of peak ozone concentrations during the summer ozone season. 
Model assessments have looked at impacts on peak ozone concentrations 
after potential emission reduction scenarios for NOX and 
VOCs for NOX-limited and VOC-limited areas. For example, one 
study \5\ concluded that NOX emission reductions strategies 
would be effective in lowering ozone mixing ratios in urban areas and 
another study showed NOX reductions would reduce peak ozone 
concentrations in non-attainment areas in the Mid-Atlantic (i.e., a 10 
percent reduction in electric generating unit (EGU) and non-EGU 
NOX emissions would result in approximately a 6 ppb 
reduction in peak ozone concentrations in Washington, DC).\6\
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    \5\ Jiang, G.; Fast, J.D. (2004) Modeling the effects of VOC and 
NOX emission sources on ozone formation in Houston during 
the TexAQS 2000 field campaign. Atmospheric Environment 38: 5071-
5085.
    \6\ Liao, K. et al. (2013) Impacts of interstate transport of 
pollutants on high ozone events over the Mid-Atlantic U.S. 
Atmospheric Environment 84, 100-112.
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    On March 12, 2008, the EPA promulgated a revision to the NAAQS, 
lowering both the primary and secondary standards to 75 ppb.\7\ On 
October 1, 2015, the EPA strengthened the ground-level ozone NAAQS, 
based on extensive scientific evidence about ozone's effects on public 
health and welfare.\8\ This document does not address any CAA 
requirements with respect to the 2015 ozone NAAQS.
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    \7\ See National Ambient Air Quality Standards for Ozone, Final 
Rule, 73 FR 16436 (March 27, 2008).
    \8\ See National Ambient Air Quality Standards for Ozone, Final 
Rule, 80 FR 65292 (October 26, 2015).
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B. Sections 176A and 184 of the CAA and the OTR Process

    Subpart 1 of part D of title I of the CAA provides provisions 
governing general plan requirements for designated nonattainment areas. 
This subpart includes provisions providing for the development of 
transport regions to address the interstate transport of pollutants 
that contribute to NAAQS violations. In particular, section 176A(a) of 
the CAA provides that, on the EPA's own motion or by a petition from 
the Governor of any state, whenever the EPA has reason to believe that 
the interstate transport of air pollutants from one or more states 
contributes significantly to a violation of the NAAQS in one or more 
other states, the EPA may establish, by rule, a transport region for 
such pollutant that includes such states. The provision further 
provides that the EPA may add any state or portion of a state to any 
transport region whenever the Administrator has reason to believe that 
the interstate transport of air pollutants from such state 
significantly contributes to a violation of the standard in the 
transport region.
    Section 176A(b) of the CAA provides that when the EPA establishes a 
transport region, the Administrator shall establish an associated 
transport commission, comprised of (at a minimum) the following: 
Governor or designee of each state, the EPA Administrator or designee, 
the Regional EPA Administrator and an air pollution control official 
appointed by the Governor of each state. The purpose of the transport 
commission is to assess the degree of interstate transport throughout 
the transport region and assess control strategies to mitigate the 
interstate transport.
    Subpart 2 of part D of title I of the CAA provides provisions 
governing additional plan requirements for designated ozone 
nonattainment areas. Consistent with CAA section 176A found in subpart 
1, subpart 2 included specific provisions focused on the interstate 
transport of ozone. In particular, CAA section 184(a) established a 
single transport region for ozone--the OTR--comprised of the states of 
Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, 
New Jersey, New York, Pennsylvania, Rhode Island, Vermont and the 
Consolidated Metropolitan Statistical Area that includes the District 
of Columbia and certain parts of northern Virginia.
    Section 184(b) of the CAA established certain control requirements 
that each state in the OTR is required to implement within the state 
and which require certain controls on sources of NOX and 
VOCs statewide. These include the following. Section 184(b)(1)(A) of 
the CAA requires OTR states to include in their SIPs enhanced vehicle 
inspection and maintenance (I/M) programs.\9\ Section 184(b)(2) of the 
CAA requires SIPs to subject major sources of VOCs in ozone transport 
regions to the same requirements that apply to major sources in 
designated ozone nonattainment areas classified as moderate, regardless 
of whether the source is located in a nonattainment area. Thus, the 
state must adopt rules to apply the nonattainment new source review 
(NNSR) (pursuant to CAA section 173) and reasonably available control 
technology (RACT) (pursuant to CAA section 182(b)(2)) provisions for 
major VOC sources statewide. Section 184(b)(2) of the CAA further 
provides that, for purposes of implementing these requirements, a major 
stationary source shall be defined as any source that emits or has the 
potential to emit at least 50 tons per year of VOCs. Under CAA section 
184(b)(2) states must also implement Stage II vapor recovery programs, 
incremental to Onboard Refueling Vapor Recovery achievements, or 
measures that achieve comparable emissions reductions for both 
attainment and nonattainment areas.\10\ These programs are required to 
be implemented statewide in any state

[[Page 6513]]

included within the OTR, not just in areas designated as nonattainment.
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    \9\ Enhanced vehicle inspection and maintenance programs are 
required in metropolitan statistical areas in the OTR with a 1990 
Census population of 100,000 or more regardless of ozone attainment 
status.
    \10\ See 72 FR 28772, May 16, 2012, Air Quality: Widespread Use 
for Onboard Refueling Vapor Recovery and Stage II Waiver.
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    Section 182(f) of the CAA requires states to apply the same 
requirements to major stationary sources of NOX as are 
applied to major stationary sources of VOCs under subpart 2. Thus, the 
same NNSR and RACT requirements that apply to major stationary sources 
of VOC in the OTR also apply to major stationary sources of 
NOX.\11\ While NOX emissions are necessary for 
the formation of ozone in the lower atmosphere, a local decrease in 
NOX emissions can, in some cases, increase local ozone 
concentrations, creating potential ``NOX disbenefits.'' 
Accordingly, CAA section 182(f) provides for an exemption of the 
NOX requirements where the Administrator determines that 
such NOX reductions would not contribute to the attainment 
of the NAAQS in a particular area. Areas granted a NOX 
exemption under CAA section 182(f) may be exempt from certain 
requirements of the EPA's motor vehicle I/M regulations and from 
certain federal requirements of general and transportation 
conformity.\12\
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    \11\ See 57 FR 55622 (Nitrogen Oxides Supplement to the General 
Preamble, published November 25, 1992).
    \12\ As stated in the EPA's I/M (November 5, 1992; 57 FR 52950) 
and conformity rules (60 FR 57179 for transportation rules and 58 FR 
63214 for general rules), certain NOX requirements in 
those rules do not apply where the EPA grants an area-wide exemption 
under CAA section 182(f).
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    Additionally, under CAA section 184(c), the OTC may, based on a 
majority vote of the Governors on the Commission, recommend additional 
control measures not specified in the statute to be applied within all 
or part of the OTR if necessary to bring any areas in the OTR into 
attainment by the applicable attainment dates. If EPA approves such a 
recommendation, under CAA section 184(c)(5) the Administrator must 
declare each state's implementation plan inadequate and it must order 
the states to include the approved control measures in their revised 
plans pursuant to CAA section 110(k)(5) for the state to meet the 
requirements of CAA section 110(a)(2)(D). If a CAA section 110(k)(5) 
finding is issued, states have 1 year to revise their SIPs to include 
the approved measures.
    States included in the OTR by virtue of CAA section 184(b)(1) were 
required to submit SIPs to the EPA addressing these requirements within 
2 years of the 1990 CAA Amendments, or by November 15, 1992. Section 
184(b)(1) of the CAA further provides that if states are later added to 
the OTR pursuant to CAA section 176A(a)(1), such states must submit 
SIPs addressing these requirements within 9 months after inclusion in 
the OTR.

C. Legal Standard for This Action

    Section 176A(a)(1) of the CAA states that the Administrator may add 
a state to a transport region if the Administrator has reason to 
believe that emissions from the state significantly contribute to a 
violation of the NAAQS within the transport region. For the reasons 
discussed in this section, the use of the discretionary term ``may'' in 
CAA section 176A(a) means that the Administrator may exercise 
reasonable discretion in implementing the requirements of the CAA with 
respect to interstate pollution by determining whether or not to 
approve or deny a CAA section 176A petition.
    The Administrator's discretion pursuant to CAA section 176A(a) has 
been affirmed by the U.S. District Court for the District of Columbia 
Circuit (D.C. Circuit). In Michigan v. EPA, plaintiffs challenged 
whether the EPA may exercise its authority pursuant to CAA sections 
110(k)(5) and 110(a)(2)(D) of the statute to address interstate 
transport without first forming a transport commission pursuant to CAA 
section 176A(b). 213 F.3d 663, 672 (2000). The D.C. Circuit held that 
the agency shall only establish a transport commission ``if the agency 
exercises its discretion to create a transport region pursuant to 
section 176A(a).'' Id. The court explained that ``EPA can address 
interstate transport apart from convening a 176A/184 transport 
commission as subsection (a) provides that EPA `may' establish a 
transport region . . . .'' Id. Thus, the court held that the statute 
clearly provides that the discretion to create a transport region rests 
with the Administrator. So, too, does the discretion to add states to 
or remove states from a transport commission.
    Several courts have held that the use of similarly non-mandatory 
language such as that found in CAA section 176A confers discretion on 
the agency to grant or deny a petition so long as it is supported by a 
``reasonable explanation.'' For example, in Massachusetts v. 
Environmental Protection Agency, the Supreme Court was considering 
whether the EPA's denial of a petition to regulate greenhouse gases 
under CAA section 202(a)(1) was reasonable. 549 U.S. 497 (2007). 
Section 202(a)(1) of the CAA states that the Administrator ``shall by 
regulation prescribe (and from time to time revise) . . . standards 
applicable to the emission of any air pollutant from any class or 
classes of new motor vehicles or new motor vehicle engines, which in 
his judgment cause, or contribute to, air pollution which may 
reasonably be anticipated to endanger public health or welfare.'' The 
EPA denied the petition, reasoning that the Act does not authorize the 
agency to issue mandatory regulations to address global climate change. 
Id. at 500. The Court concluded that the EPA has statutory authority to 
regulate emissions of greenhouse gases, and that the phrases ``from 
time to time'' and ``in his judgment'' conferred discretion on the 
Administrator to determine whether to promulgate an endangerment 
finding. Thus, ``[u]nder the clear terms of the Clean Air Act, EPA can 
avoid taking further action . . . if it provides some reasonable 
explanation as to why it cannot or will not exercise its discretion.'' 
Id. at 533. The Supreme Court confirmed that the review of an agency's 
denial of a petition for rulemaking is very narrow: ``Refusals to 
promulgate rules are . . . susceptible to judicial review, though such 
review is extremely limited and highly deferential.'' Id. at 527-28 
(quotations omitted). Further, the court explained that the EPA's 
reason should conform to the authorizing statute, and that the agency 
could avoid taking further regulatory action if it provides some 
reasonable explanation as to why it cannot or will not exercise its 
discretion. Id. at 533 (citations omitted).
    Consistent with Massachusetts, the D.C. Circuit has held that 
agencies have the discretion to determine how to best allocate 
resources in order to prioritize regulatory actions in a way that best 
achieve the objectives of the authorizing statute. In Defenders of 
Wildlife v. Gutierrez, the court rejected a challenge to the National 
Marine Fisheries Service's (NMFS) denial of a petition for emergency 
rulemaking to impose speed restrictions to protect the right whale from 
boating traffic pursuant to section 553(e) of the Endangered Species 
Act, which requires agencies to ``give an interested person the right 
to petition for the issuance, amendment, or repeal of a rule.'' 532 
F.3d 913 (D.C. Cir. 2008). The NMFS denied the petition on the grounds 
that imposing such restrictions would divert resources from, and delay 
development of, a more comprehensive strategy for protecting the whale 
population. Id. at 916. The court determined that NMFS's explanation 
for the denial was a reasonable decision to focus its resources on a 
comprehensive strategy, which in light of the information before the 
NMFS at the time, was reasoned and adequately supported by the record. 
Id.

[[Page 6514]]

    Similarly, in WildEarth Guardians v. EPA, the court reviewed the 
EPA's denial of a petition to list coal mines for regulation under CAA 
section 111(b)(1)(A). 751 F.3d 651 (D.C. Cir. 2014). Section 
110(b)(1)(A) of the CAA provides that, as a means of developing 
standards of performance for new stationary sources, the EPA shall, by 
a date certain publish ``(and from time to time thereafter shall 
revise) a list of categories of stationary sources.'' (emphasis added) 
The provision provides that the Administrator ``shall include a 
category of sources in such list if in his judgment it causes, or 
contributes significantly to, air pollution which may reasonably be 
anticipated to endanger public health and welfare.'' The EPA denied the 
petition, explaining that it must prioritize its actions in light of 
limited resources and ongoing budget uncertainties, and that denial of 
the petition was not a determination as to whether coal mines should be 
regulated as a source of air pollutants. 751 F.3d at 650. The EPA also 
noted as part of its denial that it might in the future initiate a 
rulemaking to do so. The D.C. Circuit held that the language in CAA 
section 111(b)(1)(A)--``from time to time'' and ``in his judgment''--
means that the Administrator may exercise reasonable discretion in 
determining when to add new sources to the list of regulated 
pollutants, and that such language afforded agency officials discretion 
to prioritize sources that are the most significant threats to public 
health to ensure effective administration of the agency's regulatory 
agenda. Id. at 651.
    In each of these cases previously discussed, the acting agency has 
been entitled to broad discretion to act on a pending petition so long 
as the agency provided a reasoned explanation. Notably, as each of 
these decisions focused on the case-specific circumstances relied upon 
by the acting agency to deny the pending petition, the courts did not 
speak to whether the agency might reach a different conclusion under 
different circumstances. Like the statutory provisions evaluated by the 
courts in these cases, the term ``may'' in CAA section 176A(a) means 
that the Administrator is permitted to exercise reasonable discretion 
in determining when to add new states to a transport region. While the 
Administrator must adequately explain the facts and policy concerns she 
relied on in acting on the petition and conform such reasons with the 
authorizing statute, review of such a decision is highly deferential. 
Thus, the agency is entitled to broad discretion when determining 
whether to grant or deny such a petition.

D. The CAA Section 176A Petition and Related Correspondence

    On December 9, 2013, the states of Connecticut, Delaware, Maryland, 
Massachusetts, New Hampshire, New York, Rhode Island and Vermont 
submitted a petition under CAA section 176A requesting that the EPA add 
to the OTR the states of Illinois, Indiana, Kentucky, Michigan, North 
Carolina, Ohio, Tennessee, West Virginia and the portion of Virginia 
currently not within the OTR. On December 17, 2013, the petition was 
amended to add the state of Pennsylvania as an additional state 
petitioner.
    The petitioning states submitted a technical analysis which the 
petitioning states contend demonstrates that the nine named upwind 
states significantly contribute to violations of the 2008 ozone NAAQS 
in the OTR. The petitioning states acknowledge and include data used to 
support rulemakings promulgated by the EPA that addressed interstate 
transport with respect to both the 2008 ozone NAAQS and prior ozone 
NAAQS in order to further support their request. Moreover, the 
petitioners identified those areas that are designated nonattainment 
with respect to the 2008 ozone NAAQS within and outside the OTR and 
conducted a linear extrapolation to predict that certain areas will 
continue to be in nonattainment or will have difficulty maintaining 
attainment of the NAAQS after the EPA's 2008 ozone NAAQS final area 
designations in 2012. The petitioning states' 2018 modeling showed 
that, with on-the-way OTR measures, areas within the OTR and non-OTR 
would continue to have problems attaining the 2008 ozone NAAQS. Lastly, 
their 2020 modeling showed that with a 58 percent NOX and 3 
percent VOC emissions reduction over the eastern U.S., there would only 
be one area in New Jersey that could have trouble maintaining the 
NAAQS.
    The petitioners further note that the OTR states have adopted and 
implemented numerous and increasingly stringent controls on sources of 
VOCs and NOX that may not currently be required for sources 
in the upwind states. Petitioners contend that expansion of the OTR to 
include these upwind states will help the petitioning states attain the 
2008 ozone NAAQS. The petitioning states include two case studies that 
identify the types of measures adopted throughout the current OTR 
including mobile source and stationary source control measures that 
have been enacted to minimize emissions of NOX and VOCs. The 
petitioners contend that the expansion of the OTR is warranted so that 
the downwind states and the upwind states can work together to address 
interstate ozone transport for the 2008 ozone NAAQS. Also, the 
petitioners assert that without immediate expansion of the OTR, 
attainment of the 2008 ozone NAAQS in many areas in the U.S. will 
remain elusive.
    At the time the petition was submitted, the EPA's most recent 
effort to address the interstate transport of ozone pollution was 
subject to litigation in the D.C. Circuit. As discussed in more detail 
later in this document, the EPA issued the Cross-State Air Pollution 
Rule (CSAPR) pursuant to section 110(a)(2)(D)(i)(I) of the CAA in order 
to address interstate transport with respect to the 1997 ozone NAAQS as 
well as the 1997 and 2006 fine particulate matter (PM2.5) 
NAAQS. 76 FR 48208 (August 8, 2011). On August 21, 2012, the D.C. 
Circuit issued a decision in EME Homer City Generation, L.P. v. EPA, 
696 F.3d 7 (D.C. Cir. 2012), vacating CSAPR based on several holdings 
that would have limited the EPA's authority pursuant to section 
110(a)(2)(D)(i)(I). The petitioners subsequently submitted the section 
176A petition. Thereafter, on April 29, 2014, the Supreme Court issued 
a decision reversing the D.C. Circuit's decision and upholding the 
EPA's interpretation of its authority pursuant to CAA section 110. EPA 
v. EME Homer City Generation, L.P., 134 S. Ct. 1584 (2014).
    Since the petition was submitted, the EPA has received 
correspondence from both the upwind states and the petitioning states 
regarding the EPA's pending action on the petition. On February 14, 
2014, the EPA received a letter from the environmental commissioners 
and directors representing the states of Illinois, Ohio, Indiana, 
Tennessee, Kentucky, Virginia, Michigan, West Virginia and North 
Carolina (in collaboration with LADCO) disagreeing with the basis for 
the petition and requesting that the EPA deny the petition. On May 29, 
2015, the EPA received a letter from the Midwest Ozone Group urging 
that the EPA consider recent air quality, on-the-books measures between 
now and 2018 and other related information prior to any action on the 
petition. On July 7, 2015, the EPA received a letter from state 
representatives from the states of Ohio, Kentucky, Indiana, West 
Virginia, North Carolina and Michigan communicating the progress of the 
voluntary dialogue called the State Collaborative on Ozone Transport 
(SCOOT) that according to the letter, resulted in commitments, from

[[Page 6515]]

utilities in the upwind states to operate NOX controls 
during the summer of 2015. The upwind states believed that the requests 
from some Northeast states to sign a memorandum of understanding to 
require additional emission control and reporting requirements from 
facilities and place such requirements into SIPs to be unnecessary and 
requested that the CAA section 176A petition be withdrawn by the 
petitioning states or denied by the EPA given the forecasted air 
quality improvements and declining ozone trends. On October 30, 2015, 
the EPA received a letter from environmental commissioners (or their 
designated representatives) from the petitioning states that provided 
an update on the SCOOT process and responded to the July 7, 2015, 
letter expressing a need for federally enforceable commitments from 
states to operate exiting controls.
    On April 6, 2016, the EPA received a letter from the petitioning 
states requesting immediate action to grant the CAA section 176A 
petition. The letter acknowledged the EPA's recent proposal to update 
the CSAPR to address interstate transport for the 2008 ozone NAAQS and 
urged the EPA to grant the petition because the proposed rulemaking 
would only partially address ozone transport problems in the eastern 
U.S. Further, the letter noted that granting the petition will also 
facilitate efforts to attain the 2015 ozone NAAQS, as well as future 
updates to the ozone NAAQS. On May 16, 2016, the EPA received a letter 
from the upwind states of Ohio, Kentucky, Indiana, West Virginia and 
Michigan requesting that the EPA deny the petition, claiming that the 
technical information used to support the petition was not comparable 
to current air quality and noting the EPA's proposed transport rule to 
address the 2008 ozone NAAQS. These communications can be found in the 
docket for this action.

IV. The EPA's Proposed Decision on the CAA Section 176A Petition

    This section describes the basis for the EPA's proposed denial of 
this CAA section 176A petition. Section IV.A of this document describes 
the alternative authorities provided by the CAA for addressing the 
interstate transport of ozone pollution and the flexibilities those 
provisions provide. Section IV.B of this document describes EPA's 
historical use of these authorities to address the interstate transport 
of ozone pollution and the advantages of those rulemakings for 
addressing current ozone nonattainment problems. Section IV.C of this 
document describes other measures that have achieved, and will continue 
to achieve, significant reductions in emissions of NOX and 
VOCs resulting in lower levels of transported ozone pollution that 
impact downwind attainment and maintenance of the 2008 ozone NAAQS. 
Finally, Section IV.D of this document describes the EPA's rationale, 
based on these considerations, for proposing to deny this CAA section 
176A petition.
    As explained more fully later, the EPA believes an expansion of the 
OTR is unnecessary at this time and would not be the most efficient way 
to address the remaining interstate transport issues for the 2008 ozone 
NAAQS in states currently included in the OTR. Additional local and 
regional ozone precursor emissions reductions are expected in the 
coming years from already on-the-books rules (see Sections IV. B and C 
of this document for more details) and as described elsewhere in this 
document, the EPA has the authority through other CAA provisions 
(including CAA sections 110 and 126) to develop a more effective remedy 
to address the particular pollutants and sources for this air quality 
situation.

A. The CAA Good Neighbor Provisions

    The CAA provision that states and the EPA have used most for 
addressing interstate transport is section 110(a)(2)(D)(i)(I), often 
referred to as the ``good neighbor'' or ``interstate transport'' 
provision, requires states to prohibit certain emissions from in-state 
sources if such emissions impact the air quality in downwind states. 
Specifically, in keeping with the CAA's structure of shared state and 
federal regulatory responsibility, CAA section 110(a)(2)(D)(i)(I) 
requires all states, within 3 years of promulgation of a new or revised 
NAAQS, to submit SIPs that contain adequate provisions prohibiting any 
source or other type of emissions 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. Thus, each state is required 
to submit a SIP that demonstrates the state is adequately controlling 
sources of emissions that would impact downwind states' air quality 
relative to the NAAQS in violation of the good neighbor provision.
    Once a state submits a good neighbor SIP, the EPA must evaluate the 
SIP to determine whether it meets the statutory criteria of the good 
neighbor provision, and then approve or disapprove, in whole or in 
part, the state's submission in accordance with CAA section 110(k)(3). 
In the event that a state does not submit a required SIP addressing the 
good neighbor provision, the EPA publishes in the Federal Register a 
``finding of failure to submit'' that a state has failed to make the 
required SIP submission. If the EPA disapproves a state's SIP 
submission or if the EPA issues a finding of failure to submit, then 
the action triggers the EPA's obligations under section 110(c) of the 
CAA, to promulgate a FIP within 2 years, unless the state corrects the 
deficiency, and the EPA approves the plan or plan revision before the 
EPA promulgates a FIP. Thus, in the event that a state does not address 
the good neighbor provision requirements in a SIP submission, the 
statute provides that the EPA must address the requirements in the 
state's stead.
    Section 110(k)(5) of the CAA also provides a means for the EPA to 
reopen previously approved SIPs, including good neighbor SIPs, if the 
EPA determines that an approved SIP is substantially inadequate to 
attain or maintain the NAAQS, to adequately mitigate interstate 
pollutant transport, or to otherwise comply with requirements of the 
CAA. The EPA can use its authority under CAA section 110(k)(5) to call 
for re-submission of the SIP to correct the inadequacies under CAA 
110(a)(2)(D)(i)(I), and if the state fails to make the required 
submission, the EPA can promulgate a FIP under CAA section 110(c) to 
address the inadequacies.
    Finally, section 126 of the CAA provides states with an additional 
opportunity to bring to the EPA's attention specific instances where a 
source or a group of sources in a specific state may be emitting in 
excess of what the good neighbor provision would allow. Section 126(b) 
of the CAA provides that any state or political subdivision may 
petition the Administrator of the EPA to find that any major source or 
group of stationary sources in upwind states emits or would emit any 
air pollutant in violation of the prohibition of CAA section 
110(a)(2)(D)(i).\13\ Petitions submitted pursuant to this section are 
referred to as CAA section 126 petitions. Section 126(c) of the CAA 
explains the impact of such a finding and establishes the conditions 
under which continued operation of a source subject to such a finding 
may be permitted. Specifically,

[[Page 6516]]

CAA section 126(c) provides that it would be a violation of section 126 
of the Act and of the applicable SIP: (1) For any major proposed new or 
modified source subject to a CAA section 126 finding to be constructed 
or operate in violation of the good neighbor prohibition of CAA section 
110(a)(2)(D)(i); or (2) for any major existing source for which such a 
finding has been made to operate more than 3 months after the date of 
the finding. The statute, however, also gives the Administrator 
discretion to permit the continued operation of a source beyond 3 
months if the source complies with emission limitations and compliance 
schedules provided by the EPA to bring about compliance with the 
requirements contained in CAA sections 110(a)(2)(D)(i) and 126 as 
expeditiously as practicable but no later than 3 years from the date of 
the finding. Where the EPA provides such limitations and compliance 
schedules, it promulgates these as a revision to the upwind state's 
good neighbor SIP, and CAA section 110(a)(2)(D)(ii) further requires 
that good neighbor SIPs ensure compliance with these limitations and 
compliance schedules.\14\
---------------------------------------------------------------------------

    \13\ The text of CAA section 126 codified in the U.S. Code cross 
references CAA section 110(a)(2)(D)(ii) instead of CAA section 
110(a)(2)(D)(i). The courts have confirmed that this is a 
scrivener's error and the correct cross reference is to CAA section 
110(a)(2)(D)(i), See Appalachian Power Co. v. EPA, 249 F.3d 1032, 
1040-44 (D.C. Cir. 2001).
    \14\ The EPA has received, but not yet acted upon, several CAA 
section 126 petitions from a number of the petitioning states 
regarding the contribution of specific EGUs to interstate ozone 
transport with respect to the 2008 and 2015 ozone NAAQS. Petitions 
have been submitted by Delaware, Maryland, and Connecticut. The list 
of EGUs identified in one or more of these petitions includes EGUs 
operating in Pennsylvania, West Virginia, Ohio, Kentucky, and 
Indiana.
---------------------------------------------------------------------------

    The flexibility provided by these statutory provisions is different 
from that provided by the requirements imposed upon states in the OTR. 
With limited exceptions described previously, states in the OTR must 
impose a uniform set of requirements on sources within each state. 
While the OTR states may impose additional requirements with the 
consent of the OTC and the EPA, the states generally must comply with 
the minimum requirements imposed by the statute. The good neighbor 
provision, by contrast, provides both the states and the EPA with the 
flexibility to develop a remedy targeted at a particular air quality 
problem, including the flexibility to tailor the remedy to address the 
particular precursor pollutants and sources that would most effectively 
address the downwind air quality problem. As described later, the EPA 
has previously promulgated four interstate transport rulemakings 
pursuant to these authorities in order to quantify the specific 
emission reductions required in certain eastern states in order to 
comply with the requirements of CAA section 110(a)(2)(D)(i)(I) with 
respect to downwind nonattainment and maintenance concerns with respect 
to the NAAQS for ozone and PM2.5. In Section IV.B. of this 
document, the EPA describes the importance of these transport rules as 
they relate to regional ozone pollution transport.

B. The EPA's Interstate Transport Rulemakings Under the Good Neighbor 
Provision

    In order to address the regional transport of ozone pursuant to the 
CAA's good neighbor provision under section 110(a)(2)(D)(i)(I), the EPA 
has promulgated four regional interstate transport rules focusing on 
the reduction of NOX emissions, as the primary meaningful 
precursor to address regional ozone, from certain sources located in 
states in the eastern half of the U.S.\15\ \16\ States and the EPA have 
implemented the emission reductions required by these rulemakings 
pursuant to the various authorities for implementing the good neighbor 
provision, including CAA sections 110(a)(1), 110(c), 110(k)(5) and 126.
---------------------------------------------------------------------------

    \15\ For purposes of these rulemakings, the western U.S. (or the 
West) consists of the 11 western contiguous states of Arizona, 
California, Colorado, Idaho, Montana, Nevada, New Mexico, Oregon, 
Utah, Washington and Wyoming.
    \16\ Two of these rulemakings also addressed the reduction of 
NOX and SO2 emissions for the purposes of 
addressing the interstate transport of particulate matter pollution 
pursuant to the good neighbor provision.
---------------------------------------------------------------------------

    In each of these rulemakings, the EPA identified those sources and 
pollutants that were most effective in addressing the particular air 
quality problem identified through the course of the EPA's analysis. 
This allowed the EPA to craft targeted remedies that provided efficient 
and effective means of addressing the particular air quality problem. 
In each of the regional transport rules, the EPA analysis has continued 
to demonstrate that NOX is the ozone precursor that is most 
effective to reduce when addressing regional transport of ozone in the 
eastern U.S. The EPA has also focused each rule on those sources that 
can most cost-effectively reduce emissions of NOX, such as 
EGUs and, in one rule, certain large non-EGUs. These rulemakings 
demonstrate that the EPA has used and is continuing to use its 
authority under CAA section 110(a)(2)(D)(i)(I) to target those sources 
and precursors that most efficiently address the particular interstate 
ozone transport problem. Accordingly, the EPA believes that it is 
unnecessary to include additional states, and sources within those 
states, in OTR in order to address the current nonattainment situation 
for the 2008 ozone NAAQS in the petitioning states. Prior to the EPA's 
promulgation of some of those federal transport rules, the EPA worked 
with states and provided guidance to help states submit approvable good 
neighbor SIPs to address the CAA good neighbor provision. States have 
the first responsibility to address these CAA requirements pursuant to 
section 110(a)(1), and the EPA issued those transport rules only after 
states had the opportunity to address their CAA interstate transport 
obligation. While some states have state-developed and EPA-approved 
good neighbor SIPs, other states are covered by EPA-issued FIPs.
1. NOX SIP Call
    Through a 2-year effort (starting in 1995 and ending in 1997) known 
as the Ozone Transport Assessment Group (OTAG), the EPA worked in 
partnership with the 37 eastern-most states and the District of 
Columbia, industry representatives, and environmental groups to address 
the interstate transport of ozone pollution. OTAG identified and 
evaluated flexible and cost-effective strategies for reducing long-
range transport of ozone and ozone precursors. Based on the OTAG 
process, the EPA engaged in a rulemaking to promulgate a final action 
commonly referred to as the NOX SIP Call in order to address 
the requirements of the good neighbor provision (CAA section 
110(a)(2)(D)(i)(I)) with respect to the 1979 1-hour ozone NAAQS and the 
1997 8-hour ozone NAAQS. 63 FR 57356 (October 27, 1998). The rule 
required 22 eastern states and the District of Columbia to amend their 
SIPs and limit NOX emissions that contribute to ozone 
nonattainment. The rule set a NOX ozone season emission 
budget for each covered state, essentially a cap on all ozone season 
NOX emissions in the state. Covered states were given the 
option to participate in a regional allowance trading program, known as 
the NOX Budget Trading Program (NBP) in order to achieve 
most of the necessary emissions reductions.
    Through the OTAG process, the states concluded that widespread 
NOX reductions were necessary to enable areas to attain and 
maintain the ozone NAAQS.\17\ The OTAG's recommendations identified 
control

[[Page 6517]]

measures for states to achieve additional reductions in emissions of 
NOX but did not identify such measures for VOC, beyond the 
EPA's promulgation of national VOC measures, at that time. The OTAG 
Regional and Urban Scale Modeling and Air Quality Analysis Work Groups 
reached the following relevant conclusions (with which the EPA agreed): 
Regional NOX emissions reductions are effective in producing 
ozone benefits; the more NOX emissions reduced, the greater 
the benefit to air quality; and VOC controls are effective in reducing 
ozone locally and are most advantageous to urban nonattainment areas. 
The EPA concluded in its rulemaking that, ``a regional strategy 
focusing on NOX reductions across a broad portion of the 
region will help mitigate the ozone problem in many areas of the East 
.'' 63 FR 57381. The EPA did not propose any new SIP requirements for 
VOC reductions for the purpose of reducing the interstate transport of 
ozone, however, the agency suggested that states may consider 
additional reductions in VOC emissions as they develop local attainment 
plans.
---------------------------------------------------------------------------

    \17\ See 62 FR 60320, November 7, 1997, Notice of proposed 
rulemaking, Finding of Significant Contribution and Rulemaking for 
Certain States in the Ozone Transport Assessment Group Region for 
Purposes of Reducing Regional Transport of Ozone.
---------------------------------------------------------------------------

    In order to quantify necessary NOX emission reductions, 
the EPA developed statewide NOX emissions budgets based on 
recommendations from OTAG on how to cost-effectively reduce emissions 
from utilities and other sources of NOX. Thus, the EPA 
established NOX emission budgets based on the conclusion 
that EGUs and large non-EGU point sources could cost-effectively 
achieve emissions reductions by the implementation of controls costing 
$2,000 per ton of NOX emissions reduced, including controls 
such as selective catalytic reduction (SCR) and selective non-catalytic 
reduction (SNCR) that could be required on a number of units in the 
OTAG region. Although the NOX SIP Call did not specify which 
sources must reduce NOX, consistent with OTAG's 
recommendations, the EPA encouraged states to consider controls on EGUs 
and large non-EGU point sources under an allowance trading program as a 
cost effective strategy for complying with the NOX emissions 
budgets.
    At the time the NOX SIP Call was finalized, the EPA had 
already approved good neighbor SIPs for many states with respect to the 
1-hour ozone standard. Accordingly, the EPA initiated a SIP call 
pursuant to CAA section 110(k)(5) requiring states covered by the rule 
to amend their SIPs in order to limit NOX emissions that 
significantly contribute to ozone nonattainment in other states 
consistent with the budgets finalized in the rule.
    In parallel with issuing the SIP call, the EPA reviewed petitions 
submitted pursuant to CAA section 126(b) by eight states requesting 
that the EPA find that stationary sources in upwind states contribute 
significantly to ozone nonattainment in the petitioning states. Because 
the section 126 petitions raised many of the same issues as those being 
addressed in NOX SIP call, the EPA coordinated its response 
to the CAA section 126 petitions with the NOX SIP Call 
rulemaking. The EPA issued findings that NOX emissions in 
twelve states and the District of Columbia contribute significantly to 
nonattainment of the 1-hour ozone NAAQS in three downwind states, but 
the EPA determined that it was appropriate to postpone CAA section 126 
findings pending the resolution of the NOX SIP call process. 
64 FR 28250 (May 25, 1999). Accordingly, the EPA issued a rule 
providing that the findings would automatically be deemed made with 
regard to sources from a given state should that state fail to submit a 
SIP revision as required by the NOX SIP Call. The rulemaking 
further established the NBP as the remedy that would apply pursuant to 
CAA section 126(c) for any state subject to such a finding.
    The D.C. Circuit subsequently issued two orders affecting 
implementation of the NOX SIP Call: (1) An order remanding 
the 1997 8-hour ozone standard to the EPA, American Trucking Ass'ns v. 
EPA, 175 F.3d 1027, reh'g granted in part and denied in part, 195 F.3d 
4 (D.C. Cir.1999), rev'd in part sub nom. Whitman v. American Trucking 
Ass'ns, 531 U.S. 457, 121 S.Ct. 903 (2001), and (2) an order staying 
the NOX SIP Call deadline pending further litigation, 
Michigan v. EPA, No. 98-1497 (D.C. Cir. May 25, 1999) (order granting 
stay in part). In response to these court decisions, the EPA took two 
actions. First, the EPA indefinitely stayed the technical 
determinations of the prior section 126 action as they applied to the 
8-hour ozone NAAQS, pending further developments in the litigation. 65 
FR 2674, 2685 (January 18, 2000). Second, with respect to the 1-hour 
standard, the EPA made the requested findings of significant 
contributions, granting the relevant portions of the section 126 
petitions. Id. at 2684-85. The EPA further imposed the NBP on affected 
sources as the remedy pursuant to section 126(c). Id. at 2686.
    Ultimately, the NOX SIP Call was largely upheld by the 
D.C. Circuit in Michigan v. EPA, 213 F.3d 663 (D.C. Cir. 2000), cert. 
denied, 532 U.S. 904 (2001).\18\ States chose to use the NBP to achieve 
the majority of the NOX reductions required by the 
NOX SIP Call. Subsequent rules have required additional 
reductions from certain sources regulated by the NOX SIP 
Call, but the rules have not replaced the NOX SIP Call 
reduction requirements and the rule remains in effect.
---------------------------------------------------------------------------

    \18\ The EPA's January 18, 2000, action on the CAA section 126 
petitions was also challenged and upheld by the D.C. Circuit in 
Appalachian Power Company v. EPA, 249 F.3d 1032 (2001).
---------------------------------------------------------------------------

2. Clean Air Interstate Rule (CAIR)
    The CAIR was published in May 2005 and addressed both the 1997 
PM2.5 and the 1997 ozone standards under the good neighbor 
provision. 70 FR 25162 (May 12, 2005). CAIR required SIP revisions in 
28 eastern states and the District of Columbia to ensure that certain 
emissions of sulfur dioxide (SO2) and/or NOX--
important precursors of regionally transported PM2.5 
(SO2 and NOX) and ozone (NOX)--were 
prohibited.
    The rule set statewide emission budgets for large EGUs that reduced 
emissions of annual SO2 and annual NOX 
(particulate matter precursors) and summertime NOX (ozone 
precursor). As in the NOX SIP Call, the EPA identified 
reductions in NOX emissions as the most efficient and 
effective way to achieve the greatest reduction of interstate ozone 
pollution. Id. at 25185-8, 25195. The EPA also determined that 
emissions reductions from EGUs were the most cost-effective and 
efficient means of achieving necessary NOX emissions 
reductions. 70 FR 25173. As in the NOX SIP Call, affected 
states were given the option to participate in a regional allowance 
trading program to satisfy their SIP obligations.
    When the EPA promulgated the final CAIR, the EPA also issued a 
national rule finding that certain states had failed to submit SIPs to 
address the requirements of CAA section 110(a)(2)(D)(i) with respect to 
the 1997 PM2.5 and the 1997 ozone NAAQS by the CAA deadline 
for those standards of July 2000. 70 FR 21147. The findings of failure 
to submit triggered a 2-year clock for the EPA to issue FIPs to address 
the good neighbor provision with respect to those standards, and the 
EPA subsequently promulgated FIPs to ensure that the emission 
reductions required by CAIR would be achieved on schedule. 71 FR 25328 
(April 28, 2006). Upon review, the D.C. Circuit determined that CAIR 
was ``fundamentally flawed,'' and the rule was remanded to the EPA to 
be replaced ``from the ground up.'' North Carolina v.

[[Page 6518]]

EPA, 531 F.3d 896, 929 (D.C. Cir. 2008), modified on reh'g, 550 F.3d 
1176.
3. CSAPR
    In response to the court's remand of CAIR, on July 6, 2011, the EPA 
promulgated CSAPR, which requires certain states to significantly 
improve air quality by reducing power plant emissions that contribute 
to ozone and/or fine particle pollution in other states. CSAPR requires 
sources in a total of 28 states to reduce annual SO2 
emissions, annual NOX emissions and/or ozone season 
NOX emissions to assist in attaining the 1997 ozone and 
PM2.5 and 2006 PM2.5 NAAQS. 76 FR 48208. The EPA 
found that each CSAPR state had failed to submit a complete SIP or the 
EPA disapproved a submitted SIP for the relevant NAAQS. To accomplish 
implementation aligned with the applicable NAAQS attainment deadlines, 
the EPA promulgated FIPs for each affected state which require affected 
sources to participate in the regional allowance trading program to 
achieve the necessary emission reductions. These states have the option 
of replacing each FIP with a SIP that could achieve the same emissions 
reductions in other ways.
    CSAPR set emissions budgets for certain states according to the 
applicable NAAQS--annual NOX and annual SO2 
budgets for PM2.5, and ozone season NOX budgets 
for ozone--to eliminate a state's significant contribution or 
interference with maintenance of a NAAQS in other states. With respect 
to the ozone NAAQS, the EPA determined that NOX emissions 
had the most meaningful interstate impacts based on air quality 
modeling that examined upwind state emissions of all ozone precursors 
(including VOCs and NOX). 75 FR 45230 (August 2, 2010) and 
76 FR 48222. Moreover, the EPA noted that the other recent assessments 
of ozone, for example those conducted for the Regulatory Impact 
Analysis for the ozone standards in 2008, continue to show the 
importance of NOX emissions on ozone transport. 75 FR 45236. 
Accordingly, the EPA quantified NOX emissions budgets for 
each affected state by quantifying the emissions reductions achievable 
by applying cost-effective controls to EGUs. 76 FR 48256. The EPA 
determined that controls at other sources were generally not available 
at similar cost levels.
    The timing of CSAPR's implementation was affected by a number of 
court actions. CSAPR was the subject to nearly four years of litigation 
in both the D.C. Circuit and the Supreme Court. CSAPR was generally 
upheld by the courts, but for the remand of certain state budgets, and 
implementation of the trading programs began in 2015. See EPA v. EME 
Homer City Generation, L.P., 134 S. Ct. 1584 (2014); EME Homer City 
Generation, L.P. v. EPA, 795 F.3d 118 (D.C. Cir. 2015).
4. The CSAPR Update To Address the 2008 Ozone NAAQS
    On October 26, 2016, the EPA published an update to CSAPR intended 
to respond to the D.C. Circuit's remand of certain NOX ozone 
season budgets from the original CSAPR and to address the good neighbor 
provision with respect to the 2008 ozone NAAQS. 81 FR 74504 (CSAPR 
Update). The CSAPR Update requires 22 states to reduce ozone season 
NOX emissions that significantly contribute to nonattainment 
or interfere with maintenance of the 2008 ozone NAAQS in certain 
downwind states. The EPA found that each CSAPR state had failed to 
submit a complete SIP or the EPA disapproved a submitted SIP for the 
2008 ozone NAAQS. To accomplish implementation aligned with the 
applicable attainment deadline for the 2008 ozone NAAQS, the EPA 
promulgated FIPs for each of the 22 states covered by CSAPR Update 
which require affected sources to participate in the regional allowance 
trading program to achieve the necessary emission reductions beginning 
with the 2017 ozone season.
    The CSAPR Update analysis found that emissions from eight of the 
nine states named in the section 176A petition, in addition to a number 
of other states, were linked to downwind projected nonattainment and/or 
maintenance receptors, in the eastern U.S., in 2017 with respect to the 
2008 ozone NAAQS. 81 FR 74506, 74538-39. For one state named in the CAA 
section 176A petition, North Carolina, the EPA determined in the CSAPR 
Update that the state was not linked to any downwind receptors and, 
therefore, will not significantly contribute to nonattainment or 
interfere with maintenance of the 2008 ozone NAAQS in any other state 
pursuant to the good neighbor provision. 81 FR 74506, 74537-38.
    For those states linked to downwind air quality problems, the EPA 
evaluated timely and cost-effective emissions reductions achievable in 
each state in order to quantify the amount of emissions constituting 
each state's significant contribution to nonattainment and interference 
with maintenance of the standard pursuant to the good neighbor 
provision. The EPA focused its analysis on: (1) Emissions reductions 
achievable by 2017 in order to assist downwind states with meeting the 
applicable attainment deadline for the 2008 ozone NAAQS (81 FR 74521), 
(2) reductions in only NOX emissions, consistent with past 
ozone transport rules (81 FR 74514), and (3) achievable, cost effective 
NOX emissions reductions from EGUs. The EPA, therefore, 
calculated emissions budgets for each affected state based on the cost-
effective NOX emissions reductions achievable from EGUs by 
the 2017 ozone season.
    The EPA concluded that the emissions reductions achieved by 
implementation of the budgets constitute a portion of most affected 
states' significant contribution to nonattainment or interference with 
maintenance of the 2008 ozone NAAQS at these downwind receptors. 81 FR 
74508, 74522.\19\ However, because downwind air quality problems were 
projected to remain after implementation of the quantified emissions 
reductions, the EPA could not determine that it had fully quantified 
the affected states' emissions reduction obligations pursuant to the 
good neighbor provision to the extent upwind states remain linked to 
the downwind receptors and further emission reductions from EGUs and 
non-EGUs could be available. In order to determine the level of 
NOX control stringency necessary to quantify those emissions 
reductions that fully constitute each state's significant contribution 
to downwind nonattainment or interference with maintenance, the EPA 
explained in promulgating the final CSAPR Update that it must evaluate 
further emission reductions from EGU and non-EGU strategies that can be 
implemented on longer timeframes. The CSAPR Update represents a 
significant first step by the EPA to quantify states' emission 
reduction obligations under the good neighbor provision for the 2008 
ozone NAAQS. Even though the CSAPR Update did not fully address upwind 
states' emission reduction obligation pursuant to the good neighbor 
provision, the implementation of the emissions budgets quantified in 
that rule will help to resolve a number of projected air quality 
problems in the Philadelphia, Pennsylvania, Jefferson County, Kentucky 
and Hamilton County, Ohio areas and will help make progress to reduce 
upwind

[[Page 6519]]

contributions to high ozone levels in Baltimore, Maryland, and the New 
York City area (including parts of Connecticut and New Jersey).
---------------------------------------------------------------------------

    \19\ For one state named in the CAA section 176A petition, 
Tennessee, the EPA determined that the emissions reductions required 
by the CSAPR Update would fully address the state's significant 
contribution to nonattainment and interference with maintenance of 
the 2008 ozone NAAQS in other states.
---------------------------------------------------------------------------

    The EPA is continuing the work necessary to address its remaining 
obligation to promulgate FIPs fully addressing the good neighbor 
provision with respect to the 2008 ozone NAAQS for 21 states. The EPA 
intends to continue to collect information and undertake analyses to 
evaluate potential future emission reductions from non-EGUs and EGUs 
that may be necessary to fully quantify each state's interstate 
transport obligations for the 2008 ozone NAAQS in a future action.\20\ 
The EPA expects to continue to fulfill its obligation to promulgate 
FIPs fully addressing interstate transport with respect to the 2008 
ozone NAAQS consistent with the authority and flexibility provided by 
the good neighbor provision to tailor a remedy based on those sources 
and precursor pollutants (i.e., NOX) that can most 
effectively address the downwind air quality problems identified by the 
EPA's analysis.
---------------------------------------------------------------------------

    \20\ Moreover, in support of this effort, on December 28, 2016, 
the EPA shared updated preliminary modeling information providing 
air quality projections for areas in the contiguous U.S. for the 
2015 ozone NAAQS, which the EPA anticipates will assist states with 
the development of SIPs. See, ``Notice of Availability of the 
Environmental Protection Agency's Preliminary Interstate Ozone 
Transport Modeling Data for the 2015 Ozone National Ambient Air 
Quality Standard (NAAQS)'' available at: https://www.epa.gov/airmarkets/notice-data-availability-preliminary-interstate-ozone-transport-modeling-data-2015-ozone.
---------------------------------------------------------------------------

C. Additional Rules That Reduce NOX and VOC Emissions

    In addition to the significant efforts to implement the good 
neighbor provision for the 2008 and prior ozone NAAQS described in 
Section IV.B of this document, there are numerous federal and state 
emission reduction rules that have already been adopted which have 
resulted or will result in the further reduction of ozone precursor 
emissions, including emissions from states named in the section 176A 
petition. Many of these rules directly require sources to achieve 
reductions of NOX, VOC, or both, and others require actions 
that will indirectly result in such reductions. As a result of these 
emissions reductions, the interstate transport of ozone has been and 
will continue to be reduced over time.
    The majority of man-made NOX and VOC emissions that 
contribute to ozone formation in the U.S. comes from the following 
sectors: on-road and nonroad mobile sources, industrial processes 
(including solvents), consumer and commercial products, and the 
electric power industry. In 2014, the most recent year for which the 
National Emissions Inventory (NEI) is available, on-road and nonroad 
mobile sources accounted for about 56 percent of annual NOX 
emissions; and the electric power industry (EGUs) accounted for about 
13 percent. With respect to VOCs, industrial processes (including 
solvents) accounted for about 48 percent of manmade VOC emissions; and 
mobile sources accounted for about 27 percent.\21\ \22\
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    \21\ The VOC percentages are for manmade VOCs only. Emissions 
from natural sources, such as trees, also comprise around 70 percent 
of total VOC emissions nationally, with a higher proportion during 
the ozone season and in areas with more vegetative cover.
    \22\ For more information, see the ``2014 NEI Summary 
Spreadsheet'' in the docket.
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    The EPA establishes emissions standards under various CAA 
authorities for numerous classes of automobile, truck, bus, motorcycle, 
earth mover, aircraft, and locomotive engines, and for the fuels used 
to power these engines. The pollutant reduction benefits from new 
engine standards increase each year as older and more-polluting 
vehicles and engines are replaced with newer, cleaner models. The 
benefits from fuel programs generally begin as soon as a new fuel is 
available. Further, the ongoing emission reductions from mobile source 
federal programs such as those listed previously will provide for 
substantial emissions reductions well into the future, and will 
complement state and local efforts to attain the 2008 ozone NAAQS.
    There are several existing national rules that continue to achieve 
emission reductions through 2025 and beyond with more protective 
emission standards for on-road vehicles that include: Control of Air 
Pollution from Motor Vehicles: Tier 3 Motor Vehicle Emission and Fuel 
Standards; \23\ Control of Air Pollution from New Motor Vehicles: Tier 
2 Motor Vehicle Emissions Standards and Gasoline Sulfur Control 
Requirements; \24\ Control of Air Pollution from New Motor Vehicles: 
Heavy-Duty Engine and Vehicle Standards and Highway Diesel Fuel Sulfur 
Control Requirements; \25\ Model Year 2017 and Later Light-Duty Vehicle 
Greenhouse Gas Emissions and Corporate Average Fuel Economy Standards; 
\26\ Model Year 2012-2016 Light-Duty Vehicle Greenhouse Gas Emission 
Standards and Corporate Average Fuel Economy Standards; \27\ Greenhouse 
Gas Emissions and Fuel Efficiency Standards for Medium- and Heavy-Duty 
Engines and Vehicles--Phase 2; \28\ Phase 1 Greenhouse Gas Emissions 
Standards and Fuel Efficiency Standards for Medium- and Heavy-Duty 
Engines and Vehicles \29\ and Control of Hazardous Air Pollutants from 
Mobile Sources.\30\
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    \23\ 81 FR 23414 (April 28, 2014).
    \24\ 65 FR 6698 (February 10, 2000).
    \25\ 66 FR 5002 (January 18, 2001).
    \26\ 77 FR 62624 (October 15, 2012).
    \27\ 75 FR 25324, (May 7, 2010).
    \28\ 81 FR 73478, (October 25, 2016).
    \29\ 76 FR 57106, (September 15, 2011).
    \30\ 72 FR 8428, (February 26, 2007).
---------------------------------------------------------------------------

    Similarly, already adopted regulations for non-road engines and 
equipment that will achieve further reductions include: Control of 
Emissions of Air Pollution from Nonroad Diesel Engines and Fuel; \31\ 
Republication for Control of Emissions of Air Pollution from Locomotive 
Engines and Marine Compression-Ignition Engines Less Than 30 Liters per 
Cylinder; \32\ Control of Emissions from New Marine Compression-
Ignition Engines at or Above 30 Liters per Cylinder; \33\ the 
International Maritime Organization's Emission Control Area to Reduce 
Emissions from Ships in the U.S. Caribbean; Control of Air Pollution 
From Aircraft and Aircraft Engines; \34\ Emission Standards and Test 
Procedures; Control of Emissions from Nonroad Large Spark-Ignition 
Engines, and Recreational Engines (Marine and Land-Based); \35\ and 
Control of Emissions from Nonroad Spark-Ignition Engines and 
Equipment.\36\
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    \31\ 69 FR 38958, (June 29, 2004).
    \32\ 73 FR 37096, (June 30, 2008).
    \33\ 75 FR 22896, (April 30, 2010).
    \34\ 77 FR 36342, (June 18, 2012).
    \35\ 67 FR 68242, (November 8, 2002).
    \36\ 73 FR 59034, (October 8, 2008).
---------------------------------------------------------------------------

    Similarly, a number of already-adopted stationary source rules will 
drive further regional reductions in ozone precursor emissions, 
including: boiler maximum achievable control technology standards under 
CAA section 112 and the Mercury and Air Toxics Standards. These rules 
target specific sources and have the co-benefit of reducing ozone 
precursors which also reduce interstate ozone pollution transport. For 
example, the measures to address Regional Haze best available retrofit 
technology determinations often include power plant pollution controls 
that can achieve NOX reductions of at least 80 to 90 percent 
from a particular source.
    Other existing rules that will achieve NOX and VOC 
emissions reductions include: New Source Performance Standards (NSPS) 
for reciprocating internal combustion engines; NSPS for gas turbines; 
NSPS for process heaters;

[[Page 6520]]

Hospital/Medical/Infectious Waste Incinerators: New Source Performance 
Standards and Emission Guidelines: Final Rule Amendments; and 
NOX Emission Standard for New Commercial Aircraft Engines. 
The EPA's regulations for commercial, industrial and solid waste 
incinerators set standards for NOX and several air toxics 
for all commercial incinerators, as required under CAA section 129. Air 
toxics rules for industrial boilers will yield co-benefit 
NOX reductions as a result of tune-ups and energy efficiency 
measures, especially from boilers that burn coal.
    The EPA expects existing federal and state rules, and also those 
that may be promulgated in the future, will have the co-benefit of 
reducing ozone precursor emissions even if they do not directly address 
interstate transport of ozone pollution. These rules will result in 
reductions in ozone concentrations that will help areas attain the 2008 
ozone NAAQS. For example, the Regional Haze Rule requires states to 
revise their regional haze SIPs \37\ to assess whether additional 
measures are necessary for continued visibility progress. On December 
14, 2016, the EPA signed a final rule that could influence state 
regional haze plans to include measures to further reduce 
NOX in light of its role as a visibility impairing 
pollutant.\38\ Further, to address interstate transport with respect to 
the 2015 ozone NAAQS, states are required to submit additional SIPs 
addressing the good neighbor provision by October 2018. Measures 
designed to address the interstate transport of ozone with respect to 
the 2015 standard will necessarily assist with addressing interstate 
transport with respect to the less-stringent 2008 standard. Lastly, in 
response to actions such as the 2012 PM2.5 SIP Requirements 
Rule and nonattainment designations under the 2010 primary 
SO2 NAAQS, many states will be submitting SIPs that reduce 
pollution, some of which reduce ozone precursor emissions as a co-
benefit.
---------------------------------------------------------------------------

    \37\ The EPA extended the due date to 2021, but is not changing 
dates for the implementation of further pollution reductions needed 
to address regional haze, which are required over the 2018-2028 time 
frame. See https://www.epa.gov/visibility/final-rulemaking-amendments-regulatory-requirements-state-regional-haze-plans.
    \38\ See https://www.epa.gov/sites/production/files/2016-12/documents/regional_haze_2060-as55_final_preamblerule_final_12-14-16_disclaimer_0.pdf.
---------------------------------------------------------------------------

    As a result of the rules and programs listed previously, various 
other state programs and efforts, and wider economic trends, ozone 
levels across the nation and the OTR have been declining. Ozone levels 
across the nation are expected to further decline over the next several 
years due to emissions controls already in place. The EPA's emissions 
projections in support of the 2015 ozone NAAQS modeling show declining 
emissions of NOX and VOCs between 2017 and 2025. In the 
states comprising the OTR plus the nine upwind states named in the CAA 
section 176A petition, total NOX emissions over the upcoming 
7-year period (2017-2025) are expected to decline by almost 20 percent 
on average and VOC emissions are expected to decline by more than 10 
percent on average over the same period.

D. Rationale for the Proposed Decision on the CAA 176A Petition

    The EPA is proposing to deny the CAA section 176A petition because 
we believe that the statute provides other, more effective means of 
addressing the impact of interstate ozone transport on the states 
within the OTR with respect to the 2008 ozone NAAQS. As described in 
Section IV of this document, the statute provides several provisions 
that allow states and the EPA to address interstate ozone transport 
with a remedy better tailored to the nature of the air quality problem, 
focusing on those precursor emissions and sources that most directly 
impact downwind ozone nonattainment and maintenance problems and which 
can be controlled most cost-effectively. The EPA and states are 
actively using these provisions, as demonstrated by the numerous 
federal and state measures that have reduced, and will continue to 
reduce, the VOC and NOX emissions that contribute to ozone 
formation and the interstate transport of ozone pollution. The EPA does 
not believe that it is necessary to add more states to the OTR at this 
time in order to effectively address transported pollution in the OTR 
relative to the 2008 ozone NAAQS.
    While the Act contains several provisions, both mandatory and 
discretionary, to address interstate pollution transport, the EPA's 
decision whether to grant or deny a CAA section 176A petition to expand 
an existing transport region is discretionary. Section 176A of the CAA 
states that the Administrator may add any state or portion of a state 
to an existing transport region whenever the Administrator has reason 
to believe that the interstate transport of air pollutants from such 
state significantly contributes to a violation of the standard in the 
transport region. The EPA does not dispute that certain named upwind 
states in the petition might significantly contribute to violations of 
the 2008 ozone NAAQS in one or more downwind states. However, the EPA 
believes that it can fully and more effectively address the upwind 
states' impacts on downwind ozone air quality through the good neighbor 
provision and the various statutory provisions that provide for its 
implementation. The EPA has already taken steps to address interstate 
transport with respect to the 2008 ozone NAAQS through the promulgation 
of the CSAPR Update, which reduces emissions in the 2017 ozone season 
and beyond. The EPA used the authority of CAA sections 
110(a)(2)(D)(i)(I) and 110(c) to tailor a remedy focused on the 
precursor pollutant most likely to improve ozone levels (currently 
NOX) and those sources that can most cost-effectively reduce 
emissions (i.e., EGUs). The EPA further implemented the remedy through 
an allowance trading program that achieves necessary emission 
reductions while providing sources with the flexibility to implement 
the control strategies of their choice.
    We believe that the continued use of the authority provided by the 
good neighbor provision to address the interstate transport of ozone 
pollution plus other regulations that are already in place will permit 
the states and EPA to achieve necessary additional reductions to 
address the 2008 ozone NAAQS without the need to implement the 
additional requirements that inclusion in the OTR would entail. As 
described in Section IV.A and B of this document, this approach to 
address the interstate transport of ozone is a proven, efficient, and 
cost-effective means of addressing downwind air quality concerns that 
the agency has employed and refined over nearly two decades. However, 
the EPA notes that the addition of states to the OTR pursuant to the 
section 176A authority--and the additional planning requirements that 
would entail--could be given consideration as an appropriate means to 
address the interstate transport requirements of the CAA should the 
agency depart from its current approach to addressing these 
requirements.
    As described in this document, the CAA provides the agency with the 
authority to mitigate the specific sources that contribute to 
interstate pollution through the approval of SIPs or promulgation of 
FIPs to satisfy the requirements of the good neighbor provision, CAA 
section 110(a)(2)(D)(i)(I), and through the related petition process 
under section 126. This authority gives the EPA and states numerous 
potential policy approaches to address interstate pollution transport 
of ozone, and the EPA has consistently and repeatedly used its 
authority under CAA section 110(a)(2)(D)(i)(I) to approve state plans

[[Page 6521]]

for reducing ozone transport or to promulgate its own federal 
implementation plan to specifically target the sources of ozone 
transport both within and outside the OTR. The NOX SIP call, 
CAIR, CSAPR, CSAPR Update and numerous individual SIP approvals 
demonstrate that the EPA has a long history of using its section 110 
authority to specifically address interstate pollution transport in a 
targeted way that is tailored to a specific NAAQS and set of pollution 
sources which are the primary contributors to interstate pollution 
transport. As described in Section IV.B of this document, using the 
authority of the good neighbor provision has allowed the EPA to focus 
its efforts on pollution sources that are responsible for the largest 
contributions to ozone transport and that can cost-effectively reduce 
emissions, and also enables the agency to focus on NOX as 
the primary driver of long range ozone transport--an approach the 
courts have found to be a reasonable means of addressing interstate 
ozone transport. EPA v. EME Homer City Generation, L.P., 134 S. Ct. at 
1607 (affirming as ``efficient and equitable'' the EPA's use of cost to 
apportion emission reduction responsibility pursuant to the good 
neighbor provision); Michigan v. EPA, 213 F.3d at 688 (``EPA reasonably 
concluded that long-range ozone transport can only be addressed 
adequately through NOX reductions'').
    As explained previously, it does not appear that adding states to 
an OTR under CAA section 176A will afford the states and EPA with the 
flexibility to focus on specific sources and ozone precursor emissions 
tailored to address the downwind state's current air quality and needed 
remedy to achieve attainment of the 2008 NAAQS. The statute prescribes 
a specific set of controls for a variety of sources to control 
emissions of both VOCs and NOX. CAA section 
110(a)(2)(D)(i)(I) on the other hand permits the EPA and the regulated 
community the flexibility to focus controls on specific sources and 
pollutants that most efficiently address the air quality problem being 
targeted. The EPA determined in the CSAPR Update that regional 
NOX emissions reductions from upwind states are the most 
effective means for providing ozone benefits to an area in the OTR 
currently violating the 2008 ozone NAAQS, and that NOX 
reductions can be most efficiently achieved by focusing on those 
sources that can cost-effectively reduce emissions. Accordingly, the 
EPA does not believe that the requirements imposed upon states added to 
the OTR would be the most effective means of addressing any remaining 
interstate transport concerns with respect to the 2008 ozone NAAQS.
    The implementation of controls within the OTR, when combined with 
the numerous federal and state emission reduction programs that have 
already been adopted that have resulted in the reduction of ozone 
precursor emissions either directly or as a co-benefit of those 
regulations, have helped to significantly reduce ozone levels. These 
programs will continue to reduce ozone precursor emissions and ozone 
concentrations both within and outside of the OTR over many years to 
come. However, the EPA believes the most efficient way to address the 
current 2008 ozone NAAQS nonattainment and interstate transport 
problems is to continue to rely on the ability to flexibly target the 
necessary reductions through this combination of targeted programs such 
as the implementation of the CSAPR Update Rule, the further utilization 
of the CSAPR framework, development of local attainment plans, and 
consideration of additional emissions limitations resulting from action 
on CAA section 126 petitions.
    As discussed in Section III.C. of this document, CAA section 176A 
provides that the Administrator may exercise reasonable discretion in 
administering the agency's regulatory agenda by determining whether or 
not to approve or deny a section 176A petition, so long as the EPA's 
action is supported by a reasonable interpretation within the context 
of the statute. The EPA has reviewed the request of the petitioners to 
add additional states to the OTR in light of required control 
strategies for ozone transport regions and the other statutory tools 
available to the agency and states to address the interstate transport 
of ozone pollution. The agency believes that continuing its 
longstanding and effective use of the existing and expected control 
programs under the CAA's mandatory good neighbor provision embodied in 
section 110(a)(2)(D)(i)(I), including implementation of the CSAPR 
Update beginning in 2017 and technical work now underway to establish a 
full remedy for the 2008 NAAQS as well as to implement the good 
neighbor provision for the more stringent 2015 NAAQS, is a more 
effective approach for addressing regional interstate ozone transport 
problems relative to the 2008 ozone standard.
    The EPA is proposing to deny the petitioning states' request to add 
additional states to the OTR for the purpose of addressing interstate 
transport of the 2008 ozone NAAQS at this time. The agency will instead 
continue to use other authorities available within the CAA in order to 
address the long range interstate transport of ozone pollution. This 
document is specific to the 2008 ozone NAAQS, but the EPA notes that 
under different circumstances the OTR provisions have been an effective 
tool for air quality management, and could be similarly effective in 
the future for addressing interstate transport of ozone pollution. 
Accordingly, nothing in this document should be read to limit states' 
ability to file a different petition under 176A or to prejudge the 
outcome of such a petition if filed. The EPA requests comment on the 
proposed denial of the petition based on the EPA's preferred approach 
to addressing interstate transport with respect to the 2008 ozone NAAQS 
pursuant to these other CAA authorities.\39\
---------------------------------------------------------------------------

    \39\ The EPA's proposal as to the pending section 176A petition 
is focused on the appropriate mechanism to address interstate 
transport issues relative to the 2008 ozone NAAQS rather than the 
scope of remaining air quality problems or the level of controls 
necessary to address any such problems. Comment on any 
determinations made in prior rulemaking actions to identify downwind 
air quality problems relative to the ozone NAAQS or to quantify 
upwind state emission reduction obligations relative to those air 
quality problems, including the EPA's decision to focus on certain 
precursor emissions or sources, are not within the scope of this 
proposal. To the extent the EPA evaluates these issues in a future 
rulemaking to address remaining air quality problems relative to the 
2008 ozone NAAQS, comments will be welcomed in the context of that 
rulemaking.
---------------------------------------------------------------------------

V. Judicial Review and Determinations Under Section 307(b)(1) of the 
CAA

    Section 307(b)(1) of the CAA indicates which Federal Courts of 
Appeal have venue for petitions of review of final actions by the EPA. 
This section provides, in part, that petitions for review must be filed 
in the Court of Appeals for the District of Columbia Circuit if (i) the 
agency action consists of ``nationally applicable regulations 
promulgated, or final action taken, by the Administrator,'' or (ii) 
such action is locally or regionally applicable, if ``such action is 
based on a determination of nationwide scope or effect and if in taking 
such action the Administrator finds and publishes that such action is 
based on such a determination.'' The EPA finds that any final action 
related to this document is ``nationally applicable'' and of 
``nationwide scope and effect'' within the meaning of CAA section 
307(b)(1). Through this document, the EPA interprets section 176A of 
the CAA, a provision which has nationwide applicability. In addition, 
this document is a response to a petition which would, if granted, 
extend

[[Page 6522]]

regulatory requirements to nine states in multiple different circuits, 
and if denied could impact the 13 states within the ozone transport 
region established in CAA section 184. This proposed action also 
discusses at length prior EPA action and analyses concerning the 
transport of pollutants between the different states under CAA section 
110. For these reasons, the Administrator determines that, when 
finalized, this action is of nationwide scope and effect for purposes 
of section 307(b)(1). Thus, pursuant to CAA section 307(b) any 
petitions for review of any final action regarding this document would 
be filed in the Court of Appeals for the District of Columbia Circuit 
within 60 days from the date any final action is published in the 
Federal Register.

VI. Statutory Authority

    42 U.S.C. 7401 et seq.

    Dated: January 11, 2017.
Gina McCarthy,
Administrator.
[FR Doc. 2017-01097 Filed 1-18-17; 8:45 am]
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                                                                                                          claimed. Information so designated will
                                                  occurrence of a specified event, or                                                                            Air Act Section 176A Petition From
                                                                                                          be disclosed by EPA only to the extent
                                                  permanently? If the occurrence of a                                                                            Connecticut, Delaware, Maryland,
                                                                                                          allowed by, and by means of, the
                                                  specific event will eliminate the need                                                                         Massachusetts, New Hampshire, New
                                                                                                          procedures set forth in, 40 CFR part 2,
                                                  for business confidentiality, please                                                                           York, Pennsylvania, Rhode Island and
                                                                                                          subpart B. If you fail to claim the
                                                  specify that event.                                                                                            Vermont
                                                                                                          information as business confidential, it
                                                     2. Information submitted to EPA                      may be made available to the requestor                 AGENCY:   Environmental Protection
                                                  becomes stale over time. Why should                     without further notice to you.                         Agency (EPA).
                                                  the information you claim as business                                                                          ACTION: Notice of proposed action on
                                                  confidential be protected for the time                  III. What should I consider as I prepare
                                                                                                          my comments for EPA?                                   petition.
                                                  period specified in your answer to
                                                  question no. 1?                                            1. Submitting CBI. Do not submit this               SUMMARY:   The Environmental Protection
                                                     3. What measures have you taken to                   information to EPA through http://                     Agency (EPA) is proposing to deny the
                                                  protect the information claimed as                      www.regulations.gov or email. Please                   Clean Air Act (CAA or Act) petition
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                                                  business confidential? Have you                         submit this information by mail to the                 filed on December 9, 2013 (and
                                                  disclosed the information to anyone                     address identified in the ADDRESSES                    amended on December 17, 2013), by the
                                                  other than a governmental body or                       section of today’s notice for inclusion in             states of Connecticut, Delaware,
                                                  someone who is bound by an agreement                    the non-public CBI docket. Clearly mark                Maryland, Massachusetts, New
                                                  not to disclose the information further?                the part or all of the information that                Hampshire, New York, Pennsylvania,
                                                  If so, why should the information still                 you claim to be CBI. For CBI                           Rhode Island and Vermont. The petition
                                                  be considered business confidential?                    information in a disk or CD ROM that                   requested that the EPA add the states of


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                                                  6510                         Federal Register / Vol. 82, No. 12 / Thursday, January 19, 2017 / Notices

                                                  Illinois, Indiana, Kentucky, Michigan,                  Policy Division, (C504–01), Research                   NSPS New Source Performance Standard
                                                  North Carolina, Ohio, Tennessee, West                   Triangle Park, NC 27711; telephone                     NSR New Source Review
                                                  Virginia and Virginia to the Ozone                      number (919) 541–0641; fax number                      OMB Office of Management and Budget
                                                                                                                                                                 OTAG Ozone Transport Assessment Group
                                                  Transport Region (OTR). As a result of                  (919) 541–5509; email at: long.pam@                    OTC Ozone Transport Commission
                                                  this denial, the geographic scope or                    epa.gov (preferred method of contact).                 OTR Ozone Transport Region
                                                  requirements of the OTR will remain                     SUPPLEMENTARY INFORMATION:                             PM Particulate Matter
                                                  unchanged.                                                                                                     RACT Reasonably Available Control
                                                                                                          I. General Information                                   Technology
                                                  DATES: Comments. Comments must be
                                                                                                             Throughout this document wherever                   SIP State Implementation Plan
                                                  received on or before February 21, 2017.                                                                       SO2 Sulfur Dioxide
                                                     Public Hearing. If anyone contacts us                ‘‘we,’’ ‘‘us,’’ or ‘‘our’’ is used, we mean
                                                                                                          the U.S. EPA.                                          UMRA Unfunded Mandates Reform Act
                                                  requesting to speak at a public hearing                                                                        VOC Volatile Organic Compound
                                                  by January 30, 2017, we will hold a                        The information in this
                                                  public hearing. Additional information                  Supplementary Information section of                   II. Executive Summary of the EPA’s
                                                  about the hearing would be published in                 this preamble is organized as follows:                 Proposed Decision on the CAA Section
                                                  a subsequent Federal Register notice.                   I. General Information                                 176A Petition
                                                  For updates and additional information                     A. Where can I get a copy of this document             The EPA is proposing to deny a
                                                  on a public hearing, please check the                         and other related material?                      petition filed pursuant to CAA section
                                                  EPA’s Web site for this notice at https://                 B. What acronyms, abbreviations and units           176A(a) that requests the states of
                                                  www.epa.gov/implementation-2008-                              are used in this preamble?
                                                                                                                                                                 Illinois, Indiana, Kentucky, Michigan,
                                                  national-ambient-air-quality-standards-                 II. Executive Summary of the EPA’s Proposed
                                                                                                                Decision on the CAA Section 176A                 North Carolina, Ohio, Tennessee, West
                                                  naaqs-ozone-state.                                            Petition                                         Virginia and Virginia 1 (the upwind
                                                  ADDRESSES: Submit your comments,                        III. Background and Legal Authority                    states) be added to the OTR, which was
                                                  identified by Docket ID No. EPA–HQ–                        A. Ozone and Public Health                          established pursuant to section 184 of
                                                  OAR–2016–0596, at http://                                  B. Sections 176A and 184 of the CAA and             the CAA. The petitioning states of
                                                  www.regulations.gov. Follow the online                        the OTR Process                                  Connecticut, Delaware, Maryland,
                                                  instructions for submitting comments.                      C. Legal Standard for this Action                   Massachusetts, New Hampshire, New
                                                  Once submitted, comments cannot be                         D. The CAA Section 176A Petition and                York, Pennsylvania, Rhode Island and
                                                  edited or removed from Regulations.gov.                       Related Correspondence                           Vermont (the petitioning states,
                                                                                                          IV. The EPA’s Proposed Decision on the CAA
                                                  The EPA may publish any comment                               Section 176A Petition
                                                                                                                                                                 downwind states, or petitioners)
                                                  received to its public docket. Do not                      A. The CAA Good Neighbor Provisions                 submitted a technical analysis intended
                                                  submit electronically any information                      B. The EPA’s Interstate Transport                   to demonstrate that these nine upwind
                                                  you consider to be Confidential                               Rulemakings under the Good Neighbor              states significantly contribute to
                                                  Business Information (CBI) or other                           Provision                                        violations of the 2008 ozone national
                                                  information whose disclosure is                            C. Additional Rules that Reduce NOX and             ambient air quality standard (NAAQS)
                                                  restricted by statute. Multimedia                             VOC Emissions                                    in one or more of the current OTR
                                                  submissions (audio, video, etc.) must be                   D. Rationale for the Proposed Decision on           states.
                                                  accompanied by a written comment.                             the CAA 176A Petition                               Section 176A(a) of the CAA provides
                                                                                                          V. Judicial Review and Determinations Under            the Administrator with the authority to
                                                  The written comment is considered the                         Section 307(b)(1) of the CAA
                                                  official comment and should include                     VI. Statutory Authority
                                                                                                                                                                 develop interstate transport regions for
                                                  discussion of all points you wish to                                                                           particular pollutants where the
                                                  make. The EPA will generally not                        I. General Information                                 Administrator determines that interstate
                                                  consider comments or comment                            A. Where can I get a copy of this                      transport of air pollutants from one or
                                                  contents located outside of the primary                 document and other related                             more states contributes significantly to
                                                  submission (i.e., on the Web, Cloud, or                 information?                                           violations of air quality standards in
                                                  other file sharing system). For                                                                                other states. The creation of such an
                                                  additional submission methods, the full                   In addition to being available in the                interstate transport region requires the
                                                  EPA public comment policy,                              docket, an electronic copy of this                     establishment of a transport commission
                                                  information about CBI or multimedia                     document will be posted at https://                    with representatives from each state that
                                                  submissions, and general guidance on                    www.epa.gov/implementation-2008-                       make recommendations for the
                                                  making effective comments, please visit                 national-ambient-air-quality-standards-                mitigation of the interstate pollution.
                                                  http://www2.epa.gov/dockets/                            naaqs-ozone-state.                                     Congress created one such transport
                                                  commenting-epa-dockets.                                 B. What acronyms, abbreviations and                    region by statute in CAA section 184(a)
                                                  FOR FURTHER INFORMATION CONTACT:                        units are used in this preamble?                       in 1990 in order to address the interstate
                                                  Questions concerning this proposed                                                                             transport of ozone pollution, referred to
                                                                                                          APA Administrative Procedures Act                      as the OTR. The statute establishes
                                                  notice should be directed to Ms. Gobeail                CAA or Act Clean Air Act
                                                  McKinley, U.S. Environmental                                                                                   certain minimum control requirements
                                                                                                          CFR Code of Federal Regulations
                                                  Protection Agency, Office of Air Quality                CH4 Methane                                            that apply to sources of emissions in
                                                  Planning and Standards, Air Quality                     D.C. Circuit United States Court of Appeals            each state in the OTR intended to
                                                  Policy Division, Mail code C539–01,                       for the District of Columbia Circuit                 address transported ozone pollution and
                                                  Research Triangle Park, NC 27711,                       EGU Electric Generating Unit                           provides the Ozone Transport
                                                  telephone (919) 541–5246; email at                      EPA U.S. Environmental Protection Agency               Commission (OTC), comprised of
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                                                  mckinley.gobeail@epa.gov.                               FIP Federal Implementation Plan                        representatives of each state in the OTR,
                                                     To request a public hearing or                       FR Federal Register                                    with the authority to recommend
                                                                                                          NAAQS National Ambient Air Quality
                                                  information pertaining to a public                        Standard                                               1 The parts of northern Virginia included in the
                                                  hearing on this document, contact Ms.                   NEI National Emissions Inventory                       Washington, DC Consolidated Metropolitan
                                                  Pamela Long, U.S. Environmental                         NESHAP National Emission Standard for                  Statistical Area are already in the OTR. The petition
                                                  Protection Agency, Office of Air Quality                  Hazardous Air Pollutants                             seeks to add the remainder of the state of Virginia
                                                  Planning and Standards, Air Quality                     NOX Nitrogen Oxides                                    to the OTR as well.



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                                                                               Federal Register / Vol. 82, No. 12 / Thursday, January 19, 2017 / Notices                                            6511

                                                  additional controls within the region.                  oxides (NOX) and volatile organic                      implement necessary emissions
                                                  The downwind states’ petition seeks to                  compounds (VOC)) that contribute to                    reductions. For purposes of addressing
                                                  expand the OTR to include additional                    the formation of ozone. The EPA and                    interstate transport of ozone with
                                                  states and would thereby subject                        states have promulgated a number of                    respect to the 2008 ozone NAAQS, the
                                                  sources in those states to the                          rules that have already or are expected                EPA believes that continuing its
                                                  requirements applicable in the OTR.                     in the future to result in reductions in               longstanding and effective utilization of
                                                     The CAA provides other provisions                    ozone concentrations that will help                    the existing and expected control
                                                  for addressing the interstate transport of              areas attain the 2008 ozone NAAQS.                     programs under the CAA’s mandatory
                                                  ozone pollution besides sections 176A                   Several of these rules were developed                  good neighbor provision embodied in
                                                  and 184. In particular, the Act includes                specifically to address the interstate                 CAA section 110(a)(2)(D)(i)(I) is a more
                                                  a specific provision addressing how the                 transport of ozone pollution. With                     effective means of addressing regional
                                                  EPA and the states are to mitigate the                  respect to the 2008 ozone NAAQS, the                   ozone pollution transport with respect
                                                  specific sources of emissions that                      EPA recently promulgated FIPs to                       the 2008 ozone NAAQS for the areas
                                                  contribute to interstate ozone pollution                address the requirements of CAA                        within the OTR that must attain the
                                                  transport. Section 110(a)(2)(D)(i)(I) of                section 110(a)(2)(D)(i)(I) to specifically             NAAQS. Thus, the EPA believes that
                                                  the CAA, also referred to as the ‘‘good                 address interstate transport of ozone                  regulation pursuant to these other CAA
                                                  neighbor’’ provision, requires that states              pollution in the eastern U.S. from power               authorities together with the
                                                  develop state implementation plans                      plants during the ozone season.2 Other                 implementation of existing EPA and
                                                  (SIPs) to prohibit emissions that will                  rules reduce ozone precursor emissions                 state rules expected to further reduce
                                                  ‘‘contribute significantly to                           to address other ozone pollution                       precursor pollutant emissions that
                                                  nonattainment in, or interfere with                     challenges (e.g., ozone attainment                     contribute to the interstate transport of
                                                  maintenance by, any other state’’ with                  demonstrations) and impact the                         ozone are the more effective means for
                                                  respect to a NAAQS. Pursuant to this                    interstate transport of ozone pollution as             addressing the interstate ozone transport
                                                  provision, states have the primary                      a co-benefit. Further, several other state             problem with respect to the 2008 ozone
                                                  responsibility for reducing the interstate              and federal air quality regulations                    NAAQS. Accordingly, the EPA is
                                                  transport of pollutants, including ozone.               reduce emissions of other air pollutants,              proposing to deny the CAA section
                                                  Should the states fail to fulfill this                  such as rules targeted to reduce air                   176A petition filed by the petitioning
                                                  responsibility, the EPA is obligated to                 toxics from industrial boilers, which                  states. This proposed denial is specific
                                                  develop federal implementation plans                    often also result in the reduction of                  to the 2008 ozone NAAQS, but the EPA
                                                  (FIPs) to ensure that appropriate                       ozone precursors (e.g., NOX) and                       notes that under different circumstances
                                                  emissions reductions are achieved and                   thereby reduce interstate ozone                        the OTR provisions have been an
                                                  that the air quality standards downwind                 transport as a co-pollutant benefit.                   effective tool for air quality
                                                  are attained and maintained. The CAA                       Section 176A of the CAA provides the                management, and could be similarly
                                                  also contains a provision in section                    Administrator with discretion to                       effective in the future. The EPA requests
                                                  126(b) that permits states and political                determine whether to establish a new                   comment on the proposed denial of the
                                                  subdivisions to petition the                            transport region or expand an existing                 petition based on the EPA’s preferred
                                                  Administrator for a finding that any                    transport region. The EPA has reviewed                 approach to addressing interstate
                                                  major source or group of stationary                     the request of the petitioners in light of             transport with respect to the 2008 ozone
                                                  sources emits in violation of the                       the control requirements that apply to                 NAAQS pursuant to these other CAA
                                                  prohibition in the good neighbor                        sources located in states now included                 authorities.
                                                  provision. In response to such a finding,               in the OTR and that would apply to
                                                  the EPA may promulgate additional                       states if they were added and the other                III. Background and Legal Authority
                                                  limits on such sources, and these limits                statutory authorities provided for                     A. Ozone and Public Health
                                                  must then be included in a state’s good                 addressing the interstate transport of
                                                  neighbor SIP pursuant to CAA section                                                                              Ground-level ozone causes a variety
                                                                                                          ozone pollution. The EPA proposes to
                                                  110(a)(2)(D)(ii). This provision provides                                                                      of negative effects on human health,
                                                                                                          deny the CAA section 176A petition to
                                                  a means for the EPA to mediate disputes                                                                        vegetation, and ecosystems. In humans,
                                                                                                          add states to the OTR for the purpose of
                                                  between the states regarding the                                                                               acute and chronic exposure to ozone is
                                                                                                          addressing the interstate ozone transport
                                                  compliance of specific sources with the                                                                        associated with premature mortality and
                                                                                                          problem with respect to the 2008 ozone
                                                  requirements of the good neighbor                                                                              a number of morbidity effects, such as
                                                                                                          NAAQS. The EPA believes that, based
                                                  provision. As described in detail later in                                                                     asthma exacerbation. In ecosystems,
                                                                                                          on the reasons fully described in
                                                  this document, states and the EPA have                                                                         ozone exposure causes visible foliar
                                                                                                          Section IV of this document, other CAA
                                                  historically used their authority under                                                                        injury, decreases plant growth, and
                                                                                                          provisions (e.g., CAA sections 110 or
                                                  CAA sections 110(a)(2)(D)(i)(I) and                                                                            affects ecosystem community
                                                                                                          126) provide a better alternative
                                                  section 126 to develop SIPs and FIPs                                                                           composition. Ground-level ozone is not
                                                                                                          pathway for states and the EPA to
                                                  that target specific sources of ozone                                                                          emitted directly into the air, but is a
                                                                                                          develop a targeted remedy to address
                                                  precursor emissions to address                                                                                 secondary air pollutant created by
                                                                                                          interstate ozone transport that focuses
                                                  interstate ozone transport across the                                                                          chemical reactions between NOX,
                                                                                                          on the precursor pollutants and sources
                                                  U.S., including with respect to air                     most effective at addressing the nature                carbon monoxide (CO), methane (CH4),
                                                  quality concerns stemming from                          of the downwind air quality problems                   and non-methane VOCs in the presence
                                                  interstate transport of ozone within the                identified by the petitioning states. The              of sunlight. Emissions from electric
                                                                                                                                                                 generating utilities (EGUs), industrial
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                                                  OTR.                                                    states and the EPA have historically and
                                                     Pursuant to these and other CAA                      effectively reduced ozone and the                      facilities, motor vehicles, gasoline
                                                  authorities, the EPA and states within                  interstate transport of ozone pollution                vapors, and chemical solvents are some
                                                  and outside the OTR have taken                          using these CAA authorities to                         of the major anthropogenic sources of
                                                  significant actions independently and in                                                                       ozone precursors. The potential for
                                                  collaboration for many years to address                   2 See 81 FR 74504, October 26, 2016, Cross-State     ground-level ozone formation increases
                                                  ozone pollution problems by reducing                    Air Pollution Rule Update for the 2008 Ozone           during periods with warmer
                                                  precursor emissions (i.e., nitrogen                     NAAQS.                                                 temperatures and stagnant air masses;


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                                                  6512                         Federal Register / Vol. 82, No. 12 / Thursday, January 19, 2017 / Notices

                                                  therefore ozone levels are generally                     percent reduction in electric generating              assess control strategies to mitigate the
                                                  higher during the summer months.3                        unit (EGU) and non-EGU NOX emissions                  interstate transport.
                                                  Ground-level ozone concentrations and                    would result in approximately a 6 ppb                   Subpart 2 of part D of title I of the
                                                  temperature are highly correlated in the                 reduction in peak ozone concentrations                CAA provides provisions governing
                                                  eastern U.S. with observed ozone                         in Washington, DC).6                                  additional plan requirements for
                                                  increases of 2–3 parts per billion (ppb)                   On March 12, 2008, the EPA                          designated ozone nonattainment areas.
                                                  per degree Celsius reported.4 Increased                  promulgated a revision to the NAAQS,                  Consistent with CAA section 176A
                                                  temperatures may also increase                           lowering both the primary and                         found in subpart 1, subpart 2 included
                                                  emissions of volatile man-made and                       secondary standards to 75 ppb.7 On                    specific provisions focused on the
                                                  biogenic organics and can indirectly                     October 1, 2015, the EPA strengthened                 interstate transport of ozone. In
                                                  increase anthropogenic NOX emissions                     the ground-level ozone NAAQS, based                   particular, CAA section 184(a)
                                                  as well (e.g., through increased                         on extensive scientific evidence about                established a single transport region for
                                                  electricity generation to power air                      ozone’s effects on public health and                  ozone—the OTR—comprised of the
                                                  conditioning).                                           welfare.8 This document does not                      states of Connecticut, Delaware, Maine,
                                                     Precursor emissions can be                            address any CAA requirements with                     Maryland, Massachusetts, New
                                                  transported downwind directly or, after                  respect to the 2015 ozone NAAQS.                      Hampshire, New Jersey, New York,
                                                  transformation in the atmosphere, as                                                                           Pennsylvania, Rhode Island, Vermont
                                                                                                           B. Sections 176A and 184 of the CAA
                                                  ozone. Studies have established that                                                                           and the Consolidated Metropolitan
                                                                                                           and the OTR Process
                                                  ozone formation, atmospheric residence,                                                                        Statistical Area that includes the District
                                                  and transport occurs on a regional scale                    Subpart 1 of part D of title I of the              of Columbia and certain parts of
                                                  (i.e., hundreds of miles) over much of                   CAA provides provisions governing                     northern Virginia.
                                                  the eastern U.S., with elevated                          general plan requirements for                           Section 184(b) of the CAA established
                                                  concentrations occurring in rural as well                designated nonattainment areas. This                  certain control requirements that each
                                                  as metropolitan areas. As a result of                    subpart includes provisions providing                 state in the OTR is required to
                                                  ozone transport, in any given location,                  for the development of transport regions              implement within the state and which
                                                  ozone pollution levels are impacted by                   to address the interstate transport of                require certain controls on sources of
                                                  a combination of local emissions and                     pollutants that contribute to NAAQS                   NOX and VOCs statewide. These
                                                  emissions from upwind sources. The                       violations. In particular, section 176A(a)            include the following. Section
                                                  transport of ozone pollution across state                of the CAA provides that, on the EPA’s                184(b)(1)(A) of the CAA requires OTR
                                                  borders compounds the difficulty for                     own motion or by a petition from the                  states to include in their SIPs enhanced
                                                  downwind states in meeting the health-                   Governor of any state, whenever the                   vehicle inspection and maintenance (I/
                                                  and-welfare based NAAQS. Numerous                        EPA has reason to believe that the                    M) programs.9 Section 184(b)(2) of the
                                                  observational studies have                               interstate transport of air pollutants                CAA requires SIPs to subject major
                                                  demonstrated the transport of ozone and                  from one or more states contributes                   sources of VOCs in ozone transport
                                                  its precursors and the impact of upwind                  significantly to a violation of the                   regions to the same requirements that
                                                  emissions on high concentrations of                      NAAQS in one or more other states, the                apply to major sources in designated
                                                  ozone pollution.                                         EPA may establish, by rule, a transport               ozone nonattainment areas classified as
                                                     While substantial progress has been                   region for such pollutant that includes               moderate, regardless of whether the
                                                  made in reducing ozone in many urban                     such states. The provision further                    source is located in a nonattainment
                                                  areas, regional-scale ozone transport is                 provides that the EPA may add any state               area. Thus, the state must adopt rules to
                                                  still an important component of peak                     or portion of a state to any transport                apply the nonattainment new source
                                                  ozone concentrations during the                          region whenever the Administrator has                 review (NNSR) (pursuant to CAA
                                                  summer ozone season. Model                               reason to believe that the interstate                 section 173) and reasonably available
                                                  assessments have looked at impacts on                    transport of air pollutants from such                 control technology (RACT) (pursuant to
                                                  peak ozone concentrations after                          state significantly contributes to a                  CAA section 182(b)(2)) provisions for
                                                  potential emission reduction scenarios                   violation of the standard in the transport            major VOC sources statewide. Section
                                                  for NOX and VOCs for NOX-limited and                     region.                                               184(b)(2) of the CAA further provides
                                                  VOC-limited areas. For example, one                         Section 176A(b) of the CAA provides                that, for purposes of implementing these
                                                  study 5 concluded that NOX emission                      that when the EPA establishes a                       requirements, a major stationary source
                                                  reductions strategies would be effective                 transport region, the Administrator shall             shall be defined as any source that emits
                                                  in lowering ozone mixing ratios in                       establish an associated transport                     or has the potential to emit at least 50
                                                  urban areas and another study showed                     commission, comprised of (at a                        tons per year of VOCs. Under CAA
                                                  NOX reductions would reduce peak                         minimum) the following: Governor or                   section 184(b)(2) states must also
                                                  ozone concentrations in non-attainment                   designee of each state, the EPA                       implement Stage II vapor recovery
                                                  areas in the Mid-Atlantic (i.e., a 10                    Administrator or designee, the Regional               programs, incremental to Onboard
                                                                                                           EPA Administrator and an air pollution                Refueling Vapor Recovery
                                                     3 Rasmussen, D.J. et al. (2011) Ground-level          control official appointed by the                     achievements, or measures that achieve
                                                  ozone-temperature relationship in the eastern US: A      Governor of each state. The purpose of                comparable emissions reductions for
                                                  monthly climatology for evaluating chemistry-            the transport commission is to assess                 both attainment and nonattainment
                                                  climate models. Atmospheric Environment 47: 142–         the degree of interstate transport
                                                  153.
                                                                                                                                                                 areas.10 These programs are required to
                                                     4 Bloomer, B.J., J.W. Stehr, C.A. Piety, R.J.
                                                                                                           throughout the transport region and                   be implemented statewide in any state
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                                                  Salawitch, and R.R. Dickerson (2009), Observed
                                                                                                              6 Liao, K. et al. (2013) Impacts of interstate
                                                  relationships of ozone air pollution with                                                                        9 Enhanced vehicle inspection and maintenance

                                                  temperature and emissions, Geophysical Research          transport of pollutants on high ozone events over     programs are required in metropolitan statistical
                                                  Letters, 36, L09803.                                     the Mid-Atlantic U.S. Atmospheric Environment         areas in the OTR with a 1990 Census population of
                                                     5 Jiang, G.; Fast, J.D. (2004) Modeling the effects   84, 100–112.                                          100,000 or more regardless of ozone attainment
                                                                                                              7 See National Ambient Air Quality Standards for   status.
                                                  of VOC and NOX emission sources on ozone
                                                  formation in Houston during the TexAQS 2000 field        Ozone, Final Rule, 73 FR 16436 (March 27, 2008).        10 See 72 FR 28772, May 16, 2012, Air Quality:

                                                  campaign. Atmospheric Environment 38: 5071–                 8 See National Ambient Air Quality Standards for   Widespread Use for Onboard Refueling Vapor
                                                  5085.                                                    Ozone, Final Rule, 80 FR 65292 (October 26, 2015).    Recovery and Stage II Waiver.



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                                                                               Federal Register / Vol. 82, No. 12 / Thursday, January 19, 2017 / Notices                                             6513

                                                  included within the OTR, not just in                    must submit SIPs addressing these                      vehicles or new motor vehicle engines,
                                                  areas designated as nonattainment.                      requirements within 9 months after                     which in his judgment cause, or
                                                     Section 182(f) of the CAA requires                   inclusion in the OTR.                                  contribute to, air pollution which may
                                                  states to apply the same requirements to                                                                       reasonably be anticipated to endanger
                                                                                                          C. Legal Standard for This Action
                                                  major stationary sources of NOX as are                                                                         public health or welfare.’’ The EPA
                                                  applied to major stationary sources of                     Section 176A(a)(1) of the CAA states                denied the petition, reasoning that the
                                                  VOCs under subpart 2. Thus, the same                    that the Administrator may add a state                 Act does not authorize the agency to
                                                  NNSR and RACT requirements that                         to a transport region if the                           issue mandatory regulations to address
                                                  apply to major stationary sources of                    Administrator has reason to believe that               global climate change. Id. at 500. The
                                                  VOC in the OTR also apply to major                      emissions from the state significantly                 Court concluded that the EPA has
                                                  stationary sources of NOX.11 While NOX                  contribute to a violation of the NAAQS                 statutory authority to regulate emissions
                                                  emissions are necessary for the                         within the transport region. For the                   of greenhouse gases, and that the
                                                  formation of ozone in the lower                         reasons discussed in this section, the                 phrases ‘‘from time to time’’ and ‘‘in his
                                                  atmosphere, a local decrease in NOX                     use of the discretionary term ‘‘may’’ in               judgment’’ conferred discretion on the
                                                  emissions can, in some cases, increase                  CAA section 176A(a) means that the                     Administrator to determine whether to
                                                  local ozone concentrations, creating                    Administrator may exercise reasonable                  promulgate an endangerment finding.
                                                  potential ‘‘NOX disbenefits.’’                          discretion in implementing the                         Thus, ‘‘[u]nder the clear terms of the
                                                  Accordingly, CAA section 182(f)                         requirements of the CAA with respect to                Clean Air Act, EPA can avoid taking
                                                  provides for an exemption of the NOX                    interstate pollution by determining                    further action . . . if it provides some
                                                  requirements where the Administrator                    whether or not to approve or deny a                    reasonable explanation as to why it
                                                  determines that such NOX reductions                     CAA section 176A petition.                             cannot or will not exercise its
                                                  would not contribute to the attainment                     The Administrator’s discretion                      discretion.’’ Id. at 533. The Supreme
                                                  of the NAAQS in a particular area.                      pursuant to CAA section 176A(a) has
                                                                                                                                                                 Court confirmed that the review of an
                                                  Areas granted a NOX exemption under                     been affirmed by the U.S. District Court
                                                                                                                                                                 agency’s denial of a petition for
                                                  CAA section 182(f) may be exempt from                   for the District of Columbia Circuit (D.C.
                                                                                                                                                                 rulemaking is very narrow: ‘‘Refusals to
                                                  certain requirements of the EPA’s motor                 Circuit). In Michigan v. EPA, plaintiffs
                                                                                                                                                                 promulgate rules are . . . susceptible to
                                                  vehicle I/M regulations and from certain                challenged whether the EPA may
                                                                                                                                                                 judicial review, though such review is
                                                  federal requirements of general and                     exercise its authority pursuant to CAA
                                                                                                                                                                 extremely limited and highly
                                                  transportation conformity.12                            sections 110(k)(5) and 110(a)(2)(D) of
                                                                                                                                                                 deferential.’’ Id. at 527–28 (quotations
                                                     Additionally, under CAA section                      the statute to address interstate
                                                                                                                                                                 omitted). Further, the court explained
                                                  184(c), the OTC may, based on a                         transport without first forming a
                                                                                                                                                                 that the EPA’s reason should conform to
                                                  majority vote of the Governors on the                   transport commission pursuant to CAA
                                                                                                          section 176A(b). 213 F.3d 663, 672                     the authorizing statute, and that the
                                                  Commission, recommend additional                                                                               agency could avoid taking further
                                                  control measures not specified in the                   (2000). The D.C. Circuit held that the
                                                                                                          agency shall only establish a transport                regulatory action if it provides some
                                                  statute to be applied within all or part                                                                       reasonable explanation as to why it
                                                  of the OTR if necessary to bring any                    commission ‘‘if the agency exercises its
                                                                                                          discretion to create a transport region                cannot or will not exercise its
                                                  areas in the OTR into attainment by the                                                                        discretion. Id. at 533 (citations omitted).
                                                  applicable attainment dates. If EPA                     pursuant to section 176A(a).’’ Id. The
                                                                                                          court explained that ‘‘EPA can address                    Consistent with Massachusetts, the
                                                  approves such a recommendation,                                                                                D.C. Circuit has held that agencies have
                                                                                                          interstate transport apart from
                                                  under CAA section 184(c)(5) the                                                                                the discretion to determine how to best
                                                                                                          convening a 176A/184 transport
                                                  Administrator must declare each state’s                                                                        allocate resources in order to prioritize
                                                                                                          commission as subsection (a) provides
                                                  implementation plan inadequate and it                                                                          regulatory actions in a way that best
                                                                                                          that EPA ‘may’ establish a transport
                                                  must order the states to include the                                                                           achieve the objectives of the authorizing
                                                                                                          region . . . .’’ Id. Thus, the court held
                                                  approved control measures in their                                                                             statute. In Defenders of Wildlife v.
                                                                                                          that the statute clearly provides that the
                                                  revised plans pursuant to CAA section                                                                          Gutierrez, the court rejected a challenge
                                                                                                          discretion to create a transport region
                                                  110(k)(5) for the state to meet the                                                                            to the National Marine Fisheries
                                                                                                          rests with the Administrator. So, too,
                                                  requirements of CAA section                                                                                    Service’s (NMFS) denial of a petition for
                                                                                                          does the discretion to add states to or
                                                  110(a)(2)(D). If a CAA section 110(k)(5)                remove states from a transport                         emergency rulemaking to impose speed
                                                  finding is issued, states have 1 year to                commission.                                            restrictions to protect the right whale
                                                  revise their SIPs to include the                           Several courts have held that the use               from boating traffic pursuant to section
                                                  approved measures.                                      of similarly non-mandatory language                    553(e) of the Endangered Species Act,
                                                     States included in the OTR by virtue                 such as that found in CAA section 176A                 which requires agencies to ‘‘give an
                                                  of CAA section 184(b)(1) were required                  confers discretion on the agency to grant              interested person the right to petition
                                                  to submit SIPs to the EPA addressing                    or deny a petition so long as it is                    for the issuance, amendment, or repeal
                                                  these requirements within 2 years of the                supported by a ‘‘reasonable                            of a rule.’’ 532 F.3d 913 (D.C. Cir. 2008).
                                                  1990 CAA Amendments, or by                              explanation.’’ For example, in                         The NMFS denied the petition on the
                                                  November 15, 1992. Section 184(b)(1) of                 Massachusetts v. Environmental                         grounds that imposing such restrictions
                                                  the CAA further provides that if states                 Protection Agency, the Supreme Court                   would divert resources from, and delay
                                                  are later added to the OTR pursuant to                  was considering whether the EPA’s                      development of, a more comprehensive
                                                  CAA section 176A(a)(1), such states                     denial of a petition to regulate                       strategy for protecting the whale
                                                                                                          greenhouse gases under CAA section                     population. Id. at 916. The court
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                                                    11 See 57 FR 55622 (Nitrogen Oxides Supplement

                                                  to the General Preamble, published November 25,         202(a)(1) was reasonable. 549 U.S. 497                 determined that NMFS’s explanation for
                                                  1992).                                                  (2007). Section 202(a)(1) of the CAA                   the denial was a reasonable decision to
                                                    12 As stated in the EPA’s I/M (November 5, 1992;      states that the Administrator ‘‘shall by               focus its resources on a comprehensive
                                                  57 FR 52950) and conformity rules (60 FR 57179          regulation prescribe (and from time to                 strategy, which in light of the
                                                  for transportation rules and 58 FR 63214 for general
                                                  rules), certain NOX requirements in those rules do
                                                                                                          time revise) . . . standards applicable to             information before the NMFS at the
                                                  not apply where the EPA grants an area-wide             the emission of any air pollutant from                 time, was reasoned and adequately
                                                  exemption under CAA section 182(f).                     any class or classes of new motor                      supported by the record. Id.


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                                                  6514                         Federal Register / Vol. 82, No. 12 / Thursday, January 19, 2017 / Notices

                                                     Similarly, in WildEarth Guardians v.                 discretion when determining whether to                 emissions of NOX and VOCs. The
                                                  EPA, the court reviewed the EPA’s                       grant or deny such a petition.                         petitioners contend that the expansion
                                                  denial of a petition to list coal mines for                                                                    of the OTR is warranted so that the
                                                                                                          D. The CAA Section 176A Petition and
                                                  regulation under CAA section                                                                                   downwind states and the upwind states
                                                                                                          Related Correspondence
                                                  111(b)(1)(A). 751 F.3d 651 (D.C. Cir.                                                                          can work together to address interstate
                                                  2014). Section 110(b)(1)(A) of the CAA                    On December 9, 2013, the states of                   ozone transport for the 2008 ozone
                                                  provides that, as a means of developing                 Connecticut, Delaware, Maryland,                       NAAQS. Also, the petitioners assert that
                                                  standards of performance for new                        Massachusetts, New Hampshire, New                      without immediate expansion of the
                                                  stationary sources, the EPA shall, by a                 York, Rhode Island and Vermont                         OTR, attainment of the 2008 ozone
                                                                                                          submitted a petition under CAA section                 NAAQS in many areas in the U.S. will
                                                  date certain publish ‘‘(and from time to
                                                                                                          176A requesting that the EPA add to the                remain elusive.
                                                  time thereafter shall revise) a list of
                                                                                                          OTR the states of Illinois, Indiana,                      At the time the petition was
                                                  categories of stationary sources.’’
                                                                                                          Kentucky, Michigan, North Carolina,                    submitted, the EPA’s most recent effort
                                                  (emphasis added) The provision                          Ohio, Tennessee, West Virginia and the                 to address the interstate transport of
                                                  provides that the Administrator ‘‘shall                 portion of Virginia currently not within               ozone pollution was subject to litigation
                                                  include a category of sources in such list              the OTR. On December 17, 2013, the                     in the D.C. Circuit. As discussed in
                                                  if in his judgment it causes, or                        petition was amended to add the state                  more detail later in this document, the
                                                  contributes significantly to, air pollution             of Pennsylvania as an additional state                 EPA issued the Cross-State Air Pollution
                                                  which may reasonably be anticipated to                  petitioner.                                            Rule (CSAPR) pursuant to section
                                                  endanger public health and welfare.’’                     The petitioning states submitted a                   110(a)(2)(D)(i)(I) of the CAA in order to
                                                  The EPA denied the petition, explaining                 technical analysis which the petitioning               address interstate transport with respect
                                                  that it must prioritize its actions in light            states contend demonstrates that the                   to the 1997 ozone NAAQS as well as the
                                                  of limited resources and ongoing budget                 nine named upwind states significantly                 1997 and 2006 fine particulate matter
                                                  uncertainties, and that denial of the                   contribute to violations of the 2008                   (PM2.5) NAAQS. 76 FR 48208 (August 8,
                                                  petition was not a determination as to                  ozone NAAQS in the OTR. The                            2011). On August 21, 2012, the D.C.
                                                  whether coal mines should be regulated                  petitioning states acknowledge and                     Circuit issued a decision in EME Homer
                                                  as a source of air pollutants. 751 F.3d at              include data used to support                           City Generation, L.P. v. EPA, 696 F.3d
                                                  650. The EPA also noted as part of its                  rulemakings promulgated by the EPA                     7 (D.C. Cir. 2012), vacating CSAPR
                                                  denial that it might in the future initiate             that addressed interstate transport with               based on several holdings that would
                                                  a rulemaking to do so. The D.C. Circuit                 respect to both the 2008 ozone NAAQS                   have limited the EPA’s authority
                                                  held that the language in CAA section                   and prior ozone NAAQS in order to                      pursuant to section 110(a)(2)(D)(i)(I).
                                                  111(b)(1)(A)—‘‘from time to time’’ and                  further support their request. Moreover,               The petitioners subsequently submitted
                                                  ‘‘in his judgment’’—means that the                      the petitioners identified those areas                 the section 176A petition. Thereafter, on
                                                  Administrator may exercise reasonable                   that are designated nonattainment with                 April 29, 2014, the Supreme Court
                                                  discretion in determining when to add                   respect to the 2008 ozone NAAQS                        issued a decision reversing the D.C.
                                                  new sources to the list of regulated                    within and outside the OTR and                         Circuit’s decision and upholding the
                                                  pollutants, and that such language                      conducted a linear extrapolation to                    EPA’s interpretation of its authority
                                                  afforded agency officials discretion to                 predict that certain areas will continue               pursuant to CAA section 110. EPA v.
                                                  prioritize sources that are the most                    to be in nonattainment or will have                    EME Homer City Generation, L.P., 134 S.
                                                  significant threats to public health to                 difficulty maintaining attainment of the               Ct. 1584 (2014).
                                                  ensure effective administration of the                  NAAQS after the EPA’s 2008 ozone                          Since the petition was submitted, the
                                                  agency’s regulatory agenda. Id. at 651.                 NAAQS final area designations in 2012.                 EPA has received correspondence from
                                                                                                          The petitioning states’ 2018 modeling                  both the upwind states and the
                                                     In each of these cases previously                    showed that, with on-the-way OTR                       petitioning states regarding the EPA’s
                                                  discussed, the acting agency has been                   measures, areas within the OTR and                     pending action on the petition. On
                                                  entitled to broad discretion to act on a                non-OTR would continue to have                         February 14, 2014, the EPA received a
                                                  pending petition so long as the agency                  problems attaining the 2008 ozone                      letter from the environmental
                                                  provided a reasoned explanation.                        NAAQS. Lastly, their 2020 modeling                     commissioners and directors
                                                  Notably, as each of these decisions                     showed that with a 58 percent NOX and                  representing the states of Illinois, Ohio,
                                                  focused on the case-specific                            3 percent VOC emissions reduction over                 Indiana, Tennessee, Kentucky, Virginia,
                                                  circumstances relied upon by the acting                 the eastern U.S., there would only be                  Michigan, West Virginia and North
                                                  agency to deny the pending petition, the                one area in New Jersey that could have                 Carolina (in collaboration with LADCO)
                                                  courts did not speak to whether the                     trouble maintaining the NAAQS.                         disagreeing with the basis for the
                                                  agency might reach a different                            The petitioners further note that the                petition and requesting that the EPA
                                                  conclusion under different                              OTR states have adopted and                            deny the petition. On May 29, 2015, the
                                                  circumstances. Like the statutory                       implemented numerous and                               EPA received a letter from the Midwest
                                                  provisions evaluated by the courts in                   increasingly stringent controls on                     Ozone Group urging that the EPA
                                                  these cases, the term ‘‘may’’ in CAA                    sources of VOCs and NOX that may not                   consider recent air quality, on-the-books
                                                  section 176A(a) means that the                          currently be required for sources in the               measures between now and 2018 and
                                                  Administrator is permitted to exercise                  upwind states. Petitioners contend that                other related information prior to any
                                                  reasonable discretion in determining                    expansion of the OTR to include these                  action on the petition. On July 7, 2015,
                                                  when to add new states to a transport                   upwind states will help the petitioning                the EPA received a letter from state
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                                                  region. While the Administrator must                    states attain the 2008 ozone NAAQS.                    representatives from the states of Ohio,
                                                  adequately explain the facts and policy                 The petitioning states include two case                Kentucky, Indiana, West Virginia, North
                                                  concerns she relied on in acting on the                 studies that identify the types of                     Carolina and Michigan communicating
                                                  petition and conform such reasons with                  measures adopted throughout the                        the progress of the voluntary dialogue
                                                  the authorizing statute, review of such                 current OTR including mobile source                    called the State Collaborative on Ozone
                                                  a decision is highly deferential. Thus,                 and stationary source control measures                 Transport (SCOOT) that according to the
                                                  the agency is entitled to broad                         that have been enacted to minimize                     letter, resulted in commitments, from


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                                                                               Federal Register / Vol. 82, No. 12 / Thursday, January 19, 2017 / Notices                                                       6515

                                                  utilities in the upwind states to operate               continue to achieve, significant                       not submit a required SIP addressing the
                                                  NOX controls during the summer of                       reductions in emissions of NOX and                     good neighbor provision, the EPA
                                                  2015. The upwind states believed that                   VOCs resulting in lower levels of                      publishes in the Federal Register a
                                                  the requests from some Northeast states                 transported ozone pollution that impact                ‘‘finding of failure to submit’’ that a
                                                  to sign a memorandum of understanding                   downwind attainment and maintenance                    state has failed to make the required SIP
                                                  to require additional emission control                  of the 2008 ozone NAAQS. Finally,                      submission. If the EPA disapproves a
                                                  and reporting requirements from                         Section IV.D of this document describes                state’s SIP submission or if the EPA
                                                  facilities and place such requirements                  the EPA’s rationale, based on these                    issues a finding of failure to submit,
                                                  into SIPs to be unnecessary and                         considerations, for proposing to deny                  then the action triggers the EPA’s
                                                  requested that the CAA section 176A                     this CAA section 176A petition.                        obligations under section 110(c) of the
                                                  petition be withdrawn by the                               As explained more fully later, the                  CAA, to promulgate a FIP within 2
                                                  petitioning states or denied by the EPA                 EPA believes an expansion of the OTR                   years, unless the state corrects the
                                                  given the forecasted air quality                        is unnecessary at this time and would                  deficiency, and the EPA approves the
                                                  improvements and declining ozone                        not be the most efficient way to address               plan or plan revision before the EPA
                                                  trends. On October 30, 2015, the EPA                    the remaining interstate transport issues              promulgates a FIP. Thus, in the event
                                                  received a letter from environmental                    for the 2008 ozone NAAQS in states                     that a state does not address the good
                                                  commissioners (or their designated                      currently included in the OTR.                         neighbor provision requirements in a
                                                  representatives) from the petitioning                   Additional local and regional ozone                    SIP submission, the statute provides
                                                  states that provided an update on the                   precursor emissions reductions are                     that the EPA must address the
                                                  SCOOT process and responded to the                      expected in the coming years from                      requirements in the state’s stead.
                                                  July 7, 2015, letter expressing a need for              already on-the-books rules (see Sections                  Section 110(k)(5) of the CAA also
                                                  federally enforceable commitments from                  IV. B and C of this document for more                  provides a means for the EPA to reopen
                                                  states to operate exiting controls.                     details) and as described elsewhere in                 previously approved SIPs, including
                                                     On April 6, 2016, the EPA received a                 this document, the EPA has the                         good neighbor SIPs, if the EPA
                                                  letter from the petitioning states                      authority through other CAA provisions                 determines that an approved SIP is
                                                  requesting immediate action to grant the                (including CAA sections 110 and 126) to                substantially inadequate to attain or
                                                  CAA section 176A petition. The letter                   develop a more effective remedy to                     maintain the NAAQS, to adequately
                                                  acknowledged the EPA’s recent                           address the particular pollutants and                  mitigate interstate pollutant transport,
                                                  proposal to update the CSAPR to                         sources for this air quality situation.                or to otherwise comply with
                                                  address interstate transport for the 2008                                                                      requirements of the CAA. The EPA can
                                                                                                          A. The CAA Good Neighbor Provisions
                                                  ozone NAAQS and urged the EPA to                                                                               use its authority under CAA section
                                                  grant the petition because the proposed                    The CAA provision that states and the               110(k)(5) to call for re-submission of the
                                                  rulemaking would only partially                         EPA have used most for addressing                      SIP to correct the inadequacies under
                                                  address ozone transport problems in the                 interstate transport is section                        CAA 110(a)(2)(D)(i)(I), and if the state
                                                  eastern U.S. Further, the letter noted                  110(a)(2)(D)(i)(I), often referred to as the           fails to make the required submission,
                                                  that granting the petition will also                    ‘‘good neighbor’’ or ‘‘interstate                      the EPA can promulgate a FIP under
                                                  facilitate efforts to attain the 2015 ozone             transport’’ provision, requires states to              CAA section 110(c) to address the
                                                  NAAQS, as well as future updates to the                 prohibit certain emissions from in-state               inadequacies.
                                                  ozone NAAQS. On May 16, 2016, the                       sources if such emissions impact the air                  Finally, section 126 of the CAA
                                                  EPA received a letter from the upwind                   quality in downwind states.                            provides states with an additional
                                                  states of Ohio, Kentucky, Indiana, West                 Specifically, in keeping with the CAA’s                opportunity to bring to the EPA’s
                                                  Virginia and Michigan requesting that                   structure of shared state and federal                  attention specific instances where a
                                                  the EPA deny the petition, claiming that                regulatory responsibility, CAA section                 source or a group of sources in a specific
                                                  the technical information used to                       110(a)(2)(D)(i)(I) requires all states,                state may be emitting in excess of what
                                                  support the petition was not comparable                 within 3 years of promulgation of a new                the good neighbor provision would
                                                  to current air quality and noting the                   or revised NAAQS, to submit SIPs that                  allow. Section 126(b) of the CAA
                                                  EPA’s proposed transport rule to                        contain adequate provisions prohibiting                provides that any state or political
                                                  address the 2008 ozone NAAQS. These                     any source or other type of emissions                  subdivision may petition the
                                                  communications can be found in the                      activity within the state from emitting                Administrator of the EPA to find that
                                                  docket for this action.                                 any air pollutant in amounts which will                any major source or group of stationary
                                                                                                          contribute significantly to                            sources in upwind states emits or would
                                                  IV. The EPA’s Proposed Decision on the                  nonattainment in, or interfere with
                                                  CAA Section 176A Petition                                                                                      emit any air pollutant in violation of the
                                                                                                          maintenance by, any other state with                   prohibition of CAA section
                                                    This section describes the basis for                  respect to any NAAQS. Thus, each state                 110(a)(2)(D)(i).13 Petitions submitted
                                                  the EPA’s proposed denial of this CAA                   is required to submit a SIP that                       pursuant to this section are referred to
                                                  section 176A petition. Section IV.A of                  demonstrates the state is adequately                   as CAA section 126 petitions. Section
                                                  this document describes the alternative                 controlling sources of emissions that                  126(c) of the CAA explains the impact
                                                  authorities provided by the CAA for                     would impact downwind states’ air                      of such a finding and establishes the
                                                  addressing the interstate transport of                  quality relative to the NAAQS in                       conditions under which continued
                                                  ozone pollution and the flexibilities                   violation of the good neighbor                         operation of a source subject to such a
                                                  those provisions provide. Section IV.B                  provision.                                             finding may be permitted. Specifically,
                                                  of this document describes EPA’s                           Once a state submits a good neighbor
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                                                  historical use of these authorities to                  SIP, the EPA must evaluate the SIP to                     13 The text of CAA section 126 codified in the
                                                  address the interstate transport of ozone               determine whether it meets the statutory               U.S. Code cross references CAA section
                                                  pollution and the advantages of those                   criteria of the good neighbor provision,               110(a)(2)(D)(ii) instead of CAA section
                                                  rulemakings for addressing current                      and then approve or disapprove, in                     110(a)(2)(D)(i). The courts have confirmed that this
                                                                                                                                                                 is a scrivener’s error and the correct cross reference
                                                  ozone nonattainment problems. Section                   whole or in part, the state’s submission               is to CAA section 110(a)(2)(D)(i), See Appalachian
                                                  IV.C of this document describes other                   in accordance with CAA section                         Power Co. v. EPA, 249 F.3d 1032, 1040–44 (D.C. Cir.
                                                  measures that have achieved, and will                   110(k)(3). In the event that a state does              2001).



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                                                  6516                         Federal Register / Vol. 82, No. 12 / Thursday, January 19, 2017 / Notices

                                                  CAA section 126(c) provides that it                     states in order to comply with the                     include additional states, and sources
                                                  would be a violation of section 126 of                  requirements of CAA section                            within those states, in OTR in order to
                                                  the Act and of the applicable SIP: (1)                  110(a)(2)(D)(i)(I) with respect to                     address the current nonattainment
                                                  For any major proposed new or                           downwind nonattainment and                             situation for the 2008 ozone NAAQS in
                                                  modified source subject to a CAA                        maintenance concerns with respect to                   the petitioning states. Prior to the EPA’s
                                                  section 126 finding to be constructed or                the NAAQS for ozone and PM2.5. In                      promulgation of some of those federal
                                                  operate in violation of the good                        Section IV.B. of this document, the EPA                transport rules, the EPA worked with
                                                  neighbor prohibition of CAA section                     describes the importance of these                      states and provided guidance to help
                                                  110(a)(2)(D)(i); or (2) for any major                   transport rules as they relate to regional             states submit approvable good neighbor
                                                  existing source for which such a finding                ozone pollution transport.                             SIPs to address the CAA good neighbor
                                                  has been made to operate more than 3                                                                           provision. States have the first
                                                                                                          B. The EPA’s Interstate Transport
                                                  months after the date of the finding. The                                                                      responsibility to address these CAA
                                                                                                          Rulemakings Under the Good Neighbor
                                                  statute, however, also gives the                                                                               requirements pursuant to section
                                                                                                          Provision
                                                  Administrator discretion to permit the                                                                         110(a)(1), and the EPA issued those
                                                  continued operation of a source beyond                     In order to address the regional                    transport rules only after states had the
                                                  3 months if the source complies with                    transport of ozone pursuant to the                     opportunity to address their CAA
                                                  emission limitations and compliance                     CAA’s good neighbor provision under                    interstate transport obligation. While
                                                  schedules provided by the EPA to bring                  section 110(a)(2)(D)(i)(I), the EPA has                some states have state-developed and
                                                  about compliance with the requirements                  promulgated four regional interstate                   EPA-approved good neighbor SIPs,
                                                  contained in CAA sections                               transport rules focusing on the                        other states are covered by EPA-issued
                                                  110(a)(2)(D)(i) and 126 as expeditiously                reduction of NOX emissions, as the                     FIPs.
                                                  as practicable but no later than 3 years                primary meaningful precursor to
                                                                                                          address regional ozone, from certain                   1. NOX SIP Call
                                                  from the date of the finding. Where the
                                                  EPA provides such limitations and                       sources located in states in the eastern                  Through a 2-year effort (starting in
                                                  compliance schedules, it promulgates                    half of the U.S.15 16 States and the EPA               1995 and ending in 1997) known as the
                                                  these as a revision to the upwind state’s               have implemented the emission                          Ozone Transport Assessment Group
                                                  good neighbor SIP, and CAA section                      reductions required by these                           (OTAG), the EPA worked in partnership
                                                  110(a)(2)(D)(ii) further requires that                  rulemakings pursuant to the various                    with the 37 eastern-most states and the
                                                  good neighbor SIPs ensure compliance                    authorities for implementing the good                  District of Columbia, industry
                                                                                                          neighbor provision, including CAA                      representatives, and environmental
                                                  with these limitations and compliance
                                                                                                          sections 110(a)(1), 110(c), 110(k)(5) and              groups to address the interstate
                                                  schedules.14
                                                                                                          126.                                                   transport of ozone pollution. OTAG
                                                     The flexibility provided by these                       In each of these rulemakings, the EPA               identified and evaluated flexible and
                                                  statutory provisions is different from                  identified those sources and pollutants                cost-effective strategies for reducing
                                                  that provided by the requirements                       that were most effective in addressing                 long-range transport of ozone and ozone
                                                  imposed upon states in the OTR. With                    the particular air quality problem                     precursors. Based on the OTAG process,
                                                  limited exceptions described                            identified through the course of the                   the EPA engaged in a rulemaking to
                                                  previously, states in the OTR must                      EPA’s analysis. This allowed the EPA to                promulgate a final action commonly
                                                  impose a uniform set of requirements on                 craft targeted remedies that provided                  referred to as the NOX SIP Call in order
                                                  sources within each state. While the                    efficient and effective means of                       to address the requirements of the good
                                                  OTR states may impose additional                        addressing the particular air quality                  neighbor provision (CAA section
                                                  requirements with the consent of the                    problem. In each of the regional                       110(a)(2)(D)(i)(I)) with respect to the
                                                  OTC and the EPA, the states generally                   transport rules, the EPA analysis has                  1979 1-hour ozone NAAQS and the
                                                  must comply with the minimum                            continued to demonstrate that NOX is                   1997 8-hour ozone NAAQS. 63 FR
                                                  requirements imposed by the statute.                    the ozone precursor that is most                       57356 (October 27, 1998). The rule
                                                  The good neighbor provision, by                         effective to reduce when addressing                    required 22 eastern states and the
                                                  contrast, provides both the states and                  regional transport of ozone in the                     District of Columbia to amend their SIPs
                                                  the EPA with the flexibility to develop                 eastern U.S. The EPA has also focused                  and limit NOX emissions that contribute
                                                  a remedy targeted at a particular air                   each rule on those sources that can most               to ozone nonattainment. The rule set a
                                                  quality problem, including the                          cost-effectively reduce emissions of                   NOX ozone season emission budget for
                                                  flexibility to tailor the remedy to                     NOX, such as EGUs and, in one rule,                    each covered state, essentially a cap on
                                                  address the particular precursor                        certain large non-EGUs. These                          all ozone season NOX emissions in the
                                                  pollutants and sources that would most                  rulemakings demonstrate that the EPA                   state. Covered states were given the
                                                  effectively address the downwind air                    has used and is continuing to use its                  option to participate in a regional
                                                  quality problem. As described later, the                authority under CAA section                            allowance trading program, known as
                                                  EPA has previously promulgated four                     110(a)(2)(D)(i)(I) to target those sources             the NOX Budget Trading Program (NBP)
                                                  interstate transport rulemakings                        and precursors that most efficiently                   in order to achieve most of the
                                                  pursuant to these authorities in order to               address the particular interstate ozone                necessary emissions reductions.
                                                  quantify the specific emission                          transport problem. Accordingly, the                       Through the OTAG process, the states
                                                  reductions required in certain eastern                  EPA believes that it is unnecessary to                 concluded that widespread NOX
                                                                                                                                                                 reductions were necessary to enable
                                                    14 The EPA has received, but not yet acted upon,        15 For purposes of these rulemakings, the western
                                                                                                                                                                 areas to attain and maintain the ozone
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                                                  several CAA section 126 petitions from a number         U.S. (or the West) consists of the 11 western          NAAQS.17 The OTAG’s
                                                  of the petitioning states regarding the contribution    contiguous states of Arizona, California, Colorado,
                                                  of specific EGUs to interstate ozone transport with     Idaho, Montana, Nevada, New Mexico, Oregon,            recommendations identified control
                                                  respect to the 2008 and 2015 ozone NAAQS.               Utah, Washington and Wyoming.
                                                  Petitions have been submitted by Delaware,                16 Two of these rulemakings also addressed the         17 See 62 FR 60320, November 7, 1997, Notice of
                                                  Maryland, and Connecticut. The list of EGUs             reduction of NOX and SO2 emissions for the             proposed rulemaking, Finding of Significant
                                                  identified in one or more of these petitions includes   purposes of addressing the interstate transport of     Contribution and Rulemaking for Certain States in
                                                  EGUs operating in Pennsylvania, West Virginia,          particulate matter pollution pursuant to the good      the Ozone Transport Assessment Group Region for
                                                  Ohio, Kentucky, and Indiana.                            neighbor provision.                                    Purposes of Reducing Regional Transport of Ozone.



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                                                                               Federal Register / Vol. 82, No. 12 / Thursday, January 19, 2017 / Notices                                                    6517

                                                  measures for states to achieve additional                  In parallel with issuing the SIP call,              (2001).18 States chose to use the NBP to
                                                  reductions in emissions of NOX but did                  the EPA reviewed petitions submitted                   achieve the majority of the NOX
                                                  not identify such measures for VOC,                     pursuant to CAA section 126(b) by eight                reductions required by the NOX SIP
                                                  beyond the EPA’s promulgation of                        states requesting that the EPA find that               Call. Subsequent rules have required
                                                  national VOC measures, at that time.                    stationary sources in upwind states                    additional reductions from certain
                                                  The OTAG Regional and Urban Scale                       contribute significantly to ozone                      sources regulated by the NOX SIP Call,
                                                  Modeling and Air Quality Analysis                       nonattainment in the petitioning states.               but the rules have not replaced the NOX
                                                  Work Groups reached the following                       Because the section 126 petitions raised               SIP Call reduction requirements and the
                                                  relevant conclusions (with which the                    many of the same issues as those being                 rule remains in effect.
                                                  EPA agreed): Regional NOX emissions                     addressed in NOX SIP call, the EPA                     2. Clean Air Interstate Rule (CAIR)
                                                  reductions are effective in producing                   coordinated its response to the CAA
                                                  ozone benefits; the more NOX emissions                  section 126 petitions with the NOX SIP                    The CAIR was published in May 2005
                                                  reduced, the greater the benefit to air                 Call rulemaking. The EPA issued                        and addressed both the 1997 PM2.5 and
                                                  quality; and VOC controls are effective                 findings that NOX emissions in twelve                  the 1997 ozone standards under the
                                                  in reducing ozone locally and are most                  states and the District of Columbia                    good neighbor provision. 70 FR 25162
                                                  advantageous to urban nonattainment                     contribute significantly to                            (May 12, 2005). CAIR required SIP
                                                  areas. The EPA concluded in its                         nonattainment of the 1-hour ozone                      revisions in 28 eastern states and the
                                                  rulemaking that, ‘‘a regional strategy                  NAAQS in three downwind states, but                    District of Columbia to ensure that
                                                  focusing on NOX reductions across a                     the EPA determined that it was                         certain emissions of sulfur dioxide (SO2)
                                                  broad portion of the region will help                   appropriate to postpone CAA section                    and/or NOX—important precursors of
                                                  mitigate the ozone problem in many                      126 findings pending the resolution of                 regionally transported PM2.5 (SO2 and
                                                  areas of the East .’’ 63 FR 57381. The                  the NOX SIP call process. 64 FR 28250                  NOX) and ozone (NOX)—were
                                                  EPA did not propose any new SIP                         (May 25, 1999). Accordingly, the EPA                   prohibited.
                                                  requirements for VOC reductions for the                 issued a rule providing that the findings                 The rule set statewide emission
                                                  purpose of reducing the interstate                      would automatically be deemed made                     budgets for large EGUs that reduced
                                                  transport of ozone, however, the agency                 with regard to sources from a given state              emissions of annual SO2 and annual
                                                  suggested that states may consider                      should that state fail to submit a SIP                 NOX (particulate matter precursors) and
                                                  additional reductions in VOC emissions                  revision as required by the NOX SIP                    summertime NOX (ozone precursor). As
                                                  as they develop local attainment plans.                 Call. The rulemaking further established               in the NOX SIP Call, the EPA identified
                                                     In order to quantify necessary NOX                   the NBP as the remedy that would apply                 reductions in NOX emissions as the
                                                  emission reductions, the EPA developed                  pursuant to CAA section 126(c) for any                 most efficient and effective way to
                                                  statewide NOX emissions budgets based                   state subject to such a finding.                       achieve the greatest reduction of
                                                  on recommendations from OTAG on                                                                                interstate ozone pollution. Id. at 25185–
                                                                                                             The D.C. Circuit subsequently issued                8, 25195. The EPA also determined that
                                                  how to cost-effectively reduce emissions
                                                                                                          two orders affecting implementation of                 emissions reductions from EGUs were
                                                  from utilities and other sources of NOX.
                                                                                                          the NOX SIP Call: (1) An order                         the most cost-effective and efficient
                                                  Thus, the EPA established NOX
                                                  emission budgets based on the                           remanding the 1997 8-hour ozone                        means of achieving necessary NOX
                                                  conclusion that EGUs and large non-                     standard to the EPA, American Trucking                 emissions reductions. 70 FR 25173. As
                                                  EGU point sources could cost-effectively                Ass’ns v. EPA, 175 F.3d 1027, reh’g                    in the NOX SIP Call, affected states were
                                                  achieve emissions reductions by the                     granted in part and denied in part, 195                given the option to participate in a
                                                  implementation of controls costing                      F.3d 4 (D.C. Cir.1999), rev’d in part sub              regional allowance trading program to
                                                  $2,000 per ton of NOX emissions                         nom. Whitman v. American Trucking                      satisfy their SIP obligations.
                                                  reduced, including controls such as                     Ass’ns, 531 U.S. 457, 121 S.Ct. 903                       When the EPA promulgated the final
                                                  selective catalytic reduction (SCR) and                 (2001), and (2) an order staying the NOX               CAIR, the EPA also issued a national
                                                  selective non-catalytic reduction (SNCR)                SIP Call deadline pending further                      rule finding that certain states had failed
                                                  that could be required on a number of                   litigation, Michigan v. EPA, No. 98–                   to submit SIPs to address the
                                                  units in the OTAG region. Although the                  1497 (D.C. Cir. May 25, 1999) (order                   requirements of CAA section
                                                  NOX SIP Call did not specify which                      granting stay in part). In response to                 110(a)(2)(D)(i) with respect to the 1997
                                                  sources must reduce NOX, consistent                     these court decisions, the EPA took two                PM2.5 and the 1997 ozone NAAQS by
                                                  with OTAG’s recommendations, the                        actions. First, the EPA indefinitely                   the CAA deadline for those standards of
                                                  EPA encouraged states to consider                       stayed the technical determinations of                 July 2000. 70 FR 21147. The findings of
                                                  controls on EGUs and large non-EGU                      the prior section 126 action as they                   failure to submit triggered a 2-year clock
                                                  point sources under an allowance                        applied to the 8-hour ozone NAAQS,                     for the EPA to issue FIPs to address the
                                                  trading program as a cost effective                     pending further developments in the                    good neighbor provision with respect to
                                                  strategy for complying with the NOX                     litigation. 65 FR 2674, 2685 (January 18,              those standards, and the EPA
                                                  emissions budgets.                                      2000). Second, with respect to the 1-                  subsequently promulgated FIPs to
                                                                                                          hour standard, the EPA made the                        ensure that the emission reductions
                                                     At the time the NOX SIP Call was
                                                                                                          requested findings of significant                      required by CAIR would be achieved on
                                                  finalized, the EPA had already approved
                                                                                                          contributions, granting the relevant                   schedule. 71 FR 25328 (April 28, 2006).
                                                  good neighbor SIPs for many states with
                                                                                                          portions of the section 126 petitions. Id.             Upon review, the D.C. Circuit
                                                  respect to the 1-hour ozone standard.
                                                                                                          at 2684–85. The EPA further imposed                    determined that CAIR was
                                                  Accordingly, the EPA initiated a SIP call
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                                                                                                          the NBP on affected sources as the                     ‘‘fundamentally flawed,’’ and the rule
                                                  pursuant to CAA section 110(k)(5)
                                                                                                          remedy pursuant to section 126(c). Id. at              was remanded to the EPA to be replaced
                                                  requiring states covered by the rule to
                                                                                                          2686.                                                  ‘‘from the ground up.’’ North Carolina v.
                                                  amend their SIPs in order to limit NOX
                                                  emissions that significantly contribute                    Ultimately, the NOX SIP Call was
                                                                                                                                                                   18 The EPA’s January 18, 2000, action on the CAA
                                                  to ozone nonattainment in other states                  largely upheld by the D.C. Circuit in
                                                                                                                                                                 section 126 petitions was also challenged and
                                                  consistent with the budgets finalized in                Michigan v. EPA, 213 F.3d 663 (D.C. Cir.               upheld by the D.C. Circuit in Appalachian Power
                                                  the rule.                                               2000), cert. denied, 532 U.S. 904                      Company v. EPA, 249 F.3d 1032 (2001).



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                                                  6518                         Federal Register / Vol. 82, No. 12 / Thursday, January 19, 2017 / Notices

                                                  EPA, 531 F.3d 896, 929 (D.C. Cir. 2008),                upheld by the courts, but for the remand               focused its analysis on: (1) Emissions
                                                  modified on reh’g, 550 F.3d 1176.                       of certain state budgets, and                          reductions achievable by 2017 in order
                                                                                                          implementation of the trading programs                 to assist downwind states with meeting
                                                  3. CSAPR
                                                                                                          began in 2015. See EPA v. EME Homer                    the applicable attainment deadline for
                                                     In response to the court’s remand of                 City Generation, L.P., 134 S. Ct. 1584                 the 2008 ozone NAAQS (81 FR 74521),
                                                  CAIR, on July 6, 2011, the EPA                          (2014); EME Homer City Generation,                     (2) reductions in only NOX emissions,
                                                  promulgated CSAPR, which requires                       L.P. v. EPA, 795 F.3d 118 (D.C. Cir.                   consistent with past ozone transport
                                                  certain states to significantly improve                 2015).                                                 rules (81 FR 74514), and (3) achievable,
                                                  air quality by reducing power plant                                                                            cost effective NOX emissions reductions
                                                  emissions that contribute to ozone and/                 4. The CSAPR Update To Address the
                                                                                                                                                                 from EGUs. The EPA, therefore,
                                                  or fine particle pollution in other states.             2008 Ozone NAAQS
                                                                                                                                                                 calculated emissions budgets for each
                                                  CSAPR requires sources in a total of 28                    On October 26, 2016, the EPA                        affected state based on the cost-effective
                                                  states to reduce annual SO2 emissions,                  published an update to CSAPR intended                  NOX emissions reductions achievable
                                                  annual NOX emissions and/or ozone                       to respond to the D.C. Circuit’s remand                from EGUs by the 2017 ozone season.
                                                  season NOX emissions to assist in                       of certain NOX ozone season budgets                       The EPA concluded that the
                                                  attaining the 1997 ozone and PM2.5 and                  from the original CSAPR and to address                 emissions reductions achieved by
                                                  2006 PM2.5 NAAQS. 76 FR 48208. The                      the good neighbor provision with                       implementation of the budgets
                                                  EPA found that each CSAPR state had                     respect to the 2008 ozone NAAQS. 81                    constitute a portion of most affected
                                                  failed to submit a complete SIP or the                  FR 74504 (CSAPR Update). The CSAPR                     states’ significant contribution to
                                                  EPA disapproved a submitted SIP for                     Update requires 22 states to reduce                    nonattainment or interference with
                                                  the relevant NAAQS. To accomplish                       ozone season NOX emissions that                        maintenance of the 2008 ozone NAAQS
                                                  implementation aligned with the                         significantly contribute to                            at these downwind receptors. 81 FR
                                                  applicable NAAQS attainment                             nonattainment or interfere with                        74508, 74522.19 However, because
                                                  deadlines, the EPA promulgated FIPs for                 maintenance of the 2008 ozone NAAQS                    downwind air quality problems were
                                                  each affected state which require                       in certain downwind states. The EPA                    projected to remain after
                                                  affected sources to participate in the                  found that each CSAPR state had failed                 implementation of the quantified
                                                  regional allowance trading program to                   to submit a complete SIP or the EPA                    emissions reductions, the EPA could not
                                                  achieve the necessary emission                          disapproved a submitted SIP for the                    determine that it had fully quantified
                                                  reductions. These states have the option                2008 ozone NAAQS. To accomplish                        the affected states’ emissions reduction
                                                  of replacing each FIP with a SIP that                   implementation aligned with the                        obligations pursuant to the good
                                                  could achieve the same emissions                        applicable attainment deadline for the                 neighbor provision to the extent upwind
                                                  reductions in other ways.                               2008 ozone NAAQS, the EPA                              states remain linked to the downwind
                                                     CSAPR set emissions budgets for                      promulgated FIPs for each of the 22                    receptors and further emission
                                                  certain states according to the                         states covered by CSAPR Update which                   reductions from EGUs and non-EGUs
                                                  applicable NAAQS—annual NOX and                         require affected sources to participate in             could be available. In order to determine
                                                  annual SO2 budgets for PM2.5, and ozone                 the regional allowance trading program                 the level of NOX control stringency
                                                  season NOX budgets for ozone—to                         to achieve the necessary emission                      necessary to quantify those emissions
                                                  eliminate a state’s significant                         reductions beginning with the 2017                     reductions that fully constitute each
                                                  contribution or interference with                       ozone season.                                          state’s significant contribution to
                                                  maintenance of a NAAQS in other                            The CSAPR Update analysis found                     downwind nonattainment or
                                                  states. With respect to the ozone                       that emissions from eight of the nine                  interference with maintenance, the EPA
                                                  NAAQS, the EPA determined that NOX                      states named in the section 176A                       explained in promulgating the final
                                                  emissions had the most meaningful                       petition, in addition to a number of                   CSAPR Update that it must evaluate
                                                  interstate impacts based on air quality                 other states, were linked to downwind                  further emission reductions from EGU
                                                  modeling that examined upwind state                     projected nonattainment and/or                         and non-EGU strategies that can be
                                                  emissions of all ozone precursors                       maintenance receptors, in the eastern                  implemented on longer timeframes. The
                                                  (including VOCs and NOX). 75 FR 45230                   U.S., in 2017 with respect to the 2008                 CSAPR Update represents a significant
                                                  (August 2, 2010) and 76 FR 48222.                       ozone NAAQS. 81 FR 74506, 74538–39.                    first step by the EPA to quantify states’
                                                  Moreover, the EPA noted that the other                  For one state named in the CAA section                 emission reduction obligations under
                                                  recent assessments of ozone, for                        176A petition, North Carolina, the EPA                 the good neighbor provision for the
                                                  example those conducted for the                         determined in the CSAPR Update that                    2008 ozone NAAQS. Even though the
                                                  Regulatory Impact Analysis for the                      the state was not linked to any                        CSAPR Update did not fully address
                                                  ozone standards in 2008, continue to                    downwind receptors and, therefore, will                upwind states’ emission reduction
                                                  show the importance of NOX emissions                    not significantly contribute to                        obligation pursuant to the good
                                                  on ozone transport. 75 FR 45236.                        nonattainment or interfere with                        neighbor provision, the implementation
                                                  Accordingly, the EPA quantified NOX                     maintenance of the 2008 ozone NAAQS                    of the emissions budgets quantified in
                                                  emissions budgets for each affected state               in any other state pursuant to the good                that rule will help to resolve a number
                                                  by quantifying the emissions reductions                 neighbor provision. 81 FR 74506,                       of projected air quality problems in the
                                                  achievable by applying cost-effective                   74537–38.                                              Philadelphia, Pennsylvania, Jefferson
                                                  controls to EGUs. 76 FR 48256. The EPA                     For those states linked to downwind                 County, Kentucky and Hamilton
                                                  determined that controls at other                       air quality problems, the EPA evaluated                County, Ohio areas and will help make
                                                  sources were generally not available at                 timely and cost-effective emissions
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                                                                                                                                                                 progress to reduce upwind
                                                  similar cost levels.                                    reductions achievable in each state in
                                                     The timing of CSAPR’s                                order to quantify the amount of                          19 For one state named in the CAA section 176A

                                                  implementation was affected by a                        emissions constituting each state’s                    petition, Tennessee, the EPA determined that the
                                                  number of court actions. CSAPR was the                  significant contribution to                            emissions reductions required by the CSAPR
                                                                                                                                                                 Update would fully address the state’s significant
                                                  subject to nearly four years of litigation              nonattainment and interference with                    contribution to nonattainment and interference
                                                  in both the D.C. Circuit and the                        maintenance of the standard pursuant to                with maintenance of the 2008 ozone NAAQS in
                                                  Supreme Court. CSAPR was generally                      the good neighbor provision. The EPA                   other states.



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                                                                               Federal Register / Vol. 82, No. 12 / Thursday, January 19, 2017 / Notices                                                   6519

                                                  contributions to high ozone levels in                   (including solvents), consumer and                     Average Fuel Economy Standards; 27
                                                  Baltimore, Maryland, and the New York                   commercial products, and the electric                  Greenhouse Gas Emissions and Fuel
                                                  City area (including parts of Connecticut               power industry. In 2014, the most recent               Efficiency Standards for Medium- and
                                                  and New Jersey).                                        year for which the National Emissions                  Heavy-Duty Engines and Vehicles—
                                                     The EPA is continuing the work                       Inventory (NEI) is available, on-road and              Phase 2; 28 Phase 1 Greenhouse Gas
                                                  necessary to address its remaining                      nonroad mobile sources accounted for                   Emissions Standards and Fuel
                                                  obligation to promulgate FIPs fully                     about 56 percent of annual NOX                         Efficiency Standards for Medium- and
                                                  addressing the good neighbor provision                  emissions; and the electric power                      Heavy-Duty Engines and Vehicles 29 and
                                                  with respect to the 2008 ozone NAAQS                    industry (EGUs) accounted for about 13                 Control of Hazardous Air Pollutants
                                                  for 21 states. The EPA intends to                       percent. With respect to VOCs,                         from Mobile Sources.30
                                                  continue to collect information and                     industrial processes (including solvents)                 Similarly, already adopted regulations
                                                  undertake analyses to evaluate potential                accounted for about 48 percent of                      for non-road engines and equipment
                                                  future emission reductions from non-                    manmade VOC emissions; and mobile                      that will achieve further reductions
                                                  EGUs and EGUs that may be necessary                     sources accounted for about 27                         include: Control of Emissions of Air
                                                  to fully quantify each state’s interstate               percent.21 22                                          Pollution from Nonroad Diesel Engines
                                                  transport obligations for the 2008 ozone                   The EPA establishes emissions                       and Fuel; 31 Republication for Control of
                                                  NAAQS in a future action.20 The EPA                     standards under various CAA                            Emissions of Air Pollution from
                                                  expects to continue to fulfill its                      authorities for numerous classes of                    Locomotive Engines and Marine
                                                  obligation to promulgate FIPs fully                     automobile, truck, bus, motorcycle,                    Compression-Ignition Engines Less
                                                  addressing interstate transport with                    earth mover, aircraft, and locomotive                  Than 30 Liters per Cylinder; 32 Control
                                                  respect to the 2008 ozone NAAQS                         engines, and for the fuels used to power               of Emissions from New Marine
                                                  consistent with the authority and                       these engines. The pollutant reduction                 Compression-Ignition Engines at or
                                                  flexibility provided by the good                        benefits from new engine standards                     Above 30 Liters per Cylinder; 33 the
                                                  neighbor provision to tailor a remedy                   increase each year as older and more-                  International Maritime Organization’s
                                                  based on those sources and precursor                    polluting vehicles and engines are                     Emission Control Area to Reduce
                                                  pollutants (i.e., NOX) that can most                    replaced with newer, cleaner models.                   Emissions from Ships in the U.S.
                                                  effectively address the downwind air                    The benefits from fuel programs                        Caribbean; Control of Air Pollution
                                                  quality problems identified by the EPA’s                generally begin as soon as a new fuel is               From Aircraft and Aircraft Engines; 34
                                                  analysis.                                               available. Further, the ongoing emission               Emission Standards and Test
                                                                                                          reductions from mobile source federal                  Procedures; Control of Emissions from
                                                  C. Additional Rules That Reduce NOX                                                                            Nonroad Large Spark-Ignition Engines,
                                                                                                          programs such as those listed previously
                                                  and VOC Emissions                                                                                              and Recreational Engines (Marine and
                                                                                                          will provide for substantial emissions
                                                    In addition to the significant efforts to             reductions well into the future, and will              Land-Based); 35 and Control of
                                                  implement the good neighbor provision                   complement state and local efforts to                  Emissions from Nonroad Spark-Ignition
                                                  for the 2008 and prior ozone NAAQS                      attain the 2008 ozone NAAQS.                           Engines and Equipment.36
                                                  described in Section IV.B of this                                                                                 Similarly, a number of already-
                                                                                                             There are several existing national
                                                  document, there are numerous federal                                                                           adopted stationary source rules will
                                                                                                          rules that continue to achieve emission
                                                  and state emission reduction rules that                                                                        drive further regional reductions in
                                                                                                          reductions through 2025 and beyond
                                                  have already been adopted which have                                                                           ozone precursor emissions, including:
                                                                                                          with more protective emission
                                                  resulted or will result in the further                                                                         boiler maximum achievable control
                                                                                                          standards for on-road vehicles that
                                                  reduction of ozone precursor emissions,                                                                        technology standards under CAA
                                                                                                          include: Control of Air Pollution from
                                                  including emissions from states named                                                                          section 112 and the Mercury and Air
                                                                                                          Motor Vehicles: Tier 3 Motor Vehicle                   Toxics Standards. These rules target
                                                  in the section 176A petition. Many of                   Emission and Fuel Standards; 23 Control                specific sources and have the co-benefit
                                                  these rules directly require sources to                 of Air Pollution from New Motor                        of reducing ozone precursors which also
                                                  achieve reductions of NOX, VOC, or                      Vehicles: Tier 2 Motor Vehicle                         reduce interstate ozone pollution
                                                  both, and others require actions that                   Emissions Standards and Gasoline                       transport. For example, the measures to
                                                  will indirectly result in such reductions.              Sulfur Control Requirements; 24 Control                address Regional Haze best available
                                                  As a result of these emissions                          of Air Pollution from New Motor                        retrofit technology determinations often
                                                  reductions, the interstate transport of                 Vehicles: Heavy-Duty Engine and                        include power plant pollution controls
                                                  ozone has been and will continue to be                  Vehicle Standards and Highway Diesel                   that can achieve NOX reductions of at
                                                  reduced over time.                                      Fuel Sulfur Control Requirements; 25                   least 80 to 90 percent from a particular
                                                    The majority of man-made NOX and                      Model Year 2017 and Later Light-Duty                   source.
                                                  VOC emissions that contribute to ozone                  Vehicle Greenhouse Gas Emissions and                      Other existing rules that will achieve
                                                  formation in the U.S. comes from the                    Corporate Average Fuel Economy                         NOX and VOC emissions reductions
                                                  following sectors: on-road and nonroad                  Standards; 26 Model Year 2012–2016                     include: New Source Performance
                                                  mobile sources, industrial processes                    Light-Duty Vehicle Greenhouse Gas                      Standards (NSPS) for reciprocating
                                                                                                          Emission Standards and Corporate                       internal combustion engines; NSPS for
                                                    20 Moreover, in support of this effort, on

                                                  December 28, 2016, the EPA shared updated
                                                                                                                                                                 gas turbines; NSPS for process heaters;
                                                                                                            21 The VOC percentages are for manmade VOCs
                                                  preliminary modeling information providing air          only. Emissions from natural sources, such as trees,
                                                  quality projections for areas in the contiguous U.S.                                                             27 75 FR 25324, (May 7, 2010).
                                                                                                          also comprise around 70 percent of total VOC
                                                  for the 2015 ozone NAAQS, which the EPA                                                                          28 81 FR 73478, (October 25, 2016).
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                                                                                                          emissions nationally, with a higher proportion
                                                  anticipates will assist states with the development     during the ozone season and in areas with more           29 76 FR 57106, (September 15, 2011).
                                                  of SIPs. See, ‘‘Notice of Availability of the           vegetative cover.                                        30 72 FR 8428, (February 26, 2007).
                                                  Environmental Protection Agency’s Preliminary             22 For more information, see the ‘‘2014 NEI            31 69 FR 38958, (June 29, 2004).
                                                  Interstate Ozone Transport Modeling Data for the
                                                                                                          Summary Spreadsheet’’ in the docket.                     32 73 FR 37096, (June 30, 2008).
                                                  2015 Ozone National Ambient Air Quality Standard          23 81 FR 23414 (April 28, 2014).                       33 75 FR 22896, (April 30, 2010).
                                                  (NAAQS)’’ available at: https://www.epa.gov/
                                                                                                            24 65 FR 6698 (February 10, 2000).                     34 77 FR 36342, (June 18, 2012).
                                                  airmarkets/notice-data-availability-preliminary-
                                                                                                            25 66 FR 5002 (January 18, 2001).                      35 67 FR 68242, (November 8, 2002).
                                                  interstate-ozone-transport-modeling-data-2015-
                                                  ozone.                                                    26 77 FR 62624 (October 15, 2012).                     36 73 FR 59034, (October 8, 2008).




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                                                  6520                         Federal Register / Vol. 82, No. 12 / Thursday, January 19, 2017 / Notices

                                                  Hospital/Medical/Infectious Waste                       over the next several years due to                     fully and more effectively address the
                                                  Incinerators: New Source Performance                    emissions controls already in place. The               upwind states’ impacts on downwind
                                                  Standards and Emission Guidelines:                      EPA’s emissions projections in support                 ozone air quality through the good
                                                  Final Rule Amendments; and NOX                          of the 2015 ozone NAAQS modeling                       neighbor provision and the various
                                                  Emission Standard for New Commercial                    show declining emissions of NOX and                    statutory provisions that provide for its
                                                  Aircraft Engines. The EPA’s regulations                 VOCs between 2017 and 2025. In the                     implementation. The EPA has already
                                                  for commercial, industrial and solid                    states comprising the OTR plus the nine                taken steps to address interstate
                                                  waste incinerators set standards for NOX                upwind states named in the CAA                         transport with respect to the 2008 ozone
                                                  and several air toxics for all commercial               section 176A petition, total NOX                       NAAQS through the promulgation of
                                                  incinerators, as required under CAA                     emissions over the upcoming 7-year                     the CSAPR Update, which reduces
                                                  section 129. Air toxics rules for                       period (2017–2025) are expected to                     emissions in the 2017 ozone season and
                                                  industrial boilers will yield co-benefit                decline by almost 20 percent on average                beyond. The EPA used the authority of
                                                  NOX reductions as a result of tune-ups                  and VOC emissions are expected to                      CAA sections 110(a)(2)(D)(i)(I) and
                                                  and energy efficiency measures,                         decline by more than 10 percent on                     110(c) to tailor a remedy focused on the
                                                  especially from boilers that burn coal.                 average over the same period.                          precursor pollutant most likely to
                                                     The EPA expects existing federal and                                                                        improve ozone levels (currently NOX)
                                                  state rules, and also those that may be                 D. Rationale for the Proposed Decision
                                                                                                                                                                 and those sources that can most cost-
                                                  promulgated in the future, will have the                on the CAA 176A Petition
                                                                                                                                                                 effectively reduce emissions (i.e.,
                                                  co-benefit of reducing ozone precursor                     The EPA is proposing to deny the                    EGUs). The EPA further implemented
                                                  emissions even if they do not directly                  CAA section 176A petition because we                   the remedy through an allowance
                                                  address interstate transport of ozone                   believe that the statute provides other,               trading program that achieves necessary
                                                  pollution. These rules will result in                   more effective means of addressing the                 emission reductions while providing
                                                  reductions in ozone concentrations that                 impact of interstate ozone transport on                sources with the flexibility to
                                                  will help areas attain the 2008 ozone                   the states within the OTR with respect                 implement the control strategies of their
                                                  NAAQS. For example, the Regional                        to the 2008 ozone NAAQS. As described                  choice.
                                                  Haze Rule requires states to revise their               in Section IV of this document, the                       We believe that the continued use of
                                                  regional haze SIPs 37 to assess whether                 statute provides several provisions that               the authority provided by the good
                                                  additional measures are necessary for                   allow states and the EPA to address                    neighbor provision to address the
                                                  continued visibility progress. On                       interstate ozone transport with a remedy               interstate transport of ozone pollution
                                                  December 14, 2016, the EPA signed a                     better tailored to the nature of the air               plus other regulations that are already in
                                                  final rule that could influence state                   quality problem, focusing on those                     place will permit the states and EPA to
                                                  regional haze plans to include measures                 precursor emissions and sources that                   achieve necessary additional reductions
                                                  to further reduce NOX in light of its role              most directly impact downwind ozone                    to address the 2008 ozone NAAQS
                                                  as a visibility impairing pollutant.38                  nonattainment and maintenance                          without the need to implement the
                                                  Further, to address interstate transport                problems and which can be controlled                   additional requirements that inclusion
                                                  with respect to the 2015 ozone NAAQS,                   most cost-effectively. The EPA and                     in the OTR would entail. As described
                                                  states are required to submit additional                states are actively using these                        in Section IV.A and B of this document,
                                                  SIPs addressing the good neighbor                       provisions, as demonstrated by the                     this approach to address the interstate
                                                  provision by October 2018. Measures                     numerous federal and state measures                    transport of ozone is a proven, efficient,
                                                  designed to address the interstate                      that have reduced, and will continue to                and cost-effective means of addressing
                                                  transport of ozone with respect to the                  reduce, the VOC and NOX emissions                      downwind air quality concerns that the
                                                  2015 standard will necessarily assist                   that contribute to ozone formation and                 agency has employed and refined over
                                                  with addressing interstate transport                    the interstate transport of ozone                      nearly two decades. However, the EPA
                                                  with respect to the less-stringent 2008                 pollution. The EPA does not believe that               notes that the addition of states to the
                                                  standard. Lastly, in response to actions                it is necessary to add more states to the              OTR pursuant to the section 176A
                                                  such as the 2012 PM2.5 SIP                              OTR at this time in order to effectively               authority—and the additional planning
                                                  Requirements Rule and nonattainment                     address transported pollution in the                   requirements that would entail—could
                                                  designations under the 2010 primary                     OTR relative to the 2008 ozone NAAQS.                  be given consideration as an appropriate
                                                  SO2 NAAQS, many states will be                             While the Act contains several                      means to address the interstate transport
                                                  submitting SIPs that reduce pollution,                  provisions, both mandatory and                         requirements of the CAA should the
                                                  some of which reduce ozone precursor                    discretionary, to address interstate                   agency depart from its current approach
                                                  emissions as a co-benefit.                              pollution transport, the EPA’s decision                to addressing these requirements.
                                                     As a result of the rules and programs                whether to grant or deny a CAA section                    As described in this document, the
                                                  listed previously, various other state                  176A petition to expand an existing                    CAA provides the agency with the
                                                  programs and efforts, and wider                         transport region is discretionary.                     authority to mitigate the specific sources
                                                  economic trends, ozone levels across the                Section 176A of the CAA states that the                that contribute to interstate pollution
                                                  nation and the OTR have been                            Administrator may add any state or                     through the approval of SIPs or
                                                  declining. Ozone levels across the                      portion of a state to an existing transport            promulgation of FIPs to satisfy the
                                                  nation are expected to further decline                  region whenever the Administrator has                  requirements of the good neighbor
                                                                                                          reason to believe that the interstate                  provision, CAA section
                                                     37 The EPA extended the due date to 2021, but is     transport of air pollutants from such                  110(a)(2)(D)(i)(I), and through the
                                                  not changing dates for the implementation of            state significantly contributes to a                   related petition process under section
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                                                  further pollution reductions needed to address
                                                  regional haze, which are required over the 2018–
                                                                                                          violation of the standard in the transport             126. This authority gives the EPA and
                                                  2028 time frame. See https://www.epa.gov/               region. The EPA does not dispute that                  states numerous potential policy
                                                  visibility/final-rulemaking-amendments-regulatory-      certain named upwind states in the                     approaches to address interstate
                                                  requirements-state-regional-haze-plans.                 petition might significantly contribute                pollution transport of ozone, and the
                                                     38 See https://www.epa.gov/sites/production/files/

                                                  2016-12/documents/regional_haze_2060-as55_
                                                                                                          to violations of the 2008 ozone NAAQS                  EPA has consistently and repeatedly
                                                  final_preamblerule_final_12–14–16_                      in one or more downwind states.                        used its authority under CAA section
                                                  disclaimer_0.pdf.                                       However, the EPA believes that it can                  110(a)(2)(D)(i)(I) to approve state plans


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                                                                               Federal Register / Vol. 82, No. 12 / Thursday, January 19, 2017 / Notices                                                     6521

                                                  for reducing ozone transport or to                      states added to the OTR would be the                   this time. The agency will instead
                                                  promulgate its own federal                              most effective means of addressing any                 continue to use other authorities
                                                  implementation plan to specifically                     remaining interstate transport concerns                available within the CAA in order to
                                                  target the sources of ozone transport                   with respect to the 2008 ozone NAAQS.                  address the long range interstate
                                                  both within and outside the OTR. The                       The implementation of controls                      transport of ozone pollution. This
                                                  NOX SIP call, CAIR, CSAPR, CSAPR                        within the OTR, when combined with                     document is specific to the 2008 ozone
                                                  Update and numerous individual SIP                      the numerous federal and state emission                NAAQS, but the EPA notes that under
                                                  approvals demonstrate that the EPA has                  reduction programs that have already                   different circumstances the OTR
                                                  a long history of using its section 110                 been adopted that have resulted in the                 provisions have been an effective tool
                                                  authority to specifically address                       reduction of ozone precursor emissions                 for air quality management, and could
                                                  interstate pollution transport in a                     either directly or as a co-benefit of those            be similarly effective in the future for
                                                  targeted way that is tailored to a specific             regulations, have helped to significantly              addressing interstate transport of ozone
                                                  NAAQS and set of pollution sources                      reduce ozone levels. These programs                    pollution. Accordingly, nothing in this
                                                  which are the primary contributors to                   will continue to reduce ozone precursor                document should be read to limit states’
                                                  interstate pollution transport. As                      emissions and ozone concentrations                     ability to file a different petition under
                                                  described in Section IV.B of this                       both within and outside of the OTR over                176A or to prejudge the outcome of such
                                                  document, using the authority of the                    many years to come. However, the EPA                   a petition if filed. The EPA requests
                                                  good neighbor provision has allowed                     believes the most efficient way to                     comment on the proposed denial of the
                                                  the EPA to focus its efforts on pollution               address the current 2008 ozone NAAQS                   petition based on the EPA’s preferred
                                                  sources that are responsible for the                    nonattainment and interstate transport                 approach to addressing interstate
                                                  largest contributions to ozone transport                problems is to continue to rely on the                 transport with respect to the 2008 ozone
                                                  and that can cost-effectively reduce                    ability to flexibly target the necessary               NAAQS pursuant to these other CAA
                                                  emissions, and also enables the agency                  reductions through this combination of                 authorities.39
                                                  to focus on NOX as the primary driver                   targeted programs such as the
                                                                                                          implementation of the CSAPR Update                     V. Judicial Review and Determinations
                                                  of long range ozone transport—an                                                                               Under Section 307(b)(1) of the CAA
                                                  approach the courts have found to be a                  Rule, the further utilization of the
                                                  reasonable means of addressing                          CSAPR framework, development of                           Section 307(b)(1) of the CAA indicates
                                                  interstate ozone transport. EPA v. EME                  local attainment plans, and                            which Federal Courts of Appeal have
                                                  Homer City Generation, L.P., 134 S. Ct.                 consideration of additional emissions                  venue for petitions of review of final
                                                  at 1607 (affirming as ‘‘efficient and                   limitations resulting from action on                   actions by the EPA. This section
                                                  equitable’’ the EPA’s use of cost to                    CAA section 126 petitions.                             provides, in part, that petitions for
                                                                                                             As discussed in Section III.C. of this              review must be filed in the Court of
                                                  apportion emission reduction
                                                                                                          document, CAA section 176A provides                    Appeals for the District of Columbia
                                                  responsibility pursuant to the good
                                                                                                          that the Administrator may exercise                    Circuit if (i) the agency action consists
                                                  neighbor provision); Michigan v. EPA,
                                                                                                          reasonable discretion in administering                 of ‘‘nationally applicable regulations
                                                  213 F.3d at 688 (‘‘EPA reasonably
                                                                                                          the agency’s regulatory agenda by                      promulgated, or final action taken, by
                                                  concluded that long-range ozone
                                                                                                          determining whether or not to approve                  the Administrator,’’ or (ii) such action is
                                                  transport can only be addressed
                                                                                                          or deny a section 176A petition, so long               locally or regionally applicable, if ‘‘such
                                                  adequately through NOX reductions’’).
                                                                                                          as the EPA’s action is supported by a                  action is based on a determination of
                                                     As explained previously, it does not                 reasonable interpretation within the                   nationwide scope or effect and if in
                                                  appear that adding states to an OTR                     context of the statute. The EPA has                    taking such action the Administrator
                                                  under CAA section 176A will afford the                  reviewed the request of the petitioners                finds and publishes that such action is
                                                  states and EPA with the flexibility to                  to add additional states to the OTR in                 based on such a determination.’’ The
                                                  focus on specific sources and ozone                     light of required control strategies for               EPA finds that any final action related
                                                  precursor emissions tailored to address                 ozone transport regions and the other                  to this document is ‘‘nationally
                                                  the downwind state’s current air quality                statutory tools available to the agency                applicable’’ and of ‘‘nationwide scope
                                                  and needed remedy to achieve                            and states to address the interstate                   and effect’’ within the meaning of CAA
                                                  attainment of the 2008 NAAQS. The                       transport of ozone pollution. The agency               section 307(b)(1). Through this
                                                  statute prescribes a specific set of                    believes that continuing its longstanding              document, the EPA interprets section
                                                  controls for a variety of sources to                    and effective use of the existing and                  176A of the CAA, a provision which has
                                                  control emissions of both VOCs and                      expected control programs under the                    nationwide applicability. In addition,
                                                  NOX. CAA section 110(a)(2)(D)(i)(I) on                  CAA’s mandatory good neighbor                          this document is a response to a petition
                                                  the other hand permits the EPA and the                  provision embodied in section                          which would, if granted, extend
                                                  regulated community the flexibility to                  110(a)(2)(D)(i)(I), including
                                                  focus controls on specific sources and                  implementation of the CSAPR Update                       39 The EPA’s proposal as to the pending section
                                                  pollutants that most efficiently address                beginning in 2017 and technical work                   176A petition is focused on the appropriate
                                                  the air quality problem being targeted.                 now underway to establish a full                       mechanism to address interstate transport issues
                                                  The EPA determined in the CSAPR                         remedy for the 2008 NAAQS as well as                   relative to the 2008 ozone NAAQS rather than the
                                                                                                                                                                 scope of remaining air quality problems or the level
                                                  Update that regional NOX emissions                      to implement the good neighbor                         of controls necessary to address any such problems.
                                                  reductions from upwind states are the                   provision for the more stringent 2015                  Comment on any determinations made in prior
                                                  most effective means for providing                      NAAQS, is a more effective approach                    rulemaking actions to identify downwind air
                                                  ozone benefits to an area in the OTR                    for addressing regional interstate ozone               quality problems relative to the ozone NAAQS or
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                                                                                                                                                                 to quantify upwind state emission reduction
                                                  currently violating the 2008 ozone                      transport problems relative to the 2008                obligations relative to those air quality problems,
                                                  NAAQS, and that NOX reductions can                      ozone standard.                                        including the EPA’s decision to focus on certain
                                                  be most efficiently achieved by focusing                   The EPA is proposing to deny the                    precursor emissions or sources, are not within the
                                                  on those sources that can cost-                         petitioning states’ request to add                     scope of this proposal. To the extent the EPA
                                                                                                                                                                 evaluates these issues in a future rulemaking to
                                                  effectively reduce emissions.                           additional states to the OTR for the                   address remaining air quality problems relative to
                                                  Accordingly, the EPA does not believe                   purpose of addressing interstate                       the 2008 ozone NAAQS, comments will be
                                                  that the requirements imposed upon                      transport of the 2008 ozone NAAQS at                   welcomed in the context of that rulemaking.



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                                                  6522                         Federal Register / Vol. 82, No. 12 / Thursday, January 19, 2017 / Notices

                                                  regulatory requirements to nine states in                 For technical information contact:                   pass through a metal detector, and sign
                                                  multiple different circuits, and if denied              Scott M. Sherlock, Attorney Advisor,                   the EPA visitor log. All visitor bags are
                                                  could impact the 13 states within the                   Environmental Assistance Division,                     processed through an X-ray machine
                                                  ozone transport region established in                   Office of Pollution Prevention and                     and subject to search. Visitors will be
                                                  CAA section 184. This proposed action                   Toxics, Environmental Protection                       provided an EPA/DC badge that must be
                                                  also discusses at length prior EPA action               Agency, 1200 Pennsylvania Ave. NW.,                    visible at all times in the building and
                                                  and analyses concerning the transport of                Washington, DC 20460–0001; telephone                   returned upon departure.
                                                  pollutants between the different states                 number: (202) 564–8257; email address:                   2. Other related information. For
                                                  under CAA section 110. For these                        sherlock.scott@epa.gov.                                information about EPA’s programs to
                                                  reasons, the Administrator determines                   DATES: This action is effective on March               evaluate new and existing chemicals
                                                  that, when finalized, this action is of                 20, 2017.                                              and their potential risks and the
                                                  nationwide scope and effect for                         SUPPLEMENTARY INFORMATION:                             amended TSCA, go to https://
                                                  purposes of section 307(b)(1). Thus,                                                                           www.epa.gov/assessing-and-managing-
                                                  pursuant to CAA section 307(b) any                      I. General Information                                 chemicals-under-tsca/frank-r-
                                                  petitions for review of any final action                A. Does this action apply to me?                       lautenberg-chemical-safety-21st-
                                                  regarding this document would be filed                                                                         century-act.
                                                                                                             This announcement is directed to the
                                                  in the Court of Appeals for the District                public in general. It may, however, be of              II. What action is the Agency taking?
                                                  of Columbia Circuit within 60 days from                 particular interest to you if you
                                                  the date any final action is published in                                                                         The amended TSCA provides new
                                                                                                          manufacture (defined by statute to                     requirements relating to the assertion,
                                                  the Federal Register.                                   include import) and/or process                         substantiation and review of CBI claims.
                                                  VI. Statutory Authority                                 chemicals covered by TSCA (15 U.S.C.                   EPA is interpreting the revised TSCA
                                                                                                          2601 et seq.). This may include                        section 14(c)(3) as requiring
                                                     42 U.S.C. 7401 et seq.
                                                                                                          businesses identified by the North                     substantiation of all CBI claims at the
                                                    Dated: January 11, 2017.                              American Industrial Classification                     time the information claimed as CBI is
                                                  Gina McCarthy,                                          System (NAICS) codes 325 and 32411.                    submitted to EPA, except for claims for
                                                  Administrator.                                          Because this action is directed to the                 information subject to TSCA section
                                                  [FR Doc. 2017–01097 Filed 1–18–17; 8:45 am]             general public and other entities may                  14(c)(2).
                                                  BILLING CODE 6560–50–P                                  also be interested, the Agency has not                    This action facilitates the Agency’s
                                                                                                          attempted to describe all the specific                 implementation of TSCA section 14(g)
                                                                                                          entities that may be interested in this                to review all CBI claims for chemical
                                                  ENVIRONMENTAL PROTECTION                                action. If you have any questions                      identity, with limited exceptions, as
                                                  AGENCY                                                  regarding the applicability of this action             well as to review a representative
                                                                                                          to a particular entity, consult the                    sample of at least 25% of other non-
                                                  [EPA–HQ–OPPT–2017–0026; FRL–9958–34]                    technical person listed under FOR                      exempt claims.
                                                                                                          FURTHER INFORMATION CONTACT.
                                                  Statutory Requirements for                                                                                     III. What is the Agency’s authority for
                                                                                                          B. How can I get copies of this document               taking this action?
                                                  Substantiation of Confidential                          and other related information?
                                                  Business Information (CBI) Claims                                                                                 EPA has determined that TSCA
                                                  Under the Toxic Substances Control                        1. Docket. EPA has established a                     section 14(c)(3), 15 U.S.C. 2613(c)(3),
                                                  Act (TSCA)                                              docket for this action under docket                    requires an affected business to
                                                                                                          identification (ID) number EPA–HQ–                     substantiate all TSCA CBI claims,
                                                  AGENCY: Environmental Protection                        OPPT–2017–0026. All documents in the                   except for information subject to TSCA
                                                  Agency (EPA).                                           docket are listed in the docket index                  section 14(c)(2), at the time the affected
                                                  ACTION: Notice.                                         available at http://www.regulations.gov.               business submits the claimed
                                                                                                          Although listed in the index, some                     information to EPA.
                                                  SUMMARY:   In June 2016, the Frank R.                   information is not publicly available,                    TSCA section 14(c)(1)(a) requires an
                                                  Lautenberg Chemical Safety for the 21st                 e.g., CBI or other information whose                   affected business to assert a claim for
                                                  Century Act amended the Toxic                           disclosure is restricted by statute.                   protection from disclosure concurrent
                                                  Substances Control Act (TSCA). EPA is                   Certain other material, such as                        with submission of the information in
                                                  announcing an interpretation of TSCA                    copyrighted material, will be publicly                 accordance with existing or future rules.
                                                  section 14 concerning confidential                      available only in hard copy. Publicly                  TSCA section 14(c)(3) in turn requires
                                                  business information (CBI) claims for                   available docket materials are available               an affected business submitting a claim
                                                  information submitted to EPA. EPA                       electronically at http://                              to protect information from disclosure
                                                  interprets the revised TSCA section                     www.regulations.gov, or, if only                       to substantiate the claim, also in
                                                  14(c)(3) as requiring substantiation of                 available in hard copy, at the OPPT                    accordance with existing or future rules.
                                                  non-exempt CBI claims at the time the                   Docket. The OPPT Docket is located in                  The language of TSCA section 14(c)(3)
                                                  information claimed as CBI is submitted                 the EPA Docket Center (EPA/DC) at Rm.                  is as follows:
                                                  to EPA.                                                 3334, EPA West Bldg., 1301
                                                                                                                                                                   ‘‘(3) Substantiation requirements. Except as
                                                  FOR FURTHER INFORMATION CONTACT:                        Constitution Ave. NW., Washington,                     provided in paragraph (2), a person asserting
                                                    For general information contact:                      DC. The EPA/DC Public Reading Room                     a claim to protect information from
                                                  Colby Lintner, Regulatory Coordinator,                  hours of operation are 8:30 a.m. to 4:30
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                                                                                                                                                                 disclosure under this section shall
                                                  Environmental Assistance Division                       p.m., Monday through Friday, excluding                 substantiate the claim, in accordance with
                                                  (7408M), Office of Pollution Prevention                 legal holidays. The telephone number of                such rules as the Administrator has
                                                  and Toxics, Environmental Protection                    the EPA/DC Public Reading Room is                      promulgated or may promulgate pursuant to
                                                  Agency, 1200 Pennsylvania Ave. NW.,                     (202) 566–1744, and the telephone                      this section.’’
                                                  Washington, DC 20460–0001; telephone                    number for the OPPT Docket is (202)                      EPA interprets TSCA section 14(c)(3)
                                                  number: (202) 554–1404; email address:                  566–0280. Docket visitors are required                 to require substantiation for all TSCA
                                                  TSCA-Hotline@epa.gov.                                   to show photographic identification,                   CBI claims, except for information


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Document Created: 2018-02-01 15:16:20
Document Modified: 2018-02-01 15:16:20
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
ActionNotice of proposed action on petition.
DatesComments. Comments must be received on or before February 21, 2017.
ContactQuestions concerning this proposed notice should be directed to Ms. Gobeail McKinley, U.S. Environmental Protection Agency, Office of Air Quality Planning and Standards, Air Quality Policy Division, Mail code C539-01, Research Triangle Park, NC 27711, telephone (919) 541-5246; email at [email protected]
FR Citation82 FR 6509 
RIN Number2060-AT22

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