
[Federal Register Volume 74, Number 102 (Friday, May 29, 2009)]
[Proposed Rules]
[Pages 25686-25689]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-12557]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R04-OAR-2005-KY-0003-200616; FRL-8911-3]


Approval and Promulgation of Implementation Plans; Kentucky; 
NOX SIP Call Phase II

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing to approve the State Implementation Plan 
(SIP) revisions submitted by the Commonwealth of Kentucky on September 
12, 2005, and March 24, 2006. The first revision provides Kentucky's 
response to EPA's regulations entitled, ``Finding of Significant 
Contribution and Rulemaking for Certain States in Ozone Transport 
Assessment Group Region for Purposes of Reducing Regional Transport of 
Ozone,'' otherwise known as the ``Nitrogen Oxides (NOX) SIP 
Call Phase I.'' The second revision responds to EPA's regulations 
entitled, ``Interstate Ozone Transport: Response to Court Decisions on 
the NOX SIP Call, NOX SIP Call Technical 
Amendments, and Section 126 Rules,'' otherwise known as the `` 
NOX SIP Call Phase II.'' The NOX SIP Call Phase 
II revision satisfies EPA's rule that requires Kentucky to submit Phase 
II revisions necessary to achieve applicable, incremental reductions of 
NOX. The intended effect of the Phase II SIP revision is to 
reduce emissions of NOX originating in the Commonwealth of 
Kentucky to help attain and maintain the national ambient air quality 
standard for ozone. The March 24, 2006, final submittal stopped the 
federal implementation plan clock that started on February 8, 2006, 
when EPA made a finding that Kentucky failed to submit the required SIP 
for Phase II of the NOX SIP Call by April 1, 2005.

DATES: Comments must be received on or before June 29, 2009.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R04-
OAR-2005-KY-0003, by one of the following methods:
    1. http://www.regulations.gov: Follow the on-line instructions for 
submitting comments.
    2. E-mail: benjamin.lynorae@epa.gov.
    3. Fax: 404-562-9019.
    4. Mail: EPA-R04-OAR-2005-KY-0003, Regulatory Development Section, 
Air Planning Branch, Air, Pesticides and Toxics Management Division, 
U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street, SW., 
Atlanta, Georgia 30303-8960.
    5. Hand Delivery or Courier: Lynorae Benjamin, Chief, Regulatory 
Development Section, Air Planning Branch, Air, Pesticides and Toxics 
Management Division, U.S. Environmental Protection Agency, Region 4, 61 
Forsyth Street, SW., Atlanta, Georgia 30303-8960. Such deliveries are 
only accepted during the Regional Office's normal hours of operation. 
The Regional Office's official hours of business are Monday through 
Friday, 8:30 to 4:30, excluding federal holidays.
    Instructions: Direct your comments to Docket ID No. EPA-R04-OAR-
2005-KY-0003. EPA's policy is that all comments received will be 
included in the public docket without change and may be made available 
Online at http://www.regulations.gov, including any personal 
information provided, unless the comment includes information claimed 
to be Confidential Business Information (CBI) or other information 
whose disclosure is restricted by statute. Do not submit through http://www.regulations.gov or e-mail, information that you consider to be CBI 
or otherwise protected. The http://www.regulations.gov Web site is an 
``anonymous access'' system, which means EPA will not know your 
identity or contact information unless you provide it in the body of 
your comment. If you send an e-mail comment directly to EPA without 
going through http://www.regulations.gov, your e-mail address will be 
automatically captured and included as part of the comment that is 
placed in the public docket and made available on the Internet. If you 
submit an electronic comment, EPA recommends that you include your name 
and other contact information in the body of your comment and with any 
disk or CD-ROM you submit. 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. Electronic files should avoid 
the use of special characters, any form of encryption, and be free of 
any defects or viruses. For additional information about EPA's public 
docket visit the EPA Docket Center homepage at http://www.epa.gov/epahome/dockets.htm.
    Docket: All documents in the electronic docket are listed in the 
http://www.regulations.gov index. 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 in http://www.regulations.gov or in hard copy at the Regulatory Development 
Section, Air Planning Branch, Air, Pesticides and Toxics Management 
Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth 
Street, SW., Atlanta, Georgia 30303-8960. EPA

[[Page 25687]]

requests that if at all possible, you contact the person listed in the 
FOR FURTHER INFORMATION CONTACT section to schedule your inspection. 
The Regional Office's official hours of business are Monday through 
Friday, 8:30 to 4:30, excluding Federal holidays.

FOR FURTHER INFORMATION CONTACT: Nacosta C. Ward, Regulatory 
Development Section, Air Planning Branch, Air, Pesticides and Toxics 
Management Division, U.S. Environmental Protection Agency, Region 4, 61 
Forsyth Street, SW., Atlanta, Georgia 30303-8960. The telephone number 
is (404) 562-9140. Ms. Ward can also be reached via electronic mail at 
ward.nacosta@epa.gov.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background
II. Analysis of State's Submittal
III. Proposed Action
IV. Statutory and Executive Order Reviews

I. Background

    On October 27, 1998, EPA published a final rule known as the 
``NOX SIP Call'' (63 FR 57356), and later known as the 
``NOX SIP Call Phase I.'' The NOX SIP Call Phase 
I required 22 states, including the Commonwealth of Kentucky, to meet 
NOX emission budgets during the ozone season (March through 
September) to reduce the amount of ground level ozone that is 
transported across the eastern United States. EPA identified 
NOX emission reductions by source category when they could 
be achieved by using cost-effective measures. These source categories 
include electric generating units (EGUs), non-EGUs, internal combustion 
engines (ICEs) and cement kilns. For each affected jurisdiction, EPA 
determined NOX emission budgets based on the implementation 
of cost effective controls. The budgets were to be met by the year 
2007. Phase I of the NOX SIP Call gave states the 
flexibility to decide which source categories to regulate to meet its 
statewide budget. During Phase I, Kentucky regulated EGUs, non-EGUs and 
cement kilns, but chose not to address ICEs. See, 67 FR 17624, 17625 
(April 11, 2002) (Approval and Promulgation of Implementation Plans: 
Kentucky: Nitrogen Oxides Budget and Allowance Trading Program).
    A number of parties, including certain states as well as industry 
and labor groups, challenged Phase I of the NOX SIP Call 
rule. On March 2, 2000, EPA published additional technical amendments 
to the NOX SIP Call in the Federal Register (64 FR 26298 and 
65 FR 11222, respectively). On March 3, 2000, the United States Court 
of Appeals for the District of Columbia Circuit Court (D.C. Circuit 
Court) issued its decision on the NOX SIP Call, ruling in 
favor of EPA on all the major issues. Michigan v. EPA, 213 F.3d 663 
(D.C. Cir. 2000). However, the D.C. Circuit Court remanded four 
specific elements to EPA for further action: The definition of EGU; the 
level of control for stationary internal combustion engines; the 
geographic extent of the NOX SIP Call for Georgia and 
Missouri; and the inclusion of Wisconsin. On January 31, 2002, the 
Kentucky Environmental and Public Protection Cabinet (KEPPC) submitted 
final revisions to its SIP that complied with the requirements of Phase 
I of the NOX SIP Call. EPA approved the revisions on April 
11, 2002, 67 FR 17624, which became effective on June 10, 2002.
    On April 21, 2004, EPA published a final rule, addressing the 
remanded portion of the NOX SIP Call Rule. This rule is 
entitled, ``Interstate Ozone Transport: Response to Court Decisions on 
the NOX SIP Call, NOX SIP Call Technical 
Amendments, and Section 126 Rules,'' and is otherwise known as the 
``NOX SIP Rule Phase II'' (69 FR 21604). The action 
promulgated specific changes in response to the Court's ruling on Phase 
I of the Rule. Specifically, it finalized certain aspects of the 
definitions of EGU and non-EGU, and the control level assumed for large 
stationary ICEs. For large, natural gas fired, stationary ICEs the 
control level was set at 82 percent, because the vast majority of large 
natural gas-fired ICEs are lean burn. For diesel and dual fuel 
stationary ICEs the control level was set at 90 percent since on 
average they are rich burn, diesel and dual fuel ICEs. The April 21, 
2004, rule also finalized partial state budgets for Georgia, Missouri, 
Alabama, and Michigan, changes to statewide NOX budgets, the 
SIP submittal dates for the required states to address the Phase II 
portion of the budget, the SIP submittal dates for Georgia and 
Missouri, the compliance date for all covered sources, and the 
exclusion of Wisconsin from the NOX SIP Call (69 FR 21604, 
April 21, 2004). The final rule also required states that submitted 
NOX SIP Call Phase I revisions, to submit by April 1, 2005, 
Phase II SIP revisions as needed to achieve the necessary incremental 
reductions of NOX. Phase II requires emissions reductions 
that are relatively small, representing less than 10 percent of the 
total reductions required by Phase I of the NOX SIP Call.
    Phase II of the NOX SIP Call required Kentucky to reduce 
the Phase I NOX emissions originating in the Commonwealth 
from 165,075 tons (Phase I budget) to 162,519 tons (Phase II budget) of 
NOX emissions. (69 FR 21604, 2162, April 21, 2004). This 
represents a 4,224 ton reduction of NOX emissions in 
Kentucky. The budget numbers for Phase II for each affected state were 
based on the Phase I emission inventory as revised in the ``Technical 
Amendment to the Finding of Significant Contribution and Rulemaking for 
Certain States for Purposes of Reducing Regional Transport of Ozone,'' 
which was published on March 2, 2000. However, EPA approved a revised 
Phase I Budget for Kentucky in a revision to the NOX SIP 
Call submitted on April 11, 2002 (67 FR 17624). Therefore, the final 
Kentucky Phase II Budget in the April 21, 2004, notice is inaccurate 
because it is based on the previous Phase I Budget.
    On January 23, 2004, EPA wrote a letter to KEPPC clarifying that 
based on current rules and regulations, including 63 FR 57356, 57416 
(October 27, 1998), and 40 CFR 96.2, EPA was allowing each state with 
one or more carbon monoxide (CO) boiler combusting CO from fluidized 
catalytic cracking units (FCCUs) to determine whether all of the 
Commonwealth's FCCU-CO boilers were covered by the NOX SIP 
Call trading program. There is currently only one facility in Kentucky 
with FCCU-CO boilers (the Ashland Oil facility, located in Ashland, 
Kentucky). Kentucky elected to exclude all FCCU-CO boilers in the 
Commonwealth from the NOX trading program. Today's action 
removes the requirement from the Kentucky SIP that such units comply 
with the NOX SIP Call Phase I by exempting them from the 
non-EGU portion of the Kentucky NOX budget. However, 
Kentucky is still able to meet the phase II budgets through other 
reductions. For more information regarding the specifics of Phase I 
source categories and budgets, see 67 FR 17624 (April 11, 2002).
    Kentucky is achieving the Phase II goal by setting the control 
level for large, stationary ICEs at 82 percent, and for diesel and dual 
fuel stationary ICEs at 90 percent. The application of control levels 
to ICEs represents a reduction in NOX emissions originating 
in Kentucky. Therefore, the large stationary ICE portion of Kentucky's 
non-EGU NOX trading budget is being reduced by 2,491 tons of 
NOX emissions.
    On September 12, 2005, the KEPPC submitted a draft of its SIP 
regulation revisions, intended to meet the requirements of the 
NOX SIP Call Phase II. A public hearing was conducted on 
October 21, 2005. On March 24, 2006,

[[Page 25688]]

SIP revisions were submitted in their final form. The March 24, 2006, 
submittal stopped the federal implementation plan clock that started 
under the Clean Air Act (CAA) following EPA's February 8, 2006, finding 
that Kentucky failed to submit the required SIP revisions for Phase II 
of the NOX SIP Call by April 1, 2005 (71 FR 6347, February 
8, 2006).

II. Analysis of State Submittal

    The September 12, 2005, and March 24, 2006, proposed revisions to 
the Kentucky SIP include changes to regulation 401 KAR 51:150, which 
are consistent with EPA requirements for Phase II of the NOX 
SIP Call. In addition, the proposed revisions included a change to 
regulation 401 KAR 51:160, which is consistent with EPA requirements 
for Phase I of the NOX SIP Call. The Phase II revisions 
require the Cabinet to set NOX emission levels for large 
stationary ICEs, including large utility and industrial boilers (i.e., 
engines emitting more than one ton of NOX per average ozone 
season day in 1997), except FCCU-CO boilers, at 82 percent. The 
combination of the Kentucky regulations addressing NOX 
emissions from large utility and industrial boilers, cement kilns and 
ICEs achieve all the necessary NOX reductions required to 
meet NOX Phase II requirements for Kentucky. In light of 
these reductions, the projected 2007 control period NOX 
emissions for the various categories are as follows in tons per year:
     Total EGU NOX Budget--36,504.
     Total Non-EGU NOX--Budget 26,259.
     Total NOX Budget for Stationary Area Sources--
31,807.
     Total NOX Budget for Nonroad Mobile Sources--
15,025.
     Total NOX Budget for Highway Mobile Sources--
53,268.\1\
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    \1\ This NOX Budget is not intended for the purposes 
of implementing transportation conformity requirements. Refer to the 
attainment demonstration, maintenance plan or reasonable further 
progress plan for the particular nonattainment and/or maintenance 
area(s) for the appropriate motor vehicle emissions budget for an 
area for transportation conformity purposes.
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     Total NOX Budget for Kentucky--162,863.
    The revised non-EGU NOX budget was 28,750 tons in the 
January 31, 2002, SIP revision and revised to 26,259 tons in the 
September 2005 SIP Revision. The large boilers/turbines were reduced 
from 179 to 64 NOX ozone season tons due to FCCU-CO boilers 
being exempted from that category. The large cement kilns remained the 
same at 1,091 NOX ozone season tons. The large ICEs went 
from 3,083 to 577 NOX ozone season tons by applying the 
appropriate Phase II reductions. Small and other sources increased from 
24,397 to 24,527 tons due to moving Ashland Oil from the large boilers/
turbines to this portion of the non-EGU budget. Additionally, there was 
an error in Kentucky's original inventory for units at the Texas Gas-
Jeffersontown facility, resulting in eight more units than initially 
included in the small/other sources budget. The chart below summarizes 
the budgets:

                 Summary of Non-EGU NOX Emissions Budget
------------------------------------------------------------------------
                                     January 31, 2002    March 24, 2006
                                     NOX SIP Call SIP   NOX SIP Call SIP
    Portion of the non-EGU NOX           revision           revision
         emissions budget             submittal (NOX     submittal (NOX
                                      ozone  season      ozone  season
                                          tons)              tons)
------------------------------------------------------------------------
Large Boilers/Turbines*...........                179                 64
Large Cement Kilns................               1091               1091
Large ICEs........................               3083                577
Small/Other Sources...............             24,397             24,527
                                   -------------------------------------
    Total Non-EGU Emissions.......             28,750            26,259
------------------------------------------------------------------------
* Non-EGU budget that is part of the NOX SIP Call cap and trade program.

III. Proposed Action

    EPA is proposing to approve the aforementioned changes to the SIP, 
including Kentucky's NOX SIP Call Phase II budget. This SIP 
revision is consistent with section 110 of the CAA.

IV. Statutory and Executive Order Reviews

    Under the CAA, the Administrator is required to approve a SIP 
submission that complies with the provisions of the Act and applicable 
Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in 
reviewing SIP submissions, EPA's role is to approve state choices, 
provided that they meet the criteria of the CAA. Accordingly, this 
proposed action merely approves State law as meeting Federal 
requirements and does not impose additional requirements beyond those 
imposed by State law. For that reason, this proposed action:
     Is not a ``significant regulatory action'' subject to 
review by the Office of Management and Budget under Executive Order 
12866 (58 FR 51735, October 4, 1993);
     Does not impose an information collection burden under the 
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Is certified as not having a significant economic impact 
on a substantial number of small entities under the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.);
     Does not contain any unfunded mandate or significantly or 
uniquely affect small governments, as described in the Unfunded 
Mandates Reform Act of 1995 (Pub. L. 104-4);
     Does not have Federalism implications as specified in 
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Is not an economically significant regulatory action based 
on health or safety risks subject to Executive Order 13045 (62 FR 
19885, April 23, 1997);
     Is not a significant regulatory action subject to 
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of Section 12(d) of the 
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 
note) because application of those requirements would be inconsistent 
with the CAA; and
     Does not provide EPA with the discretionary authority to 
address, as appropriate, disproportionate human health or environmental 
effects, using practicable and legally permissible methods, under 
Executive Order 12898 (59 FR 7629, February 16, 1994).
    In addition, this rule does not have tribal implications as 
specified by Executive Order 13175 (65 FR 67249,

[[Page 25689]]

November 9, 2000), because the SIP is not approved to apply in Indian 
country located in the state, and EPA notes that it will not impose 
substantial direct costs on tribal governments or preempt tribal law.

List of Subjects in 40 CFR Part 52

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

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

    Dated: May 18, 2009.
Beverly H. Banister,
Acting Regional Administrator, Region 4.
[FR Doc. E9-12557 Filed 5-28-09; 8:45 am]
BILLING CODE 6560-50-P


