Rule To Reduce Interstate Transport of Fine Particulate Matter
and Ozone (Interstate Air Quality Rule)
[Federal Register: January 30, 2004 (Volume 69, Number 20)]
[Proposed Rules]
[Page 4565-4650]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30ja04-11]
[[Page 4566]]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 51, 72, 75, and 96
[FRL-7604-3]
Rule To Reduce Interstate Transport of Fine Particulate Matter
and Ozone (Interstate Air Quality Rule)
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
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SUMMARY: In today's action, EPA is proposing to find that 29 States and
the District of Columbia contribute significantly to nonattainment of
the national ambient air quality standards (NAAQS) for fine particles
(PM2.5) and/or 8-hour ozone in downwind States. The EPA is
proposing to require these upwind States to revise their State
implementation plans (SIPs) to include control measures to reduce
emissions of sulfur dioxide (SO2) and/or nitrogen oxides
(NOX). Sulfur dioxide is a precursor to PM2.5
formation, and NOX is a precursor to both ozone and
PM2.5 formation. Reducing upwind precursor emissions will
assist the downwind PM2.5 and 8-hour ozone nonattainment
areas in achieving the NAAQS. Moreover, attainment would be achieved in
a more equitable, cost-effective manner than if each nonattainment area
attempted to achieve attainment by implementing local emissions
reductions alone.
Based on State obligations to address interstate transport of
pollutants under section 110(a)(2)(D) of the Clean Air Act (CAA), EPA
is proposing statewide emissions reduction requirements for
SO2 and NOX. The EPA is proposing that the
emissions reductions be implemented in two phases, with the first phase
in 2010 and the second phase in 2015. The proposed emissions reduction
requirements are based on controls that are known to be highly cost
effective for electric generating units (EGUs).
Today's action also discusses model multi-State cap and trade
programs for SO2 and NOX that States could choose
to adopt to meet the proposed emissions reductions in a flexible and
cost-effective manner. The EPA intends to propose the model trading
programs in a future supplemental action.
DATES: The comment period on this proposal ends on March 30, 2004.
Comments must be postmarked by the last day of the comment period and
sent directly to the Docket Office listed in ADDRESSES (in duplicate
form if possible).
Up to two public hearings will be held prior to the end of the
comment period. The dates, times and locations will be announced
separately. Please refer to SUPPLEMENTARY INFORMATION for additional
information on the comment period and public hearings.
ADDRESSES: Comments may be submitted by mail to: Air Docket,
Environmental Protection Agency, Mail code: 6102T, 1200 Pennsylvania
Ave., NW., Washington, DC 20460, Attention Docket ID No. OAR-2003-0053.
Comments may also be submitted electronically, by facsimile, or
through hand delivery/courier. Follow the detailed instructions
provided under SUPPLEMENTARY INFORMATION.
Documents relevant to this action are available for public
inspection at the EPA Docket Center, located at 1301 Constitution
Avenue, NW., Room B102, Washington, DC between 8:30 a.m. and 4:30 p.m.,
Monday through Friday, excluding legal holidays. A reasonable fee may
be charged for copying.
FOR FURTHER INFORMATION CONTACT: For general questions concerning
today's action, please contact Scott Mathias, U.S. EPA, Office of Air
Quality Planning and Standards, Air Quality Strategies and Standards
Division, C539-01, Research Triangle Park, NC, 27711, telephone (919)
541-5310, e-mail at mathias.scott@epa.gov. For legal questions, please
contact Howard J. Hoffman, U.S. EPA, Office of General Counsel, Mail
Code 2344A, 1200 Pennsylvania Avenue, NW., Washington, DC, 20460,
telephone (202) 564-5582, e-mail at hoffman.howard@epa.gov. For
questions regarding air quality analyses, please contact Norm Possiel,
U.S. EPA, Office of Air Quality Planning and Standards, Emissions
Modeling and Analysis Division, D243-01, Research Triangle Park, NC,
27711, telephone (919) 541-5692, e-mail at possiel.norm@epa.gov. For
questions regarding statewide emissions inventories and emissions
reductions requirements, please contact Ron Ryan, U.S. EPA, Office of
Air Quality Planning and Standards, Emissions Modeling and Analysis
Division, Mail Code D205-01, Research Triangle Park, NC, 27711,
telephone (919) 541-4330, e-mail at ryan.ron@epa.gov. For questions
regarding the EGU cost analyses, emissions inventories and budgets,
please contact Kevin Culligan, U.S. EPA, Office of Atmospheric
Programs, Clean Air Markets Division, Mail Code 6204J, 1200
Pennsylvania Avenue, NW., Washington, DC, 20460, telephone (202) 343-
9172, e-mail at culligan.kevin@epa.gov. For questions regarding the
model cap and trade programs, please contact Sam Waltzer, U.S. EPA,
Office of Atmospheric Programs, Clean Air Markets Division, Mail Code
6204J, 1200 Pennsylvania Avenue, NW., Washington, DC, 20460, telephone
(202) 343-9175, e-mail at waltzer.sam@epa.gov. For questions regarding
the regulatory impact analyses, please contact Linda Chappell, U.S.
EPA, Office of Air Quality Planning and Standards, Air Quality
Strategies and Standards Division, Mail Code C339-01, Research Triangle
Park, NC, 27711, telephone (919) 541-2864, e-mail at
chappell.linda@epa.gov.
SUPPLEMENTARY INFORMATION:
Regulated Entities
This action does not propose to directly regulate emissions
sources. Instead, it proposes to require States to revise their SIPs to
include control measures to reduce emissions of NOX and
SO2. The proposed emissions reductions requirements that
would be assigned to the States are based on controls that are known to
be highly cost effective for EGUs.
Public Hearing
The EPA will hold up to two public hearings on today's proposal
during the comment period. The details of the public hearings,
including the times, dates, and locations will be provided in a future
Federal Register notice and announced on EPA's Web site for this
rulemaking at http://www.epa.gov/interstateairquality/.
The public hearings will provide interested parties the opportunity
to present data, views, or arguments concerning the proposed rule. The
EPA may ask clarifying questions during the oral presentations, but
will not respond to the presentations or comments at that time. Written
statements and supporting information submitted during the comment
period will be considered with the same weight as any oral comments and
supporting information presented at a public hearing.
How Can I Get Copies of This Document and Other Related Information?
Docket. The EPA has established an official public docket for this
action under Docket ID No. OAR-2003-0053. The official public docket
consists of the documents specifically referenced in this action, any
public comments received, and other information related to this action.
Although a part of the official docket, the public docket does not
include Confidential Business Information (CBI) or other information
whose disclosure is restricted by statute.
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The official public docket is the collection of materials that is
available for public viewing at the Air Docket in the EPA Docket
Center, (EPA/DC) EPA West, Room B102, 1301 Constitution Ave., NW.,
Washington, DC. The EPA Docket Center Public Reading Room is open from
8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal
holidays. The telephone number for the Public Reading Room is (202)
566-1744, and the telephone number for the Air Docket is (202) 566-
1742. A reasonable fee may be charged for copying.
Electronic Access. You may access this Federal Register document
electronically through the EPA Internet under the ``Federal Register''
listings at http://www.epa.gov/fedrgstr/.
An electronic version of the public docket is available through
EPA's electronic public docket and comment system, EPA Dockets. You may
use EPA Dockets at http://www.regulations.gov/ to submit or view public
comments, access the index listing of the contents of the official
public docket, and to access those documents in the public docket that
are available electronically. Once in the system, select ``search,''
then key in the appropriate docket identification number.
Certain types of information will not be placed in the EPA Dockets.
Information claimed as CBI and other information whose disclosure is
restricted by statute, which is not included in the official public
docket, will not be available for public viewing in EPA's electronic
public docket. The EPA's policy is that copyrighted material will not
be placed in EPA's electronic public docket but will be available only
in printed, paper form in the official public docket. To the extent
feasible, publicly available docket materials will be made available in
EPA's electronic public docket. When a document is selected from the
index list in EPA Dockets, the system will identify whether the
document is available for viewing in EPA's electronic public docket.
Although not all docket materials may be available electronically, you
may still access any of the publicly available docket materials through
the docket facility identified above. The EPA intends to work towards
providing electronic access to all of the publicly available docket
materials through EPA's electronic public docket.
For public commenters, it is important to note that EPA's policy is
that public comments, whether submitted electronically or in paper,
will be made available for public viewing in EPA's electronic public
docket as EPA receives them and without change, unless the comment
contains copyrighted material, CBI, or other information whose
disclosure is restricted by statute. When EPA identifies a comment
containing copyrighted material, EPA will provide a reference to that
material in the version of the comment that is placed in EPA's
electronic public docket. The entire printed comment, including the
copyrighted material, will be available in the public docket.
Public comments submitted on computer disks that are mailed or
delivered to the docket will be transferred to EPA's electronic public
docket. Public comments that are mailed or delivered to the Docket will
be scanned and placed in EPA's electronic public docket. Where
practical, physical objects will be photographed, and the photograph
will be placed in EPA's electronic public docket along with a brief
description written by the docket staff.
For additional information about EPA's electronic public docket,
visit EPA Dockets online or see 67 FR 38102; May 31, 2002.
The EPA has also established a Web site for this rulemaking at
http://www.epa.gov/interstateairquality/ which will include the
rulemaking actions and certain other related information.
How and to Whom Do I Submit Comments?
You may submit comments electronically, by mail, by facsimile, or
through hand delivery/courier. To ensure proper receipt by EPA,
identify the appropriate docket identification number, OAR-2003-0053,
in the subject line on the first page of your comment. Please ensure
that your comments are submitted within the specified comment period.
Comments received after the close of the comment period will be marked
``late.'' The EPA is not required to consider these late comments. If
you wish to submit CBI or information that is otherwise protected by
statute, please follow the instructions below under, ``How Should I
submit CBI to the Agency?'' Do not use EPA Dockets or e-mail to submit
CBI or information protected by statute.
Electronically. If you submit an electronic comment as prescribed
below, EPA recommends that you include your name, mailing address, and
an e-mail address or other contact information in the body of your
comment. Also include this contact information on the outside of any
disk or CD ROM you submit, and in any cover letter accompanying the
disk or CD ROM. This ensures that you can be identified as the
submitter of the comment and allows EPA to contact you in case EPA
cannot read your comment due to technical difficulties or needs further
information on the substance of your comment. The EPA's policy is that
EPA will not edit your comment, and any identifying or contact
information provided in the body of a comment will be included as part
of the comment that is placed in the official public docket, and made
available in EPA's electronic public docket. If EPA cannot read your
comment due to technical difficulties and cannot contact you for
clarification, EPA may not be able to consider your comment.
EPA Dockets. Your use of EPA's electronic public docket to submit
comments to EPA electronically is EPA's preferred method for receiving
comments. Go directly to EPA Dockets at http://www.epa.gov/edocket, and
follow the online instructions for submitting comments. To access EPA's
electronic public docket from the EPA Internet Home Page, select
``Information Sources,'' ``Dockets,'' and ``EPA Dockets.'' Once in the
system, select ``search,'' and then key in Docket ID No. OAR-2003-0053.
The system is an ``anonymous access'' system, which means EPA will not
know your identity, e-mail address, or other contact information unless
you provide it in the body of your comment.
Electronic mail. Comments may be sent by e-mail to
A-and-R-Docket@epa.gov, Attention Docket ID No. OAR-2003-0053. In contrast to
EPA's electronic public docket, EPA's e-mail system is not an
``anonymous access'' system. If you send an e-mail comment directly to
the Docket without going through EPA's electronic public docket, EPA's
e-mail system automatically captures your e-mail address. The e-mail
addresses that are automatically captured by EPA's e-mail system are
included as part of the comment that is placed in the official public
docket, and made available in EPA's electronic public docket.
Electronic submissions will be accepted in WordPerfect or ASCII file
format. Avoid the use of special characters and any form of encryption.
Disk or CD ROM. You may submit comments on a disk or CD ROM that
you mail to the mailing address identified under Docket above. These
electronic submissions will be accepted in WordPerfect or ASCII file
format. Avoid the use of special characters and any form of encryption.
By Mail. Send your comments to Air Docket (in duplicate if
possible), Environmental Protection Agency, Mail code: 6102T, 1200
Pennsylvania Ave.,
[[Page 4568]]
NW, Washington, DC, 20460, Attention Docket ID No. OAR-2003-0053.
By Hand Delivery or Courier. Deliver your comments to: Air Docket,
Environmental Protection Agency, 1301 Constitution Avenue, NW, Room
B108, Mail code: 6102T, Washington, DC 20004, Attention Docket ID No.
OAR-2003-0053. Such deliveries are only accepted during the Docket's
normal hours of operation as identified above under Docket.
By Facsimile. Fax your comments to (202) 566-1741, Attention Docket
ID. No. OAR-2003-0053.
How Should I Submit CBI to the Agency?
Do not submit information that you consider to be CBI
electronically through EPA's electronic public docket or by e-mail.
Send or deliver information identified as CBI only to the following
address: Roberto Morales, U.S. EPA, Office of Air Quality Planning and
Standards, Mail Code C404-02, Research Triangle Park, NC 27711,
telephone (919) 541-0880, e-mail at morales.roberto@epa.gov, Attention
Docket ID No. OAR-2003-0053. You may claim information that you submit
to EPA as CBI by marking any part or all of that information as CBI (if
you submit CBI on disk or CD ROM, mark the outside of the disk or CD
ROM as CBI and then identify electronically within the disk or CD ROM
the specific information that is CBI). Information so marked will not
be disclosed except in accordance with procedures set forth in 40 CFR
part 2.
In addition to one complete version of the comment that includes
any information claimed as CBI, a copy of the comment that does not
contain the information claimed as CBI must be submitted for inclusion
in the public docket and EPA's electronic public docket. If you submit
the copy that does not contain CBI on disk or CD ROM, mark the outside
of the disk or CD ROM clearly that it does not contain CBI. Information
not marked as CBI will be included in the public docket and EPA's
electronic public docket without prior notice. If you have any
questions about CBI or the procedures for claiming CBI, please consult
the person identified in the FOR FURTHER INFORMATION CONTACT section.
What Should I Consider as I Prepare My Comments for EPA?
You may find the following suggestions helpful for preparing your
comments:
1. Explain your views as clearly as possible.
2. Describe any assumptions that you used.
3. Provide any technical information and/or data you used that
support your views.
4. If you estimate potential burden or costs, explain how you
arrived at your estimate.
5. Provide specific examples to illustrate your concerns.
6. Offer alternatives.
7. Make sure to submit your comments by the comment period deadline
identified.
8. To ensure proper receipt by EPA, identify the appropriate docket
identification number in the subject line on the first page of your
response. It would also be helpful if you provided the name, date, and
Federal Register citation related to your comments.
Outline
I. Background
A. Summary of Rulemaking and Affected States
B. General Background on Air Quality Impacts of PM2.5
and Ozone
1. What are the Effects of Ambient PM2.5?
2. What are the Effects of Ambient Ozone?
3. What Other Environmental Effects Are Associated with
SO2 and NOX, the Main Precursors to
PM2.5 and Ozone Addressed in this Proposal?
C. What is the Ambient Air Quality of PM2.5 and
Ozone?
1. What is the PM2.5 Ambient Air Quality?
2. What is the Ozone Ambient Air Quality?
D. What is the Statutory and Regulatory Background for Today's
Action?
1. What are the CAA Provisions on Attainment of the
PM2.5 and Ozone NAAQS?
2. What is the NOX SIP Call?
3. What is the Acid Rain Program and Its Relationship to this
Proposal?
4. What is the Regional Haze Program and Its Relationship to
this Proposal?
5. What is the Proposed Utility Control Program for Air Toxics
and Its Relationship to This Proposal?
II. Characterization of the Origin and Distribution of 8-Hour Ozone
and PM2.5 Air Quality Problems
A. Ground-level Ozone
1. Ozone Formation
2. Spatial and Temporal Patterns of Ozone
B. Fine Particles
1. Characterization and Origins of Fine Particles
2. Spatial and Temporal Patterns of PM2.5 and Major
Components
3. Implications for Control of Transported PM2.5
4. Air Quality Impacts of Regional SO2 Reductions
III. Overview of Proposed Interstate Air Quality Rule
A. Purpose of Interstate Air Quality Rule
B. Summary of EPA's Key Findings and Proposed Remedy for
Interstate Transport
C. Coordination of Multiple Air Quality Objectives in Today's
Rulemakings
1. Linkages Between Interstate Air Quality and Mercury
Rulemakings
2. Linkages Between PM2.5 and 8-Hour Ozone Transport
Requirements
3. Linkages Between Interstate Air Quality Rulemaking and
Section 126 Petitions
D. Overview of How EPA Assessed Interstate Transport and
Determined Remedies
1. Assessment of Current and Future Nonattainment
2. Prospects for Progress Towards Attainment Through Local
Reductions
a. Fine Particles
b. Eight-hour Ozone
3. Assessment of Transported Pollutants and Precursors
a. Fine Particles
b. Ozone
4. Role of Interstate Transport in Future Nonattainment
a. Fine Particles
b. Eight-hour Ozone
5. Assessment of Potential Emissions Reductions
a. Identifying Highly Cost-Effective Emissions Reductions
b. Timing for Submission of Transport SIPs
c. Timing for Achieving Emissions Reductions
d. Compliance Approaches and Statewide Emissions Budgets
E. Request for Comment on Potential Applicability to Regional
Haze
F. How Will the Interstate Air Quality Rule Apply to the
Federally Recognized Tribes?
IV. Air Quality Modeling to Determine Future 8-Hour Ozone and
PM2.5 Concentrations
A. Introduction
B. Ambient 8-Hour Ozone and Annual Average PM2.5
Design Values
1. Eight-Hour Ozone Design Values
2. Annual Average PM2.5 Design Values
C. Emissions Inventories
1. Introduction
2. Overview of 2001 Base Year Emissions Inventory
3. Overview of the 2010 and 2015 Base Case Emissions Inventories
4. Procedures for Development of Emissions Inventories
a. Development of Emissions Inventories for Electric Generating
Units
b. Development of Emissions Inventories for On-Road Vehicles
c. Development of Emissions Inventories for Non-Road Engines
d. Development of Emissions Inventories for Other Sectors
5. Preparation of Emissions for Air Quality Modeling
D. Ozone Air Quality Modeling
1. Ozone Modeling Platform
2. Ozone Model Performance Evaluation
3. Projection of Future 8-Hour Ozone Nonattainment
E. The PM2.5 Air Quality Modeling
1. The PM2.5 Modeling Platform
2. The PM2.5 Model Performance Evaluation
3. Projection of Future PM2.5 Nonattainment
F. Analysis of Locally-Applied Control Measures for Reducing
PM2.5
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1. Control Measures and Percentage Reductions
2. Two Scenarios Analyzed for the Geographic Area Covered by
Control Measures
3. Results of the Two Scenarios
4. Additional Observations on the Results of the Local Measures
Analyses
V. Air Quality Aspects of Significant Contribution for 8-Hour Ozone
and Annual Average PM2.5 Before Considering Cost
A. Introduction
B. Significant Contribution to 8-Hour Ozone Before Considering
Cost
1. Findings from Non-EPA Analyses that Support the Need for
Reductions in Interstate Ozone Transport
2. Air Quality Modeling of Interstate Ozone Contributions
a. Analytical Techniques for Modeling Interstate Contributions
to 8-Hour Ozone Nonattainment
b. Zero-Out Metrics
c. Source Apportionment Metrics
d. Evaluation of Upwind State Contributions to Downwind 8-Hour
Ozone Nonattainment
C. Significant Contribution for Annual Average PM2.5
Before Considering Cost
1. Analyses of Air Quality Data that Support the Need to Reduce
Interstate Transport of PM2.5
a. Spatial Gradients of Pollutant Concentrations
b. Urban vs. Rural Concentrations
c. Inter-site Correlation of PM2.5 Mass and Component
Species
d. Ambient Source Apportionment Studies
2. Non-EPA Air Quality Modeling Analyses Relevant to
PM2.5 Transport and Mitigation Strategies
3. Air Quality Modeling of Interstate PM2.5
Contributions
a. Analytical Techniques for Modeling Interstate Contributions
to Annual Average PM2.5 Nonattainment
b. Evaluation of Upwind State Contributions to Downwind
PM2.5 Nonattainment
VI. Emissions Control Requirements
A. Source Categories Used for Budget Determinations
1. Electric Generation Units
2. Treatment of Cogenerators
3. Non-EGU Boilers and Turbines
4. Other Non-EGUs
B. Overview of Control Requirements and EGU Budgets
C. Regional Control Requirements and Budgets Based on a Showing
of Significant Contribution
1. Performance and Applicability of Pollution Control
Technologies for EGUs
2. Evaluation of Cost Effectiveness
a. Cost Effectiveness of SO2 Emissions Reductions
b. Cost Effectiveness of NOX Emissions Reductions
c. The EPA Cost Modeling Methodology
3. Timing, Engineering and Financial Factor Impacts
a. Engineering Assessment to Determine Phase 1 Budgets
b. Financial and Other Technical Issues Regarding Pollution
Control Installation
4. Interactions with Existing Title IV Program
D. Methodology for Setting SO2 and NOX
Budgets
1. Approach for Setting Regionwide SO2 and
NOX Emissions Reductions Requirements
a. SO2 Budgets for EGUs
b. NOX Budgets for EGUs
2. State-by-State Emissions Reductions Requirements and EGU
Budgets
E. Budgets for Use by States Choosing to Control Non-EGU Source
Categories
F. Timing and Process for Setting Baseline Inventories and Sub-
inventories
G. Comment on Emissions Caps and Budget Program
H. Budgets for Federally-Recognized Tribes
VII. State Implementation Plan Schedules and Requirements
A. State Implementation Plan Schedules
1. State Implementation Plan Submission Schedule
2. Implementation Schedule
B. State Implementation Plan Requirements
1. The Budget Approach
2. The Emissions Reduction Approach
3. The EPA's Proposed Hybrid Approach
a. Requirements if States Choose to Control EGUs
b. Requirements if States Choose to Control Sources Other than
EGUs
VIII. Model Cap and Trade Program
A. Application of Cap and Trade Approach
1. Purpose of the Cap and Trade Programs and Model Rules
2. Benefits of Participating in a Cap and Trade Program
a. Advantages of Cap and Trade Over Command-and-Control
b. Application of the Cap and Trade Approach in Prior
Rulemakings
i. Title IV
ii. Ozone Transport Commission NOX Budget Program
iii. NOX SIP Call
c. Regional Environmental Improvements Achieved Using Cap and
Trade Programs
B. Considerations and Aspects Unique to the SO2 Cap
and Trading Program
1. The SO2 Cap and Trade Program Overview
2. Interactions with Existing Title IV Acid Rain SO2
Cap and Trade Program
a. Initial Analysis
b. Emissions Increases Prior to Implementation of the Proposed
Rule
c. Consideration for Emissions Shifting Outside the Control
Region
d. Desired Outcomes in the Design of the Cap and Trade Rule
e. Discussion of Possible Solutions
f. Proposed Approach
i. Using Pre-2010 Banked Title IV Allowances in Proposed
SO2 Cap and Trade Program
ii. Proposed Ratios and the Phasing of the Caps
3. Allowance Allocations
a. Statewide Cap and Trade Budgets
b. Determination of SO2 Allowance Allocations for
EGUs not Receiving Title IV Allowances
C. Consideration and Aspects Unique to the NOX Cap
and Trade Program
1. NOX Cap and Trade Program Overview
2. Interactions with the NOX SIP Call Cap and Trade
Program and the Title IV NOX Program
a. Geographic Scope
b. Seasonal-to-Annual Compliance Period
c. Revision of Existing State NOX SIP Call Rules
d. Retention of Existing Title IV NOX Emission Rate
Limits
e. The NOX Allowance Banking
3. NOX Allocations
4. Joining Both SO2 and NOX Cap and Trade
Programs for States Voluntarily Participating
D. Cap and Trade Program Aspects that are Common to Both the
SO2 and NOX Programs
1. Applicability
a. Core Applicability
2. Allowance Management System, Compliance, Penalties, and
Banking
a. Allowance Management
b. Compliance
c. Penalties
d. Banking
3. Accountability for Affected Sources
4. Allowance Allocation Timing
5. Emissions Monitoring and Reporting
E. Inter-pollutant Trading
IX. Air Quality Modeling of Emissions Reductions
A. Introduction
B. The PM2.5 Air Quality Modeling of the Proposed Regional
SO2 and NOX Strategy
C. Ozone Air Quality Modeling of the Regional NOX
Strategy
X. Benefits of Emissions Reductions in Addition to the PM and Ozone
NAAQS
A. Atmospheric Deposition of Sulfur and Nitrogen--Impacts on
Aquatic, Forest, and Coastal Ecosystems
1. Acid Deposition and Acidification of Lakes and Streams
2. Acid Deposition and Forest Ecosystem Impacts
3. Coastal Ecosystems
B. Human Health and Welfare Effects Due to Deposition of Mercury
XI. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review
B. Paperwork Reduction Act
C. Regulatory Flexibility Act
D. Unfunded Mandates Reform Act
E. Executive Order 13132: Federalism
F. Executive Order 13175: Consultation and Coordination with
Indian Tribal Governments
G. Executive Order 13045: Protection of Children from
Environmental Health and Safety Risks
H. Executive Order 13211: Actions that Significantly Affect
Energy Supply, Distribution, or Use
I. National Technology Transfer Advancement Act
J. Executive Order 12898: Federal Actions to Address
Environmental Justice in Minority Populations and Low-Income
Populations
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I. Background
A. Summary of Rulemaking and Affected States
The CAA contains a number of requirements to address nonattainment
of the PM2.5 and the 8-hour ozone national ambient air
quality standards (NAAQS), including requirements that States address
interstate transport that contributes to such nonattainment.\1\ Based
on air quality modeling, ambient air quality data analyses, and cost
analyses, EPA proposes to conclude that emissions in certain upwind
States result in amounts of transported fine particles
(PM2.5), ozone, and their emissions precursors that
significantly contribute to nonattainment in downwind States. In
today's action, we are proposing State implementation plan (SIP)
requirements for the affected upwind States under CAA section 110(a)(1)
to meet the requirements of section 110(a)(2)(D). Clean Air Act Section
110(a)(2)(D) requires SIPs to contain adequate provisions to prohibit
air pollutant emissions from sources or activities in those States from
``contribut[ing] significantly to nonattainment in,'' a downwind State
of the PM2.5 and ozone NAAQS. In particular, EPA is
proposing to require SIP revisions in 29 States and the District of
Columbia to ensure that SIPs provide for necessary regional reductions
of emissions of SO2 and/or NOX, which are
important precursors of PM2.5 (NOX and
SO2) and ozone (NOX). Achieving these emissions
reductions will help enable PM2.5 and ozone nonattainment
areas in the eastern half of the United States to prepare attainment
demonstrations. Moreover, attainment would ultimately be achieved in a
more certain, equitable, and cost-effective manner than if each
nonattainment area attempted to implement local emissions reductions
alone. We are proposing to require the submission of SIP measures that
meet the specified SO2 and NOX emissions
reductions requirements within 18 months after publication of the
notice of final rulemaking.
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\1\ In today's proposal, when we use the term ``transport'' we
mean to include the transport of both fine particles
(PM2.5) and their precursor emissions and/or transport of
both ozone and its precursor emissions.
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The EPA has evaluated current scientific and technical knowledge
and conducted a number of air quality data and modeling analyses
regarding the contribution of pollutant emissions to interstate
transport. These evaluations and modeling analyses are summarized in
section II, Characterization of the Origin and Distribution of 8-Hour
Ozone and PM2.5 Air Quality Problems, section IV, Air
Quality Modeling to Determine Future 8-Hour Ozone and PM2.5
Concentrations, and section V, Air Quality Aspects of Significant
Contribution for 8-Hour Ozone and Annual Average PM2.5
Before Considering Cost. The EPA proposes to find, after considering
relevant information, that SO2 and NOX emissions
in the District of Columbia and the following 28 States significantly
contribute to nonattainment in a downwind State with respect to the
PM2.5 NAAQS: Alabama, Arkansas, Delaware, Florida, Georgia,
Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland,
Massachusetts, Michigan, Minnesota, Mississippi, Missouri, New Jersey,
New York, North Carolina, Ohio, Pennsylvania, South Carolina,
Tennessee, Texas, Virginia, West Virginia, and Wisconsin. The EPA also
proposes to find, after considering relevant information, that
NOX emissions in the District of Columbia and the following
25 States significantly contribute to nonattainment in a downwind State
with respect to the 8-hour ozone NAAQS: Alabama, Arkansas, Connecticut,
Delaware, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana,
Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Jersey,
New York, North Carolina, Ohio, Pennsylvania, South Carolina,
Tennessee, Virginia, West Virginia, and Wisconsin. In addition to
proposing findings of significant contribution to nonattainment, EPA is
proposing to assign emissions reductions requirements for
SO2 and/or NOX that each of the identified States
must meet through SIP measures.
The proposed emissions reductions requirements are based on
controls that EPA has determined to be highly cost effective for EGUs
under an optional cap and trade program. However, States have the
flexibility to choose the measures to adopt to achieve the specified
emissions reductions. If the State chooses to control EGUs, then it
must establish a budget--that is, an emissions cap--for those sources.
Due to feasibility constraints, EPA is proposing that the emissions
reductions be implemented in two phases, with the first phase in 2010
and the second phase in 2015. These requirements are described in more
detail in section VI, Emissions Control Requirements; section VII,
State Implementation Plan Schedules and Requirements; and section VIII,
Model Cap and Trade Program.
Section VIII discusses model multi-State cap and trade programs for
SO2 and NOX that EPA is developing that States
could choose to adopt to meet the proposed emissions reductions in a
flexible and cost-effective way. We intend to propose the model trading
programs in a future supplemental notice of proposed rulemaking (SNPR)
to be issued by May 2004. We plan to address several additional issues
in the SNPR.
Sulfur dioxide and NOX are not the only emissions that
contribute to interstate transport and PM2.5 nonattainment.
However, EPA believes that given current knowledge, it is not
appropriate at this time to specify emissions reduction requirements
for direct PM2.5 emissions or organic precursors (e.g.
volatile organic compounds (VOCs) or ammonia (NH3)). (For
further discussion of EPA's proposal on which pollutant emissions to
regulate, see section III.) Therefore, we are not proposing new SIP
requirements for emissions of these pollutants for the purpose of
reducing the interstate transport of PM2.5. States may,
however, need to consider additional reductions in some or all of these
emissions as they develop SIPs to attain and maintain the
PM2.5 standards. Similarly, for 8-hour ozone, we continue to
rely on the conclusion of the Ozone Transport Assessment Group (OTAG)
that analysis of interstate transport control opportunities should
focus on NOX, rather than VOCs.\2\
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\2\ The OTAG was active from 1995-1997 and consisted of
representatives from the 37 states in that region; the District of
Columbia; EPA; and interested members of the public, including
industry and environmental groups. See discussion below under
NOX SIP Call for further information on OTAG.
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Section III of this preamble, Overview of Proposed Interstate Air
Quality Rule, explains in broad overview our assessment of the
interstate pollution transport problem and our development of this
proposal to address transport under the CAA.
The requirements in this proposal are intended to address regional
interstate transport of air pollution. There are likely more localized
transport problems that will remain, particularly between contiguous
urban areas located in two or more States. States that share an
interstate nonattainment area are expected to work together in
developing the nonattainment SIP for that area, reducing emissions that
contribute to local-scale interstate transport problems.
In this preamble, we generally refer to States as both the sources
and receptors of interstate transport that contributes to
nonattainment. We intend to refer to Tribal governments in a similar
way. Clean Air Act section 301(d) recognizes that American Indian
Tribal
[[Page 4571]]
governments are generally the appropriate authority to implement the
CAA in Indian country. The Tribal Authority Rule (TAR) (63 FR 7262;
February 12, 1998 and 59 FR 43960-43961; August 24, 1994) discusses the
provisions of the CAA for which it is appropriate to treat Tribes in a
manner similar to States. Therefore, in this preamble, unless otherwise
specified, when we discuss the role of the State in implementing the
Interstate Air Quality Rule, we are also referring to the Tribes. In
certain parts of this preamble, however, we ask for comments on
addressing the special needs of the Tribes. Section VI provides a more
complete discussion of this Tribal issue.
Our benefit-cost analysis concludes that substantial net economic
benefits to society are likely to be achieved as a result of the
emissions reductions associated with this rulemaking. The results
detailed in section XI show that this rule would be highly beneficial
to society, with annual net benefits by 2010 of approximately $55
billion ($58 billion annual benefits compared to annual social cost of
approximately $3 billion) and net annual benefits by 2015 of $80
billion ($84 billion in benefits compared to annual social costs of $4
billion). Therefore, even if the benefits were overestimated by as much
as a factor of twenty, benefits would still exceed costs.
B. General Background on Air Quality Impacts of PM2.5 and
Ozone
1. What Are the Effects of Ambient PM2.5?
On July 18, 1997, we revised the NAAQS for particulate matter (PM)
to add new standards for fine particles, using as the indicator
particles with aerodynamic diameters smaller than a nominal 2.5
micrometers, termed PM2.5. We established health- and
welfare-based (primary and secondary) annual and 24-hour standards for
PM2.5 (62 FR 38652). The annual standards are 15 micrograms
per cubic meter, based on the 3-year average of annual mean
PM2.5 concentrations. The 24-hour standard is a level of 65
micrograms per cubic meter, based on the 3-year average of the annual
98th percentile of 24-hour concentrations.
Fine particles are associated with a number of serious health
effects including premature mortality, aggravation of respiratory and
cardiovascular disease (as indicated by increased hospital admissions,
emergency room visits, absences from school or work, and restricted
activity days), lung disease, decreased lung function, asthma attacks,
and certain cardiovascular problems such as heart attacks and cardiac
arrhythmia. The EPA has estimated that attainment of the
PM2.5 standards would prolong tens of thousands of lives and
prevent tens of thousands of hospital admissions each year, as well as
hundreds of thousands of doctor visits, absences from work and school,
and respiratory illnesses in children. Individuals particularly
sensitive to fine particle exposure include older adults, people with
heart and lung disease, and children. Health studies have shown that
there is no clear threshold below which adverse effects are not
experienced by at least certain segments of the population. Thus, some
individuals particularly sensitive to fine particle exposure may be
adversely affected by fine particle concentrations below those for the
annual and 24-hour standards. More detailed information on health
effects of fine particles can be found on EPA's Web site at:
http://www.epa.gov/ttn/naaqs/standards/pm/s_pm_index.html.
At the time EPA established the primary standards in 1997, we also
established welfare-based (secondary) standards identical to the
primary standards. The secondary standards are designed to protect
against major environmental effects caused by PM such as visibility
impairment, soiling, and materials damage.
The EPA also established the regional haze regulations in 1999 for
the improvement of visual air quality in Class I areas which include
national parks and wilderness areas across the country.
As discussed in other sections of this preamble, EGUs are a major
source of SO2 and NOX emissions, both of which
contribute to fine particle concentrations. In addition, EGU
NOX emissions contribute to ozone problems, described in the
next section. We believe today's proposal will significantly reduce
SO2 and NOX emissions that contribute to
PM2.5 and 8-hour ozone problems described here. The control
strategies we are proposing are discussed in detail in section III and
section VI below.
2. What Are the Effects of Ambient Ozone?
On July 18, 1997, EPA promulgated identical revised ozone primary
and secondary ozone standards that specified that the 3-year average of
the fourth highest daily maximum 8-hour average ozone concentration
could not exceed 0.08 ppm. In general, the revised 8-hour standards are
more protective of public health and the environment and more stringent
than the pre-existing 1-hour ozone standards. There are more areas that
do not meet the 8-hour standard than there are that do not meet the 1-
hour standard. Short-term (1- to 3-hour) and prolonged (6- to 8-hour)
exposures to ambient ozone have been linked to a number of adverse
health effects. Short-term exposure to ozone can irritate the
respiratory system, causing coughing, throat irritation, and chest
pain. Ozone can reduce lung function and make it more difficult to
breathe deeply. Breathing may become more rapid and shallow than
normal, thereby limiting a person's normal activity. Ozone also can
aggravate asthma, leading to more asthma attacks that require a
doctor's attention and the use of additional medication. Increased
hospital admissions and emergency room visits for respiratory problems
have been associated with ambient ozone exposures. Longer-term ozone
exposure can inflame and damage the lining of the lungs, which may lead
to permanent changes in lung tissue and irreversible reductions in lung
function. A lower quality of life may result if the inflammation occurs
repeatedly over a long time period (such as months, years, a lifetime).
People who are particularly susceptible to the effects of ozone
include children and adults who are active outdoors, people with
respiratory diseases, such as asthma, and people with unusual
sensitivity to ozone.
In addition to causing adverse health effects, ozone affects
vegetation and ecosystems, leading to reductions in agricultural crop
and commercial forest yields; reduced growth and survivability of tree
seedlings; and increased plant susceptibility to disease, pests, and
other environmental stresses (e.g., harsh weather). In long-lived
species, these effects may become evident only after several years or
even decades and thus have the potential for long-term adverse impacts
on forest ecosystems. Ground-level ozone damage to the foliage of trees
and other plants can also decrease the aesthetic value of ornamental
species used in residential landscaping, as well as the natural beauty
of our national parks and recreation areas. The economic value of some
welfare losses due to ozone can be calculated, such as crop yield loss
from both reduced seed production (e.g., soybean) and visible injury to
some leaf crops (e.g., lettuce, spinach, tobacco) and visible injury to
ornamental plants (i.e., grass, flowers, shrubs), while other types of
welfare loss may not be fully quantifiable in economic terms (e.g.,
reduced aesthetic value of trees growing in heavily visited National
parks). More detailed information on health effects of ozone
[[Page 4572]]
can be found at the following EPA Web site: http://www.epa.gov/ttn/naaqs/
standards/ozone/s_o3_index.html.
3. What Other Environmental Effects Are Associated With SO2
and NOX, the Main Precursors to PM2.5 and Ozone
Addressed in This Proposal?
This proposed action will result in benefits in addition to the
enumerated human health and welfare benefits resulting from reductions
in ambient levels of PM and ozone. Reductions in NOX and
SO2 will contribute to substantial visibility improvements
in many parts of the Eastern U.S. where people live, work, and
recreate, including Federal Class I areas such as the Great Smoky
Mountains. Reductions in these pollutants will also reduce
acidification and eutrophication of water bodies in the region. In
addition, reduced mercury emissions are anticipated as a result of this
proposal. Reduced mercury emissions will lessen mercury contamination
in lakes and thereby potentially decrease both human and wildlife
exposure.
C. What Is the Ambient Air Quality of PM2.5 and Ozone?
1. What Is the PM2.5 Ambient Air Quality?
The PM2.5 ambient air quality monitoring for the 2000-
2002 period shows that areas violating the standards are located across
much of the eastern half of the United States and in parts of
California. Based on these data, 120 counties have at least one monitor
that violates either the annual or the 24-hour PM2.5
standard. Most areas violate only the annual standard; a small number
of areas violate both the annual and 24-hour standards; and no areas
violate just the 24-hour standard. The population of these 120 counties
totals 65 million people.
Only two States in the western half of the U.S., California and
Montana, have counties that exceed the PM2.5 standards. On
the other hand, in the eastern half of the U.S., 175 sites in 106
counties exceeded the annual PM2.5 standard of 15.0
micrograms per cubic meter ([mu]g/m\3\) over the 3-year period from
2000 to 2002 and 395 sites meet the annual standard. No sites in the
eastern half of the United States exceed the daily PM2.5
standard of 65 [mu]g/m\3\. The 106 violating counties are located in a
distinct region made up of 19 States (plus the District of Columbia),
extending from St. Clair County, Illinois (East St. Louis), the
western-most violating county, to New Haven, Connecticut, the eastern-
most violating county, and including the following States located in
between: Illinois, Michigan, Indiana, Ohio, Pennsylvania, New York, New
Jersey, Kentucky, West Virginia, Virginia, Maryland, Delaware,
Tennessee, North Carolina, Alabama, Georgia, and South Carolina.
Because interstate transport is not thought to be a main
contributor to exceedances of the PM2.5 standards in
California or Montana, today's proposal is focused only on the
PM2.5 monitoring sites in the Eastern U.S.
Speciated ambient data, which measures the major components of
PM2.5 (sulfate, nitrate, total carbonaceous mass, and
crustal material) are invaluable in understanding the nature and extent
of the PM2.5 problem. Speciated data from the Interagency
Monitoring of Protected Visual Environments (IMPROVE), the Clean Air
Status and Trends Network (CASTNET), both predominantly rural networks,
along with EPA's Speciation Network, show that ambient concentrations
of PM2.5 species have distinctive seasonal and geographic
patterns within the eastern United States.
Mass associated with ammonium sulfate concentrations make up a
significant portion (25 to 50 percent) of the annual average
PM2.5 mass. The largest sulfate contributions to
PM2.5 mass occur during the summer season mainly within a
large multi-State area centered near Tennessee and Southwest Virginia.
Sulfate concentrations during the winter season are relatively low.
Concentrations of ammonium nitrate particles typically comprise
less than 25 percent of the annual average PM2.5 mass.
Nitrates tend to be highest during the winter months over large
portions of the Midwest including northern Ohio, Indiana, Michigan, and
eastern Wisconsin. Relatively higher winter concentrations are also
reported within and near major urban areas including metropolitan New
York, Philadelphia, and the Baltimore-Washington, DC area. Nitrate
concentrations reported in southern States represent a somewhat smaller
portion of the PM2.5 mass, primarily due to warmer
temperatures that are less conducive to nitrate formation and chemical
stability.
Total carbon also contributes a significant amount of mass to
annual PM2.5 levels (25 to 50 percent) but does not exhibit
strong seasonal or regional concentration patterns. As with nitrate,
total carbon concentrations are higher in and near urban areas.
Concentrations of the last PM2.5 component, crustal, are
relatively small (less than 10 percent of PM2.5 mass) and do
not exhibit strong regional or seasonal trends. (For further discussion
on the science of PM2.5 formation, see section II; for
further discussion of EPA's proposal on which pollutant emissions to
regulate, see section III.)
2. What Is the Ozone Ambient Air Quality?
Almost all areas of the country have experienced some progress in
lowering ozone concentrations over the last 20 years. As reported in
the EPA's report, ``Latest Findings on National Air Quality: 2002
Status and Trends,'' \3\ national average levels of 1-hour ozone
improved by 22 percent between 1983 and 2002 while 8-hour levels
improved by 14 percent over the same time period. The Northeast and
Pacific Southwest (particularly Los Angeles) have shown the greatest
20-year improvement. Even so, on balance, ozone has exhibited the
slowest progress of the six major pollutants tracked nationally. During
the most recent 10 years, ozone levels have been relatively constant
reflecting little if any air quality improvement. During the period
from 1993 to 2002, additional control requirements have reduced
emissions of the two major ozone precursors, although at different
rates. Emissions of VOCs were reduced by 25 percent from 1993 levels,
while emissions of NOX declined by only 11 percent. During
the same time period, gross domestic product increased by 57 percent
and vehicle miles traveled increased by 23 percent.
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\3\ EPA 454/K-03-001, August 2003.
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Despite the progress made nationally since 1970, ozone remains a
significant public health concern. Presently, wide geographic areas,
including most of the nation's major population centers, experience
unhealthy ozone levels--concentrations exceeding the NAAQS for 8-hour
ozone. These areas include much of the eastern half of the United
States and large areas of California. More specifically, 297 counties
with a total population of over 115 million people currently violate
the 8-hour ozone standard.
Existing regulatory requirements (e.g., Federal motor vehicle
standards, EPA's regional NOX rule known as the
NOX SIP Call, and local measures already adopted under the
CAA) are expected to reduce over time the geographic extent of the
nation's 8-hour ozone problem. However, the number of people living in
areas with unhealthy ozone levels will remain significant for the
foreseeable future because existing control programs alone will not
eliminate unhealthy ozone levels in some of the nation's largest
population centers.
[[Page 4573]]
D. What Is the Statutory and Regulatory Background for Today's Action?
1. What are the CAA Provisions on Attainment of the PM2.5
and Ozone NAAQS?
The CAA, which was extensively amended by Congress in 1990,
contains numerous State planning and attainment requirements associated
with the PM and ozone NAAQS. In 1997, EPA revised the NAAQS for PM to
add new annual average and 24-hour standards for fine particles, using
PM2.5 as the indicator (62 FR 38652). At the same time, EPA
issued its final action to revise the NAAQS for ozone (62 FR 38856) to
establish new 8-hour standards. These standards were subject to
litigation, which delayed implementation. The litigation was
sufficiently resolved in 2001 to permit the EPA and States to begin the
process of implementing the new PM2.5 and 8-hour ozone
standards. See Whitman v. American Trucking Ass'n., 121 S.Ct. 903
(2001).
Following promulgation of new NAAQS, the CAA requires all areas,
regardless of their designation as attainment, nonattainment, or
unclassifiable, to submit SIPs containing provisions specified under
section 110(a)(2). This includes provisions to address the following
required SIP elements: emission limits and other control measures;
provisions for meeting nonattainment requirements; ambient air quality
monitoring/data system; program for enforcement of control measures;
measures to address interstate transport; provisions for adequate
funding, personnel, and legal authority for implementing the SIP;
stationary source monitoring system; authority to implement the
emergency episode provisions in their SIPs; provisions for SIP revision
due to NAAQS changes or findings of inadequacy; consultation
requirements with local governments and land managers; requirement to
meet applicable requirements of part C related to prevention of
significant deterioration and visibility protection; air quality
modeling/data; stationary source permitting fees; and provisions for
consultation and participation by affected local entities affected by
the SIP. In addition, SIPs for nonattainment areas are generally
required to include additional emissions controls providing for
attainment of the NAAQS.
Under subpart 1 of part D, the SIPs must include, but are not
limited to, the following elements: (1) Reasonably available control
measures (RACM) and reasonably available control technology (RACT)
control measures, (2) measures to assure reasonable further progress
(RFP), (3) an accurate and comprehensive inventory of actual emissions
for all sources of the relevant pollutant in the nonattainment area,
(4) enforceable emissions limits for stationary sources, (5) permits
for new and modified major stationary sources, (6) measures for new
source review (NSR), and (7) contingency measures which should be ready
to be implemented without further action from the State or EPA.
Section 110(a)(2)(D) provides a tool for addressing the problem of
transported pollution. This provision applies to all SIPs for each
pollutant covered by a NAAQS and to all areas regardless of their
attainment designation. Under section 110(a)(2)(D) a SIP must contain
adequate provisions prohibiting sources in the State from emitting air
pollutants in amounts that will contribute significantly to
nonattainment in one or more downwind States.
The CAA section 110(k)(5) authorizes EPA to find that a SIP is
substantially inadequate to meet any CAA requirement. If EPA makes such
a finding, it must require the State to submit, within a specified
period, a SIP revision to correct the inadequacy. This is generally
known as a ``SIP call.'' In 1998, EPA used this authority to issue the
NOx SIP Call, discussed below, to require States to revise
their SIPs to include measures to reduce NOx emissions that
were significantly contributing to ozone nonattainment problems in
downwind States.
2. What Is the NOx SIP Call? \4\
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\4\ For a more detailed background discussion, see 67 FR 8396;
February 22, 2002.
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In the early 1990's, EPA recognized that ozone transport played an
important role in preventing downwind areas from developing attainment
demonstrations. In response to a recommendation by the Environmental
Council of States, EPA formed a national work group to assess and
attempt to develop consensus solutions to the problem of interstate
transport of ozone and its precursors in the eastern half of the
country. This work group, the Ozone Transport Assessment Group (OTAG),
which was active from 1995-1997, consisted of representatives from the
37 States in that region; the District of Columbia; EPA; and interested
members of the public, including industry and environmental groups. The
OTAG completed the most comprehensive analysis of ozone transport that
had ever been conducted, developing technical data, including up-to-
date inventories and state-of-the-art air quality modeling, to quantify
and identify the sources of interstate ozone transport. The OTAG
concluded that regional NOx emissions reductions are
effective in producing ozone benefits, while VOC controls are effective
in reducing ozone locally and are most advantageous to urban
nonattainment areas.
In 1998, EPA promulgated a rule, based in part on the work by OTAG,
determining that 22 States \5\ and the District of Columbia in the
eastern half of the country significantly contribute to 1-hour and 8-
hour ozone nonattainment problems in downwind States.\6\ This rule,
generally known as the NOx SIP Call, required those
jurisdictions to revise their SIPs to include NOx control
measures to mitigate the significant ozone transport. The EPA
determined the emissions reductions requirements by projecting
NOx emissions to 2007 for all source categories and then
reducing those emissions through controls that EPA determined to be
highly cost effective. The affected States were required to submit SIPs
providing the resulting amounts of emissions reductions.
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\5\ The jurisdictions are: Alabama, Connecticut, Delaware,
District of Columbia, Georgia, Illinois, Indiana, Kentucky,
Maryland, Massachusetts, Michigan, Missouri, New Jersey, New York,
North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina,
Tennessee, Virginia, West Virginia, and Wisconsin.
\6\ See ``Finding of Significant Contribution and Rulemaking for
Certain States in the Ozone Transport Assessment Group Region for
Purposes of Reducing Regional Transport of Ozone; Final Rule,'' 63
FR 57,356 (October 27, 1998). The EPA also published two Technical
Amendments revising the NOx SIP Call emission reduction
requirements. (64 FR 26,298; May 14, 1999 and 65 FR 11222; March 2,
2000).
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Under the NOx SIP Call, States have the flexibility to
determine the mix of controls to meet their emissions reductions
requirements. However, the rule provides that if the SIP controls EGUs,
then the SIP must establish a budget, or cap, for EGUs. The EPA
recommended that each State authorize a trading program for
NOx emissions from EGUs. We developed a model cap and trade
program that States could voluntarily choose to adopt.
In response to litigation over EPA's final NOx SIP Call
rule, the U.S. Court of Appeals for the District of Columbia Circuit
issued two decisions concerning the NOx SIP Call and its
technical amendments.\7\ The Court decisions generally upheld the
NOx SIP Call and technical amendments, including EPA's
[[Page 4574]]
interpretation of the definition of ``contribute significantly'' under
CAA section 110(a)(2)(D). The litigation over the NOx SIP
Call coincided with the litigation over the 8-hour NAAQS. Because of
the uncertainty caused by the litigation on the 8-hour NAAQS, EPA
stayed the portion of the NOx SIP Call based on the 8-hour
NAAQS (65 FR 56245, September 18, 2000). Therefore, for the most part,
the Court did not address NOx SIP Call requirements under
the 8-hour ozone NAAQS.
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\7\ See Michigan v. EPA, 213 F.3d 663 (D.C. Cir. 2000), cert.
denied, 532 U.S. 904 (2001) (NOx SIP call) and
Appalachian Power v. EPA, 251 F.3d 1026 (D.C. Cir. 2001) (technical
amendments).
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As in the NOx SIP Call, in today's action EPA is
exercising its Federal role to ensure States work in a coordinated way
to solve regional pollution transport problems. Today's action follows
the NOx SIP Call approach in many ways.
3. What Is the Acid Rain Program and Its Relationship to This Proposal?
Title IV of the CAA Amendments of 1990 established the Acid Rain
Program to address the deposition of acidic particles and gases. These
particles and gases are largely the result of SO2 and
NOx emissions from power plants that are transported over
long distances in the atmosphere. In the environment, acid deposition
causes soils and water bodies to acidify, making the water unsuitable
for some fish and other wildlife. Acid deposition also damages forest
soils by stripping soil nutrients, as well as damaging some sensitive
tree species including maple and pine trees, particularly at high
elevations. It speeds the decay of buildings, statues, and sculptures
that are part of our national heritage. The nitrogen portion of acid
deposition contributes to eutrophication in coastal ecosystems, the
symptoms of which include algal blooms (some of which may be toxic),
fish kills, and loss of plant and animal diversity. Finally,
acidification of lakes and streams can increase the amount of methyl
mercury available in aquatic systems. Most exposure to mercury results
from eating contaminated fish.
The Acid Rain Program requires a phased reduction of SO2
(and, to a lesser extent, NOX) emissions from power
generators that sell electricity. Larger EGUs were covered in 1995 with
additional generators being added in 2000. Acid Rain Program affected
sources would likely be affected by today's action, which proposes to
require additional cost-effective SO2 and NOX
reductions from large EGUs.
The Acid Rain Program utilizes a market-based cap and trade
approach to require power plants to reduce SO2 emissions to
50 percent of the 1980 emission levels. At full implementation after
2010, emissions will be limited (i.e., ``capped'') to 8.95 million tons
in the contiguous United States. Individual existing units are directly
allocated their share of the total emissions allowances--each allowance
is an authorization to emit a ton of SO2--in perpetuity. New
units are not allocated allowances. Today's rule builds off of the Acid
Rain cap and trade program and allows sources to use SO2
allowances to meet the proposed emissions caps. This effectively
reduces the national cap on SO2 emissions.
The Acid Rain Program has achieved major SO2 emissions
reductions, and associated air quality improvements, quickly and cost
effectively. In 2002, SO2 emissions from power plants were
10.2 million tons, 41 percent lower than 1980.\8\ These emissions
reductions have translated into substantial reductions in acid
deposition, allowing lakes and streams in the Northeast to begin
recovering from decades of acid rain. Cap and trade under the Acid Rain
Program has created financial incentives for electricity generators to
look for new and low-cost ways to reduce emissions, and improve the
effectiveness of pollution control equipment, at costs much lower than
predicted. The Program's cap on emissions, its requirement that excess
emissions be offset with allowances (with the potential for fines and
civil prosecution), and its stringent emissions monitoring and
reporting requirements ensure that environmental goals are achieved and
sustained, while allowing for flexible compliance strategies which take
advantage of trading and banking. The level of compliance under the
Acid Rain Program continues to be uncommonly high with over 99 percent
of the affected sources holding sufficient allowances by the annual
compliance deadline. Even this handful of non-compliant sources did not
compromise the integrity of the cap because each ton emitted in excess
of allowances must be automatically offset.
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\8\ U.S. Environmental Protection Agency, EPA Acid Rain Program:
2002 Progress Report (EPA 430-R-03-011), November 2003. (Available
at: http://www.epa.gov/airmarkets/cmprpt/arp02/2002report.pdf)
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Title IV also specifies a two-part, rate-based strategy to reduce
NOX emissions from coal-fired electric power plants.
Beginning in 1996 with larger units, the Acid Rain Program included
smaller EGUs and required additional reductions from the larger units
in 2000. By basing the required levels of NOX reductions on
commercially available combustion controls, title IV has reduced
NOX emissions to 2.1 million tons per year beginning in
2000. Utilities have the flexibility to comply with the rule by: (1)
Meeting the standard annual emissions limitations; (2) averaging the
emissions rates of two or more boilers; or (3) if a utility cannot meet
the standard emission limit, applying for a less stringent alternative
emission limit (AEL) based upon its unique application of
NOx emissions control technology on which the rule is based.
4. What Is the Regional Haze Program and Its Relationship to This
Proposal?
Regional haze is visibility impairment that is caused by the same
types of sources likely to be affected by this proposed rule. These
types of sources emit fine particles and their precursors, and they are
located across a broad geographic area.\9\ In 1977, in the initial
visibility protection provisions of the CAA, Congress specifically
recognized that the ``visibility problem is caused primarily by
emission into the atmosphere of SO2, oxides of nitrogen, and
particulate matter, especially fine particulate matter, from
inadequate[ly] controlled sources.'' \10\ The fine particulate matter,
or PM2.5, that impairs visibility by scattering and
absorbing light also causes serious health effects and mortality in
humans discussed earlier in this section. Data from the existing
visibility monitoring network show that visibility impairment caused by
air pollution occurs virtually all of the time at most national park
and wilderness area monitoring stations.\11\
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\9\ See, e.g., U.S. EPA, National Center for Environmental
Assessment, Office of Research and Development, Research Triangle
Park, NC, Air Quality Criteria for Particulate Matter, EPA/600/P-95/
001bF, April 1996.
\10\ H.R. Rep. No. 95-294 at 204 (1977).
\11\ National Park Service, Air Quality in the National Parks: A
Summary of Findings from the National Park Service Air Quality
Research and Monitoring Program. Natural Resources Report 88-1.
Denver CO, July 1988.
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Under the 1999 Regional Haze Rule,\12\ States are required to set
periodic goals for improving visibility in the 156 Class I areas, and
to adopt long-term strategies to meet the goal of returning visibility
in these areas to natural conditions (see 40 CFR part 81, subpart D).
Today's proposal will reduce SO2 and NOX
emissions in 29 States, assisting those States and their neighbors in
making progress toward their visibility goals.
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\12\ 64 FR 35714, July 1, 1999.
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5. What Is the Proposed Utility Control Program for Air Toxics and Its
Relationship to This Proposal?
Today's interstate air quality proposal affecting SO2
and NOX emissions is related to a proposal signed on
December 15, 2003 to regulate mercury from certain types of EGU's using
the
[[Page 4575]]
maximum achievable control technology (MACT) provisions of section 112
of the CAA or using the performance standards provisions under section
111 of the CAA.
The EPA believes that a carefully designed multi-pollutant
approach--a program designed to control NOX, SO2,
and mercury at the same time--is the most effective way to reduce
emissions from electric utilities. One key feature of this approach is
the interrelationship of the timing and cap levels for SO2,
NOX, and mercury. Today, we know that electric utilities can
reduce their emissions of all three pollutants by installing flue gas
desulfurization (FGD) (which controls SO2 and mercury
emissions) and selective catalytic reduction (SCR) (which controls
NOX and mercury). We have designed the interstate transport
proposal and the mercury section 111 proposal to take advantage of the
combined emissions reductions that these technologies provide. Taken
together, these proposals would coordinate emissions reductions from
electric utilities to achieve necessary health protections cost
effectively.
II. Characterization of the Origin and Distribution of 8-Hour Ozone and
PM2.5 Air Quality Problems
This section presents a simplified account of the occurrence,
formation, and origins of ozone and PM2.5, as well as an
introduction to certain relevant scientific and technical terms and
concepts that are used in the remainder of this proposal. It also
provides scientific and technical insights and experiences relevant to
formulating control approaches for reducing the contribution of
transport to these air quality problems.
A. Ground-level Ozone
1. Ozone Formation
Ozone is formed by natural processes at high altitudes, in the
stratosphere, where it serves as an effective shield against
penetration of harmful solar UV-B radiation to the ground. The ozone
present at ground level as a principal component of photochemical smog
is formed in sunlit conditions through atmospheric reactions of two
main classes of precursor compounds: VOCs and NOX (mainly NO
and NO2). The term ``VOC'' includes many classes of
compounds that possess a wide range of chemical properties and
atmospheric lifetimes, which helps determine their relative importance
in forming ozone. Sources of VOCs include man-made sources such as
motor vehicles, chemical plants, refineries, and many consumer
products, but also natural emissions from vegetation. Nitrogen oxides
are emitted by motor vehicles, power plants, and other combustion
sources, with lesser amounts from natural processes including lightning
and soils. Key aspects of current and projected inventories for
NOX and VOC are summarized in section IV of this proposal
and EPA Web sites (e.g., http://www.epa.gov/ttn/chief).
The relative importance of NOX and VOC in ozone
formation and control varies with location- and time-specific factors,
including the relative amounts of VOC and NOX present. In
rural areas with high concentrations of VOC from biogenic sources,
ozone formation and control is governed by NOX. In some
urban core situations, NOX concentrations can be high enough
relative to VOC to suppress ozone formation locally, but still
contribute to increased ozone downwind from the city. In such
situations, VOC reductions are most effective at reducing ozone within
the urban environment and immediately downwind.
The formation of ozone increases with temperature and sunlight,
which is one reason ozone levels are higher during the summer.
Increased temperature increases emissions of volatile man-made and
biogenic organics and can indirectly increase NOX as well
(e.g., increased electricity generation for air conditioning).
Summertime conditions also bring increased episodes of large-scale
stagnation, which promote the build-up of direct emissions and
pollutants formed through atmospheric reactions over large regions. The
most recent authoritative assessments of ozone control
approaches13 14 have concluded that, for reducing regional
scale ozone transport, a NOX control strategy would be most
effective, whereas VOC reductions are most effective in more dense
urbanized areas.
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\13\ Ozone Transport Assessment Group, OTAG Final Report, 1997.
\14\ NARSTO, An Assessment of Tropospheric Ozone Pollution--A
North American Perspective, July 2000.
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2. Spatial and Temporal Patterns of Ozone
Studies conducted in the 1970's established that ozone occurs on a
regional scale (i.e. 1000's of kilometers) over much of the Eastern
U.S., with elevated concentrations occurring in rural as well as
metropolitan areas.15 16 While progress has been made in
reducing ozone in many urban areas, the Eastern U.S. continues to
experience elevated regional scale ozone episodes in the extended
summer ozone season.
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\15\ National Research Council, Rethinking the Ozone Problem in
Urban and Regional Air Pollution, 1991.
\16\ NARSTO, An Assessment of Tropospheric Ozone Pollution--A
North American Perspective, July 2000.
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Regional 8-hour ozone levels are highest in the Northeast and Mid-
Atlantic areas with peak 2002 (3-year average of the 4th highest value
for all sites in the region) ranging from 0.097 to 0.099 parts per
million (ppm).\17\ The Midwest and Southeast States have slightly lower
peak values (but still above the 8-hour standard in many urban areas)
with 2002 regional averages ranging from 0.083 to 0.090 ppm. Regional-
scale ozone levels in other regions of the country are generally lower,
with 2002 regional averages ranging from 0.059 to 0.082 ppm.
Nevertheless, some of the highest urban 8-hour ozone levels in the
nation occur in southern and central California and the Houston area.
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\17\ U.S. EPA, Latest Findings on National Air Quality, August
2003.
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B. Fine Particles
1. Characterization and Origins of Fine Particles
Particulate matter is a chemically and physically diverse mixture
of discrete particles and droplets. It exists in the air in a range of
particle sizes, from submicrometer to well above 30 micrometers
([mu]m). Most of the mass of particles is distributed in two size modes
that are termed fine and coarse particles. Although there is some
overlap at the division of the modes (1 to 3 [mu]m), fine and coarse
particles generally have different origins, source types, chemical
composition, and atmospheric transport and removal processes. In
particular, because of their small size and mechanisms of formation,
fine particles can be created and transported substantial distances
(hundreds to over 1000 km) from emission sources.
As noted above, EPA has established NAAQS for fine particles, which
are defined as those smaller than a nominal 2.5 [mu]m (aerodynamic
diameter) or PM2.5. Standards also exist for particles
smaller than a nominal 10 [mu]m aerodynamic diameter (or
PM10) which include both fine particles and inhalable coarse
mode particles. For reasons summarized in section III below, today's
proposal focuses on reducing significant transport of PM2.5
as it affects attainment of the annual standards.
Fine particles can be directly emitted from sources or, like ozone,
can be formed in the atmosphere from precursor gases. Directly emitted
particles are often termed ``primary'' particles, while those formed in
the
[[Page 4576]]
atmosphere are called ``secondary'' particles.\18\ The most common
source of directly emitted PM2.5 is incomplete combustion of
fuels containing carbon (fossil or biomass), which produces
carbonaceous particles consisting of a variety of organic substances
and black carbon (soot), as well as gaseous carbon monoxide, VOCs and
NOX. Certain high energy industrial processes also emit
primary PM2.5. Examples of direct PM2.5 sources
include diesel and gasoline vehicles, open burning, residential wood
burning, forest fires, power generation, and industrial metals
production and processing.
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\18\ These terms used in the context of atmospheric science
should not be confused with similar terms that are used in section
109 of the CAA to distinguish standards that are intended to protect
public health (primary) from those that protect public welfare
(secondary).
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The major gaseous precursors of secondary PM2.5 include
SO2, NOX, certain VOCs and NH3. The
SO2 and NOX form, respectively, sulfuric and
nitric acids, which then react with ammonia to form various sulfate and
nitrate compounds. At typical summertime humidities in the East, these
substances absorb water and the particles exist as tiny droplets.
Ammonia generally would not form atmospheric particles in the absence
of acidic sulfates and nitrates. Certain reactive VOCs of relatively
high molecular weight (e.g., toluene, xylenes in gasoline) can be
oxidized to form secondary organic aerosol particles (SOA) in the same
kinds of photochemical processes that produce ozone.
The major sources of secondary PM2.5 forming gases
(SO2, NOX, certain VOCs, NH3) include
nearly every source category of air pollutants. Major SO2
sources in the U.S. include coal-fired power plants and industrial
boilers and smelters. Major NOX sources were summarized in
subsection 1 (ozone) above. Significant man-made sources of organic PM
precursors (particularly aromatic compounds \19\) include motor vehicle
fuels, solvents, petrochemical facilities, diesel and gasoline vehicle
emissions, and biogenic emissions from trees. Ammonia is emitted from
numerous livestock and other agricultural activities and natural
processes in soil, but smaller source categories may be important in
urban areas.
---------------------------------------------------------------------------
\19\ Grosjean, D., Seinfeld, J.H., Parameterization of the
formation potential of secondary organic aerosols, Atmospheric
Environment 23, 1733-1747, 1989.
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Secondary formation of PM2.5 involves complex processes
that depend on factors such as the amounts of needed precursor gases;
the concentrations of other reactive species such as ozone
(O3), hydroxyl radicals (OH-), or hydrogen
peroxide (H2O2); atmospheric conditions including
solar radiation, temperature and relative humidity (RH); and the
interactions of precursors and pre-existing particles with cloud or fog
droplets or in the liquid film on solid particles. Significantly, these
processes indicate an important link between PM2.5 and the
pollutants and sources that form ozone. More complete discussions of
the formation and characteristics of secondary particles can be found
in the U.S. EPA Criteria Document,\20\ and in the recent NARSTO Fine
Particle Assessment.\21\ More complete discussions of the
characteristics and sources of both primary and secondary particles can
be found in the U.S. EPA Staff Paper on Review of the National Ambient
Air Quality Standards for Particulate Matter.\22\
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\20\ U.S. EPA, National Center for Environmental Assessment, Air
Quality Criteria for Particulate Matter, 4th External Review Draft.
June 2003.
\21\ NARSTO, Particulate Matter Science for Policy Makers--A
NARSTO Assessment. February 2003.
\22\ U.S. EPA, Review of the National Ambient Air Quality
Standards for Particulate Matter: Policy Assessment of Scientific
and Technical Information OAQPS Staff Paper--First Draft. August
2003.
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2. Spatial and Temporal Patterns of PM2.5 and Major
Components
As noted in section I above, the most recent PM2.5
monitoring data (2000-2002) show numerous counties in violation of the
annual standards across much of the Eastern U.S., as well as in
southern and central California. A major reason for the high values in
eastern urban areas is the regional contributions from sources distant
to these areas.\23\ This is illustrated by comparing recent
PM2.5 data from the EPA Speciation Network (urban sites) and
the IMPROVE Network (non-urban sites). A tabular summary comparing
these urban and rural ambient data is included in the Air Quality Data
Analysis Technical Support Document. This comparison suggests that in
the East, rural regional transport contributes well over half of the
PM2.5 observed in urban areas.
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\23\ NARSTO, Particulate Matter Science for Policy Makers--A
NARSTO Assessment. February 2003.
---------------------------------------------------------------------------
The EPA Speciation Network and IMPROVE data also permits comparison
of the regional contribution of the major components that comprise
PM2.5. The major chemical compounds/classes typically
measured or estimated include sulfate, and nitrate, ammonium (estimated
from sulfate and nitrate in IMPROVE), total carbonaceous materials
(TCM), including black carbon and estimated organic carbon, and
crustal-related materials. The crustal materials reflect intrusion of
the smallest particles originating in the coarse mode as well as a
number of fine mode metals and other elements present in small amounts.
Nationally, the most recent urban PM2.5 composition data
show a significant contribution of carbonaceous material at all sites,
with sulfates higher in the East and nitrates higher in the West.
Crustal material is typically less than 5 to 10 percent of the total.
Focusing on the rural eastern sites representative of the regional
contribution, sulfates and associated ammonium are the largest
fraction, followed by carbonaceous material. Nitrates are also a
significant contributor to PM2.5 in the more northern areas
of the Eastern U.S., especially in the industrial Midwest (about 20
percent).
Rao and Frank \24\ (2003) have compared the concentrations of
sulfates and carbonaceous particles for specific pairs of urban and
nearby non-urban sites. In the East, sulfate at urban monitoring
locations is only slightly higher than at nearby non-urban sites. In
contrast, carbonaceous material at urban sites is significantly higher
than at the non-urban sites. The similarity of urban and rural sulfates
suggests that ambient sulfate is present on a regional scale and that
most urban sulfate is likely associated with regional transport. On the
other hand, urban carbonaceous material appears to have both a regional
and an urban component. The much higher concentrations in urban areas
indicate the importance of local sources. Detailed source apportionment
studies discussed in section V below suggest that mobile and other
combustion sources, which are much more concentrated in urban areas,
may explain much of the elevated urban carbon concentrations.
---------------------------------------------------------------------------
\24\ V. Rao, N. Frank, A. Rush, F. Dimmick, Chemical Speciation
of PM2.5 in Urban and Rural Areas, In the Proceedings of
the Air & Waste Management Association Symposium on Air Quality
Measurement Methods and Technology, San Francisco, on November 13-
15, 2002.
---------------------------------------------------------------------------
Seasonal variations in PM2.5 and components provide
useful insights into the relative importance of various sources and
atmospheric processes. In the East, rural PM2.5
concentrations are usually significantly higher in the summertime than
in the winter. In large urban areas, however, summer/winter differences
are smaller, and winter peaks may be higher. More specifically,
PM2.5 concentrations in urban areas in the Northeast,
industrial Midwest, and upper Midwest regions peak both in the winter
and in the summer and are
[[Page 4577]]
lowest in the spring and fall. The concentrations in the peak seasons
in the Northeast and industrial Midwest are 5 [mu]g/m3 or
more higher in concentration than the low seasons. The peak seasons in
the upper Midwest are less than 5 [mu]g/m3 higher than the
low seasons. In the Southeast, however, the urban areas have just one
peak that occurs in the summer, and that peak is only 4 to 5 [mu]g/
m3 higher than the lowest season.
The seasonal pattern of summer PM2.5 peaks in rural
areas does not vary as much by region as do urban patterns. The
composition data show that these summer peaks are due to elevated
regional sulfates and organic carbon. Urban and rural nitrates tend to
be low in the summer and significantly higher in the winter, when
sulfates are lowest. Wintertime urban peaks appear to consist of
increased ammonium nitrate and carbonaceous material of local
origin.\25\
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\25\ NARSTO, Particulate Matter Science for Policy Makers--A
NARSTO Assessment. February 2003.
---------------------------------------------------------------------------
3. Implications for Control of Transported PM2.5
The interplay between sulfates and nitrates observed in the
seasonal data above is of particular importance. The formation of
ammonium nitrate is favored by availability of ammonia and nitric acid
vapor, low temperatures, high relative humidity, and the absence of
acid sulfate particles. At higher summer temperatures when
photochemical processes and meteorological conditions in the East
produce high sulfate levels, ammonia and nitric acid vapor tend to
remain in the gas phase rather than forming ammonium nitrate particles.
In winter months, with cooler temperatures and lower sulfur-related
acidity, the presence of sufficient nitric acid and ammonia favors
formation of nitrate particles.
The chemistry summarized above has consequences for the
effectiveness of SO2 reductions in lowering regional and
urban PM2.5 concentrations. Both observations and modeling
simulations (see subsection II.B.4 below) suggest that regional
SO2 reductions are effective at reducing sulfates and
PM2.5. When SO2 reductions reach a certain point
in relation to other relevant reactants and conditions, however, the
ammonia formerly associated with sulfate can react with excess nitric
acid vapor to form nitrate particles, effectively replacing at least
part of the PM2.5 reduction due to sulfate. This phenomenon
is termed ``nitrate replacement.'' Under these conditions,
SO2 reductions will not be as effective at reducing
PM2.5. Empirical evidence based on ambient measurements and
modeling simulations show nitrate replacement changes under differing
scenarios involving meteorological factors and relative concentrations
of important components.26, 27 Obviously, sulfate
reduction approaches (SO2 controls) will be more effective
at lowering PM2.5 if complemented by strategies that reduce
nitrates (NOX controls), particularly in the winter.
---------------------------------------------------------------------------
\26\ NARSTO, Particulate Matter Science for Policy Makers--A
NARSTO Assessment. February 2003.
\27\ Blanchard and Hidy. J., Effects of Changes in Sulfate,
Ammonia, and Nitric Acid on Particulate Nitrate Concentrations in
the Southeastern United States, Air & Waste Manage. Assoc. 53:283-
290. 2003.
---------------------------------------------------------------------------
This chemistry also has implications for the role of ammonia
sources in contributing to regional PM2.5. As noted above,
ammonia would not be present in particle form were it not for the
presence of sulfuric and nitric acids. Significant reductions of these
acids through SO2 and NOX controls would also
reduce particulate ammonia, without the need for ammonia controls. As
evidenced in the discussion above, it is clear that any effects of
ammonia emissions controls on PM2.5 would vary considerably
with the concentrations of sulfate, total ammonia (gas phase plus
aerosol), total nitric acid temperature, and location and season. In
some cases, a decrease in ammonia will have no effect on
PM2.5, while in other cases, the decrease will reduce total
nitrate contributions.\28\
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\28\ The marginal effectiveness of reducing ammonia on
PM2.5 is examined in West, J. J., A. S. Ansari, and S. N.
Pandis, Marginal PM 2.5: nonlinear aerosol mass response
to sulfate reductions in the eastern U.S., Journal Air & Waste
Management Assoc., 49(12): 1415-1424, 1999.
---------------------------------------------------------------------------
In essence, the effect of significant reductions in ammonia on
PM2.5 is least in conditions with low particulate nitrate
levels (e.g., warm conditions) or low nitric acid vapor levels (e.g.,
through NOX reductions) in comparison to ammonia levels. The
most significant effects of ammonia control would occur in conditions
where there is an abundance of nitric acid, in which ammonia limits
particulate nitrate formation. Therefore, significant reductions in
SO2 and NOX emissions would create conditions
that would reduce the effectiveness of ammonia controls in reducing
PM2.5.
In addition to these direct effects of ammonia controls on
PM2.5, ammonia is a weak base that serves to partially
neutralize acids that occur in PM2.5. As such, reducing
ammonia will make PM2.5, clouds, and precipitation more
acidic, thereby exacerbating acidifying precipitation (acid rain) and
possibly causing health effects related to PM2.5 acidity.
Through this increased acidity of clouds and fogs, ammonia reductions
can slow the conversion of SO2 to particle sulfate.\29\ The
increased acidity associated with ammonia reductions may also increase
the formation of secondary organic aerosols, according to recent
laboratory studies.\30\ In contrast, NOX reductions can both
slow sulfate formation through oxidant chemistry, while also reducing
acidity.
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\29\ NARSTO, Particulate Matter Science for Policy Makers--A
NARSTO Assessment. February 2003.
\30\ Jang, M.; Czoschke, N. M.; Lee, S.; Kamens, R. M.,
Heterogeneous Atmospheric Aerosol Production by Acid-Catalyzed
Particle Phase Reactions, Science, 2002, 298, 814-817.
---------------------------------------------------------------------------
A further complication in consideration of ammonia controls is the
uncertainty regarding the location and temporal variations in ammonia
emissions, particularly in urban areas. This is an area of active
research and investigation for EPA and others. It is of note that the
maximum concentration of ammonium nitrates occurs in the winter, a
period that is expected to have the lowest ammonia emissions from
agricultural activities; \31\ by contrast, the potential
PM2.5 benefit of reducing ammonia emissions in the summer
when they may be at a peak is limited to the ammonium itself, because
this is the time of lowest ammonium nitrate particle levels.
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\31\ Battye, W., V. P. Aneja, and P. A. Roelle, Evaluation and
improvement of ammonia emissions inventories, Atmospheric
Environment, 2003, 37, 3873-3883.
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The origins of the carbonaceous component of regional transport are
even less well characterized. It reflects a complex mixture of hundreds
or even thousands of organic carbon compounds, most of which have not
yet been successfully quantified. In addition to directly emitted
carbonaceous materials from fires and transport from urban areas, a
varying amount is likely derived from biogenic emissions--which may
include both primary and transformed secondary materials. Because the
observed summertime increase in organic particles may be related to
photochemical activity, it is reasonable to expect that--as for
regional ozone--NOX reductions might produce some benefits.
Further, recent work by Jang et al. suggests that acidic aerosols
(e.g., sulfates) may increase the formation of secondary organic
aerosols (SOA).\32\
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\32\ Jang, M.; Czoschke, N. M.; Lee, S.; Kamens, R. M.,
Heterogeneous Atmospheric Aerosol Production by Acid-Catalyzed
Particle Phase Reactions, Science, 2002, 298, 814-817.
---------------------------------------------------------------------------
Despite significant progress that has been made in understanding
the origins
[[Page 4578]]
and properties of SOA, it remains the least understood component of
PM2.5. Moreover, the contribution of primary and secondary
organic aerosol components to measured organic aerosol concentrations
is thought to be highly variable and is a controversial issue.\33\ The
relative amounts of primary versus secondary organic compounds in the
ambient air throughout the U.S., however, appear to vary with location
and time of year. While carbonaceous material appears to be a
significant component in regional transport in the East, it is
currently not possible to determine with certainty the relative
contribution of primary versus secondary carbonaceous particles, or to
fully quantify the fraction that might be reduced by control of man-
made sources. The EPA and others have funded substantial research and
monitoring efforts to clarify these issues. New information from the
scientific community continues to emerge to improve our understanding
of the relationship between sources of PM precursors and secondary
particle formation.
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\33\ NARSTO, Particulate Matter Science for Policy Makers--A
NARSTO Assessment. February 2003.
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4. Air Quality Impacts of Regional SO2 Reductions
As noted above, sulfates from SO2 comprise the largest
component of regional transport in the East. Fortunately, we already
have significant observational evidence of the effectiveness of
reducing regional SO2 emissions. By contrast, while small to
modest NOX emissions reductions from control programs to
date have resulted in reduced nitrate deposition in some portions of
the East,\34\ we have no comparable long-term experience in observing
the expected effects of more substantial regional reductions for
NOX. Perhaps the best documented example of the results of
any major regional air pollution control program is reflected in the
experience of the title IV Acid Rain Program (see section VIII below).
From 1990 to date, this market-based program reduced SO2
emissions from electric utilities throughout the country, with most of
the emissions reductions achieved by sources in the East. The regional
reductions have resulted in substantial improvements in air quality and
deposition throughout the East. The spatial and temporal patterns of
these improvements have been observed at most eastern rural monitoring
networks.\35\
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\34\ Butler, Thomas J., Gene E. Likens, Francoise M. Vermeylen
and Barbara J. B. Stunder. The relation between NOX
emissions and precipitation NO3-in the eastern USA,
Atmospheric Environment, Volume 37, Issue 15, May 2003, Pages 2093-
2104.
\35\ U.S. EPA, Clean Air Status and Trends Network 2002 Annual
Report. November 2003.
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The signal of regional air quality has been detected by the
CASTNET. The CASTNET sites in rural areas of the Midwest and East
measured high average SO2 concentrations prior to the Acid
Rain Program, particularly in areas of the Ohio River Valley and into
New York and eastern Pennsylvania where electric utility SO2
emissions were high. Average concentrations of sulfates throughout this
area were elevated throughout an even broader region, indicating that
sulfates were being transported from the SO2 emission
sources to areas throughout the East.
Since 1990, SO2 concentrations at CASTNET sites have
been reduced substantially in the areas where concentrations were high
before the Acid Rain Program.\36\ A comparison of current mean
SO2 concentrations (3-year average 2000-2002) to
SO2 concentrations before the Program (1990-1992) shows that
all sites decreased. The largest decrease was observed at sites from
Illinois to northern West Virginia across Pennsylvania to western New
York.
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\36\ U.S. EPA, Acid Rain Progress Report, November 2003.
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Rural monitoring networks have also been able to detect temporal
patterns in SO2 and sulfate concentrations. Temporal trends
in rural concentrations of these pollutants can be used to determine if
monitored concentrations responded to changes in emissions trends. The
most substantial drop in SO2 emissions occurred in 1995 when
Phase I of the Acid Rain Program began. After 1995, emissions increased
slightly, as sources began to use allowances that they had banked by
reducing emissions before the program began, until Phase II of the
program began in 2000 and emissions declined again.\37\
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\37\ U.S. EPA, Clean Air Status and Trends Network 2002 Annual
Report, November 2003.
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Monitored SO2 concentrations, sulfate concentrations at
eastern CASTNET sites, sulfur concentrations in precipitation at
eastern National Atmospheric Deposition (NADP) sites, and total (Dry +
Wet) sulfur deposition at NADP and CASTNET sites closely tracked the
yearly trends in SO2 emissions from Acid Rain Program
sources from 1990-2002. Notably, the most significant decline in the
various pollutants was observed in 1995 immediately after Phase I
began.\38\
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\38\ U.S. EPA, Clean Air Status and Trends Network 2002 Annual
Report. November 2003.
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These trends in air quality and deposition at rural monitoring
sites show that a large, regional emission reduction program can
achieve significant, observable environmental improvements throughout a
broad area, especially where pollution levels are elevated before the
program is implemented. In addition, the temporal trend in observed
improvements shows that emissions reductions can lead to immediate
environmental improvements. Additional discussions of the air quality
impacts of regional SO2 reductions can be found in the U.S.
Air Quality and Emission Trends Report,\39\ as well as recent reports
from IMPROVE \40\ and the National Atmospheric Deposition Program.\41\
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\39\ U.S. EPA, National Air Quality and Emissions Trends Report,
1999. March 2001.
\40\ Malm, William C., Spatial and Seasonal Patterns and
Temporal Variability of Haze and its Constituents in the United
States:'' Report III. May 2000.
\41\ National Atmospheric Deposition Program, National
Atmospheric Deposition Program, 2002 Annual Summary. 2003.
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III. Overview of Proposed Interstate Air Quality Rule
A. Purpose of Interstate Air Quality Rule
For this rulemaking, EPA has assessed the role of transported
emissions from upwind States in contributing to unhealthy levels of
PM2.5 and 8-hour ozone in downwind States. Based on that
assessment, the EPA is proposing emissions reduction requirements for
SO2 and NOX that would apply to upwind States.
Emissions reductions to eliminate transported pollution are
required by the CAA and supported by sound policy. Clean Air Act
section 110(a)(2)(D) requires SIP revisions for upwind States to
eliminate emissions that contribute significantly to nonattainment
downwind. Under section 110(a)(1), these SIP revisions were required in
2000 (three years after the 1997 revision of the PM2.5 and
8-hour ozone NAAQS); EPA proposes that they be submitted as
expeditiously as practicable, but no later than 18 months after the
date of promulgation.
There are also strong policy reasons for addressing interstate
pollution transport, and for doing so now. First, emissions from upwind
States can alone, or in combination with local emissions, result in air
quality levels that exceed the NAAQS and jeopardize the health of
citizens in downwind communities. Second, interstate pollution
transport requires some consideration of reasonable balance between
local and regional controls. If significant contributions of pollution
from upwind States go unabated, the downwind area must achieve greater
[[Page 4579]]
local emissions reductions, thereby incurring extra clean-up costs in
the downwind area. Third, requiring reasonable controls for both upwind
and local emissions sources should result in achieving air quality
standards at a lesser cost than a strategy that relies solely on local
controls. For all these reasons, EPA believes it is important to
address interstate transport as early as possible. Doing so as we are
today, in advance of the time that States must adopt local
nonattainment plans, will make it easier for states to develop plans to
reach attainment of the standards.
The EPA previously addressed interstate pollution transport for
ozone in rules published in 1998 and 2000. These rules, known as the
NOX SIP Call and Section 126 Rule, are substantially
reducing ozone transport and helping downwind areas meet the 1-hour and
8-hour ozone standards. However, EPA is reassessing ozone transport in
this rulemaking for two reasons. First, several years have passed since
promulgation of the NOX SIP Call and updated data are
available. Second, in view of the difficulty some areas are expected to
have meeting the 8-hour ozone standards, EPA believes it is important
to assess the degree to which ozone transport will remain a problem
after full implementation of the existing rules, and to determine
whether further controls are warranted to ensure continued progress
toward attainment. Today's rulemaking is EPA's first attempt to address
interstate pollution transport for PM2.5.
B. Summary of EPA's Key Findings and Proposed Remedy for Interstate
Transport
Based on a multi-part assessment summarized below, EPA has
concluded that:
? Without adoption of additional emissions
controls, a substantial number of urban areas in the central and
eastern regions of the U.S. will continue to have levels of
PM2.5 or 8-hour ozone (or both) that do not meet the
national air quality standards.
? Although States have not yet developed plans for
meeting the PM2.5 and 8-hour ozone standards, predictive
analyses by EPA for the year 2010 show that even with implementation of
substantial local controls, many areas would continue to experience
unhealthy air quality in that year. Consequently, EPA has concluded
that small contributions of pollution transport to downwind
nonattainment areas should be considered significant from an air
quality standpoint because these contributions could prevent or delay
downwind areas from achieving the health-based standards.
? Based on our analyses, we have concluded that
SO2 and NOX are the chief emissions contributing
to interstate transport of PM2.5. For the 8-hour ozone
nonattainment, EPA continues to believe, in accordance with the
conclusion of the Ozone Transport Assessment Group (OTAG), that the
focus of interstate transport control should be on NOX.
? For both PM2.5 and 8-hour ozone, EPA
has concluded that interstate transport is a major contributor to the
projected nonattainment problem in the Eastern U.S. in 2010. In the
case of PM2.5, the nonattainment areas analyzed are
estimated to receive a transport contribution attributable to
SO2 and NOX emissions ranging from 4.22 to 7.36
[mu]g/m3 on an annual average basis, with an average of 5.47
[mu]g/m3 across all nonattainment areas. In the case of 8-
hour ozone, the nonattainment areas analyzed receive a transport
contribution of more than 20 percent of their ambient ozone
concentrations, and 21 of 47 had a transport contribution of more than
50 percent.
? Typically, two or more States contribute
transported pollution to a single downwind area, so that the
``collective contribution'' is much larger than the contribution of any
single State.
Based on these conclusions, EPA is proposing to make several
findings, and to require the remedy summarized below:
? For PM2.5, we are proposing to find
that SO2 and NOX emissions in 28 States and the
District of Columbia will contribute significantly in 2010 to
PM2.5 levels in downwind nonattainment areas in amounts that
exceed an air quality significance threshold proposed today.
? For ozone, we are proposing to find that
NOX emissions in 25 States and the District of Columbia will
contribute significantly in 2010 to ozone levels in excess of the 8-
hour standards in downwind nonattainment areas in amounts that exceed
the air quality significance threshold EPA previously established in
the 1998 NOX SIP Call, and which we propose today to
continue to use.
? We are also proposing to find that emissions
reductions from EGUs in the identified upwind States and the District
of Columbia would be highly cost effective. As in the NOX
SIP Call, we propose to find that these highly cost-effective
reductions constitute the significant contributions to downwind
nonattainment in other States that must be eliminated under the CAA.
? We are proposing that the level of reductions
that would be highly cost effective corresponds to power sector
emissions caps in a 28-state plus District of Columbia region of 2.7
million annual tons for SO2 and 1.3 million annual tons for
NOX.
? In order to strike a balance between the
feasibility of achieving a substantial amount of emissions reductions,
and the need to achieve them as expeditiously as practicable for
attainment of health standards, we are proposing that the emissions
caps for the affected States (and the District of Columbia) be
implemented in two phases, with the first phase in 2010 and the second
phase in 2015. The first phase caps would be 3.9 million tons for
SO2 and 1.6 million tons for NOX.
? We estimate that, compared to the emissions that
would otherwise occur in 2010 and 2015, this proposal would result in
emissions reductions of 3.6 million tons SO2 (40 percent)
and 1.5 million tons NOX (49 percent) by 2010, and 3.7
million tons SO2 (44 percent) and 1.8 million tons
NOX (58 percent) by 2015.
? Compared to EGU emissions in 2002 in the
affected States, at full implementation of today's proposal
SO2 emissions would be reduced about 71 percent. On the same
basis, NOX emissions would be reduced 65 percent.
? The proposed emissions reductions would be met
by affected States using one of two options for compliance: (1)
Participating in an interstate cap and trade system that caps emissions
from the electric generating sector, thereby reducing the costs of
emissions reductions while ensuring that the required reductions are
achieved by the region as a whole (an approach EPA believes is
preferable); or (2) meeting an individual State emissions budget
through measures selected by the State in accord with the requirements
discussed in sections VI and VII below.
Today's proposal relies on information and analysis relevant to
determining whether sources in upwind States emit in amounts that
``contribute significantly to [downwind] nonattainment,'' which the
upwind States' SIPs are required to prohibit under section
110(a)(2)(D)(i)(I).
C. Coordination of Multiple Air Quality Objectives in Today's
Rulemakings
1. Linkages Between Interstate Air Quality and Mercury Rulemakings
As noted above, today's proposal for reducing the transport of
pollutants that contribute significantly to violations of the
PM2.5 and 8-hour ozone air quality standards is accompanied
by separate
[[Page 4580]]
actions proposing EPA's approach for addressing mercury from power
plants. The EPA has endeavored to recognize and integrate the pollution
reduction requirements incorporated in today's proposed rules so as to
provide benefits for public health and the environment in a manner that
has proven effective in other programs. In so doing, we were guided by
our experience and success in implementing the title IV Acid Rain
Program for reducing some of the same pollutants. We have also fully
considered the extensive analyses and assessment of options that EPA
has conducted over the last eight years in developing proposals that
would establish an integrated multi-pollutant program for addressing
the power sector, including the President's Clear Skies Act.
Our experience with title IV and the assessments leading to the
proposed Clear Skies Act have suggested that we can achieve substantial
benefits at reduced costs by expanding the market-based mechanisms of
title IV to achieve substantial reductions in SO2,
NOX, and mercury, and by recognizing the interactions
inherent in designing control strategies in an integrated rather than
sequential manner. This approach has the added advantage of providing
regulatory certainty, both for the States, which are charged with
developing attainment strategies for areas that are affected by
interstate transport, and for sources that would be affected by today's
proposed rules for addressing transport and mercury emissions.
While EPA still hopes that Congress will adopt the Administration's
Clear Skies multi-pollutant legislation, the outcome of that process is
not certain. Accordingly, we believe it is our responsibility to move
forward to achieve these reductions as expeditiously as possible under
existing regulatory authorities. We believe today's proposals reflect
the best regulatory approach for making expeditious progress towards
meeting air quality standards and other health and environmental goals,
while providing flexibility that will minimize the cost of compliance.
We have incorporated ambitious emissions reduction schedules to ensure
the combined reductions of all pollutants occur as quickly as is
feasible. We are proposing to offer, as an option for implementing the
SO2 and NOX reductions, emissions cap and trade
programs that would provide a seamless transition from the current
title IV and NOX SIP Call programs.
2. Linkages Between PM2.5 and 8-hour Ozone Transport
Requirements
Although PM2.5 and ozone are distinct NAAQS with
separate implementation requirements, in reality they are closely
linked in many ways. Because of these linkages, we have considered
PM2.5 and ozone in an integrated manner in developing this
proposal. The linkages between PM2.5 and ozone arise from
their interactions in atmospheric chemistry, the overlap in the
pollutants and emission sources that contribute to elevated ambient
levels, and similarities in their implementation schedules. Emissions
of NOX and SO2 contribute to PM2.5
nonattainment, and NOX emissions also contribute to 8-hour
ozone nonattainment. Moreover, because the power generation sector and
other source types are major emitters of both NOX and
SO2, and because control actions for these pollutants may
reinforce or compete with each other, it is also appropriate to address
NOX and SO2 control requirements in an integrated
manner, keeping in mind that the relevant provisions of the CAA must,
in the end, be met for each NAAQS and its associated pollutant
precursors.
3. Linkages Between Interstate Air Quality Rulemaking and Section 126
Petitions
Recent history of how EPA and the States have relied on certain CAA
transport provisions indicates that a brief discussion of these
provisions may be useful. In the NOX SIP Call rule, we
determined that under section 110(a)(2)(D), the SIP for each affected
State (and the District of Columbia) must be revised to eliminate the
amount of emissions that contribute significantly to nonattainment in
downwind States. We further determined that amount, for each State, as
the quantity of emissions that could be eliminated by the application
of highly cost-effective controls on specified sources in that State.
During July-August, 1997, EPA received petitions under CAA section
126 from eight northeastern states. The petitions asked EPA to find
that specified sources in specified upwind States were contributing
significantly to nonattainment in the petitioning States. Shortly after
promulgation of the NOX SIP Call, in May, 1999, EPA
promulgated a rule making affirmative technical determinations for
certain of the section 126 petitions. Relying on essentially the same
record as we had for the NOX SIP Call rulemaking, we made
the affirmative technical determinations with respect to the same
sources in certain of the same States covered under the NOX
SIP Call. Moreover, we approved a section 126 remedy based on the same
set of highly cost-effective controls. However, EPA withheld granting
the findings for the petitions. Instead, we stated that because we had
promulgated the NOX SIP Call--a transport rule under section
110(a)(2)(D)--as long as an upwind State remained on track to comply
with that rule, EPA would defer making the section 126 finding. 64 FR
28250 (May 25, 1999) (``May 1999 Rule'').
Following promulgation of the May 1999 Rule, however, the U.S.
Court of Appeals for the D.C. Circuit stayed the NOX SIP
Call. We then promulgated a revised section 126 rule, in January 2000.
65 FR 2674 (January 18, 2000) (``January 2000 Rule''). We stated that
because upwind States were no longer obliged to adhere to the
requirements of the NOX SIP Call, we would go ahead and make
the section 126 findings.
Even so, in the January 2000 Rule, we further indicated that we
were considering rescinding the section 126 finding with respect to an
affected State if, in general, we approved a SIP revision submitted by
the affected State as fully achieving the amount of reductions required
under the NOX SIP Call. The reason for this rescission would
be the fact that the affected State's SIP revision would fulfill the
section 110(a)(2)(D) requirements, so that there would no longer be any
basis for the section 126 finding with respect to that State. In this
manner, the NOX SIP Call and the Section 126 Rules would be
harmonized.
Today, we are similarly proposing a remedy under section
110(a)(2)(D) to eliminate the significant contribution of emissions, in
this case both SO2 and NOX, from upwind States to
downwind States' nonattainment of the fine particle and 8-hour ozone
standards. We believe it would be appropriate to apply the same
approach to any section 126 petitions submitted in the future, should
there be any, as we used under the NOX SIP Call and the
related section 126 rules. Thus, we expect that the remedy we would
provide in response to a section 126 petition concerning reductions in
EGU emissions of SO2 or NOX by 2010 would be
identical to that provided in this rulemaking under section
110(a)(2)(D), assuming that the petition relies on essentially the same
record. Thus, we would expect to take the same position we took in the
May 1999 Rule--that as long as EPA has promulgated a transport rule
under section 110(a)(2)(D), the transport rule and the section 126
timeframes are roughly comparable, and a State is on
[[Page 4581]]
track to comply with the transport rule, then EPA is not required to
approve section 126 petitions targeting sources in that State if those
petitions rely on essentially the same record.
If a section 126 petition is submitted, we would obviously need to
set out in more detail our approach to the interaction between section
110(a)(2)(D) and section 126 in our response to that petition. Today,
we are setting forth our general view of the relationship between these
two sections and seeking comment on this view and on the issues raised
by the interaction between these sections.
D. Overview of How EPA Assessed Interstate Transport and Determined
Remedies
This section provides a conceptual overview of the EPA's technical
and legal analyses of the problem of interstate pollution transport as
it affects attainment of the PM2.5 and 8-hour ozone
standards. It is intended to provide an overall context for the more
detailed discussions below. In general, EPA has taken a two-step
approach in interpreting section 110(a)(2)(D). In the first step, EPA
conducted an air quality assessment to identify upwind States which
contribute significantly (before considering cost) to downwind
nonattainment. In the second step, EPA conducted a control cost
assessment to determine the amount of emissions in each upwind State
that should be reduced in order to eliminate each upwind State's
significant contribution to downwind nonattainment.
This two-step approach involved multiple technical assessments,
which are listed below in brief, and explained in further detail in the
subsections that follow. The EPA addressed:
(1) The degree and geographic extent of current and expected future
nonattainment with the PM2.5 and 8-hour ozone NAAQS;
(2) The potential impact of local controls on future nonattainment;
(3) The potential for individual pollutants to be transported
between States;
(4) The extent to which pollution transport across State boundaries
will contribute to future PM2.5 and 8-hour ozone
nonattainment; and
(5) The availability and timing of emissions reduction measures
that can achieve highly cost-effective reductions in pollutants that
contribute to excessive PM2.5 and 8-hour ozone levels in
downwind nonattainment areas.
1. Assessment of Current and Future Nonattainment
The EPA assessed the degree and geographic extent of current
nonattainment of the PM2.5 and 8-hour ozone NAAQS. For the
3-year period 2000-2002, 120 counties with monitors exceed the annual
PM2.5 NAAQS and 297 counties with monitor readings exceed
the 8-hour ozone NAAQS.\42\ Nonattainment of the PM2.5
standards exists throughout the Eastern U.S.--from western Illinois and
Tennessee eastward--and in California. Nonattainment of the 8-hour
ozone standards also exists widely east of the continental divide--from
eastern Texas and Oklahoma to the Atlantic coast--as well as in
California and Arizona.
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\42\ See ``Air Quality Data Analysis Technical Support Document
for the Proposed Interstate Air Quality Rule (January 2004).'' We
expect that the actual designation of PM2.5 and 8-hour
ozone nonattainment areas will be based on 2001-2003 data. We plan
to update our assessment to reflect the most recent data available
at the time we issue the final rule.
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In analyzing significant contribution to nonattainment, we
determined it was reasonable to exclude the Western U.S., including the
States of Washington, Idaho, Oregon, California, Nevada, Utah, and
Arizona from further analysis due to geography, meteorology, and
topography. Based on these factors, we concluded that the
PM2.5 and 8-hour ozone nonattainment problems are not likely
to be affected significantly by pollution transported across these
States' boundaries. Therefore, for the purpose of assessing States'
contributions to nonattainment in other States, we have only analyzed
the nonattainment counties located in the rest of the U.S.
We assessed the prospects for future attainment and nonattainment
in 2010 and 2015 with the 8-hour ozone NAAQS using the Comprehensive
Air Quality Model with Extensions (CAMX), and with the
PM2.5 NAAQS using the Regional Modeling System for Aerosols
and Deposition (REMSAD).\43\ These two forecasting years were chosen
because they include the range of expected attainment dates for many
PM2.5 nonattainment areas, and under our proposed 8-hour
implementation rule, the range of expected attainment dates for many 8-
hour ozone nonattainment areas. In addition, considering the likely
schedule for this rulemaking and the implementation steps that would
follow it (see section VII), we believe that 2010 would be the first
year in which sizable emission reductions could confidently be expected
as a result of this rulemaking.
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\43\ See section IV, Air Quality Modeling to Determine Future 8-
hour Ozone and PM2.5 Concentrations, for more detail on
the approach summarized in this subsection.
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In modeling the 2010 and 2015 ``base cases,'' we took into account
adopted State and Federal regulations (e.g., mobile source rules, the
NOX SIP Call) as well as regulations that have been proposed
and that we expect will be promulgated before today's proposal is
finalized.
Based on this approach we predicted that, in the absence of
additional control measures, 47 counties with air quality monitors
would violate the 8-hour ozone NAAQS in 2010, and 34 counties would
violate in 2015. For PM2.5 we predicted that 61 counties
would violate the standards in 2010, and 41 counties would violate in
2015.\44\ These counties are listed in Tables IV-3 and IV-4. The
counties with predicted nonattainment are widely distributed throughout
the central and eastern regions of the U.S. The degree of predicted
nonattainment in both years spans a range of values from close to the
NAAQS level to well above the NAAQS level. Given the number and
geographic extent of predicted future nonattainment problems, we
continued the assessment to quantify the role of interstate
contributions to nonattainment.
2. Prospects for Progress Towards Attainment Through Local Reductions
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\44\ The EPA also considered the current and likely future
nonattainment of the PM10 NAAQS and the 24-hour average
PM2.5 NAAQS. Only a small number of areas are presently
experiencing PM10 exceedances, and all have approved SIPs
that are expected to result in attainment through local control
measures. Accordingly, we do not believe that interstate transport
will be an important consideration for PM10
implementation in the period from 2010, or beyond, and therefore
PM10 is not a subject of today's proposal. Few areas, all
in the western U.S., presently have violations of the 24-hour
average PM2.5 NAAQS, and all of these are also violating
the annual PM2.5 NAAQS. We believe that to the extent
interstate transport is contributing to nonattainment of the 24-hour
PM2.5 NAAQS, actions aimed at the broader problem of
PM2.5 nonattainment will correct any transport affecting
24-hour PM2.5 also. The 24-hour PM2.5 standard
was not further assessed in our analysis for today's proposal.
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The assessments of future nonattainment presented above considered
only the effect of emission reduction measures already adopted or that
are specifically required and that we expect will be adopted by the
time this rule is promulgated. Once designated, States containing
PM2.5 and 8-hour ozone nonattainment areas will be required
to submit SIPs that may include additional local emission reduction
measures designed to achieve attainment. Accordingly, we assessed, to
the extent feasible with available methods, whether it would be
possible for nonattainment areas to attain the annual PM2.5
and 8-hour ozone NAAQS through local emissions reductions with
reasonably available control measures, or whether the amount of
transport from
[[Page 4582]]
upwind States would make this difficult or impossible. This information
could then be used to determine whether upwind States should be
expected to reduce their emissions.
a. Fine Particles
We conducted an assessment of the emissions reductions that States
may need to include in nonattainment SIPs, and identified measures that
could provide those emission reductions. We focused on the counties
predicted to be nonattainment in the 2010 base case.
For our analysis of States' ability to attain the PM2.5
standards, we developed a group of emissions reduction measures for
SO2, NOX, direct PM2.5, and volatile
organic compounds (VOC) as a surrogate for measures that States would
potentially implement prior to 2009 in an effort to reach attainment.
The measures address a broad range of source types.\45\ We analyzed the
effect of applying this group of local controls in two different ways.
First, we analyzed the impact of the emission controls on the immediate
area in which they were applied. We applied the local control measures
in three sample cities: Philadelphia, Birmingham, and Chicago. The
group of local emissions controls was estimated to achieve ambient
annual average PM2.5 reductions ranging from about 0.5
[mu]g/m3 to about 0.9 [mu]g/m3, which was less
than the amount needed to bring any of the three cities into attainment
in 2010. The detailed results of this three-city analysis are provided
in section IV.
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\45\ See section IV and Tables IV-5, IV-6, and IV-7 for details
on the analyses of local control measures.
---------------------------------------------------------------------------
Second, we analyzed the impact of applying the group of local
controls to all 290 counties that are located in metropolitan areas in
the eastern and central U.S. and that contain one or more of the
counties projected to be nonattainment in 2010. This analysis was
designed to assess whether applying local controls in upwind
nonattainment areas, as States are expected to do, would significantly
reduce transport to downwind States.
Based on this analysis, we concluded that for many PM2.5
nonattainment areas it would be difficult, if not impossible, to reach
attainment unless transport is reduced to a much greater degree and
over a much broader regional area than by the simultaneous adoption of
local controls within specific nonattainment areas. In addition, we
found that much of the air quality improvement that did occur in
downwind areas with this strategy was due to reductions in transported
sulfate attributable to upwind SO2 emissions. This indicates
in particular that broader reductions in regionwide emissions of
SO2, from sources located both inside and outside potential
nonattainment areas, would lead to sizable reductions in
PM2.5 concentrations.\46\
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\46\ This particular type of analysis is not able to similarly
distinguish the separate effects of upwind and local NOX
emissions reductions, but other types of analysis described in
section V show the usefulness of upwind NOX reductions in
reducing PM2.5 concentrations in nonattainment areas. 0.
The detailed results of this three-city analysis are provided in
section IV.
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b. Eight-Hour Ozone
Our analyses suggest that NOX emissions in upwind States
will contribute a sizable fraction of the projected 8-hour ozone
nonattainment problem in most nonattainment areas east of the
continental divide in 2010 (even after the substantial improvements
expected from implementing the NOX SIP Call).\47\ Our
analysis also shows that additional highly cost-effective reductions of
NOX from power plants are available. Given continued
widespread ozone nonattainment, we believe it is appropriate to require
additional reductions in NOX emissions that contribute to
future nonattainment due to interstate transport.
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\47\ Emissions reductions required under section 110(a)(2)(D)
alone will not eliminate all transported ozone. Because areas with
the highest interstate transport contributions tend to be located
relatively close to major nonattainment areas in adjoining states,
we expect that controls adopted for attainment purposes in upwind
nonattainment areas will also reduce interstate ozone transport.
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Although numerous areas will attain the 8-hour ozone standards in
the near term with existing controls, EPA believes that 15-20 areas
east of the continental divide will need further emissions reductions
(in some cases, large reductions) to attain the 8-hour standard. These
areas have already adopted numerous measures to reduce 1-hour ozone
levels.
We analyzed the effect of local measures on 8-hour ozone
attainment. We conducted a preliminary scoping analysis in which
hypothetical total NOX and VOC emissions reductions of 25
percent were applied in all projected nonattainment areas east of the
continental divide in 2010. Despite these substantial reductions,
approximately eight areas were projected to have ozone levels exceeding
the 8-hour standard. We believe that this hypothetical local control
scenario is an indication that attaining the 8-hour standard will
entail substantial cost in a number of areas, and that further regional
reductions are warranted.
3. Assessment of Transported Pollutants and Precursors
a. Fine Particles
Section II provides a summary of our knowledge concerning the
nature of PM2.5 and its precursors. We have reviewed several
studies that confirm the presence of interstate transport and identify
many States as either sources or receptors. We have also conducted new
analyses based on comparisons of newly available urban and rural
ambient air quality data, source-receptor relationships, satellite
observations, and wind trajectories. The details of these most recent
analyses are contained in section V. These analyses show a wide range
of transport patterns for PM2.5. On different days in a
year, transport follows a variety of paths, suggesting that to some
extent emissions originating in one upwind State make some contribution
to annual average PM2.5 in many downwind States, even if the
upwind State is a considerable distance from the downwind States.
These analyses further conclude that sources of SO2 and
NOX emissions continue to play a strong role in transported
PM2.5. They suggest that nearly all the particulate sulfate
in the cities we examined appears to result from transport from upwind
sources outside the local urban area, while upwind and local
contributions for the particle nitrate and carbonaceous components of
PM2.5 are likely to come from both upwind and local sources.
These findings are consistent with what is known about the location of
emissions sources for these pollutants and their atmospheric formation
and transport mechanisms.
Based on a consideration of these findings regarding the origin and
relative contribution of the major components to transported
PM2.5 in rural areas of the U.S. (see section II), as well
as the results of modeling the air quality improvements of adopting
highly cost-effective controls on SO2 and NOX
emissions from EGUs in certain states east of the continental divide
(see section IX), EPA proposes to base the PM2.5
requirements on man-made SO2 and NOX emissions,
and not other pollutants. As summarized below, current information
related to sources and controls for the other components identified in
transported PM2.5 (carbonaceous particles, ammonium, and
crustal materials) does not, at this time, provide an adequate basis
for regulating the regional transport of emissions responsible for
these PM2.5 components.
Carbonaceous substances (organic compounds and soot) form a large
[[Page 4583]]
component of PM2.5 in rural and urban areas of the East. As
discussed in section II, the origins and effectiveness of alternative
controls in reducing transported carbonaceous materials are
particularly uncertain, and our ability to identify and quantify
appropriate measures is quite limited. Some significant fraction may be
of natural origin, including biogenic emissions and wildfires. The EPA
has already issued national rules to reduce the most significant direct
man-made source category of carbonaceous materials, the mobile source
sector. These rules will provide some reduction of transported
carbonaceous material, as well as significant reductions in urban
areas. For other sources, the primary emissions of carbonaceous
materials are not currently quantified with certainty. While controls
for other man-made sources (e.g., prescribed fires, home heating) may
be of significance in developing local control approaches for
PM2.5 (e.g., as in the analysis summarized in section
III.D.2), their relative effectiveness in addressing regional transport
is not well enough understood at this time. Substantial uncertainty
also exists in attempting to model the formation processes and regional
transport of secondary organic particles deriving from biogenic or man-
made emissions of organic precursors. To the extent that the production
of regional secondary organic particles is related to ozone formation
processes, regional NOX reductions could provide some
additional benefit. Measures adopted to reduce man-made VOC emissions
should also tend to reduce secondary organic PM2.5.
We also do not feel it is necessary or appropriate at this time to
attempt to reduce the ammonium portion of PM2.5 through
regional ammonium controls. As indicated in section II, it is
reasonable to expect that simultaneous significant reductions in
regional SO2 and NOX emissions will also result
in a decrease in particulate phase ammonium, while reducing the
relative effectiveness of additional ammonia reductions. The
alternative of reducing regional ammonia loadings in place of
SO2 and NOX controls is unattractive because it
increases the acidity of PM2.5 and of deposition, and is
less effective at reducing total loadings of fine particles. Further,
while local ammonia reductions might reduce nitrates in some locations,
the peak nitrate concentrations in the East come in the wintertime,
when ammonia emissions are lowest. As noted in section II, in such
circumstances, reductions in NOX are likely to be effective
in reducing nitrates. Finally, the strength and location of ammonia
emissions sources, including agricultural operations, are uncertain,
and the costs and net effectiveness of alternative regional-scale
ammonia controls from a variety of rural and urban sources cannot be
adequately quantified. The EPA continues to support research on ammonia
emissions, controls and atmospheric processes, which should inform
State and local control agency decisions on ammonia controls in the
future.
We are proposing not to address direct emissions of crustal
material because, among other things, the amount of crustal material is
generally a small fraction of total PM2.5 in nonattainment
areas, crustal material does not appear to be much involved in
regional-scale transport on an annual basis, and we face uncertainties
in inventories and control costs for crustal material. While most
crustal material on a regional scale is likely derived from soils, a
small but uncertain fraction of certain components of combustion
emissions are classified as ``crustal'' or ``soil derived.'' As a
practical matter, we expect that implementation of today's proposed
controls to reduce SO2 and NOX from coal-fired
EGUs would have co-benefits in reducing those direct emissions of
PM2.5 that are now classified as crustal material.
The proposed decisions to focus on SO2 and
NOX reductions for addressing interstate pollution transport
should not preclude controls related to carbonaceous particles,
ammonium, or other significant PM2.5 sources on a local
basis, where these can be adopted cost effectively in local
PM2.5 control plans. We welcome comment on the choice to not
regulate the above components of transported PM2.5,
including further information regarding the cost effectiveness of
controls.
b. Ozone
Section II summarizes our knowledge regarding ozone and its
precursors. We continue to rely on the assessment of ozone transport
made in great depth by the OTAG in the mid-1990s. As indicated in the
NOX SIP Call proposal, the OTAG Regional and Urban Scale
Modeling and Air Quality Analysis Work Groups reached the following
conclusions:
? Regional NOX emissions reductions are
effective in producing ozone benefits; the more NOX reduced,
the greater the benefit.
? Controls for VOC are effective in reducing ozone
locally and are most advantageous to urban nonattainment areas. (62 FR
60320, November 7, 1997)
We reaffirm this conclusion in this rulemaking, and propose to
address only NOX emissions for the purpose of reducing
interstate ozone transport.
4. Role of Interstate Transport in Future Nonattainment
a. Fine Particles
For PM2.5, we used a ``zero-out'' approach to assess
PM2.5 transport coming from each of the 41 States that lie
at least partly east of the continental divide, i.e., New Mexico
northwards to Montana and all States east of those. Our zero-out
approach consisted of air quality model runs for each State, both with
and without each State's man-made SO2 and NOX
emissions. We then compared the predicted downwind concentrations in
the 2010 base case, which included the State's SO2 and
NOX emissions, to the ``zero-out'' case which excluded all
of the State's man-made SO2 and NOX emissions.
From these results, we were able to evaluate the impact of, for
example, Ohio's total man-made SO2 and NOX
emissions on each projected downwind nonattainment county in 2010.
Using the results of this modeling, we identified States as
significantly contributing (before considering costs) to downwind
nonattainment based on the predicted change in the PM2.5
concentration in the downwind nonattainment area which receives the
largest impact.
As detailed in section VI below, EPA's modeling indicates a wide
range of maximum downwind nonattainment impacts from the 41 States. The
largest contribution is from Ohio on Hancock County, WV where the
annual PM2.5 impact is 1.90 [mu]g/m\3\. Rhode Island has the
lowest maximum contribution to a downwind nonattainment area,
registering a maximum impact of 0.01 [mu]g/m\3\ on New Haven,
Connecticut.
We have considered what level of air quality impact should be
regarded as significant (without taking costs into account), and
believe that the level should be a small fraction of the annual
PM2.5 NAAQS of 15.0 [mu]g/m\3\. Our reasoning is based on
two factors. First, as EPA determined in 1997 when we established the
PM2.5 NAAQS, there are significant public health impacts
associated with ambient PM2.5, even at relatively low
levels. By the same token, as summarized earlier, EPA's modeling
indicates that at least some nonattainment areas will find it difficult
or impossible to attain the standards without reductions in upwind
emissions. In combination, these factors suggest a relatively low value
for the
[[Page 4584]]
PM2.5 transport contribution threshold is appropriate.
Second, our analysis of ``base case'' PM2.5 transport
shows that many upwind States contribute to concentrations in each of
the areas predicted to be nonattainment in 2010. This ``collective
contribution'' is a feature of the PM2.5 transport problem,
in part because the annual nature of the NAAQS means that wind patterns
throughout the year--rather than wind patterns during one season of the
year or on a few worst days during the year--play a role in determining
how States contribute to each other. The implication is that to address
the transport affecting a given nonattainment area, many upwind States
must reduce their emissions, even though their individual contributions
may be relatively small. By the same token, as summarized earlier,
EPA's modeling indicates that at least some nonattainment areas will
find it difficult or impossible to attain the standards without
reductions in upwind emissions. In combination, these factors suggest a
relatively low value for the PM2.5 transport contribution
threshold is appropriate.
We adopted a similar approach for determining the significance
level for ozone transport in the NOX SIP Call rulemaking,
and the D.C. Circuit viewed this approach as reasonable when the Court
generally upheld the NOX SIP Call. The Court acknowledged
that EPA had set a relatively low hurdle for States to pass the air
quality component (and thus be considered to contribute significantly,
depending on costs): ``EPA's design was to have a lot of States make
what it considered modest NOX reductions. * * * '' See
Michigan v. EPA, 213 F.3d 663(D.C. Cir. 2000), cert. denied, 532 U.S.
904 (2001). Indeed, the Court intimated that EPA could have established
an even lower hurdle for States to pass the air quality component:
EPA has determined that ozone has some adverse health effects--
however slight--at every level [citing National Ambient Air Quality
Standards for Ozone, 62 FR 38856 (1997)]. Without consideration of
cost it is hard to see why any ozone-creating emissions should not
be regarded as fatally ``significant'' under section
110(a)(2)(D)(i)(I).'' 213 F.3d at 678 (emphasis in original).
We believe the same approach should apply in the case of
PM2.5 transport.
In applying this approach, we first considered a significance level
of 0.10 [mu]g/m\3\. This is a small level, which is consistent with the
factors described. Further, an increment of this size in the annual
average PM2.5 concentration is the smallest one that can
make the difference between compliance and violation of the NAAQS for
an area very near the NAAQS, due to the treatment of significant digits
and rounding in the definition of the NAAQS. Because the
PM2.5 NAAQS is 15.0 [mu]g/m\3\ (three significant figures),
a concentration after rounding of 15.1 [mu]g/m\3\ would be a
violation.\48\
---------------------------------------------------------------------------
\48\ An area with a reported rounded concentration of 15.0
[mu]g/m\3\ would have actual air quality somewhere in the range of
14.95 to 15.04 [mu]g/m\3\. An increase of 0.10 [mu]g/m\3\ would make
the rounded concentration equal 15.1 [mu]g/m\3\, which would
constitute an exceedance, no matter where in the 14.95 to 15.04
[mu]g/m\3\ range the concentration fell originally. This is not the
case with any increase less than 0.10 [mu]g/m\3\. For example, an
increase of 0.09 [mu]g/m\3\ when added to 14.95 [mu]g/m\3\ and then
rounded would result in a NAAQS compliance value of 15.0 [mu]g/m\3\,
a passing result.
---------------------------------------------------------------------------
On the other hand, we then considered that the air quality
forecasts we have conducted in assessing future air quality impacts
have, of necessity, been based on modeling, not monitoring data. In
evaluating such results, we believe it is, on balance, more appropriate
to adopt a small percentage value of the standard level, rather than
absolute number derived from monitoring considerations. A percentage
amount that is close to the value derived from the monitoring level
described above is 1 percent. We therefore propose to adopt an annual
PM2.5 significance level equal to 1 percent of the standard.
We believe that contributions equal to or greater than 0.15 [mu]g/m\3\
would reflect a reasonable threshold for determining significant levels
of interstate transport.
Applying the proposed cutoff of 0.15 [mu]g/m\3\ or higher to the
results of the transport impact assessment identifies SO2
and NOX emissions in 28 States and the District of Columbia
as contributing significantly (before considering costs) to
nonattainment in another State. These States, with their maximum
downwind PM2.5 contributions, are listed in section V, Table
V-5.
Although we are proposing to use 0.15 [mu]g/m\3\ as the air quality
criteria, we have also analyzed the effects of using 0.10 [mu]g/m\3\.
Based on our current modeling, two additional states, Oklahoma and
North Dakota, would be included if we were to adopt 0.10 [mu]g/m\3\ as
the air quality criterion. Thus, today's proposal includes the State
EGU budgets that would apply if these two states were included under
the final rule. The EPA requests comments on the appropriate geographic
scope of this proposal and the merits of the proposed 0.15 [mu]g/m\3\
threshold level as indicating a potentially significant effect of air
quality in nonattainment areas in neighboring states. We request
comments on the use of higher and lower thresholds for this purpose.
b. Eight-Hour Ozone
In assessing the role of interstate transport to 8-hour ozone
nonattainment, we have followed the approach used in the NOX
SIP Call, but have used an updated model and updated inputs that
reflect current requirements (including the NOX SIP Call
itself).\49\ Using updated contribution results, we rely on the same
contribution indicators, or metrics, that were used to make findings in
the NOX SIP Call. Section V and the air quality technical
support document present the 8-hour ozone transport analysis and
findings in detail.
---------------------------------------------------------------------------
\49\ The modeling for today's proposal, and the proposal itself
fulfills EPA's commitment in the 1998 NOX SIP Call final
rule to reevaluate by 2007. See 63 FR 57399; October 27, 1998.
---------------------------------------------------------------------------
In general, we found a range in how much transport from each upwind
State contributes to 2010 nonattainment in downwind States. The EPA's
modeling indicates from 22 to 96 percent of the ozone problem is due to
transport, depending on the area.
Based on the same metrics employed in the NOX SIP Call,
we have concluded that, even with reductions from the NOX
SIP Call and other control measures that will reduce NOX and
VOC emissions, interstate transport of NOX from 25 States
and the District of Columbia will contribute significantly to downwind
8-hour ozone nonattainment in 2010. These States are listed in Table V-
2. We are deferring findings for Texas, Oklahoma, Kansas, Nebraska,
South Dakota, and North Dakota, which at this time cannot be assessed
on the same basis as States to the east because they are only partially
included in the modeling domain. We intend to conduct additional
modeling for these six States using a larger modeling domain, and may
propose action on them based on that modeling in a supplemental
proposal.
5. Assessment of Potential Emissions Reductions
Today's proposal generally follows the statutory interpretation and
approach under section 110(a)(2)(D) developed in the NOX SIP
Call rulemaking. Under this interpretation, the emissions in each
upwind State that contribute significantly to nonattainment are
identified as being those emissions which can be eliminated through
highly cost-effective controls.
Section 110(a) requires upwind States to eliminate emissions that
contribute significantly to nonattainment
[[Page 4585]]
downwind, and to do so through a SIP revision that must be submitted to
EPA within 3 years of issuance of revised NAAQS. In addition, States
are required to submit SIPs that provide for attainment in
nonattainment areas no later than 3 years after designation.
Through these provisions, the CAA places the responsibility for
controls needed to assure attainment on both upwind States and their
sources, and on local sources of emissions. The CAA does not specify
the relative shares of the burden that each should carry, but section
110(a)(2)(D) clearly mandates that upwind States reduce those emissions
that contribute significantly to downwind nonattainment. Moreover, as a
matter of broad policy, even if an area could attain the NAAQS through
technically feasible, but costly, local controls alone, some
consideration needs to be given to a reasonable balance between
regional and local controls to reach attainment. In the absence of
regional controls on upwind sources, downwind States would be forced to
obtain greater emissions reductions, and incur greater costs, to offset
the transported pollution from upwind sources.
For the PM2.5 and 8-hour ozone NAAQS, our air quality
modeling shows attainment with local controls alone would be difficult
or impossible for many areas. Our analysis in section VI shows that
substantial regional reductions in SO2 and NOX
emissions from EGUs are available at costs that are well within the
levels of historically adopted measures. An attainment strategy that
relies on a combination of local controls and regional EGU controls is
a more equitable and therefore a more reasonable approach than a
strategy that relies solely on local controls.
a. Identifying Highly Cost-Effective Emissions Reductions
As the second step in the two-step process for determining the
amount of significant contribution, we must determine the amount of
emissions that may be eliminated through highly cost-effective
controls. Today we are proposing to retain the concept of highly cost-
effective controls as developed and used in the NOX SIP
Call, in which we determined such controls by comparing the cost of
recently required controls, and to apply it to the SO2 and
NOX precursors of PM2.5 and 8-hour ozone
nonattainment.
For today's proposal, EPA independently evaluated the cost
effectiveness of strategies to reduce SO2 and NOX
to address PM2.5 and ozone nonattainment. We developed
criteria for highly cost-effective amounts through: (1) comparison to
the average cost effectiveness of other regulatory actions and (2)
comparison to the marginal cost effectiveness of other regulatory
actions. These ranges indicate cost-effective controls. The EPA
believes that controls with costs towards the low end of the range may
be considered to be highly cost effective because they are self-
evidently more cost effective than most other controls in the range. We
also considered other factors. Our approach to the cost-effectiveness
element of significant contribution and the results of our analysis are
presented in section VI.
The other factors we have considered include the applicability,
performance, and reliability of different types of pollution control
technologies for different types of sources; the downwind impacts of
the level of control that is identified as highly cost effective; and
other implementation costs of a regulatory program for any particular
group of sources. We also consider some of these same factors in
determining the time period over which controls should be installed.
Depending on the type of controls we view as cost effective, we must
take into account the time it would take to design, engineer, and
install the controls, as well as the time period that a source would
need to obtain the necessary financing. These various factors,
including engineering and financial factors, are discussed in section
VI. We may also consider whether emissions from a particular source
category will be controlled under an upcoming regulation (a MACT
standard, for example).
Today's action proposes emissions reductions requirements based on
highly cost-effective emissions reductions obtainable from EGUs.
Section VI explains the proposed requirements.
b. Timing for Submission of Transport SIPs
We are proposing today to require that PM2.5 and 8-hour
ozone transport SIPs be submitted, under CAA section 110(a)(1), as soon
as practicable, but not later than 18 months from the date of
promulgation of this rule. Based on the experience of States in
developing plans to respond to the NOX SIP Call, we believe
this is a reasonable amount of time. The NOX SIP Call
required States to submit SIPs within 12 months of the final rule, a
period within the maximum 18 months allowed under section 110(k)(5)
governing States' responses to SIP calls. The 12-month period was
reasonable for the NOX SIP Call given the focus on a single
pollutant, NOX, and the attainment deadlines facing downwind
1-hour ozone nonattainment areas. Since today's proposal requires
affected States to control both SO2 and NOX
emissions, and to do so for the purpose of addressing both the
PM2.5 and 8-hour ozone NAAQS, we believe it is reasonable to
allow affected States more time than was allotted in the NOX
SIP Call to develop and submit transport SIPs. Since we plan to
finalize this rule no later than mid-2005, SIP submittals would be due
no later than the end of 2006. Under this schedule, upwind States'
transport SIPs would be due before the downwind States'
PM2.5 and 8-hour ozone nonattainment SIPs, under CAA section
172(b). We expect that the downwind States' 8-hour ozone nonattainment
area SIPs will be due by May 2007, and their nonattainment SIPs for
PM2.5 by January 2008.\50\ As explained in section VII
below, today's proposed requirement that the upwind States submit the
transport SIP revisions even before the downwind States submit
nonattainment SIPs is consistent with the CAA SIP submittal sequence,
will provide health and environmental benefits, and will assist the
downwind States in their attainment demonstration planning.
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\50\ The actual dates will be determined by relevant provisions
in the CAA and EPA's interpretation of these provisions published in
upcoming implementation rules for the PM2.5 and 8-hour
ozone NAAQS.
---------------------------------------------------------------------------
c. Timing for Achieving Emissions Reductions
As discussed in section VI, engineering and financial factors
suggest that only a portion of the emissions reductions that EPA
considers highly cost effective can be achieved by January 1, 2010. To
ensure timely protection of public health, while taking into account
these considerations, we are proposing to implement highly cost-
effective reductions in two phases, with a Phase I compliance date of
January 1, 2010, and a Phase II compliance date of January 1, 2015.
Based on EPA's analysis, we believe that a regional emissions cap
on SO2 of 3.9 million tons together with a NOX
emissions cap of 1.6 million tons is achievable by January 1, 2010, and
therefore we are proposing these limits as the Phase I
requirements.\51\ The EPA believes the remaining highly cost-effective
SO2 and NOX emissions reductions can be achieved
by January 1, 2015, and will be helpful to areas with PM2.5
or 8-hour ozone attainment dates approaching 2015. The EGU caps
[[Page 4586]]
in the proposed control region would be lowered in the second phase to
2.7 million tons for SO2 and 1.3 million tons for
NOX. The current 28-state\52\ emissions, baseline emissions
in 2010 and 2015 and proposed regional emissions caps are shown in
Table III-1.
---------------------------------------------------------------------------
\51\ Because Connecticut is affected only by the 8-hour ozone
findings, NOX emissions reductions are not necessary
until the ozone season. Therefore, for Connecticut only, EPA is
proposing a Phase I NOX reduction compliance date of May
1, 2010.
\52\ Excludes emissions from Connecticut.
Table III-1.--SO2 and NOX Regionwide Emissions Reductions and Emissions Caps
----------------------------------------------------------------------------------------------------------------
2010 (tons) 2015 (tons)
2002 -------------------------------------------------------
Emissions Baseline Baseline
(tons) emissions Cap emissions Cap
----------------------------------------------------------------------------------------------------------------
SO2....................................... 9.4M 9.0M 3.9M 8.3M 2.7M
NOX....................................... 3.7M 3.1M 1.6M 3.2M 1.3M
----------------------------------------------------------------------------------------------------------------
We derived these amounts as follows: The SO2 emissions
limitations correspond to 65 percent of the affected States' title IV
allowances in 2015, and 50 percent in 2010. The NOX
emissions limitations correspond to the sum of the affected States'
historic heat input amounts, multiplied by an emission rate of 0.125
mmBtu for 2015 and 0.15 mmBtu for 2010. Historic heat input is derived
as the highest annual heat input during 1999-2002. We are proposing
that these regionwide limits correspond to costs that meet the highly
cost-effective criteria.
Further, EPA proposes to apportion these regionwide amounts to the
individual States in the region as follows: For SO2, EPA
proposes to apportion the regionwide amounts to the individual States
in the region in proportion to their title IV allocations. This would
amount to requiring reductions in the amount of 65 percent of each
affected State's title IV allocations for 2015, and 50 percent for
2010. The EPA is considering requiring an adjustment to these amounts
to account for the fact that the utility industry has changed since the
title IV allocation formulae were developed. For NOX, EPA
proposes to apportion the regionwide amounts to the individual States
in the region in proportion to their historic heat input, determined as
the average of several years of heat input.
d. Compliance Approaches and Statewide Emissions Budgets
Today's proposal affects 28 upwind States and the District of
Columbia for the purpose of addressing PM2.5 transport, and
25 States and the District of Columbia for the purpose of addressing
ozone transport. For States required to reduce NOX emissions
to address 8-hour ozone transport, the NOX reductions must
be implemented at least during the ozone season. For States required to
reduce SO2 and NOX emissions to address
PM2.5 transport, the NOX and SO2
reductions must be achieved annually. For States affected for both
PM2.5 and ozone, EPA is proposing that compliance with the
PM2.5-related annual emissions reduction requirement be
deemed sufficient for compliance with the seasonal ozone-related
emissions reduction requirement.
The EPA also wants to streamline potentially overlapping compliance
requirements between the existing NOX SIP Call and today's
proposed action, while ensuring that the ozone benefits of the
NOX SIP Call are not jeopardized. The EPA is proposing that
States may choose to recognize compliance with the more stringent
annual NOX reduction requirements contained in today's
rulemaking as satisfying the original NOX SIP Call seasonal
reduction requirements for sources that States cover under both the
NOX SIP Call and today's proposal.
We are proposing to calculate the amount of required reductions on
the basis of controls available for EGUs. We believe these EGU
reductions represent the most cost-effective reductions available. In
2010, considering other controls that will be in place, but not
assuming a rule to address transported pollution is implemented, EGUs
are projected to emit approximately one-quarter of the total man-made
NOX emissions in 2010 and two-thirds of the man-made
SO2 emissions in the region proposed for reductions in
today's rulemaking. Extensive information exists indicating that highly
cost-effective controls are available for achieving significant
reductions in NOX and SO2 emissions from the EGU
sector.
We are proposing that (as under the NOX SIP Call) States
obtaining reductions from EGUs to comply with today's proposal must cap
their EGUs at levels that will assure the required reductions. In
addition, today's action proposes an approach which permits the use of
title IV SO2 allowances at discounted levels that provide
for a planned transition toward accomplishing the objectives of the
interstate air quality rule.
Based on our experience in the NOX SIP Call, we
anticipate that States will choose to require EGUs to participate in
the cap and trade programs administered by EPA. If States choose to
participate in the cap and trade programs, States must adopt the model
cap and trade programs, described in section VIII. The cap and trade
programs will create incentives for EGUs to reduce SO2 and
NOX emissions starting no later than 2010, and probably
somewhat earlier, and continuing to 2015 and beyond. The model cap and
trade programs are designed to satisfy all the SO2 and
NOX emissions reduction requirements proposed in today's
rule.
If a State imposes the full amount of SO2 and
NOX emissions reductions on EGUs that EPA has deemed highly
cost effective, we are taking comment on whether this approach to
compliance with the interstate air quality rule by affected EGUs in
affected States would satisfy for those sources the Best Available
Retrofit Technology (BART) requirements of the CAA. We are further
soliciting comment, for the circumstances just described, on whether
compliance through participation in a regionwide or statewide cap and
trade program, rather than source-specific emissions limits, could
satisfy the BART requirements for those sources.
States that choose to obtain some of the required SO2 or
NOX reductions from non-EGU sources must adopt control
measures for those other sources. To assure accurate accounting of
emissions reductions, these States will have to establish sector-
specific baseline emission inventories for 2010 and 2015. These States
will also have to measure projected emissions reductions from adopted
measures from these baselines. The sector-specific baseline inventory
minus the amount of
[[Page 4587]]
reduction the State chooses to obtain from that sector is the sector
budget for those sources. The SIP must contain a projection showing
that compliance with the adopted measure(s) for that sector will ensure
that emissions from the sector will meet the sector budget.
E. Request for Comment on Potential Applicability to Regional Haze
We believe that the emissions reductions that would result from
today's proposed rulemaking would help the States in making substantial
progress towards meeting the goals and requirements of the Regional
Haze rule in the Eastern U.S. As a result of the predicted emissions
reductions, we anticipate that visibility would improve in Class I
areas in this region, including in areas such as the Great Smoky and
Shenandoah National Parks. We request comment on the extent to which
the reductions achieved by these rules would, for States covered by the
IAQR, satisfy the first long term strategy for regional haze, which is
required to achieve reasonable progress towards the national visibility
goal by 2018.
We also request comment on whether the cap and trade approach
proposed in this rulemaking is a suitable mechanism that could be
expanded to help other States meet their regional haze obligations
under the CAA. If we were to propose this approach, we would address
this further in a supplemental notice and we would need to amend our
Regional Haze rule to specify that, in establishing a reasonable
progress goal for any Class I area as required by CAA section 169A and
our rule, the State would need to submit a SIP revision that, at a
minimum, would enable the State to participate in a cap and trade
program that reflects a rate of progress based on specified levels of
SO2 and NOX reductions that we find are
reasonable in light of the natural visibility goal that Congress
established in 1977. Such an approach could be proposed to apply to
areas identified in our final Regional Haze rule (64 FR 35714, July 1,
1999) as having emissions that may reasonably be anticipated to cause
or contribute to an impairment of visibility in at least one Class I
area, to reduce those emissions. We note that, under such an approach,
we could consider two separate NOX emission levels and two
separate cap and trade zones for NOX. States included on the
basis of their contribution to either ozone or PM2.5
nonattainment would be in one zone and would need to meet the
NOX emission reduction requirements discussed elsewhere in
this action. States included only on the basis of needing to achieve
reasonable progress goals would be in a separate zone and would need to
meet a level specifically designed to address that issue. We request
comment on what emissions levels should be considered for
SO2 and NOX if we were to pursue such an
approach. We also request comment on how such an approach could be
integrated with and combine the efforts of Regional Planning
Organizations that are working to address regional haze.
F. How Will the Interstate Air Quality Rule Apply to the Federally
Recognized Tribes?
The Tribal Authority Rule (TAR) (40 CFR part 49), which implements
section 301(d) of the CAA, gives Tribes the option of developing CAA
programs, including Tribal Implementation Plans (TIPs). However, unlike
States, Tribes are not required to develop implementation plans.
Specifically, the TAR, adopted in 1998, provides for the Tribes to be
treated in the same manner as a State in implementing sections of the
CAA. The EPA determined in the TAR that it was appropriate to treat
Tribes in a manner similar to a State in all aspects except specific
plan submittal and implementation deadlines for NAAQS-related
requirements, including, but not limited to, such deadlines in CAA
sections 110(a)(1), 172(a)(2), 182, 187, and 191.\53\
---------------------------------------------------------------------------
\53\ See 40 CFR 49.4(a).
---------------------------------------------------------------------------
In addition, the TAR also indicates that section 110(a)(2)(d)
applies to the Tribes. This provision of the Act requires EPA to ensure
that SIPs and TIPs ensure that their sources do not contribute
significantly to nonattainment downwind. In fact, Tribes generally have
few emissions sources and thus air quality problems in Indian country
are generally created by transport into Tribal lands. Specifically, in
the February 12, 1998 preamble to the Tribal Air Rule we stated:
EPA notes that several provisions of the CAA are designed to
address cross-boundary air impacts. EPA is finalizing its proposed
approach that the CAA protections against interstate pollutant
transport apply with equal force to States and Tribes. Thus EPA is
taking the position that the prohibitions and authority contained in
sections 110(a)(2)(D) and 126 of the CAA apply to Tribes in the same
manner as States. As EPA noted in the preamble to its proposed rule,
section 110(a)(2)(D), among other things, requires States to include
provisions in their SIPs that prohibit any emissions activity within
the State from significantly contributing to nonattainment * * * In
addition, section 126 authorizes any State or Tribe to petition EPA
to enforce these prohibitions against a State containing an
allegedly offending source or group of sources. See 63 FR 7262, 59
FR 43960-43961.
Because the Tribes, like the States are our regulatory partners, in
developing the interstate air quality rule we want to ensure that the
Tribes' air quality and sovereignty are protected. Thus, we are
exploring areas in the rule development where Tribes will be impacted.
One area, in particular, is in the establishment of emissions reduction
requirements and budgets. We are not aware of the presence of any EGUs
on tribal lands located in the States for which EPA has conducted air
quality modeling for today's proposal. Although, it is possible that
EGUs may locate in Indian country in the future. We are requesting
comment on whether and how to apply any emissions reductions or budget
requirements to the Tribes, as well as comments on other areas of the
rule that will impact the Tribes.
IV. Air Quality Modeling To Determine Future 8-Hour Ozone and
PM2.5 Concentrations
A. Introduction
In this section, we describe the air quality modeling performed to
support today's proposal. We used air quality modeling primarily to
quantify the impacts of SO2 and NOx emissions
from upwind States on downwind annual average PM2.5
concentrations, and the impacts of NOx emissions from upwind
States on downwind 8-hour ozone concentrations.
This section includes information on the air quality models applied
in support of the proposed rule, the meteorological and emissions
inputs to these models, the evaluation of the air quality models
compared to measured concentrations, and the procedures for projecting
ozone and PM2.5 concentrations for future year scenarios. We
also present the results of modeling locally applied control measures
designed to reduce concentrations of PM2.5 in projected
nonattainment areas. The Air Quality Modeling Technical Support
Document (AQMTSD) contains more detailed information on the air quality
modeling aspects of this rule.\54\ Updates made between the proposed
rule and the final rule to components of the ozone and PM modeling
platform will be made public in a Notice of Data Availability.
---------------------------------------------------------------------------
\54\ ``Air Quality Modeling Technical Support Document for the
Proposed Interstate Air Quality Rule (January 2004)'' can be
obtained from the docket for today's proposed rule: OAR-2003-0053.
---------------------------------------------------------------------------
[[Page 4588]]
B. Ambient 8-Hour Ozone and Annual Average PM2.5 Design
Values
1. 8-Hour Ozone Design Values
Future year levels of air quality are estimated by applying
relative changes in model-predicted ozone to current measurements of
ambient ozone data. Current measurements of ambient ozone data come
from monitoring networks consisting of more than one thousand monitors
located across the country. The monitors are sited according to the
spatial and temporal nature of ozone, and to best represent the actual
air quality in the United States. More information on the monitoring
network used to collect current measurements of ambient ozone is in the
Air Quality Data Analysis Technical Support Document.\55\
---------------------------------------------------------------------------
\55\ ``Air Quality Data Analysis Technical Support Document for
the Proposed Interstate Air Quality Rule (January 2004)'' can be
obtained from the docket for today's proposed rule: OAR-2003-0053.
---------------------------------------------------------------------------
In analyzing the ozone across the United States, the raw monitoring
data must be processed into a form pertinent for useful
interpretations. For this action, the ozone data have been processed
consistent with the formats associated with the NAAQS for ozone. The
resulting estimates are used to indicate the level of air quality
relative to the NAAQS. For ozone air quality indicators, we developed
estimates for the 8-hour ozone standard. The level of the 8-hour ozone
NAAQS is 0.08 ppm. The 8-hour ozone standard is not met if the 3-year
average of the annual 4th highest daily maximum 8-hour ozone
concentration is greater than 0.08 ppm (0.085 is rounded up). This 3-
year average is called the annual standard design value. As described
below, the approach for forecasting future ozone design values involved
the projection of 2000-2002 ambient design values to the various future
year emissions scenarios analyzed for today's proposed rule. These data
were obtained from EPA's Air Quality System (AQS) on August 11, 2003. A
more detailed description of design values is in the Air Quality Data
Analysis Technical Support Document. A list of the 2000-2002 Design
Values is available at http://www.epa.gov/airtrends/values.html.
2. Annual Average PM2.5 Design Values
Future year levels of air quality are estimated by applying
relative changes in model predicted PM2.5 to current
measurements of ambient PM2.5 data. Current measurements of
ambient PM2.5 data come from monitoring networks consisting
of more than one thousand monitors located across the country. The
monitors are sited according to the spatial and temporal nature of
PM2.5, and to best represent the actual air quality in the
United States. More information on the monitoring network used to
collect current measurements of ambient PM2.5 is in the Air
Quality Data Analysis Technical Support Document.
In analyzing the PM2.5 data across the United States,
the raw monitoring data must be processed into a form pertinent for
useful interpretations. For this action, the PM2.5 data have
been processed consistent with the formats associated with the NAAQS
for PM2.5. The resulting estimates are used to indicate the
level of air quality relative to the NAAQS. For PM2.5, the
annual standard is met when the 3-year average of the annual mean
concentration is 15.0 [mu]g/m \3\ or less. The 3-year average annual
mean concentration is computed at each site by averaging the daily
Federal Reference Method (FRM) samples taken each quarter, averaging
these quarterly averages to obtain an annual average, and then
averaging the three annual averages. The 3-year average annual mean
concentration is also called the annual standard design value. As
described below, the approach for forecasting future PM2.5
design values involved the projection of 1999-2001 and 2000-2002
ambient design values to the various future year emissions scenarios
analyzed for today's proposed rule. These data were obtained from EPA's
Air Quality System (AQS) on July 9, 2003. A more detailed description
of design values is in the Air Quality Data Analysis Technical Support
Document. A list of the 1999-2001 and 2000-2002 Design Values is
available at http://www.epa.gov/airtrends/values.html.
C. Emissions Inventories
1. Introduction
In order to support the air quality modeling analyses for the
proposed rule, emission inventories were developed for the 48
contiguous States and the District of Columbia. These inventories were
developed for a 2001 base year to reflect current emissions and for
future baseline scenarios for years 2010 and 2015. The 2001 base year
and 2010 and 2015 future base case inventories were in large part
derived from a 1996 base year inventory and projections of that
inventory to 2007 and 2020 as developed for previous EPA rulemakings
for Heavy Duty Diesel Engines (HDDE) (http://www.epa.gov/otaq/models/
hd2007/r00020.pdf) and Land-based Non-road Diesel Engines (LNDE)
(http://www.epa.gov/nonroad/454r03009.pdf). The inventories were
prepared at the county level for on-road vehicles, non-road engines,
and area sources. Emissions for EGUs and industrial and commercial
sources (non-EGUs) were prepared as individual point sources. The
inventories contain both annual and typical summer season day emissions
for the following pollutants: oxides of nitrogen (NOX);
volatile organic compounds (VOC); carbon monoxide (CO); sulfur dioxide
(SO2); direct particulate matter with an aerodynamic
diameter less than 10 micrometers (PM10) and less than 2.5
micrometers (PM2.5); and ammonia (NH3).
Additional information on the development of the emissions inventories
for air quality modeling and State total emissions by sector and by
pollutant for each scenario are provided in the AQMTSD.
2. Overview of 2001 Base Year Emissions Inventory
Emissions inventory inputs representing the year 2001 were
developed to provide a base year for forecasting future air quality, as
described below in section IV.D. for ozone and section IV.E. for
PM2.5. Because the complete 2001 National Emissions
Inventory (NEI) and future year projections consistent with that NEI
were not available in a form suitable for air quality modeling when
needed for this analysis, the following approach was used to develop a
reasonably representative ``proxy'' inventory for 2001 in model-ready
form that retained the same consistency with the existing future year
projected inventories as the 1996 model-ready inventory that was used
as the basis for those projected inventories.
The EPA had available model-ready emissions input files for a 1996
Base Year and a 2010 Base Case from a previous analysis. In addition,
robust NEI estimates were available for 2001 for three of the six man-
made emissions sectors: EGUs; on-road vehicles; and non-road engines.
For the EGU sector, State-level emissions totals from the NEI 2001 were
divided by similar totals from the 1996 modeling inventory to create a
set of 1996 to 2001 adjustment ratios. Ratios were developed for each
State and pollutant. These ratios were applied to the model-ready 1996
EGU emissions file to produce the 2001 EGU emissions file.
The NEI 2001 emissions estimates for the on-road vehicles and non-
road engines sectors were available from the MOBILE6 and NONROAD2002
models, respectively. Because both of these models were updates of the
versions used to produce the existing 1996 model-ready emissions files
and their associated projection year files, a
[[Page 4589]]
slightly different approach than that used for the EGUs was used to
adjust the 1996 model-ready files to produce files for 2001.
The updated MOBILE6 and NONROAD2002 models were used to develop
1996 emissions estimates that were consistent with the 2001 NEI
estimates. A set of 1996-to-2001 adjustment ratios were then created by
dividing State-level total emissions for each pollutant for 2001 by the
corresponding consistent 1996 emissions. These adjustment ratios were
then multiplied by the gridded model-ready 1996 emissions for these two
sectors to produce model-ready files for 2001. These model-ready 2001
files, therefore, maintain consistency with the future year projection
files that were based on the older emission model versions but also
capture the effects of the 1996 to 2001 emission changes as indicated
by the latest versions of the two emissions models.
Consistent estimates of emissions for the 2001 Base Year were not
available at the time modeling was begun for two other emission
sectors: non-EGU point sources and area sources. For these two sectors,
linear interpolations were performed between the gridded 1996 emissions
and the gridded 2010 Base Case emissions to produce 2001 gridded
emissions files. These interpolations were done separately for each of
the two sectors, for each grid cell, for each pollutant. As the 2010
Base Case inventory was itself a projection from the 1996 inventory,
this approach maintained consistency of methods and assumptions between
the 2001 and 2010 emissions files.
3. Overview of the 2010 and 2015 Base Case Emissions Inventories
The future base case scenarios generally represent predicted
emissions in the absence of any further controls beyond those State,
local, and Federal measures already promulgated plus other significant
measures expected to be promulgated before the final rule from today's
proposal. Any additional local control programs which may be necessary
for areas to attain the annual PM2.5 NAAQS and the ozone
NAAQS are not included in the future base case projections. The future
base case scenarios do reflect projected economic growth, as described
in the AQMTSD.
Specifically, the future base case scenarios include the effects of
the LNDE as proposed, the HDDE standards, the Tier 2 tailpipe
standards, the NOX SIP Call as remanded (excludes controls
in Georgia and Missouri), and Reasonably Available Control Techniques
(RACT) for NOX in 1-hour ozone nonattainment areas.
Adjustments were also made to the non-road sector inventories to
include the effects of the Large Spark Ignition and Recreational
Vehicle rules; and to the non-EGU sector inventories to include the
SO2 and particulate matter co-benefit effects of the
proposed Maximum Achievable Control Technology (MACT) standard for
Industrial Boilers and Process Heaters. The future base case scenarios
do not include the NOX co-benefit effects of proposed MACT
regulations for Gas Turbines or stationary Reciprocating Internal
Combustion Engines, which we estimate to be small compared to the
overall inventory; or the effects of NOX RACT in 8-hour
ozone nonattainment areas, because these areas have not yet been
designated.
4. Procedures for Development of Emission Inventories
a. Development of Emissions Inventories for Electric Generating Units
As stated above, the 2001 Base Year inventory for the EGU sector
was developed by applying State-level adjustment ratios of 2001 NEI
\56\ emissions to 1996 emissions for the EGU sector to the existing
model-ready 1996 EGU file. Adjustments were thus made in the modeling
file to account for emissions reductions that had occurred between 1996
and 2001, but at an aggregated State-level, rather than for each
individual source. Future year 2010 and 2015 Base Case EGU emissions
used for the air quality modeling runs that predicted ozone and
PM2.5 nonattainment status were obtained from version 2.1.6
of the Integrated Planning Model (IPM) (http://www.epa.gov/airmarkets/
epa-ipm/index.html). However, results from this version of the IPM
model were not available at the time that the air quality model runs to
determine interstate contributions (``zero-out runs'') were started.
Therefore, we used EGU emissions from the previous IPM version (v2.1)
for the zero-out air quality model runs and associated 2010 Base Case.
Updates applied to the IPM model between versions 2.1 and 2.1.6 include
the update of coal and natural gas supply curves and the incorporation
of several State-mandated emission caps and New Source Review (NSR)
settlements.
---------------------------------------------------------------------------
\56\ The 2001 NEI emissions for EGUs includes emissions for
units reporting to EPA under title IV.
---------------------------------------------------------------------------
Tables IV-1 and IV-2 provide State-level emissions totals for the
2010 Base Case for SO and NOX, respectively, for each of the
five sectors. These tables are helpful in understanding the relative
magnitude of each sector to the total inventory. In addition, these
tables include, for comparison, a column showing the EGU emissions from
the older version 2.1 IPM outputs that were used for the zero-out
modeling analysis. Our examination indicates that the EGU differences
between the two IPM outputs are generally minor and have not affected
the content of this proposal.
Table IV-1.--State SO2 Emissions by Sector in the 2010 Base Case 1
--------------------------------------------------------------------------------------------------------------------------------------------------------
ST EGU v21 EGU v216 Non-EGU On-road Non-road Area Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
AL........................................................... 494,700 473,000 121,300 600 1,600 51,900 648,400
AZ........................................................... 47,800 47,800 120,800 600 700 4,300 174,200
AR........................................................... 119,300 122,700 17,500 300 500 21,200 162,100
CA........................................................... 17,300 17,300 44,000 3,400 13,000 10,700 88,400
CO........................................................... 90,400 73,100 15,900 500 800 4,700 94,900
CT........................................................... 6,600 6,300 7,600 300 400 500 15,000
DE........................................................... 36,800 46,400 38,400 100 300 10,200 95,400
DC........................................................... 0 0 2,100 0 100 5,800 8,000
FL........................................................... 230,300 233,200 90,400 1,700 15,100 44,700 385,300
GA........................................................... 610,000 609,200 92,800 1,100 2,600 6,700 712,300
ID........................................................... 0 0 26,800 200 300 8,800 36,000
IL........................................................... 591,500 600,800 277,200 1,100 1,700 36,400 917,300
IN........................................................... 599,000 670,400 152,200 800 1,100 2,200 826,700
IA........................................................... 186,200 169,900 84,000 300 600 14,600 269,400
[[Page 4590]]
KS........................................................... 71,500 63,500 16,000 300 800 3,500 84,100
KY........................................................... 393,300 363,100 42,900 500 1,800 58,000 466,400
LA........................................................... 96,300 112,500 193,600 400 21,100 94,000 421,700
ME........................................................... 4,700 3,200 22,200 200 200 10,800 36,600
MD........................................................... 261,400 232,200 22,500 600 8,100 900 264,300
MA........................................................... 17,700 15,600 15,300 600 1,200 61,300 94,000
MI........................................................... 375,800 387,600 135,000 1,000 1,300 32,700 557,600
MN........................................................... 94,200 91,600 41,200 500 1,100 5,700 140,000
MS........................................................... 84,600 73,500 77,500 400 2,000 82,700 236,100
MO........................................................... 261,000 293,100 128,600 700 900 31,900 455,200
MT........................................................... 17,700 17,900 34,700 100 300 1,400 54,400
NE........................................................... 97,200 97,600 7,300 200 600 10,100 115,800
NV........................................................... 56,700 16,400 3,500 200 400 3,900 24,300
NH........................................................... 7,300 7,300 7,900 100 200 90,800 106,300
NJ........................................................... 85,300 41,300 70,800 700 53,500 42,600 208,900
NM........................................................... 48,300 48,600 115,200 300 200 9,400 173,700
NY........................................................... 211,400 214,100 168,600 1,300 2,200 122,100 508,200
NC........................................................... 221,500 219,400 95,400 1,000 1,200 33,800 350,800
ND........................................................... 172,200 160,900 56,100 100 400 64,100 281,600
OH........................................................... 979,300 1,258,700 337,600 1,200 5,700 63,300 1,666,40
OK........................................................... 133,000 133,000 41,200 500 600 5,500 180,800
OR........................................................... 15,200 15,200 6,600 400 800 20,900 43,800
PA........................................................... 670,200 853,400 141,000 1,100 3,300 80,900 1,079,80
RI........................................................... 0 0 2,400 100 2,900 4,100 9,500
SC........................................................... 191,500 199,700 63,900 500 1,200 15,600 280,900
SD........................................................... 42,100 36,300 1,400 100 200 23,800 61,800
TN........................................................... 317,300 306,100 134,300 700 2,800 47,800 491,700
TX........................................................... 539,900 487,700 318,600 2,300 33,400 9,600 851,700
UT........................................................... 31,200 31,500 30,300 300 400 13,100 75,600
VT........................................................... 0 0 2,000 100 100 13,000 15,100
VA........................................................... 180,600 187,800 112,700 900 4,600 9,500 315,400
WA........................................................... 6,000 6,000 51,600 600 9,500 3,700 71,400
WV........................................................... 456,800 550,600 62,200 200 33,600 11,300 658,000
WI........................................................... 217,200 214,100 88,500 600 800 45,900 349,800
WY........................................................... 47,100 47,300 59,700 100 200 17,300 124,600
--------------
9,435,400 9,856,900 3,799,200 29,800 236,400 1,367,600 15,290,0
--------------------------------------------------------------------------------------------------------------------------------------------------------
1 All values rounded to nearest 100 tons. EGU v216 emissions are latest version and are included in totals. EGU v21 emissions were used for the zero-out
analysis.
Table IV-2.--State NOX Emissions by Sector in the 2010 Base Case 1
--------------------------------------------------------------------------------------------------------------------------------------------------------
ST EGU v21 EGU v216 Non-EGU On-road Non-road Area Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
AL........................................................... 129,500 134,100 83,400 110,200 55,800 69,400 453,000
AZ........................................................... 88,200 84,600 118,200 91,300 43,600 78,100 415,700
AR........................................................... 52,600 52,500 23,500 64,900 35,400 44,800 221,100
CA........................................................... 18,200 17,700 137,300 401,900 276,100 129,300 962,300
CO........................................................... 87,000 82,700 44,900 80,600 57,000 59,900 325,100
CT........................................................... 6,700 5,200 11,300 48,500 17,300 9,300 91,600
DE........................................................... 11,500 10,300 8,500 17,400 16,800 6,900 59,900
DC........................................................... 100 0 800 4,800 5,400 1,900 13,000
FL........................................................... 162,900 161,800 59,000 293,900 147,900 53,200 716,000
GA........................................................... 152,500 150,600 71,400 189,200 66,400 74,700 552,300
ID........................................................... 1,400 1,200 6,600 32,700 17,300 29,400 87,200
IL........................................................... 194,200 171,400 134,900 177,700 150,200 115,800 750,100
IN........................................................... 223,300 239,700 45,400 142,900 90,400 37,900 556,300
IA........................................................... 95,400 86,100 26,500 61,600 57,600 31,100 262,900
KS........................................................... 101,400 100,900 108,800 59,100 79,500 74,300 422,600
KY........................................................... 186,300 195,900 34,800 95,700 73,100 76,900 476,400
LA........................................................... 64,700 49,800 297,100 89,300 205,000 103,500 744,700
ME........................................................... 6,000 2,100 15,600 30,600 8,800 4,900 62,000
MD........................................................... 60,500 60,600 19,100 73,100 38,900 15,900 207,700
MA........................................................... 27,800 10,400 18,200 74,400 70,000 24,900 197,800
MI........................................................... 126,200 125,400 161,000 171,400 63,200 115,600 636,500
MN........................................................... 109,700 104,500 83,800 103,400 64,800 24,800 381,500
MS........................................................... 49,700 43,200 74,400 68,800 44,800 56,700 287,800
MO........................................................... 144,700 137,000 29,700 117,800 64,200 14,800 363,600
MT........................................................... 38,500 38,500 20,800 24,800 34,000 18,400 136,400
NE........................................................... 58,100 57,800 14,500 37,700 57,400 15,400 182,800
NV........................................................... 44,800 37,400 6,000 36,300 25,400 8,500 113,500
[[Page 4591]]
NH........................................................... 3,000 3,600 4,200 25,700 6,200 13,900 53,700
NJ........................................................... 40,000 29,300 51,000 93,100 86,400 79,800 339,600
NM........................................................... 77,300 76,400 68,700 54,500 10,700 32,400 242,800
NY........................................................... 58,700 68,400 36,700 181,500 90,900 88,100 465,600
NC........................................................... 64,700 62,100 63,300 150,000 60,100 37,000 372,400
ND........................................................... 81,100 77,900 7,200 16,400 41,800 21,200 164,600
OH........................................................... 249,100 266,800 77,500 201,300 116,900 82,200 744,700
OK........................................................... 97,700 82,100 121,000 86,800 40,000 33,200 363,100
OR........................................................... 18,000 13,300 16,800 67,400 52,600 39,900 190,000
PA........................................................... 212,100 209,800 173,000 200,600 80,600 114,300 778,300
RI........................................................... 1,300 1,400 900 12,300 5,600 2,800 23,000
SC........................................................... 67,500 64,700 46,000 94,200 29,900 26,100 260,900
SD........................................................... 13,800 11,700 4,700 20,200 24,400 7,900 69,000
TN........................................................... 106,700 102,800 78,000 132,900 138,900 52,300 505,000
TX........................................................... 246,200 200,900 523,800 399,600 432,100 43,100 1,599,50
UT........................................................... 68,400 69,400 31,600 49,000 31,500 23,500 205,100
VT........................................................... 0 0 800 16,000 3,900 11,500 32,100
VA........................................................... 55,800 55,500 66,500 147,000 76,600 45,700 391,300
WA........................................................... 26,600 28,400 47,000 114,600 78,800 23,000 291,800
WV........................................................... 142,500 155,200 50,100 40,400 57,000 21,300 324,000
WI........................................................... 116,200 111,500 54,300 109,600 51,000 58,700 385,100
WY........................................................... 90,300 90,500 49,500 18,600 22,900 71,700 253,200
--------------
4,079,200 3,943,400 3,228,200 4,931,900 3,405,000 2,225,900 17,734,4
--------------------------------------------------------------------------------------------------------------------------------------------------------
1 All values rounded to nearest 100 tons. EGU v216 emissions are latest version and are included in totals. EGU v21 emissions were used for the zero-out
analysis.
b. Development of Emissions Inventories for On-road Vehicles
The 2001 base year inventory for the on-Road vehicle sector was
developed by applying State and pollutant specific adjustment ratios to
each grid cell's emissions as found in the existing 1996 model-ready
file for on-road sources. The adjustment ratios were created by
dividing State-level emissions for each pollutant as estimated for the
2001 NEI using the MOBILE6 model by the State-level emissions for 1996
as estimated using the same MOBILE6 model.
The 1996 model-ready file, along with consistent files for 2007 and
2020 emissions, had been developed for previous EPA rulemakings using a
version of the MOBILE5b model which had been adjusted to simulate the
MOBILE6 model that was under development at that time. The 1996 and
2007 emissions files had been developed for the HDDE rule (http://
www.epa.gov/otaq/models/hd2007/r00020.pdf) and the 2020 emissions file
had been developed for the LNDE rule (http://www.epa.gov/nonroad/
454r03009.pdf). Note that the 2020 on-road vehicle emissions file
developed for the LNDE rule includes the reductions expected from
implementation of the HDDE rule.
Application of the MOBILE6-based adjustment ratios to the 1996
MOBILE5b-based emission file allowed the resulting 2001 model-ready
file to remain consistent in methodology with the existing 2007 and
2020 files. The 2010 and 2015 base case emissions files used for this
proposal were then developed as straight-line interpolations between
those 2007 and 2020 files, and they are therefore also consistent with
the 2001 file.
c. Development of Emissions Inventories for Non-Road Engines
For the non-road sector, the 2001 model-ready emissions file was
developed in a manner similar to that described above for the on-road
vehicle sector. State-level 2001 NEI emissions developed from the
NONROAD2002 model were divided by a consistent set of emissions for
1996, also developed using the NONROAD2002 model, to produce a set of
adjustment ratios for each State and pollutant. These adjustment ratios
were applied to the existing 1996 model-ready emissions for each grid
cell to produce a 2001 model-ready file that remains consistent with
the 1996 file and the existing future projections that were based on
that 1996 file.
For the future scenarios, the 2010 and 2020 emissions files
developed for EPA's analysis of the preliminary controls of the LNDE
rule were modified to reflect that rule as finally proposed (68 FR
28327, May 23, 2003) and to incorporate the effects of the Large Spark
Ignition and Recreational Vehicle rules. These modifications were done
using adjustment ratios developed from national-level estimates of the
benefits of these two rules. A 2015 emissions file for this sector was
then developed as a straight-line interpolation between the modified
2010 and 2020 files.
d. Development of Emissions Inventories for Other Sectors
The NEI estimates for 2001 were not available at the time modeling
was begun for the remaining two man-made emission sectors: non-EGU
point sources and area sources. For these two sectors, linear
interpolations were performed between gridded 1996 emissions and
gridded projected 2010 base case emissions to produce gridded 2001
emissions files. The gridded emissions input files for 1996 and 2010
were available from previous EPA analyses. The interpolations were done
separately for each of the two sectors, for each grid cell, and for
each pollutant. The 2010 and 2015 emissions files for these sectors
that were used as part of this interpolation to 2001 were themselves
developed as straight-line interpolations between the 2007 and 2020
inventories described above for the on-road vehicle sector. The
interpolated 2010 and 2015 emissions were adjusted to reflect the
SO2, PM10, and PM2.5 co-control
benefits of the proposed Industrial Boiler and Process Heater MACT (68
FR 1660, January 13, 2003). The 2007 and 2020 projection inventories
had been developed by applying State- and 2-digit SIC-specific economic
growth ratios to the 1996 NEI, followed by application of any emissions
control regulations.
[[Page 4592]]
5. Preparation of Emissions for Air Quality Modeling
The annual and summer day emissions inventory files were processed
through the Sparse Matrix Operator Kernel Emissions (SMOKE) Modeling
System version 1.4 to produce 36-km gridded input files for annual
PM2.5 air quality modeling and 12-km input files for
episodic ozone air quality modeling. In addition to the U.S. man-made
emission sources described above, hourly biogenic emissions were
estimated for individual modeling days using the BEIS model version
3.09 (ftp.epa.gov/amd/asmd/beis3v09/). Emissions inventories for Canada
and for U.S. offshore oil platforms were merged in using SMOKE to
provide a more complete modeling data set. The single set of biogenic,
Canadian, and offshore U.S. emissions was used in all scenarios
modeled. That is, the emissions for these sources were not varied from
run to run. Additional information on the development of the emissions
data sets for modeling is provided in the AQMTSD.
D. Ozone Air Quality Modeling
1. Ozone Modeling Platform
The CAMX was used to assess 8-hour ozone concentrations
as part of this rulemaking. The CAMX is a publicly available
Eulerian model that accounts for the processes that are involved in the
production, transport, and destruction of ozone over a specified three-
dimensional domain and time period. Version 3.10 of the CAMX
model was employed for this analyses. More information on the
CAMX model can be found in the model user's guide.\57\ The
model simulations were performed for a domain covering the Eastern U.S.
and adjacent portions of Canada.
---------------------------------------------------------------------------
\57\ Environ, 2002: User's Guide to the Comprehensive Air
Quality Model with Extensions (CAMX), Novato, CA.
---------------------------------------------------------------------------
Three episodes during the summer of 1995 were used for modeling
ozone and precursor pollutants: June 12-24, July 5-15, and August 10-
21. The start of each episode was chosen to correspond to a day with no
ozone exceedances (an exceedance is an 8-hour daily maximum ozone
concentration of 85 ppb or more). The first three days of each episode
are considered ramp-up days and were discarded from analysis to
minimize effects of the clean initial concentrations used at the start
of each episode. In total, thirty episode days were used for analyzing
interstate transport. As described in the AQMTSD, these episodes
contain meteorological conditions that reflect various ozone transport
wind patterns across the East. In general, ambient ozone concentrations
during these episodes span the range of 2000-2002 8-hour ozone design
values at monitoring sites in the East.
In order to solve for the change in pollutant concentrations over
time and space, the CAMX model requires certain
meteorological inputs for the episodes being modeled, including: winds,
temperature, water vapor mixing ratio, atmospheric air pressure, cloud
cover, rainfall, and vertical diffusion coefficient. Most of the
gridded meteorological data for the three historical 1995 episodes were
developed by the New York Department of Environment and Conservation
using the Regional Atmospheric Modeling System (RAMS), version 3b. A
model performance evaluation \58\ was completed for a portion of the
1995 meteorological modeling (July 12-15). Observed data not used in
the assimilation procedure were compared against modeled data at the
surface and aloft. This evaluation concluded there were no widespread
biases in the RAMS meteorological data. The remaining meteorological
inputs (cloud fractions and rainfall rates) were developed based on
observed data.
---------------------------------------------------------------------------
\58\ Hogrefe, C., S.T. Rao, P. Kasibhatla, G. Kallos, C.
Tremback, W. Hao, D. Olerud, A. Xiu, J. McHenry, K. Alapaty, 2001.
``Evaluating the performance of regional-scale photochemical
modeling systems: Part-I meteorological predictions.'' Atmospheric
Environment, vol. 35, No. 34, 4159-4174.
---------------------------------------------------------------------------
2. Ozone Model Performance Evaluation
The CAMX model was run with Base Year emissions in order
to evaluate the performance of the modeling platform for replicating
observed concentrations. This evaluation was comprised principally of
statistical assessments of paired model/observed data. The results
indicate that, on average, the predicted patterns and day-to-day
variations in regional ozone levels are similar to what was observed
with measured data. When all hourly observed ozone values (greater than
60 ppb) are compared to their model counterparts for the 30 days
modeled (paired in time and space), the mean normalized bias is -1.1
percent and the mean normalized gross error is 20.5 percent. As
described in the AQMTSD, the performance for individual episodes
indicates variations in the degree of model performance with a tendency
for underprediction during the June and July episodes and
overprediction during the August episode.
At present, there are no generally accepted statistical criteria by
which one can judge the adequacy of model performance for regional
scale ozone model applications. However, as documented in the AQMTSD,
the base year modeling for today's rule represents an improvement in
terms of statistical model performance when compared to prior regional
modeling analyses (e.g., model performance analyses for OTAG, the Tier-
2/Low Sulfur Rule, and the Heavy Duty Engine Rule).
3. Projection of Future 8-Hour Ozone Nonattainment
Ozone modeling was performed for 2001 emissions and for the 2010
and 2015 Base Cases as part of the approach for forecasting which
counties are expected to be nonattainment in these 2 future years. In
general, the approach involves using the model in a relative sense to
estimate the change in ozone between 2001 and each future base case.
Concentrations of ozone in 2010 were estimated by applying the relative
change in model predicted ozone from 2001 to 2010 with present-day 8-
hour ozone design values (2000-2002). The procedures for calculating
future case ozone design values are consistent with EPA's draft
modeling guidance \59\ for 8-hour ozone attainment demonstrations,
``Draft Guidance on the Use of Models and Other Analyses in Attainment
Demonstrations for the 8-Hour Ozone NAAQS.'' The draft guidance
specifies the use of the higher of the design values from (a) the
period that straddles the emissions inventory Base Year or (b) the
design value period which was used to designate the area under the
ozone NAAQS. In this case, 2000-2002 is the design value period which
straddles the 2001 Base Year inventory and is also the latest period
which is available for determining designation compliance with the
NAAQS. Therefore, 2000-2002 was the only period used as the basis for
projections to the future years of 2010 and 2015.
---------------------------------------------------------------------------
\59\ U.S. EPA, 1999: Draft Guidance on the Use of Models and
Other Analyses in Attainment Demonstrations for the 8-Hour Ozone
NAAQS, Office of Air Quality Planning and Standards, Research
Triangle Park, NC.
---------------------------------------------------------------------------
The procedures in the guidance for projecting future 8-hour ozone
nonattainment are as follows:
Step 1: Hourly model predictions are processed to determine daily
maximum 8-hour concentrations for each episode day modeled. A relative
reduction factor (RRF) is then determined for each monitoring site.
First, the multi-day mean (excluding ramp-up days) of the 8-hour daily
maximum predictions in the nine grid cells that include or surround the
site is calculated using only those
[[Page 4593]]
predictions greater than or equal to 70 ppb, as recommended in the
guidance. This calculation is performed for the base year 2001 scenario
and the future-year scenario. The RRF for a site is the ratio of the
mean prediction in the future-year scenario (e.g., 2010) to the mean
prediction in the 2001 base year scenario. The RRFs were calculated on
a site-by-site basis.
Step 2: The RRF for each site is then multiplied by the 2000-2002
ambient design value for that site, yielding an estimate of the future
design value at that particular monitoring location.
Step 3: For counties with only one monitoring site, the value at
that site was selected as the value for that county. For counties with
more than one monitor, the highest value in the county was selected as
the value for that county. Counties with projected 8-hour ozone design
values of 85 ppb or more are projected to be nonattainment.
As an example, consider Clay County, Alabama which has one ozone
monitor. The 2000-2002 8-hour ambient ozone design value is 82 ppb. In
the 2001 base year simulation, 24 of the 30 episode modeling days have
CAMx values of 70 ppb or more in one of the nine grid cells that
include or surround the monitor location. The average of these
predicted ozone values is 88.62 ppb. In 2010, the average of the
predicted values for these same grid cells was 70.32 ppb. Therefore,
the RRF for this location is 0.79, and the projected 2010 design value
is 82 multiplied by 0.79 equals 65.07 ppb. All projected future case
design values are truncated to the nearest ppb (e.g., 65.07 becomes
65). Since there are no other monitoring locations in Clay County,
Alabama, the projected 2010 8-hour design value for this county is 65
ppb.
The RRF approach described above was applied for the 2010 and 2015
Base Case scenarios. The resulting 2010 and 2015 Base Case design
values are provided in the AQMTSD. Of the 287 counties that were
nonattainment based on 2000-2002 design values, 47 are forecast to be
nonattainment in 2010 and 34 in 2015. None of the counties that were
measuring attainment in the period 2000-2002 are forecast to become
nonattainment in the future. Those counties projected to be
nonattainment for the 2010 and 2015 Base Cases are listed in Table IV-3.
Table IV-3.--Counties Projected To Be Nonattainment for the 8-Hour Ozone NAAQS in the 2010 and 2015 Base Cases
----------------------------------------------------------------------------------------------------------------
2010 Base case projected 2015 Base case porojected
State nonattainment counties nonattainment counties
----------------------------------------------------------------------------------------------------------------
AR.................................... Crittenden......................... Crittenden.
CT.................................... Fairfield, Middlesex, New Haven.... Fairfield, Middlesex, New Haven.
DC.................................... Washington, DC..................... Washington, DC.
DE.................................... New Castle......................... None.
GA.................................... Fulton............................. None.
IL.................................... None............................... Cook.
IN.................................... Lake............................... Lake.
MD.................................... Anne Arundel, Baltimore, Cecil, Anne Arundel, Cecil, Harford.
Harford, Kent, Prince Georges.
MI.................................... None............................... Macomb.
NJ.................................... Bergen, Camden, Cumberland, Bergen, Camden, Gloucester,
Gloucester, Hudson, Hunterdon, Hunterdon, Mercer, Middlesex,
Mercer, Middlesex, Monmouth, Monmouth, Morris, Ocean.
Morris, Ocean.
NY.................................... Erie, Putnam, Richmond, Suffolk, Erie, Richmond, Suffolk,
Westchester. Westchester.
NC.................................... Mecklenburg........................ None.
OH.................................... Geauga, Summit..................... Geauga.
PA.................................... Allegheny, Bucks, Delaware, Bucks, Montgomery, Philadelphia.
Montgomery, Philadelphia.
RI.................................... Kent............................... Kent.
TX.................................... Denton, Harris, Tarrant............ Harris.
VA.................................... Arlington, Fairfax................. Arlington, Fairfax.
WI.................................... Kenosha, Racine, Sheboygan......... Kenosha, Sheboygan.
----------------------------------------------------------------------------------------------------------------
The counties projected to be nonattainment for the 2010 Base Case
are the nonattainment receptors used for assessing the contribution of
emissions in upwind States to downwind nonattainment as part of today's
proposal. It should be noted that the approach used to identify these
nonattainment receptors differed from that used in the NOX
SIP Call where we aggregated on a State-by-State basis all grid cells
which were both (a) associated with counties that violated the 8-hour
NAAQS (based on 1994-1996 data), and (b) had future base case
predictions of 85 ppb or more. For this proposal, we have treated each
individual county projected to be nonattainment in the future as a
downwind nonattainment receptor.
E. The PM2.5 Air Quality Modeling
1. The PM2.5 Modeling Platform
The REMSAD model version 7 was used as the tool for simulating base
year and future concentrations of PM2.5 in support of
today's proposed rule. The REMSAD is a publicly available model. An
overview of the scientific aspects of this model is provided below.
More detailed information can be found in the REMSAD User's Guide.\60\
The basis for REMSAD is the atmospheric diffusion equation (also called
the species continuity or advection/diffusion equation). This equation
represents a mass balance in which all of the relevant emissions,
transport, diffusion, chemical reactions, and removal processes are
expressed in mathematical terms.
---------------------------------------------------------------------------
\60\ ICF Kaiser, 2002: User's Guide to the Regional Modeling
System for Aerosols and Deposition (REMSAD) Version 7, San Rafael,
CA.
---------------------------------------------------------------------------
The REMSAD simulates both gas phase and aerosol chemistry. The gas
phase chemistry uses a reduced-form version of Carbon Bond (CB4)
chemical mechanism termed ``micro-CB4'' (mCB4). Formation of secondary
PM species, such as sulfate \61\ and nitrate, is simulated through
chemical reactions within the model. Aerosol sulfate is formed in both
the gas phase and the aqueous phase. The REMSAD also accounts for the
production of secondary organic aerosols through atmospheric chemistry
processes. Direct PM emissions in REMSAD are treated as inert species
which are advected and
[[Page 4594]]
deposited without any chemical interaction with other species.
---------------------------------------------------------------------------
\61\ Ammonium sulfates are referred to as ``sulfate'' in
sections IV and V of today's proposed rule.
---------------------------------------------------------------------------
The REMSAD was run using a latitude/longitude horizontal grid
structure in which the horizontal grids are generally divided into
areas of equal latitude and longitude. The grid cell size was
approximately 36 km by 36 km. The REMSAD was run with 12 vertical
layers extending up to 16,000 meters, with a first layer thickness of
approximately 38 meters. The REMSAD modeling domain used for this
analysis covers the entire continental United States.
The REMSAD requires input of winds, temperatures, surface pressure,
specific humidity, vertical diffusion coefficients, and rainfall rates.
The meteorological input files were developed from a 1996 annual MM5
model run that was developed for previous projects. The MM5 is a
numerical meteorological model that solves the full set of physical and
thermodynamic equations which govern atmospheric motions. The MM5 was
run in a nested-grid mode with 2 levels of resolution: 108 km, and 36km
with 23 vertical layers extending from the surface to the 100 mb
pressure level.\62\ All of the PM2.5 model simulations were
performed for a full year using the 1996 meteorological inputs.
---------------------------------------------------------------------------
\62\ Olerud, D., K. Alapaty, and N. Wheeler, 2000:
Meteorological Modeling of 1996 for the United States with MM5.
MCNC-Environmental Programs, Research Triangle Park, NC.
---------------------------------------------------------------------------
2. The PM2.5 Model Performance Evaluation
An annual simulation of REMSAD was performed for 1996 using the
meteorological data and emissions data for that year. The predictions
from the 1996 Base Year modeling were used to evaluate model
performance for predicting concentrations of PM2.5 and its
related speciated components (e.g., sulfate, nitrate, elemental carbon,
organic carbon). The evaluation was comprised principally of
statistical assessments of model versus observed pairs.
The evaluation used data from the IMPROVE,\63\ CASTNet \64\ dry
deposition, and NADP \65\ monitoring networks. The IMPROVE and NADP
networks were in full operation during 1996. The CASTNet dry deposition
network was partially shutdown during the first half of the year. There
were 65 CASTNet sites with at least one season of complete data. There
were 16 sites which had complete annual data. The largest available
ambient data base for 1996 comes from the IMPROVE network. The IMPROVE
network is a cooperative visibility monitoring effort between EPA,
Federal land management agencies, and State air agencies. Data is
collected at Class I areas across the United States mostly at national
parks, national wilderness areas, and other protected pristine areas.
There were approximately 60 IMPROVE sites that had complete annual
PM2.5 mass and/or PM2.5 species data for 1996.
Forty-two sites were in the West \66\ and 18 sites were in the East.
The following is a brief summary of the model performance for
PM2.5 and deposition. Additional details on model
performance are provided in the AQMTSD.
---------------------------------------------------------------------------
\63\ IMPROVE, 2000. Spatial and Seasonal Patterns and Temporal
Variability of Haze and its Constituents in the United States:
Report III. Cooperative Institute for Research in the Atmosphere,
ISSN: 0737-5352-47.
\64\ U.S. EPA, Clean Air Status and Trends Network (CASTNet),
2001 Annual Report.
\65\ NADP, 2002: National Acid Deposition Program 2002 Annual
Summary.
\66\ The dividing line between the West and East was defined as
the 100th meridian (e.g., monitoring sites to the east of this
meridian are included in aggregate performance statistics for the
East).
---------------------------------------------------------------------------
Considering the ratio of the annual mean predictions to the annual
mean observations (e.g., predicted divided by observed) at the IMPROVE
monitoring sites REMSAD underpredicted fine particulate mass
(PM2.5), by 18 percent. Specifically, PM2.5 in
the East was underpredicted by 2 percent, while PM2.5 in the
West was underpredicted by 33 percent. Sulfate in the East is slightly
underpredicted and nitrate and largely crustal material are
overestimated. Elemental carbon is neither overpredicted nor
underpredicted in the East. Organic aerosols are slightly overpredicted
in the East. All PM2.5 component species were underpredicted
in the West.
The comparisons to the CASTNet data show generally good model
performance for sulfate. Comparison of total nitrate indicate an
overestimate, possibly due to overpredictions of nitric acid in the
model.
Performance at the NADP sites for wet deposition of ammonium,
sulfate, and nitrate was reasonably good. However, the nitrate and
sulfate wet deposition were each underestimated compared to the
corresponding observed values.
Given the state of the science relative to PM modeling, it is
inappropriate to judge PM model performance using criteria derived for
other pollutants, like ozone. The overall model performance results may
be limited by our current knowledge of PM science and chemistry, by the
emissions inventories for direct PM and secondary PM precursor
pollutants, by the relatively sparse ambient data available for
comparisons to model output, and by uncertainties in monitoring
techniques. The model performance for sulfate in the East is quite
reasonable, which is key since sulfate compounds comprise a large
portion of PM2.5 in the East.
Negative effects of relatively poor model performance for some of
the smaller (i.e., lower concentration) components of PM2.5,
such as crustal mass, are mitigated to some extent by the way we use
the modeling results in projecting future year nonattainment and
downwind contributions. As described in more detail below, each
measured component of PM2.5 is adjusted upward or downward
based on the percent change in that component, as determined by the
ratio of future year to base year model predictions. Thus, we are using
the model predictions in a relative way, rather than relying on the
absolute model predictions for the future year scenarios. By using the
modeling in this way, we are reducing the risk that large
overprediction or underprediction will unduly affect our projection of
future year concentrations. For example, REMSAD may overpredict the
crustal component at a particular location by a factor of 2, but since
measured crustal concentrations are generally a small fraction of
ambient PM2.5, the future crustal concentration will remain
as a small fraction of PM2.5.
A number of factors need to be considered when interpreting the
results of this performance analysis. First, simulating the formation
and fate of particles, especially secondary organic aerosols and
nitrates is part of an evolving science. In this regard, the science in
air quality models is continually being reviewed and updated as new
research results become available. Also, there are a number of issues
associated with the emissions and meteorological inputs, as well as
ambient air quality measurements and how these should be paired to
model predictions that are currently under investigation by EPA and
others. The process of building consensus within the scientific
community on ways for doing PM model performance evaluations has not
yet progressed to the point of having a defined set of common
approaches or criteria for judging model performance. Unlike ozone,
there is a limited data base of past performance statistics against
which to measure the performance of regional/national PM modeling.
Thus, the approach used for this analysis may be modified or expanded
in future evaluation analyses.
[[Page 4595]]
3. Projection of Future PM2.5 Nonattainment
As with ozone, the approach for identifying areas expected to be
nonattainment for PM2.5 in the future involves using the
model predictions in a relative way to forecast current
PM2.5 design values to 2010 and 2015. The modeling portion
of this approach includes annual simulations for 2001 emissions and for
the 2010 and 2015 Base Case emissions scenarios. As described below,
the predictions from these runs were used to calculate RRFs which were
then applied to current PM2.5 design values. The approach we
followed is consistent with the procedures in the draft
PM2.5 air quality modeling guidance,\67\ ``Guidance for
Demonstrating Attainment of Air Quality Goals for PM2.5 and
Regional Haze.'' It should be noted that the approach for
PM2.5 differs from the approach recommended for projecting
future year 8-hour ozone design values in terms of the base period for
design values. The approach for ozone uses the higher of the ambient
design values for two 3-year periods, as described above. In contrast,
the PM2.5 guidance recommends selecting the highest design
value from among the three periods that straddle the base emissions
year (i.e., 2001). The three periods that straddle this year are 1999-
2001, 2000-2002, and 2001-2003. The data from the first two design
value periods are readily available, but the data from the 2001-2003
period could not be used since the 2003 data were not yet available.
Thus, we have relied on the data for the two periods 1999-2001 and
2000-2002. The design values from the period 2000-2002, which is the
most recent period with available data, were used to identify which
monitors are currently measuring nonattainment (i.e., annual average
PM2.5 of 15.05 [mu]g/m\3\ or more). To be consistent with
procedures in the modeling guideline, we selected the higher of the
1999-2001 or 2000-2002 design value from each nonattainment monitor for
use in projecting future design values. The recommendation in the
guidance for selecting the highest values from among 3 periods is
applicable for nonattainment counties, but not necessarily for
attainment counties. Thus, for monitors that are measuring attainment
(i.e., PM2.5 less than 15.05 [mu]g/m\3\) using the most
recent 3 years of data, we used the 2000-2002 design values as the
starting point for projecting future year design values. Note that none
of the counties that are attainment for the period 2000-2002 are
forecast to become nonattainment in 2010 or 2015.
---------------------------------------------------------------------------
\67\ U.S. EPA, 2000: Draft Guidance for Demonstrating Attainment
of Air Quality Goals for PM2.5 and Regional Haze; Draft 1.1, Office
of Air Quality Planning and Standards, Research Triangle Park, NC.
---------------------------------------------------------------------------
The modeling guidance recommends that model predictions be used in
a relative sense to estimate changes expected to occur in each major
PM2.5 species. These species are sulfate, nitrate, organic
carbon, elemental carbon, crustal and un-attributed mass. Un-attributed
mass is defined as the difference between FRM PM2.5 and the
sum of the other five components. The procedure for calculating future
year PM2.5 design values is called the Speciated Modeled
Attainment Test (SMAT). The following is a brief summary of those
steps. Additional details are provided in the AQMTSD.
Step 1: Calculate quarterly mean concentrations (averaged over 3
years) for each of the six major components of PM2.5. This
is done by multiplying the monitored quarterly mean concentration of
FRM-derived PM2.5 by the monitored fractional composition of
PM2.5 species for each quarter in 3 consecutive years (e.g.,
20 percent sulfate multiplied by 15 [mu]g/m\3\ PM2.5 equals
3 [mu]g/m\3\ sulfate).
Step 2: For each quarter, calculate the ratio of future (e.g.,
2010) to current (i.e., 2001) predictions for each component specie.
The result is a component-specific RRF (e.g., assume that 2001
predicted sulfate for a particular location is 10 [mu]g/m\3\ and the
2010 Base concentration is 8 [mu]g/m\3\, then RRF for sulfate is 0.8).
Step 3: For each quarter and each component specie, multiply the
current quarterly mean component concentration (Step 1) by the
component-specific RRF obtained in Step 2. This produces an estimated
future quarterly mean concentration for each component (e.g., 3 [mu]g/
m\3\ sulfate multiplied by 0.8 equals future sulfate of 2.4 [mu]g/
m\3\).
Step 4: Average the four quarterly mean future concentrations to
get an estimated future annual mean concentration for each component
specie. Sum the annual mean concentrations of the 6 components to
obtain an estimated future annual average concentration for
PM2.5.
We are using the FRM data for projecting future design values since
these data will be used for nonattainment designations. In order to
apply SMAT to the FRM data, information on PM2.5 speciation
is needed for the location of each FRM monitoring site. Only a small
number of the FRM sites have measured species information. Therefore,
spatial interpolation techniques were applied to the speciated
component averages from the IMPROVE and Speciation Trends Network (STN)
data to estimate concentrations of species mass at all FRM
PM2.5 monitoring sites. Details on the procedures and
assumptions used in mapping the IMPROVE and STN data to the locations
of the FRM sites are described in the AQMTSD.
The preceding procedures for determining future year
PM2.5 concentrations were applied for each FRM site. For
counties with only one FRM site, the forecast design value for that
site was used to determine whether or not the county will be
nonattainment in the future. For counties with multiple monitoring
sites, the site with the highest future concentration was selected for
that county. Those counties with future year design values of 15.05
[mu]g/m\3\ or more are predicted to be nonattainment. The result is
that 61 counties in the East are forecast to be nonattainment for the
2010 Base Case. Of these, 41 are forecast to remain nonattainment for
the 2015 Base Case. The PM2.5 nonattainment counties for the
2010 and 2015 Base Cases are listed in Table IV-4. These counties were
used as receptors for quantifying the impacts of the SO2 and
NOX emissions reductions in today's proposal, as presented
in section IX.
Table IV-4. Counties Projected To Be Nonattainment for the Annual Average PM2.5 NAAQS for the 2010 and 2015 Base
Cases
----------------------------------------------------------------------------------------------------------------
2010 Base case projected 2015 Base case projected
State nonattainment counties nonattainment counties
----------------------------------------------------------------------------------------------------------------
AL.................................... DeKalb, Jefferson, Montgomery, Jefferson, Montgomery, Russell,
Russell, Talladaga. Talladaga.
CT.................................... New Haven.......................... New Haven.
DC.................................... Washington, DC..................... None.
DE.................................... New Castle......................... None.
[[Page 4596]]
GA.................................... Clarke, Clayton, Cobb, DeKalb, Clarke, Clayton, Cobb, DeKalb,
Floyd, Fulton, Hall, Muscogee, Floyd, Fulton, Hall, Muscogee,
Paulding, Richmond, Wilkinson. Richmond, Wilkinson.
IL.................................... Cook, Madison, St. Clair, Will..... Cook, Madison, St. Clair.
IN.................................... Clark, Marion...................... Clark, Marion.
KY.................................... Fayette, Jefferson................. Jefferson.
MD.................................... Baltimore City..................... Baltimore City.
MI.................................... Wayne.............................. Wayne.
MO.................................... St. Louis.......................... None.
NY.................................... New York (Manhattan)............... New York (Manhattan).
NC.................................... Catawba, Davidson, Mecklenburg..... None.
OH.................................... Butler, Cuyahoga, Franklin, Butler, Cuyahoga, Franklin,
Hamilton, Jefferson, Lawrence, Hamilton, Jefferson, Scioto,
Mahoning, Scioto, Stark, Summit, Stark, Summit.
Trumbull.
PA.................................... Allegheny, Bucks, Lancaster, York.. Allegheny, York.
SC.................................... Greenville......................... None.
TN.................................... Davidson, Hamilton, Knox, Roane, Hamilton, Knox.
Sullivan.
WV.................................... Brooke, Cabell, Hancock, Kanawha, Brooke, Cabell, Hancock, Kanawha,
Marshal, Wood. Wood.
----------------------------------------------------------------------------------------------------------------
As noted above in section IV.C.4, the 2010 Base Case used for the
zero-out PM2.5 modeling included EGU emissions from an
earlier simulation of the Integrated Planning Model. Of the 61 2010
Base Case nonattainment counties listed in Table IV-4, 4 counties
(i.e., Catawba Co., NC, Trumbull Co., OH, Greenville Co., SC, and
Marshall Co., WV) were projected to be in attainment in the 2010 Base
Case used for the zero-out modeling. Thus, 57 nonattainment counties
(i.e., the 61 counties in Table IV-4 less these 4 counties) were used
as downwind receptors in the air quality modeling assessment of
interstate PM2.5 contributions described in section V.C.3.
F. Analysis of Locally-Applied Control Measures for Reducing
PM2.5
We conducted two air quality modeling analyses to assess the
probability that attainment of the PM standard could be reached with
local measures only. The results of these analyses, discussed in detail
in the AQMTSD, support the need for today's rulemaking requiring
reductions of transport pollutants. Both analysis were conducted by:
? Identifying a list of local control measures
that could be applied in addition to those measures already in place or
required to be in place in the near future;
? Determining the emissions inventory categories
that would be affected by those measures, and the estimated percentage
reduction;
? Applying those percentage reductions to sources
within a selected geographic area; and
? Conducting regional large-scale air quality
modeling using REMSAD to determine the ambient impacts those measures
would have, and the degree to which those measures would reduce the
expected number of nonattainment areas.
1. Control Measures and Percentage Reductions
For our analysis of PM2.5 attainment prospects, we
developed a list of emissions reductions measures as a surrogate for
measures that State, local and Tribal air quality agencies might
include in their PM2.5 implementation plans. The list
includes measures that such agencies might be able to implement to
reach attainment in 2009 or as soon thereafter as possible. The
measures address a broad range of man-made point, area, and mobile
sources. In general, the measures represent what we consider to be a
highly ambitious but achievable level of control.\68\ We identified
measures for direct PM2.5 and also for the following
PM2.5 precursors: SO2, NOX, and
VOC.\69\ We did not attempt to address ammonia emissions, in part due
to relatively low emissions of ammonia in urban areas and the
likelihood of fewer controllable sources within the urban areas
targeted for the analysis.
---------------------------------------------------------------------------
\68\ Our assumptions regarding the measures for this analysis
are not intended as a statement regarding the measures that
represent RACT or RACM for PM2.5 nonattainment areas.
\69\ Some VOCs are precursors to the secondary organic aerosol
component of PM2.5.
---------------------------------------------------------------------------
The percentage reductions were developed in two ways. First, we
developed percentage reduction estimates for specific technologies when
available. The available estimates were based on both the percentage
control that might be achieved for sources applying that technology,
and the percentage of the inventory the measures might be applicable
to. For example, if a given technology would reduce a source's
emissions by 90 percent where it was installed, but would be reasonable
to install for only 30 percent of sources in the category, that
technology would be assigned a percentage reduction of 90 times 30, or
27 percent.
Second, there were some groups of control measures where data and
resources were not available to develop technology-specific estimates
in this manner. For these, we felt it preferable to make broad
judgments on the level of control that might be achieved rather than to
leave these control measures out of the analysis entirely. For example,
the analysis reflects a reduction of 3 percent from on-road mobile
source emissions relative to a 2010 and 2015 baseline. We judged this 3
percent estimate to represent a reasonable upper bound on the degree to
which transportation control measures and other measures for reducing
mobile source emissions could reduce the overall inventory of mobile
source emissions in a given area.
Additionally, we believe that it may be possible for point source
owners to improve the performance of emissions control devices such as
baghouses and electrostatic precipitators, and in some cases to upgrade
to a more effective control device. In our current emissions
inventories, we have incomplete data on control equipment currently in
use. As a result, data are not available to calculate for each source
the degree to which the control effectiveness could be improved.
Nonetheless, we believed it important to include reasonable assumptions
concerning controls for this category for direct PM2.5. For
this analysis, we assumed across the board that all point sources of PM
could reduce emissions by 25 percent.
[[Page 4597]]
Table IV-5 shows the control measures selected for the analysis,
the pollutants reduced and the percentage reduction estimates.
2. Two Scenarios Analyzed for the Geographic Area Covered by Control
Measures
We developed two scenarios for identifying the geographic area to
which the control measures were applied. These two scenarios were
intended to address two separate issues related to the effects of
urban-based control measures.
The first scenario was intended to illustrate the effect of the
selected local control measures within the geographic area to which
controls were applied. For this, we applied the control measures and
associated emissions reductions to the inventories for three cities--
Birmingham, Chicago, and Philadelphia. We selected these three urban
areas because each area was predicted to exceed the PM2.5
standard in 2010, albeit to varying degrees. Additionally, the three
urban areas were selected because they are widely separated.
Accordingly, we were able to conduct a single air quality analysis with
less concerns for overlapping impacts due to transport than if less
separated cities were selected.
The control measures were applied to the projected 2010 baseline
emission inventories for all counties within those Primary Metropolitan
Statistical Areas (PMSAs).\70\ Thus, for Chicago, measures were applied
to the 10 counties in Illinois, but were not applied in northwest
Indiana or Wisconsin. For Philadelphia, measures were applied to the
New Jersey and Pennsylvania counties within the Philadelphia urban
area. For Birmingham, measures were applied to four Alabama counties.
---------------------------------------------------------------------------
\70\ For the three-city study, we chose the PMSA counties rather
than the larger list of counties in the consolidated metropolitan
statistical area (CMSA). Both the PMSA and the CMSA classifications
for metrololitan areas are created by the Office of Management and
Budget (OMB). For this study, we used the classifications of
counties in place as of spring 2003, rather than the revised
classifications released by OMB on June 6, 2003.
---------------------------------------------------------------------------
The second scenario was intended to address the cumulative impact
of local control measures applied within nonattainment areas.
Recognizing that PM2.5 nonattainment areas may be near
enough to each other to have transport effects between them, we applied
the control measures identified in Table IV-5, with some modifications
discussed below, to all 290 counties of the metropolitan areas we
projected to contain any nonattainment county in 2010 in the baseline
scenario. Specifically, the control measures were applied to all
counties in Consolidated Metropolitan Statistical Areas (CMSAs) for
which any county in the CMSA contained a nonattainment monitor.
3. Results of the Two Scenarios
Table IV-6 shows the results of applying the control measures in
each of the three urban areas addressed in the first scenario. The
emissions reductions were estimated to achieve ambient PM2.5
reductions of about 0.5 [mu]g/m\3\ to about 0.9 [mu]g/m\3\, less than
needed to bring any of the cities into attainment in 2010.
The SO2 reductions in Birmingham were large--80 percent-
-because of the assumption that scrubbers would be installed for two
large-emitting power plants within the Birmingham-area counties.
Reductions of other pollutants in Birmingham, and of all pollutants in
the two other cities, were 33 percent or lower. We note that despite
the large reduction assumed for SO2 emissions in the
Birmingham area, ambient sulfate in Birmingham declined only 7 percent,
indicating that the large majority of sulfate in Birmingham is
attributable to SO2 sources outside the metropolitan area.
Table IV-5.--Control Measures, Pollutants, and Percentage Reductions for the Local Measures Analysis
--------------------------------------------------------------------------------------------------------------------------------------------------------
SO2 NOX PM2.5 Tol+Xyl (VOC)
Source Description Control Measure ---------------------------------------------------------------------------------
Eff Eff App Red Eff App Red Eff App % Red
--------------------------------------------------------------------------------------------------------------------------------------------------------
Utility boilers.......................... FGD scrubber for some or (\1\) ...... ...... ....... ...... ...... ....... ...... ...... ......
all unscrubbed units.
Coal-fired industrial boilers Coal switching............. 50 ...... ...... ....... ...... ...... ....... ...... ...... ......
250 mmBtu/hr.
Petroleum fluid catalytic cracking units. Wet gas scrubber........... 50 ...... ...... ....... ...... ...... ....... ...... ...... ......
Refinery process heaters--oil-fired...... Switch to natural gas...... 50 ...... ...... ....... ...... ...... ....... ...... ...... ......
Sulfuric acid plants..................... Meet NSPS level............ 42-96 ...... ...... ....... ...... ...... ....... ...... ...... ......
Coal-fired industrial boilers............ SNCR....................... ...... 50 20 10 ...... ...... ....... ...... ...... ......
Gas-fired industrial boilers (large & SNCR....................... ...... 45 20 9 ...... ...... ....... ...... ...... ......
medium).
Gas-fired industrial boilers (small)..... Low NOX burner............. ...... 50 20 10 ...... ...... ....... ...... ...... ......
Gas-fired IC Engines (reciprocating)..... NSCR....................... ...... 94 10 9.4 ...... ...... ....... ...... ...... ......
Gas-fired turbine & cogeneration......... SCR........................ ...... 90 10 9 ...... ...... ....... ...... ...... ......
Asphalt Concrete, Lime Manufacture....... Low NoX burner............. ...... 27 50 14 ...... ...... ....... ...... ...... ......
Cement Manufacturing..................... Tire derived fuel & mid- ...... 34 50 18 ...... ...... ....... ...... ...... ......
kiln firing.
Petroleum Refinery Gas-fired Process Ultra-low NoX burner & SNCR ...... 93 50 46.5 ...... ...... ....... ...... ...... ......
Heaters.
All direct PM2.5 points sources.......... Improve existing controls ...... ...... ...... ....... ...... ...... 25 ...... ...... ......
(baghouses, ESPs).
Wood fireplaces \2\...................... Natural gas inserts........ ...... ...... ...... ....... 80 30 24 ...... ...... ......
Replace with certified ...... ...... ...... ....... 71 30 21.4 ...... ...... ......
noncatalytic woodstove.
[[Page 4598]]
HDDV including buses..................... Engine Modifications, ...... 40 5 2 ...... ...... ....... ...... ...... ......
Diesel oxidation catalyst.
Particulate filter......... ...... ...... ...... ....... 90 30 27 ...... ...... ......
Idling reduction........... ...... ...... ...... 1.7 ...... ...... 1.7 ...... ...... 1.7
Off-highway diesel construction and Engine modifcations, diesel ...... 40 73 29 ...... ...... ....... ...... ...... ......
mining equipment. oxidation catalyst.
particulate filter......... ...... ...... ...... ....... 25 73 18 ...... ...... ......
Diesel Marine Vessels.................... SCR........................ ...... 75 5 4 ...... ...... ....... ...... ...... ......
Particulate filter......... ...... ...... ...... ....... 90 30 27 ...... ...... ......
Diesel locomotives....................... SCR........................ ...... 72 5 4 ...... ...... ....... ...... ...... ......
Electrification of yard.... 2.5 2.5 6 0.2 2.5 6 0.2 2.5 6 0.2
Unpaved roads............................ Gravel covering............ ...... ...... ...... ....... 60 30 18 ...... ...... ......
Construction road........................ Watering................... ...... ...... ...... ....... ...... 50 30 15
Open burning............................. Ban........................ ...... 100 75 75 100 75 75 100 75 75
Agricultural tilling..................... Soil conservation measures, ...... ...... ...... ....... 20 30 6 ...... ...... ......
unspecified.
LDGV and LDGT1........................... Combination of unspecified ...... ...... ...... 3 ...... ...... 3 ...... ...... 3
measures to reduce highway
vehicle miles and
emissions.
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ For the three-city study, we assumed controls to an emission rate of 0.15 lb/mmBtu on all currently unscrubbed coal-fired utility boilers within the
three metropolitan areas. For the second scenario, we applied a 50 percent reduction to all unscrubbed utility units within the 290 counties, as a
surrogate for a strategy that applied FGD scrubbers to enough units to achieve a 50 percent reduction overall.
\2\ For the 1996 inventory, woodstoves and fireplaces are combined into one SCC category. We assumed for the purpose of this analysis, that woodstoves
and fireplaces each comprise half of the total wood burned for the category overall. Thus, the total percentage reduction is (24+21.4)/2 = 22.7
percent.
Table IV-6.--Modeled PM2.5 Reductions From Application of Hypothetical Local Controls in 3 Urban Areas
----------------------------------------------------------------------------------------------------------------
2010 base PM2.5
Metro area PM2.5 ([mu]g/ reduction Final PM2.5 Attainment achieved?
m3) ([mu]g/m3) ([mu]g/m3)
----------------------------------------------------------------------------------------------------------------
Birmingham, AL............................ 20.07 -0.84 19.23 No.
Chicago, IL............................... 18.01 -0.94 17.07 No.
Philadelphia, PA.......................... 15.6 -0.52 15.08 No.
----------------------------------------------------------------------------------------------------------------
Table IV-7 shows the results for the second scenario which, again,
applied the same list of controls to 290 counties, resulting in local
and transport reductions. These results show that some of the 2010
nonattainment areas would be projected to attain, but many are not.
Accordingly, we concluded that for a sizable number of PM2.5
nonattainment areas it will be difficult if not impossible to reach
attainment unless transport is reduced to a much greater degree than by
the simultaneous adoption of controls within only the nonattainment
areas.
Table IV-7.--Modeled PM2.5 Reductions From Application of Hypothetical
Local Controls in All Areas Predicted to Exceed the NAAQS in 2010
------------------------------------------------------------------------
With local
Baseline controls
------------------------------------------------------------------------
Part A--Full Modeling Results Considering All Pollutants and Species....
------------------------------------------------------------------------
Number of nonattainment counties... 61.................... 26
Average Reduction in PM2.5 Design Not Applicable........ 1.26
Value ([mu]g/m3).
------------------------------------
Part B--Results Not Counting Reductions in Sulfate Component of PM2.5...
------------------------------------------------------------------------
Number of nonattainment counties... 61.................... 48
Average Reduction in PM2.5 Design Not Applicable........ 0.37
Value ([mu]g/m3).
------------------------------------------------------------------------
We were interested in what part of the PM2.5 improvement
seen in this modeling run was attributable to SO2 reductions
both locally and upwind. Part B of Table IV-7 shows a re-analysis of
the modeling results in which the observed sulfate reductions were not
considered in calculating the PM2.5 effects of the control
package. If, as we
[[Page 4599]]
expect, the observation from the earlier described modeling of
Birmingham and two other cities that local SO2 reductions
have relatively small local effects on sulfate applies more generally,
then the difference between parts A and B of Table IV-7 would generally
represent the effect of upwind reductions in SO2 from power
plants and other sources in other urban areas.
The results of the two scenarios show that much of the difference
between the baseline case and the local control case is due to the
sulfate component.
4. Additional Observations on the Results of the Local Measures
Analyses
The application of control measures for the local measures analyses
(with the exception of sulfur dioxide for Birmingham as noted
previously) results in somewhat modest percentage and overall tons/year
reductions. This is because a substantial part of local emissions is
attributable to mobile sources, small business, and household
activities for which practical, large-reduction, and quick-acting
emissions reductions measures could not be identified at this time. A
list of the control measures and their reduction potential is contained
in the AQMTSD.
Preliminary analysis indicates that the reductions in
SO2 and NOX required by today's proposed rule, if
achieved through controls on EGUs, will have a lower cost per ton than
most of the measures applied in the local measures study.
The EPA recognizes that the above analysis of the possible results
of local control efforts is uncertain. It is not feasible at this time
to identify with certainty the levels of emissions reductions from
sources of regional transport and reductions from local measures that
will lead to attainment of the PM standards. Much technical work
remains as States develop their SIPs, including improvements in local
emissions inventories, local area and subregional air quality analyses,
and impact analysis of the effects and costs of local controls. At the
same time, EPA believes that all of the available analyses of the
effects of local measures support the reductions in transported
pollutants that are addressed by today's proposal. Taken as a whole,
the studies described above strongly support the need for the
substantial reductions in transported pollutants that EPA is proposing.
At the same time, EPA believes that nothing in the local measures
analysis should be interpreted as discouraging the development of
urban-based control measures. Clearly, for many areas, attaining the
PM2.5 standard will require measures to address both local
and regional transport. We encourage the development of early reduction
measures, and specifically we note that the CAA requires States to
analyze the control measures necessary to attain the standard as soon
as possible.
We also note that the baseline emissions inventory used for this
analysis has some known gaps. For example, direct PM2.5 and
VOXC commercial cooking (e.g., charbroiling) are not included because
no robust estimates were available for the 1996 base year used for this
analysis. Also, excess PM2.5 due to deterioration of engines
in service, and emissions from open burning of refuse, may not be well
represented. The effect of these omissions on our estimates of the
number of areas reaching attainment is uncertain, but we do not believe
the omissions affect our preliminary conclusions that transport
controls are less expensive on a per ton basis, and are beneficial for
attainment.
V. Air Quality Aspects of Significant Contribution for 8-Hour Ozone and
Annual Average PM2.5 Before Considering Cost
A. Introduction
In this section, we present the analyses of ambient data and
modeling which support the findings in today's proposal on the air
quality aspects of significant contribution (before considering cost)
for 8-hour ozone and annual average PM2.5. The analyses for
ozone are presented first, followed by the analyses for
PM2.5. For both pollutants, we summarize information from
non-EPA studies then present the procedures and findings from EPA's air
quality modeling analyses of interstate transport for ozone and
PM2.5.
B. Significant Contribution to 8-Hour Ozone Before Considering Cost
1. Findings From Non-EPA Analyses That Support the Need for Reductions
in Interstate Ozone Transport
As discussed in section II, it is a long-held scientific view that
ground-level ozone is a regional, and not merely a local, air quality
problem. Ozone and its precursors are often transported long distances
across State boundaries exacerbating the downwind ozone problem. This
transport of ozone can make it difficult--or impossible--for some
States to meet their attainment deadlines solely by regulating sources
within their own boundaries.
The EPA participated with States in the Eastern U.S. as well as
industry representatives and environmental groups in the Ozone
Transport Assessment Group (OTAG), which documented that long-distance
transport of NOX (a primary ozone precursor) across much of
the OTAG study area contributed to high levels of ozone. For background
on OTAG and the results from the study, see the following Web site:
http://www.epa.gov/ttn/naaqs/ozone/rto/otag/index.html.
The air quality and modeling analyses by OTAG yielded the following
major findings and technical conclusions relevant to today's proposed
rulemaking:
? Air quality data indicate that ozone is
pervasive, that ozone is transported, and that ozone aloft is carried
over and transported from 1 day to the next.
? Regional NOX reductions are effective
in producing ozone benefits; the more NOX reduced, the
greater the benefit.
? Ozone benefits are greatest where emissions
reductions are made; benefits decrease with distance.
? Elevated and low-level NOX reductions
are both effective.
? Volatile organic compounds (VOC) controls are
effective in reducing ozone locally and are most advantageous to urban
nonattainment areas. The OTAG report also recognized that VOC emissions
reductions do not play much of a role in long-range transport, and
concluded that VOC reductions are effective in reducing ozone locally
and are most advantageous to urban nonattainment areas.
These OTAG findings provide technical evidence that transport
within portions of the OTAG region results in large contributions from
upwind States to ozone in downwind areas, and that a regional approach
to reduce NOX emissions is an effective means of addressing
interstate ozone transport.
2. Air Quality Modeling of Interstate Ozone Contributions
This section documents the procedures used by EPA to quantify the
impact of emissions in specific upwind States on air quality
concentrations in projected downwind nonattainment areas for 8-hour
ozone. These procedures are the first of the two-step approach for
determining significant contribution, as described in section III,
above.
The analytic approach for modeling the contribution of upwind
States to ozone in downwind nonattainment areas is described in
subsection (a), the methodology for analyzing the modeling results is
presented in subsection (b), and the findings as to whether individual
States make a significant contribution (before considering cost) to 8-
hour ozone nonattainment is provided in subsection (c).
[[Page 4600]]
The air quality modeling for the interstate ozone contribution
analysis was performed for those counties predicted to be nonattainment
for 8-hour ozone in the 2010 Base Case, as described above in section
IV.D. The procedures used by EPA to determine the air quality component
of whether emissions in specific upwind States make a significant
contribution (before considering cost) to projected downwind
nonattainment for 8-hour ozone are the same as those used by EPA for
the State-by-State determination in the NOX SIP Call.
a. Analytical Techniques for Modeling Interstate Contributions to 8-
Hour Ozone Nonattainment
The modeling approach used by EPA to quantify the impact of
emissions in specific upwind States on projected downwind nonattainment
areas for 8-hour ozone includes two different techniques, zero-out and
source apportionment. The outputs of the two modeling techniques were
used to calculate ``metrics'' or measures of contribution. The metrics
were evaluated in terms of three key contribution factors to determine
which States make a significant contribution (before considering cost)
to downwind ozone nonattainment. Details of the modeling techniques and
metrics are described in this section.
The zero-out and source apportionment modeling techniques provide
different technical approaches to quantifying the downwind impact of
emissions in upwind States. The zero-out modeling analysis provides an
estimate of downwind impacts by comparing the model predictions from a
base case run to the predictions from a run in which the base case man-
made emissions are removed from a specific State. Zero-out modeling was
performed by removing all man-made emissions of NOX and VOC
in the State.
In contrast to the zero-out approach, the source apportionment
modeling quantifies downwind impacts by tracking the impacts of ozone
formed from emissions in an upwind source area. For this analysis, the
source apportionment technique was implemented to provide the
contributions from all man-made sources of NOX and VOC in
each State. Additional information on the source apportionment
technique can be found in the CAMX User's Guide.\71\ There
is currently no technical evidence showing that one technique is
clearly superior to the other for evaluating contributions to ozone
from various emission sources; therefore, both approaches were given
equal consideration in this analysis.
---------------------------------------------------------------------------
\71\ Environ, 2002: User's Guide to the Comprehensive Air
Quality Model with Extensions (CAMX), Novato, CA.
---------------------------------------------------------------------------
The EPA performed State-by-State zero-out modeling and source
apportionment modeling for 31 States in the East. These States are as
follows: Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia,
Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland,
Massachusetts, Michigan, Minnesota, Mississippi, Missouri, New
Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania,
Rhode Island, South Carolina, Tennessee, Vermont, Virginia, West
Virginia, and Wisconsin. In both types of modeling, emissions from the
District of Columbia were combined with those from Maryland. For the
source apportionment modeling, North Dakota and South Dakota were
aggregated into a single source region. Because large portions of the
six States along the western border of the modeling domain (i.e.,
Kansas, Nebraska, North Dakota, Oklahoma, South Dakota, and Texas) are
outside the domain, EPA has deferred analyzing the contributions to
downwind ozone nonattainment for these States.
The EPA selected several metrics to quantify the projected downwind
contributions from emissions in upwind States. The metrics were
designed to provide information on three fundamental factors for
evaluating whether emissions in an upwind State make large and/or
frequent contributions to downwind nonattainment. These factors are:
? The magnitude of the contribution,
? The frequency of the contribution, and
? The relative amount of the contribution.
The magnitude of contribution factor refers to the actual amount of
ozone contributed by emissions in the upwind State to nonattainment in
the downwind area. The frequency of the contribution refers to how
often contributions above certain thresholds occur. The relative amount
of the contribution is used to compare the total ozone contributed by
the upwind State to the total amount of nonattainment ozone in the
downwind area. The factors are the basis for several metrics that can
be used to assess a particular impact. The metrics used in this
analysis are the same as those used in the NOX SIP Call.
These metrics are described below for the zero-out modeling and for the
source apportionment modeling. Table V-1 lists the metrics for each
factor. Additional details with examples of the procedures for
calculating the metrics are provided in the AQMTSD. We solicit comment
on other metrics including whether it would be appropriate to develop a
metric based on annualized costs for each State per ambient impact on
each downwind nonattainment receptor.
Table V-1.--Ozone Contribution Factors and Metrics
------------------------------------------------------------------------
Factor Zero-out Source apportionment
------------------------------------------------------------------------
Magnitude of contribution... Maximum contribution Maximum
contribution; and
Highest daily
average
contribution (ppb
and percent).
Frequency of contribution... Number and percent Number and percent
of exceedances with of exceedances with
contributions in contributions in
various various
concentration concentration
ranges. ranges.
Relative amount of Total contribution Total average
contribution. relative to the contribution to
total exceedance exceedance hours in
ozone in the the downwind area.
downwind area and.
Population-weighted ....................
total contribution
relative to the
total population-
weighted exceedance
ozone in the
downwind area.
------------------------------------------------------------------------
[[Page 4601]]
The values for each metric were calculated using only those periods
during which model-predicted 8-hour average ozone concentration were of
85 ppb or more in at least one of the model grid cells that are
associated with the receptor county. That is, we only analyzed
interstate ozone contributions for the nonattainment receptor counties
when the model predicted an exceedance in the 2010 Base Case. The
procedures for assigning model grid cells to each nonattainment county
are described in the AQMTSD.
As in the NOX SIP Call, the ozone contribution metrics
are calculated and evaluated for each upwind State to each downwind
nonattainment receptor. These source-receptor pairs are referred to as
``linkages.''
b. Zero-Out Metrics
A central component of several of the metrics is the number of
predicted exceedances in the 2010 Base Case for each nonattainment
receptor. The number of exceedances in a particular nonattainment
receptor is determined by the total number of daily predicted peak 8-
hour concentrations of 85 ppb or more across all the episode days for
the model grid cells assigned to the receptor.
The Maximum Contribution Metric for a particular upwind State to an
individual downwind nonattainment receptor linkage is determined by
first calculating the concentration differences between the 2010 Base
Case and the zero-out simulation for that upwind State. This
calculation is performed for all 2010 Base Case exceedances predicted
for the downwind receptor. The largest difference (i.e., contribution)
for the linkage across all of the exceedances at the downwind receptor
is the maximum contribution.
The Frequency of Contribution Metric for a particular linkage is
determined by first sorting the contributions by concentration range
(e.g., 2 to 5 ppb, 5 to 10 ppb, etc.). The number of impacts in each
range is used to assess the frequency of contribution.
Determining the Total Ozone Contribution Relative to the Base Case
Exceedance Metric for a particular linkage involves first calculating
the total ozone of 85 ppb or more in the 2010 Base Case and in the
upwind State's zero-out run. The calculation is performed by summing
the amount of ozone above the NAAQS for each predicted exceedance at
the downwind receptor area. Finally, the amount of ozone above the
NAAQS from the zero-out run is divided by the amount of ozone above the
NAAQS from the 2010 Base simulation to form this metric.
The Population-Weighted Relative Contribution Metric is similar to
the total ozone contribution metric described in the preceding
paragraph, except that during the calculation the amount of ozone above
the NAAQS in both the base case and the zero-out simulation is weighted
by (i.e., multiplied by) the 2000 population in the receptor county.
c. Source Apportionment Metrics
Despite the fundamental differences between the zero-out and source
apportionment techniques, the definitions of the source apportionment
contribution metrics are generally similar to the zero-out metrics. One
exception is that all periods during the day with predicted 8-hour
averages of 85 ppb or more are included in the calculation of source
apportionment metrics, as opposed to just the daily peak 8-hour
predicted values which are used for the zero-out metrics. Additional
information on differences between the zero-out and source
apportionment metrics calculations can be found in the AQMTSD.
The outputs from the source apportionment modeling provide
estimates of the contribution to each predicted exceedance for each
linkage. For a given upwind State to downwind nonattainment receptor
linkage, the Maximum Contribution Metric is the highest contribution
from among the contributions to all exceedances at the downwind
receptor. The Frequency of Contribution Metric for the source
apportionment technique is determined in a similar way to which this
metric is calculated for the zero-out modeling.
The Highest Daily Average Contribution Metric is determined for
each day with predicted exceedances at the downwind receptor. The
metric is calculated by first summing the contributions for that
linkage over all exceedances on a particular day, then dividing by the
number of exceedances on that day to produce a daily average
contribution to nonattainment. The daily average contribution values
across all days with exceedances are examined to identify the highest
value which is then selected for use in the determination of
significance (before considering cost). We also express this metric as
a percent by dividing the highest daily average contribution by the
corresponding ozone exceedance concentration on the same day.
The Percent of Total Nonattainment Metric is determined for each of
the three episodes individually as well as for all 30 days (i.e., all
three episodes) combined. This metric is calculated by first summing
the contributions to all exceedances for a particular linkage to
produce an estimate of the total contribution. Second, the total
contribution is divided by the total ozone for periods above the NAAQS.
d. Evaluation of Upwind State Contributions to Downwind 8-Hour Ozone
Nonattainment
The EPA compiled the 8-hour metrics by downwind area in order to
evaluate the contributions to downwind nonattainment. The contribution
data were reviewed to determine how large of a contribution a
particular upwind State makes to nonattainment in each downwind area in
terms of both the magnitude of the contribution, and the relative
amount of the total contribution. The data were also examined to
determine how frequently the contributions occur.
The first step in evaluating this information was to screen out
linkages for which the contributions were very low. This initial
screening was based on: (1) A maximum contribution of less than 2 ppb
from either of the two modeling techniques and/or, (2) a percent of
total nonattainment of less than 1 percent. Any upwind State that did
not pass both of these screening criteria for a particular downwind
area was considered not to make a significant contribution to that
downwind area.
The finding of meeting the air quality component of significance
(i.e., before considering cost) for linkages that passed the initial
screening criteria was based on EPA's technical assessment of the
values for the three factors. Each upwind State that had large and/or
frequent contributions to the downwind area, based on these factors, is
considered as contributing significantly (before considering cost) to
nonattainment in the downwind area. For each upwind State, the modeling
disclosed a linkage in which all three factors--high magnitude of
contribution, high frequency of contribution, high relative percentage
of nonattainment--are met. In addition, each upwind State contributed
to nonattainment problems in at least two downwind States (except for
Louisiana and Arkansas which contributed to nonattainment in only
Texas).\72\ There have to be at least two different factors that
indicate large and/or frequent contributions in order for the linkage
to be significant (before considering cost).
[[Page 4602]]
In this regard, the finding of a significant contribution (before
considering cost) for an individual linkage was not based on any single
factor. For most of the individual linkages, the factors yield a
consistent result (i.e., either large and frequent contributions and
high relative contributions or small and infrequent contributions and
low relative contributions). In some linkages, however, not all of the
factors are consistent. The EPA believes that each of the factors
provides an independent, legitimate measure of contribution.
---------------------------------------------------------------------------
\72\ In some cases, we determined the contribution of some
States to downwind problems as significant (before considering cost)
because it passed two, but not all three, factors.
---------------------------------------------------------------------------
The EPA applied the evaluation methodology described above to each
upwind-downwind linkage to determine which States contribute
significantly (before considering cost) to nonattainment in the 47
specific downwind counties. The analysis of the metrics for each
linkage is presented in the AQMTSD. Of the 31 States included in the
assessment of interstate ozone contributions, 25 States were found to
have emissions which make a significant contribution (before
considering cost) to downwind 8-hour ozone nonattainment. These States
are listed in Tables V-2 and V-3. The linkages which EPA found to be
significant (before considering cost) are listed in Tables V-2 (by
upwind State) and V-3 (by downwind nonattainment county) for the 8-hour
NAAQS. Of the 31 States included in the assessment of interstate ozone
transport, the following six States are found to not make a significant
contribution to downwind nonattainment: Florida, Maine, Minnesota, New
Hampshire, Rhode Island, and Vermont.
Table V-2.--Projected Downwind Counties to Which Sources in Upwind
States Contribute Significantly (Before Considering Cost) for the 8-hour
NAAQS.
------------------------------------------------------------------------
Upwind state Downwind 2010 nonattainment counties
------------------------------------------------------------------------
AL.................... Crittenden AR, Fulton GA, Harris TX.
AR.................... Harris TX, Tarrant TX.
CT.................... Kent RI, Suffolk NY.
DE.................... Bucks PA, Camden NJ, Cumberland NJ, Delaware PA,
Gloucester NJ, Hunterdon NJ, Mercer NJ,
Middlesex NJ, Monmouth NJ, Montgomery PA,
Morris NJ, Ocean NJ, Philadelphia PA, Richmond
NY, Suffolk NY.
GA.................... Crittenden AR, Mecklenburg NC.
IA.................... Kenosha WI, Lake IN, Racine WI.
IL.................... Allegheny PA, Crittenden AR, Erie NY, Geauga OH,
Kenosha WI, Lake IN, Racine WI, Sheboygan WI,
Summit OH.
IN.................... Allegheny PA, Crittenden AR, Geauga OH, Kenosha
WI, Racine WI, Sheboygan WI, Summit OH.
KY.................... Allegheny PA, Crittenden AR, Fulton GA, Geauga
OH.
LA.................... Harris TX, Tarrant TX.
MA.................... Kent RI, Middlesex CT.
MD.................... Arlington VA, Bergen NJ, Bucks PA, Camden NJ,
Cumberland NJ, Delaware PA, Erie NY, Fairfax
VA, Fairfield CT, Gloucester NJ, Hudson NJ,
Hunterdon NJ, Mecklenburg NC, Mercer NJ,
Middlesex CT, Middlesex NJ, Monmouth NJ,
Montgomery PA, Morris NJ, New Haven CT,
Newcastle DE, Ocean NJ, Philadelphia PA, Putnam
NY, Richmond NY, Suffolk NY, Summit OH,
Washington DC, Westchester NY.
MI.................... Allegheny PA, Anne Arundel MD, Baltimore MD,
Bergen NJ, Bucks PA, Camden NJ, Cecil MD,
Cumberland NJ, Delaware PA, Erie NY, Geauga OH,
Gloucester NJ, Harford MD, Hudson NJ, Hunterdon
NJ, Kenosha WI, Kent MD, Lake IN, Mercer NJ,
Middlesex NJ, Monmouth NJ, Montgomery PA,
Morris NJ, Newcastle DE, Ocean NJ, Philadelphia
PA, Prince Georges MD, Racine WI, Richmond NY,
Suffolk NY, Summit OH.
MO.................... Crittenden AR, Geauga OH, Kenosha WI, Lake IN,
Racine WI, Sheboygan WI.
MS.................... Crittenden AR, Harris TX.
NC.................... Anne Arundel MD, Baltimore MD, Camden NJ, Cecil
MD, Cumberland NJ, Fulton GA, Gloucester NJ,
Harford MD, Kent MD, Newcastle DE, Ocean NJ,
Philadelphia PA, Suffolk NY.
NJ.................... Bucks PA, Delaware PA, Erie NY, Fairfax VA,
Fairfield CT, Kent RI, Middlesex CT, Montgomery
PA, New Haven CT, Philadelphia PA, Putnam NY,
Richmond NY, Suffolk NY, Westchester NY.
NY.................... Fairfield CT, Hudson NJ, Kent RI, Mercer NJ,
Middlesex CT, Middlesex NJ, Monmouth NJ, Morris
NJ, New Haven CT.
OH.................... Allegheny PA, Anne Arundel MD, Arlington VA,
Baltimore MD, Bergen NJ, Bucks PA, Camden NJ,
Cecil MD, Cumberland NJ, Delaware PA, Fairfax
VA, Fairfield CT, Gloucester NJ, Harford MD,
Hudson NJ, Hunterdon NJ, Kenosha WI, Kent MD,
Kent RI, Lake IN, Mercer NJ, Middlesex CT,
Middlesex NJ, Monmouth NJ, Montgomery PA,
Morris NJ, New Haven CT, Newcastle DE, Ocean
NJ, Philadelphia PA, Prince Georges MD, Racine
WI, Richmond NY, Suffolk NY, Washington DC,
Westchester NY.
PA.................... Anne Arundel MD, Arlington VA, Baltimore MD,
Bergen NJ, Camden NJ, Cecil MD, Cumberland NJ,
Erie NY, Fairfax VA, Fairfield CT, Gloucester
NJ, Harford MD, Hudson NJ, Hunterdon NJ,
Kenosha WI, Kent MD, Kent RI, Lake IN,
Mecklenburg NC, Mercer NJ, Middlesex CT,
Middlesex NJ, Monmouth NJ, Morris NJ, New Haven
CT, Newcastle DE, Ocean NJ, Prince Georges MD,
Putnam NY, Racine WI, Richmond NY, Suffolk NY,
Summit OH, Washington DC, Westchester NY.
SC.................... Fulton GA, Mecklenburg NC.
TN.................... Crittenden AR, Fulton GA, Lake IN, Mecklenburg
NC, Tarrant TX.
VA.................... Anne Arundel MD, Baltimore MD, Bergen NJ, Bucks
PA, Camden NJ, Cecil MD, Cumberland NJ,
Delaware PA, Erie NY, Fairfield CT, Gloucester
NJ, Harford MD, Hudson NJ, Hunterdon NJ, Kent
MD, Kent RI, Lake IN, Mecklenburg NC, Mercer
NJ, Middlesex CT, Middlesex NJ, Monmouth NJ,
Montgomery PA, Morris NJ, New Haven CT,
Newcastle DE, Ocean NJ, Philadelphia PA, Prince
Georges MD, Putnam NY, Richmond NY, Suffolk NY,
Summit OH, Washington DC, Westchester NY.
WI.................... Erie NY, Lake IN.
WV.................... Allegheny PA, Anne Arundel MD, Baltimore MD,
Bucks PA, Camden NJ, Cecil MD, Cumberland NJ,
Delaware PA, Fairfax VA, Fairfield CT, Fulton
GA, Gloucester NJ, Harford MD, Hunterdon NJ,
Kent MD, Mercer NJ, Middlesex NJ, Monmouth NJ,
Montgomery PA, Morris NJ, New Haven CT,
Newcastle DE, Ocean NJ, Philadelphia PA, Prince
Georges MD, Suffolk NY, Summit OH, Washington
DC, Westchester NY.
------------------------------------------------------------------------
[[Page 4603]]
Table V-3.--Upwind States That Contain Emissions Sources That Contribute Significantly (Before Considering Cost)
to Projected 8-hour Nonattainment in Downwind States.
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Downwind nonattainment Upwind States
counties
------------------------------
Crittenden AR................ AL GA IL IN KY MO MS TN
Fairfield CT................. MD NJ NY OH PA VA WV
Middlesex CT................. MA MD NJ NY OH PA VA
New Haven CT................. MD NJ NY OH PA VA WV
Washington DC................ MD OH PA VA WV
Newcastle DE................. MD MI NC OH PA VA WV
Fulton GA.................... AL KY NC SC TN WV
Lake IN...................... IA IL MI MO OH PA TN VA WI
Anne Arundel MD.............. MI NC OH PA VA WV
Baltimore MD................. MI NC OH PA VA WV
Cecil MD..................... MI NC OH PA VA
Harford MD................... MI NC OH PA VA WV
Kent MD...................... MI NC OH PA VA WV
Prince Georges MD............ MI OH PA VA WV
Mecklenburg NC............... GA MD SC TN VA
Bergen NJ.................... MD MI OH PA VA
Camden NJ.................... DE MD MI NC OH PA VA WV
Cumberland NJ................ DE MD MI NC OH PA VA WV
Gloucester NJ................ DE MD MI NC OH PA VA WV
Hudson NJ.................... MD MI NY OH PA VA
Hunterdon NJ................. DE MD MI OH PA VA WV
Mercer NJ.................... DE MD MI NY OH PA VA WV
Middlesex NJ................. DE MD MI NY OH PA VA WV
Monmouth NJ.................. DE MD MI NY OH PA VA WV
Morris NJ.................... DE MD MI NY OH PA VA WV
Ocean NJ..................... DE MD MI NC OH PA VA WV
Erie NY...................... IL MD MI NJ PA VA WI
Putnam NY.................... MD NJ PA VA
Richmond NY.................. DE MD MI NJ OH PA VA
Suffolk NY................... CT DE MD MI NC NJ OH PA VA WV
Westchester NY............... MD NJ OH PA VA WV
Geauga OH.................... IL IN KY MI MO
Summit OH.................... IL IN MD MI PA VA WV
Allegheny PA................. IL IN KY MI OH WV
Bucks PA..................... DE MD MI NJ OH VA WV
Delaware PA.................. DE MD MI NJ OH VA WV
Montgomery PA................ DE MD MI NJ OH VA WV
Philadelphia PA.............. DE MD MI NC NJ OH VA WV
Kent RI...................... CT MA NJ NY OH PA VA
Denton TX.................... None of the upwind States examined in this analysis were found to make a
significant contribution (before considering cost) to this nonattainment
receptor.
Harris TX.................... AL AR LA MS
Tarrant TX................... AR LA TN
Arlington VA................. MD OH PA
Fairfax VA................... MD NJ OH PA WV
Kenosha WI................... IA IL IN MI MO OH PA
Racine WI.................... IA IL IN MI MO OH PA
Sheboygan WI................. IL IN MO
----------------------------------------------------------------------------------------------------------------
C. Significant Contribution for Annual Average PM2.5 Before Considering
Cost
1. Analyses of Air Quality Data That Support the Need To Reduce
Interstate Transport of PM2.5
a. Spatial Gradients of Pollutant Concentrations
Daily maps of PM2.5 mass concentrations from EPA's
national monitoring network show large areas of elevated
PM2.5 occurring over monitoring locations in urban areas as
well as rural areas. The fact that many of the rural monitors are not
located near emissions sources, or at least not near large emission
sources, and yet the rural concentrations are elevated like the
neighboring urban concentrations, provides evidence that
PM2.5 is being transported to the rural areas.
When the daily maps of PM2.5 mass concentrations are
viewed in sequence, they show the large areas of elevated
PM2.5 moving from one area to another, suggesting that
PM2.5 is being transported not just from urban areas to
neighboring rural areas, but also from one State to another and from
one part of the country to another. The smoke from wildfires in
southeastern Ontario reaching all of the New England States in July of
2002 is but one well-publicized example of transported
PM2.5.
It may be suggested that it is not PM2.5 that is being
transported; rather, it is meteorological conditions conducive to
PM2.5 formation that are being transported. However, the
fact that the monitors located far from emission sources often report
elevated PM2.5 just after the upwind monitors record high
levels and just before the downwind monitors record high levels
indicates strongly that it is PM2.5 that is being
transported.
Episodes of movement of elevated PM2.5 have been seen in
almost every
[[Page 4604]]
direction in the Eastern United States, including in the west to east
direction along the lower Great Lakes, in the south to north direction
along the East Coast, in the south to north direction across the
Midwestern States, in the north to south direction across the
Midwestern States, and in the north to south direction along the East
Coast. More information on episodes of movement of PM2.5 is
contained in the Air Quality Data Analysis Technical Support Document.
Satellite data from Moderate Resolution Imaging Spectroradiometer
(MODIS) sensors, designed to retrieve aerosol properties over both land
and ocean, are strongly correlated with the ground-based monitors that
measure PM2.5 concentrations below. The MODIS data provide a
visual corroboration for the above described regional transport. Three
examples follow:\73\
---------------------------------------------------------------------------
\73\ Battelle, Satellite Data for Air Quality Analysis. July
2003.
---------------------------------------------------------------------------
Midwest-Northeast Haze Event: June 20-28, 2002
During late June 2002, the Central and Eastern United States
experienced a haze event from a combination of man-made air pollutants
combined with some smoke. The MODIS images document the buildup of
aerosols in the Midwest from June 20-22, then the transport of aerosols
across the Northeast from June 23-26. Images from June 27 and 28 show
the beginning of smoke transported from fires in Canada into the
Northern Midwest. This series from June 20-26 qualitatively documents a
haze transport event from the Midwest into the Northeast. The imagery
also documents the geographical scale of the smoke transport on June
27-28.
Northeast Fire Event: July 4-9, 2002
In early July 2002, the MODIS imagery captured two events: an
episodic widespread haze event in the East, Southeast, and Midwest; and
an event directly related to major forest fires in Canada. On July 4
and 5, MODIS images show urban haze in the East, Southeast, and
Midwest. This haze event persists in the Southeast and southern Midwest
throughout the remaining days, July 7-9. At the same time, MODIS images
for July 6 through July 8 document how the Northeast and mid-Atlantic
become dominated by smoke transported into the region from Canada
fires. On July 9, MODIS images show the smoke and the southern haze has
moved towards the east while dissipating over the Atlantic. This series
from July 6-8 qualitatively documents the smoke transport event from
major fires in Canada. The imagery also documents the widespread
geographical scale of haze, particularly from July 4-8, as well as the
movement of the haze (along with smoke) across large distances.
Midwest-Southeast Haze Event: September 8-14, 2002
This imagery during September 2002 reveals the formation of a
large-scale haze event over the lower Ohio River Valley that eventually
transports over large portions of Southcentral and Southeastern United
States. The MODIS images document the buildup of aerosols in the
Midwest over September 8 and 9. Influenced by a strong low-pressure
system off the mid-Atlantic seaboard on September 10, the haze plume
divides, with the majority traveling south and west toward Texas and a
small remnant moving northeast. On September 11 and 12, the Midwest
plume, combined with additional pollutants from Texas and the
Southeast, is transported to the East. September 13 has another low
pressure system, forcing collection of pollutants in Texas and
Louisiana, which are obscured by cloud cover on September 14. This
series reveals the geographic extent and the complexities that are
possible with the transfer of pollutants. More information on the use
of satellite data to observe the movement of PM2.5 is
contained in the Air Quality Data Analysis Technical Support Document.
b. Urban vs. Rural Concentrations
Differences between concentrations at urban areas and nearby rural
locations help indicate the general magnitudes of regional and local
contributions to PM2.5 and PM2.5 species.\74\ The
differences indicate that in the Eastern United States, the regional
contributions to the annual average concentrations at urban locations
is 50 to 80 percent which, in terms of mass, is generally between 10
and 13 [mu]g/m3. For many rural areas, average
PM2.5 concentrations exceed 10 [mu]g/m3 and are
often not much below the annual PM2.5 NAAQS of 15 [mu]g/
m3. These results are consistent with those found in the
NARSTO Fine Particle Assessment.\75\ More information on comparisons of
urban and rural concentrations of PM2.5 is contained in the
Air Quality Data Analysis Technical Support Document.
---------------------------------------------------------------------------
\74\ Rao, Tesh, Chemical Speciation of PM2.5 in Urban
and Rural Areas, Published in the Proceedings of the Air and Waste
Management Symposium on Air Quality Measurement Methods and
Technology--2002, November 2002.
\75\ North American Research Strategy for Tropospheric Ozone and
Particulate Matter, Particulate Matter Science for Policy Makers--A
NARSTO Assessment. February 2003.
---------------------------------------------------------------------------
For the most part, sulfate is regionwide, as indicated by the rural
sulfate concentrations being 80 to 90 percent of the urban sulfate
concentrations. Total carbon is less of a regional phenomenon than
sulfate, as evidenced by the rural total carbon concentrations being
about 50 percent of the urban total carbon concentrations. Last,
nitrate has a regional component; however, the local component can be
as large as 2.0 [mu]g/m3.
c. Inter-Site Correlation of PM2.5 Mass and Component
Species
Correlation analysis provides further evidence for the transport of
PM2.5 and its constituents. Analysis of the time series
history of PM2.5 among different monitoring locations
indicates a strong tendency for PM2.5 concentrations to rise
and fall in unison. Correlations of PM2.5 daily
concentrations among stations separated by over 300 to 500 kilometers
frequently have correlation coefficients that exceed 0.7. The
correlation coefficient is a measure of the degree of linear
association between two variables, and the square of the correlation
coefficient, denoted R\2\, measures how much of the total variability
in the data is explained by a simple linear model. For example, in the
preceding case, approximately 50 percent, (0.7)\2\, of the variability
in PM2.5 concentrations at one site frequently can be
explained by PM2.5 concentrations at a site over 300
kilometers away. These high correlations occur both in warm and cool
seasons suggesting that large scale transport phenomenon in conjunction
with large and small scale meteorological conditions play a major role
in particle concentration changes over large geographic areas.
Correlation of major PM2.5 constituents among monitoring
stations show differing patterns as distance separating monitors
increases. For sulfate, the correlation among daily average
concentrations remains strong (above 0.7) at distances exceeding 300
kilometers. Correlation of nitrates among monitoring stations tends to
be lower than for sulfate and also varies somewhat among seasons. Warm
season correlations, when nitrates are lowest, tend to be relatively
low (about 0.4) for stations separated by 300 kilometers or more. Cool
season correlations for nitrates are larger than warm season
correlations and range from about 0.5 to above 0.6 for stations near
urban areas and separated by 300 kilometers or more. Correlation
coefficients for organic carbon typically range from about 0.4 to above
0.6 for separation
[[Page 4605]]
distances above 300 kilometers but appear to decrease more rapidly
during the summer season compared with the other three seasons. For
elemental carbon and crustal material, correlation with distance drops
very rapidly to values below 0.2 or 0.3 for separation distances above
50 to 100 kilometers.
The formation rate and relative stability for the major
PM2.5 species help explain the observed correlation
patterns. For sulfate, conversion of SO2 to sulfate occurs
slowly over relatively large distances downwind of major emission
sources of SO2. Slow conversion of SO2 to sulfate
over large travel distances promotes greater spatial homogeneity and
thus large correlation among distant monitoring stations. For nitrates,
evidence suggests that higher inter-station correlations in winter are
associated with increased stability of nitrate (longer travel
distances) when conditions are cool compared with warm seasons when
nitrates are much less stable. The formation of secondary organic
carbon from natural sources helps maintain a relatively homogeneous
regional component (higher correlation) that is offset somewhat by
higher organic carbon in urban areas associated with local carbon
sources. For elemental carbon and crustal material, almost all of the
contributions come from nearby sources and hence the relatively low
correlation among stations that are separated by even small distances.
More information on inter-site correlation of PM2.5 and
species is contained in the Air Quality Data Analysis Technical Support
Document.
d. Ambient Source Apportionment Studies
Generally, sources emitting particulate matter, or precursors that
later form particulate matter, emit multiple species of particulate
matter simultaneously. Often, the proportions of the species are
sufficiently different from one source type to another that it is
possible to determine how much each source type contributes to the
PM2.5 mass observed at a monitoring location. This technique
is called source apportionment or receptor modeling.
A review of nearly 20 recently published articles using source
apportionment modeling at over 35 locations in the Eastern United
States was conducted to understand commonalities and differences in
source apportionment results.\76\ A large sulfate dominated source was
identified as the largest or one of the largest source types in nearly
every study. Some studies labeled this source coal combustion, while
others labeled it secondary sulfate and did not attribute it to an
emission source. For many of the locations, over 50 percent of the
PM2.5 mass is apportioned to this source type during some
seasons. Summer is typically the season with the largest contributions.
Most of the studies, by using back trajectory analysis, indicated that
the probable location of the sulfate/coal combustion sources is in the
Midwest. Also, studies with multiple years of data tended to identify a
winter and summer signature of the sulfate source type, with more mass
being apportioned to the summer version. Reasons cited in these studies
for the two signatures included different types of coal being burned
during the summer versus the winter or different atmospheric chemistry
leading to different proportions of species at the monitoring location
by season.
---------------------------------------------------------------------------
\76\ Battelle, Compilation of Existing Studies of Source
Apportionment for PM2.5. August 2003.
---------------------------------------------------------------------------
A nitrate-dominated source type was identified at approximately
half the sites and contributes to between 10 and 30 percent of the
annual PM2.5 mass. The source has seasonal variation with
maxima in the cold seasons. The back trajectories sometimes point to
areas with high ammonia emissions. However, the interpretation of this
nitrate-dominated source type is not consistent from study to study.
Some authors associate this source type with NOX point
sources and motor vehicles from major cities that are sufficiently far
from the receptor for the NOX to oxidize and react with
ammonia. Other authors associate this source type with mobile emissions
from nearby highways. One author does not interpret the source type
since he believes it is artificially created by the meteorological
conditions and atmospheric chemistry required for formation of ammonium
nitrate.
Another major source type identified at nearly all the sites is one
dominated by secondary organic matter. Some studies labeled this source
motor vehicles, while other studies labeled it secondary organic matter
and did not attribute it to an emission source. For several sites, this
source type contributes more than 20 percent of the annual
PM2.5 mass. Only a few studies separated the source type
into the combustion of gasoline and diesel fuel, and this separation
was generally accomplished by using the four organic carbon fractions
and the three elemental carbon fractions available from the IMPROVE
network. In Washington, DC, over 85 percent of the mobile source type
contribution is associated with gasoline vehicles and less than 15
percent with diesel. This contrasts with Atlanta, where only 33 to 55
percent (depending on the study) of the mobile source type contribution
is associated with gasoline vehicles.
Wood smoke and forest fires were identified as a significant source
type at several sites. The magnitude of their contributions varies from
site to site. For a rural site in Vermont, the magnitude of the
contribution of this source type is approximately 1 [mu]g/m\3\, which
is approximately 15 percent of the total PM2.5 mass. For
Atlanta, the magnitude of contribution ranged from 0.5 to 2.0 [mu]g/
m\3\ depending on the study, which is approximately 3 to 11 percent of
the total PM2.5 mass.
A crustal source category is identified for all sites and usually
comprises 1 to 3 percent of the total PM2.5 mass.
In addition to reviewing the source apportionment results in the
published literature, EPA conducted receptor modeling using the data
from the EPA speciation network to identify and quantify major
contributors to PM2.5 in eight urban areas: Houston,
Birmingham, Charlotte, St. Louis, Indianapolis, Washington, DC,
Milwaukee, and New York City.\77\ The ``8 city report'' contains 2
general types of findings that provide evidence to support that
interstate transport of fine particles occurs. First, the source
apportionment analyses at the eight cities provides evidence of the
types of sources that are most likely the major contributors to fine
particle mass in each city. Second, linking wind trajectories with the
source apportionment analyses provides evidence of the most likely
locations of the source types that are the major contributors to fine
particle mass in each city.
---------------------------------------------------------------------------
\77\ Battelle, Eight Site Source Apportionment of PM2.5
Specification Trends Data. September 2003.
---------------------------------------------------------------------------
The source apportionment results identify the largest source type
at each site to be coal combustion. The source type contains a large
amount of sulfate and is a major source of selenium, a trace particle
normally associated with the combustion of coal. The mass apportioned
to this source type ranged from a low of 1 to 3 [mu]g/m\3\ in the
lowest season to more than 10 [mu]g/m\3\ in the high seasons at 5 of
the sites. The source type accounted for 30 to 50 percent of the
overall mass, consistent with the proportions found in the published
literature. The consistency in the relative and absolute magnitude in
the contributions from the coal combustion source type in these eight
cities, combined with the fact that the distance of major coal
combustion sources from each city varies widely, indicates that it
[[Page 4606]]
is most likely a regional source rather than a local source.
The second and third largest source types are an ammonium nitrate
source type and mobile sources. As the name implies, the ammonium
nitrate source type contains a large amount of both ammonium and
nitrate. Association of actual emission sources with this source type
is less definitive, as was the case in the published literature. It is
most likely that the source type originates from both coal combustion
and mobile emissions. The mass apportioned to this source type ranged
from 1 to 5 [mu]g/m\3\, which is 8 to 30 percent of the overall mass.
This source type was identified in each city except Houston.
The absolute and relative magnitude of contribution from this
source type showed much more variation than the coal combustion source
type. It was highest in the Midwest in the winter, contributing between
7 and 10 [mu]g/m\3\, where the temperatures are cooler and there are
more ammonia emissions. The summertime contributions of this source
type are generally low, near 1 [mu]g/m\3\.
The mobile source type contains a large amount of organic carbon,
some elemental carbon, very little sulfate and some metals
(particularly barium from brake pads). The mass apportioned to this
source type ranged from a low of 2.5 [mu]g/m\3\ at Milwaukee to a high
of 6.5 [mu]g/m\3\ at Birmingham. This source type has the least
seasonal variability of the largest source types. Contributions for the
highest season, which varies from site to site but is generally fall or
summer, are only 1.5 or 2 times higher than the contributions for the
lowest season. As a percentage of mass, the mobile source type accounts
for 15 to 40 percent of the total mass. It is assumed that most of the
mass apportioned to the mobile source type is associated with local
sources.
Linking the wind trajectories with the source apportionment results
allows us to develop source regions (i.e., geographic regions with a
high probability of being the origin of the mass associated with a
source profile). These source regions provide evidence that at least
some of the particles associated with the source profiles are likely
transported over long distances. For example, the highest probability
source region for the coal combustion source profile for Birmingham
includes parts of the following States: Missouri, Illinois, Indiana,
Ohio, Kentucky, Virginia, North Carolina, South Carolina, Alabama, and
Mississippi. Table V-4 lists the States included in the highest
probability source regions for each of the three largest source
profiles at each of the 8 sites.
The EPA compared the source regions for the coal combustion source
(the largest source in each city) with the results from the zero-out
modeling (described below) at the six cities in the 8 City Source
Apportionment Study that were projected to violate the PM2.5
standard in 2010. To perform these comparisons, for each city, the
States in the highest probability source regions were compared to the
States with a maximum contribution of 0.10 [mu]g/m\3\ or greater at the
monitor in that city. These comparisons were generally good. At the
Bronx site for instance, 8 of the 9 States with a maximum contribution
of 0.10 [mu]g/m\3\ or greater were included in the highest probability
source region for the coal combustion source. In 5 of the 6 cities for
which the comparison was performed, at least two thirds of the States
with a maximum contribution of 0.10 [mu]g/m\3\ were also in the highest
probability source region for the coal combustion source. In the 6th
city, St. Louis, 7 of the 13 States with a maximum contribution of 0.10
[mu]g/m\3\ were the highest probability source region for the coal
combustion source. In summary, the general agreement between these two
independent methods (source apportionment linked with wind trajectories
and zero-out modeling) produce similar results in determining what
States impact downwind receptors.
Sulfate is generally formed in the atmosphere from SO2
(which is why the source is often referred to as secondary sulfate).
Since the major sources of SO2 emissions are utility plants,
which are fairly well inventoried, the sulfate source locations have
been compared to the utility plant SO2 emissions as a check
on the source identifications. Similarly, much of the nitrate is formed
from NOX reactions in the atmosphere with utility plants
being a major source of NOX. Hence, the nitrate source
locations have also been compared with utility plant NOX
emissions inventories (although we do not expect the correlation to be
as good because (a) nitrate is semi-volatile, (b) there are other
significant sources of NOX, and (c) the nitrate formation is
also dependent on NH3 emissions).
The comparisons of the sulfate source regions with the utility
SO2 emissions were good for some of the sites. At the Bronx
site for instance, the back trajectories do yield the expected source
region associations with large utility emissions of SO2,
namely the Ohio River Valley and the borders of Ohio, West Virginia,
and Pennsylvania.
Comparisons of the contour maps of the various non-marine nitrate
sources show a common pattern, namely Midwest farming regions.
Illinois, in particular, stands out. It has both NOX utility
emissions and the farming regions for sources of ammonia.
More information on ambient source apportionment studies is
contained in the Air Quality Data Analysis Technical Support Document.
Table V-4.--Eight City Source Apportionment Study States in Highest Probability Regions for Largest Sources
----------------------------------------------------------------------------------------------------------------
Eight city source apportionment study states in highest probability regions for largest sources
-----------------------------------------------------------------------------------------------------------------
City Coal combustion source Mobile sources Ammonium nitrate source
----------------------------------------------------------------------------------------------------------------
Bronx................................ NY, PA, MD, VA, NC, WV, VT, MA, NY, NJ, PA, MD, NY, NJ, DE, MD, VA, NC,
OH, KY, IN, MI, IL, WI. VA, OH, IN, IL, WI, MN. PA, OH, IL, WI, MN.
Washington, DC....................... NY, PA, VA, NC, SC, GA, MD, DE, VA, NC, SC, WV, NY, PA, MD, DE, KY, TN,
OH, KY, TN, IN, IL, AR. OH, KY, TN. IL.
Charlotte............................ NY, CT, NJ, PA, MD, VA, NC, SC, GA, TN AR...... PA, MD, VA, NC, SC, GA,
NC, SC, GA, FL, WV, FL, KY, TN, AR, MO,
OH, KY, MI, IN, AL, MS. KS.
Birmingham........................... VA, NC< SC, GA, FL, OH, NC, SC, GA, AL, MS, AR. IN, KY, TN, IL, MS, MN,
KY, TN, AL, IN, IL, MO. IA, AR, LA, NE, OK,
TX.
Milwaukee............................ OH, MI, IN, KY, TN, AL, AL, WI, TN, MS, MN, MO. MI, OH, IN, WI, IL, MN,
MS, IL, WI, IA, MO, IA, MO, AR, ND, KS,
AR, LA, SD, NE, KS, OK. OK.
[[Page 4607]]
Indianapolis......................... NC, KY, TN, AL, FL, IN, OH, KY, TN, NC, GA, IN, MI, OH, IN, WI, IL, MN,
IL, IA, MO, AR, LA, MI, WI, AR, LA. IA, MO, AR, ND, KS,
TX, NE, KS. OK.
St. Louis............................ WV, MI, KY, TN, IL, MO, MO, LA, NE, KS......... OH, IN, KY, TN, IL, IA,
AR, LA, TX. KS.
Houston 1............................ SC, GA, FL, AL, MS, LA, KY, TN, AL, MS, IN, IL, .......................
TX, IN. AR, LA, TX.
----------------------------------------------------------------------------------------------------------------
1 No ammonium nitrate source was identified in Houston.
2. Non-EPA Air Quality Modeling Analyses Relevant to PM2.5
Transport and Mitigation Strategies
Air quality modeling was performed as part of the Southern
Appalachian Mountains Initiative (SAMI) to support an assessment of the
impacts of aerosols, ozone, and acid deposition in Class I areas within
an eight-State portion of the Southeast.\78\ The results of the SAMI
modeling \79\ provide the following technical information on transport
relevant to today's proposal:
---------------------------------------------------------------------------
\78\ The eight States of the Southern Appalachians covered by
SAMI are: Alabama, Georgia, Kentucky, North Carolina, South
Carolina, Tennessee, Virginia, and West Virginia.
\79\ Southern Appalachian Mountains Initiative Final Report,
August 2002.
---------------------------------------------------------------------------
? Emissions reductions strategies produce the
largest changes in fine particle mass on days with the highest mass.
? Most of the reductions in fine particle mass are
due to reductions in sulfate particles.
? Particle mass in Class I areas of the SAMI
region are influenced most by SO2 emissions within the State
and within adjacent States.
? SO2 emissions in other regions
outside SAMI also contribute to particle mass at Class I areas in the
SAMI States.
? Specifically, in a 2010 baseline scenario,
SO2 emissions reductions in States outside the SAMI region
accounted for approximately 20 percent to as much as 60 percent of the
modeled sulfate reduction in the 10 Class 1 areas in the SAMI region.
? The relative sensitivity of nitrate fine
particle mass at the SAMI Class I areas to changes in NOX
emissions from SAMI States and from other regions is similar to the
above findings for sulfate fine particle mass.
? For SAMI to accomplish its mission, emissions
reductions are essential both inside and outside the SAMI region.
? Formation of nitrate particles is currently
limited in the rural southeastern U.S. by the availability of ammonia.
As sulfate particles are reduced, more ammonia will be available to
react with nitric acid vapor and form nitrate particles.
The findings of the air quality modeling performed by SAMI are very
consistent and supportive of EPA's zero-out modeling, as described
below. The findings indicate that interstate transport results in non-
trivial contributions to PM2.5 in downwind locations. High
concentrations of PM2.5 at sensitive downwind receptors are
not only influenced by emissions within that State, but are also
heavily influenced by emissions in adjacent States as well as emissions
from States in other regions. The SAMI results support a regional
control approach involving SO2 emissions reductions in order
to sufficiently reduce PM2.5 to meet environmental
objectives. The SAMI also found that SO2 emissions
reductions can lead to an increase in particle nitrate (i.e., nitrate
replacement). As described in section II.B.3, any such increases could
be mitigated through reductions in emissions of NOX.
3. Air Quality Modeling of Interstate PM2.5 Contributions
This section documents the procedures used by EPA to quantify the
impact of emissions in specific upwind States on projected downwind
nonattainment for annual average PM2.5. These procedures are
part of the two-step approach for determining significant contribution,
as described in section III, above.
The analytic approach for modeling the contribution of upwind
States to PM2.5 in downwind nonattainment areas and the
methodology for analyzing the modeling results are described in
subsection (a) and the findings as to whether individual States meet
the air quality prong of the significant contribution test is provided
in subsection (b). The air quality modeling for the interstate
PM2.5 contribution analysis was performed for those counties
predicted to be nonattainment for annual average PM2.5 in
the 2010 Base Case, as described above in section IV.E.
a. Analytical Techniques for Modeling Interstate Contributions to
Annual Average PM2.5 Nonattainment
The EPA performed State-by-State zero-out modeling to quantify the
contribution from emissions in each State to future PM2.5
nonattainment in other States and to determine whether that
contribution meets the air quality prong (i.e., before considering
cost) of the ``contribute significantly'' test. As part of the zero-out
modeling technique we removed the 2010 Base Case man-made emissions of
SO2 and NOX for 41 States on a State-by-State
basis in different model runs. The States EPA analyzed using zero-out
modeling are: Alabama, Arkansas, Colorado, Connecticut, Delaware,
Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana,
Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi,
Missouri, Montana, Nebraska, New Hampshire, New Mexico, New Jersey, New
York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode
Island, South Carolina, South Dakota, Tennessee, Texas, Vermont,
Virginia, West Virginia, Wisconsin, and Wyoming. Emissions from the
District of Columbia were combined with those from Maryland.
The contribution from each State to PM2.5 at
nonattainment receptors in other States was determined in the following
manner:
Step 1: The PM2.5 species predictions from the zero-out
run were applied using the SMAT to calculate PM2.5 at the 57
2010 Base Case nonattainment receptor counties. These receptors are
identified in section IV.E.3, above.
Step 2: For each of the 57 receptors, we calculated the difference
in PM2.5 between the 2010 Base Case and the zero-out run.
This difference is the
[[Page 4608]]
contribution from the particular State to the downwind nonattainment
receptor.
As described above in section V.B.2., EPA used three fundamental
factors for evaluating the contribution of upwind States to downwind 8-
hour ozone nonattainment, i.e., the magnitude, frequency, and relative
amount of contribution. One of these factors, the frequency of
contribution, is not relevant for an annual average NAAQS and thus,
frequency was not considered in the evaluation of interstate
contributions to nonattainment of the PM2.5 NAAQS.
The EPA considered a number of metrics to quantify the magnitude
and relative amount of the PM2.5 contributions. All of the
metrics are described in the AQMTSD. As discussed in section III,
above, EPA is proposing to use the maximum downwind contribution metric
as the means for evaluating the significance (before considering cost)
of interstate PM2.5 transport. We solicit comment on other
metrics including population-weighted metrics and whether it would be
appropriate to develop a metric based on annualized costs for each
State per ambient impact on each downwind nonattainment receptor.
The procedures for calculating the maximum contribution metric are
as follows:
Step 1: Determine the contribution from each upwind State to
PM2.5 at each downwind receptor;
Step 2: The highest contribution from among those determined in
Step 1 is the maximum downwind contribution.
b. Evaluation of Upwind State Contributions to Downwind
PM2.5 Nonattainment
The EPA is proposing to use a criterion of 0.15 [mu]g/m\3\ for
determining whether emissions in a State make a significant
contribution (before considering cost) to PM2.5
nonattainment in another State. The rationale for choosing this
criterion is described in section III, above. The maximum downwind
contribution from each upwind State to a downwind nonattainment county
is provided in Table V-5. Of the States analyzed for this proposal, 28
States and the District of Columbia contribute 0.15 [mu]g/m\3\ or more
to nonattainment in other States and therefore are found to make a
significant contribution (before considering cost) to PM2.5.
Although we are proposing to use 0.15 [mu]g/m\3\ as the air quality
criterion, we have also analyzed the impacts of using 0.10 [mu]g/m\3\.
Based on our current modeling, two additional States, Oklahoma and
North Dakota, would be included if we were to adopt 0.10 [mu]g/m\3\ as
the air quality criterion. The contributions to PM2.5 from
each of the 41 upwind States to each of the downwind nonattainment
counties are provided in the AQMTSD. Table V-6 provides a count of the
number of downwind counties that received contributions of 0.15 [mu]g/
m\3\ or more from each upwind State. This table also provides the
number of downwind counties that received contributions of 0.10 [mu]g/
m\3\ or more from each upwind State.
Table V-5.--Maximum Downwind PM2.5 Contribution ([mu]g/m\3\) for Each of 41 Upwind States
----------------------------------------------------------------------------------------------------------------
Maximum
Upwind state downwind Downwind nonattainment county of maximum
contribution contribution
----------------------------------------------------------------------------------------------------------------
Alabama...................................... 1.17 Floyd, GA.
Arkansas..................................... 0.29 St. Clair, IL.
Connecticut.................................. 0.07 New York, NY.
Colorado..................................... 0.04 Madison, IL.
Delaware..................................... 0.17 Berks, PA.
Florida...................................... 0.52 Russell, AL.
Georgia...................................... 1.52 Russell, AL.
Illinois..................................... 1.50 St. Louis, MO.
Indiana...................................... 1.06 Hamilton, OH.
Iowa......................................... 0.43 Madison, IL.
Kansas....................................... 0.15 Madison, IL.
Kentucky..................................... 1.10 Clark, IN.
Louisiana.................................... 0.25 Jefferson, AL.
Maryland/District of Columbia................ 0.85 York, PA.
Maine........................................ 0.03 New Haven, CT.
Massachusetts................................ 0.21 New Haven, CT.
Michigan..................................... 0.88 Cuyahoga, OH.
Minnesota.................................... 0.39 Cook, IL.
Mississippi.................................. 0.30 Jefferson, AL.
Missouri..................................... 0.89 Madison, IL.
Montana...................................... 0.03 Cook, IL.
Nebraska..................................... 0.08 Madison, IL.
New Hampshire................................ 0.06 New Haven, CT.
New Jersey................................... 0.45 New York, NY.
New Mexico................................... 0.03 Knox, TN.
New York..................................... 0.85 New Haven, CT.
North Carolina............................... 0.41 Sullivan, TN.
North Dakota................................. 0.12 Cook, IL.
Ohio......................................... 1.90 Hancock, WV.
Oklahoma..................................... 0.14 Madison, IL.
Pennsylvania................................. 1.17 New Castle, DE.
Rhode Island................................. 0.01 New Haven, CT.
South Carolina............................... 0.72 Richmond, GA.
South Dakota................................. 0.04 Madison, IL.
Tennessee.................................... 0.57 Floyd, GA.
Texas........................................ 0.37 St. Clair, IL.
Vermont...................................... 0.06 New Haven, CT.
Virginia..................................... 0.67 Washington, DC.
West Virginia................................ 0.89 Allegheny, PA.
[[Page 4609]]
Wisconsin.................................... 1.00 Cook, IL.
Wyoming...................................... 0.05 Madison, IL.
----------------------------------------------------------------------------------------------------------------
Table V-6.--Number of Downwind PM2.5 Nonattainment Counties That Receive
Contributions 0.15 [mu]g/m\3\ or More and 0.10 [mu]g/m\3\ or More From
Each Upwind State
------------------------------------------------------------------------
Number of Number of
downwind downwind
nonattainment nonattainment
Upwind state counties with counties with
contributions contributions
of 0.10 [mu]g/ of 0.15 [mu]g/
m\3\ or more m\3\ or more
------------------------------------------------------------------------
Alabama................................. 43 32
Arkansas................................ 27 4
Delaware................................ 4 1
Florida................................. 23 19
Georgia................................. 38 27
Illinois................................ 53 53
Indiana................................. 54 53
Iowa.................................... 30 13
Kansas.................................. 4 2
Kentucky................................ 52 50
Louisiana............................... 33 25
Maryland/District of Columbia........... 9 7
Massachusetts........................... 2 1
Michigan................................ 55 39
Minnesota............................... 18 8
Mississippi............................. 28 18
Missouri................................ 47 31
New Jersey.............................. 8 7
New York................................ 16 12
North Carolina.......................... 35 28
North Dakota............................ 4 0
Ohio.................................... 47 47
Oklahoma................................ 3 0
Pennsylvania............................ 52 46
South Carolina.......................... 23 19
Tennessee............................... 50 43
Texas................................... 48 36
Virginia................................ 35 17
West Virginia........................... 46 32
Wisconsin............................... 48 29
------------------------------------------------------------------------
VI. Emissions Control Requirements
This section describes the proposed criteria EPA used to establish
these new SO2 and NOX control requirements, for
the States with emissions sources contributing to nonattainment as
described in section V. This section also explains how information on
EGUs was used in proposing emissions control requirements for
SO2 and NOX to address interstate pollution
transport, and what source categories were also considered by the
Agency. This includes consideration of the technologies available for
reducing SO2 and NOX emissions and the methods
that we used to evaluate the cost effectiveness of these emissions
reductions. This section also discusses interactions of today's
proposed action with the existing Acid Rain Program under title IV of
the CAA. This section discusses the emission source categories that EPA
considered for today's action, and explains that we assumed control on
EGUs in developing this proposal. This section also describes the
methodology used for developing State budgets from the proposed control
requirements, with a step in the methodology based on regionwide
targets. Further, this section presents the proposed State budgets for
NOX and SO2 for EGUs. (More details regarding
requirements related to budget demonstrations can be found in section
VII.) This section also discusses baseline inventories.
A. Source Categories Used for Budget Determinations
Today's action proposes requirements based on emissions reductions
for EGUs. The EPA is examining potential pollution control approaches
and the cost effectiveness of emissions reductions for other source
categories. Today, EPA solicits comments on those other source
categories, but is not proposing action on them.
1. Electric Generation Units
In developing today's proposal, we investigated various source
categories to see which may be candidates for additional controls. Our
attention focused on emission reductions from EGUs for several reasons.
Electric Generating Units are the most
[[Page 4610]]
significant source of SO2 emissions and a very substantial
source of NOX in the affected region. For example, EGU
emissions are projected to represent approximately one-quarter (23
percent) of the total NOX emissions in 2010 and over two-
thirds (67 percent) of the total SO2 emissions in 2010 in
the 28-State plus DC region that is being controlled for both
SO2 and NOX after application of current CAA
controls. Furthermore, control technologies available for reducing
NOX and SO2 from EGUs are considered highly cost
effective and able to achieve significant emissions reductions.
The methodology for setting SO2 and NOX
budgets described below under sections VI.B, VI.C, and VI.D applies to
EGUs only. Electric Generating Units are defined as fossil-fuel fired
boilers and turbines serving an electric generator with a nameplate
capacity of greater than 25 megawatts (MW) producing electricity for
sale. Fossil fuel is defined as natural gas, petroleum, coal, or any
form of solid, liquid, or gaseous fuel derived from such material. The
term ``fossil fuel-fired'' with regard to a unit means combusting
fossil fuel, alone or in combination with any amount of other fuel or
material. These definitions are the same as those used under the title
IV Acid Rain program.
2. Treatment of Cogenerators
The EPA is proposing that the determination of whether a boiler or
turbine that is used for cogeneration should be considered an EGU is
dependent upon the amount of electricity that the unit sells.\80\
---------------------------------------------------------------------------
\80\ The NOX SIP Call, as finalized in 1998, moved
beyond the ``utility unit'' definition in the Acid Rain Program and
treated as ``ECUs'' all fossil- fuel-fired units serving generators
with a nameplate capacity exceeding 25 MW and producing any
electricity for sale. This EGU definition, as applied to
cogeneration units, was remanded to EPA as a result of litigation.
Subsequently, EPA proposed to retain the approach in the 1998 rule,
but in response to comments EPA received on that proposal, EPA is
preparing to finalize a response to the court remand in which EPA
will change the definition of EGU originally finalized in the
NOX SIP Call to be very similar to the existing title IV
definition.
---------------------------------------------------------------------------
We propose to treat a cogeneration unit as an EGU in this proposed
rule if it serves a generator with a nameplate capacity of greater than
25 MW and supplies more than one-third of its potential electric output
capacity and sells more than 25 MW electrical output to any utility
power distribution system for sale in any of the years 1999 through
2002. If one-third or less of the potential electric output capacity or
25 MW or less is sold during all of those years, the cogeneration unit
would be classified as a non-EGU. The definition of potential
electrical output capacity proposed for this rule is the definition
under part 72, appendix D of the Acid Rain regulations.
The definition of a cogeneration facility under the title IV Acid
Rain program and the NOX SIP Call was based on the Federal
Energy Regulatory Commission Qualifying Facility definition. We propose
to use this same definition with one change. We propose to apply the
efficiency standards under title 18, section 292.205 to coal, oil, and
gas-fired units instead of applying the efficiency standards only to
oil and gas-fired units. The EPA believes this change would be more
consistent with its fuel-neutral approach throughout this proposed
rule. In addition, not applying an efficiency standard to coal-fired
units would be counter productive to EPA's efforts to reduce
SO2 and NOX emissions under this proposed rule
because of the relatively high SO2 and NOX
emissions from coal-fired units.
We solicit comment on use of this definition of cogeneration
facility for purposes of developing emission budgets.
3. Non-EGU Boilers and Turbines
For several reasons, the approach we are proposing today would not
require or assume additional emissions reductions from non-EGU boilers
and turbines. First, compared to the information we have about
emissions from EGUs and the costs of controlling those emissions, we
have relatively little information about non-EGU boilers and
turbines.\81\ In particular, we have limited information both about
SO2 controls and the integration of NOX and
SO2 controls. As a result, we are not able to determine that
further emissions reductions from these sources would be highly cost
effective. Second, based on the information we do have, projected
emissions of NOX and SO2 from these sources in
2010 are much lower than those projected from EGUs. However, we invite
information and comment on these source categories. In particular, we
request comments on sources of emissions and cost information.
---------------------------------------------------------------------------
\81\ See ``Identification and Discussion of Sources of Regional
Point Source NOX and SO2 Emissions Other Than EGUs
(January 2004)''.
---------------------------------------------------------------------------
We recognize, for example, that some industrial boiler owners may
prefer the certainty and flexibility of being included in a regional
trading program, rather than facing the uncertainty of the SIP
development process. In addition, many non-EGU boilers and turbines
already are regulated under the NOX SIP Call and thus are
part of a NOX trading program with EGUs. It is EPA's intent
that, for EGUs, compliance with the more stringent annual
NOX reduction requirement in today's proposed rule will be
able to serve as compliance with the seasonal NOX SIP Call
limits. Therefore since EGUs will no longer be participating in the
seasonal NOX SIP Call Trading Program, the cost of
compliance for non-EGUs will likely increase.
4. Other Non-EGUs
We also evaluated the available information on SO2 and
NOX emissions and control measures for source categories
other than EGUs and large industrial boilers and turbines, in order to
identify highly cost effective emission reductions. Our approach to
considering these source categories is discussed in a technical support
document available in the docket, entitled ``Identification and
Discussion of Sources of Regional Point Source NOX and
SO2 Emissions Other Than EGUs (January 2004)''. Based on
this evaluation, we are not proposing to consider reductions from any
of these source categories because we are unable to identify specific
quantities of SO2 or NOX emissions reductions
that would be highly cost effective. However, we invite information and
comment on these sources categories. In particular, we request comment
on sources of emissions and cost information.
The EPA did not identify highly cost-effective controls on mobile
or area sources that would achieve broad-scale regional emissions
reductions relative to baseline conditions and fit well with the
regulatory authority available under section 110(a)(2)(D). We observe
that Federal requirements for new on-road and off-road engines and
motor vehicles will substantially reduce emissions as the inventory of
vehicles and engines turns over.
B. Overview of Control Requirements and EGU Budgets
This section explains how EPA developed State emissions reduction
requirements for NOX and SO2 emissions that will
lead to reductions of emissions associated with the interstate
transport of fine particles and ozone. We seek to implement the section
110(a)(2)(D) requirement that upwind States act as ``good neighbors''
by eliminating the amount of their emissions that contribute
significantly to the downwind nonattainment areas. The proposed
requirements would apply to 29 Eastern States (and DC) that
significantly contribute to fine particle and/or ozone nonattainment.
We propose to establish these emissions reduction requirements, for
both SO2 and NOX purposes, based on
[[Page 4611]]
assuming the application of highly cost-effective controls to large
EGUs. The approach of identifying highly cost-effective controls was
the basis for developing the emissions budgets in the NOX
SIP Call, and is the basis for developing the emissions budgets in
today's action. Today's proposal bases its reduction and control
requirements solely on controls for EGUs.
The States have full flexibility in choosing the sources that must
reduce emissions. If the States choose to require EGUs to reduce their
emissions, then the States must impose a cap on EGU emissions, which
would, in effect, be an emissions budget. If a State chooses to control
EGUs and elects to allow them to participate in the interstate cap and
trade program, the State must follow EPA rules for allocating
allowances to the individual EGUs. If a State wants to control EGUs but
does not want to allow EGUs to participate in the interstate cap and
trade program, the State has flexibility in allocating, but it must cap
EGUs. The State must also assure that EGUs meet title IV requirements.
In 2010, the proposed requirements would effectively establish
emissions caps for SO2 and NOX of 3.9 million
tons and 1.6 million tons, respectively. The budgets would be lowered
in 2015 to provide SO2 and NOX emissions caps of
2.7 million tons and 1.3 million tons, respectively, in the proposed
control region. An SO2 emissions cap of 2.7 million tons in
28 States will lead to nationwide emissions of approximately 3.5
million tons when the cap is fully implemented. This is significantly
lower than the 8.95 million tons of SO2 emissions allowed
from EGUs under the current title IV Acid Rain SO2 Trading
Program. EPA expects that States will elect to join a regional cap and
trade program for these pollutants that the Agency will administer
similar to the NOX SIP Call. This is discussed in section
VIII of this proposal.
If the States choose to control other sources, then they must
employ methods to assure that those other sources implement controls
that will yield the appropriate amount of reductions. This is discussed
further in section VII, below.
The EPA believes that it will take substantial time (more than 3
years from completion of SIPs) to install all of the equipment
necessary to meet the proposed control requirements. Thus, EPA is
proposing that the required reductions be made in two phases, with
annual emissions caps for NOX and SO2 taking
effect in 2010 and 2015.
Today's approach is similar to that of the NOX SIP Call.
In that case, EPA required States that controlled emissions from large
boilers (either EGUs or non-EGUs) to cap emissions from those source
categories. In addition, EPA allowed States to meet part of their
emissions budget requirements by participating in an interstate
emissions cap and trade program. The cap and trade program in effect
meant that the total amount of NOX emissions from EGUs and
non-EGU boilers and turbines was limited on a regionwide basis, rather
than on a State-specific basis. For other source categories, EPA did
not require the State to cap emissions, as long as it demonstrated that
it had enforceable measures that achieved the necessary emission
reductions. We are proposing to take a similar approach in today's
rulemaking.
For convenience, we use specific terminology to refer to certain
concepts. ``State budget'' refers to the statewide emissions that may
be used as an accounting technique to determine the amount of emissions
reductions that controls may yield. It does not imply that there is a
legally enforceable statewide cap on emissions from all SO2
or NOX sources. ``Regionwide budget'' refers to the amount
of emissions, computed on a regionwide basis, which may be used to
determine State-by-State requirements. It does not imply that there is
a legally enforceable regionwide cap on emissions from all
SO2 or NOX sources. ``State EGU budget'' refers
to the legally enforceable cap on EGUs a State would apply should it
decide to control EGUs.
C. Regional Control Requirements and Budgets Based on a Showing of
Significant Contribution
In determining States' emissions reduction requirements, EPA
considered both the level and timing of the emissions budgets for the
electric power industry at a regional level and State level. The EPA
wants to assist the States to attain the NAAQS for PM2.5 and
8-hour ozone in a way that is timely, practical, and cost effective.
For purposes of the PM2.5 and 8-hour ozone transport
requirements, CAA section 110(a)(2)(D) requires that States submit SIPs
than prohibit emissions in the amount that contributes significantly to
nonattainment downwind. Our interpretation of the ``contribute
significantly'' determination includes an air quality component and a
cost-effectiveness component. The air quality component is discussed in
sections IV, V, and IX. As to the cost-effectiveness component, in the
NOX SIP Call, we applied this component by employing
``highly cost-effective'' controls as the benchmark. We adopt that
benchmark for today's proposal.
In determining the States' obligations under this rule, EPA
considers a variety of factors. These include:
? The availability of information,
? The identification of source categories emitting
relatively large amounts of the relevant emissions,
? The performance and applicability of control
measures,
? The cost effectiveness of control measures, and
? Engineering and financial factors that affect
the availability of control measures.
We have relatively complete information with respect to these
factors for the electric power industry. We do not have information to
this degree of completeness for other sources.
The electric power industry emits relatively large amounts of the
relevant emissions. This factor is particularly important in a case
such as this when the Federal government is proposing a multistate
regional approach to reducing transported pollution.
We request comment on how to determine what constitutes ``a
relatively large amount'' of the relevant emissions. One approach would
be to consider the percent contribution the source category makes to
the total inventory (e.g., 1 to 10 percent). Another approach, which
some have suggested, would be to consider the contribution of a source
category to the total NAAQS exceedance level. For example, this
approach might consider a source category's contribution to ambient
concentrations above the attainment level in all nonattainment areas in
affected downwind States for PM2.5. We request comment on
both of these approaches as well as what the appropriate percent
contribution under each approach might be.
Under the cost effectiveness component, we also take into account
available information about the applicability, performance, and
reliability of different types of pollution control technologies for
different types of sources. Based on engineering judgement, we consider
how many sources in a particular source category can install control
technology, and whether such technology is compatible with the typical
configuration of sources in that category. As was done in the
NOX SIP Call, and as proposed in today's rule we also
evaluate the downwind impacts of the level of control that is
identified as highly cost effective. The fact that a particular control
level has a substantial downwind impact affirms the selection of that
level as ``highly cost effective.''
[[Page 4612]]
However, as noted above, we are requesting comment on an approach that
would incorporate the effect on downwind States as part of the cost
effectiveness component of significant contribution.
There are other practical considerations that we may also consider.
For example, if we are aware that emissions from a particular source
category will be controlled under an upcoming regulation (a MACT
standard, for example), we would also take that fact into account.
We considered several additional factors, including the engineering
factors concerning construction and installation of the controls when
evaluating the time period needed to implement the controls. This
analysis also involves consideration of the time period needed by
sources to obtain the financing needed for the controls. Engineering
and financial factors are discussed in this section.
The EPA's approach to controls factored in the air quality
improvements that could occur. Air quality modeling that is covered in
section IX indicates that today's proposed transport reductions will
bring many fine particle nonattainment areas and some ozone
nonattainment areas into attainment by 2010 or 2015, and improve air
quality in many downwind PM2.5 and ozone nonattainment
areas. The modeling also shows more reductions will be needed for some
areas to attain. We are striving in this proposal to set up a
reasonable balance of regional and local controls to provide a cost
effective and equitable governmental approach to attainment with the
NAAQS for fine particles and ozone.
1. Performance and Applicability of Pollution Control Technologies for
EGUs
In developing today's proposal, EPA focused on the utility industry
as a potential source of highly cost effective reductions of both
SO2 and NOX emissions. We began by reviewing the
reliability, capability and applicability of today's SO2 and
NOX pollution controls for this industry.
Both wet and dry flue gas desulfurization (FGD) technologies for
SO2 control, and the selective catalytic reduction (SCR)
technology for NOX control on coal-fired boilers, are fully
demonstrated and available pollution control technologies. The design
and performance levels for these technologies were based on proven
industry experience.\82\
---------------------------------------------------------------------------
\82\ References for this dicussion are provided in the docket
for today's rulemaking.
---------------------------------------------------------------------------
For SO2 control, EPA has considered two wet FGD
technologies, consisting of the limestone forced oxidation system
(LSFO) with dibasic acid injection and the magnesium enhanced lime
(MEL) system. In addition, a dry FGD technology, lime spray dryer (LSD)
system, has also been considered. Of these, the LSFO system is
generally used for installations firing high-sulfur (2 percent and
higher) coals, LSD for low-sulfur (less than 2 percent) coals, and MEL
for both low- and high-sulfur coals, depending on the overall economics
of each application.
In EPA's analyses, the SO2 reduction capabilities
considered are 95 percent for the LSFO system, 96 percent for the MEL
system, and 90 percent for the LSD system. A significant amount of
industry information is available on the use of these technologies. One
reference shows over 30 years of operating experience in U.S.
electrical utility plants. The three FGD systems considered by EPA have
been used in the majority of these plants. A significant number of the
wet FGD systems, especially those installed in the last 10 years, have
design SO2 removal efficiencies ranging from 95 to 99
percent. Also, there are several LSD installations designed for 90
percent or higher SO2 removal, supporting the performance
levels selected by EPA.
The EPA has also identified several other references that support
its FGD technology selections. These references report long-term
operating experience with wet FGD systems, with and without dibasic
acids, at SO2 removal rates of 95 to 99 percent. We also
performed a study that lists in a greater detail the criteria and the
references for selection of all three FGD technologies considered.
The NOX reduction capability considered by EPA for the
SCR technology is 90 percent, with the minimum NOX emission
rate limited to 0.05 lb/mmBtu. Because of this 0.05 lb/mmBtu limit, the
actual NOX reduction requirement for SCR systems on the
boilers with existing or future combustion controls is expected to be
less than 90 percent. For example, the baseline NOX
emissions on a large number of boilers with existing combustion
controls are below 0.3 lb/mmBtu, requiring SCRs with NOX
removal rates of approximately 83 percent or lower.
The first SCR application in the U.S. on a coal-fired boiler
started operating in 1993. At the end of 2002, the number of operating
SCR installations on U.S. boilers stood at 56. Another 85 SCR units are
scheduled to go into operation in 2003. The design NOX
reduction efficiencies of these SCR systems vary, but many of them are
designed for 90 percent reduction. Operating data available from many
plants indicate that the 90 percent NOX removal rate has
been met or exceeded at these plants.
There is more long-term experience with coal-fired SCR applications
in Europe and Japan. This experience includes high- and medium-sulfur
coal applications and is directly applicable to the U.S. installations.
The overall SCR experience both in the U.S. and abroad, therefore,
supports the criteria EPA has used for this technology.
SCRs and scrubbers have been used in combination on most new coal-
fired powered plants built in the U.S. since the early 1990s. The
combination has also been retrofit on a number of existing coal-fired
units.
2. Evaluation of Cost Effectiveness
With effective, well-established controls available for both
SO2 and NOX emissions from EGUs, EPA must
determine what is the appropriate level of costs for these controls. In
the NOX SIP Call rule, EPA defined the cost component of the
``contribute significantly'' test in terms of a level of cost
effectiveness, that is, dollars spent per ton of emissions reductions.
Specifically, in the NOX SIP Call, EPA defined the cost
component in terms of ``highly cost-effective'' controls, a definition
upheld by the D.C. Circuit in the Michigan case. Today, EPA proposes to
use this approach.
We want to provide an emissions reductions program for
SO2 and NOX that complements State efforts to
attain the PM2.5 and ozone standards in the most cost-
effective, equitable and practical manner possible. The objective of
the analysis is to select from the spectrum of possible pollution
controls the least expensive approaches available at the time the
controls are selected.
To ensure that EPA's overarching goal of achieving the NAAQS in the
most cost effective, equitable and practical manner possible is met by
Federal and State actions, the Agency has decided to pursue emissions
reductions that it considers are highly cost effective now before State
plans for nonattainment are due. Proposing highly cost-effective
controls also provides greater certainty that transport controls are
not being overemphasized relative to local controls.
For today's proposal, EPA independently evaluated the cost
effectiveness of strategies to reduce SO2 and NOX
to address PM2.5 and ozone nonattainment. The results of
EPA's analysis are summarized below. (All costs in this summary are
rounded to
[[Page 4613]]
the nearest hundred dollars, and are presented in 1999$.) It should be
noted that the results of these analyses for SO2 controls
are not relevant to NOX controls, and vice versa. Each
pollutant has a different history of cost of controls, which makes
cross-pollutant comparison inappropriate.
We note that comparisons of the cost per ton of pollutant reduced
from various control measures should be viewed carefully. Cost per ton
of pollutant reduction is a convenient way to measure cost
effectiveness, but it does not take into account the fact that any
given ton of pollutant reduction may have different impacts on ambient
concentration and human exposure, depending on factors such as the
relative locations of the emissions sources and receptor areas. Thus,
for example, an alternative approach might adopt the effect of emission
reductions on ambient concentrations in downwind nonattainment areas as
the measure of effectiveness of further control. The EPA solicits
comment on whether to take such considerations into account and what,
if any, scientifically defensible methods may be available to do so.
a. Cost Effectiveness of SO2 Emission Reductions
The EPA developed criteria for highly cost-effective amounts
through: (1) Comparison to the average cost effectiveness of other
regulatory actions and (2) comparison to the marginal cost
effectiveness of other regulatory actions. These ranges indicate cost-
effective controls. EPA believes that controls with costs towards the
low end of the range may be considered to be highly cost effective
because they are self-evidently more cost effective than most other
controls in the range. Moreover, this level of cost is consistent with
SO2 and NOX emissions reductions that yield
substantial ambient benefits in downwind nonattainment areas, as
discussed in section IX. For these reasons, EPA proposes today the
costs identified below as highly cost-effective levels, and the
associated set of SO2 and NOX emissions
reductions and emissions budgets, as the basis for the SIP
requirements.
Table VI-1 provides the average and marginal costs of annual
SO2 reductions under EPA proposed controls for 2010 and
2015. Also, EPA considered the sensitivity of the marginal cost results
to assumptions of higher electric growth and future natural gas prices
than it used in its base case. These assumptions in the sensitivity
analysis were based on the Energy Information Agency's Annual Energy
Outlook for 2003.
Table VI-2 provides the average cost per ton of recent EPA, State,
and local Best Available Control Technology (BACT) permitting decisions
for SO2. These decisions reflect the application of BACT for
SO2 to new sources and major modifications at existing
sources. These decisions, which include consideration of average and
incremental cost effectiveness, reflect the application of best
available controls in attainment and unclassified areas. These
decisions do not reflect the application of lowest achievable emission
rate, which is required in nonattainment areas and which does not
directly consider cost in any form. The BACT decisions are relevant for
present purposes because they comprise cost effective controls that
have been demonstrated.
Table VI-3 provides the marginal cost per ton of recent State
decisions for annual SO2 controls where marginal cost
information was available. These include the WRAP Regional
SO2 Trading Program and statewide rules that have required
significant reductions of SO2 in North Carolina and
Wisconsin.
The results of the sensitivity analysis of the marginal cost in
Table VI-1 when compared to Table VI-3 results further supports that
the SO2 controls are highly cost effective.
Additionally, the Agency further considered the cost effectiveness
of alternative stringency levels for this regulatory proposal
(examining changes in the marginal cost curve at varying levels of
emissions reductions). Figure VI-1 shows that the ``knee'' in the
marginal cost effectiveness curve--the point where the cost of control
is increasing at a higher rate than the amount of SO2
removal for EGUs--appears to start above $1,200 per ton. The selected
approach was well below the point at which there would be significant
diminishing returns on the dollars spent for pollution control. The EPA
used the Technology Retrofitting Updating Model (TRUM), a spreadsheet
model based on the Integrated Planning Model (IPM), for this analysis.
Details of this analysis can be found in ``An Analysis of the Marginal
Cost of SO2 and NOX Reductions'' (January 2004)
in the docket for today's rulemaking.
Table VI-1.--Predicted Costs Per Ton of SO2 Controlled Under Proposed
Control Strategy (1999$)/Ton \1\
------------------------------------------------------------------------
2010 2015
------------------------------------------------------------------------
Average Cost.................................. $700 $800
Marginal Cost................................. 700 1,000
Sensitivity Analysis: Marginal Cost, Assuming 900 1,100
High Electric Demand and Natural Gas Price...
------------------------------------------------------------------------
\1\ EPA IPM modeling; available in the docket.
Table VI-2.--Average Costs Per Ton of Annual SO2 Controls
------------------------------------------------------------------------
SO2 control action Average cost (1999$)/ton
------------------------------------------------------------------------
Best Available Control Technology $500-$2,100 \1\
(BACT) determinations.
------------------------------------------------------------------------
\1\ These numbers reflect a range of cost effectiveness data entered
into EPA's RACT/BACT/LAER Clearinghouse (RBLC) for add-on SO2
controls.
Table VI-3.--Marginal Costs Per Ton of Annual SO2 Control Actions
------------------------------------------------------------------------
SO2 control action Marginal cost (1999$)/ton
------------------------------------------------------------------------
Wisconsin Multi-pollutant rule......... $1,400 \1\
North Carolina Multi-pollutant rule.... $800 \2\
WRAP Regional SO2 Trading Program...... $1,100-$2,200 \3\
------------------------------------------------------------------------
\1\ EPA's IPM Base Case run, available in the docket.
\2\ EPA's IPM Base Case run, available in the docket.
\3\ ``An Assessment of Critical Mass for the Regional SO2 Trading
Program,'' Prepared for Western Regional Air Partnership Market
Trading Forum by ICF Consulting Group, September 27, 2002, available
in the docket and at http://www.wrapair.org/forums/mtf/critical_mass.html. 
This analysis looked at the implications of one or more
States choosing to opt-out of the WRAP regional SO2 trading program.
[[Page 4614]]
[GRAPHIC] [TIFF OMITTED] TP30JA04.000
b. Cost Effectiveness of NOX Emission Reductions
In developing the NOX SIP Call, EPA determined that an
average cost effectiveness of $2,500/ton (in 1999$, from original
$2,000/ton in 1990$), or less, was highly cost effective for
NOX reductions during the ozone season. This was based on
review of other relevant actions EPA and others had recently taken. An
updated summary of average costs of NOX control actions is
in Table VI-4. Each of the programs in Table VI-4 cover annual
NOX reductions, which makes comparison of these estimates to
ozone season reductions a conservative comparison, as was done in the
NOX SIP Call. The table's results are very similar to what
EPA found in 1998 and reaffirm the Agency's earlier determination of
what a highly cost-effective reduction of NOX emissions is.
Table VI-5 provides the results of EPA's analysis of the cost
effectiveness of the proposed NOX control requirements for
States contributing to downwind ozone nonattainment. The average costs
are well below $2,500/ton. The marginal costs in 2010 are much lower
than the benchmark, but in 2015 are above it by a modest amount.
Notably, if the controls during the ozone season are then used for the
remaining months of the year, their costs are very low. Table VI-6
provides these results. These reductions are among the lowest cost EPA
has ever observed in NOX control actions and are obviously
highly cost effective.
Table VI-7 shows the average and marginal costs of year-round
controls for EPA's proposed approach. When these costs are compared to
the costs in Table VI-8, it is clear that in the States that control
NOX for PM2.5 only, the controls are highly cost
effective.
The Agency further considered the cost effectiveness of alternative
stringency levels for this regulatory proposal (examining changes in
the marginal cost curve at varying levels of emission reductions).
Figure VI-2 shows that the knee in the marginal cost effectiveness
curve for NOX appears to start above $2,000 per ton. The
selected approach was well below the point at which there would be
significant diminishing returns on the dollars spent for pollution
control.
Table VI-4.--Average Cost Per Ton of Existing and Proposed Annual NOX
Rules
------------------------------------------------------------------------
NOX rule \1\ Average cost (1999$)
------------------------------------------------------------------------
Tier 2 Vehicle Gasoline Sulfur \2\....... $1,300-$2,300
2004 Highway HD Diesel \2\............... $200-$400
Off-highway Diesel Engine \2\............ $400-$700
Tier 1 Vehicle Standards \2\............. $2,100-$2,800
National Low Emission Vehicle \2\........ $1,900
Marine SI Engines \2\.................... $1,200-$1,800
2007 Highway HD Diesel Stds \2\.......... $1,600-$2,100
On-board Diagnostics \2\................. $2,300
Marine CI Engines \2\.................... Up to $200
Revision of NSPS for New EGUs............ $2,100
------------------------------------------------------------------------
\1\ Costs for rules affecting mobile sources presented here include a
VOC component.
\2\ Control of Air Pollution from New Motor Vehicles: Heavy-Duty Engine
and Vehicle Standards and Highway Diesel Fuel Sulfur Control
Requirements; Final Rule (66 FR 5102; January 18, 2001). The values
shown for 2007 Highway HD Diesel Stds are discounted costs.
Table VI-5.--Predicted Costs Per Ton of Ozone Season-Only NOX Controlled
Under Proposed Control Strategy (1999$)/ton \1\
------------------------------------------------------------------------
2010 2015
------------------------------------------------------------------------
Average Cost...................................... $1,000 $1,500
Marginal Cost..................................... 2,200 2,600
------------------------------------------------------------------------
\1\ EPA IPM modeling; available in the docket.
Table VI-6.--Predicted Costs Per Ton of Winter Season NOX Controlled
Under Proposed Control Strategy (1999$)/ton \1\
------------------------------------------------------------------------
2010 2015
------------------------------------------------------------------------
Average Cost...................................... $700 $500
------------------------------------------------------------------------
\1\ EPA IPM modeling; available in the docket.
[[Page 4615]]
Table VI-7.--Predicted Costs Per Ton of Annual NOX Controlled Under
Proposed Control Strategy (1999$)/ton \1\
------------------------------------------------------------------------
2010 2015
------------------------------------------------------------------------
Average Cost...................................... $800 $700
Marginal Cost..................................... 1,300 1,500
Sensitivity Analysis: of Marginal Cost, Assuming 1,300 1,600
High Electricity Demand and Natural Gas Price....
Sensitivity Analysis: of Marginal Cost, Assuming 2,200 2,000
High Electricity Demand, Natural Gas Price and
SCR Costs........................................
------------------------------------------------------------------------
\1\ EPA IPM modeling; available in the docket.
Table VI-8.--Marginal Cost Per Ton of Reduction Recent NOX Rules
------------------------------------------------------------------------
NOX action Marginal cost per ton (1999$)
------------------------------------------------------------------------
Wisconsin Rules--Annual Controls......... $1,800 \1\
Texas Rules--Annual Controls............. $1,400-$3,000 \1\
------------------------------------------------------------------------
\1\ EPA's IPM Base Case run, available in the docket. NOX control
requirements in Texas vary regionally; the range of marginal costs
here reflects the various requirements in the State.
[GRAPHIC] [TIFF OMITTED] TP30JA04.001
c. EPA Cost Modeling Methodology
The EPA conducted analysis through the Integrated Planning Model
(IPM) that indicates that its proposed SO2 and
NOX control strategies are consistent with the level of
controls proposed as highly cost effective. We use IPM to examine costs
and, more broadly, analyze the projected impact of environmental
policies on the electric power sector in the 48 contiguous States and
the District of Columbia. The IPM is a multi-regional, dynamic,
deterministic linear programming model of the U.S. electric power
sector. It provides forecasts of least-cost capacity expansion,
electricity dispatch, and emission control strategies for meeting
energy demand and environmental, transmission, dispatch, and
reliability constraints. We used IPM to evaluate the cost and emissions
impacts of the policies to limit emissions of SO2 and
NOX from the electric power sector that are proposed in
today's rulemaking. The National Electric Energy Data System (NEEDS)
contains the generation unit records used to construct model plants
that represent existing and planned/committed units in EPA modeling
applications of IPM. The NEEDS includes basic geographic, operating,
air emissions, and other data on all the generation units that are
represented by model plants in EPA's v. 2.1.6 update of IPM.
We used the IPM to conduct the cost effectiveness analysis for the
emissions control program proposed in this action. The model was also
used to derive the marginal cost of several State programs that EPA
considers as part of its base case.
For the purpose of preliminarily evaluating today's proposal, EPA
modeled a strategy that assumes SO2 controls in the 48
contiguous States in a manner that largely leads to a cap on Eastern
States without leakage of emissions to nearby States. The modeled 48-
State cap simulates a control program that is very similar to the
program we are now proposing to control SO2 in only the 28-
State and DC region. Most of the SO2 emissions and
reductions would occur in the 28-State and DC control region and
therefore a very similar result is expected. Based on IPM modeling, the
SO2 emissions in 2015 from the proposed 28-State and DC
region would be 92 percent of national emissions under base case
conditions (i.e., without implementation of today's proposed program).
In addition, emissions reductions in the 28-State and DC region would
be 96 percent of total national reductions, under the 48 State cap that
was modeled. Thus, the 48-
[[Page 4616]]
State cap that was modeled very closely represents the proposed 28-
State and DC cap.
We modeled NOX controls in a 31 and one-half State
region that includes Minnesota, Iowa, Missouri, Arkansas, Louisiana,
Eastern Texas and all of the States to the east, and DC. The
NOX control region proposed in today's action (28-States and
the District of Columbia, plus ozone season only control in
Connecticut) is very similar to this region used for modeling.
Because the regions used for modeling SO2 and
NOX controls encompass a significant amount of the
electricity generation in the country, they provide information that
could be applied to somewhat smaller or larger regions. We believe that
costs (both marginal and average) in a somewhat smaller or larger
region would be similar.\83\
---------------------------------------------------------------------------
\83\ We began our emissions and economic analysis for today's
proposal before the air quality analysis, which affects the States
we are proposing for control requirements, was completed. Thus, we
modeled emissions and economic effects on regions that are similar
but not identical to the region proposed today. We intend to publish
revised emissions and economic modeling in a supplemental action.
---------------------------------------------------------------------------
In this modeling case, EPA assumes interstate emissions trading.
While EPA is not requiring States to participate in an interstate
trading program for EGUs, EPA believes it is reasonable to evaluate
control costs assuming States choose to participate in such a program
since the program will result in less expensive reductions.
The modeled case discussed below assumes a phased program, with the
first set of reductions occurring in 2010 and the second phase
occurring in 2015. For SO2 in particular, it should be noted
that the regional reductions or budget levels are not actually achieved
in the year that they are implemented. This is because of the existence
of an SO2 emission bank. The availability of the
SO2 emission bank allows sources to make emission reductions
earlier and then use the allowances that are saved at a later date.
Banking has less of an effect on NOX emissions because in
the existing ozone-season only program, NOX allowances are
more expensive than they are expected to be in an annual program. Thus,
there is not an incentive to make early NOX emission
reductions to create allowances to be used in the future.
3. Timing, Engineering and Financial Factor Impacts
While cost considerations are one of the primary components in
establishing emission reduction requirements, another important
consideration is the time by which the emission reductions may be
achieved. The EPA has determined that for engineering and financial
reasons, it would take substantial time to install the projected
controls that would be necessary to reach the ultimate control levels
proposed. We seek to require implementation of the reductions on a
schedule that will provide air quality benefits as soon as feasible to
as many nonattainment areas as possible. Therefore, we propose to
require the implementation of as much of the reductions as possible by
an early date and to set a later date for the remaining amount of
reductions.
Specifically, EPA proposes that the first phase must be implemented
by January 1, 2010. This date is based upon the following schedule: EPA
finalizes today's proposed rule by mid-2005; States submit SIPs by the
end of 2006; and sources install the first phase of required controls
by January 1, 2010, and the second phase by January 1, 2015.
EPA recognizes that this two-phase approach assumes that States
will achieve the reduction requirements imposed by the rules proposed
today through controls on EGUs. Of course, States may choose to control
different sources, and if so, the specific engineering constraints
applicable to EGU compliance may not apply to these other sources.\84\
Nevertheless, EPA believes it appropriate to authorize a two-phase
approach for all States, regardless of how they choose to achieve the
reduction requirements. This approach is consistent with the fact that
EPA calculated the amount of reductions required on the basis of
assumed controls on EGUs, as well as the fact that as a practical
matter, most (if not all) States are likely to adopt EGU controls as
their primary (if not exclusive) way to achieve the required
reductions.
---------------------------------------------------------------------------
\84\ Other sources may face similar or other timing constraints
for implementation purposes.
---------------------------------------------------------------------------
a. Engineering Assessment To Determine Phase 1 Budgets
When designing an emissions reductions program such as EPA is
proposing in today's action, the Agency must consider the effect that
the timing and reduction stringency of the program will have on the
quantity of resources required to complete the control technology
installation and the ability of markets to adjust and to provide more
resources where needed. We used IPM to predict the number and size of
facilities that would install new emissions control equipment to meet
the implementation dates and emissions reductions in today's proposed
rule. Then, we estimated the resources required for the installation of
those control technologies.
Today's proposed rule does not require the imposition of controls
on any particular source and instead leaves that matter to the affected
States. However, the cost effectiveness of EGU controls makes it likely
that many States will achieve reductions through EGU controls.
Accordingly, EPA considers it appropriate to evaluate the timing of the
reduction requirements with reference to the EGU control implementation
schedule. Therefore, today's proposed rule assumes the installation of
significant numbers of SO2 and NOX controls on
EGUs. To meet the existing Federal title IV program and NOX
SIP Call requirements, there has been a reliance on low sulfur coal and
limited use of scrubbers (also called FGD) for SO2
reductions and low NOX burners and post-combustion controls
(e.g., SCR) for NOX reductions, as well as shifting of
dispatch to more efficient and less polluting units for each air
pollutant. However, to meet the future requirements proposed in today's
rule, for SO2 control we predict there will be heavy
reliance on scrubbers in the decade following finalization of today's
rule. For NOX control, we predict there will be heavy
reliance on SCR and, to a much lesser degree, selective non-catalytic
reduction (SNCR) and gas reburn.
The installation of the advanced post-combustion controls required
under today's proposal will take significant resources and time.
Installation of these controls are large-scale construction projects
that can span several years, especially if multiple units are being
installed at a single power plant. If EPA were to allow sources all of
the time they needed to install controls to meet the ultimate cap
levels without the imposition of intermediate caps, the consequences
for SO2 and NOX would be different. For
SO2, the existence of the title IV program and the ability
to bank would likely encourage sources to run their SO2
emission controls as soon as they were installed. While these early
reductions would be environmentally beneficial, they would also allow
sources to continue to increase their SO2 banks. By creating
an intermediate cap, the ability to bank would be limited. For
NOX, there would be little incentive to turn on controls and
achieve additional reductions, particularly in the non-ozone season and
in the States not affected by the NOX SIP Call. Therefore,
in order to get any additional NOX reductions--either during
the winter
[[Page 4617]]
months from already installed SCRs or year-round from newly installed
SCRs outside of the SIP Call region--it is necessary to impose an
intermediate cap.
We believe that 3 years is a reasonable amount of time to allow
companies to install emission controls that could be used to comply
with the first phase reduction requirements of today's proposed rule.
In certain circumstances, some individual units could install emissions
reduction equipment in considerably less time than 3 years.\85\ In the
report, ``Engineering and Economic Factors Affecting the Installation
of Control Technologies for Multi-pollutant Strategies' (October 2002),
EPA projected that it would take on average about 21 months to install
a SCR on one unit and about 27 months to install a scrubber on one
unit. However, many times, companies must install controls on units at
the same plant. To do so, companies will often stagger installations to
minimize operational disruptions, thereby taking more time. We project
that seven SCRs could be installed at a single facility in 3 years.
Also, we project that three scrubber modules (scrubbing a total of six
units) could be installed in 3 years. Since we believe that 3 years is
enough time to install controls on all the units required at a large
power plant, EPA believes that 3 years is a reasonable amount of time
to allow for the first phase of compliance.
---------------------------------------------------------------------------
\85\ For instance, a SCR was installed on a 675 MW unit in about
13 months (Engineering and Economic Factors, p.21).
---------------------------------------------------------------------------
The availability of skilled labor--specifically, boilermakers--is
an important constraint for the installation of significant amounts of
emission controls. Boilermakers are skilled steel workers who are
specially trained to install both NOX controls such as SCR
and SO2 controls such as scrubbers.
Since the availability of boilermaker labor affects the
installation of both SO2 controls and NOX
controls, it is also necessary to decide what mix of pollution
reductions is desired in the first phase. In today's rulemaking, EPA is
proposing to require similar percentage reductions of both
SO2 and NOX in the first phase. In developing the
first phase control levels, we intended to maximize the total control
installations possible (and thus total reductions) considering the
constraint on boilermaker labor, while getting similar reductions for
both pollutants. This results in predicted reductions of between 40 and
50 percent for both pollutants, in the first phase.
Based on all of these constraints, EPA is proposing a two-phase
reduction requirement, with a first phase cap on SO2 in 2010
based on a 50 percent reduction from title IV levels. This represents
about a 40 percent reduction in emissions from the Base Case. This
strategy would require about 63 GW of scrubbers to be installed by
2010. Of these, 49 GW of scrubbers would be incremental to the Base
Case. (We based this analysis on the assumption that States choose to
control EGUs.)
The EPA's proposed NOX reduction requirement would also
be implemented in two phases, with a first phase cap based, in a
comparable manner, on about a 49 percent decrease in emissions from the
Base Case. (The calculation of this first phase cap is discussed more
below.) This cap would require installation of about 39 GW of SCR
between 2005 and 2010. Of this, 24 GW are incremental to the Base Case.
(We based this analysis on the assumption that States choose to control
EGUs.)
Since the NOX SIP Call experience showed that many power
companies are averse to committing money to install controls until
after State rules are finalized, EPA analyzed availability of
boilermakers assuming companies did not begin installing controls until
after the State rules were finalized. While boilermakers are one of the
key components in building SCRs and scrubbers, most of their work
cannot begin until well into the construction project. First, the power
company must do preliminary studies to determine which controls to
install, then jobs must be bid and design must begin. After the
installation is designed, foundations must be poured and pieces of the
control equipment must be built in machine shops. It is only after all
of this activity has taken place that the boilermakers can erect the
control equipment.
We assumed, therefore, that most of the demand for boilermakers
came in the last 21 months of the 3 year period to install controls.
Furthermore, in order to have controls fully operational in time for
the compliance deadline, companies would likely complete installation
well before the deadline to allow for testing of the controls. Assuming
that most companies would try to complete controls in time to provide
for a 3-month testing period, most of the demand for boilermaker labor
will come in an 18-month window.
It is EPA's projection that approximately 12,700 boilermaker years
would be needed to install all of the required equipment for the first
phase of compliance. We project that approximately 14,700 boilermaker
years would be available during the time when first phase controls
would be installed. This projected number of boilermakers is based on
the assumption that all the boilermakers that EPA projects are
available for work on power sector environmental retrofit projects
would be fully utilized (e.g., 40 hours a week for 50 weeks of the
year). In reality, it would be difficult to achieve this full
utilization of boilermakers. For instance, boilermakers will be unable
to work when moving from job-site to job-site, during inclement
weather, etc. We believe that the availability of approximately 15
percent more boilermaker years than are required assures that there are
enough boilermakers available to construct all of the required
retrofits.
b. Financial and Other Technical Issues Regarding Pollution Control
Installation
The EPA recognizes that the power sector will need to devote large
amounts of capital to meet the control requirements of the first phase.
Controls installed by 2010 will generally be the largest and easiest to
install. Subsequent controls will need to be installed at more plants
and under more challenging circumstances. We believe that deferring the
second phase to 2015 will provide enough time for companies to overcome
these technical challenges and raise additional, reasonably-priced
capital needed to install controls.
4. Interactions With Existing Title IV Program
As EPA developed this regulatory action, great consideration was
given to interactions between the existing title IV program and today's
proposed rule designed to achieve significant reductions in
SO2 emissions beyond title IV. Requiring sources to reduce
emissions beyond what title IV mandates has both environmental and
economic implications for the existing title IV SO2 trading
program. In the absence of a method for accounting for the statutory
requirements of title IV, a new program that imposes a tighter cap on
SO2 emissions for a particular region of the country would
likely result in an excess supply of title IV allowances and the
potential for increased emissions in the area not subject to the more
stringent emission cap. The potential for increased emissions exists in
the entire country for the years prior to the proposed implementation
deadline and would continue after implementation for any areas not
affected by the proposed rule. These excess emissions could negatively
affect air quality,
[[Page 4618]]
disrupt allowance markets, and erode confidence in cap and trade
programs.
In view of the significant reductions in SO2 emissions
under title IV of the CAA, the large investments in pollution controls
that firms have made under title IV that enable companies to sell
excess emissions reductions, and the potential for emissions increases,
it is necessary to consider ways to preserve the environmental benefits
achieved through title IV and maintain the integrity of the title IV
market for SO2 allowances. The EPA does not have authority
to address this issue by tightening the requirements of title IV. In
any event, title IV has successfully reduced emissions of
SO2 using the cap and trade approach, eliminating millions
of tons of SO2 from the environment. Building on this
existing program to further improve air quality by requiring additional
reductions of SO2 emissions is appropriate.
We have developed an approach to incorporate the title IV
SO2 market to ensure that the desired reductions under
today's action are achieved in a manner consistent with the previously
stated environmental goals. Our proposed approach effectively reduces
the title IV cap for SO2 and allows title IV allowances for
compliance with this rule at a ratio greater than one-to-one. Section
VIII provides more detail on our initial analysis of the interactions
between the title IV Acid Rain program and today's proposed cap and
trade program and outlines a solution for creating a new rule that
builds off of title IV.
D. Methodology for Setting SO2 and NOX Budgets
In section D, EPA describes in detail how it proposes to establish
the reduction requirements and, to the extent applicable, budget
requirements for EGUs. The first step for both SO2 and
NOX was determining the total amount of emissions reductions
that would be achievable based on the control strategy determined to be
highly cost effective. Our evaluation of cost effectiveness for the
proposed 2010 and 2015 emissions caps was explained in the preceding
subsection as was the need to split these budget requirements into two
phases to assure that emission reductions were achieved expeditiously
considering factors that could limit the amount of emission controls
that could be installed in a given time period.
There were then two more steps that followed. In the second step,
EPA determined the amount of emissions reductions that were needed
across the region covered by this proposal and, for EGUs, set annual
emissions caps accordingly in 2010 and 2015. These caps remain at the
2015 levels thereafter, to maintain air quality in the downwind areas.
In the third step, EPA partitioned the cap levels into State emissions
budgets that they may use for granting allowances for SO2
and NOX emissions.
1. Approach for Setting Regionwide SO2 and NOX
Emission Reductions Requirements
a. SO2 Budgets for EGUs
The EPA is proposing a two-phase SO2 reduction program.
The first phase, in 2010, would reduce SO2 emissions in the
28-State and DC region by the amount that results from making a 50
percent reduction from title IV Phase II allowance levels. The second
phase, in 2015, would further reduce SO2 emissions by the
amount that results from making a 65 percent reduction from the title
IV Phase II allowance level.
These amounts may be calculated in terms of regionwide EGU caps for
the first and second phases, assuming that all the affected States
control only EGUs. Similarly, it is necessary to calculate the amount
of regionwide SO2 reductions for the first and second phase,
for States that choose to control sources other than (or in addition
to) EGUs. This calculation of the amount of the regionwide cap or
emissions reductions is a useful step because this amount may then be
apportioned to individual State. In addition, the methodology for
calculating regionwide amounts should accommodate revisions in the
universe of States in the region--adding or subtracting individual
States--based on refinement to the air quality modeling that EPA
expects to complete and publish in the SNPR.
The EPA proposes that the regionwide SO2 budgets may be
calculated by adding together the title IV Phase II allowances for all
of the States in the control region, and making a 50 percent reduction
for the 2010 cap and a 65 percent reduction for the 2015 cap. This
results in a first phase SO2 cap of about 3.9 million tons
and a second phase cap of about 2.7 million tons, in the 28-State and
DC control region.
Modeling predicts nationwide SO2 emissions of about 5.4
million tons in 2015 with today's proposed controls. (This compares to
approximately 9.1 million tons without today's proposed controls.)
Predicted emissions in the 28-State and DC region that EPA is proposing
to find significantly contribute to PM2.5 nonattainment are
about 4.6 million tons in 2015. (These emission estimates are from
modeling using the 48-State region as described above.) The projected
SO2 emissions are higher than the caps due to use of banked
allowances resulting from the incentive for early reductions.
Accordingly, the 2015 annual SO2 emissions reductions amount
to about 3.7 million tons, and the 2010 annual SO2 emissions
reductions amount to about 3.6 million tons.
b. NOX Budgets for EGUs
The EPA is proposing a two-phased annual NOX control
program, with a first phase in 2010 and a second phase in 2015, which
would apply to the same control region as the SO2
requirements, that is, 28-States and DC. In addition, Connecticut would
be required to control NOX during the ozone season.
On a regionwide basis, the control requirements EPA is proposing
would result in a total EGU NOX budget of about 1.6 million
tons in 2010 and 1.3 million tons in 2015, in the 28-State and DC
region that would be affected by today's rulemaking (assuming each
State controlled only EGUs and thereby subjected themselves to the
proposed caps). In addition, the control requirements would lead to
2015 annual NOX emissions reductions of about 1.8 million
tons from the base case, and 2010 annual NOX emissions
reductions of about 1.5 million tons from the base case.
Calculating the regionwide budget and emissions reductions
requirements serve the same purposes as in the case of SO2,
described above. Our methodology proposed today determines historical
annual heat input data for Acid Rain Program units in the applicable
States and multiplies by 0.15 lb/mmBtu (for 2010) and 0.125 lb/mmBtu
(for 2015) to determine total annual NOX mass. For the
annual heat input values to use in this formula, EPA proposes to take
the highest annual heat input for any year from 1999 through 2002 for
each applicable State. This proposed approach provides a regionwide
budget for 2010 that is approximately 37,500 tons more than the budget
that would result from using the highest annual regional heat input for
any of the 4 years, and about 60,700 tons more than using the average
regional heat input for the 4-year period. We believe that this cushion
provides for a reasonable adjustment to reflect that there are some
non-Acid Rain units that operate in these States that will be subject
to the proposed budgets.
Note that EPA proposes today that Connecticut contributes
significantly to downwind ozone nonattainment, but not to fine particle
nonattainment. Thus, Connecticut would not be subject to an
[[Page 4619]]
annual NOX control requirement, and is not included in the
28-State and DC region we are proposing for annual controls.
Connecticut would be subject to an ozone season-only NOX
cap.\86\ Because Connecticut is required to make reductions only during
the ozone season, compliance for sources would not be required to begin
until May 1, 2010. If Connecticut chooses to participate in the
regional trading program on an annual basis, compliance would begin on
January 1, 2010.
---------------------------------------------------------------------------
\86\ If Connecticut, or any State subject to an existing
NOX ozone season-only budget program, chooses to
participate in the interstate NOX trading program
proposed today, that State would need to operate under an annual
NOX cap rather than ozone season only. Interstate trading
is discussed in more detail in section VIII, below.
---------------------------------------------------------------------------
Although EPA proposes to determine the regionwide amount of EGU
NOX emissions by using historic heat input and emission
rates of 0.15 lb/mmBtu and 0.125 lb/mmBtu, we take comment on using,
instead, heat input projected to the implementation years of 2010 and
2015 and/or different emission rates. Under this approach, we take
comment on whether to use the same method for projecting heat input as
used in the NOX SIP Call, or a different method. The
NOX SIP Call method is described in 67 FR 21868 (May 1,
2002).
2. State-by-State Emissions Reductions Requirements and EGU Budgets
This section describes the methodologies used for apportioning
regionwide emission reduction requirements or budgets to the individual
States. State budgets may be set with a methodology different from that
used in setting the regionwide budgets, for reasons described in this
section.
In practice, if States control EGUs and participate in the regional
trading program, the choice of method used to impose State-by-State
reduction requirements makes little difference in terms of total
regionwide SO2 and NOX emissions. The cap and
trade framework would encourage least-cost compliance over the region,
an outcome that does not depend on the individual State budgets.
However, the distribution of budgets to the States is important in
that it can have economic impacts on the State's sources. Should a
State receive a disproportionate share of the regionwide budget, there
would be fewer allowances to allocate to its sources. This may
adversely affect compliance costs for sources within that State as they
are forced to increase their level of emission control or became net
buyers from sources in States that may have received a greater share of
regionwide cap.
For SO2, we propose determining State SO2
budgets for EGUs on the basis of title IV allowances, which is in line
with the planned interactions of this rule with title IV of the CAA
Amendments. See section VIII for a more detailed discussion of
interactions with title IV. Such budgets would be easy to understand,
would be straightforward to set, would reflect previously implemented
allocations and would allow for the smoothest transition to the new
program proposed today.
For the proposed 28 State SO2 control region, the
proposed annual State EGU SO2 budgets are presented in Table
VI-9, below.
Table VI-9.--28-States and District of Columbia Annual EGU SO2 Budgets
------------------------------------------------------------------------
28-State SO2 28-State SO2
State budget 2010 Budget 2015
(tons) (tons)
------------------------------------------------------------------------
Alabama................................. 157,629 110,340
Arkansas................................ 48,716 34,101
Delaware................................ 22,417 15,692
District of Columbia.................... 708 495
Florida................................. 253,525 177,468
Georgia................................. 213,120 149,184
Illinois................................ 192,728 134,909
Indiana................................. 254,674 178,272
Iowa.................................... 64,114 44,879
Kansas.................................. 58,321 40,825
Kentucky................................ 188,829 132,180
Louisiana............................... 59,965 41,976
Maryland................................ 70,718 49,502
Massachusetts........................... 82,585 57,810
Michigan................................ 178,658 125,061
Minnesota............................... 50,002 35,001
Mississippi............................. 33,773 23,641
Missouri................................ 137,255 96,078
New Jersey.............................. 32,401 22,681
New York................................ 135,179 94,625
North Carolina.......................... 137,383 96,168
Ohio.................................... 333,619 233,533
Pennsylvania............................ 276,072 193,250
South Carolina.......................... 57,288 40,101
Tennessee............................... 137,256 96,079
Texas................................... 321,041 224,729
Virginia................................ 63,497 44,448
West Virginia........................... 215,945 151,162
Wisconsin............................... 87,290 61,103
-----------------
Total............................... 3,864,708 2,705,293
------------------------------------------------------------------------
[[Page 4620]]
If alternatively, EPA were to adopt an 0.10 [mu]g/m\3\ as the air
quality criterion, Oklahoma and North Dakota would also receive
SO2 budgets. Oklahoma's 2010 State SO2 budget
would be 63,328 tons and its 2015 SO2 budget would be 44,330
tons. North Dakota's 2010 SO2 budget would be 82,510 tons
and its 2015 SO2 budget would be 57,757 tons.
If the State EGU SO2 budget is entirely based on the
title IV retirement ratio, then the budget would equal the title IV
allowances multiplied by the retirement ratio (as discussed earlier in
this section). However, under the CAA, the title IV SO2
allowances are allocated on the basis of activity as of 1985, and as a
result, they do not take into account any of the significant changes
and growth in the sectors since that time.
An alternate method of determining State SO2 EGU budgets
would consist of two parts:
(1) The first part of the budget would be based on title IV
allocations--but with a tighter title IV retirement ratio than that
proposed for the region.
(2) The tighter retirement ratio would result in some un-allocated
EGU allowances (reflecting the difference between the regionwide budget
and State budgets calculated based on part (1)). These could be
allocated to States' budgets for their non-title IV EGUs, or as a way
to redistribute or update allowances to the title IV EGUs. This
allocation could be done on the basis of methods discussed in more
detail below. Such a two-part EGU budget would recognize the fact that
the sector has grown and changed since title IV allocations were
initially made.
For NOX, we propose determining State NOX
budgets for EGUs on the basis of current/historic heat input rates.
Regionwide budgets would be distributed to States based on an average
of several years of historical data. We are proposing to use data from
1999 to 2002.
A similar approach was taken by the SO2 program under
title IV of the CAA. As a result, States with significant projected
increases in growth were required to either: (1) Reduce their emissions
further, or (2) burn fuel more efficiently in order to compensate. (For
such States, the ability to trade emissions regionwide was particularly
attractive because States with low increases or decreases in
utilization could trade emissions with States having significantly
increased utilization).
Most of the States within the proposed control region are part of
the NOX SIP Call, with a regionwide budget that on a
seasonal basis constrains increases in NOX emissions for the
region as a whole. States with high growth (measured from a historic
baseline to the start of the new program) would already be provided
incentives to control NOX emissions as they would need to
use additional NOX SIP Call allowances to emit during the
ozone season. Consequently, growth in generation in the years after the
proposed State budgets have been set would not necessarily lead to
increased emissions. Furthermore, the majority of the growth (of heat
input, or output) through 2010 is expected to be met by recently built
natural gas units, with no SO2 and very low NOX
emissions.
Such an option is also appropriate to consider if it is decided
that SO2 budgets for non-title IV sources should be
developed as explained below.
Among the advantages of a budget methodology based on historic/
current activity is that it is relatively simple to implement and would
not need to be changed as a result of future data.
For the proposed 28 State Annual NOX control region, the
proposed annual State EGU NOX budgets based on this
methodology are presented in Table VI-10, below.
Table VI-10.--28-States and District of Columbia Annual EGU NOX Budgets
------------------------------------------------------------------------
28-State NOX 28-State NOX
State Budget 2010 Budget 2015
(tons) (tons)
------------------------------------------------------------------------
Alabama................................. 67,414 56,178
Arkansas................................ 24,916 20,763
Delaware................................ 5,039 4,199
District of Columbia.................... 215 179
Florida................................. 115,489 96,241
Georgia................................. 63,567 52,973
Illinois................................ 73,613 61,344
Indiana................................. 102,283 85,235
Iowa.................................... 30,454 25,378
Kansas.................................. 32,433 27,027
Kentucky................................ 77,929 64,940
Louisiana............................... 47,333 39,444
Maryland................................ 26,604 22,170
Massachusetts........................... 19,624 16,353
Michigan................................ 60,199 50,165
Minnesota............................... 29,300 24,417
Mississippi............................. 21,930 18,275
Missouri................................ 56,564 47,137
New Jersey.............................. 9,893 8,245
New York................................ 52,448 43,707
North Carolina.......................... 55,756 46,463
Ohio.................................... 101,692 84,743
Pennsylvania............................ 84,542 70,452
South Carolina.......................... 30,892 25,743
Tennessee............................... 47,734 39,778
Texas................................... 224,181 186,818
Virginia................................ 31,083 25,903
West Virginia........................... 68,227 56,856
Wisconsin............................... 39,039 32,533
-----------------
Total............................... 1,600,392 1,333,660
------------------------------------------------------------------------
[[Page 4621]]
If alternatively, EPA were to adopt an 0.10 [mu]g/m\3\ as the air
quality criterion, Oklahoma and North Dakota would also receive annual
NOX budgets. The proposed annual State EGU NOX
budgets for all 30 States based on the proposed methodology are
presented in Table VI-11 below.
Table VI-11.--30-State and District of Columbia Annual EGU NOX Budgets
------------------------------------------------------------------------
30-State NOX 30-State NOX
State budget 2010 budget 2015
(tons) (tons)
------------------------------------------------------------------------
Alabama................................. 67,415 56,179
Arkansas................................ 24,916 20,763
Delaware................................ 5,039 4,199
District of Columbia.................... 215 179
Florida................................. 115,490 96,242
Georgia................................. 63,568 52,973
Illinois................................ 73,614 61,345
Indiana................................. 102,283 85,236
Iowa.................................... 30,454 25,378
Kansas.................................. 32,433 27,027
Kentucky................................ 77,929 64,941
Louisiana............................... 47,333 39,445
Maryland................................ 26,604 22,170
Massachusetts........................... 19,624 16,353
Michigan................................ 60,199 50,166
Minnesota............................... 29,300 24,417
Mississippi............................. 21,930 18,275
Missouri................................ 56,565 47,137
New Jersey.............................. 9,894 8,245
New York................................ 52,448 43,707
North Carolina.......................... 55,756 46,463
North Dakota............................ 26,570 22,141
Ohio.................................... 101,693 84,744
Oklahoma................................ 41,293 34,411
Pennsylvania............................ 84,543 70,452
South Carolina.......................... 30,892 25,744
Tennessee............................... 47,734 39,778
Texas................................... 224,183 186,819
Virginia................................ 31,083 25,903
West Virginia........................... 68,227 56,856
Wisconsin............................... 39,040 32,533
-----------------
Total............................... 1,668,268 1,390,223
------------------------------------------------------------------------
There are two different metrics that EPA could use for determining
alternate State EGU NOX budgets. These metrics include:
(1) Pro-rated emissions levels (budgets based on reductions in
emissions levels),
(2) Pro-rated share of Output (kwh) (budgets based on their output
(same lb/kwh rate)).
We solicit comment on the use of these different methods.
There are options for implementing the heat input-based budget and
the two different metrics in determining actual State budgets. Budgets
could be based on projected levels (calculated by taking historical
level and applying growth rates, or directly taking levels projected by
IPM).
The methodology used in the NOX SIP Call (setting State
budgets by applying State-specific growth rates for heat input) is an
example of this approach. (67 FR 21868; May 1, 2002) Alternatively, it
would be possible to use heat input or output as projected directly by
IPM in the setting of budgets. This would have the benefit of being
consistent with the methodology for determining cost. We would also
have projections for relevant years, and there would be little
disconnect between the years used to develop growth rates and the years
to which growth rates are applied. However, under such a methodology,
it would be difficult to adjust budgets if we receive comments about
missing units. We solicit comment on these options.
As noted above, EPA proposes that Connecticut contributes
significantly to ozone nonattainment areas, but not to fine particle
nonattainment areas. Thus, Connecticut would not be subject to proposed
annual SO2 and NOX controls, but would be subject
to ozone season-only NOX control requirements. We propose an
ozone-season EGU NOX control level of 4,360 tons in 2010 and
about 3,633 tons in 2015.
If Connecticut (or any State subject to an existing NOX
ozone season-only budget program) chooses to participate in the
interstate trading program proposed today, that State would need to
operate under an annual NOX cap rather than ozone season
only. Interstate trading is discussed in more detail in section VIII of
this preamble. The EPA proposes an annual NOX control level
of about 9,283 tons in 2010 and 7,735 tons in 2015, if Connecticut were
to participate in today's proposed interstate trading program on an
annual basis.
The EPA calculated these proposed levels using the 1999 Acid Rain
Program reported heat inputs for Connecticut. The ozone-season level
was calculated by multiplying the reported ozone-season heat inputs by
0.15 lb/mmBtu for 2010 and 0.125 lb/mmBtu for 2015. The proposed annual
level was determined by multiplying the reported annual heat input by
0.15 lb/mmBtu for 2010 and 0.125 lb/mmBtu for 2015. We reviewed
reported Acid Rain Program heat inputs for the years 1999 through 2002,
and selected 1999 data for calculating these proposed levels because
the 1999
[[Page 4622]]
Connecticut heat input was higher than the other 3 years considered,
and this is similar to the way the regionwide proposed control levels
were calculated.
The EPA also takes comment on an alternate way to calculate a
NOX budget for Connecticut that would be entirely consistent
with the way that the budgets were calculated for other States. Under
this methodology, EPA would calculate region wide NOX
budgets for both the ozone season and non ozone season using State by
State heat input data for the highest year between 1999 and 2002 and
multiplying it by 0.15 lbs/mmBtu for 2010 and 0.125 lbs/mmBtu for 2015.
Both ozone season and non-ozone season State budgets would be
calculated by giving States their pro-rated share of the budget based
on annual heat input from the years 1999 to 2002. For States required
to make year-round reductions, their budgets would be based on the sum
of their ozone-season and non-ozone season heat input. For a State such
as Connecticut that was only required to make ozone-season reductions,
its ozone-season budget would be based upon its share of the ozone-
season budget. If Connecticut decided to participate on an annual
basis, its budget would be calculated like all other States.
E. Budgets for Use by States Choosing To Control Non-EGU Source
Categories
While EPA is not proposing to assume any emissions reductions from
other source categories (e.g., non-EGU stationary sources, area sources
and mobile sources), States may elect to obtain some or all of the
required emissions reductions from other source categories. In this
case, EGUs within the State would not be able to participate in the cap
and trade programs.
If a State chooses to obtain some but not all of its required
reductions from EGUs, it would set an EGU SO2 budget and/or
an EGU NOX budget, at some level higher than shown in Tables
VI-9 and VI-10. The State must also (1) develop baseline emissions sub-
inventories for all non-EGU sectors for 2010 and 2015, (2) divide the
portion of the required emissions reductions that it will not obtain
from EGUs (i.e., the difference between its selected EGU budget for
SO2 or NOX and the budget listed in Tables VI-9
or VI-10) among the non-EGU source sectors in any manner it chooses,
(3) subtract these emissions reductions from the corresponding
emissions sub-inventories to arrive at the emissions budget for each
sector, and (4) adopt measures that are projected to achieve those
budgets. Compliance with all of these control measures would be
enforceable. Section VII explains the role of emission budgets for non-
EGU sectors in more detail. We plan to propose in the SNPR requirements
to ensure the accuracy of the baseline emission sub-inventories.
We believe it is unlikely that any State will choose to obtain all
or part of the required SO2 and NOX emission
reductions from sources other than EGUs, but we do wish to offer States
this alternative if equal reductions can be obtained. The SNPR will
propose specific emission reductions for this purpose, or provisions
for determining these emission reduction quantities. Once these are
determined, the four steps described in the previous paragraph will
apply.
F. Timing and Process for Setting Baseline Inventories and Sub-
Inventories
In the NOX SIP Call, EPA promulgated a NOX
emission reduction requirement for each State (as we propose here for
SO2 and NOX). We also promulgated baseline sub-
inventories for each State for five sectors (EGU, non-EGU, area, non-
road, and highway) which summed to an overall baseline inventory.
Finally, the NOX SIP Call rule contained a table of State-
by-State NOX emissions budgets, developed by subtracting the
required NOX emission reduction from the overall baseline
NOX inventory.
Today, we are proposing specific EGU budgets for affected States
for the purposes of the model trading program, but we are not proposing
any baseline sub-inventories. There is no need for baseline sub-
inventories to be established by rule for States choosing to
participate in the model trading programs. As explained in section VI.E
above, we propose that if a State chooses to obtain some of the
required emission reductions from non-EGU sources, the baseline sub-
inventories and the sector budgets should be developed by the State
itself and be subject to EPA approval as part of the transport SIP. In
this way, baseline sub-inventories and sector budgets will reflect
updates to newer emission estimation methods, more recent data on
current emissions, and updated projection methods. This will increase
the certainty that the required emission reductions will be achieved in
practice.
We invite comment at this time on what assumptions and methods for
establishing sector inventories should be specified in the supplemental
proposal and final rule. In the NOX SIP Call, for example,
we said that emissions reductions from subsequent Federal rules must be
incorporated into the baseline sector inventories. Clear rules
regarding determination of historical emissions, development of growth
factors, estimation of rule effectiveness, and credibility of State-
adopted measures may also be needed.
Section IV, above, presents the baseline emission projections that
have been used in the air quality modeling that supports today's
proposal. We will be updating these baseline inventories for the final
rule to incorporate newer data and methods.
G. Comment on Emissions Caps and Budget Program
While EPA's analysis indicates that the availability of boilermaker
labor will be a limiting factor in first phase scrubber installations,
the Agency is soliciting comment on this analysis. In particular, we're
asking for comment on whether there might be alternative post-
combustion technologies that could reduce SO2 emissions in a
manner equally cost-effective as scrubbers, but that wouldn't require
as much boilermaker labor. Examples might include multi-pollutant
technologies (boilermaker labor might be less constrained if single
technologies can be installed to reduce both SO2 and
NOX). We also solicit comment on whether advanced coal
preparation processes might provide highly cost effective emission
reductions. We solicit comment on whether such alternative technologies
will be commercialized by 2010, and what the costs will be.
In addition, EPA seeks comment on whether other factors such as
other EPA regulatory actions will create an increase in boilermaker
demand earlier than today's proposal (pre-2007), resulting in growth in
the number of boilermakers that could be used to install controls
required under this program in 2007 and beyond. We solicit comments on
whether other factors might increase demand for boilermakers in advance
of 2007, and what these factors would be.
As noted above, EPA is proposing to require SO2 and
NOX to be reduced by similar percentages in the first phase
of today's proposed rule, given the limited supply of labor to install
controls at electric generating units. An alternative would be to give
priority to SO2 control in the first phase, and postpone
summertime NOX reductions for a couple of years. This would
focus limited labor resources on SO2 control to reduce the
sulfate component of PM2.5 as quickly as possible. This
approach could achieve more early PM2.5 reductions and might
help some PM2.5 nonattainment areas attain earlier. On the
one hand, based on the analysis
[[Page 4623]]
of section XI, the quantified benefits from PM2.5 control
are generally larger than those for ozone. Nevertheless, the tradeoff
would be that ozone reductions under the interstate air quality rule
would be postponed. Because many ozone areas will be required to attain
in 2010, fewer projected ozone nonattainment areas would be helped by
the interstate air quality rule. A number of areas required to attain
in 2010 (and perhaps some 2013 areas as well) would incur greater local
control costs to attain on time, or achieve less improvement in ozone
levels. We request comment on the relative merits of the proposed
approach and this alternative, considering public health, costs, and
equity. More generally, EPA seeks comment on the mix of first phase
SO2 and NOX reductions that represents the proper
balance between the goals of reducing PM2.5 transport and
ozone transport in the near term.
Additionally, EPA seeks comment on the level of the second phase
caps and the resulting division of responsibility between local and
interstate transport sources. Would a less stringent or more stringent
level of transport control lower total costs of attainment, or better
address equity issues? Has EPA identified the appropriate level of
control as highly cost effective? Should the Agency reduce the second-
phase reductions (or raise the second-phase caps) for NOX
and SO2, and thereby leave more of the emissions reductions
burden to the individual States preparing plans for meeting air quality
standards in each nonattainment area? Or should the second-phase
emissions reductions be increased (or the caps be made lower) in an
effort to give more help to States through regional controls that
achieve greater reductions and benefits while remaining cost effective?
For example, rather than basing the 2015 caps on a 65 percent reduction
from title IV levels, should they be based on a 55 percent reduction or
a 75 percent reduction?
The EPA also requests comment on the timing of each phase of the
cap and trade program. Regarding the first phase, EPA notes that the
January 1, 2010 NOX compliance date occurs after the last
ozone season that influences the attainment status of the ``moderate''
8-hour ozone nonattainment areas that will receive an attainment date
no later than April 2010. We also note that its analysis indicates that
the level of control in the first phase is constrained by the amount of
control equipment that can be installed by a limited labor force, and
providing an earlier compliance deadline might reduce the reductions
feasible in the first phase. We request comment on whether the first
phase deadline should be as proposed, or adjusted earlier or later, in
light of these competing factors.
For SO2, if States choose to control EGUs through the
model cap and trade program, emissions banking provides incentives that
lead to steadily declining emissions and thus results in additional
benefits before the 2010 and 2015 reductions. However, it appears that
it would help several States to reach attainment by CAA deadlines if
the second phase emissions cap went into effect earlier, especially for
NOX. This needs to be balanced against the ability of the
power industry to do substantially more at that time. The EPA is
soliciting comment on the timing of the second phase.
The EPA strongly encourages each State to consider reserving a
portion of its allowance budget for an auction. Proceeds from the
auction would be fully retained by the State to be used as they see
fit. Some possible suggestions for auction revenue that States may want
to choose will be further explored in a supplemental notice. For
example, a State could develop a program that uses the revenue to
provide incentives for additional local reductions within nonattainment
areas.
The EPA sees benefits in requiring States to reserve a portion of
their budgets for auction, but has concerns about whether such a
requirement would intrude on State prerogatives.\87\ We solicit comment
on this issue.
---------------------------------------------------------------------------
\8\ See Virginia v. EPA, 108 F.3d 1397 (D.C. Cir. 1997).
---------------------------------------------------------------------------
H. Budgets for Federally-Recognized Tribes
In the 1990 CAA amendments, Congress recognized our obligation to
treat Tribes in a manner similar to States. Currently, we are not aware
of any EGUs in Indian country in the eastern and central U.S. that
could potentially be affected by the interstate air quality rule.
The Tribal air programs are relatively new and Tribes are just now
establishing their capacity to develop air quality management plans and
beginning to participate in national policy setting processes such as
this rulemaking. In addition, past Federal policy limited the economic
development and thus the number of emissions sources that might
otherwise have been built on Tribal lands. However, many Tribes are
currently encouraging economic development on their lands, particularly
in the area of energy generation.
In the NOX SIP Call, EPA did not explicitly consider the
issue of Tribal lands and we made no specific provisions for them. One
consequence is that Tribal implementation plans--even ones that cover
new or existing sources on Tribal lands--apparently are not subject to
any of the requirements of the NOX SIP Call rule. We now
realize that we should adopt specific provisions for Tribal lands in
today's proposed rulemaking. For States, which have substantial
emissions now and corresponding impacts on nonattainment in other
States, we have focused in this proposal on what emissions reductions
are needed to eliminate existing significant contributions to
nonattainment. For Tribes, since there are few sources on Tribal lands
now and no EGUs, we should consider what increases are possible without
causing significant contributions to nonattainment in State lands and
other Tribal lands.
Title IV SO2 allowances have been provided to EGUs.
Because there are no EGUs on Tribal lands, title IV allowances have not
been awarded to any EGUs on Tribal lands. Additionally, without EGUs
there is no historical heat input for use in calculating an allowance
budget for NOX for Tribal lands. In our discussions prior to
this proposal, Tribal representatives have expressed concern that
budgets based on existing emissions effectively exclude them from the
program unless Tribes buy allowances from the surrounding States. If
Tribes do buy allowances, they will be effectively subsidizing the
development and inadequate environmental planning of surrounding
States. In this rulemaking, we are taking into consideration the past
inequities created by Federal policy and traditionally depressed
development in Indian country, as well as the need to make progress in
air quality.
We are not proposing specific provisions for Tribal lands today. We
invite comment generally and on the following specific questions
regarding allowance allocation to Tribes:
(1) Should allowance budgets for Tribes be created by the rule
separately from State allowance budgets, or be deducted from the
proposed State budgets? On what basis or criteria should either
approach be implemented?
(2) Alternatively, should the rule set an allowance pool for Tribes
in the aggregate with some further process by EPA or by the Tribes
collectively to allocate the allowances to specific Tribes? Should the
allowance allocation issues be deferred entirely to separate action(s)
later? Should any immediate or
[[Page 4624]]
eventual allocations to individual Tribes be based on current
emissions, existing contracts for new sources, population, land base,
or some other factor(s)? Some Tribes may have concerns that deferral of
allowance allocations to individual Tribes does not adequately
recognize the sovereignty of individual Tribal nations. There may also
be concern that continued uncertainty in the allowances available to
the individual Tribes may discourage planning for development.
(3) Should allowances be tradeable among Tribes once allocated?
Should they be bankable?
(4) Because the SIPs do not generally apply in Indian country, the
system for regulating sources on Tribal land for purposes of limiting
transport will need to be implemented through either a Tribal
implementation plan or a Federal implementation plan. We invite comment
on the best mechanism to implement the budgets.
We recognize that information on economic development and potential
for growth may be sensitive for the Tribes to share with EPA or a
public docket. We request input from the Tribes on how to determine the
allowance needs for the Tribes.
VII. State Implementation Plan Schedules and Requirements
This section describes the dates for submittal and implementation
of the interstate transport SIPs that today we propose to require, and
discusses those dates in the context of the attainment dates and SIP
submittal requirements for the downwind nonattainment areas. In
addition, this section describes the required SIP elements that we
propose today.
A. State Implementation Plan Schedules
1. State Implementation Plan Submission Schedule
Clean Air Act section 110(a)(1) requires each State to submit a SIP
to EPA ``within 3 years * * * after the promulgation of a [NAAQS] (or
any revision thereof).'' Section 110(a)(2) makes clear that this SIP
must include, among other things, the ``good neighbor'' provisions
required under section 110(a)(2)(D). These provisions may be read
together to require that each upwind State submit, within three years
of a NAAQS revision, SIPs that address the section 110(a)(2)(D)
requirement.
The PM2.5 and 8-hour ozone NAAQS revisions were issued
in July 1997. More than 3 years have already elapsed since promulgation
of the NAAQS, and States have not submitted SIPs to address their
section 110(a)(2)(D) obligations under the new NAAQS. We further
recognize that until recently, there was substantial uncertainty as to
whether each NAAQS would be remanded to EPA, and that this uncertainty
would, as a practical matter, render more complex the upwind States'
task of developing transport SIPs.
In addition, today's proposal makes available a great deal of data
and analysis concerning air quality and control costs, as well as
policy judgments from EPA concerning the appropriate criteria for
determining whether upwind sources contribute significantly to downwind
nonattainment under section 110(a)(2)(D). We recognize that States
would face great difficulties in developing transport SIPs without
these data and policies. In light of these factors and the fact that
States can no longer meet the original three-year submittal date, we
are proposing that SIPs to reduce interstate transport, as required by
this proposal, be submitted as expeditiously as practicable, but no
later than 18 months from the date of promulgation. The EPA intends to
promulgate today's proposed rule between approximately December 2004
and June 2005. In this case, the SIPs required today would be due
between approximately July and December 2006.
By comparison, in the NOX SIP Call rulemaking, EPA
provided 12 months for the affected States to submit their SIP
revisions. One of the factors that we considered in setting that 12-
month period was that upwind States had already, as part of the Ozone
Transport Assessment Group process begun three years before the
NOX SIP Call rulemaking, been given the opportunity to
consider available control options.
Since today's proposal requires affected States to control both
SO2 and NOX emissions, and to do so for the
purpose of addressing both the PM2.5 and 8-hour ozone NAAQS,
we believe it is reasonable to allow affected States more time than was
allotted in the NOX SIP Call to develop and submit transport
SIPs. Since we plan to finalize this rule no later than mid-2005, SIP
submittals would be due no later than the end of 2006. Under this
schedule, upwind States' transport SIPs would be due before the
downwind States' PM2.5 and 8-hour ozone nonattainment SIPs,
under CAA section 172(b). We expect that the downwind States' 8-hour
ozone nonattainment area SIPs will be due by May 2007, and their
nonattainment SIPs for PM2.5 by January 2008.\88\
---------------------------------------------------------------------------
\88\ The actual dates will be determined by relevant provisions
in the CAA and EPA's interpretation of these provisions published in
upcoming implementation rules for the PM2.5 and 8-hour
ozone NAAQS.
---------------------------------------------------------------------------
The SIP submittal date proposed today should be considered in the
context of the downwind nonattainment area SIP submittal schedules and
attainment dates. Under CAA section 172(b), the downwind nonattainment
SIPs are due no later than three years after the designations. The EPA
expects to designate PM2.5 areas by December 31, 2004, and
to require the nonattainment area SIPs by three years of the
designation. The EPA is required to designate 8-hour ozone areas by
April 15, 2004, with an effective date of May 2004, and to require the
nonattainment area SIPs by three years of the designation.
Accordingly, today's proposal requires the submittal of the upwind
transport SIPs before the downwind nonattainment area SIPs will be due.
This sequence is consistent with the provisions of both section
110(a)(1)-(2), which provides that the submittal period for the
transport SIPs runs from the earlier date of the NAAQS revision; and
section 172(b), which provides that the submittal period for the
nonattainment area SIPs runs from the later date of designation.
The earlier submittal date for transport SIPs is also consistent
with sound policy considerations. The upwind reductions required today
will facilitate attainment planning by the downwind States. Further,
most of the downwind States that will benefit by today's rulemaking are
themselves upwind contributors to problems further downwind, and, thus,
are subject to the same requirements as the States further upwind. The
reductions these downwind States must implement due to their additional
role as upwind States will help reduce their own PM2.5 and
8-hour ozone problems on the same schedule as emissions reductions for
the upwind States.
2. Implementation Schedule
Section 110(a)(2)(D) requires SIPs to ``contain adequate provisions
* * * prohibiting * * * [emissions that] will * * * contribute
significantly to nonattainment in * * * any other State. * * *'' The
phrase ``will * * * contribute significantly'' suggests that EPA should
establish the significance of the emissions' contribution, and require
their prohibition, as of a time in the future. However, the provision
does not, by its terms, indicate the applicable date in the future; nor
does it address the future period of time.
For today's proposal, EPA believes that determining significant
[[Page 4625]]
contribution as of 2010, and requiring implementation of the reductions
by January 1, 2010, is a reasonable application of the statutory
provisions. As discussed in section VI, emissions controls for EGUs may
be feasibly implemented by that time. As a result, January 1, 2010 is
the date by which we can confidently predict that highly cost-effective
emission reductions from EGUs can begin, considering cost broadly to
encompass many factors, including engineering feasibility and
electricity supply reliability risks.
Emissions reductions by this date will also provide significant air
quality benefits to the downwind nonattainment areas. We expect that
the attainment date for numerous downwind areas will be 2010 or later,
so that these reductions will facilitate attainment. For ozone
nonattainment areas, the reductions will reduce the amount of
nonattainment. For PM2.5 nonattainment areas, the reductions
will have the same effect, and help bring those areas into attainment.
Indeed, we believe that the anticipation of the optional trading
program beginning in 2010 will create incentives for reductions in
SO2 emissions prior to that date. Therefore, today's
proposal will have benefits for progress towards attainment with the
PM2.5 NAAQS in the years between finalization of this rule
and 2010. Further discussion of these air quality benefits is included
in section IX.
As discussed in section VI, feasibility considerations warrant
deferring a portion of the emissions reductions to 2015. As discussed
in section IX, these reductions will provide air quality benefits at
that time, as well, and, as in the case with the 2010 emission
reductions, we expect that the anticipation of tighter controls will
likely lead to SO2 emissions reductions prior to 2015.
B. State Implementation Plan Requirements
Today's proposal requires States to submit SIPs that contain
controls sufficient to eliminate specified amounts of emissions. The
EPA determined these amounts through the application of highly cost-
effective controls to the EGU source category. The amount of the
emissions reduction is determined by comparing the amount of EGU
emissions in the base case--that is, in the absence of controls--to the
amount of emissions after implementation of the controls. Section VI
contains a more detailed discussion of the process for determining the
amounts of emissions in the base case.
As noted elsewhere, EPA is gathering information concerning certain
other source categories. However, EPA does not, at present, have
information upon which to propose a determination that any other source
categories may achieve specific emissions reductions at a cost that
could be considered highly cost effective.
To achieve the required amount of emissions reductions, States may
impose emission limits on other sources--in addition to EGUs--if they
choose. The EPA is considering what additional requirements are needed
to ensure that these limits are met. Overarching considerations include
whether the requirements (i) provide certainty that all emissions that
EPA determined to contribute significantly will be eliminated both at
the State and regional level; (ii) ensure that contributions will
continue to be eliminated in future years; and (iii) ensure that the
control requirements can be feasibly implemented.
The EPA considered two main approaches to the SIP requirements: a
budget (i.e., cap) approach, and an emission reduction approach. The
EPA is proposing a hybrid approach that we believe incorporates the
best elements of both approaches while minimizing the shortfalls of
both approaches.
1. The Budget Approach
In its most rigorous form, a budget approach would require a
statewide cap, that is, the capping of aggregate emissions from all
source categories in each State. Mechanisms would be set up to ensure
that the overall budget was not exceeded. These mechanisms could
require individual source categories to meet sub-budgets or could
provide for emission shifting between source categories. Subjecting
each State throughout the region to aggregate emissions budgets would
provide great certainty that the amount of emissions identified as
contributing significantly to nonattainment had been eliminated. This
approach would also assure that the significant contribution was fully
addressed for future years because any increase in activity across all
emission sources would have to occur within the budget, that is,
without generating additional emissions. If all States applied such an
approach, it would also assure that emissions from a source within a
given source category would be permanently reduced and not merely
shifted to another source within the region, as could occur if sources
in one State were controlled under a budget but similar sources in
another State were not.
A less rigorous approach would require enforceable budgets for only
some source categories, namely, those that were required to make the
emissions reductions. Under this approach, there would be less
certainty that all States will continue to not contribute significantly
(in terms of the air quality component) in future years because growth
in overall emissions may still occur.
The U.S. EPA and State environmental agencies have successfully
applied budget approaches to certain source categories and groups of
source categories. For instance, the title IV requirements of the CAA
applied a SO2 budget to most large EGUs. The Ozone Transport
Commission (OTC) NOX budget trading program applied an ozone
season NOX budget to large EGUs and non-EGU boilers and
turbines, and many States have adopted the same approach to meet the
requirements of the NOX SIP Call.\89\ These successes
demonstrate that budget programs can work for large stationary sources.
These types of sources can accurately monitor emissions at the unit
level, and these sources are manageable in number, so that overall
emissions can be determined using this unit level data.
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\89\ These budget approaches authorize trading among sources,
but other control methodologies, such as emission rate controls, may
also authorize trading. See U.S. EPA, ``Improving Air Quality with
Economic Incentive Programs,'' (January 2001).
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On the other hand, there has been virtually no experience with
budget programs for mobile and area sources, due to challenges in
accounting for emissions from these types of sources. Emissions from
these sources are typically estimated using emission factors and
estimated emission data, so that there is much less certainty about the
accuracy of these amounts of emissions. Additionally, monitoring at the
unit level and tracking unit level emissions would be much more
difficult because of the large number of small sources involved.
As noted above, EPA believes that there are benefits from requiring
a State to impose a cap on EGUs. We also believe that there would be
benefits from requiring a State to impose a cap on any source category
on which the State imposes controls. One benefit would be a permanent
limit on the amount of emissions from that category to assure the
reductions in emissions that significantly contribute to nonattainment
in affected downwind States. We solicit comment on the approach of
requiring States to impose caps on any source categories which the
State chooses to regulate under the rule proposed today.
[[Page 4626]]
2. The Emissions Reduction Approach
Under the emissions reduction approach, SIPs must impose control
requirements that typically consist of an emission rate limit or,
possibly, application of a specified type of technology, but not an
emissions cap. These control requirements, when implemented by the
affected sources in the implementation years, must result in the amount
of emission reductions that EPA required through the highly cost-
effective calculations described in section VI.
This approach is most useful when a State chooses to apply the
control requirements to a source category for which current source-
monitoring methods do not permit specific emissions quantification for
each source, and for which shifts in emissions-generating activity are
unlikely to result from the control program. This limitation in the
methodology may result because, among other possible reasons, (i) the
source's emissions generating activities are of a type for which no
accurate quantification methodology exists; (ii) such a methodology
would be unreasonably expensive to apply to the source; or (iii) the
sources are too numerous.
Even so, to ensure that the desired emissions reductions are
achieved, this methodology requires accurate baseline emission
estimates, which, as a practical matter, may be difficult to develop in
light of the uncertainties in estimating emissions from the affected
source types. If the baseline estimates are high, States may achieve
credit for emissions reductions they will not in fact achieve (by
reducing emissions to a certain emission rate from the incorrectly high
baseline emission rate). Additionally, while this approach may assure
similar emissions reductions to the budget approach in the early years
following implementation, growth in activity levels in the controlled
source categories would likely lead to growth in emissions in later
years, which in turn may adversely affect downwind nonattainment areas.
Although the emissions reduction approach has limitations, EPA
believes it is the most workable approach for some source categories,
such as mobile and area sources, for which there is little or no
experience in using the budget approach and for which the available
emissions quantification techniques are too imprecise to support the
budget approach.
3. The EPA's Proposed Hybrid Approach
The EPA proposes today to require each affected State to submit a
SIP containing control requirements that will assure a specified amount
of emissions reductions. These amounts would be computed with reference
to specified control levels for EGUs, which EPA has determined to be
highly cost effective.
States may meet their emissions reduction requirements by imposing
controls on any source category they choose. If they choose the EGU
source category, they must impose a cap because this category may
feasibly implement a cap. If States choose to get emissions reductions
from other source categories, they may implement the emissions
reduction approach, that is, they need not implement caps, but rather
may implement other forms of controls. Even so, EPA strongly encourages
States to control source categories for which workable budget programs
can be developed, and to require the budget approach for those sources
to which it can feasibly be applied.\90\
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\90\ It should be noted that even if a State uses a budget
approach for a source category within the State, it is possible that
production may shift to another part of the transport region, so
that the State's claimed emission reductions may in fact simply
represent emissions shifted to another part of the transport region.
---------------------------------------------------------------------------
The EPA is proposing specific requirements that States must meet,
depending on which source categories they choose to control. These
requirements are intended to provide as much certainty as possible that
the controls will eliminate the amounts of significant contributions.
a. Requirements if States Choose To Control EGUs
As explained above, States must apply the budget approach if they
choose to control EGUs. That is, they must cap EGUs at the level that
assures the appropriate amount of reductions. We believe that this is
the preferable approach for complying with today's proposed rule.
Moreover, as discussed in sections VI and VIII, States that choose
to allow their EGUs to participate in EPA-administered interstate
SO2 and NOX emissions trading program must adhere
to EPA's model trading rules, which we intend to propose in the SNPR.
For SO2 sources, these rules will require the States to
allocate control obligations to sources in a manner that mirrors the
sources' title IV allowance allocations, although EPA is considering
certain variations that are described in section VI.
With respect to monitoring, recordkeeping, and reporting
requirements, most EGUs are already subject to the requirements of 40
CFR part 75 to demonstrate compliance with the title IV SO2
provisions. In addition, many EGUs are also subject to part 75 due to
SIP requirements under the NOX SIP Call. The EPA believes
that part 75 provides accurate and transparent accounting of emissions
from this source category. Therefore, EPA proposes to require States,
if they apply controls to EGUs, to subject EGUs to the requirements of
part 75.
As explained in sections VI and VIII, today's proposed
SO2 emissions reductions requirement, when applied to EGUs
subject to the title IV allowance programs, would result in a cap that,
in turn, would create surplus title IV allowances. These surplus
allowances, if allowed to be traded, may have adverse impacts in and
outside of the States directly affected by today's proposal. In
particular, the large number of these allowances that become available
may depress their price, which may lead to even more of them being
purchased and used in States not affected by today's proposed rule.
To prevent these impacts, EPA is proposing that SIPs assure that
the State's title IV allowances exceeding the emissions that the
State's EGUs may emit under the rule proposed today are not used in a
manner that undermines the rule proposed today. As a practical matter,
SIPs may need to require the retirement or elimination of certain of
the title IV allowances. The number of retired or eliminated allowances
may well equal the difference between the number of title IV allowances
allocated to a State and the SO2 budget that the State sets
for EGUs under today's proposed rule. For example, assume that a
State's EGUs are allocated a total 5,000 SO2 allowances
under title IV (each allowance authorizes one ton of SO2
emissions). Assume further that today's proposed rule requires the
State to reduce its SO2 emissions by 2,500 tons. Assume even
further that the State chooses to achieve all of the required
reductions from EGUs, beginning January 1, 2010. Under these
circumstances, the SIP must include a mechanism to retire or eliminate
the remaining 2,500 allowances.
The EPA believes that this proposed requirement to retire or
eliminate surplus allowances applies regardless of whether or not a
State participates in the EPA-managed trading system. If the State does
not participate in the EPA-managed trading system, it may choose
[[Page 4627]]
the specific method to retire or eliminate surplus allowances from its
sources. If it chooses the EPA-managed trading system, it must adhere
to the provisions of the model trading rule, which are broadly outlined
in section VIII.
States may allow EGUs to demonstrate compliance with the State EGU
SO2 emission budget by using (i) allowances that were banked
(that is, issued for years earlier than the year in which the source is
demonstrating compliance), or (ii) title IV allowances from the same
year purchased from sources in other States.
b. Requirements if States Choose To Control Sources Other Than EGUs
If a State chooses to require emissions reductions from only EGUs,
then its SIP revision submitted under the rule proposed today need
contain only provisions related to EGUs, as described above. The State
need not adopt or submit, under the rule proposed today, any other
provisions concerning any other source categories.\91\
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\91\ Of course, the State may be obligated to submit SIP
revisions covering other source categories under applicable CAA
provisions other than section 110(a)(2)(D).
---------------------------------------------------------------------------
On the other hand, if a State chooses to require emissions
reductions from sources other than EGUs, the State must adopt and
submit SIP revisions, and supporting documentation, designed to
quantify the amount of reductions from the sources and to assure that
the controls will achieve that amount of reductions. The EPA is not
proposing today that the State be required to cap those sources.
However, EPA solicits comment on whether to require States that choose
to control sources other than EGUs to cap those sources.
To demonstrate the amount of emissions reductions from the
controlled sources, the State must take into account the amount of
emissions attributable to the source category both (i) in the base
case--that is, in the implementation year (2010 and 2015) without
assuming SIP-required reductions from that source category under
today's proposed rule--and (ii) in the control case. Both scenarios
(base case and control case) are necessary to determine the amount of
emissions reductions that will result from the controls. As noted
above, section VI contains a more detailed discussion of the process
for determining the amounts of emissions in the base case.
The EPA intends to propose in the SNPR monitoring, recordkeeping,
and reporting requirements for sources other than EGUs. Further, EPA
intends to include proposed rule language for these requirements.
Commenters will have an opportunity to comment following publication of
the SNPR. As a result, EPA is not soliciting comment on this subject
now. Even so, EPA intends to consider any comments submitted on this
subject that commenters may wish to submit.
VIII. Model Cap and Trade Program
In today's action, we are outlining multi-State cap and trade
programs for SO2 and NOX that States may choose
as a cost-effective mechanism to achieve the required air emissions
reductions. Use of these cap and trade programs will not only ensure
that emissions reductions under the proposed rulemaking are achieved,
but also provide the flexibility and cost effectiveness of a market-
based system. This section provides background information, a
description of the cap and trade programs, and an explanation of how
the cap and trade programs would interface with other State and Federal
programs. It is EPA's intent to propose model SO2 and
NOX cap and trade rules in a future SNPR that States could
adopt.
By adopting the model rules, States choose to participate in the
cap and trade programs, which are a fully approvable control strategy
for achieving emissions reductions required under today's proposed
rulemaking. Should a State choose to participate in the cap and trade
programs, EPA's authority to cooperate with and assist the State in the
implementation of the cap and trade program(s) would reside in both
State law and the CAA. With respect to State law, any State that elects
to participate in the cap and trade programs as part of its SIP will be
authorizing EPA to assist the State in implementing the cap and trade
program with respect to the regulated sources in that State. With
respect to the CAA, EPA believes that the Agency's assistance to those
States that choose to participate in the cap and trade programs will
facilitate the implementation of the programs and minimize any
administrative burden on the States. One purpose of title I of the CAA
is to offer assistance to States in implementing title I air pollution
prevention and control programs (42 U.S.C. 101(b)(3)). In keeping with
that purpose, section 103(a) and (b) generally authorize EPA to
cooperate with and assist State authorities in developing and
implementing pollution control strategies, making specific note of
interstate problems and ozone transport. Finally, section 301(a) grants
EPA broad authority to prescribe such regulations as are necessary to
carry out its functions under the CAA. Taken together, EPA believes
that these provisions of the CAA authorize EPA to cooperate with and
assist the States in implementing cap and trade programs to reduce
emissions of transported SO2 and NOX that
contribute significantly to ozone and PM2.5 nonattainment.
To inform the current rulemaking process, EPA recently hosted two
workshops in July and August of 2003 to listen to States and multi-
State air planning organization's experience with the NOX
SIP Call program to date: What has worked well, what may not have
worked well, and what could be improved. (The EPA Web site \92\
provides information on these workshops.) Workshops such as these have
played an important role in the development and implementation of the
NOX SIP Call and will help in the development of this rule.
---------------------------------------------------------------------------
\92\ http://www.epa.gov/airmarkets/business/noxsip/atlanta/atl03.html.
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This section in today's action describes, on a generally conceptual
level, the cap and trade program. EPA will publish, in a future SNPR, a
more detailed description of the proposed rules, as well as model
rules. As a result, EPA is not soliciting comment on this section in
today's action. Interested persons will have a full opportunity to
comment on all aspects of this cap and trade program through the SNPR.
Even so, EPA recognizes that continued stakeholder input on the cap and
trade programs described in this section may be useful concerning the
programmatic implications of addressing multiple environmental issues
(i.e., PM2.5 and ozone) with synchronized cap and trade
programs for SO2 and NOX. Accordingly, EPA
intends to review comments that may be submitted on all of the program
elements described in today's NPR.
A. Application of Cap and Trade Approach
1. Purpose of the Cap and Trade Programs and Model Rules
In the cap and trade programs, EPA is proposing to jointly
implement with participating States a capped market-based program for
EGUs to achieve and maintain an emissions budget consistent with the
proposed rulemaking. Specifically, EPA has designed today's proposal to
assist States in their efforts to: (1) Improve air quality and achieve
the emissions reductions required by the proposed rulemaking; (2) offer
compliance flexibility for regulated sources; (3) reduce compliance
costs for sources controlling emissions; (4)
[[Page 4628]]
streamline the administration of programs to reduce multiple pollutants
for States; and (5) ensure that emission reductions are occurring and
that results are publicly available. In addition to realizing these
benefits of a cap and trade program, EPA also seeks to create as simple
a regulatory regime as possible by applying a single, comprehensive
regulatory approach to controlling multiple pollutants across multiple
jurisdictions.
Beyond choosing to use a cap and trade program, State adoption of
the model rule would ensure consistency in certain key operational
elements of the program among participating States. Uniformity of the
key operational elements across the region is necessary to ensure a
viable and efficient cap and trade program with low transaction costs
and minimum administrative costs for sources, States, and EPA. (These
necessary elements are discussed in section B.3.). States will continue
to have flexibility in other important program elements (e.g.,
allowance allocations, inclusion of additional measures to address
persistent local attainment issues).
2. Benefits of Participating in a Cap and Trade Program
a. Advantages of Cap and Trade Over Command-and-Control
When designed and implemented properly, a cap and trade program
offers many advantages over traditional command-and-control and
project-by-project emission reduction credit trading programs. There
are several advantages of a well-designed cap and trade system that
include: (1) Control of emissions to desired levels under a fixed cap
that is not compromised by future growth; (2) high compliance rates;
(3) lower cost of compliance for individual sources and the regulated
community as a whole; (4) incentives for early emissions reductions;
(5) promotion of innovative compliance solutions and continued
evolution of generation and pollution control technology; (6)
flexibility for the regulated community (without resorting to waivers,
exemptions and other forms of administrative relief that can delay
emissions reductions); (7) direct legal accountability for compliance
by those emitting; (8) coordinated program implementation that
efficiently applies administrative resources while enhancing
compliance; and (9) transparent, complete, and accurate recording of
emissions. These benefits result primarily from the rigorous framework
established by a cap and trade program that provides flexibility in
compliance options available to sources and the monetary reward
associated with avoided emissions in a market-based system. The cost of
compliance in a market-based program is reduced because sources have
the freedom to pursue various compliance strategies, such as switching
fuels, installing pollution control technologies, or buying emission
allowances from a source that has over-complied. Since reducing
emissions to levels below the allocations for a source allows them to
sell excess allowances on the market, this program promotes cost
effective pollution prevention, and encourages innovations in less-
polluting alternatives and control equipment.
A market-based system that employs a fixed, enforceable tonnage
limitation (or cap) for a source or group of sources provides the
greatest certainty that a specific level of emissions will be attained
and maintained. With respect to transport of pollution, an emissions
cap also provides assurance to downwind States that emissions from
upwind States will be effectively managed over time. The capping of
total emissions of pollutants over a region and through time ensures
achievement of the environmental goal while allowing economic growth
through the development of new sources or increased use of existing
sources. In an uncapped system (where, for example, sources are
required only to demonstrate that they meet a given emission rate) the
addition of new sources to the regulated sector or an increase in
activity at existing sources can increase total emissions even though
the desired emission rate control is in effect.
In addition, the reduced implementation burden for regulators and
affected sources benefits taxpayers and those who must comply with the
rules. This streamlined administration allows a relatively small number
of government employees to successfully manage the emissions of many
sources by (1) minimizing the necessity for case-by-case decisions, and
(2) taking full advantage of electronic communication and data transfer
to track compliance and develop detailed inventories of emissions and
plant operations.
b. Application of the Cap and Trade Approach in Prior Rulemakings
i. Title IV
Title IV of the CAA Amendments of 1990 established the Acid Rain
Program, a program that utilizes a market-based cap and trade approach
to require power plants, to reduce SO2 emissions by 50
percent from 1980. At full implementation after 2010, emissions will be
limited, or capped, at 8.95 million tons in the contiguous United
States. The Acid Rain SO2 Program is widely acknowledged as
a model air pollution control program because it provides significant
and measurable environmental and human health benefits with low
implementation costs.
Individual units are directly allocated their share of the total
allowances--each allowance is an authorization to emit a ton of
SO2--based upon historical records of the heat content of
the fuel that they combusted in 1985-1987. Units that reduce their
emissions below the number of allowances they hold, may trade excess
allowances on the open market or bank them to cover emissions in future
years. Allowances may be purchased through the open market or at EPA-
managed auctions. Each affected source is required to surrender
allowances to cover its emissions each year. Should any source fail to
hold sufficient allowances, automatic penalties apply. In addition to
financial penalties, sources either will have allowances deducted
immediately from their accounts or, if this would interfere with
electric reliability, may submit a plan to EPA that specifies when
allowances will be deducted in the future.
The Acid Rain Program requires affected sources to install systems
that continuously monitor emissions. The use of continuous emissions
monitoring systems (CEMS) is an important component of the program that
allows both EPA and sources to track progress, ensure compliance, and
provide credibility to the cap and trade component of the program.
While title IV does provide for an Acid Rain Permit, this is a
simple permit that does not incorporate source specific requirements,
but rather requires the source to comply with the standard rules of the
program. The Acid Rain Permit has been easily incorporated into the
title V permit process and does not require the typically resource
intensive, case-by-case review associated with other permits under
command-and-control programs.
The Acid Rain Program has achieved major SO2 emissions
reductions, and associated air quality improvements, quickly and cost
effectively. In 2002, SO2 emissions from power plants were
10.2 million tons, 41 percent lower than 1980.\93\ (2002 Acid Rain
Progress
[[Page 4629]]
Report.) These emission reductions have translated into substantial
reductions in acid deposition, allowing lakes and streams in the
Northeast to begin recovering from decades of acid rain. In addition,
substantial improvements in air quality have occurred under the Acid
Rain Program. Fine particle exposures have been reduced, providing
significant benefits to public health. These benefits include the
annual reduction of thousands of premature mortalities, thousands of
cases of chronic bronchitis, thousands of hospitalizations for
cardiovascular and respiratory diseases.
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\93\ U.S. EPA, EPA Acid Rain Program: 2002 Progress Report (EPA
430-R-03-011), November 2003. Available at http://www.epa.gov/airmarkets/
cmprpt/arp02/2002report.pdf.
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Cap and trade under the Acid Rain Program has created financial
incentives for electricity generators to look for new and low-cost ways
to reduce emissions, and improve the effectiveness of pollution control
equipment, at costs much lower than predicted. The cap on emissions,
automatic penalties for noncompliance, and stringent emissions
monitoring and reporting requirements ensure that environmental goals
are achieved and sustained, while allowing for flexible compliance
strategies which take advantage of trading and banking. The level of
compliance under the Acid Rain Program continues to be uncommonly high,
measuring over 99 percent.
ii. Ozone Transport Commission NOX Budget Program
The Ozone Transport Commission's (OTC) NOX Budget
Program was a cap and trade program to reduce NOX emissions
from power plants and other large combustion sources in the Northeast.
The OTC was established under the CAA Amendments of 1990 to help States
in the Northeast and Mid-Atlantic region meet the NAAQS for ground-
level ozone. The NOX Budget Program set a regional budget on
NOX emissions from power plants and other large combustion
sources during the ozone season (from May 1 through September 30)
beginning in 1999.
The OTC NOX Budget Program has significantly reduced
NOX emissions from large combustion facilities in the
Northeast and Mid-Atlantic region with total regional emissions in 2002
approximately 60 percent below 1990 levels; well under target levels.
Significant reductions in ozone season NOX emissions have
occurred in all States across the region. In addition, the emission
reductions have proven to be cost effective with the cost of
NOX allowances stabilized below original projections.\94\
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\94\ Ozone Transport Commission. NOX Budget Program
1999-2002 Progress Report, March 2003. Available at
http://www.epa.gov/airmarkets/otc/otcreport.pdf.
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The OTC States generally folded their SIP requirements under the
OTC NOX Budget Program into the SIP revisions they submitted
with the NOX SIP Call. The NOX Budget Program was
incorporated into the NOX SIP Call. The 2003 ozone season
marked the first year of compliance with the NOX SIP Call
for the OTC States.
iii. NOX SIP Call
The NOX SIP Call, finalized in 1998, requires ozone
season (i.e., summertime) NOX reductions across a region
which includes most of the OTC States and southeastern and midwestern
States that were found by EPA to have sources that contribute
significantly to another State's ongoing ozone NAAQS nonattainment
problems. The NOX SIP Call proposed a cap and trade program
as a way to make cost-effective NOX reductions. Each of the
States required to submit a NOX SIP under the NOX
SIP Call chose to adopt the cap and trade program regulating large
boilers and turbines. Each State based its cap and trade program on a
model rule developed by EPA. This model rule included key elements such
as the use of continuous emissions monitoring (CEMS) and 40 CFR part 75
monitoring and reporting requirements, and a single party that is
legally responsible for compliance. Some States essentially adopted the
full model rule as is, while other States adopted the model rule with
changes to the sections that EPA specifically identified as areas in
which States may have some flexibility. The NOX SIP Call cap
and trade program, modeled closely after the OTC NOX Budget
Program takes effect in 2004. When it does so, it expands from the OTC
States to eleven additional States in 2004. The EPA intends to draw
heavily upon this and other experience in developing model
SO2 and NOX cap and trade programs.
c. Regional Environmental Improvements Achieved Using Cap and Trade
Programs
One concern with emissions trading programs is that the flexibility
associated with trading might allow sources or groups of sources to
increase emissions, resulting in areas of elevated pollution or ``hot
spots.'' The environmental results observed under the Acid Rain Program
have instead indicated that the combination of trading with a stringent
emissions cap results in substantial reductions throughout the region,
with the greatest reductions achieved in the areas where pollution was
originally the highest.
Since 1990, SO2 and sulfate concentrations at CASTNET
sites have been reduced substantially in the areas where concentrations
were highest before the Acid Rain Program. (Acid Rain Program Progress
Report 2002). All sites in the East showed reductions in SO2
and sulfate 3 year average concentrations between 1990-1992 and 2000-
2002. The largest decreases in SO2 concentrations were
observed at sites where SO2 emissions and monitored
SO2 concentrations were highest before the program (from
Illinois, to northern West Virginia, across Pennsylvania, to western
New York). CASTNET sites throughout the broader eastern region also
show a substantial reduction in sulfate concentrations, with the
largest decreases in sulfate levels occurring along the Ohio River
Valley from Illinois to West Virginia, Pennsylvania, and the mid-
Atlantic states.
Independent analyses, in addition to those conducted by EPA, have
shown that emissions trading under this type of program has not
resulted in the creation of ``hot spots'' because trading has resulted
in emissions reductions being achieved in areas where emissions were
highest before the program.\95\ The Environmental Law Institute,
Environmental Defense, and the Massachusetts Institute of Technology's
Center for Energy and Environmental Policy have all examined emissions
trading under the Acid Rain Program and none have concluded that the
program has resulted in hot spots of high emissions. To the contrary,
the highest emitting sources have tended to reduce emissions by the
greatest amount. This is the case, in part, because trading occurs
under a nationwide cap that represents a reduction in total emissions
and improvements in regional air quality. The flexibility of a cap and
trade system provides a mechanism for achieving established emission
goal(s)at lowest possible cost. The most cost effective opportunities
for reductions are at the larger, more efficient coal-fired units that
have modest (or no) controls and are geographically dispersed.
---------------------------------------------------------------------------
\95\ Environmental Law Institute (http://www.epa.gov/airmarkets/articles/
so2trading-hotspots_charts/pdf), Environmental Defense (
http://www.environmentaldefense.org/documents/645_SO2.pdf)
and MIT's Center for Energy and Environmental Policy Research
(http://web.mit.edu/ceepr/www/2003-015.pdf).
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Further support for trading actually reducing ``hot spots'' was
found by Resources for the Future. Resources for the Future, a non-
partisan environmental advocacy group,
[[Page 4630]]
modeled air quality and health benefits under the trading program and
under a non-trading scenario and found that trading actually resulted
in additional benefits because emissions reductions took place in areas
where they were more environmentally effective.\96\
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\96\ http://www.rff.org/CFDOCS/disc_papers/PDF_files/9925.pdf
Cap and trade programs are designed to reduce emissions of numerous
polluting sources by significant amounts over large geographic areas.
The trading mechanism does not replace the requirement to meet the
NAAQSs at the local level, but rather helps achieve this requirement
through significant reductions in background pollution. Thus, State and
local governments will continue to have the obligation and the
authority under the CAA to assure that the NAAQS are met.
Nearly 10 years of experience with the Acid Rain Program for
SO2 has clearly demonstrated that market-based cap and trade
programs are an effective vehicle for achieving broad improvements in
air quality by reducing emissions of a regionally transported air
pollutant. More recently, the OTC's regional NOX program
also has shown the value of a cap and trade approach for NOX
reductions. The more stringent SO2 and NOX caps
proposed in this rulemaking will build on this track record of success.
B. Considerations and Aspects Unique to the SO2 Cap and
Trading Program
1. SO2 Cap and Trade Program Overview
This section of today's proposal outlines an SO2 cap and
trade program which builds upon the concepts applied in the cap and
trade programs described in section VIII.A. This section discusses
elements unique to the proposed SO2 trading program, paying
particular attention to those aspects that significantly differ from
the corresponding provisions in existing programs. (Additional details
on the SO2 and NOX trading program may be found
in section VIII.D, which describes major program elements that must be
consistent across States in order for EPA to implement a trading
program.)
While key considerations and program elements are outlined in
today's proposed rule, a complete model cap and trade rule will be
proposed by EPA in a future SNPR. In addition to a model rule, the SNPR
will address other issues such as allocations and voluntary measures
for States to address persistent local non-attainment issues.
The proposed SO2 cap and trade program would apply to
the large power generators in the transport region. (See section VI of
today's rule for a discussion of the emission budgets and the core
sources.) States would have some flexibility to include other sources
or source categories in the trading program should they demonstrate
their ability to measure the emissions from these other sources to the
same standards required of the core trading sources.
The units affected by today's SO2 rule are already
regulated by EPA. EPA is committed to a transition that ensures
continued environmental progress, preserves the integrity of existing
emission trading markets, and minimizes confusion and cost for the
public, sources and regulators. Section VIII.B.2 below discusses the
interactions between today's proposal and existing programs by
presenting analysis and implementation options. A discussion of the
applicable sources is contained in section VIII.D.1.
2. Interactions With Existing Title IV Acid Rain SO2 Cap and
Trade Program
As discussed above, title IV of the CAA requires reductions in
SO2 emissions from power plants to abate acid rain and
improve public health using a cap and trade approach. Further, title I
of the CAA requires EPA to help States develop and design
implementation plans to meet the NAAQS. To achieve that end, today's
action proposes a regional rule to reduce ambient concentrations of
PM2.5, as mandated by the CAA. The SO2 program
establishes a model cap and trade system for reducing emissions that
States can adopt in order to help meet the NAAQS.
As EPA developed this regulatory action, great consideration was
given to interactions between the existing title IV program and a
rulemaking designed to achieve significant reductions in SO2
emissions beyond title IV. Requiring sources to reduce emissions beyond
the title IV mandates has implications for the existing title IV
SO2 program which are both environmental and economic. In
the absence of a method for incorporating the statutory requirements of
title IV, a rule that imposes a tighter cap on SO2 emissions
for a particular region of the country would likely result in an excess
supply of title IV allowances and the potential for increased emissions
in the area not subject to the more stringent emission cap. The
potential for increased emissions exists in the entire country for the
years prior to the proposed implementation deadline and would continue
after implementation for any areas not affected by the proposed rule.
These excess emissions could negatively affect air quality, disrupt
allowance markets, and erode confidence in cap and trade programs.
In view of the significant reductions in SO2 emissions
under title IV of the CAA, the large investments in pollution controls
that firms have made under title IV that enable companies to sell
excess emissions reductions, and the potential for emissions increases,
it became a priority to think of ways to preserve the environmental
benefits achieved through title IV and maintain the integrity of the
title IV market for SO2 allowances.
In addition, EPA does not have authority to remove the statutory
requirements of title IV and must work within the context of the
existing CAA to further reduce emissions of SO2 through a
new rule. Title IV has successfully reduced emissions of SO2
using the cap and trade approach, eliminating millions of tons of
SO2 from the environment. Building off this existing program
to further improve air quality by requiring additional reductions of
SO2 emissions is appropriate.
The EPA has developed an approach to incorporate the title IV
SO2 market to ensure that the desired reductions under this
rule are achieved in a manner consistent with the previously stated
environmental goals. The following sections provide more detail on
EPA's initial analysis of the interactions between the title IV Acid
Rain program and this proposal outlines a solution for creating a rule
that builds off of title IV.
Initial Analysis
Initial analytical work shows that a more stringent cap on
SO2 emissions in the eastern part of the country, that is
separate from the title IV cap, would create an excess supply of title
IV allowances nationwide as sources in that eastern region comply with
a tighter requirement than title IV and no longer need as many title IV
allowances. As a result of this excess supply, all title IV allowances
would lose value. This impact on the title IV market results in (1) an
incentive to use all banked title IV allowances prior to implementation
of the rule as firms anticipate the value of allowances dropping
essentially to zero and (2) emission increases outside the region after
rule implementation because those sources would be able to obtain title
IV allowances at essentially no cost.
b. Emissions Increases Prior to Implementation of the Proposed Rule
The EPA expects that the number of banked (i.e., the retention of
unused
[[Page 4631]]
allowances from one calendar year for use in a later calendar year)
title IV allowances will be in the millions of tons at the end of 2009
in the absence of the rule. The actual number of allowances banked will
depend upon future economic growth and the independent decisions of the
sources between now and 2010, and EPA will continue to evaluate
emissions trends and the bank prior to finalizing the rule. Should the
rule not permit the use of banked title IV allowances in the program,
the banked allowances would likely be expended during the years prior
to implementation of the rule. This could cause over 1 million tons per
year of additional SO2 emissions, nationwide, that could be
emitted above levels projected in the absence of a rule.
c. Consideration for Emissions Shifting Outside the Control Region
Title IV sources outside the more stringently regulated region
would be able to obtain title IV allowances from sources affected by
the rule at very low cost after the commencement of the program. The
flow of inexpensive, abundant allowances out of an area with more
stringent emission control requirements is referred to as ``leakage''
and would likely result in increased emissions outside the region. In
essence, sources outside of the region would not face a binding title
IV constraint on their emissions of SO2 due to the potential
availability of abundant allowances provided by sources inside of the
control region. Though certain State and local requirements or physical
constraints would mitigate the problem of emissions increases outside
the region, meaningful increases would be a possibility. Emissions
increases outside the region would worsen air quality in those areas
and could potentially negate some of the reductions achieved in the
region.
The potential for leakage is dependent upon the size of the region.
The large eastern trading region proposed in today's rule--which is
based upon addressing PM2.5--is not likely to result in
significant leakage because the region is large enough to take
advantage of the physical limitations in the electricity grid that
prevent large power movements from the East to the West (or vice versa)
through the Western Interconnect.
d. Desired Outcomes in the Design of the Cap and Trade Rule
The proposed cap and trade program will be designed to meet three
primary goals: (1) Achieving environmental goals; (2) preserving and
potential strengthening of allowance trading markets; and (3) providing
the flexibility to incorporate additional jurisdictions and types of
sources in the future, while maintaining the integrity of the cap and
allowance markets.
First and foremost, the proposed cap and trade program must be
designed to improve air quality to protect the public's health and the
environment. To accomplish this, the program must address the potential
for emission leakage, require credible emission monitoring and
reporting, and provide for source accountability.
Preservation of the benefit of the title IV allowance market (i.e.,
a solution that would maintain or even increase the economic value of
title IV allowances) would eliminate the incentive to increase
emissions prior to the start of the program and ease the administrative
transition. Incorporating title IV creates incentives for earlier
reductions by title IV sources and may create incentives for title IV
sources not included in the rule to maintain, or even reduce, emissions
of SO2 both before and after the rule goes into effect. In
addition, it sends a clear signal to sources that have already made
investments in pollution control equipment that the allowance market is
sound and will continue to operate.
The proposed cap and trade solution must provide opportunities for
incorporating additional sources (e.g., non-title IV sources, other
source categories) and States, during promulgation and in the future.
Designing a cap and trade program that can include these additional
sources creates the potential to achieve additional environmental
benefit and/or reduce the program's total cost.
e. Discussion of Possible Solutions
The EPA explored several options for addressing the coordination of
title IV and the proposed rule consistent with the objective of
minimizing emissions increases and providing a mechanism of allocating
allowances to sources lacking any title IV allocations. One option
would establish a separate cap and trade program for SO2
that would require the retirement of surplus title IV allowances for
the rule (i.e., the difference between total title IV allocations and
the trading budget for a given State under the rule). Sources would
have to comply with both programs independently, and States would have
flexibility in allocating the newly created allowances to non-title IV
sources. Although this option could be designed so as to maintain the
value of title IV allowances once the new cap and trade program begins
under the rule, thus minimizing leakage, it would not address banked
title IV allowances accumulated before implementation of the program,
resulting in possible emissions increases prior to rule implementation.
Another option would allow for conversion of title IV allowances
into separate allowances under a new cap and trade program. This
conversion would be applied at a specific ratio (e.g., two-to-one) that
yields the desired emission reductions, and could be applied to both
banked and current title IV allowances. By complying with the rule and
submitting more than one title IV allowance for every ton emitted, a
source would be in compliance with both programs. New allowances could
be created to give States flexibility with SO2 allocations,
but the conversion ratio would need to be adjusted to incorporate these
new allowances. This solution presents some challenges, such as
establishing the proper conversion ratio and the need to adjust the cap
under the rule to account for the converted allowances. In addition,
the uncertainty surrounding how many banked allowances would be
converted poses challenges when designing the cap and trade rule.
f. Proposed Approach
A third option and the approach proposed here best addresses the
three principles identified above. It would require sources to use
title IV allowances directly for compliance with the rule in a way that
maintains the downward trend in emissions throughout the country,
preserves the existing SO2 allowance market, and allows the
inclusion of non-title IV sources, now and in the future.
Title IV sources in the region would be required to comply with the
rule by using more than one title IV allowance for every ton emitted
(e.g., a two-to-one ratio). EPA would propose to amend the title IV
rules in a future SNPR so that sources that comply with the rule would
be deemed in compliance with title IV since by submitting allowances at
a greater than one-to-one ratio, a source would be going beyond what
title IV required. The requirement to submit more than one allowance
for every ton emitted is, in effect, a reduction of the title IV cap.
The specific ratio would be determined based on the amount of emissions
to be allowed for the region. The ratio, in essence, would reflect the
cap levels and determine the ultimate emissions in the region. Section
VIII.B.3 below, discusses a methodology that could be used to provide
allowances to EGUs that were not allocated allowances under title IV.
While EPA is not currently proposing to require sources other than
EGUs to be part of the cap and trade program, EPA
[[Page 4632]]
believes that this approach could also allow other sources to
participate in the cap and trade program. States electing to include
additional sources could develop mechanisms to provide them with access
to allowances through auctions or direct allocations. (This is
discussed in greater detail in section VIII.B.3.)
i. Using Pre-2010 Banked Title IV Allowances in Proposed SO2
Cap and Trade Program
Under the proposed approach, title IV allowances could be banked
before the 2010 implementation date for use in the new program. Pre-
2010 title IV allowances banked prior to 2010 could be used at a one-
to-one ratio for compliance at any time. This provides incentives to
reduce emissions before the 2010 implementation date because sources
would want to ease the transition to the more stringent caps in 2010
and thereafter. However, it should be noted that these allowances could
then be used in later years, delaying the amount of time until the
ultimate cap level is achieved.
ii. Proposed Ratios and the Phasing of the Caps
The proposed SO2 program would allow: (1) Pre-2010
allowances to be used at a one-to-one ratio; (2) 2010 through 2014
allowances to be used at a two-to-one; and (3) 2015 and later
allowances to be used at a three-to-one ratio. Since title IV
allowances are already identified by serial numbers that indicate the
year the allowance is first allowed to be used, it is possible to use
different retirement ratios for allowances of different vintages. The
progressively more stringent, phased-in nature of the rule will be
reflected in the proposed cap and trade program by adjusting the ratio
for retiring allowances in each phase. EPA developed these ratios to
achieve the emissions reductions as described in section VI with
careful consideration given to the title IV bank, State EGU budgets,
and phasing in order to create ratios that are consistent with the
objectives of the rule. The ratios, in effect, tighten the existing
title IV cap.
States choosing to participate in the cap and trade program must
require sources to submit title IV allowances at the ratios set in the
model rule.
The EPA projects that using 2010 to 2014 vingtage title IV
allowances at a ratio of two-to-one and post 2014 allowances at a ratio
of three-to-one in the second phase will produce the desired emission
reductions for SO2. These ratios are projected to lead
sources to bank roughly an additional 10.5 million allowances prior to
2010. Vintage year allowances 2009 and earlier are projected to be used
starting in 2010 at an average rate of 1.3 million per year.
The value of title IV allowances is projected to increase to $400
during the first phase, and to fall to $330 during the second phase,
according to EPA modeling. In other words, sources in the region would
face a marginal cost of $805 per ton of emissions in the first phase at
a two-to-one ratio and $989 in the second phase at a three-to-one
ratio. The marginal cost numbers presented here are generated from EPA
modeling of this rule, looking specifically at the interactions with
title IV.
3. Allowance Allocations
a. Statewide Cap and Trade Budgets
Today's rule proposes statewide EGU SO2 emission budgets
(detailed in section VI) that States may allocate. Discretion in the
allocation of this budget to title IV units (which constitute a
majority of the EGUs) that already receive allowances under title IV is
somewhat limited for States because the existing title IV
SO2 allocation provisions explicitly allocate allowances to
specific units. Therefore, as a practical matter, States that wish to
participate in an EPA-managed interstate trading program will not have
as much flexibility in developing their SO2 allocation
methodology for title IV units that already receive allowances than
they will with NOX allocations.
b. Determination of SO2 Allowance Allocations for EGUs Not
Receiving Title IV Allowances
As discussed in section VI (Statewide Emissions Budgets), States
will have the flexibility to address equity issues for newer units that
do not receive title IV allowances. However, as mentioned above,
because title IV allocates virtually all of the Acid Rain Program
allowances directly to individual sources, any State electing to
provide allowances to newer sources would have to develop a mechanism
that creates an excess of allowances after the initial allocation. One
potential remedy is a mechanism that creates a State-managed pool of
allowances from EGUs within that State by either: (1) Requiring in-
State EGUs that receive title IV allowances to surrender allowances at
a rate tighter than today's rule retirement ratio and transferring this
overage to the State (e.g., an EGU would retire 2 allowances and
surrender 1 allowance for every ton emitted); or, (2) tightening the
retirement ratio for in-State EGUs that receive title IV allowances and
providing for EPA to create new SO2 allowances, the total
being equal to or less than the overage, that are issued to the new
sources (e.g., an EGU would retire 3 allowances for every ton emitted
and EPA would issue a new SO2 allowance to the new source).
EPA intends to assist States by providing a more detailed discussion of
allocation alternatives in a future SNPR.
Should States decide to allocate allowances to these newer EGUs,
States would be given latitude in determining how they would distribute
them from the pool of allowances for EGUs that receive title IV
allowances. States may choose to hold an allowance auction or
distribute allowances directly to sources. Should a State decide to
allocate allowances, it would have flexibility in selecting the method
upon which the allocation share is determined. Common methods for
allocating allowances include:
(1) Actual emissions (in tons) from the unit,
(2) Actual heat input (in mmBtu) of the unit, and
(3) Actual production output (in terms of electricity generation
and/or steam energy) of the unit.
Each of these options has variations, including the use of
allowance set-asides, and may be implemented with allocations performed
on a permanent or an updating basis.
The details of specific allocation options will be presented in
greater detail in the future SNPR.
C. Consideration and Aspects Unique to the NOX Cap and Trade
Program
1. NOX Cap and Trade Program Overview
The NOX cap and trade program would be substantially
similar, in its basic requirements and procedures, to the
SO2 cap and trade program described above. However, some
components of a proposed NOX cap and trade program are
unique to its implementation in the context of existing regional
NOX control programs. This section describes those unique
components. Because the authority for the existing NOX cap
and trade programs exists at the State level and are not constrained by
intricate title IV interactions, States may have more flexibility to
revise their existing rules than they would have in complying with the
proposed SO2 program. Section VIII.D discusses elements of
the cap and trade programs that are common to both the SO2
and NOX programs.
[[Page 4633]]
2. Interactions with the NOX SIP Call Cap and Trade Program
and the Title IV NOX Program
This section discusses specific implementation issues related to
transitioning from existing regional NOX control programs to
today's proposed NOX cap and trade program.
a. Geographic Scope
States in the Proposed Region. Ideally, the NOX and
SO2 cap and trade program regions would be identical.
However, the geographic boundaries of the NOX cap and trade
program must be related to the contribution made by emissions sources
to the interstate transport of NOX as it affects non-
attainment of PM2.5 and ozone standards. While the
PM2.5 standard of most interest is annual, the ozone
standard is an 8-hour duration with exceedances in the summer season.
Therefore, EPA is proposing a NOX trading region that
applies to those States affected by the PM2.5 finding; a
region which encompasses virtually the same region as would be affected
by the ozone findings with the exception of the State of Connecticut.
Furthermore, EPA is proposing to allow the State of Connecticut, which
is required to reduce only summertime NOX emissions to
address ozone under today's action, to participate in the EPA-managed
NOX cap and trade program on an annual basis. In addition,
EPA proposes to allow other States currently participating in EPA-
managed, ozone season, NOX cap and trade programs to join
the year-round NOX cap and trade program on an annual basis.
If States chose to participate on an annual basis, EPA will determine
corresponding annual budgets.
States Outside the Proposed Region with Existing Regional
NOX Cap and Trade Programs. There are three States that
participate in the existing regional NOX trading market that
would not be affected by today's proposed ozone or PM2.5
rules: New Hampshire (as part of the OTC), and Massachusetts and Rhode
Island (as part of the NOX SIP Call). These States would be
allowed and encouraged to voluntarily participate in the NOX
cap and trade program under today's rules in order to minimize
administrative burden and simplify compliance for sources. Both the OTC
and NOX SIP Call are ozone season only compliance programs.
Any States choosing to participate in an EPA-managed program proposed
today, would be required to participate on an annual basis if they
choose to participate in the proposed NOX cap and trade
program.
b. Seasonal-to-Annual Compliance Period
The NOX SIP Call regulates NOX emissions
during an ``ozone season'' that lasts from May 1 through September 30.
The proposed rule requires annual NOX reductions. As
explained in section VI, EPA analysis shows that under the proposed
annual caps, EGUs in the NOX SIP Call region would emit less
during the ozone season than they were allowed to emit under the
NOX SIP Call.
c. Revision of Existing State NOX SIP Call Rules
The EPA plans to design the model cap and trade rule in such a way
that States that are part of the NOX SIP Call will be able
to modify their State rules to include the new provisions and new
NOX caps, and States that are not currently part of the
NOX SIP Call will be able to adopt the model rule language
for the new program. Transition issues, such as new NOX caps
and applicability will be discussed thoroughly in the SNPR.
d. Retention of Existing Title IV NOX Emission Rate Limits
Title IV requires coal-fired EGUs to meet average annual
NOX emission rates. These requirements would remain in
effect after the 2010 compliance deadline for this proposed rule. EPA
analysis shows that under the more stringent NOX cap of
today's rule, the title IV NOX limits would not be binding
for most units. Therefore, the limits would not interfere with the
ability of the NOX trading market to find the least-cost
reductions. However, without a statutory change, the title IV
NOX program remains in effect and sources would have to
continue to comply with its administrative requirements.
e. The NOX Allowance Banking
The NOX emission allowance trading market being
administered by EPA for the NOX SIP Call States has been
active and we wish to make the transition to the NOX program
proposed today as simple as possible. For that reason, any entity
holding existing NOX allowances will be able to bank them
and carry them forward into the new, proposed cap and trade program.
While EPA believes it is important to provide this compliance
flexibility for sources, it is unlikely that many sources will take
advantage of this mechanism because the projected future value of
NOX allowances under the proposed cap and trade program is
less than under the existing NOX cap and trade programs.
3. NOX Allocations
Within each State participating in the proposed NOX cap
and trade program, the statewide EGU budget (described in section VI of
today's proposal) would form the basis for NOX allocations.
Unlike SO2 allocations that are heavily dictated by the
interaction between the proposed SO2 cap and trade program
and title IV, there are many allocation options that States could
consider for distributing NOX allowances.
There is a variety of allocation approaches that address equity
issues and provide opportunities for States to encourage specific
behaviors. This would include flexibility in how often the allocations
are updated (i.e., a one-time permanent allocation or one that is
periodically updated) and the process metric upon which the allocation
share is determined. As described below in section VIII.D.4, States
participating in an EPA-managed program would be required to be
consistent in the deadline for finalizing their source-by-source
allocation.
The details of specific allocation options will be more fully
developed and presented in detail in the future SNPR.
4. Joining Both SO2 and NOX Cap and Trade
Programs for States Voluntarily Participating
The participation by States in both the EPA-managed NOX
cap and trade program and the EPA-managed SO2 program offers
administrative advantages to EPA and, we think, maximizes cost-
effectiveness to the sources. We encourage each State to participate in
both programs, and we think that, as a practical matter, many States
will elect to do so.
We would like, in the SNPR, to propose to require that States that
elect to participate in the EPA-managed NOX cap and trade
program be required to participate in the EPA-managed SO2
program, and vice-versa. However, we are concerned that this
requirement may be considered to intrude upon the prerogatives of the
States in developing their SIPs.\97\ We solicit comment on this
question.
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\97\ See Virginia v. EPA, 108 F.3d 1397 (D.C. Cir. 1997).
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D. Cap and Trade Program Aspects That Are Common to Both the
SO2 and NOX Programs
Sections VIII.B and VIII.C discussed key considerations that are
unique to the proposed SO2 and NOX cap and trade
programs, respectively. This section presents elements of a cap and
trade program that must be a part of a
[[Page 4634]]
State's rule--for both the SO2 and NOX programs--
if it wishes to participate in the regional cap and trade program. As
noted earlier, EPA intends to provide a detailed discussion and propose
model rules in the future SNPR. Although EPA is not soliciting comment
on the discussion in this section VIII, and instead will provide a full
opportunity to comment on the SNPR, EPA recognizes that some may wish
to comment on today's discussion. As such, commenters are encouraged to
focus on the implications of addressing multiple environmental problems
(i.e., PM2.5 and ozone).
1. Applicability
Applicability, or the group of sources that the regulations will
affect, must be similar from State-to-State to minimize confusion,
administrative burdens, and emission leakage.
a. Core Applicability
As discussed in section VI, we have determined State EGU emission
reduction requirements (which are sometimes referred to as ``budgets'')
assuming reductions from large EGUs (e.g. boilers and turbines serving
an electrical generator with a nameplate capacity exceeding 25MW and
producing power for sale). States must include these core sources if
they wish to participate in the regional cap and trade program. While
States have discretion to achieve the required reduction levels by
regulating other sources, EPA analysis identified EGUs as appropriate
candidates for achieving the mandated reductions. If a State chooses to
regulate other source categories, EPA is proposing that these source
categories can be included in the cap and trade program only if EPA and
the State agree that each source category can meet all of the
requirements that are mandated for EGUs (e.g., monitoring according to
40 CFR part 75 and the ability to clearly assign legal responsibility
for compliance).
Once a unit is classified as an EGU for purposes of this rule, the
unit will remain classified as an EGU regardless of any future
modifications to the unit. If a unit serving a generator that initially
does not qualify as an EGU (based on the nameplate capacity) is later
modified to increase the capacity of the generator to the extent that
the unit meets the definition of EGU, this unit shall be considered an
EGU for purposes of this rule. This approach is proposed to prevent
sources from derating units for the purpose of avoiding regulation.
2. Allowance Management System, Compliance, Penalties, and Banking
The allowance management system, compliance, penalties and banking
are all components of the accounting system that enables the
functioning of a cap and trade program. An accurate, efficient
accounting system is critical to an emissions trading market.
Transparency of the system, allowing all interested parties access to
the information contained in the accounting system, increases the
accountability for regulated sources and contributes to reduced
transaction costs of transferring allowances by minimizing confusion
and making allowance information readily available.
In order to guarantee the equitable treatment of all affected
sources across the trading region, the elements included in this
section need to be incorporated in the same manner in each State that
participates in the cap and trade program.
a. Allowance Management
The EPA intends to propose a model cap and trade rule that will be
reasonably consistent with the existing allowance tracking systems that
are currently in use for the Acid Rain Program under title IV and the
NOX Budget Trading Program under the NOX SIP
Call. These two systems are called the Allowance Tracking System (ATS)
and the NOX Allowance Tracking System (NATS), respectively.
Under the cap and trade rule, the SO2 program and the
NOX program would remain separate trading programs
maintained in ATS and NATS. Both ATS and NATS would remain as automated
systems used to track SO2 and NOX allowances held
by affected units under the cap and trade program, as well as those
allowances held by other organizations or individuals. Specifically,
ATS and NATS would track the allocation of all SO2 and
NOX allowances, holdings of SO2 and
NOX allowances in accounts, deduction of SO2 and
NOX allowances for compliance purposes, and transfers
between accounts. The primary role of ATS and NATS is to provide an
efficient, automated means of monitoring compliance with the cap and
trade programs. ATS and NATS also provide the allowance market with a
record of ownership of allowances, dates of allowance transfers, buyer
and seller information, and the serial numbers of allowances
transferred.
b. Compliance
Compliance in the cap and trade program consists of the deduction
of allowances from affected facilities' accounts to offset the quantity
of emissions at the facilities for each compliance period. Currently
under the Acid Rain and regional NOX cap and trade programs,
compliance is assessed at the unit level. Some flexibility is allowed
in the NOX program through the use of overdraft accounts.
Both EPA and the regulated community find that, in practice, overdraft
accounts and their use can be quite complicated and do not
significantly reduce the burden of unit-level accounting. EPA is
considering an approach that assesses compliance at the facility level
in the proposed cap and trade program. More discussion of this option
will be included in the future SNPR.
c. Penalties
The EPA plans to propose a system of automatic penalties should a
facility not obtain sufficient NOX or SO2
allowances to cover emissions for the compliance period. In order to
offset this deficiency in allowances, a facility must surrender
allowances allocated for a future year equal in amount to the
deficiency in allowances for the current compliance period. In
addition, EPA will propose that an automatic penalty be imposed in
addition to this offset in order to provide a strong incentive for
facilities to hold sufficient allowances. The automatic penalty
provisions will not limit the ability of the permitting authority or
EPA to take enforcement action under State law or the CAA, but will
establish for the regulated community the immediate, minimum economic
consequences of noncompliance.
d. Banking
Banking is the retention of unused allowances from one calendar
year for use in a later calendar year. Banking allows sources to make
reductions beyond required levels and ``bank'' the unused allowances
for use later. Generally speaking, banking has several advantages: it
can encourage earlier or greater reductions than are required from
sources, stimulate the market and encourage efficiency, and provide
flexibility in achieving emissions reduction goals. On the other hand,
it may result in banked allowances being used to allow emissions in a
given year to exceed the cap and trade program budget. Banking of
allowances from the Acid Rain and regional NOX cap and trade
programs into the proposed cap and trade program is discussed above in
section VIII.B.2.f(i) for Acid Rain and above in section VIII.C.2.e.
for the NOX SIP Call.
Based on the experience of both the SO2 and
NOX cap and trade programs,
[[Page 4635]]
EPA plans to propose in the future SNPR that the banking of allowances
after the start of the cap and trade program be allowed with no
restrictions.
3. Accountability for Affected Sources
Key to the success of existing cap and trade programs and the
integrity of the allowance trading markets has been clear
accountability for unit emissions. This takes the form of affected
units officially designating a specific person (and alternate) as
responsible for the official certification of all allowance transfers
and emissions monitoring and reporting as submitted to EPA in quarterly
compliance reports. With each quarterly submission, this responsible
party must certify that: the monitoring data were recorded in
compliance with the monitoring and reporting requirements, including
quality assurance testing and missing data procedures; and, the
emission and operational reports are true, accurate, and complete.
The cap and trade program to be proposed in the future SNPR will
include provisions to provide for the same strict standards for source
accountability established in the Acid Rain Program and the
NOX SIP Call. This will include provisions for the
establishment of an Authorized Account Representative. Adoption of
these provisions will be required by all States that wish to
participate in the cap and trade program.
4. Allowance Allocation Timing
The SNPR will propose requirements for when a State would finalize
allowance allocations for each control period in the cap and trade
program and submit them to EPA for inclusion into the ATS and NATS. The
timing requirements ensure that all units would have equal and
sufficient time to plan for compliance for each control period and
equal time to trade allowances. The requirement would also contribute
to the efficient administration of the trading program. By establishing
this schedule at the outset of the cap and trade program, both the
States and EPA would be able to develop internal procedures for
effectively implementing the allowance provisions of the trading
program. The timing requirements would ensure that EPA would be able to
record in the ATS and NATS the allowance allocations for the budget
units in all participating States at the same time for each control
period.
5. Emissions Monitoring and Reporting
Monitoring and reporting of an affected source's emissions are
integral parts of any cap and trade program. Consistent and accurate
measurement of emissions ensures each allowance actually represents one
ton of emissions and that one ton of reported emissions from one source
is equivalent to one ton of reported emissions from another source.
This establishes the integrity of the allowance and instills confidence
in the market mechanisms which are designed to provide sources with
flexibility in achieving compliance. Given the variability in the type,
operation and fuel mix of sources in the cap and trade program, EPA
believes that to ensure the needed accuracy and consistency, emissions
must be monitored continuously. For many sources, this accuracy and
consistency is achieved through the use of continuous emissions
monitors (CEMS); however, alternative monitoring methodologies are
appropriate for certain types of sources. The continuous emissions
monitoring methods must also incorporate rigorous quality assurance
procedures (e.g., periodic testing to ensure continued accuracy of the
measurement method). Additionally, in order to account for all
emissions at all times, provisions for estimating emissions during
times when monitors are unavailable because of planned and unplanned
outages are also necessary. Part 75 of the Acid Rain regulations (40
CFR part 75) sets forth monitoring and reporting requirements for both
SO2 and NOX mass emissions and includes the
additional provisions necessary for a cap and trade program. Part 75 is
used in both the Acid Rain and NOX SIP Call programs.
In an effort to ensure program integrity, EPA proposes to require
States to include year round part 75 monitoring and reporting for
SO2 and NOX for all sources. Monitor
certification deadlines and other details will be specified in the
model cap and trade rule. The EPA believes that emissions will then be
consistently and accurately monitored and reported from unit to unit
and from State to State.
Part 75 also specifies reporting requirements. The EPA proposes to
require year-round, quarterly reporting of emissions and monitoring
data from each unit at each affected facility. The EPA proposes a
single quarterly report. The single report will include hourly
emissions information for both SO2 and NOX
emissions on a quarterly basis in a format specified by the Agency. The
reports must be in an electronic data reporting (EDR) format and be
submitted to EPA electronically using EPA's Emissions Tracking System
(ETS). This coordinated reporting requirement is necessary to ensure
consistent review, checking, and posting of the emissions and
monitoring data at all affected sources, which contributes to the
integrity and efficacy of the trading program.
Many sources affected by this rulemaking are already meeting the
requirements of part 75. Impacts on different types of sources will be
discussed thoroughly in the SNPR.
E. Inter-Pollutant Trading
Cap and trade programs can incorporate mechanisms for
interpollutant trading when more than one pollutant contributes to the
same environmental problem. While the proposed cap and trade programs
would control SO2 to address PM2.5 and
NOX for both PM2.5 and ozone, EPA solicits
comment on whether SO2 allowances and NOX
allowances should be interchangeable, and if so, at what ratio should
the allowances be interchangeable. The main advantage of inter-
pollutant trading is that it presents regulated entities with more
flexibility in meeting compliance, thus reducing the costs of
compliance. If the relative air quality impact of the two pollutants on
the environmental issue (i.e., PM2.5 or ozone)is known, then
inter-pollutant trading set at this ratio will achieve the same total
air quality impact. There are many technical difficulties involved with
incorporating an effective inter-pollutant trading mechanism, and EPA
solicits opinions on the feasibility of addressing these concerns:
(1) What should be the exchange rate (i.e., the transfer ratio) for
the two pollutants?
(2) How can this transfer ratio best reflect the goals of achieving
PM2.5 and ozone attainment in downwind States?
(3) How would inter-pollutant trading accommodate the different
geographic regions covered for SO2 and NOX under
the proposed rule?
IX. Air Quality Modeling of Emissions Reductions
A. Introduction
In this section, we describe the air quality modeling performed to
determine the projected impacts on PM2.5 and 8-hour ozone of
the regional SO2 and NOX emissions reductions in
today's proposal. The regional emissions reductions are associated with
State emissions budgets in 2010 and 2015, as explained in section VI.
The impacts of the regional reductions in 2010 and 2015 are determined
by comparing air quality modeling results for each of these regional
control scenarios to the modeling results for the corresponding 2010
and 2015 Base Case
[[Page 4636]]
scenarios. A description of the 2010 and 2015 Base Cases is provided in
section IV. Note that neither the Base Cases nor the regional control
strategy scenarios include any of the local control measures discussed
in section IV. Also note that the 2015 Base Case does not include any
2010 emissions reductions from the regional strategy.
The 2010 and 2015 regional strategy budgets cover emissions from
the power generation sector in 29 eastern States plus the District of
Columbia that contribute significantly to both PM2.5 and
ozone nonattainment in downwind States.\98\ These annual SO2
and NOX budgets are provided in section VI.
---------------------------------------------------------------------------
\98\ In addition, summer season only EGU NOX controls
are proposed for Connecticut which significantly contributes to
ozone, but not PM2.5 nonattainment in other States.
---------------------------------------------------------------------------
As described in section VI, EPA modeled a two-phase cap and trade
strategy for SO2 and for NOX using the IPM to
assess the impacts of the budgets in today's proposal. For the purposes
of air quality modeling, we used a scenario that assumes a 48-State
SO2 trading area and SO2 allowances. Most of the
SO2 emissions reductions in this scenario occur in the 28-
State and DC control region; there are only small changes in nearly
States not affected by today's proposal.\99\ We do not expect these
latter changes to actually occur; but, because they are only small
changes, the results of using this IPM scenario are expected to be very
similar to the actual results of today's proposal. For NOX,
EPA modeled a NOX trading scenario covering 31 States, DC,
and the eastern half of Texas. The 31 States include Arkansas, Iowa,
Louisiana, Minnesota, Missouri, and all other States to the east of
these five States. Thus, the modeled strategy does not match the
NOX reductions required in today's proposal for Kansas and
western Texas. In addition, the modeled strategy includes
NOX reductions in Maine, New Hampshire, Rhode Island, and
Vermont which do not have any required reductions in today's proposal.
---------------------------------------------------------------------------
\99\ The modeled scenario reduces EGU emissions in the five New
England States not covered by today's proposal by less than 3,000
tons per year. In the 15 States located to the west of the region
covered by today's proposal, total EGU SO2 emissions
decline by 17 percent.
---------------------------------------------------------------------------
Phase 1 of the regional strategy is forecast to reduce total EGU
SO2 emissions in the 28-States plus DC by 40 percent in
2010. Phase 2 is forecast to provide a 44 percent reduction in EGU
SO2 emissions compared to the Base Case in 2015. When fully
implemented, we expect today's proposed rule to result in more than a
70 percent reduction in EGU SO2 emissions compared to
current emissions levels. The net effect of the strategy on total
SO2 emissions in the 28-State plus DC region, considering
all sectors of emissions, is a 27 percent reduction in 2010 and a 28
percent reduction in 2015. For NOX, Phase 1 of the strategy
is forecast to reduce EGU emissions by 44 percent and total emissions
by 10 percent in the 28-States plus DC region in 2010. In Phase 2, EGU
NOX emissions are projected to decline by 53 percent in
2015. Total NOX emissions are projected to be reduced by 14
percent in 2015. The percent change in emissions by State for
SO2 and NOX in 2010 and 2015 for the regional
strategy are provided in the Air Quality Modeling Technical Support
Document (AQMTSD).\100\
---------------------------------------------------------------------------
\100\ ``Air Quality Modeling Technical Support Document for the
Proposed Interstate Air Quality Rule'' (January 2004), can be
obtained from the docket for today's proposed rule: OAR-2003-0053.
---------------------------------------------------------------------------
B. The PM2.5 Air Quality Modeling of the Proposed Regional
SO2 and NOX Strategy
The PM modeling platform described in section IV was used by EPA to
model the impacts of the proposed SO2 and NOX
emissions reductions on annual average PM2.5 concentrations.
In brief, we ran the REMSAD model for the meteorological conditions in
the year of 1996 using our nationwide modeling domain. Modeling for
PM2.5 was performed for both 2010 and 2015 to assess the
expected effects of the proposed regional strategy in each of these
years on projected PM2.5 design value concentrations and
nonattainment. The procedures used to project future PM2.5
design values and nonattainment are described in section IV. The
projected design values for each nonattainment county for the 2010 and
2015 scenarios are provided in the AQMTSD. The counties that are
projected to be nonattainment for the PM2.5 NAAQS are listed
in Table IX-1 for the 2010 Base Case and the 2010 regional strategy
scenario and in Table IX-2 for the 2015 Base Case and 2015 regional
strategy scenario. The projected 2010 Base Case and control scenario
PM2.5 design values are provided in Table IX-3. The
projected 2015 Base Case and control PM2.5 design values are
provided in Table IX-4. Concerning the future baseline concentrations,
we expect improvement beyond 2015 based on the fact that the bank will
be used up and further reductions are expected from the Heavy Duty
Diesel Engines and Land-based Non-road Diesel Engines rules. Also, even
those counties that remain nonattainment in 2015 after the controls in
today's rule will benefit from air quality improvements and lower
concentrations of fine particles as a result of the SO2 and
NOX emissions reductions in this rule.
Table IX-1.--Projected PM2.5 Nonattainment Counties for 2010 Base Case and Regional Strategy Scenarios
----------------------------------------------------------------------------------------------------------------
2010 regional strategy case
State 2010 base case projected PM2.5 projected PM2.5 nonattainment
nonattainment counties counties
----------------------------------------------------------------------------------------------------------------
AL.................................... DeKalb, Jefferson, Montgomery, Jefferson, Russell, Talladaga.
Russell, Talladaga.
CT.................................... New Haven.......................... None.
DC.................................... Washington DC...................... None.
DE.................................... New Castle......................... None.
GA.................................... Clarke, Clayton, Cobb, DeKalb, Clarke, Clayton, Cobb, DeKalb,
Floyd, Fulton, Hall, Muscogee, Floyd, Fulton, Muscogee,
Paulding, Richmond, Wilkinson. Wilkinson.
IL.................................... Cook, Madison, St. Clair, Will..... Cook, Madison, St. Clair.
IN.................................... Clark, Marion...................... None.
KY.................................... Fayette, Jefferson................. None.
MD.................................... Baltimore City..................... None.
MI.................................... Wayne.............................. Wayne.
MO.................................... St. Louis.......................... None.
NY.................................... New York (Manhattan)............... New York (Manhattan).
NC.................................... Catawba, Davidson, Mecklenburg..... None.
[[Page 4637]]
OH.................................... Butler, Cuyahoga, Franklin, Cuyahoga, Hamilton, Jefferson,
Hamilton, Jefferson, Lawrence, Scioto, Stark.
Mahoning, Scioto, Stark, Summit,
Trumbull.
PA.................................... Allegheny, Berks, Lancaster, York.. Allegheny.
SC.................................... Greenville......................... None.
TN.................................... Davidson, Hamilton, Knox, Roane, Knox.
Sullivan.
WV.................................... Brooke, Cabell, Hancock, Kanawha, None.
Marshal, Wood.
----------------------------------------------------------------------------------------------------------------
Table IX-2.--Projected PM2.5 Nonattainment Counties for 2015 Base Case and Regional Strategy Scenarios
----------------------------------------------------------------------------------------------------------------
2015 regional strategy case
State 2015 base case projected PM2.5 projected PM2.5 nonattainment
nonattainment counties counties
----------------------------------------------------------------------------------------------------------------
AL.................................... Jefferson, Montgomery, Russell, Jefferson, Russel.
Talladaga
CT.................................... New Haven.......................... None.
GA.................................... Clarke, Clayton, Cobb, DeKalb, Clayton, DeKalb, Fulton.
Floyd, Fulton, Hall, Muscogee,
Richmond, Wilkinson.
IL.................................... Cook, Madison, St. Clair........... Cook.
IN.................................... Clark, Marion...................... None.
KY.................................... Jefferson.......................... None.
MD.................................... Baltimore City..................... None.
MI.................................... Wayne.............................. Wayne.
NY.................................... New York County (Manhattan)........ None.
OH.................................... Butler, Cuyahoga, Franklin, Cuyahoga, Hamilton, Jefferson,
Hamilton, Jefferson, Scioto, Scioto.
Stark, Summit
PA.................................... Allegheny, York.................... Allegheny.
TN.................................... Hamilton, Knox..................... Knox.
WV.................................... Brooke, Cabell, Hancock, Kanawha, None.
Wood
----------------------------------------------------------------------------------------------------------------
Table IX-3.--Projected PM2.5 Design Values for the 2010 Base Case and Regional Strategy Scenarios
----------------------------------------------------------------------------------------------------------------
2010 regional
State County 2010 base case control
strategy
----------------------------------------------------------------------------------------------------------------
Alabama.................................... DeKalb............................. 15.22 13.92
Alabama.................................... Jefferson.......................... 20.03 18.85
Alabama.................................... Montgomery......................... 15.69 14.60
Alabama.................................... Russell............................ 17.07 15.77
Alabama.................................... Talladega.......................... 16.44 15.26
Connecticut................................ New Haven.......................... 15.43 14.50
Delaware................................... New Castle......................... 15.43 14.12
District of Columbia....................... District of Columbia............... 15.48 13.70
Georgia.................................... Clarke............................. 17.04 15.56
Georgia.................................... Clayton............................ 17.73 16.43
Georgia.................................... Cobb............................... 16.80 15.56
Georgia.................................... DeKalb............................. 18.26 16.92
Georgia.................................... Floyd.............................. 16.99 15.65
Georgia.................................... Fulton............................. 19.79 18.37
Georgia.................................... Hall............................... 15.62 14.24
Georgia.................................... Muscogee........................... 16.68 15.41
Georgia.................................... Paulding........................... 15.40 14.17
Georgia.................................... Richmond........................... 15.99 14.65
Georgia.................................... Wilkinson.......................... 16.68 15.51
Illinois................................... Cook............................... 17.90 16.90
Illinois................................... Madison............................ 16.41 15.33
Illinois................................... St. Clair.......................... 16.31 15.11
Illinois................................... Will............................... 15.21 14.25
Indiana.................................... Clark.............................. 15.86 14.34
Indiana.................................... Marion............................. 15.89 14.39
Kentucky................................... Fayette............................ 15.21 13.55
Kentucky................................... Jefferson.......................... 15.79 14.23
Maryland................................... Baltimore City..................... 16.58 14.82
Michigan................................... Wayne.............................. 18.78 17.65
Missouri................................... St. Louis City..................... 15.25 14.14
New York................................... New York........................... 16.30 15.25
North Carolina............................. Catawba............................ 15.26 13.87
North Carolina............................. Davidson........................... 15.52 14.22
[[Page 4638]]
North Carolina............................. Mecklenburg........................ 15.18 13.92
Ohio....................................... Butler............................. 16.01 14.53
Ohio....................................... Cuyahoga........................... 19.13 17.68
Ohio....................................... Franklin........................... 16.69 15.04
Ohio....................................... Hamilton........................... 17.75 15.96
Ohio....................................... Jefferson.......................... 18.04 16.06
Ohio....................................... Lawrence........................... 15.48 13.67
Ohio....................................... Mahoning........................... 15.39 13.76
Ohio....................................... Scioto............................. 18.40 16.33
Ohio....................................... Stark.............................. 17.09 15.19
Ohio....................................... Summit............................. 16.35 14.71
Ohio....................................... Trumbull........................... 15.13 13.56
Pennsylvania............................... Allegheny.......................... 19.52 16.92
Pennsylvania............................... Berks.............................. 15.39 13.84
Pennsylvania............................... Lancaster.......................... 15.46 13.71
Pennsylvania............................... York............................... 15.68 13.93
South Carolina............................. Greenville......................... 15.06 13.75
Tennessee.................................. Davidson........................... 15.36 13.92
Tennessee.................................. Hamilton........................... 16.14 14.74
Tennessee.................................. Knox............................... 18.36 16.60
Tennessee.................................. Roane.............................. 15.18 13.69
Tennessee.................................. Sullivan........................... 15.24 13.77
West Virginia.............................. Brooke............................. 16.60 14.77
West Virginia.............................. Cabell............................. 16.39 14.41
West Virginia.............................. Hancock............................ 16.69 14.85
West Virginia.............................. Kanawha............................ 17.11 14.81
West Virginia.............................. Marshall........................... 15.53 13.25
West Virginia.............................. Wood............................... 16.30 14.15
----------------------------------------------------------------------------------------------------------------
Table IX-4.--Projected PM2.5 Design Values for the 2015 Base Case and Regional Strategy Scenarios
----------------------------------------------------------------------------------------------------------------
2015 regional
State County 2015 base case control
strategy
----------------------------------------------------------------------------------------------------------------
Alabama.................................... Jefferson.......................... 19.57 18.11
Alabama.................................... Montgomery......................... 15.35 14.05
Alabama.................................... Russell............................ 16.68 15.05
Alabama.................................... Talladega.......................... 15.97 14.57
Connecticut................................ New Haven.......................... 15.13 14.13
Georgia.................................... Clarke............................. 16.46 14.58
Georgia.................................... Clayton............................ 17.26 15.49
Georgia.................................... Cobb............................... 16.28 14.37
Georgia.................................... DeKalb............................. 17.93 16.22
Georgia.................................... Floyd.............................. 16.51 14.71
Georgia.................................... Fulton............................. 19.44 17.62
Georgia.................................... Hall............................... 15.05 13.16
Georgia.................................... Muscogee........................... 16.31 14.71
Georgia.................................... Richmond........................... 15.51 13.82
Georgia.................................... Wilkinson.......................... 16.40 14.88
Illinois................................... Cook............................... 17.52 16.40
Illinois................................... Madison............................ 16.03 14.88
Illinois................................... St. Clair.......................... 15.91 14.67
Indiana.................................... Clark.............................. 15.40 13.69
Indiana.................................... Marion............................. 15.31 13.79
Kentucky................................... Jefferson.......................... 15.32 13.57
Maryland................................... Baltimore City..................... 16.11 14.20
Michigan................................... Wayne.............................. 18.28 17.06
New York................................... New York (Manhattan)............... 15.82 14.69
Ohio....................................... Butler............................. 15.39 13.77
Ohio....................................... Cuyahoga........................... 18.58 17.05
Ohio....................................... Franklin........................... 16.18 14.46
Ohio....................................... Hamilton........................... 17.07 15.15
Ohio....................................... Jefferson.......................... 17.49 15.51
Ohio....................................... Scioto............................. 17.62 15.49
Ohio....................................... Stark.............................. 16.42 14.52
Ohio....................................... Summit............................. 15.78 14.14
Pennsylvania............................... Allegheny.......................... 18.64 16.09
[[Page 4639]]
Pennsylvania............................... York............................... 15.13 13.26
Tennessee.................................. Hamilton........................... 15.63 13.91
Tennessee.................................. Knox............................... 17.73 15.59
West Virginia.............................. Brooke............................. 16.10 14.26
West Virginia.............................. Cabell............................. 15.70 13.71
West Virginia.............................. Hancock............................ 16.18 14.33
West Virginia.............................. Kanawha............................ 16.45 14.10
West Virginia.............................. Wood............................... 15.58 13.49
----------------------------------------------------------------------------------------------------------------
The results of the air quality modeling indicate that 61 counties
in the East are expected to be nonattainment for PM2.5 in
the 2010 Base Case. Of these 61 counties, 38 are projected to come into
attainment in 2010 following the SO2 and NOX
emissions reductions resulting from the regional controls in today's
proposal. The 23 counties projected to remain nonattainment after the
application of the regional strategy are expected to experience a
sizeable reduction in PM2.5 from this strategy, which will
bring them closer to attainment. Specifically, the average reduction in
these 23 residual 2010 nonattainment counties is 1.50 [mu]g/
m3 with a range of 0.93 to 2.60 [mu]g/m3.
In 2015, the SO2 and NOX reductions in
today's proposal are expected to reduce the number of PM2.5
nonattainment counties in the East from 41 to 13. The regional strategy
is predicted to provide large reductions in PM2.5 in those
13 residual nonattainment counties. Specifically, the average reduction
in these 13 residual 2015 nonattainment counties is 1.70 [mu]g/m\3\
with a range of 1.00 to 2.54 [mu]g/m\3\.
Thus, the SO2 and NOX emissions reductions
which will result from today's proposal will greatly reduce the extent
of PM2.5 nonattainment by 2010 and beyond. These emissions
reductions are expected to substantially reduce the number of
PM2.5 nonattainment counties in the East and make attainment
easier for those counties that remain nonattainment by substantially
lowering PM2.5 concentrations in these residual
nonattainment counties.
C. Ozone Air Quality Modeling of the Regional NOX Strategy
The EPA used the ozone modeling platform described in section IV to
model the impacts of the proposed EGU NOX controls on 8-hour
ozone concentrations. In brief, we ran the CAMx model for the
meteorological conditions in each of the three 1995 ozone episodes
using the Eastern U.S. modeling domain. Ozone modeling was performed
for both 2010 and 2015 to assess the projected effects of the regional
strategy in each of these years on projected 8-hour ozone
nonattainment.
The results of the regional strategy ozone modeling are expressed
in terms of the expected reduction in projected 8-hour design value
concentrations and the implications for future nonattainment. The
procedures used to project future 8-hour ozone design values and
nonattainment are described in section IV. The projected design values
and exceedance counts for each nonattainment county for the 2010 and
2015 scenarios are provided in the AQMTSD. The counties that are
projected to be nonattainment for the 8-hour ozone NAAQS are listed in
Table IX-5 for the 2010 Base Case and the 2010 regional strategy
scenario and in Table IX-6 for the 2015 Base Case and 2015 regional
strategy scenario. The projected 2010 Base Case and control scenario 8-
hour ozone design values are provided in Table IX-7. The projected 2015
Base and control 8-hour ozone design values are provided in Table IX-8.
Table IX-5.--Projected 8-Hour Ozone Nonattainment Counties for 2010 Base Case and Regional Strategy Scenarios
----------------------------------------------------------------------------------------------------------------
2010 regional strategy case
State 2010 base case projected 8-hour projected 8-hour ozone
ozone nonattainment counties nonattainment counties
----------------------------------------------------------------------------------------------------------------
AR.................................... Crittenden......................... Crittenden.
CT.................................... Fairfield, Middlesex, New Haven.... Fairfield, Middlesex, New Haven.
DC.................................... Washington, DC..................... Washington, DC.
DE.................................... New Castle......................... New Castle.
GA.................................... Fulton............................. Fulton.
IL.................................... None............................... None.
IN.................................... Lake............................... Lake.
MD.................................... Anne Arundel, Baltimore, Cecil, Anne Arundel, Baltimore, Cecil,
Harford, Kent, Prince Georges. Harford, Kent, Prince Georges.
MI.................................... None............................... None.
NJ.................................... Bergen, Camden, Cumberland, Bergen, Camden, Cumberland,
Gloucester, Hudson, Hunterdon, Gloucester, Hunterdon, Mercer,
Mercer, Middlesex, Monmouth, Middlesex, Monmouth, Morris,
Morris, Ocean. Ocean.
NY.................................... Erie, Putnam, Richmond, Suffolk, Erie, Putnam, Richmond, Suffolk,
Westchester. Westchester.
NC.................................... Mecklenburg........................ Mecklenburg.
OH.................................... Geauga, Summit..................... Geauga.
PA.................................... Allegheny, Bucks, Delaware, Bucks, Delaware, Montgomery,
Montgomery, Philadelphia. Philadelphia.
RI.................................... Kent............................... Kent.
TX.................................... Denton, Harris, Tarrant............ Denton, Harris, Tarrant.
VA.................................... Arlington, Fairfax................. Arlington, Fairfax.
[[Page 4640]]
WI.................................... Kenosha, Racine, Sheboygan......... Kenosha, Racine, Sheboygan.
----------------------------------------------------------------------------------------------------------------
Table IX-6.--Projected 8-Hour Ozone Nonattainment Counties for 2015 Base Case and Regional Strategy Scenarios
----------------------------------------------------------------------------------------------------------------
2015 regional strategy case
State 2015 base case projected 8-hour projected 8-hour ozone
ozone nonattainment counties nonattainment counties
----------------------------------------------------------------------------------------------------------------
AR.................................... Crittenden......................... None.
CT.................................... Fairfield, Middlesex, New Haven.... Fairfield, Middlesex, New Haven.
DC.................................... Washington, DC..................... Washington, DC.
DE.................................... None............................... None.
GA.................................... None............................... None.
IL.................................... Cook............................... None.
IN.................................... Lake............................... Lake.
MD.................................... Anne Arundel, Cecil, Harford....... Anne Arundel, Cecil, Harford.
MI.................................... Macomb............................. None.
NJ.................................... Bergen, Camden, Gloucester, Bergen, Camden, Gloucester,
Hunterdon, Mercer, Middlesex, Hunterdon, Mercer, Middlesex,
Monmouth, Morris, Ocean. Monmouth, Ocean.
NY.................................... Erie, Richmond, Suffolk, Erie, Richmond, Suffolk,
Westchester. Westchester.
NC.................................... None............................... None.
OH.................................... Geauga............................. None.
PA.................................... Bucks, Montgomery, Philadelphia.... Bucks, Montgomery, Philadelphia.
RI.................................... Kent............................... None.
TX.................................... Harris............................. Harris.
VA.................................... Arlington, Fairfax................. Arlington.
WI.................................... Kenosha, Sheboygan................. Kenosha.
----------------------------------------------------------------------------------------------------------------
Table IX-7.--Projected 8-Hour Ozone Design Values for the 2010 Base Case and Regional Strategy Scenarios
----------------------------------------------------------------------------------------------------------------
2010 regional
State County 2010 base case control
strategy
----------------------------------------------------------------------------------------------------------------
Arkansas................................... Crittenden......................... 86 86
Connecticut................................ Fairfield.......................... 94 94
Connecticut................................ Middlesex.......................... 91 91
Connecticut................................ New Haven.......................... 92 92
District of Columbia....................... District of Columbia............... 88 88
Delaware................................... New Castle......................... 87 86
Georgia.................................... Fulton............................. 86 85
Indiana.................................... Lake............................... 87 86
Maryland................................... Anne Arundel....................... 91 91
Maryland................................... Baltimore.......................... 85 85
Maryland................................... Cecil.............................. 90 90
Maryland................................... Harford............................ 93 93
Maryland................................... Kent............................... 89 88
Maryland................................... Prince Georges..................... 86 85
New Jersey................................. Bergen............................. 88 87
New Jersey................................. Camden............................. 93 92
New Jersey................................. Cumberland......................... 86 85
New Jersey................................. Gloucester......................... 95 95
New Jersey................................. Hudson............................. 85 84
New Jersey................................. Hunterdon.......................... 89 89
New Jersey................................. Mercer............................. 98 98
New Jersey................................. Middlesex.......................... 95 95
New Jersey................................. Monmouth........................... 89 89
New Jersey................................. Morris............................. 88 87
New Jersey................................. Ocean.............................. 105 104
New York................................... Erie............................... 90 89
New York................................... Putnam............................. 85 85
New York................................... Richmond........................... 90 89
New York................................... Suffolk............................ 90 90
New York................................... Westchester........................ 86 85
North Carolina............................. Mecklenburg........................ 85 86
Ohio....................................... Geauga............................. 88 88
Ohio....................................... Summit............................. 85 84
[[Page 4641]]
Pennsylvania............................... Allegheny.......................... 85 84
Pennsylvania............................... Bucks.............................. 97 97
Pennsylvania............................... Delaware........................... 87 86
Pennsylvania............................... Montgomery......................... 90 89
Pennsylvania............................... Philadelphia....................... 92 92
Rhode Island............................... Kent............................... 89 88
Texas...................................... Denton............................. 87 87
Texas...................................... Harris............................. 100 100
Texas...................................... Tarrant............................ 88 87
Virginia................................... Arlington.......................... 88 88
Virginia................................... Fairfax............................ 87 87
Wisconsin.................................. Kenosha............................ 94 93
Wisconsin.................................. Racine............................. 86 85
Wisconsin.................................. Sheboygan.......................... 90 89
----------------------------------------------------------------------------------------------------------------
Table IX-8.--Projected 8-Hour Ozone Design Values for the 2015 Base Case and Regional Strategy Scenarios
----------------------------------------------------------------------------------------------------------------
2015 regional
State County 2015 base case control
strategy
----------------------------------------------------------------------------------------------------------------
Arkansas................................... Crittenden......................... 85 83
Connecticut................................ Fairfield.......................... 94 93
Connecticut................................ Middlesex.......................... 89 88
Connecticut................................ New Haven.......................... 90 89
District of Columbia....................... District of Columbia............... 86 85
Illinois................................... Cook............................... 85 84
Indiana.................................... Lake............................... 87 86
Maryland................................... Anne Arundel....................... 87 86
Maryland................................... Cecil.............................. 86 85
Maryland................................... Harford............................ 89 88
Michigan................................... Macomb............................. 86 84
New Jersey................................. Bergen............................. 87 86
New Jersey................................. Camden............................. 91 90
New Jersey................................. Gloucester......................... 93 92
New Jersey................................. Hunterdon.......................... 87 86
New Jersey................................. Mercer............................. 96 95
New Jersey................................. Middlesex.......................... 92 92
New Jersey................................. Monmouth........................... 87 86
New Jersey................................. Morris............................. 85 83
New Jersey................................. Ocean.............................. 102 101
New York................................... Erie............................... 88 86
New York................................... Richmond........................... 87 87
New York................................... Suffolk............................ 89 89
New York................................... Westchester........................ 86 85
Ohio....................................... Geauga............................. 85 83
Pennsylvania............................... Bucks.............................. 95 94
Pennsylvania............................... Montgomery......................... 89 88
Pennsylvania............................... Philadelphia....................... 91 90
Rhode Island............................... Kent............................... 85 84
Texas...................................... Harris............................. 99 98
Virginia................................... Arlington.......................... 87 86
Virginia................................... Fairfax............................ 85 84
Wisconsin.................................. Kenosha............................ 93 91
Wisconsin.................................. Sheboygan.......................... 86 84
----------------------------------------------------------------------------------------------------------------
In the 2010 Base Case (i.e., without the emissions reductions
called for in today's proposal), 47 counties in the East are forecast
to be nonattainment for ozone. With the implementation of the proposed
regional NOX strategy, three of the 47 2010 Base Case
nonattainment counties are forecast to come into attainment. Of the 44
counties that are projected to remain nonattainment in 2010 after the
regional controls, 12 are projected to be within 2 ppb of attainment
(i.e., counties that have design values of 85 or 86 ppb).
In 2015, the number of nonattainment counties is expected to
decline from 34 counties in the Base Case to 26 counties after the
NOX emissions reductions in today's proposal. The proposed
regional NOX strategy is projected to reduce nonattainment
ozone design values in the East by 1 to 2 ppb in all but three of the
34 2015 Base Case nonattainment counties. Of the 26 counties that are
[[Page 4642]]
forecast to remain nonattainment in the control case, ten are projected
to be within 2 ppb of attainment. Thus, our modeling indicates that by
2010 and 2015 the NOX controls in today's proposal will
reduce ozone concentrations throughout the East and help bring areas
into attainment with the 8-hour ozone NAAQS.
X. Benefits of Emissions Reductions in Addition to the PM and Ozone
NAAQS
This proposed action will result in benefits in addition to the
enumerated human health and welfare benefits resulting from reductions
in ambient levels of PM and ozone. These other benefits occur both
directly, from the reductions in NOX and SO2, and
indirectly, through reductions in co-pollutants, such as mercury. For
example, reductions in emissions of NOX and SO2
will contribute to substantial visibility improvements in many parts of
the eastern U.S. where people live, work, and recreate, including
mandatory Federal Class I areas such as the Great Smoky Mountains.
Reductions in NOX and SO2 emissions from affected
sources will also reduce acidification and eutrophication of water
bodies. The potential for reductions in nitrate contamination of
drinking water is another possible benefit of the rule. This proposal
will also reduce acid and particulate deposition that damages cultural
monuments and other materials. Reduced mercury emissions will lessen
mercury contamination in lakes that can potentially reduce both human
and wildlife exposure through consumption of contaminated fish. In
contrast to the benefits discussed, it is also possible that this
proposal will lessen the benefits of passive fertilization for forest
and terrestrial ecosystems where nutrients are a limiting factor and
for some croplands.
This rule will improve visibility in the transport region.
Visibility impairment is widespread and expected to continue (67 FR
68251, November 8, 2002) and this proposed rule will help to improve
visibility. We provide a limited assessment of the economic value of
expected improvements in visibility at some Federal Class I areas in
section XI.
The following section presents information on three categories of
public welfare and environmental impacts related to reductions in
emissions from affected sources: reduced acid deposition, reduced
eutrophication of water bodies, and reduced human health and welfare
effects due to deposition of mercury. A more thorough discussion of
these effects is provided in ``Benefits of the Proposed Interstate Air
Quality Rule (January 2004).''
A. Atmospheric Deposition of Sulfur and Nitrogen--Impacts on Aquatic,
Forest, and Coastal Ecosystems
Atmospheric deposition of sulfur and nitrogen, more commonly known
as acid rain, occurs when emissions of SO2 and
NOX react in the atmosphere (with water, oxygen, and
oxidants) to form various acidic compounds. These acidic compounds fall
to earth in either a wet form (rain, snow, and fog) or a dry form
(gases and particles). Prevailing winds can transport acidic compounds
hundreds of miles, often across State and national borders. Acidic
compounds (including small particles such as sulfates and nitrates)
cause many negative environmental effects, including acidifying lakes
and streams, harming sensitive forests, and harming sensitive coastal
ecosystems.
1. Acid Deposition and Acidification of Lakes and Streams
Acid deposition causes acidification of lakes and streams. The
effect of atmospheric deposition of acids on freshwater and forest
ecosystems depends largely upon the ecosystem's ability to neutralize
the acid. Acid Neutralizing Capacity (ANC), a key indicator of the
ability of the water and watershed soil to neutralize the acid
deposition it receives, depends largely on the watershed's physical
characteristics: geology, soils, and size. Waters that are sensitive to
acidification tend to be located in small watersheds that have few
alkaline minerals and shallow soils. Conversely, watersheds that
contain alkaline minerals, such as limestone, tend to have waters with
a high ANC. Areas especially sensitive to acidification include
portions of the Northeast (particularly the Adirondack and Catskill
Mountains, portions of New England, and streams in the mid-Appalachian
highlands) and Southeastern streams.
Quantitative impacts of this proposal on acidification of water
bodies have been assessed. Modeling for this proposed rule indicates
lakes in the Northeast and Adirondack Mountains would improve in acid
buffering capacity. Specifically, no lakes in the Andirondack Mountains
are projected to be categorized as chronically acidic in 2030 as a
result of this proposal. In contrast, twelve percent of these lakes are
projected to be chronically acidic without the emissions reductions
envisioned in this proposal. For Northeast lakes in general, 6 percent
of the lakes are anticipated to be chronically acidic before
implementation of this proposal. The IAQR is expected to decrease the
percentage of chronically acidic lakes in the Northeast to 1 percent.
2. Acid Deposition and Forest Ecosystem Impacts
Current understanding of the effects of acid deposition on forest
ecosystems focuses on the effects of ecological processes affecting
plant uptake, retention, and cycling of nutrients within forest
ecosystems. Research results from the 1990s indicate documented
decreases in base cations (calcium, magnesium, potassium, and others)
from soils in the northeastern and southeastern United States are at
least partially attributable to acid deposition. Losses of calcium from
forest soils and forested watersheds have now been documented as a
sensitive early indicator of soil response to acid deposition for a
wide range of forest soils in the United States.
Although sulfate is the primary cause of base cation leaching,
nitrate is a significant contributor in watersheds that are nearly
nitrogen saturated. Base cation depletion is a cause for concern
because of the role these ions play in surface water acid
neutralization and their importance as essential nutrients for tree
growth (calcium, magnesium and potassium).
In red spruce stands, a clear link exists between acid deposition,
calcium supply, and sensitivity to abiotic stress. Red spruce uptake
and retention of calcium is impacted by acid deposition in two main
ways: leaching of important stores of calcium from needles and
decreased root uptake of calcium due to calcium depletion from the soil
and aluminum mobilization. These changes increase the sensitivity of
red spruce to winter injuries under normal winter conditions in the
Northeast, result in the loss of needles, slow tree growth, and impair
the overall health and productivity of forest ecosystems in many areas
of the eastern United States. In addition, recent studies of sugar
maple decline in the Northeast link low base cation availability, high
levels of aluminum and manganese in the soil, and increased levels of
tree mortality due to native defoliating insects. This proposal will
improve acid deposition in the transport region, and is likely to have
positive effects on the health and productivity of forest systems in
the region.
3. Coastal Ecosystems
Since 1990, a large amount of research has been conducted on the
impact of nitrogen deposition to coastal waters.
[[Page 4643]]
Nitrogen is often the limiting nutrient in coastal ecosystems.
Increasing the levels of nitrogen in coastal waters can cause
significant changes to those ecosystems. In recent decades, human
activities have greatly accelerated nitrogen nutrient inputs, causing
excessive growth of algae and leading to degraded water quality and
associated impairments of estuarine and coastal resources for human
uses.
It is now known that nitrogen deposition is a significant source of
nitrogen to many estuaries. The amount of nitrogen entering estuaries
due to atmospheric deposition varies widely, depending on the size and
location of the estuarine watershed and other sources of nitrogen in
the watershed. There are a handful of estuaries where atmospheric
deposition of nitrogen contributes well over 40 percent of the total
nitrogen load; however, in most estuaries for which estimates exist,
the contribution from atmospheric deposition ranges from 15 to 30
percent. The area with the highest deposition rates stretches from
Massachusetts to the Chesapeake Bay and along the central Gulf of
Mexico coast.
In 1999, National Oceanic and Atmospheric Administration (NOAA)
published the results of a 5-year national assessment of the severity
and extent of estuarine eutrophication. An estuary is defined as the
inland arm of the sea that meets the mouth of a river. The 138
estuaries characterized in the study represent more than 90 percent of
total estuarine water surface area and the total number of U.S.
estuaries. The study found that estuaries with moderate to high
eutrophication conditions represented 65 percent of the estuarine
surface area.
Eutrophication is of particular concern in coastal areas with poor
or stratified circulation patterns, such as the Chesapeake Bay, Long
Island Sound, and the Gulf of Mexico. In such areas, the
``overproduced'' algae tends to sink to the bottom and decay, using all
or most of the available oxygen and thereby reducing or eliminating
populations of bottom-feeder fish and shellfish, distorting the normal
population balance between different aquatic organisms, and in extreme
cases causing dramatic fish kills. Severe and persistent eutrophication
often directly impacts human activities. For example, fishery resource
losses can be caused directly by fish kills associated with low
dissolved oxygen and toxic blooms. Declines in tourism occur when low
dissolved oxygen causes noxious smells and floating mats of algal
blooms create unfavorable aesthetic conditions. Risks to human health
increase when the toxins from algal blooms accumulate in edible fish
and shellfish, and when toxins become airborne, causing respiratory
problems due to inhalation. According to the NOAA report, more than
half of the nation's estuaries have moderate to high expressions of at
least one of these symptoms--an indication that eutrophication is well
developed in more than half of U.S. estuaries.
This proposal is anticipated to reduce nitrogen deposition in the
IAQR region. Thus, reductions in the levels of nitrogen deposition will
have a positive impact upon current eutrophic conditions in estuaries
and coastal areas in the region.
B. Human Health and Welfare Effects Due to Deposition of Mercury
Mercury emitted from utilities and other natural and man-made
sources is carried by winds through the air and eventually is deposited
to water and land. In water, Hg is transformed to methylmercury through
biological processes. Methylmercury, a highly toxic form of Hg, is the
form of Hg of greatest concern for the purpose of this rulemaking. Once
Hg has been transformed into methylmercury, it can be ingested by the
lower trophic level organisms where it can bioaccumulate in fish tissue
(i.e., concentrations in predatory fish build up over the fish's entire
lifetime, accumulating in the fish tissue as predatory fish consume
other species in the food chain). Thus, fish and wildlife at the top of
the food chain can have Hg concentrations that are higher than the
lower species, and they can have concentrations of Hg that are higher
than the concentration found in the water body itself. Therefore, the
most common form of exposure to Hg for humans and wildlife is through
the consumption of contaminated predatory fish, such as: commercially
consumed tuna, shark, or other saltwater fish species and
recreationally caught bass, perch, walleye or other freshwater fish
species. When humans consume fish contaminated with methylmercury, the
ingested methylmercury is almost completely absorbed into the blood and
distributed to all tissues (including the brain); it also readily
passes through the placenta to the fetus and fetal brain.
Based on the findings of the National Research Council, EPA has
concluded that benefits of Hg reductions would be most apparent at the
human consumption stage, as consumption of fish is the major source of
exposure to methylmercury. At lower levels, documented Hg exposure
effects may include more subtle, yet potentially important,
neurodevelopmental effects. Some subpopulations in the U.S., such as:
Native Americans, Southeast Asian Americans, and lower income
subsistence fishers, may rely on fish as a primary source of nutrition
and/or for cultural practices. Therefore, they consume larger amounts
of fish than the general population and may be at a greater risk to the
adverse health effects from Hg due to increased exposure. In pregnant
women, methylmercury can be passed on to the developing fetus, and at
sufficient exposure may lead to a number of neurological disorders in
children. Thus, children who are exposed to low concentrations of
methylmercury prenatally may be at increased risk of poor performance
on neurobehavioral tests, such as those measuring attention, fine motor
function, language skills, visual-spatial abilities (like drawing), and
verbal memory. The effects from prenatal exposure can occur even at
doses that do not result in effects in the mother. Mercury may also
affect young children who consume fish contaminated with Hg.
Consumption by children may lead to neurological disorders and
developmental problems, which may lead to later economic consequences.
In response to potential risks of consuming fish containing
elevated concentrations of Hg, EPA and FDA have issued fish consumption
advisories which provide recommended limits on consumption of certain
fish species for different populations. EPA and FDA are currently
developing a joint advisory that has been released in draft form. This
newest draft FDA-EPA fish advisory recommends that women and young
children reduce the risks of Hg consumption in their diet by moderating
their fish consumption, diversifying the types of fish they consume,
and by checking any local advisories that may exist for local rivers
and streams. This collaborative FDA-EPA effort will greatly assist in
educating the most susceptible populations. Additionally, the
reductions of Hg from this regulation may potentially lead to fewer
fish consumption advisories, which will benefit the fishing community.
We are unable to quantify changes in the levels of methylmercury in
fish associated with reductions in mercury emissions for this proposal.
While it is beneficial to society to reduce mercury, we are unable to
quantify and provide a monetized estimate of benefits at this time due
to gaps in available information on emissions, fate and transport,
human exposure, and health impact models. However, this proposal is
anticipated to decrease annual EGU mercury emissions by 10.6 tons in
2010 or approximately 23.5 percent, by 11.8 tons in 2015 or 26.3
percent, and by
[[Page 4644]]
14.3 tons or 32 percent in 2020. Emission reduction percentage
decreases are based upon expected mercury emissions changes from
fossil-fired EGUs larger than 25 megawatt capacity.
XI. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review
Under Executive Order 12866 (58 FR 51735, October 4, 1993), the
Agency must determine whether a regulatory action is ``significant''
and therefore subject to Office of Management and Budget (OMB) review
and the requirements of the Executive Order. The Order defines
``significant regulatory action'' as one that is likely to result in a
rule that may:
1. Have an annual effect on the economy of $100 million or more or
adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or Tribal governments or
communities;
2. Create a serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
3. Materially alter the budgetary impact of entitlements, grants,
user fees, or loan programs or the rights and obligations of recipients
thereof; or
4. Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.
In view of its important policy implications and potential effect
on the economy of over $100 million, this action has been judged to be
an economically ``significant regulatory action'' within the meaning of
the Executive Order. As a result, today's proposal was submitted to OMB
for review, and EPA has prepared documents entitled ``Benefits of the
Proposed Interstate Air Quality Rule'' (January 2004), ``Economic and
Energy Impact of the Proposed Interstate Air Quality Rule'' (January
2004), and other related technical support documents collectively
referred to here as the ``economic analyses.''
1. Summary of Economic Analyses
The economic analyses provide several important analyses of impacts
on public welfare. These include an analysis of the social benefits,
social costs, and net benefits of the regulatory scenario. The economic
analyses also address issues involving small business impacts, unfunded
mandates (including impacts for Tribal governments), environmental
justice, children's health, energy impacts, and requirements of the
Paperwork Reduction Act (PRA). Many of the analyses summarized below
are preliminary. The EPA intends to update these analyses as part of
the SNPR.
a. Benefit-Cost Analysis
The benefit-cost analysis concludes that substantial net economic
benefits to society are likely to be achieved as a result of the
reduction in emissions occurring as a result of this rulemaking. The
results detailed below show that this rule would be highly beneficial
to society, with annual net benefits in 2010 of approximately $55
billion, ($58 billion benefits compared to social cost of approximately
$3 billion) and net benefits in 2015 of $80 billion ($84 benefits
compared to social costs of $4 billion). All amounts are reflected in
1999$. As discussed in section IX, we did not complete air quality
modeling that precisely matches the IAQR region. We anticipate that any
differences in estimates due to the modeling region analyzed should be
small.
i. Control Scenario
Today's proposed rulemaking sets forth requirements for States to
eliminate their significant contribution to down-wind State's
nonattainment of the ozone and PM2.5 NAAQS. In order to reduce this
significant contribution, EPA is proposing to require that certain
States reduce their emissions of SO2 and NOX.
Those quantities were derived by calculating the amount of emissions of
SO2 and NOX that EPA believes can be controlled
from large EGUs in a highly cost-effective manner. For a more complete
description of the reduction requirements and how they were calculated,
see section VI of today's rulemaking.
While the emission reduction requirements were developed assuming
highly cost-effective controls on EGUs, States are free to obtain the
emissions reductions from other source categories. For purposes of
analyzing the impacts of the rule, EPA is assuming the application of
the controls that it has identified to be highly cost effective on all
EGUs in the transport region.
ii. Cost Analysis and Economic Impacts
For purposes of today's proposal, EPA analyzed the costs using the
IPM. The IPM is a model that EPA has used to analyze the impacts of
regulations on the power sector. A description of the methodology used
to model the costs and the results can be found in section VI. More
details can be found in ``Economic and Energy Impact of the Proposed
Interstate Air Quality Rule'' (January 2004).
iii. Human Health and Welfare Benefit Analysis
Our analysis of the health and welfare benefits anticipated from
this proposed rule are presented in this section. Briefly, the analysis
projects major benefits from implementation of the rule in 2010 and
2015. As described below, thousands of deaths and other serious health
effects would be prevented. We are able to monetize annual benefits of
approximately $58 billion in 2010 and $84 billion in 2015 (1999$) of
those benefits.
Table XI-1 presents the primary estimates of reduced incidence of
PM and ozone related health effects for the years 2010 and 2015 for the
regulatory control strategy. In interpreting the results, it is
important to keep in mind the limited set of effects we are able to
monetize. Specifically, the table lists the PM and ozone related
benefits associated with the reduction of ambient PM and ozone levels.
These benefits are substantial both in incidence and dollar value. In
2010, we estimate that there will be approximately 9,600 fewer
premature deaths annually associated with PM2.5, and the rule will
result in 5,200 fewer cases of chronic bronchitis, 13,000 fewer non-
fatal heart attacks, 8,900 fewer hospitalizations (for respiratory and
cardiovascular disease combined); and result in significant reductions
in days of restricted activity due to respiratory illness (with an
estimate of 6.4 million fewer cases). We also estimate substantial
health improvements for children from reduced upper and lower
respiratory illness, acute bronchitis, and asthma attacks. Ozone health
related benefits are expected to occur during the summer ozone season
(usually ranging from May to September in the Eastern U.S.). Based upon
modeling for 2010, ozone-related health benefits are expected to
include 1,000 fewer hospital admissions for respiratory illnesses, 120
emergency room admissions for asthma, 280,000 fewer days with
restricted activity levels, and 180,000 fewer days where children are
absent from school due to illnesses. While we did not include separate
estimates of the number of premature deaths that would be avoided due
to reductions in ozone levels, recent evidence has been found linking
short-term ozone exposures with premature mortality independent of PM
exposures. Recent reports by Thurston and Ito (2001) and the World
Health Organization (WHO) support an independent ozone mortality
impact,
[[Page 4645]]
and the EPA Science Advisory Board has recommended that EPA reevaluate
the ozone mortality literature for possible inclusion in the estimate
of total benefits. Based on these new analyses and recommendations, EPA
is sponsoring three independent meta-analyses of the ozone-mortality
epidemiology literature to inform a determination on inclusion of this
important health endpoint. Upon completion and peer-review of the meta-
analyses, EPA will make its determination on whether and how benefits
of reductions in ozone-related mortality will be included in the
benefits analysis for the final interstate air quality rule.
Table XI-2 presents the estimated monetary value of reductions in
the incidence of health and welfare effects. PM-related health benefits
and ozone benefits are estimated to be approximately $56.9 billion and
$82.4 billion annually in 2010 and 2015, respectively. Estimated annual
visibility benefits in Southeastern Class I areas brought about by the
IAQR are estimated to be $880 million in 2010 and $1.4 billion in 2015.
All monetized estimates are stated in 1999$. Table XI-3 presents the
total monetized benefits for the years 2010 and 2015. This table also
indicates with a ``B'' those additional health and environmental
effects that we were unable to quantify or monetize. These effects are
additive to the estimate of total benefits, and EPA believes there is
considerable value to the public of the benefits that could not be
monetized. A listing of the benefit categories that could not be
quantified or monetized in our estimate is provided in Table XI-4.
In summary, EPA's primary estimate of the annual benefits of the
rule is approximately 58 + B billion in 2010. In 2015, total monetized
benefits are approximately $84 + B billion annually. These estimates
account for growth in real gross domestic product (GDP) per capita
between the present and the years 2010 and 2015. As the table
indicates, total benefits are driven primarily by the reduction in
premature fatalities each year, which account for over 90 percent of
total benefits.
Table XI-1.--Estimated Reductions in Incidence of Health Effects
----------------------------------------------------------------------------------------------------------------
2010 2015
Endpoint Constituent estimated estimated
reduction reduction
----------------------------------------------------------------------------------------------------------------
Premature Mortality--Adult.................... PM2.5........................... 9,600 13,000
Mortality--Infant............................. PM2.5........................... 22 29
Chronic Bronchitis............................ PM2.5........................... 5,200 6,900
Acute Myocardial Infarction--Total............ PM2.5........................... 13,000 18,000
Hospital Admissions--Respiratory.............. PM2.5, Ozone.................... 5,200 8,100
Hospital Admissions--Cardiovascular........... PM2.5........................... 3,700 5,000
Emergency Room Visits--Respiratory............ PM2.5, Ozone.................... 7,100 9,400
Acute Bronchitis.............................. PM2.5........................... 12,000 16,000
Lower Respiratory Symptoms.................... PM2.5........................... 140,000 190,000
Upper Respiratory Symptoms.................... PM2.5........................... 490,000 620,000
Asthma Exacerbation........................... PM2.5........................... 190,000 240,000
Acute Respiratory Symptoms (MRADs *).......... PM2.5, Ozone.................... 6,400,000 8,500,000
Work Loss Days................................ PM2.5........................... 1,000,000 1,300,000
School Loss Days.............................. Ozone........................... 180,000 390,000
----------------------------------------------------------------------------------------------------------------
* MRADs = minor restricted activity days.
Table XI-2.--Estimated Monetary Value of Reductions in Incidence of Health and Welfare Effects
(Millions of 1999 dollars)
----------------------------------------------------------------------------------------------------------------
2010 estimated 2015 estimated
Endpoint group Constituent monetary value monetary value
of reductions of reductions
----------------------------------------------------------------------------------------------------------------
Premature Mortality--Adult.................... PM2.5........................... $53,000 $77,000
Mortality--Infant............................. PM2.5........................... 130 180
Chronic Bronchitis............................ PM2.5........................... 1,900 2,700
Acute Myocardial Infarction--Total............ PM2.5........................... 1,100 1,500
Hospital Admissions--Respiratory.............. PM2.5, Ozone.................... 85 130
Hospital Admissions--Cardiovascular........... PM2.5........................... 78 110
Emergency Room Visits--Respiratory............ PM2.5, Ozone.................... 2.0 2.6
Acute Bronchitis.............................. PM2.5........................... 4.3 5.7
Lower Respiratory Symptoms.................... PM2.5........................... 2.3 3.0
Upper Respiratory Symptoms.................... PM2.5........................... 13 17
Asthma Exacerbation........................... PM2.5........................... 8.0 10
Acute Respiratory Symptoms (MRADs *).......... PM2.5, Ozone.................... 320 440
Work Loss Days................................ PM2.5........................... 140 170
School Loss Days.............................. Ozone........................... 13 28
Worker Productivity........................... Ozone........................... 8.0 17
Visibility--Southeastern Class I Areas........ Light Extinction................ 880 1,400
-----------------
TOTAL + B * *............................. ................................ $58,000 $84,000
----------------------------------------------------------------------------------------------------------------
B = non-monetized benefits
* MRADs = minor restricted activity days.
** Note total dollar benefits are rounded to the nearest billion and column totals may not add due to rounding.
[[Page 4646]]
2. Benefit-Cost Comparison
Based upon Table XI-3, the estimated social costs to implement the
proposed rule emission reductions in 2010 and 2015 are $3 and $4
billion annually, respectively (1999$). Thus, the net benefit (social
benefits minus social costs) of the program is approximately $55 + B
billion annually in 2010 and $80 + B billion annually in 2015.
Therefore, implementation of the proposed rule is expected to provide
society with a net gain in social welfare based on economic efficiency
criteria.
Table XI-3.--Summary of Annual Benefits, Costs, and Net Benefits of the
Interstate Air Quality Rule
(Billions of 1999 dollars)
------------------------------------------------------------------------
Description 2010 2015
------------------------------------------------------------------------
Social Costs a.................. 2.9............... 3.7
Social Benefits b, c............
Ozone-related benefits...... 0.1............... 0.1
PM-related health benefits.. 56.8 + B.......... 82.3 + B
Visibility benefits......... 0.9............... 1.4
Annual Net Benefits (Benefits- $55 + B........... $80 + B
Costs) b, c, d.
------------------------------------------------------------------------
Notes:
a Note that costs are the estimated total annual costs of reducing
pollutants including NOX and SO2 in the IAQR region.
b As the table indicates, total benefits are driven primarily by PM
related health benefits. The reduction in premature fatalities each
year accounts for over 90 percent of total benefits. Benefits in this
table are associated with NOX and SO2 reductions.
c Not all possible benefits or disbenefits are quantified and monetized
in this analysis. B is the sum of all unquantified benefits and
disbenefits. Potential benefit categories that have not been
quantified and monetized are listed in Table XI-4.
d Net benefits are rounded to nearest billion. Columnar totals may not
sum due to rounding.
Every benefit-cost analysis examining the potential effects of a
change in environmental protection requirements is limited to some
extent by data gaps, limitations in model capabilities (such as
geographic coverage), and uncertainties in the underlying scientific
and economic studies used to configure the benefit and cost models.
Deficiencies in the scientific literature often result in the inability
to estimate quantitative changes in health and environmental effects,
such as potential increases in premature mortality associated with
increased exposure to carbon monoxide. Deficiencies in the economics
literature often result in the inability to assign economic values even
to those health and environmental outcomes that can be quantified.
While these general uncertainties in the underlying scientific and
economics literatures (that can cause the valuations to be higher or
lower) are discussed in detail in the economic analyses and its
supporting documents and references, the key uncertainties which have a
bearing on the results of the benefit-cost analysis of this proposed
rule include the following:
? The exclusion of potentially significant benefit
categories (such as health and ecological benefits of reduction in
mercury);
? Errors in measurement and projection for
variables such as population growth and baseline incidence rates;
? Uncertainties in the estimation of future year
emissions inventories and air quality;
? Variability in the estimated relationships of
health and welfare effects to changes in pollutant concentrations;
? Uncertainties in exposure estimation;
? Uncertainties in the size of the effect
estimates linking air pollution and health endpoints;
? Uncertainties about relative toxicity of
different components within the complex mixture of PM;
? Uncertainties associated with the effect of
potential future actions to limit emissions.
Despite these uncertainties, we believe the benefit-cost analysis
provides a reasonable indication of the expected economic benefits of
the proposed rulemaking in future years under a set of reasonable
assumptions.
There are a number of health and environmental effects that we were
unable to quantify or monetize. A full appreciation of the overall
economic consequences of the proposed rule requires consideration of
all benefits and costs expected to result from the proposed rule, not
just those benefits and costs which could be expressed here in dollar
terms. A listing of the benefit categories that could not be quantified
or monetized in our estimate are provided in Table XI-4. These effects
are denoted by ``B'' in Table XI-3 above, and are additive to the
estimates of benefits.
We are unable to quantify changes in levels of methylmercury
contamination in fish associated with reductions in mercury emissions
for this proposal. However, this proposal is anticipated to decrease
annual EGU mercury emissions nationwide by 10.6 tons in 2010 or
approximately 23.5 percent, by 11.8 tons in 2015 or 26.3 percent, and
by 14.3 tons or 32 percent in 2020. Emission reduction percentage
decreases are based upon expected mercury emissions changes from
fossil-fired EGUs larger than 25 megawatt capacity. In a separate
action today, EPA is proposing to regulate mercury and nickel from
certain types of electric generating units using the maximum achievable
control technology (MACT) provisions of section 112 of the CAA or, in
the alternative, using the performance standards provisions under
section 111 of the CAA. This proposal will have implications for
mercury reductions, and potential interactions may exist between the
rulemakings.
[[Page 4647]]
Table XI-4.--Additional Non-monetized Benefits of the Proposed
Interstate Air Quality Rule
------------------------------------------------------------------------
Unquantified and/or
Pollutant nonmonetized effects
------------------------------------------------------------------------
Ozone Health........................... Premature mortality.a
Increased airway responsiveness
to stimuli.
Inflammation in the lung.
Chronic respiratory damage.
Premature aging of the lungs.
Acute inflammation and
respiratory cell damage.
Increased susceptibility to
respiratory infection.
Non-asthma respiratory
emergency room visits.
Ozone Welfare.......................... Decreased yields for commercial
forests.
Decreased yields for fruits and
vegetables.
Decreased yields for commercial
and non-commercial crops.
Damage to urban ornamental
plants.
Impacts on recreational demand
from damaged forest
aesthetics.
Damage to ecosystem functions.
PM Health.............................. Low birth weight.
Changes in pulmonary function.
Chronic respiratory diseases
other than chronic bronchitis.
Morphological changes.
Altered host defense
mechanisms.
Non-asthma respiratory
emergency room visits.
PM Welfare............................. Visibility in many Class I
areas.
Residential and recreational
visibility in non-Class I
areas.
Soiling and materials damage.
Damage to ecosystem functions.
Nitrogen and Sulfate Deposition Welfare Impacts of acidic sulfate and
nitrate deposition on
commercial forests.
Impacts of acidic deposition on
commercial freshwater fishing.
Impacts of acidic deposition on
recreation in terrestrial
ecosystems.
Reduced existence values for
currently healthy ecosystems.
Impacts of nitrogen deposition
on commercial fishing,
agriculture, and forests.
Impacts of nitrogen deposition
on recreation in estuarine
ecosystems.
Damage to ecosystem functions.
Mercury Health......................... Neurological disorders.
Learning disabilities.
Developmental delays.
Potential cardiovascular
effects.*
Altered blood pressure
regulation.*
Increased heart rate
variability.*
Myocardial infarction.*
Potential reproductive effects
in adults.*
Mercury Deposition Welfare............. Impact on birds and mammals
(e.g., reproductive effects).
Impacts on commercial,
subsistence, and recreational
fishing.
Reduced existence values for
currently healthy ecosystems.
------------------------------------------------------------------------
Notes:
a Premature mortality associated with ozone is not separately included
in this analysis.
* These are potential effects as the literature is either contradictory
or incomplete.
B. Paperwork Reduction Act
The EPA intends to discuss the possible information collection
burdens of this action in the SNPR. Assuming that States choose to use
the optional trading program detailed in section VIII, the EPA
anticipates that the impact on sources will be very small. Under these
circumstances, the majority of the sources subject to today's rule are
subject to the title IV Acid Rain Program and many sources are already
subject to the NOX SIP Call. For sources subject to both of
these programs, EPA does not anticipate any additional monitoring or
reporting costs. For more detail on the monitoring and reporting costs
for sources not currently subject to the title IV Acid Rain Program and
or the NOX SIP Call see, ``Monitoring and Reporting Costs
Under the Proposed Interstate Air Quality Rule'' (January 2004).
Burden means the total time, effort, or financial resources
expended by persons to generate, maintain, retain, or disclose or
provide information to or for a Federal agency. This includes the time
needed to review instructions; develop, acquire, install, and utilize
technology and systems for the purposes of collecting, validating, and
verifying information, processing and maintaining information, and
disclosing and providing information; adjust the existing ways to
comply with any previously applicable instructions and requirements;
train personnel to be able to respond to a collection of information;
search data sources; complete and review the collection of information;
and transmit or otherwise disclose the information.
An Agency may not conduct or sponsor, and a person is not required
to respond to a collection of information unless it displays a
currently valid OMB control number. The OMB control numbers for EPA's
regulations are listed in 40 CFR part 9 and 48 CFR chapter 15.
C. Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA), as
amended by the Small Business Regulatory Enforcement Fairness Act
(Public Law No. 104-121) (SBREFA), provides that whenever an agency is
required to publish a general notice of proposed rulemaking, it must
prepare and make available an initial regulatory flexibility analysis,
unless it certifies that the proposed rule, if promulgated, will not
have ``a significant economic impact on a substantial number of small
entities.''
[[Page 4648]]
5 U.S.C. 605(b). Small entities include small businesses, small
organizations, and small governmental jurisdictions.
For purposes of assessing the impacts of today's rule on small
entities, small entity is defined as: (1) A small business that is
identified by the North American Industry Classification System (NAICS)
Code, as defined by the Small Business Administration (SBA); (2) a
small governmental jurisdiction that is a government of a city, county,
town, school district or special district with a population of less
that 50,000; and (3) a small organization that is any not-for-profit
enterprise which is independently owned and operated and is not
dominant in its field. Table XI-5 lists entities potentially impacted
by this proposed rule with applicable NAICS code.
Table XI-5.--Potentially Regulated Categories and Entities
------------------------------------------------------------------------
Examples of potentially
Category NAICS code \1\ regulated entities
------------------------------------------------------------------------
Industry....................... 221112 Fossil fuel-fired
electric utility steam
generating units.
Federal government............. \2\ 22112 Fossil fuel-fired
electric utility steam
generating units owned
by the Federal
government.
State/local/Tribal government.. \2\ 22112 Fossil fuel-fired
921150 electric utility steam
generating units owned
by municipalities.
Fossil fuel-fired
electric utility steam
generating units in
Indian Country.
------------------------------------------------------------------------
\1\ North American Industry Classification System.
\2\ Federal, State, or local government-owned and operated
establishments are classified according to the activity in which they
are engaged.
According to the SBA size standards for NAICS code 221112
Utilities-Fossil Fuel Electric Power Generation, a firm is small if,
including its affiliates, it is primarily engaged in the generation,
transmission, and or distribution of electric energy for sale and its
total electric output for the preceding fiscal year did not exceed 4
million megawatt hours.
Courts have interpreted the RFA to require a regulatory flexibility
analysis only when small entities will be subject to the requirements
of the rule.\101\ This rule would not establish requirements applicable
to small entities. Instead, it would require States to develop, adopt,
and submit SIP revisions that would achieve the necessary
SO2 and NOX emissions reductions, and would leave
to the States the task of determining how to obtain those reductions,
including which entities to regulate. Moreover, because affected States
would have discretion to choose the sources to regulate and how much
emissions reductions each selected source would have to achieve, EPA
could not predict the effect of the rule on small entities. Although
not required by the RFA, the Agency intends for the SNPR to conduct a
general analysis of the potential impact on small entities of possible
implementation strategies.
---------------------------------------------------------------------------
\101\ See Michigan v. EPA, 213 F.3d 663, 668-69 (D.C. Cir.
2000), cert. den. 121 S.Ct. 225, 149 L.Ed.2d 135 (2001). An agency's
certification need consider the rule's impact only on entities
subject to the rule.
---------------------------------------------------------------------------
D. Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995(Public Law
104-4)(UMRA), establishes requirements for Federal agencies to assess
the effects of their regulatory actions on State, local, and Tribal
governments and the private sector. Under section 202 of the UMRA, 2
U.S.C. 1532, EPA generally must prepare a written statement, including
a cost-benefit analysis, for any proposed or final rule that ``includes
any Federal mandate that may result in the expenditure by State, local,
and Tribal governments, in the aggregate, or by the private sector, of
$100,000,000 or more * * * in any one year.'' A ``Federal mandate'' is
defined under section 421(6), 2 U.S.C. 658(6), to include a ``Federal
intergovernmental mandate'' and a ``Federal private sector mandate.'' A
``Federal intergovernmental mandate,'' in turn, is defined to include a
regulation that ``would impose an enforceable duty upon State, Local,
or Tribal governments,'' section 421(5)(A)(i), 2 U.S.C. 658(5)(A)(i),
except for, among other things, a duty that is ``a condition of Federal
assistance,'' section 421(5)(A)(i)(I). A ``Federal private sector
mandate'' includes a regulation that ``would impose an enforceable duty
upon the private sector,'' with certain exceptions, section 421(7)(A),
2 U.S.C. 658(7)(A).
Before promulgating an EPA rule for which a written statement is
needed under section 202 of the UMRA, section 205, 2 U.S.C. 1535, of
the UMRA generally requires EPA to identify and consider a reasonable
number of regulatory alternatives and adopt the least costly, most
cost-effective, or least burdensome alternative that achieves the
objectives of the rule.
The EPA intends to prepare a written statement for the SNPR
consistent with the requirements of section 202 of the UMRA
Furthermore, as EPA stated in the proposal, EPA is not directly
establishing any regulatory requirements that may significantly or
uniquely affect small governments, including Tribal governments. Thus,
EPA is not obligated to develop under section 203 of the UMRA a small
government agency plan. Furthermore, in a manner consistent with the
intergovernmental consultation provisions of section 204 of the UMRA,
EPA carried out consultations with the governmental entities affected
by this rule.
For several reasons, however, EPA is not reaching a final
conclusion as to the applicability of the requirements of UMRA to this
rulemaking action. First, it is questionable whether a requirement to
submit a SIP revision would constitute a Federal mandate in any case.
The obligation for a State to revise its SIP that arises out of section
110(a) of the CAA is not legally enforceable by a court of law, and at
most is a condition for continued receipt of highway funds. Therefore,
it is possible to view an action requiring such a submittal as not
creating any enforceable duty within the meaning of section
421(5)(9a)(I) of UMRA (2 U.S.C. 658 (a)(I)). Even if it did, the duty
could be viewed as falling within the exception for a condition of
Federal assistance under section 421(5)(a)(i)(I) of UMRA (2 U.S.C.
658(5)(a)(i)(I)).
As noted earlier, however, notwithstanding these issues, EPA plans
to prepare for the SNPR the statement that would be required by UMRA if
its statutory provisions applied, and the EPA has consulted with
governmental entities as would be required by UMRA. Consequently, it is
not necessary for EPA to reach a conclusion as to the applicability of
the UMRA requirements.
E. Executive Order 13132: Federalism
Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August
10, 1999), requires EPA to develop an accountable process to ensure
``meaningful and timely input by State and local officials in the
development of
[[Page 4649]]
regulatory policies that have federalism implications.'' ``Policies
that have federalism implications'' is defined in the Executive Order
to include regulations that have ``substantial direct effects on the
States, on the relationship between the national government and the
States, or on the distribution of power and responsibilities among the
various levels of government.''
This proposed rule does not have federalism implications. It will
not have substantial direct effects on the States, on the relationship
between the national government and the States, or on the distribution
of power and responsibilities among the various levels of government,
as specified in Executive Order 13132. The CAA establishes the
relationship between the Federal government and the States, and this
rule does not impact that relationship. Thus, Executive Order 13132
does not apply to this rule. In the spirit of Executive Order 13132,
and consistent with EPA policy to promote communications between EPA
and State and local governments, EPA specifically solicits comment on
this proposed rule from State and local officials.
F. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments
Executive Order 13175, entitled ``Consultation and Coordination
with Indian Tribal Governments'' (65 FR 67249, November 9, 2000),
requires EPA to develop an accountable process to ensure ``meaningful
and timely input by Tribal officials in the development of regulatory
policies that have Tribal implications.'' This proposed rule does not
have ``Tribal implications'' as specified in Executive Order 13175.
This proposed rule concerns the implementation of the rules that
address transport of pollution that causes ozone and PM2.5. The CAA
provides for States and Tribes to develop plans to regulate emissions
of air pollutants within their jurisdictions. The proposed regulations
clarify the statutory obligations of States and Tribes that develop
plans to implement this rule. The TAR gives Tribes the opportunity to
develop and implement CAA programs, but it leaves to the discretion of
the Tribe whether to develop these programs and which programs, or
appropriate elements of a program, they will adopt.
This proposed rule does not have Tribal implications as defined by
Executive Order 13175. It does not have a substantial direct effect on
one or more Indian Tribes, since no Tribe has implemented an air
quality management program at this time. Furthermore, this proposed
rule does not affect the relationship or distribution of power and
responsibilities between the Federal government and Indian Tribes. The
CAA and the TAR establish the relationship of the Federal government
and Tribes in developing plans to attain the NAAQS, and this proposed
rule does nothing to modify that relationship. Because this proposed
rule does not have Tribal implications, Executive Order 13175 does not
apply.
Assuming a Tribe is implementing such a plan at this time, while
the proposed rule would have Tribal implications upon that Tribe, it
would not impose substantial direct costs upon it, nor would it preempt
Tribal law. As provided above, EPA has estimated that the total annual
costs for the rule as implemented by State, Local, and Tribal
governments is approximately $3 billion in 2010 and $4 billion in 2010
(1999$). There are currently very few emissions sources in Indian
country that could be affected by this rule and the percentage of
Tribal land that will be impacted is very small. For Tribes that choose
to regulate sources in Indian country, the costs would be attributed to
inspecting regulated facilities and enforcing adopted regulations.
Although Executive Order 13175 does not apply to this proposed
rule, EPA consulted with Tribal officials in developing this proposed
rule. The EPA has encouraged Tribal input at an early stage. Also, the
EPA held periodic meetings with the States and the Tribes during the
technical development of this rule. In addition, EPA held three calls
with Tribal environmental professionals to address concerns specific to
the Tribes. These discussions have given EPA valuable information about
Tribal concerns regarding the development of this rule. The EPA has
provided briefings for Tribal representatives and the newly formed
National Tribal Air Association (NTAA), and other national Tribal
forums. Input from Tribal representatives has been taken into
consideration in development of this proposed rule. The EPA
specifically solicits additional comment on this proposed rule from
Tribal officials.
G. Executive Order 13045: Protection of Children From Environmental
Health and Safety Risks
Executive Order 13045, ``Protection of Children from Environmental
Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997) applies
to any rule that (1) is determined to be ``economically significant''
as defined under Executive Order 12866, and (2) concerns an
environmental health or safety risk that EPA has reason to believe may
have a disproportionate effect on children. If the regulatory action
meets both criteria, Section 5-501 of the Order directs the Agency to
evaluate the environmental health or safety effects of the planned rule
on children, and explain why the planned regulation is preferable to
other potentially effective and reasonably feasible alternatives
considered by the Agency.
This proposed rule is not subject to the Executive Order because it
does not involve decisions on environmental health or safety risks that
may disproportionately affect children. The EPA believes that the
emissions reductions from the strategies proposed in this rulemaking
will further improve air quality and will further improve children's
health.
H. Executive Order 13211: Actions That Significantly Affect Energy
Supply, Distribution, or Use
Executive Order 13211 (66 FR 28355, May 22, 2001) provides that
agencies shall prepare and submit to the Administrator of the Office of
Regulatory Affairs, OMB, a Statement of Energy Effects for certain
actions identified as ``significant energy actions.'' Section 4(b) of
Executive Order 13211 defines ``significant energy actions'' as ``any
action by an agency (normally published in the Federal Register) that
promulgates or is expected to lead to the promulgation of a final rule
or regulation, including notices of inquiry, advance notices of final
rulemaking, and notices of final rulemaking (1) (i) that is a
significant regulatory action under Executive Order 12866 or any
successor order, and (ii) is likely to have a significant adverse
effect on the supply, distribution, or use of energy; or (2) that is
designated by the Administrator of the Office of Information and
Regulatory Affairs as a ``significant energy action.'' This proposed
rule is a significant regulatory action under Executive Order 12866,
and this proposed rule may have a significant adverse effect on the
supply, distribution, or use of energy. We have prepared a Statement of
Energy Effects for this action, which may be briefly summarized as
follows:
If States choose to obtain the emission reductions required by this
rule by regulating EGUs, EPA projects that approximately 3100 MWs of
coal-fired generation may be retired earlier than the generation would
have been retired absent today's proposed rule-making. We do not
believe that this rule will have any other impacts that exceed the
significance criteria. The EPA projects that the average annual
electricity price
[[Page 4650]]
will increase by about 2 percent in 2010, and about 3 percent in 2015.
The EPA believes that a number of features of today's rulemaking
serve to reduce its impact on energy supply. First, by allowing the use
of a trading program, overall cost and thus impact on energy supply is
reduced. Second EPA has provided adequate time for EGUs to install the
required controls.
The use of a capped trading program to reduce emissions of
SO2 and NOX is also consistent with the
President's National Energy Policy.
I. National Technology Transfer Advancement Act
Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 directs EPA to use voluntary consensus standards in its
regulatory activities unless to do so would be inconsistent with
applicable law or otherwise practical. Voluntary consensus standards
are technical standards (e.g., materials specifications, test methods,
sampling procedures, and business practices) that are developed or
adopted by voluntary consensus standards bodies. The NTTAA directs EPA
to provide Congress, through OMB, explanations when the Agency decides
not to use available and applicable voluntary consensus standards.
In the SNPR, EPA will include regulatory language concerning
monitoring, recordkeeping, and recording provisions that will apply to
certain source categories if States choose to require reductions from
them. These provisions may involve technical standards that may
implicate the use of voluntary consensus standards. Therefore, EPA will
address the NTTAA in the SNPR.
J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations
Executive Order 12898, ``Federal Actions to Address Environmental
Justice in Minority Populations and Low-Income Populations,'' requires
Federal agencies to consider the impact of programs, policies, and
activities on minority populations and low-income populations.
According to EPA guidance,\102\ agencies are to assess whether minority
or low-income populations face risk or a rate of exposure to hazards
that is significant and that ``appreciably exceeds or is likely to
appreciably exceed the risk or rate to the general population or to the
appropriate comparison group.''
---------------------------------------------------------------------------
\102\ U.S. Environmental Protection Agency. ``Guidance for
Incorporating Environmental Justice Concerns in EPA's NEPA
Compliance Analyses'' (Review Draft). Office of Federal Activities.
July 12, 1996.
---------------------------------------------------------------------------
In accordance with Executive Order 12898, the Agency has considered
whether this proposed rule may have disproportionate negative impacts
on minority or low income populations. Because the Agency expects this
proposed rule to reduce pollutant loadings and exposures generally,
negative impacts to these sub-populations which appreciably exceed
similar impacts to the general population are not expected.
List of Subjects
40 CFR Part 51
Administrative practice and procedure, Air pollution control,
Intergovernmental relations, Nitrogen dioxide, Ozone, Particulate
matter, Reporting and recordkeeping requirements, Sulfur oxides,
Volatile organic compounds.
40 CFR Part 72
Acid rain, Administrative practice and procedure, Air pollution
control, Electric utilities, Intergovernmental relations, Nitrogen
oxides, Reporting and recordkeeping requirements, Sulfur oxides.
40 CFR Part 75
Acid rain, Air pollution control, Electric utilities, Nitrogen
oxides, Reporting and recordkeeping requirements, Sulfur oxides.
40 CFR Part 96
Administrative practice and procedure, Air pollution control,
Nitrogen oxides, Reporting and recordkeeping requirements.
Dated: December 17, 2003.
Michael O. Leavitt,
Administrator.
[FR Doc. 04-808 Filed 1-29-04; 8:45 am]
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