The EPA is proposing to change how it allows states to calculate its 8-hour ozone totals, the effect of which will probably result in fewer areas meeting the 1997 8-hour ozone national ambient air quality standards (NAAQS).

In a notice in the Wednesday, Dec. 22, 2010, Federal Register, the agency announced its intentions to revise its earlier interpretation of its rule regarding requirements for Reasonable Further Progress (RFP) that allowed certain emissions reductions from outside the nonattainment area to be credited toward meeting the RFP requirements. The EPA is proposing that states may not take credit for emission reductions from outside the nonattainment area to meet the area's RFP obligations. The agency is also taking comment on whether it would be appropriate for states to rely on emission reductions credit from outside the nonattainment area for RFP obligations.

Under the EPA's Phase 2 \1\ Rule, certain emission reductions from sources located outside a nonattainment area could be credited toward meeting the 1997 ozone NAAQS RFP requirement. In the preamble to that rule, the EPA stated that credit could be taken for VOC and NOX emission reductions within 100 kilometers (km) and 200 km, respectively, outside the nonattainment area under certain circumstances. In addition, if a regional NOX control strategy were in place in a state, NOX reductions within that State beyond 200 km could be credited toward meeting the RFP target. In all cases, areas had to include a demonstration that the emissions from outside the nonattainment area had an impact on ozone air quality levels within the nonattainment area.

At the time, the EPA explained that where data indicated that emissions reductions from sources outside a nonattainment area improved ozone air quality within the nonattainment area, it was appropriate to allow states to take RFP credit for such reductions from outside the nonattainment area. However, that explanation came under fire when on Jan. 27, 2006, the Natural Resources Defense Council (NRDC) filed a petition for review of the EPA's Phase 2 Ozone Implementation Rule in the U.S. Court of Appeals for the District of Columbia Circuit. NRDC challenged several aspects of the Phase 2 Rule including the interpretation that formed the basis of the policy for allowing credit for reductions outside the nonattainment area. Specifically, the agency's 100-km zone for fine particulates, established around the same time, seemed to make the 200-km ozone space arbitrary. The argument essentially came down to what constitutes the phrase "in the area," with the EPA finally agreeing that this would disclude source reductions outside of the effective radius.

In the notice, the EPA said that it recognizes that not allowing credit for emissions reductions outside the nonattainment area will make it more challenging for some areas, especially some areas in California, to meet current requirements, and that the agency is considering limiting the extent to which regional programs can be creditable toward RFP. For an area to qualify for a less than the required 15-percent emissions reduction, that state must demonstrate that, in the area, New Source Review (NSR) provisions are applicable in the same manner and to the same extent as in an extreme area, RACT is required for all existing major sources, and the RFP plan includes all feasible measures that can be implemented in light of technological achievability.

The agency also admitted that despite the Court's opinion in NRDC, there may remain valid policy reasons for giving states incentive to focus on obtaining emission reductions that are the most beneficial and cost effective for attaining the ozone standards. Also, there may be cases where the most beneficial and cost-effective reductions are from sources located outside the nonattainment area boundaries. In these cases, there may be good reason to credit the emission reductions toward meeting RFP requirements.

If the EPA finalizes this proposal to provide that credit cannot be taken for emission reductions from outside the nonattainment area, states that previously submitted plans that relied on such credit will need to submit new RFP demonstrations for those areas.

Comments must be received on or before Feb. 7, 2011.

SOURCE: Federal Register