Approval and Promulgation of Implementation Plans; State of Missouri

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Final rule.

SUMMARY:

EPA is taking final action to approve Missouri's nitrogen oxides (NO_X) plan for the eastern one-third of the state. The plan consists of three rules, a budget demonstration, and supporting documentation. The plan will contribute to attainment and maintenance of the 8-hour ozone standard in several downwind areas. Missouri's plan, which focuses on large electric generating units, large industrial boilers, large stationary internal combustion engines, and large cement kilns, was developed to meet the requirements of EPA's April 21, 2004, Phase II NO_X State Implementation Plan (SIP) Call. EPA is taking final action to approve the plan as a SIP revision fulfilling the NO_X SIP Call requirements. The initial period for compliance under the plan will begin in 2007, and the emission monitoring and reporting requirements for sources holding allowances under the plan began on May 1, 2006.

DATES:

This rule is effective on September 14, 2006.

ADDRESSES:

EPA has established a docket for this action under Docket ID No. EPA-R07-OAR-2006-0467. All documents in the docket are listed on the http://www.regulations.gov Web site. Although listed in the index, some information is not publicly available, i.e., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically through http://www.regulations.gov or in hard copy at the Environmental Protection Agency, Air Planning and Development Branch, 901 North 5th Street, Kansas City, Kansas 66101. The Regional Office's official hours of business are Monday through Friday, 8:00 to 4:30 excluding Federal holidays. The interested persons wanting to examine these documents should make an appointment with the office at least 24 hours in advance.

FOR FURTHER INFORMATION CONTACT:

Michael Jay at (913) 551-7460, or by e-mail at jay.michael@epa.gov.

SUPPLEMENTARY INFORMATION:

Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA.

I. Background

II. Summary of State Submittal

A. What Are the Basic Components of the State's Plan?

B. What Do the Rules Require?

1. What Are the Requirements of the EGU and Non-EGU Rule?

2. What Are the Requirements of the Cement Kiln Rule?

3. What Are the Requirements of the Large Stationary Internal Combustion Engine Rule?

C. How Does Missouri Address Its NO_X SIP Call Budget?

III. What Action Is EPA Taking?

IV. Statutory and Executive Order Reviews

I. Background

By notice dated October 27, 1998 (63 FR 57356), we took final action to prohibit specified amounts of emissions of one of the main precursors of groundlevel ozone, NO_X, in order to reduce ozone transport across state boundaries in the eastern half of the United States. We set forth requirements for each of the affected upwind states to submit SIP revisions prohibiting those amounts of NO_X emissions during the five-month period from May 1 through September 30 which significantly contribute to downwind air quality problems. We established statewide NO_X emissions budgets for the affected states. The budgets were calculated by assuming the emissions reductions that would be achieved by applying available, highly cost-effective controls to source categories of NO_X, i.e., the amounts of reductions determined by EPA for large, fossil-fuel-fired electric generating units (EGUs), large, fossil-fuel-fired industrial boilers, combustion turbines, and combined cycle systems (non-EGUs), large stationary internal combustion (IC) engines, and cement kilns. States have the flexibility to adopt the appropriate mix of controls for their state to meet the NO_X emissions reductions requirements of the NO_X SIP Call.

A number of parties, including certain states as well as industry and labor groups, challenged our NO_X SIP Call rule. A subsequent ruling by the Court of Appeals for the District of Columbia Circuit on March 3, 2000, vacated the inclusion of the entire state of Missouri. Michigan v. EPA, 213 F.3d 663 (DC Cir. 2000). In response to the Court's decision, we issued the February 22, 2002, proposed rule to include only specified counties in the eastern one-third of Missouri in the NO_X SIP Call (67 FR 8413).

On April 21, 2004, we finalized our responses to the Court's decision in a final rulemaking, “Interstate Ozone Transport: Response to Court Decisions on the NO_X SIP Call, NO_X SIP Call Technical Amendments, and Section 126 Rules,” also referred to as “Phase II of the NO_X SIP Call” (69 FR 21604). This rulemaking made a number of revisions to the 1998 rule. Most relevant to this rulemaking, it finalized our earlier proposal to include only the eastern one-third of Missouri in the NO_X SIP Call. Accordingly, consistent with the Court's finding in Michigan, Missouri's NO_X emissions budget was revised to include only the eastern one-third of the state.

The NO_X SIP Call requires that states revise their SIPs to assure that sources in the state reduce their NO_X emissions sufficiently to eliminate the amounts of NO_X emissions that contribute significantly to ozone nonattainment, or that interfere with maintenance, downwind, as required under the Clean Air Act (CAA) section 110(a)(2)(D)(i)(I). States must demonstrate that their SIP includes sufficient measures to eliminate the significant amount of emissions by providing documentation in the form of a budget demonstration that details how the reductions are to be achieved. The total amount of NO_X emissions from all NO_X sources remaining after the state prohibits the significant amount of NO_X emissions, as identified in the NO_X SIP Call, represents the emissions budget for the state.

The NO_X SIP Call provided states the flexibility to decide which source categories to regulate in order to meet the emissions budget. In order to provide assistance to the states, we suggested imposing a variety of control strategies that provide for a highly cost effective means for states to meet their NO_X emissions budgets. These strategies include imposing NO_X emissions caps and providing for an allowance trading program for large EGUs and large non-EGUs, as well as emission reduction requirements for cement kilns and large IC engines. EPA's model NO_X budget trading rule for SIPs, 40 CFR Part 96, Subparts A through I, sets forth a NO_X allowance trading program for large EGUs and large non-EGUs. A state can voluntarily choose to adopt EPA's model rule in order to allow sources within its borders to participate in regional allowance trading as a way to achieve the required emission reductions for large EGUs and large non-EGUs. The October 27, 1998, Federal Register document contains a full description of the EPA's model NO_X budget trading program (See 63 FR 57514-57538 and 40 CFR Part 96, Subparts A through I). It should be noted that Missouri currently has in place a SIP-approved statewide NO_X Rule, 10 CSR 10-6.350, and is also in the process of adopting additional rules to meet the requirements of the Clean Air Interstate Rule (CAIR). The statewide NO_X rule and the rules under development to meet CAIR are designed to meet different EPA requirements.

II. Summary of State Submittal

A. What Are the Basic Components of the State's Plan?

The main components of Missouri's plan include three NO_X rules and a budget demonstration with supporting materials. The rules include: 10 CSR 10-6.360, pertaining to large EGUs and large fossil-fuel-fired industrial boilers (industrial boilers), 10 CSR 10-6.380 for cement kilns, and 10 CSR 10-6.390 for large stationary internal combustion engines. The purpose of these rules is to prohibit NO_X emissions as identified in the NO_X SIP Call that significantly contribute to downwind ozone nonattainment. In the NO_X SIP Call the required emissions reductions were determined based on the implementation of available, highly cost-effective controls for selected source categories. Therefore, Missouri has developed and adopted three rules generally covering the source categories (i.e., large EGUs, large industrial boilers, cement kilns, and large stationary IC engines) for which EPA found that cost-effective controls were available.¹ EPA has reviewed the three rules and has found that Missouri's rules will achieve the emission reduction requirements of the NO_X SIP Call and thus eliminate Missouri's significant contribution to downwind 8-hour ozone nonattainment. A more detailed description of each rule follows under II(B). The purpose of the budget demonstration is to provide an accounting mechanism for ensuring that Missouri has adopted control measures that prohibit the significant amounts of NO_X emissions targeted by CAA section 110(a)(2)(D)(i)(I). A more detailed discussion of the demonstration is provided below under II(C).

B. What Do the Rules Require?

1. What Are the Requirements of the EGU and Non-EGU Rule?

Missouri adopted 10 CSR 10-6.360 “Control of NO_X Emissions From Electric Generating Units and Non-Electric Generating Boilers.” The rule effectively adopts the essential elements of EPA's NO_X Budget Trading model rule set forth in the October 1998 Federal Register document for applicable sources found in the eastern one-third of the state covered by the NO_X SIP Call. The Missouri rule affects large EGUs (in general, fossil-fuel-fired boilers, combustion turbines, and combined cycle systems that serve a generator with a nameplate capacity greater than 25 megawatts (MWe) producing electricity for sale) and large industrial boilers (generally, industrial fossil-fuel-fired boilers with a maximum design heat input greater than 250 million British thermal units per hour (mmBtu/hr)).

The emissions cap on large EGUs for the eastern one-third of Missouri, as described in the Phase II notice, is set at 13,400 tons per ozone season, and was based on a baseline heat input (mmBtu/hr) and emissions rate of 0.15 NO_X lbs/mmBtu. The EGU emissions budget is equivalent to the number of allowances that the state has authority to distribute. One percent of this budget, 134 tons, has been included in an “energy efficiency and renewable generation projects set-aside.” The purpose of this set-aside is to provide an incentive to save or generate electricity through the implementation of projects that reduce the consumption of fossil-fuel. The rule contains a list of large EGUs and the number of remaining allowances that will be provided for each unit during the control periods beginning in the year 2007.

The level of reduction for large industrial boilers was based on emissions decreases from uncontrolled levels. In accordance with the NO_X SIP Call, Missouri based the number of NO_X allowances for each unit on a 60 percent reduction from each unit's estimated 2007 levels of emissions, which were adjusted for projected growth for large industrial boilers. Missouri identified three existing units in the eastern one-third of the state as meeting the applicability requirement for large industrial boilers and, based on reductions from their uncontrolled emissions adjusted for projected growth, established 59 tons as the large industrial boiler portion of the trading budget. The rule specifically allocates allowances to these three large industrial boilers. The NO_X trading budget for Missouri is the sum of the large EGU budget (13,400) and the large industrial boiler budget (59) and totals 13,459 tons.

Under 10 CSR 10-6.360, Missouri allocates NO_X allowances to both its large EGUs and large industrial boilers. Each NO_X allowance permits a unit to emit one ton of NO_X during the ozone season control period. NO_X allowances may be bought or sold. Unused NO_X allowances may also be banked for future use, with certain limitations. Missouri's rule requires each large EGU and large industrial boiler to hold allowances to cover its emissions after each control period. For each ton of NO_X emitted in a control period, EPA will remove one allowance from the unit's NO_X Allowance Tracking System account after the end of the control period. Once the allowance has been used for compliance, no unit can use the allowance again. Monitoring requirements specify that owners and operators will be required to continuously monitor their NO_X emissions by using systems that meet the requirements of 40 CFR part 75, subpart H. The monitoring requirements also include quarterly emission reporting.

The compliance supplement pool (CSP) is a pool of allowances that can be used in the beginning of the program to provide certain NO_X Budget units additional compliance flexibility. The CSP was created to address concerns raised by commenters on the NO_X SIP Call proposal regarding electric reliability during the initial years of the program. Missouri may distribute its 5,630 ton allowance pool based on early reductions, a demonstrated need, or both. A unit making an application to the CSP based on early reductions must demonstrate that reductions were made beyond all applicable requirements sometime during the ozone seasons of 2002 through 2006. Missouri's CSP may be used to account for emissions during the 2007 and 2008 control periods.

2. What Are the Requirements of the Cement Kiln Rule?

Missouri adopted 10 CSR 10-6.380, “Control of NO_X Emissions From Portland Cement Kilns.” The rule effectively adopts the NO_X SIP Call's recommended approach of obtaining a 30 percent reduction from uncontrolled levels from large Portland cement kilns found in the NO_X SIP Call region of the eastern one-third of the state. The rule applies only to kilns with process rates of at least the following:

Long dry kilns—12 tons per hour (TPH)

Long wet kilns—10 TPH

Preheater kilns—16 TPH

Precalciner and preheater/precalciner kilns—22 TPH

In the NO_X SIP Call, EPA cited its peer reviewed analysis, “EPA's Alternative Control Techniques (ACT)” (EPA-453/R-94-004, March 1994) as demonstrating that cost-effective controls in the form of low-NO_X burners and mid-kiln firing are available to the cement kiln industry and can achieve a 30 percent reduction from uncontrolled levels of emissions. Consistent with EPA's approach in the NOX SIP Call, Missouri's rule provides that compliance can be achieved by the installation and operation of low-NO_X burners or mid-kiln firing or by alternative measures that are all designed to achieve the 30 percent cost-effective reduction.

3. What Are the Requirements of the Large Stationary Internal Combustion Engine Rule?

Missouri adopted 10 CSR 10-6.390, “Control of NO_X Emissions From Large Stationary Internal Combustion Engines.” The rule effectively adopts the NO_X SIP Call's recommended approach of the establishment of emissions levels that obtain an 82 percent reduction from large natural gas-fired stationary IC engines and a 90 percent reduction from large diesel and dual fuel stationary IC engines found in the NO_X SIP Call region of the eastern one-third of the state.

C. How Does Missouri Address Its NO_X SIP Call Budget?

Missouri's budget for the NO_X SIP Call was contained in the Phase II rulemaking in April 2004. Today's rulemaking finalizes EPA's proposal to adopt corrections to the April 2004 budget for Missouri that were detailed in the June 5, 2006, proposal, as no comments were received on any of the proposed revisions. Based on EPA's approach in the proposal, the NO_X SIP Call 2007 budget for the eastern one-third of Missouri is 60,235 tons per ozone season and represents the sum of EGU, Non-EGU Point, Area, Off-Road and Mobile source emissions. A breakdown of the emissions budget can be found in Table I.

As explained in more detail in the NO_X SIP Call, the NO_X SIP Call requires that states revise their SIPs to assure that sources in the state reduce their NO_X emissions sufficiently to eliminate the amounts of NO_X emissions that contribute significantly to ozone nonattainment, or that interfere with maintenance, downwind. The amount of NO_X emissions reductions required is the amount of emissions reductions that would be achieved by applying available, highly cost-effective controls to large EGUs, large non-EGUs, large stationary IC engines, and cement kilns. However, EPA structured the rule to give the upwind states a choice of which mix of measures to adopt in order to eliminate the significant amount of NO_X emissions. To this end, EPA developed an emissions budget that was based on the aforementioned application of highly cost-effective controls. The emissions budget represents the amount of NO_X emissions remaining after the state prohibits the significant amount. EPA finds that Missouri has demonstrated compliance with the budget demonstration, and thus the NO_X SIP Call, by adopting control measures that are modeled after EPA's recommended approach for controlling large EGUs, large non-EGUs, large IC engines, and cement kilns, and that implementation of these rules will achieve the emissions reductions necessary to eliminate the “significant contribution” to downwind ozone nonattainment identified under CAA section 110(a)(2)(D)(i)(I), as implemented by the NO_X SIP Call.

III. What Action Is EPA Taking?

EPA is taking final action to approve Missouri's request to revise the SIP to include their NO_X plan that includes three NO_X rules and a budget demonstration to meet the requirements of the NO_X SIP Call. EPA proposed to approve the rules and budget demonstration on June 5, 2006 (71 FR 32291). The comment period closed on EPA's proposal on July 5, 2006. No comments were received. EPA is finalizing the approval as proposed, based on the rationale stated in the proposal and in this final action. Also, as explained in the proposal, EPA's approval is premised on Missouri's commitment to include in the Missouri trading rule any large industrial combustion turbines and large industrial combined cycle systems which may be constructed in the future.

Statutory and Executive Order Reviews

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This action merely approves state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Public Law 104-4).

This rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). This action also does not have Federalism implications because it does 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 (64 FR 43255, August 10, 1999). This action merely approves a state rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it is not economically significant.

In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. A major rule cannot take effect until 60 days after it is published in the Federal Register. This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by October 16, 2006. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

List of Subjects in 40 CFR Part 52

• Environmental protection
• Air pollution control
• Carbon monoxide
• Incorporation by reference
• Intergovernmental relations
• Lead
• Nitrogen dioxide
• Ozone
• Particulate matter
• Reporting and recordkeeping requirements
• Sulfur oxides
• Volatile organic compounds

Chapter I, Title 40 of the Code of Federal Regulations is amended as follows:

PART 52—[AMENDED]

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

Authority: 42 U.S.C. 7401 et seq.

Subpart AA—Missouri

2. In § 52.1320(c) the table is amended under Chapter 6 by adding entries for “10-6.360,” “10-6.380,” and “10-6.390” to read as follows: