National Emission Standards for Hazardous Air Pollutants: Oil and Natural Gas Production Facilities, 39441-39457 [05-13480]

Agencies

• ENVIRONMENTAL PROTECTION AGENCY

[Federal Register Volume 70, Number 130 (Friday, July 8, 2005)]
[Proposed Rules]
[Pages 39441-39457]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-13480]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 63

[OAR-2004-0238; FRL-7935-5]
RIN 2060-AM16


National Emission Standards for Hazardous Air Pollutants: Oil and 
Natural Gas Production Facilities

AGENCY: Environmental Protection Agency (EPA).

ACTION: Supplemental proposed rule.

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SUMMARY: This action is a supplemental notice of proposed rulemaking to 
our February 6, 1998 (63 FR 6288) proposed national emissions standards 
for hazardous air pollutants (NESHAP) to limit emissions of hazardous 
air pollutants (HAP) from oil and natural gas production facilities 
that are area sources. The final NESHAP for major sources was 
promulgated on June 17, 1999 (64 FR 32610), but final action with 
respect to area sources was deferred. This action proposes changes to 
the 1998 proposed rule for area sources, proposes alternative 
applicability criteria and reopens the public comment period to solicit 
comment on the changes proposed today. The proposal also includes the 
addition of ASTM D6420-99 as an alternative test method to EPA Method 
18. Oil and natural gas production is included as an area source 
category for regulation under the Urban Air Toxics Strategy 
(Strategy)(64 FR 38706, July 19, 1999). As explained below, we included 
oil and natural gas production facilities in the Strategy because of 
benzene emissions from triethylene glycol (TEG) dehydration units 
located at such facilities.

DATES: Comments must be received on or before September 6, 2005.

ADDRESSES: Comments. Submit your comments, identified by Docket ID No. 
OAR-2004-0238, by one of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the on-line instructions for submitting comments.

[[Page 39442]]

     Agency Web Site: https://www.epa.gov/edocket. EDOCKET, 
EPA's electronic public docket and comment system, is EPA's preferred 
method for receiving comments. Follow the on-line instructions for 
submitting comments.
     E-mail: a-and-r-docket@epa.gov.
     Fax: (202) 566-1741.
     Mail: Air and Radiation Docket, U.S. Environmental 
Protection Agency, Mailcode 6102T, 1200 Pennsylvania Ave., NW., 
Washington, DC, 20460. Please include a total of two copies. In 
addition, please mail a copy of your comments on the information 
collection provisions to the Office of Information and Regulatory 
Affairs, Office of Management and Budget (OMB), Attn: Desk Officer for 
EPA, 725 17th St. NW., Washington, DC, 20503.
     Hand Delivery: U.S. Environmental Protection Agency, 1301 
Constitution Ave., NW., Room: B102, Washington, DC, 20460. Such 
deliveries are only accepted during the Docket's normal hours of 
operation, and special arrangements should be made for deliveries of 
boxed information.
    We request that a separate copy also be sent to the contact person 
listed below (see FOR FURTHER INFORMATION CONTACT).
    Instructions. Direct your comments to Docket ID No. OAR-2004-0238. 
The 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.epa.gov/edocket, 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 information that you consider to 
be CBI or otherwise protected through EDOCKET, regulations.gov, or e-
mail. The EPA EDOCKET and the Federal regulations.gov Web sites are 
``anonymous access'' systems, 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 EDOCKET or 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 EDOCKET on-line or see the Federal Register of May 31, 
2002 (67 FR 38102).
    Docket. All documents in the docket are listed in the EDOCKET index 
at https://www.epa.gov/edocket. 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 information, 
such as copyrighted materials, 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 EDOCKET or in hard 
copy form at the Air and Radiation Docket, EPA/DC, EPA West, Room B102, 
1301 Constitution Ave., NW., Washington, DC. The 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 and Radiation 
Docket is (202) 566-1742.

FOR FURTHER INFORMATION CONTACT: Mr. Greg Nizich, Office of Air Quality 
Planning and Standards, Emission Standards Division (C439-03), EPA, 
Research Triangle Park, NC 27711; telephone number: 919-541-3078; fax 
number: 919-541-3207; electronic mail address: nizich.greg@epa.gov.

SUPPLEMENTARY INFORMATION: Entities Table. Entities potentially 
affected by this proposed action include, but are not limited to, the 
following:

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                                                   Examples of regulated
           Category              NAICS Code \1\           entities
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Industry.....................      211111, 211112  Condensate tank
                                                    batteries, glycol
                                                    dehydration units,
                                                    and natural gas
                                                    processing plants.
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\1\ North American Industry Classification System.

    This table is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities likely to be regulated by this 
action. To determine whether your facility would be regulated by this 
action, you should examine the applicability criteria in 40 CFR part 
63, subpart HH-National Emissions Standards for Hazardous Air 
Pollutants: Oil and Natural Gas Production Facilities. If you have any 
questions regarding the applicability of this action to a particular 
entity, consult the person listed in the preceding FOR FURTHER 
INFORMATION CONTACT section.
    Worldwide Web. In addition to being available in the docket, an 
electronic copy of the proposed rule is also available on the Worldwide 
Web (WWW) through the Technology Transfer Network (TTN). Following the 
Administrator's signature, a copy of the proposed rule will be posted 
on the TTN's policy and guidance page for newly proposed or promulgated 
rules at https://www.epa.gov/ttn/oarpg. The TTN provides information and 
technology exchange in various areas of air pollution control.
    Public Hearing. If anyone contacts EPA requesting to speak at a 
public hearing by July 28, 2005, a public hearing will be held on 
August 8, 2005. If a public hearing is requested, it will be held at 10 
a.m. at the EPA Facility Complex in Research Triangle Park, North 
Carolina or at an alternate site nearby. Contact Mr. Greg Nizich at 
919-541-3078 to request a hearing, to request to speak at a public 
hearing, to determine if a hearing will be held, or to determine the 
hearing location.
    Outline. The information presented in this preamble is organized as 
follows:

I. Background
II. Summary of Proposed Rule for Area Sources
III. Rationale for Selecting the Proposed Standards
    A. How Did We Select the Source Category?
    B. How Did We Select the Affected Sources and Emission Points?
    C. What Changes to the Applicability Requirements for Area 
Sources Are Part of This Supplemental Notice?
    D. What Changes Are We Proposing to the Startup, Shutdown, and 
Malfunction Plan Requirements?
IV. Summary of Environmental, Energy, Cost, and Economic Impacts
    A. What Are the Air Quality Impacts?
    B. What Are the Cost Impacts?
    C. What Are the Economic Impacts?
    D. What Are the Non-air Environmental and Energy Impacts?
V. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act

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    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 Risks and Safety Risks
    H. Executive Order 13211: Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act

I. Background

    We proposed NESHAP for the Oil and Natural Gas Production source 
category on February 6, 1998 (63 FR 6288) that addressed both major and 
area sources of oil and natural gas production facilities. Area sources 
of HAP are those stationary sources that emit or have the potential to 
emit, considering controls, less than 10 tons per year of any one HAP 
and less than 25 tons per year of any combination of HAP. The 1998 
proposed area source rule was based on a proposed finding of adverse 
human health effects from benzene emissions from triethylene glycol 
(TEG) dehydration units at area source oil and natural gas production 
facilities.\1\ Based on this finding, referred to as an area source 
finding, we proposed to amend the source category list to add oil and 
natural gas production to the list of area source categories 
established under section 112(c)(1) of the Clean Air Act (CAA). In June 
1999, we took final action on the major source standards but deferred 
action on the TEG dehydration units at oil and natural production area 
source facilities and on listing the area source category pending 
issuance of the Strategy.
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    \1\ The proposed finding evaluated HAP from TEG units, but the 
only HAP identified in the Strategy that is emitted from TEG units 
is benzene.
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    The Strategy was issued on July 19, 1999 (64 FR 38706) and 
addressed section 112(c)(3) and 112(k)(3)(B)(ii) of the CAA that 
instruct us to identify not less than 30 HAP which, as the result of 
emissions from area sources, present the greatest threat to public 
health in the largest number of urban areas, and to list sufficient 
area source categories or subcategories to ensure that emissions 
representing 90 percent of the 30 listed HAP are subject to regulation. 
The Strategy included a list of 33 HAP judged to pose the greatest 
potential threat to public health in the largest number of urban areas 
(the urban HAP) and a list of area source categories emitting 30 of the 
listed HAP (area source HAP). Once listed, these area source categories 
shall be subject to standards under section 112(d) of the CAA. The 
proposed standards that are the subject of today's action are based on 
generally available control technology (GACT) pursuant to section 
112(d)(5) of the CAA.
    Benzene was one of the HAP listed under the Strategy. Oil and 
natural gas production facilities were listed in the Strategy solely 
because the TEG dehydration units located at these facilities 
contributed approximately 47 percent of the national urban emissions of 
benzene from stationary sources at area sources. As the result of the 
emission standards development process, we recognize that our 
description of the source category in the Strategy is overbroad. The 
listing should read TEG dehydration units at oil and natural gas 
production facilities. This clarification to the scope of the source 
category is consistent with the Agency's proposed 1998 finding and the 
record supporting both the 1998 finding and the 1999 listing in the 
Strategy.
    Today, we are proposing the addition of regulatory language to 40 
CFR part 63, subpart HH, to address area sources and fulfill a portion 
of our obligation under section 112(c)(3) to regulate stationary 
sources of benzene. Even though we had previously included area source 
requirements as part of the 1998 subpart HH proposal, at this time, we 
are proposing some changes to the previously proposed standards in 
response to the comments we received on the 1998 proposal. In addition, 
we are proposing another geographical applicability option as an 
alternative to the previously proposed criteria. We are seeking comment 
on these proposed changes. Most importantly, we are seeking comments on 
both applicability options that are under consideration.
    An applicability option under consideration was first described in 
the 1998 proposed rule. Specifically, we proposed that the area source 
standards would apply only to TEG dehydration units at area source oil 
and natural gas production facilities located in an urban county rather 
than a rural county using Urban-1 and Urban-2 \2\ classifications that 
we defined based on information from the U.S. Census Bureau (64 FR 
6293). (Note: Urban-2 counties in the 1998 proposed rule were 
incorrectly defined. In that notice, we incorrectly stated that Urban-2 
counties were defined by criteria used by the U.S. Census Bureau to 
define urbanized areas, which are not county-based areas. The actual 
parameters for Urban-2 that we used for determining urban HAP under the 
Strategy, as well as for the 1998 and today's proposed standards for 
TEG units at area source oil and natural gas production facilities, are 
provided in footnote 2 of today's notice.) Under this proposed 
geographical applicability criterion described in footnote 2, those 
area source TEG dehydration units located in counties classified as 
urban areas would be subject to the rule.
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    \2\ Urban-1 and Urban-2 are defined based on the U.S. Census 
Bureau's most current decennial census data. Urban-1 counties 
consist of counties with metropolitan statistical areas (MSA) with a 
population greater than 250,000. Urban-2 counties are defined as all 
other counties where more than 50 percent of the population is 
designated urban by the U.S. Census Bureau. For purposes of this 
preamble, we refer to those counties that qualify as Urban-1 and 
Urban-2 as ``urban'' counties. Rural counties are those counties 
that do not meet the criteria of Urban-1 or Urban-2. A list of the 
urban and rural counties based on the 1990 census classifications 
can be found online at https://www.epa.gov/ttnatw01/urban/
112kfac.html. A list of the urban and rural counties based on the 
1990 and 2000 census classifications can be found online at https://
www.epa.gov/ttn/atw/oilgas/oilgaspg.html and in the Docket.
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    In today's notice, we are proposing a second, alternative 
applicability approach for purposes of the proposed rule. Under that 
alternative option, the final rule would apply to all TEG dehydrators 
at area source oil and natural gas production facilities.
    We are seeking comment on both of these proposed applicability 
options. We are not requesting comment on any aspect of subpart HH as 
it applies to major sources. We issued the final rule for major sources 
in 1999, and that rule is not part of today's proposal. We are today, 
however, proposing to add ASTM D6420-99(2004) as an alternative to EPA 
Method 18 for both major and area sources, and we seek comment on this 
particular proposed regulatory change, as it affects both major and 
area sources.

II. Summary of Proposed Rule for Area Sources

    The 1998 proposal described the area source requirements as largely 
identical to the major source requirements, except for the addition of 
geographic applicability criteria, the fact that only the TEG 
dehydration unit would be an affected source covered by the emission 
reduction standards at area sources, and some reduced reporting 
requirements. Except as described below, we have not changed these 
requirements with today's supplemental notice.
    As in the 1998 proposed rule (63 FR 6290), the standards proposed 
today are based on GACT which would require owners or operators of TEG 
dehydration units at area sources to connect, through a closed-vent 
system, each process vent on the TEG dehydration unit to an emission 
control system. The control system must reduce emissions either: (1) By 
95.0 percent or more of HAP

[[Page 39444]]

(generally a condenser with a flash tank), or (2) to an outlet 
concentration of 20 parts per million by volume (ppmv) or less (for 
combustion devices), or (3) to a benzene emission level of less than 
0.90 Megagrams per year (Mg/yr) (1.0 tons per year(tpy)). Sources whose 
actual annual average flowrate of natural gas to the TEG dehydration 
unit is less than 85 thousand standard cubic meters per day (thousand 
m3/day) (3 million standard cubic feet per day (MMSCFD)), or 
sources whose actual average emissions of benzene from the TEG 
dehydration unit process vent to the atmosphere are less than 0.90 Mg/
yr (1 tpy), as determined by the procedures specified in 40 CFR 
63.772(b)(1) and (2), would not have any control requirements.
    We believe these cutoffs are appropriate due to similarities 
between TEG units at area sources and those at major sources. Based on 
the available data for TEG units at major sources in 1998, we were not 
able to determine any level of emission control below the 85 thousand 
m3/day and 0.90 Mg/yr cutoff levels at major sources. 
Because our assessment of the cutoff levels for TEG units at major 
sources has not changed since 1998, and because we have no information 
suggesting any difference between major and area sources in the basis 
for controlling TEG units, we do not believe that we would be able to 
determine any level of emission control for TEG units below the cutoff 
levels at area sources either. In addition, we compared the cost of 
control per unit of HAP removed when controlling all units, against 
such cost when controlling only units with benzene emissions of 1 tpy 
or greater. We also evaluated the projected impacts and costs 
associated with four different levels of natural gas throughput (see 63 
FR 6288 and 6299). Based on these assessments, we believe that the cost 
burden to the affected sources below these cutoff levels would be too 
high for the amount of emission reduction these sources would achieve 
with the proposed controls.
    We note that for the reasons described above, we are proposing in 
this action to subcategorize those TEG dehydration units that are 
subject to the final rule based on whether the unit has an annual 
average flowrate of natural gas less than 85 thousand m3/day 
(3 MMSCFD), or actual annual average benzene emissions from the TEG 
dehydration unit process vent to the atmosphere less than 0.90 MG/yr (1 
tpy). We are further proposing that GACT for sources that meet the 
cutoffs described above is no control. We specifically seek comment on 
our proposed subcategorization approach (including the specific values 
for the cutoffs) and whether to proceed with subcategorization in this 
rule. Pursuant to section 112(d), EPA also has authority to 
``distinguish among classes, types, and sizes of sources within a 
category or subcategory in establishing * * * (emission) standards.'' 
CAA section 112(d)(1).
    As an alternative to complying with the control requirements 
mentioned above, pollution prevention measures, such as process 
modifications or combinations of process modifications and one or more 
control device that reduce the amount of HAP emissions generated, are 
allowed provided they achieve the required emissions reductions.
    Similarly, area sources would be subject to the same initial and 
continuing compliance requirements as major sources except that area 
sources would be required to submit periodic reports annually, instead 
of semiannually as is required for major sources. That is, affected 
sources must submit Notification of Compliance Status Reports annually, 
inspect/test the closed-vent system and control device(s), and 
establish monitoring parameter values. Continuing compliance 
requirements include submitting Periodic Reports, conducting annual 
inspections of closed-vent systems, repairing leaks and defects, 
conducting the required monitoring, and maintaining required records.
    As the result of comments received on the 1998 proposal on the 
level of the standards and how it is to be demonstrated, the final 
major source rule addressed the need for an averaging period to 
accommodate fluctuations in condenser efficiency due to changes in 
ambient temperature. We also clarified in that final rule that owners 
or operators could be allowed to achieve a 95 percent emission 
reduction using process modifications or combinations of process 
modifications and one or more control device. These changes are not 
dependent on the amount of emissions at the facility, but rather 
address practical considerations in complying with the control 
standards, which are the same for both major and area sources. 
Therefore, as indicated in today's proposal, we propose that these 
provisions also apply to area sources.
    Today's supplemental notice presents compliance dates for existing 
area sources and new or reconstructed area sources for the two proposed 
applicability options noted above and described in greater detail 
below. For purposes of establishing compliance dates, it should be 
noted that the 1998 proposal applied only to TEG dehydrators located in 
urban areas, which are counties designated as Urban-1 and Urban-2 (see 
supra note 2). The tables that follow present compliance dates for the 
two alternative geographic applicability options that we are proposing. 
Under Option 1 all TEG dehydration units at area source oil and natural 
gas production facilities would be subject to the final rule. Under 
Option 2, the option we proposed in 1998, only those TEG units located 
in counties that satisfy the Urban-1 or Urban-2 county criteria, as 
described herein, would be subject to the requirements of the final 
rule.
    Table 1 of this preamble presents compliance dates for Option 1.

               Table 1.--Compliance Dates for Existing and New Sources for Applicability Option 1
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For an affected area source located   Where the source was                           And the compliance date for
 in a county we classified as . . .       constructed/       Then the source is . .   that source would be . . .
                                       reconstructed . . .              .
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(a) urban based on 2000 census data  before February 6,      existing..............  3 years after the effective
                                      1998.                                           date of the area source
                                                                                      standards.
(b) urban based on 2000 census data  on or after February    new...................  the effective date of the
                                      6, 1998.                                        area source standards or
                                                                                      startup, whichever is
                                                                                      later.
(c) rural based on 2000 census data  before today's          existing..............  3 years after the effective
                                      supplemental proposal.                          date of the area source
                                                                                      standards.

[[Page 39445]]

 
(d) rural based on 2000 census data  on or after today's     new...................  the effective date of the
                                      supplemental proposal.                          area source standards or
                                                                                      startup, whichever is
                                                                                      later.
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    With respect to item (b) in Table 1 above, we solicit comment on 
the proposed compliance date for those sources located in counties that 
were rural in 1990 and became urban as a result of the 2000 decennial 
census. Specifically, we solicit comment on whether the sources 
affected under item (b) should be considered new or existing, and what 
the appropriate trigger date should be for defining new source status. 
We further solicit comment on the compliance deadlines for these 
sources.
    The list of urban (i.e., Urban-1 and Urban-2) and rural counties 
based on 1990 U.S. Census Bureau data can be found at https://
www.epa.gov/ttnatw01/urban/112kfac.html). This list can also be found 
in the docket, along with the list of urban counties based on 2000 U.S. 
Census Bureau data (Docket No. OAR-2004-0238). These two lists can also 
be found at the following url as well: https://www.epa.gov/ttn/atw/
oilgas/oilgaspg.html.
    For Option 2, existing sources (i.e., affected sources constructed 
before the 1998 proposal) must achieve compliance within 3 years after 
the effective date of the final rule, and new sources (affected sources 
constructed on or after the 1998 proposal) must comply on the effective 
date of the final rule, or startup, whichever date is later. Sources 
that are located in a county that meets the definition of rural are not 
subject to the requirements of the rule under Option 2.
    We recognize that where a source is constructed in a county that is 
initially classified as rural and subsequently reclassified as urban, 
the reclassification may occur after the source's startup date or the 
effective date of the final rule, such that it is impossible for the 
source to meet the relevant compliance deadline described above. To 
account for changes in urban/rural status that will likely occur with 
each decennial census, EPA intends, after the issuance of the decennial 
census data, to publish in the Federal Register an updated list of 
counties that qualify as urban based on the most recent decennial data.
    For any new source (i.e., affected sources constructed on or after 
the 1998 proposal) located in a county where the classification of that 
county changes from rural to urban based on 2010 or a later decennial 
census, we are proposing that the compliance deadline for such source 
be the date EPA publishes the updated list of urban counties in the 
Federal Register. We request comment on whether this compliance 
deadline is appropriate. For existing sources (i.e., affected sources 
constructed before the 1998 proposal) located in a county that is 
redesignated as urban based on 2010 or later census data, we propose 
that the compliance date for such sources be three years after the 
publication of the updated list of counties in the Federal Register. As 
noted above, we also solicit comment on how to treat new sources that 
were rural in 1990 and became urban based on the 2000 decennial census 
data and what the compliance date for such sources should be.
    In the 1998 proposal, we proposed that area sources would be exempt 
from title V permitting requirements (63 FR 6307). We do not believe 
that the proposed applicability approaches described in today's notice 
alter the basis for the proposed title V permit exemption. Neither the 
scope of geographical applicability nor the number of sources impacted 
by the options change the degree to which the standards are 
implementable outside of a permit, and we, therefore, maintain our 
belief that the permit would provide minimal additional benefit. 
Therefore, we propose to maintain the exemption.

III. Rationale for Selecting the Proposed Standards

A. How Did We Select the Source Category?

    We listed area source oil and natural gas production facilities in 
July 1999 pursuant to 112(c)(3) and 112(k)(3)(B) of the CAA to ensure 
that area sources representing 90 percent of the area source emissions 
of the 30 HAP that present the greatest threat to public health in the 
largest number of urban areas are subject to regulation under section 
112. This listing was based on information showing that benzene 
emissions from the TEG dehydration units at area sources of oil and 
natural gas production facilities contribute at least 47 percent of the 
national urban emissions of benzene, one of the 30 listed area source 
HAP, from stationary sources that are area sources. Based on emission 
estimates ranking the area source categories, TEG dehydration units at 
area sources contributed the highest quantity of benzene of all the 
source categories analyzed (see Docket No. A-97-44).

B. How Did We Select the Affected Sources and Emission Points?

    The 1999 area source listing in the Strategy was based on emissions 
information showing that TEG dehydration units emit benzene in levels 
that contribute significantly to nationwide emissions of benzene from 
area sources in urban areas. Furthermore, TEG dehydration units account 
for approximately 90 percent of the HAP emissions at an oil and natural 
gas production facility. Therefore, in listing this area source 
category in the Strategy in 1999, EPA focused on regulating benzene 
emissions from TEG dehydration units. For the same reasons, our 1998 
proposal (and proposed area source finding) did not include for 
regulation other types of dehydration units or other emission points at 
area source oil and natural gas production facilities. Consistent with 
the 1998 proposed area source finding that benzene emissions from TEG 
dehydration units are the emission points of concern for this area 
source category, we are maintaining the 1998 proposed definition of the 
affected source as each TEG dehydration unit located at a facility that 
is an area source and that processes, upgrades, or stores hydrocarbon 
liquids prior to the point of custody transfer or that processes, 
upgrades, or stores natural gas prior to the point at which natural gas 
enters the natural gas transmission and storage source category or is 
delivered to the final end user.
    We are seeking comment on the proposed applicability approaches 
described above as they relate directly to the scope of TEG dehydration 
units at oil and natural gas production

[[Page 39446]]

facilities that would be subject to the final rule.

C. What Changes to the Applicability Requirements for Area Sources Are 
Part of This Supplemental Notice?

    The 1998 area source proposal contained geographical applicability 
criteria for area source TEG dehydration units that would have limited 
the application of area source standards to those selected area source 
TEG dehydration units located in counties we classified as Urban-1 or 
Urban-2, referred to herein as ``urban.''
    As stated earlier, today, we are proposing an alternative to the 
geographical applicability criteria proposed in 1998. If finalized, the 
1998 criteria would require all TEG dehydration units at area source 
oil and natural gas production facilities in areas that meet the urban 
requirements to comply with the final rule. See supra fn. 2. The 
alternative option we are proposing for the first time today, if 
finalized, would require TEG dehydration units at area source oil and 
natural gas production facilities in urban and rural counties to comply 
with the requirements of the final rule. In sum, we are proposing two 
options for defining geographically the scope of the area source 
standards. The standards would apply: (1) In urban and rural counties; 
or (2) in urban counties only (the 1998 proposal).
    In the 1998 proposal, we estimated that there were 37,000 area 
source glycol dehydrators in the U.S., and that TEG dehydrators 
comprised most of that figure. Based on more recent information from 
the Department of Energy (DOE) regarding the number of oil and gas 
wells and the amount of natural gas produced in the U.S., we have 
updated this figure to approximately 38,000 dehydrators.
    Although we believe our estimate of TEG dehydrator population is 
reasonable, we lack information indicating the locations of most of 
these units. Therefore, in assessing the impacts of the different 
applicability options being considered, we made several assumptions. 
Using DOE data from 2003, we identified 13 States where 95 percent of 
the natural gas in the U.S. is produced (Texas, New Mexico, Oklahoma, 
Wyoming, Louisiana, Colorado, Alaska, Kansas, California, Utah, 
Michigan, Alabama and Mississippi). First, although Outer Continental 
Shelf (OCS) sources contribute over 20 percent of the 2003 natural gas 
production total, we assumed that none of the sources on the OCS are 
uncontrolled area sources that would be impacted by the final rule. 
This assumption is based on a belief that these sources are generally 
controlled through flares for safety purposes. Next, we assumed a 
uniform distribution of sources by assigning 95 percent of the 
estimated number of sources in the 13 States in proportion to their 
percentage of natural gas production. Finally, we assumed a linear 
distribution within each of the 13 States that is proportional to the 
amount of geographical area encompassed by a given option (i.e., for an 
option encompassing areas covering 20 percent of the 13-State landmass 
would contain 20 percent of the area source glycol dehydrators). We 
realize this approach does not yield precise results for determining 
affected facility populations for individual options, and it assumes a 
uniform distribution of sources between rural and urban areas, but we 
believe it is useful for comparing different options and estimating the 
number of potentially affected units.
    The urban/rural classification status of some counties may change 
every 10 years as the population is reassessed by the U.S. Census 
Bureau. These changes occur with increases in U.S. population and also 
with population relocation. These changes may cause land area 
classifications to change from one where the rule would not apply to a 
classification where it would apply. The reverse case is also a 
possibility although we would expect such a scenario to be infrequent.
    For the urban county option, sources would be required to determine 
the final rule's applicability based on data from the latest decennial 
census. Based on the latest decennial data, sources in urban counties 
would be required to comply with the requirements of the final rule. We 
would recommend that those sources not subject to requirements of the 
final rule document their status and retain a record of their finding. 
We further recommend that all sources in rural counties reconfirm their 
status related to geographical location within 6 months after the 
release of the latest decennial census results.
Proposed Applicability Options \3\
---------------------------------------------------------------------------

    \3\ We do not believe that the GACT analysis and 
subcategorization of TEG dehydration units described above would 
change based on the applicability option selected in the final rule.
---------------------------------------------------------------------------

    Option 1:
    Under option 1, all TEG dehydrators at area source oil and natural 
gas production facilities would be subject to the final rule. This 
applicability option provides a HAP reduction of approximately 14,700 
Mg/yr (16,400 tpy) and requires an estimated 2,200 TEG dehydrators to 
reduce emissions.
    Option 1 would ensure that units effecting every urban area would 
be subject to regulation. It would also ensure that benzene is reduced 
in non-densely populated areas which can provide additional benefits 
since benzene is a carcinogen and a national risk driver based on our 
National Air Toxics Assessment (NATA). (NATA is our program for 
evaluating air toxics in the U.S. and involves: Expanding air toxics 
monitoring, improving/updating emission inventories, improving small 
and large scale modeling, as well as improving our knowledge of health 
effects and assessment tools (see https://www.epa.gov/ttn/atw/nata/ for 
additional information about NATA)). Moreover, reduction in benzene 
emissions from affected sources in urban and rural counties brings us 
closer to one goal of the Strategy (i.e., to achieve a 75 percent 
reduction in cancer incidence). With this option, there is no issue of 
change in geographical applicability with decennial census updates 
(i.e., neither the regulators nor the sources need to be concerned with 
keeping track of changes in the applicability of this rule due to 
future changes in population density). We do, however, believe that 
option 1 raises an issue because it requires emission reductions for 
sources located in remote areas many miles from densely populated 
areas. As noted above, GACT for lower emitting sources (i.e., sources 
with either a natural gas throughput below 3 MMSCFD or emitting less 
than 1 tpy of benzene) is no control. We estimate the annual compliance 
cost for this option to be $39.2 million.
    Option 2:
    This option, which was in the 1998 proposal, would provide HAP 
emission reductions of approximately 6,900 Mg/yr (7,700 tpy) in 
counties with MSA populations exceeding 250,000 people and in counties 
where the majority of people are classified by the U.S. Census Bureau 
to live in urban areas based on 2000 census data. This applicability 
option would require an estimated 1,050 facilities to control 
emissions. Since this applicability option is a county-based scope, and 
since the Urban-2 county classification is based on percentage of 
people in urban areas within a county, we believe changes in county 
status from rural to urban from one decennial census to the next could 
occur as densely settled areas grow. For determining initial 
applicability, sources would know immediately which facilities would be 
subject to the emission reduction requirements simply based on county 
designation. However, the urban/rural designation provides an imperfect 
measure of population density

[[Page 39447]]

in the immediate vicinity of TEG dehydrators. Thus, under this option 
emission reductions may be required from sources in remote areas of 
counties meeting the urban criteria and, at the same time, TEG 
dehydrators may be located in densely populated areas in unregulated 
rural counties. Thus, units located in similarly populated areas would 
be regulated differently based on county designation. We estimate the 
annual compliance cost for this applicability option to be $18.5 
million.
    We specifically request comment on both applicability options and 
on possible alternative approaches that might better reflect population 
density and exposure. We also request information related to the 
locations of TEG dehydration units at area source oil and natural gas 
production facilities.

D. What Changes are We Proposing to the Startup, Shutdown, and 
Malfunction Plan Requirements?

    In the 1998 proposal, we proposed that owners and operators of TEG 
dehydration units subject to the area source standards would not be 
subject to the requirements of 40 CFR 63.6(e) of the General Provisions 
for developing and maintaining a startup, shutdown, and malfunction 
(SSM) plan, or the requirements of 40 CFR 63.10(d) of the General 
Provisions for reporting actions not consistent with the plan. Rather 
than developing a SSM plan and submitting reports in accordance with 
that plan, we proposed an alternative to the General Provisions where 
owners and operators of affected area sources should only submit 
reports of any malfunctions that are not corrected within 2 calendar 
days of the malfunction within 7 days of the subject malfunction(s). It 
was our intent that the 1998 proposal would require only the submittal 
of malfunction reports, and not the development and implementation of a 
SSM plan, and that such an approach would reduce burden.
    Commenters on the 1998 proposal stated that submittal of 
malfunction reports would be burdensome and impractical, particularly 
in remote locations that do not have full time operators onsite. They 
recommended that area sources be allowed to develop a simplified 
contingency plan, adopt and update the plan using their notification of 
compliance status reports, and allow for compilation of all events in 
which special action was taken that is inconsistent with the plan to be 
submitted in monthly letter reports. Commenters also suggested that 
sources be allowed more time to correct malfunctions and report them, 
given the nature of their operations and staffing.
    Based on these comments, we have decided to follow the requirements 
of the General Provisions regarding SSM events. We believe that the 
unique nature of unmanned or remote area source oil and natural gas 
production facilities can best be addressed by having owners or 
operators prepare an SSM plan that would provide needed flexibility of 
dealing with SSM events at these sites. The SSM plan could be tailored 
to identify SSM events posing concerns for them and establish 
appropriate procedures for minimizing emissions and making necessary 
repairs in the manner suitable for each situation. The purposes of a 
SSM plan are to: ensure that the owner or operator operates and 
maintains each affected source in such a way that minimizes emissions 
in a manner consistent with safety and good air pollution control 
practices, ensure that owners or operators are prepared to correct 
malfunctions as soon as practicable after their occurrence to minimize 
excess emissions, and reduce the reporting burden associated with SSM 
events. The submittal of separate SSM reports are only required if 
actions taken during these events are not consistent with the plan. 
Events handled in accordance with the SSM plan are documented and 
included with the periodic reports. For the reasons stated above, we 
have revised the SSM provisions for area sources in the 1998 proposal 
to require the development and implementation of SSM plans, as opposed 
to malfunction reports as proposed in 1998. We are proposing the same 
SSM requirements that we have for major sources, except the timing of 
periodic SSM reports. Because we are proposing that area sources submit 
annual rather than reports, area sources may submit such reports 
annually.

IV. Summary of Environmental, Energy, Cost, and Economic Impacts

    The environmental and cost impacts for the proposed options are 
presented in Table 3 of this preamble:

                    Table 3.--Summary of National Impacts for the Geographical Options for the Oil and Natural Gas Production NESHAP
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                      Emission reduction  (Mg/yr)            Total annual
                                                               Number of   ------------------------------------------------   compliance
                                                              controlled                                                    cost  (million
                                                                sources           VOC             HAP           Benzene          $/yr)
------------------------------------------------------------------------------------------------------------------------------------------
Option 1..................................................           2,200          28,600          14,700           4,400            39.2
Option 2..................................................           1,050          13,700           6,900           2,070            18.5
--------------------------------------------------------------------------------------------------------------------------------------------------------

A. What Are the Air Quality Impacts?

    For existing area source TEG dehydration units in the oil and 
natural gas production source category, we estimate that nationwide 
baseline area sources HAP emissions are 45,100 Mg/yr (49,600 tpy). The 
standards being proposed with today's supplemental notice require that 
TEG dehydration units with a natural gas throughput greater than 85 
thousand standard cubic meters per day and benzene emissions greater 
than 0.90 Mg/yr (1.0 tpy) achieve a 95 percent emission reduction 
either through pollution prevention process changes or by installing a 
control device (e.g., condenser).
    We anticipate that no new area source TEG dehydration units will be 
constructed over the next 5 years based on an assumption that any new 
sources constructed during this period will be major sources. We 
specifically request comment on this assumption. Emission reduction 
requirements for new sources are the same as for existing sources.
    Secondary environmental impacts are considered to be any air, 
water, or solid waste impacts, positive or negative, associated with 
the implementation of the final standards. These impacts are exclusive 
of the direct organic HAP air emissions reductions discussed in the 
previous section.
    The capture and control of benzene that is presently emitted from 
area source TEG dehydration units will result in a decrease in volatile 
organic compound (VOC) emissions as well. The estimated total VOC 
emissions reductions shown above are from a nationwide baseline of 
86,500 Mg/yr (95,200 tpy).
    Emissions of VOC have been associated with a variety of health and

[[Page 39448]]

welfare impacts. VOC emissions, together with nitrogen oxides, are 
precursors to the formation of groundlevel ozone, or smog. Exposure to 
ambient ozone is responsible for a series of public health impacts, 
such as alterations in lung capacity and aggravation of existing 
respiratory disease. Ozone exposure can also damage forests and crops.
    Other secondary environmental impacts are those associated with the 
operation of certain air emission control devices (i.e., flares). The 
adverse secondary air impacts would be minimal in comparison to the 
primary HAP reduction benefits from implementing the proposed control 
options for area sources. We estimate that national annual increase of 
secondary air pollutant emissions that would result from the use of a 
flare to comply with the proposed standards is less than 1 Mg/yr (0.24 
tpy) for sulfur oxides, 2.2 Mg/yr (2.4 tpy) for carbon monoxide, and 11 
Mg/yr (12 tpy) for nitrogen oxides based on option 1, which affects the 
largest number of sources.

B. What Are the Cost Impacts?

    Since several compliance options are available to owners/operators 
of affected sources, we are not sure what control method will be 
employed. Sources can control emissions by routing emissions to a 
condenser, a flare, a process heater, or back to the process or by 
implementing pollution prevention process changes. Some of these 
options have very low capital costs, however, for the purpose of 
determining costs, we have assumed that 90 percent of the affected 
sources utilize condensers and 10 percent use flares. For the cost 
estimates developed for condenser systems, we looked at systems with 
and without the use of a gas condensate glycol separator (GCG separator 
or flash tank) in TEG dehydration system design.
    The estimated annual costs shown in Table 3 of this preamble 
include the capital cost; operating and maintenance costs; the cost of 
monitoring, inspection, recordkeeping, and reporting (MIRR); and any 
associated product recovery credits.

C. What Are the Economic Impacts?

    For the 1998 proposal, we prepared an economic impact analysis 
evaluating the impacts of the rule on affected producers, consumers, 
and society. The economic analysis focuses on the regulatory effects on 
the U.S. natural gas market that is modeled as a national, perfectly 
competitive market for a homogenous commodity.
    The results of the analysis show that the imposition of regulatory 
costs on the natural gas market would result in negligible changes in 
natural gas prices, output, employment, foreign trade, and business 
closures. The price and output changes as a result of the 1998 proposed 
regulation were estimated to be less than 0.01 percent, significantly 
less than observed market trends. Because we believe that these 
assumptions are relevant for both applicability options described in 
today's proposal and that the result of the 1998 economic impact 
analysis resulted in a very low percent increase in price and output 
changes, we believe that imposition of regulatory costs associated with 
the proposed applicability options will result in negligible changes in 
natural gas prices, output, employment, foreign trade, and business 
closures.

D. What Are the Non-air Environmental and Energy Impacts?

    The water impacts associated with the installation of a condenser 
system for the TEG dehydration unit reboiler vent would be minimal. 
This is because the condensed water collected with the hydrocarbon 
condensate can be directed back into the system for reprocessing with 
the hydrocarbon condensate or, if separated, combined with produced 
water for disposal by reinjection.
    Similarly, the water impacts associated with installation of a 
vapor control system would be minimal. This is because the water vapor 
collected along with the hydrocarbon vapors in the vapor collection and 
redirect system can be directed back into the system for reprocessing 
with the hydrocarbon condensate or, if separated, combined with the 
produced water for disposal for reinjection.
    Therefore, we expect the adverse water impacts from the 
implementation of control options for either option considered for 
proposed area source standards to be minimal.
    We do not anticipate any adverse solid waste impacts from the 
implementation of the area source standards.
    Energy impacts are those energy requirements associated with the 
operation of emission control devices. There would be no national 
energy demand increase from the operation of any of the control options 
analyzed under the proposed oil and natural gas production standards 
for area sources. The proposed area source standards encourage the use 
of emission controls that recover hydrocarbon products, such as methane 
and condensate, that can be used on-site as fuel or reprocessed, within 
the production process, for sale. Thus, both options considered for 
proposed standards have a positive impact associated with the recovery 
of non-renewable energy resources.

V. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), we 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 a ``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, 
adversely affecting in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety in 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 entitlement, grants, 
user fees, or loan programs of 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.
    Pursuant to the terms of Executive Order 12866, OMB has notified 
EPA that it considers this a ``significant regulatory action'' within 
the meaning of the Executive Order. The EPA submitted this action to 
OMB for review. Changes made in response to OMB suggestions or 
recommendations will be documented in the public record.

B. Paperwork Reduction Act

    The OMB has previously approved the information collection 
requirements in the existing major source rule (40 CFR part 63, subpart 
HH). The information collection requirements in the proposed rule have 
been submitted for approval to OMB under the Paperwork Reduction Act, 
44 U.S.C. 3501 et seq. The Information Collection Request (ICR) 
document prepared by EPA has been assigned EPA ICR number 1788.07.
    The information to be collected for the area source provisions of 
the Oil and Natural Gas Production NESHAP are based on notification, 
recordkeeping, and reporting requirements in the NESHAP General 
Provisions in 40 CFR part 63, subpart A, which are mandatory

[[Page 39449]]

for all operators subject to national emission standards. These 
recordkeeping and reporting requirements are specifically authorized by 
section 114 of the CAA (42 U.S.C. 7414). All information submitted to 
the EPA pursuant to the recordkeeping and reporting requirements for 
which a claim of confidentiality is made is safeguarded according to 
EPA policies set forth in 40 CFR part 2, subpart B.
    The proposed rule would require maintenance inspections of the 
control devices but would not require any notifications or reports 
beyond those required by the General Provisions in subpart A to 40 CFR 
part 63. The recordkeeping requirements require only the specific 
information needed to determine compliance.
    The oil and natural gas production NESHAP require that facility 
owners or operators retain records for a period of 5 years, which 
exceeds the 3 year retention period contained in the guidelines in 5 
CFR 1320.6. The 5-year retention period is consistent with the General 
Provisions of 40 CFR part 63, and with the 5-year records retention 
requirement in the operating permit program under title V of the CAA. 
All subsequent guidelines have been followed and do not violate any of 
the Paperwork Reduction Act guidelines contained in 5 CFR 1320.6.
    The burden and associated costs discussed here are based on option 
1 since it would affect the greatest number of sources among the two 
proposed applicability options. The annual projected burden for this 
information collection to owners and operators of affected sources 
subject to the final rule (averaged over the first 3 years after the 
effective date of the promulgated rule) is estimated to be 209,322 
labor-hours per year, with a total annual cost of $17.1 million per 
year. These estimates include a one-time performance test and report 
(with repeat tests where needed): Preparation of a startup, shutdown, 
and malfunction plan; immediate reports for any event when the 
procedures in the plan were not followed; annual compliance reports; 
maintenance inspections; notifications; and recordkeeping.
    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 in 40 CFR are listed in 40 CFR part 9.
    To comment on the Agency's need for this information, the accuracy 
of the provided burden estimates, and any suggested methods for 
minimizing respondent burden, including through the use of automated 
collection techniques, EPA has established a public docket for the 
proposed rule, which includes this ICR, under Docket ID number OAR-
2004-0238. Submit any comments related to the ICR for the proposed rule 
to EPA and OMB. See ADDRESSES section at the beginning of this notice 
for where to submit comments to EPA. Send comments to OMB at the Office 
of Information and Regulatory Affairs, Office of Management and Budget, 
725 17th St., NW., Washington, DC 20503, Attention: Desk Office for 
EPA. Since OMB is required to make a decision concerning the ICR 
between 30 and 60 days after July 8, 2005, a comment to OMB is best 
assured of having its full effect if OMB receives it by August 8, 2005. 
The final rule will respond to any OMB or public comments on the 
information collection requirements contained in this proposal.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to prepare a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements under the Administrative 
Procedure Act or any other statute unless the agency certifies that the 
rule will not have a significant economic impact on a substantial 
number of small entities. Small entities include small businesses, 
small organizations, and small governmental jurisdictions.
    For purposes of assessing the impacts of the proposed rule on small 
entities, small entity is defined as: (1) A small business based on 
Small Business Administration size standards of 1,500 employees and a 
mass throughput of 75,000 barrels/day or less, and 4 million kilowatt-
hours of production or less, respectively; (2) a small governmental 
jurisdiction that is a government of a city, county, town, school 
district or special district with a population of less than 50,000; and 
(3) a small organization that is any not-for-profit enterprise that is 
independently owned and operated and is not dominant in its field.
    After considering the economic impacts of the proposed rule on 
small entities, I certify that the proposed rule will not have a 
significant impact on a substantial number of small entities. While we 
cannot predict the exact number of small entities that will be subject 
to the control requirements of the final rule, the proposed rule 
provides that GACT for certain subcategories (85 thousand m\3\/day (3 
MMSCF/D)) is no control. That should minimize impacts on those small 
businesses that operate area source oil and natural gas production 
facilities. The proposed rule would require installation of emissions 
controls only at facilities that operate a TEG dehydration unit with an 
average annual natural gas throughput of 85 thousand m\3\/day (3 MMSCF/
D) or higher. Exempting potential sources under 85 thousand m\3\/day (3 
MMSCF/D) will limit the number of sources who would have to comply with 
the emission control requirements from approximately 38,000 potential 
sources to 2,222.
    EPA performed an economic impact analysis to estimate the changes 
in product price and production quantities for the proposed rule. 
However, sales and revenues data were not readily available for the 
affected industries, so EPA began its analysis by examining the annual 
cost of control. The annual per unit cost of compliance with the 
proposed rule would be $17,699. The throughput cost for natural gas has 
experienced significant volatility within the past several years, 
making a point estimate difficult to identify. Therefore, EPA assumed a 
throughput value at the high end of the range of recent costs, at 
$88.29 per thousand cubic meters ($2.50 per thousand cubic feet), for 
this analysis.
    One frequently-used approach for determining whether or not a rule 
would have a significant impact on a small entity is to compare 
annualized control cost with annualized revenue from sales. Typically, 
costs less than 1 percent of revenues are not considered as imposing a 
significant impact. In the present case, the annual per-unit cost of 
compliance is estimated to be $17,699. Using the aforementioned 1 
percent criterion for significant impact, annual revenues would have to 
be less than $1,769,900 in order for significant impact to occur. At 
$88.29 per thousand cubic meters ($2.50 per thousand cubic feet) of 
throughput, that revenue

[[Page 39450]]

translates to 20,046 thousand cubic meters per year (707,960 thousand 
cubic feet per year) throughput, or 54.9 thousand m\3\/day (1.94 MMSCF/
D). Since the cutoff for installation of emissions controls for the 
proposed rule is 85 thousand m\3\/day (3 MMSCF/D), the Agency 
determined the annual cost of control for those entities affected by 
the proposed rule is not sufficient to generate a significant impact on 
a substantial number of small entities.
    Although the proposed rule will not have a significant economic 
impact on a substantial number of small entities, EPA nonetheless has 
tried to reduce the impact of the rule on small entities. In the 
proposed rule, the Agency is applying the minimum level of control and 
the minimum level of monitoring, recordkeeping, and reporting to 
affected sources allowed by the CAA. In addition, as mentioned above, 
the natural gas throughput criteria should reduce the size of small 
entity impacts. We continue to be interested in the potential impacts 
of the proposed rule on small entities and welcome comments on issues 
related to such impacts.

D. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, 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, we 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed or final rules with Federal mandates that may 
result in expenditures by State, local, and tribal governments, in the 
aggregate, or by the private sector, of $100 million or more in any 1 
year. Before promulgating an EPA rule for which a written statement is 
needed, section 205 of the UMRA generally requires us 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 provisions of section 205 do 
not apply where they are inconsistent with applicable law. Moreover, 
section 205 allows us to adopt an alternative other than the least-
costly, most cost-effective, or least-burdensome alternative if