Approval and Promulgation of Air Quality Implementation Plans; Texas; Revisions to the Discrete Emission Credit Banking and Trading Program, 15648-15655 [2010-6801]
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15648
Federal Register / Vol. 75, No. 60 / Tuesday, March 30, 2010 / Proposed Rules
TAC Chapter 117. These nonsubstantive revisions do not affect the
emission use calculations established
for the ERC Program.
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IV. Final Action
EPA is proposing to approve severable
revisions to the Texas SIP submitted on
October 24, 2006, and August 16, 2007.
Specifically from the October 24, 2006
submittal, EPA is approving the
amendments to section 101.302(a) and
(f) that move the international emission
reduction requirements to a new
section, the amendments to section
101.302(d)(1)(C)(vi) that clarify EPA’s
role in approving emission
quantification protocols, and the
amendment to section 101.306(a)(5) that
updates the approved uses for ERCs to
include the HECT. EPA is also
proposing to approve provisions for
international emission reductions at
new section 101.305 submitted on
October 24, 2006. Additionally, we are
proposing to approve the following
nonsubstantive revisions to the Texas
SIP submitted on August 16, 2007:
revisions to sections 101.302(d)(1)(A)
and 101.306(b)(3) to update the crossreferences to recently recodified
provisions in 30 TAC Chapter 117.
In a separate rulemaking, EPA is
proposing action on the severable DERC
Program revisions at 30 TAC sections
101.372, 101.373, 101.375, 101.376, and
101.378 submitted on October 24, 2006,
and 30 TAC sections 101.372 and
101.376 submitted on August 16, 2007
(see EPA–R06–OAR–2010–0418).
At this time, EPA is not taking action
on the revisions to the Emissions
Banking and Trading of Allowances
Program at 30 TAC sections 101.338 and
101.339 submitted on October 24, 2006.
EPA is also not taking action at this time
on the revisions to the general air
quality definitions at 30 TAC Section
101.1 or the revisions to the System Cap
Trading Program at 30 TAC sections
101.383, and 101.385 submitted on
August 16, 2007. These severable
revisions remain under review by EPA
and will be addressed in separate
actions.
V. Statutory and Executive Order
Reviews
Under the Clean Air Act, 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 Clean Air Act.
Accordingly, this action merely
approves State law as meeting Federal
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requirements and does not impose
additional requirements beyond those
imposed by State law. For that reason,
this 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 Clean Air Act;
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,
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, Air
pollution control, Intergovernmental
relations, Nitrogen oxides, Ozone,
Reporting and recordkeeping
requirements, Volatile organic
compounds.
Authority: 42 U.S.C. 7401 et seq.
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Dated: March 18, 2010.
Lawrence E. Starfied,
Acting Regional Administrator, Region 6.
[FR Doc. 2010–6800 Filed 3–29–10; 8:45 am]
BILLING CODE 6560–50–P
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 52
[EPA–R06–OAR–2010–0148; FRL–9130–5]
Approval and Promulgation of Air
Quality Implementation Plans; Texas;
Revisions to the Discrete Emission
Credit Banking and Trading Program
AGENCY: Environmental Protection
Agency (EPA).
ACTION: Proposed rule.
SUMMARY: EPA is proposing to approve
severable portions of two revisions to
the Texas State Implementation Plan
(SIP) submitted by the State of Texas on
October 24, 2006, and August 16, 2007.
These revisions amend existing sections
and create a new section in Title 30 of
the Texas Administrative Code (TAC),
Chapter 101—General Air Quality
Rules, Subchapter H—Emissions
Banking and Trading, Division 4—
Discrete Emission Credit Banking and
Trading, referred to elsewhere in this
notice as the Discrete Emission
Reduction Credit (DERC) Program. The
October 24, 2006, submittal creates a
new section for international emission
reduction provisions and amends
existing sections to prohibit the
generation and use of DERCs from
shutdown activities and further clarify
procedures for using emission protocols.
The August 16, 2007, submittal amends
two sections of the DERC program to
update cross-references to recently
recodified 30 TAC Chapter 117
provisions. Additionally, EPA is
proposing to find that the Texas
Commission on Environmental Quality
(TCEQ) has satisfied all elements of our
September 6, 2006, final conditional
approval of the DERC program with the
submittal of the October 24, 2006, SIP
submittal; and as such, the DERC
program conditional approval is
proposed for full approval. EPA has
determined that these SIP revisions
comply with the Clean Air Act and EPA
regulations, are consistent with EPA
policies, and will improve air quality.
This action is being taken under section
110 and parts C and D of the Federal
Clean Air Act (the Act or CAA).
DATES: Comments must be received on
or before April 29, 2010.
ADDRESSES: Submit your comments,
identified by Docket ID No. EPA–R06–
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Federal Register / Vol. 75, No. 60 / Tuesday, March 30, 2010 / Proposed Rules
OAR–2010–0148, by one of the
following methods:
(1) https://www.regulations.gov:
Follow the on-line instructions for
submitting comments.
(2) E-mail: Mr. Jeff Robinson at
robinson.jeffrey@epa.gov. Please also cc
the person listed in the FOR FURTHER
INFORMATION CONTACT paragraph below.
(3) U.S. EPA Region 6 ‘‘Contact Us’’
Web site: https://epa.gov/region6/
r6coment.htm. Please click on ‘‘6PD’’
(Multimedia) and select ‘‘Air’’ before
submitting comments.
(4) Fax: Mr. Jeff Robinson, Chief, Air
Permits Section (6PD–R), at fax number
214–665–6762.
(5) Mail: Mr. Jeff Robinson, Chief, Air
Permits Section (6PD–R), Environmental
Protection Agency, 1445 Ross Avenue,
Suite 1200, Dallas, Texas 75202–2733.
(6) Hand or Courier Delivery: Mr. Jeff
Robinson, Chief, Air Permits Section
(6PD–R), Environmental Protection
Agency, 1445 Ross Avenue, Suite 1200,
Dallas, Texas 75202–2733. Such
deliveries are accepted only between the
hours of 8:30 a.m. and 4:30 p.m.
weekdays except for legal holidays.
Special arrangements should be made
for deliveries of boxed information.
Instructions: Direct your comments to
Docket ID No. EPA–R06–OAR–2010–
0148. EPA’s policy is that all comments
received will be included in the public
docket without change and may be
made available online at https://
www.regulations.gov, including any
personal information provided, unless
the comment includes information
claimed to be Confidential Business
Information (CBI) or other information
the disclosure of which is restricted by
statute. Do not submit information
through https://www.regulations.gov or
e-mail, if you believe that it is CBI or
otherwise protected from disclosure.
The https://www.regulations.gov Web
site is an ‘‘anonymous access’’ system,
which means that 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 https://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 along with any disk or CD–
ROM submitted. 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
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should avoid the use of special
characters and any form of encryption
and should be free of any defects or
viruses. For additional information
about EPA’s public docket, visit the EPA
Docket Center homepage at https://
www.epa.gov/epahome/dockets.htm.
Docket: All documents in the docket
are listed in the https://
www.regulations.gov index. Although
listed in the index, some information is
not publicly available, e.g., CBI or other
information the disclosure of which is
restricted by statute. Certain other
material, such as copyrighted material,
will be publicly available only in hard
copy. Publicly available docket
materials are available either
electronically in https://
www.regulations.gov or in hard copy at
the Air Permits Section (6PD–R),
Environmental Protection Agency, 1445
Ross Avenue, Suite 700, Dallas, Texas
75202–2733. The file will be made
available by appointment for public
inspection in the Region 6 FOIA Review
Room between the hours of 8:30 a.m.
and 4:30 p.m. weekdays except for legal
holidays. Contact the person listed in
the FOR FURTHER INFORMATION CONTACT
paragraph below to make an
appointment. If possible, please make
the appointment at least two working
days in advance of your visit. A 15 cent
per page fee will be charged for making
photocopies of documents. On the day
of the visit, please check in at the EPA
Region 6 reception area on the seventh
floor at 1445 Ross Avenue, Suite 700,
Dallas, Texas.
The State submittal related to this SIP
revision, and which is part of the EPA
docket, is also available for public
inspection at the State Air Agency listed
below during official business hours by
appointment:
Texas Commission on Environmental
Quality, Office of Air Quality, 12124
Park 35 Circle, Austin, Texas 78753.
FOR FURTHER INFORMATION CONTACT: If
you have questions concerning today’s
proposed rule, please contact Ms. Adina
Wiley (6PD–R), Air Permits Section,
Environmental Protection Agency,
Region 6, 1445 Ross Avenue (6PD–R),
Suite 1200, Dallas, TX 75202–2733. The
telephone number is (214) 665–2115.
Ms. Wiley can also be reached via
electronic mail at wiley.adina@epa.gov.
SUPPLEMENTARY INFORMATION:
Throughout this document wherever,
any reference to ‘‘we,’’ ‘‘us,’’ or ‘‘our’’ is
used, we mean EPA.
Table of Contents
I. What Action Is EPA Taking?
II. What Did Texas Submit?
III. What Is EPA’s Evaluation of These SIP
Revisions?
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IV. What Is EPA’s Evaluation of the TCEQ’s
Response to the DERC Conditional
Approval?
V. Final Action
VI. Statutory and Executive Order Reviews
I. What Action Is EPA Taking?
We are proposing to approve
severable portions of two revisions to
the Texas SIP submitted by the TCEQ on
October 24, 2006 and August 16, 2007,
specific to the DERC Program. The
DERC Program, conditionally approved
by EPA on September 6, 2006,
establishes an open market trading
program to provide flexibility for
sources in complying with certain State
and Federal requirements. In an open
market trading program, a source
generates emission credits by reducing
its emissions during a discrete period of
time. These credits, called discrete
emission credits, or DECs, in the Texas
program, are quantified in units of mass.
Discrete emission credit (DEC) is a
generic term that encompasses
reductions from stationary sources
(discrete emission reduction credits, or
DERCs) and reductions from mobile
sources (mobile discrete emission
reduction credits, or MDERCs).1 The
revisions we are proposing to approve
amend existing sections and create a
new section in the DERC Program at
Title 30 of the Texas Administrative
Code (TAC), Chapter 101—General Air
Quality Rules, Subchapter H—
Emissions Banking and Trading,
Division 4—Discrete Emission Credit
Banking and Trading. The October 24,
2006 submittal creates a new section for
international emission reduction
provisions and amends existing sections
to prohibit the generation and use of
DERCs from shutdown activities and
further clarifies procedures for using
emission protocols. Additionally, EPA
is proposing to find that the TCEQ has
satisfied all elements of our September
6, 2006 final conditional approval of the
DERC program with the submittal of the
October 24, 2006 SIP submittal; and as
such, the DERC program conditional
approval is proposed for full approval.2
The severable portions of the August 16,
2007 submittal that we are proposing to
approve non-substantively revise the
DERC Program to correctly update the
1 In this action, when we refer to the program as
the ‘‘DERC Rule’’ or the ‘‘DERC Program’’ we are
speaking of the entire Discrete Emission Credit
Banking and Trading Program, which encompasses
both DERCs and MDERCs.
2 Today’s action proposes to find that the TCEQ
has satisfied all conditions of the September 6, 2006
final DERC conditional approval. See 71 FR 52703.
This action is separate from, and unrelated to, the
Dallas/Fort Worth 1997 8-hour Ozone Attainment
Demonstration conditional approval finalized by
EPA on January 14, 2009, at 74 FR 1903.
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cross-references to the stationary source
nitrogen oxide (NOX) rules found in the
Texas SIP at 30 TAC Chapter 117 as a
result of the non-substantive
recodification of Chapter 117 approved
by EPA as part of the Texas SIP on
December 3, 2008 (see 73 FR 73562).
Additionally, in both the October 24,
2006 and August 16, 2007 SIP
submittals TCEQ has made several nonsubstantive revisions to update grammar
and document style. Consequently, we
are proposing to approve the revisions
to the Texas SIP at 30 TAC sections
101.372(a), 101.372(d), 101.372(f),
101.372(j), 101.373(a), 101.376(c)(4),
and 101.378(b) and the creation of new
section 101.375 submitted on October
24, 2006. Additionally, we are
proposing to approve revisions to the
Texas SIP at 30 TAC sections 101.372(d)
and 101.376(d) submitted on August 16,
2007 by the TCEQ.
II. What Did Texas Submit?
We are proposing to approve
severable portions of two revisions to
the Texas SIP specific to the DERC
Program. The first revision we are
proposing action on was adopted by the
TCEQ on October 4, 2006, and
submitted to EPA on October 24, 2006.
At the same time that TCEQ adopted
and submitted revisions to the DERC
Program, revisions were also adopted
and submitted for the Emission Credit
Banking and Trading Program (referred
to elsewhere in this notice as the
Emission Reduction Credit (ERC)
Program) and the Emissions Banking
and Trading of Allowances (EBTA)
Program. The revisions to the ERC and
EBTA Programs are specific to separate,
distinct trading programs and, as such,
are severable from the DERC Program
revisions. We are not proposing to act
upon the severable revisions to the ERC
Program at 30 TAC Chapter 101,
Subchapter H, Division 1, sections
101.302, 101.305, and 101.306. EPA is
processing a separate rulemaking to
address the 2006 and 2007 ERC Program
revisions (see EPA–R06–OAR–2010–
0417). EPA has not yet taken action on
the EBTA Program at 30 TAC Chapter
101, Subchapter H, Division 2 and
therefore is not proposing action today
on the repeal and replacement of section
101.338 and the revisions to section
101.339. The second revision upon
which we are proposing action was
adopted by the TCEQ on July 25, 2007,
and submitted to EPA on August 16,
2007. Also at this time TCEQ adopted
and submitted revisions to the general
air quality definitions, the ERC Program,
and the System Cap Trading (SCT)
Program. We are not acting today upon
revisions to the general air quality
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definitions at 30 TAC Chapter 101,
Subchapter A, section 101.1 because the
DERC Program does not rely upon them
(therefore the revisions are severable
from the DERC Program) and previous
revisions to section 101.1 are still
pending for review by EPA. We are also
not acting today upon the revisions to
the ERC Program at 30 TAC Chapter
101, Subchapter H, Division 1, sections
101.302 and 101.306 because these
revisions are severable from the DERC
program and the October 24, 2006 SIP
revision is still under EPA review. EPA
intends to take a separate rulemaking
action to address the 2006 and 2007
ERC Program revisions (see EPA–R06–
OAR–2010–0417). EPA has not yet
taken action on the System Cap Trading
Program at 30 TAC Chapter 101,
Subchapter H, Division 5 and therefore
is not acting today upon the severable
revisions to sections 101.383 and
101.385.
A copy of the October 24, 2006 and
August 16, 2007 SIP submittals as well
as our Technical Support Document
(TSD) can be obtained from the Docket,
as discussed in the ‘‘Docket’’ section
above. A discussion of the specific
Texas rule changes that we are
approving is included in the TSD and
summarized below.
shutdown activities; specifically,
section 101.373(a)(1) is amended to
delete permanent shutdowns as a
method of generating DERCs and section
101.373(a)(2) is amended to update the
prohibited generation strategy list to
include permanent shutdowns.
A. October 24, 2006 SIP Submittal
5. 30 TAC Chapter 101, Subchapter H,
Division 4, Section 101.378—Discrete
Emission Credit Banking and Trading
The existing SIP-approved version of
section 101.378 was adopted by the
TCEQ on December 13, 2002, and
conditionally approved by EPA on
September 6, 2006 (see 71 FR 52703).
The revisions to section 101.378(b)
revise the lifetime of a discrete emission
credit to prohibit the use of discrete
emission credits generated from
shutdowns; specifically, section
101.378(b)(1) states that discrete
emission credits generated from
shutdowns prior to September 30, 2002,
will be available for use until September
8, 2010, and section 101.378(b)(2)
prohibits the use of shutdown discrete
emission credits generated after
September 30, 2002.
1. 30 TAC Chapter 101, Subchapter H,
Division 4, Section 101.372—General
Provisions
The existing SIP-approved version of
section 101.372 was adopted by the
TCEQ on December 13, 2002, and
conditionally approved by EPA on
September 6, 2006 (see 71 FR 52703).
The revisions to section 101.372(a) and
(f) adopted by the TCEQ on October 4,
2006, delete the information pertaining
to international emission reductions and
move these provisions to new section
101.375. Additionally, section
101.372(d)(1)(C)(vi) is revised to clarify
EPA’s approval process of the
quantification protocols for the DERC
Program. Several non-substantive
revisions for grammar and style were
also made by the TCEQ in this
submittal.
2. 30 TAC Chapter 101, Subchapter H,
Division 4, Section 101.373—Discrete
Emission Reduction Credit Generation
and Certification
The existing SIP-approved version of
section 101.373 was adopted by the
TCEQ on November 10, 2004, and
conditionally approved by EPA on
September 6, 2006 (see 71 FR 52703).
The revisions to section 101.373(a)
prohibit the generation of DERCs from
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3. 30 TAC Chapter 101, Subchapter H,
Division 4, Section 101.375—Emission
Reductions Achieved Outside the
United States
On October 4, 2006, TCEQ adopted
new section 101.375. This new section
contains the previously SIP-approved
international emission reduction
provisions from sections 101.372(a) and
(f) and updates the international
provisions consistent with the
requirements of Texas Senate Bill 784.
4. 30 TAC Chapter 101, Subchapter H,
Division 4, Section 101.376—Discrete
Emission Credit Use
The existing SIP-approved version of
section 101.376 was adopted by the
TCEQ on November 10, 2004, and
conditionally approved by EPA on
September 6, 2006 (see 71 FR 52703).
The proposed SIP revision adopted by
the TCEQ on October 4, 2006, amends
section 101.376(c)(4) to update crossreferences to 30 TAC Chapter 106 in the
list of prohibited DEC use strategies.
B. August 16, 2007 SIP Submittal
1. 30 TAC Chapter 101, Subchapter H,
Division 4, Section 101.372—General
Provisions
The revisions to section 101.372
adopted by the TCEQ on July 25, 2007,
further revise the revisions adopted by
the TCEQ on October 4, 2002. The 2007
revisions non-substantively amend
section 101.372(d)(1)(A) to correctly
cross-reference the recodified stationary
source nitrogen oxide (NOX) rules to the
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Texas SIP at 30 TAC Chapter 117.
Additionally, section 101.372(d)(1)(B)
was non-substantively amended to
include the correct title for the
stationary source volatile organic
compound rules to the Texas SIP at 30
TAC Chapter 115.
2. 30 TAC Chapter 101, Subchapter H,
Division 4, Section 101.376—Discrete
Emission Credit Use
The revisions to section 101.376
adopted by the TCEQ on July 25, 2007,
further revise the revisions adopted by
the TCEQ on October 4, 2002. The 2007
revisions non-substantively amend
section 101.376(d)(2)(A) to correctly
cross-reference the recodified stationary
source NOX rules to the Texas SIP at 30
TAC Chapter 117.
III. What Is EPA’s Evaluation of These
SIP Revisions?
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A. October 24, 2006 SIP Submittal
1. 30 TAC Chapter 101, Subchapter H,
Division 1, Section 101.302—General
Provisions
The October 4, 2006, revisions to
sections 101.372(a), 101.372(d),
101.372(f) and 101.372(j) are
approvable. Sections 101.372(a) and
101.372(f) were revised to delete the
information pertaining to international
emission reductions and relocate these
provisions to new section 101.375. This
consolidation of the international
emission reduction provisions improves
the clarity of the DERC Program by
creating a new section specific to
international emission reductions.
Section 101.372(d)(1)(C)(vi) was revised
to clarify EPA’s role in the approval of
emission quantification protocols.
While the previous SIP-approved
provisions were accurate and consistent
with EPA’s Economic Incentive Program
(EIP) Guidance (‘‘Improving Air Quality
with Economic Incentive Programs’’
(EPA–452/R–01–001, January 2001)),
the revised language has been
restructured to more closely follow the
provisions for approving emission
quantification protocols at section 5.2(c)
of the EIP Guidance. The nonsubstantive revisions to sections
101.372(d)(1)(C)(iv) and 101.372(j)
update the formatting and grammar of
the DERC General Provisions.
The revisions to section 101.372
described above were made pursuant to
TCEQ’s September 8, 2005, commitment
letter for the DERC Program conditional
approval (included in the docket for this
action). In this commitment letter,
TCEQ committed to revising, among
others things, section 101.372 to more
clearly require EPA approval for
international emission reduction
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transactions and to clarify the EPA’s
role in approving emission
quantification protocols. Please see
section IV. of this notice for a discussion
of how the TCEQ has addressed the
elements of DERC conditional approval
and the September 8, 2005, commitment
letter.
2. 30 TAC Chapter 101, Subchapter H,
Division 4, Section 101.373—Discrete
Emission Reduction Credit Generation
and Certification
The October 4, 2006, revisions to
sections 101.373(a)(1) and 101.373(a)(2)
are approvable. The revisions to section
101.373(a)(1) and (a)(2) amend the
allowable and prohibited generation
strategy lists to reflect that permanent
shutdowns are a prohibited DERC
generation strategy. These amendments
are consistent with the Open-Market
Trading provisions at section 7.5(b) of
the EIP Guidance.
The revisions to section 101.373
described above were made pursuant to
TCEQ’s September 8, 2005, commitment
letter for the DERC Program conditional
approval (included in the docket for this
action). In this commitment letter,
TCEQ committed to revising the DERC
program to prohibit the future
generation of DERCs from shutdowns.
Please see section IV. of this notice for
a discussion of how the TCEQ has
addressed the elements of DERC
conditional approval and the September
8, 2005, commitment letter.
3. 30 TAC Chapter 101, Subchapter H,
Division 4, Section 101.375—Emission
Reductions Achieved Outside the
United States
New section 101.375 adopted on
October 4, 2006, is approvable. EPA
finds that in addition to relocating the
SIP-approved international emission
reduction language from section
101.372, new section 101.375 has
expanded the scope of our original
DERC program approval to allow the use
of international reductions in lieu of
DERCs to occur in attainment areas
within 100-km of the Texas-Mexico
border, consistent with the requirements
of Texas Senate Bill 784. However, the
continued requirement at section
101.375 for EPA approval before any
such use is consistent with the intent of
our DERC program conditional approval
on September 6, 2006. EPA approval
continues to be through a case-specific
SIP revision that must clearly
demonstrate through a detailed CAA
section 110(l) analysis that the use of
such international reductions will not
jeopardize attainment or maintenance of
the National Ambient Air Quality
Standards or any other applicable
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standards. As noted in our September 6,
2006, final conditional approval of the
DERC Program ‘‘* * * international
trades present an especially difficult
case. For instance, currently there is no
mechanism for demonstrating that
reductions made in another country are
surplus or enforceable. Nonetheless,
emission reductions in other countries
could offer substantial air quality
benefits in the United States.’’ See 71 FR
52703, 52705. In approving this revision
to the DERC program, ‘‘EPA is
recognizing the concept of international
trading and describing a framework (i.e.,
the submission of a SIP revision
demonstrating among other things the
validity and enforceability of foreign
reductions) for such trading, in the
event that a suitable and approvable
mechanism is ever developed for
resolving concerns including
enforceability and surplus. Until such a
mechanism is developed and approved
by EPA, however, EPA will not approve
international trades under the DERC
rule.’’ See 71 FR 52703, 52705. Further,
it is important to note, that even though
we are approving the use of
international reductions in lieu of
DERCs along the Texas-Mexico border,
the use of these reductions must still
meet the requirements of the CAA.
Therefore, the international reductions
are not available for use as Federal NSR
offsets since section 173(c)(1) of the
CAA requires that offset reductions
come from the same nonattainment area
as the proposed source or modification
or another nonattainment area with an
equal or higher nonattainment
classification.
4. 30 TAC Chapter 101, Subchapter H,
Division 4, Section 101.376—Discrete
Emission Credit Use
The October 4, 2006, revisions to
section 101.376(c)(4) are approvable.
TCEQ correctly updated the crossreferences to Chapter 106 in response to
our final conditional approval notice. In
our final notice we stated that ‘‘We are
not approving section 101.376(c)(4) into
the Texas SIP because the crossreferences to 30 TAC Chapter 106
Permit by Rule, sections 106.261(3) or
(4) or section 106.262(3) are incorrect
and do not exist in State law, the Texas
SIP, or the Texas Federal Operating
Permits program. Consequently, unless
and until the State adopts and submits
a revision to EPA for approval as a SIP
revision and EPA approves it, the use of
discrete emission credits to exceed the
provisions in certain types of preconstruction permits termed Permits by
Rule is not available under the Texas
SIP.’’
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While EPA has not approved sections
106.261 and 106.262 into the Texas SIP,
we are able to approve the revisions to
section 101.376(c)(4). By approving the
revisions to section 101.376(c)(4) we are
not approving a use of DERCs that
conflicts with the Texas SIP, rather we
are approving a listed prohibition of
DERC usage that would further support
the Texas SIP. Additionally, if an owner
or operator of a facility wished to use
DERCs in a manner that exceeded
limitations from sections 106.261 or
106.262, the use would have to be
approved by TCEQ and EPA; EPA
anticipates our approval would only
occur through a case-specific SIP
revision following a demonstration from
the owner/operator that useage of
DERCs in this manner would not
undermine the attainment strategy of
the area or constitute a violation of CAA
section 110(l).
The July 25, 2007 revisions to section
101.376(d)(2)(A) are approvable. As
demonstrated further in our TSD, these
non-substantive revisions correctly
cross-reference the recodified stationary
source NOX rules in the Texas SIP at 30
TAC Chapter 117. These nonsubstantive revisions do not affect the
emission use calculations established
for the DERC Program.
5. 30 TAC Chapter 101, Subchapter H,
Division 4, Section 101.378—Discrete
Emission Credit Banking and Trading
IV. What Is EPA’s Evaluation of the
TCEQ’s Response to the DERC
Conditional Approval?
The October 4, 2006, revisions to
section 101.378 are approvable. The
revisions to section 101.378(b)(1) and
(b)(2) limit the lifetime of certain
discrete emission credits generated from
shutdowns. Discrete emission credits
generated from shutdowns prior to
September 30, 2002, remain available
for use until September 8, 2010. Any
discrete emission credits certified from
shutdowns after September 30, 2002,
may not be used. These amendments are
consistent with the Open-Market
Trading provisions at section 7.5(b) of
the EIP Guidance.
The revisions to section 101.378
described above were made pursuant to
TCEQ’s September 8, 2005 commitment
letter for the DERC Program conditional
approval (included in the docket for this
action). In this commitment letter,
TCEQ committed to revising the DERC
program to restrict the lifetime of
previously generated shutdown DERCs.
Please see section IV. of this notice for
a discussion of how the TCEQ has
addressed the elements of DERC
conditional approval and the September
8, 2005 commitment letter.
A. What is a conditional approval?
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B. August 16, 2007 SIP Submittal
1. 30 TAC Chapter 101, Subchapter H,
Division 4, Section 101.372—General
Provisions
The July 25, 2007 revisions to section
101.372(d)(1)(A) and (B) are approvable.
As demonstrated further in our TSD, the
non-substantive revisions to section
101.372(d)(1)(A) correctly crossreference the recodified stationary
source NOX rules in the Texas SIP at 30
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TAC Chapter 117. The non-substantive
revisions to section 101.372(d)(1)(B)
correctly update the titles of the
stationary source VOC rules in the
Texas SIP at 30 TAC Chapter 115. These
non-substantive revisions do not affect
the approved emission quantification
protocols established for the DERC
Program.
2. 30 TAC Chapter 101, Subchapter H,
Division 1, Section 101.376—Discrete
Emission Credit Use
Under section 110(k)(4) of the Clean
Air Act, EPA may conditionally approve
a plan based on a commitment from the
State to adopt specific enforceable
measures within one year from the date
of approval. The conditional approval
remains in effect until EPA takes its
final action—either a final approval or
disapproval.
If EPA determines that the revised
rule is approvable, EPA will propose
approval of the rule through a notice
and comment rulemaking. After
responding to comments received, EPA
will publish a final approval of the rule
and the conditional approval is no
longer in effect. However, if the State
fails to meet its commitment within the
one year period, then EPA must proceed
with a disapproval action. EPA will
propose disapproval of the rule through
notice and comment rulemaking, and
will finalize the disapproval after
responding to all comments received.
Note that EPA will conditionally
approve a certain rule only once.
Subsequent submittals of the same rule
that attempt to correct the same
specifically identified problems will not
be eligible for conditional approval.
B. What are the terms of the DERC
program conditional approval?
EPA conditionally approved the
DERC program on September 6, 2006.
Our conditional approval was based on
a commitment letter submitted by the
TCEQ on September 8, 2005. The
September 8, 2005 commitment letter
included the following provisions that
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the TCEQ agreed to address by
December 1, 2006. Additionally, TCEQ
agreed to comply with these
commitments during the conditional
approval period. Specifically, TCEQ
agreed to not approve any trades
involving the types of reductions
described in item (3) below, not approve
any use of discrete shutdown credits
that were generated after September 30,
2002, and to require the waiver
described in item (4) below for
generators and users of discrete
emission credits.
1. Revise 30 TAC § 101.373 to prohibit
the future generation of DERCs from
permanent shutdowns and to allow
DERCs generated and banked from
permanent shutdowns prior to
September 30, 2002 to remain available
for use for no more than five years from
the date of this letter.
2. The TCEQ will perform a credit
audit to remove from the emissions
bank all DERCs generated from
permanent shutdowns after September
30, 2002. Even if the shutdown itself
occurred before September 30, 2002, no
DERCs can be generated from that event
after September 30, 2002.
3. Revise 30 TAC §§ 101.302(f),
101.372(f)(7) and 101.372(f)(8) to clarify
that EPA approval is required for
individual transactions involving
emission reductions generated in
another state or nation, as well as those
transactions from one nonattainment
area to another, or from attainment
counties into nonattainment areas. The
TCEQ further understands that the EPA
would require a state implementation
plan revision prior to approving a
transaction between another state or
nation, as well as, those transactions
between counties not located within the
same nonattainment area.
4. The TCEQ will revise Form DEC–
1, Notice of Generation and Generator
Certification of Discrete Emission
Credits; Form MDEC–1, Notice of
Generation and Generator Certification
of Mobile Discrete Emission Credits;
and Form DEC–2, Notice of Intent to
Use Discrete Emission Credits, to
include a waiver to the Federal statute
of limitations defense for generators,
and users of DERCs and mobile discrete
emission reduction credits (MDERCs).
Please be reminded that there is
currently no applicable state statute of
limitations in the State of Texas. In
addition, the TCEQ will maintain its
current policy of preserving all records
relating to DERC and MDERC generation
and use for a minimum of five years
after the use strategy has ended.
5. Revise 30 TAC §§ 101.302 and
101.372 to clarify that a proposed
quantification protocol may not be used
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if the TCEQ Executive Director receives
a letter from the EPA objecting to the
use of the protocol during the 45-day
adequacy review period or if the EPA
proposes disapproval of the protocol in
the Federal Register.
6. Revise 30 TAC § 101.306 to specify
that Emission Reduction Credits may be
used within the highly reactive volatile
organic compounds Emissions Cap and
Trade program as an annual allocation
of allowances as provided under 30
TAC § 101.399.
C. Were the terms of the DERC
conditional approval met?
Following is an analysis of each DERC
program element of the September 8,
2005, commitment letter and TCEQ’s
response. EPA is not including the ERC
program elements (see commitments 3,
5, and 6 above) in our analysis of the
DERC conditional approval. The ERC
and DERC programs operate
independently of each other and have
been approved as separate, stand alone
programs by EPA. The submission of
these ERC provisions will not impact
the functionality of the DERC program
nor were these revisions to the ERC
program necessary for the DERC
program to be considered consistent
with EPA regulations, policy and
guidance. EPA has evaluated the
October 24, 2006, ERC program
revisions in a separate rulemaking (see
EPA–R06–OAR–2010–0147).
1. Revise 30 TAC § 101.373 to prohibit
the future generation of DERCs from
permanent shutdowns and to allow
DERCs generated and banked from
permanent shutdowns prior to
September 30, 2002, to remain available
for use for no more than five years from
the date of this letter.
TCEQ met this commitment of the
conditional approval. TCEQ adopted the
appropriate provisions and submitted
the revised rules as a SIP revision
within the time frame. TCEQ adopted
revisions to section 101.373 that
removed shutdowns as a method of
generation and added the following
language under the list of prohibited
generation activities at section
101.373(a)(2): ‘‘permanent or temporary
shutdowns or permanent curtailment of
an activity at a facility’’. TCEQ adopted
revisions to section 101.378(b)(1) that
revise the lifetime of a DEC. Section
101.378(b)(1) states that ‘‘Discrete
emission credits generated from
shutdown strategies prior to September
30, 2002, will be available for use until
September 8, 2010.’’
Note that the DERC calculation
procedures at sections 101.373(c)(1), (3),
and (4) discuss how DERCs are
calculated from shutdowns.
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Additionally, section 101.373(d)(3)(c)
discusses how to certify the generation
of DERCs from shutdown activities. EPA
believes that the inclusion of this
language was an oversight on TCEQ’s
part when responding to our conditional
approval commitments. The DERC
program at section 101.373(a)(2)(A)
clearly prohibits the generation of
DERCs from shutdowns. Therefore, EPA
feels that TCEQ should remove this
language at their earliest convenience,
but that the prohibition on generation of
shutdown DERCs is not impacted by
this erroneous calculation.
2. The TCEQ will perform a credit
audit to remove from the emissions
bank all DERCs generated from
permanent shutdowns after September
30, 2002. Even if the shutdown itself
occurred before September 30, 2002, no
DERCs can be generated from that event
after September 30, 2002.
TCEQ met this commitment of the
conditional approval. TCEQ adopted the
appropriate provisions and submitted
the revised rules as a SIP revision
within the time frame. TCEQ confirmed
in a letter dated February 5, 2010, that
the credit audit was performed in
January 2006 (this letter is available in
the docket for this rulemaking).
Additionally, TCEQ adopted two
revisions to the SIP that will ensure that
shutdowns after September 30, 2002, do
not generate DERCs. First, the revision
to section 101.373(a)(2) prohibits the
future generation of DERCs from
shutdowns (as discussed in item 1
above). Second, the TCEQ revised
section 101.378(b)(2) so that ‘‘Discrete
emission credits certified from facility
shutdowns after September 30, 2002,
may not be used.’’
3. Revise 30 TAC §§ 101.372(f)(7) and
101.372(f)(8) to clarify that EPA
approval is required for individual
transactions involving emission
reductions generated in another state or
nation, as well as those transactions
from one nonattainment area to another,
or from attainment counties into
nonattainment areas. The TCEQ further
understands that the EPA would require
a state implementation plan revision
prior to approving a transaction between
another state or nation, as well as, those
transactions between counties not
located within the same nonattainment
area.
TCEQ met the DERC-specific portion
of this commitment. Section 101.372(f)
outlines the geographic scope of the
DERC rule and generally provides that,
with the exception of international
reductions pursuant to section 101.375,
only reductions generated in the State of
Texas can be certified as DERCs. Section
101.372(f)(7) was unchanged by TCEQ
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15653
and continues to provide that
reductions from other counties, states,
or nations can be used in any attainment
or nonattainment county provided a
demonstration showing improvement in
air quality has been approved by the
TCEQ ED and EPA. The use of
international reductions under section
101.372(f)(7) is further modified by the
restrictions at section 101.375.
Section 101.372(f)(8) was moved to
new section 101.375. Section 101.375
establishes two ways that a facility
could use an international reduction.
First, a facility could use reductions of
a criteria pollutant or precursor of
criteria pollutant to meet requirements
of the same criteria pollutant. This
option would be used if a facility had
a NOX requirement in Texas and could
find NOX reductions in Mexico or an
ozone requirement in Texas and could
find VOC reductions in Mexico.
Alternately, a facility could use
reductions of a criteria pollutant or its
precursors to substitute for reductions
in other criteria pollutants. For example,
this situation would be one in which a
source could be subject to a PM2.5
requirement and wants to use CO
reductions to satisfy the requirement.
Generally, both of these uses (the same
criteria pollutant or the substitution)
requires approval by EPA and the TCEQ
ED; the source must demonstrate that
the reduction is real, permanent,
enforceable, quantifiable, and surplus to
any applicable Mexican, Federal, State,
or local law; demonstrate that the use of
the reduction does not cause localized
health impacts; submit all supporting
information for calculations and
modeling; and be located within 100km
of the Texas-Mexico border.
There are additional requirements for
the case where a facility wants to
substitute the international reduction of
a criteria pollutant or its precursor for
the obligations of a different criteria
pollutant (the example above in which
the facility used CO reductions for a
PM2.5 requirement). The facility must
either show that the reduction is
substituted for the reduction
requirement of another criteria pollutant
and the substitution results in a greater
health benefit and is of equal or greater
benefit to the overall air quality of the
area; or, the source must show that the
reduction of a criteria pollutant (or
precursor) for which the area is
nonattainment is substituted for another
criteria pollutant (or precursor)
requirement for which an area is
nonattainment.
Even though section 101.372(f)(7) was
not revised, EPA approval is clearly
required for uses of reductions from
other counties, states, or other nations.
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Uses of international reductions under
section 101.372(f)(7) are further
modified by the restrictions at section
101.375, which also clearly require EPA
approval.
4. The TCEQ will revise Form DEC–
1, Notice of Generation and Generator
Certification of Discrete Emission
Credits; Form MDEC–1, Notice of
Generation and Generator Certification
of Mobile Discrete Emission Credits;
and Form DEC–2, Notice of Intent to
Use Discrete Emission Credits, to
include a waiver to the Federal statute
of limitations defense for generators,
and users of DERCs and mobile discrete
emission reduction credits (MDERCs).
Please be reminded that there is
currently no applicable state statute of
limitations in the State of Texas. In
addition, the TCEQ will maintain its
current policy of preserving all records
relating to DERC and MDERC generation
and use for a minimum of five years
after the use strategy has ended.
TCEQ met this commitment of the
conditional approval. In a letter dated
February 5, 2010, the TCEQ stated that
even though the commitment included
modifying Form MDEC–1, such form
has never been created. However, Form
MDEC–1 will include a waiver of the
Federal statute of limitations defense if
at any time in the future the TCEQ
creates said form. Also in the February
5, 2010, letter, the TCEQ stated that the
Forms DEC–1 and DEC–2 were modified
in or before February 2007, but that the
exact modification date could not be
determined since the TCEQ does not
keep copies of old versions of the form.
Additionally, the TCEQ modified Form
DEC–3, Notice of Use of Discrete
Emission Credits, to include the same
waiver of the Federal statute of
limitations defense even though
modification of Form DEC–3 was not
part of the commitment. Copies of the
modified DEC–1, DEC–2, and DEC–3
forms were included with the letter.
Note that the February 5, 2010, letter
and attachments is available in the
FDMS docket for this action.
The TCEQ confirmed that during the
time period between September 2006
and February 2007, there were no DERC
generations submitted. So, even though
Form DEC–1 was not revised until
February 2007, there was not an
instance where DERC generation did not
have the appropriate waiver. However,
between September 2006 and February
2007, there were 18 DEC–2 forms
submitted to the TCEQ without the
waiver of Federal statute of limitations
defense language. But, under the DERC
program, any notification of intent to
use DERCs submitted on a DEC–2 form,
must be followed by a notification of
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use through the submission of a DEC–
3 form. All 18 DEC–2 forms were
followed by submissions of the DEC–3
forms with the appropriate waiver
language.
Even though the DEC–1 and DEC–2
forms were not modified by the
December 2006 deadline specified in
the commitment letter, EPA finds that
the intent of this commitment has been
satisfied. The intent of this commitment
was to ensure that all DERC generation
and use activities were covered by a
waiver of the Federal statute of
limitations defense. Since no DERCs
were generated during this time, there
was no need for a DEC–1 form. The 18
DEC–2 forms provide notification that a
source intends to use DERCs, the
verification that the use occurred is
through the submission of a DEC–3
form. TCEQ verified that all 18 DEC–2
forms were followed by the submission
of a modified DEC–3 form—thereby
covering all DERC usage activities with
the waiver of the Federal statute of
limitations defense.
5. Revise 30 TAC § 101.372 to clarify
that a proposed quantification protocol
may not be used if the TCEQ Executive
Director receives a letter from the EPA
objecting to the use of the protocol
during the 45-day adequacy review
period or if the EPA proposes
disapproval of the protocol in the
Federal Register.
TCEQ met this commitment of the
conditional approval. TCEQ adopted the
appropriate provisions and submitted
the revised rule as a SIP revision within
the time frame. TCEQ revised section
101.372(d)(vi) to state that
‘‘quantification protocols shall not be
accepted for use with this division if the
executive director receives a letter
objecting to the use of the protocol from
the EPA during the 45-day adequacy
review or the EPA proposes disapproval
of the protocol in the Federal Register.’’
V. Final Action
EPA is proposing to approve severable
revisions to the Texas SIP submitted on
October 24, 2006, and August 16, 2007.
Specifically from the October 24, 2006
submittal, EPA is approving the
amendments to section 101.372(a) and
(f) that move the international emission
reduction requirements to a new
section, the amendments to section
101.372(d)(1)(C)(vi) that clarify EPA’s
role in approving emission
quantification protocols, the
amendments to section 101.373 to
prohibit the generation of DERCs from
shutdowns, the amendment to section
101.376(c)(4) that updates the crossreferences to Chapter 106 provisions,
the amendments to section 101.378(b) to
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limit the lifetime of previously
generated shutdown DERCs, and nonsubstantive revisions to sections
101.372(d) and 101.372(j). EPA is also
proposing to approve provisions for
international emission reductions at
new section 101.375 submitted on
October 24, 2006. The October 24, 2006,
DERC Program revisions satisfy the
elements of the September 8, 2005,
commitment letter; as such, EPA is
proposing the DERC program for full
approval. Additionally, we are
proposing to approve the following
nonsubstantive revisions to the Texas
SIP submitted on August 16, 2007:
revisions to sections 101.372(d)(1)(A)
and 101.376(d)(2)(A) to update the
cross-references to recently recodified
provisions in 30 TAC Chapter 117 and
revisions to section 101.372(d)(1)(B) to
update the cross-referenced title to
provisions in Chapter 115.
In a separate rulemaking, EPA is
proposing action on the severable ERC
Program revisions at 30 TAC sections
101.302, 101.305, and 101.306
submitted on October 24, 2006, and 30
TAC sections 101.302 and 101.306
submitted on August 16, 2007 (see EPA–
R06–OAR–2010–0417).
At this time, EPA is not taking action
on the revisions to the Emissions
Banking and Trading of Allowances
Program at 30 TAC sections 101.338 and
101.339 submitted on October 24, 2006.
EPA is also not taking action at this time
on the revisions to the general air
quality definitions at 30 TAC Section
101.1 or the revisions to the System Cap
Trading Program at 30 TAC sections
101.383, and 101.385 submitted on
August 16, 2007. These severable
revisions remain under review by EPA
and will be addressed in separate
actions.
VI. Statutory and Executive Order
Reviews
Under the Clean Air Act, 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 Clean Air Act.
Accordingly, this 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 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);
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• 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 Clean Air Act;
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,
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.
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List of Subjects in 40 CFR Part 52
Environmental protection, Air
pollution control, Intergovernmental
relations, Nitrogen oxides, Ozone,
Reporting and recordkeeping
requirements, Volatile organic
compounds.
Authority: 42 U.S.C. 7401 et seq.
Dated: March 18, 2010.
Lawrence E. Starfield,
Acting Regional Administrator, Region 6.
[FR Doc. 2010–6801 Filed 3–29–10; 8:45 am]
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ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 63
[EPA–HQ–OAR–2009–0746; FRL–9131–8]
RIN 2060–AP91
Requirements for Control Technology
Determinations for Major Sources in
Accordance With Clean Air Act
Sections, Sections 112(g) and 112(j)
AGENCY: Environmental Protection
Agency (EPA).
ACTION: Proposed rule.
SUMMARY: We are proposing to amend
the rule governing case-by-case
emission limits for major sources of
hazardous air pollutants under section
112(j) of the Clean Air Act. Specifically,
we are proposing revisions to the
section 112(j) rule to clarify and
streamline the process for establishing
case-by-case emission limits in the case
of the complete vacatur of a section
112(d) rule applicable to a major source
category initially listed pursuant to
section 112(c)(1). In addition, we are
also proposing revisions that would
eliminate provisions of the section
112(j) rule that have become obsolete or
are redundant.
DATES: Comments must be received on
or before April 29, 2010, unless a public
hearing is requested by April 14, 2010.
If a hearing is requested on the proposed
amendments, written comments must be
received by May 14, 2010. Under the
Paperwork Reduction Act, comments on
the information collection provisions
are best assured of having full effect if
the Office of Management and Budget
(OMB) receives a copy of your
comments on or before April 29, 2010.
ADDRESSES: Submit your comments,
identified by Docket ID No. EPA–HQ–
OAR–2009–0746, by one of the
following methods:
• Federal eRulemaking Portal: https://
www.regulations.gov: Follow the on-line
instructions for submitting comments.
• Agency Web Site: https://
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Frm 00029
Fmt 4702
Sfmt 4702
15655
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E:\FR\FM\30MRP1.SGM
30MRP1
]]>Agencies
[Federal Register Volume 75, Number 60 (Tuesday, March 30, 2010)]
[Proposed Rules]
[Pages 15648-15655]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-6801]
-----------------------------------------------------------------------
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[EPA-R06-OAR-2010-0148; FRL-9130-5]
Approval and Promulgation of Air Quality Implementation Plans;
Texas; Revisions to the Discrete Emission Credit Banking and Trading
Program
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: EPA is proposing to approve severable portions of two
revisions to the Texas State Implementation Plan (SIP) submitted by the
State of Texas on October 24, 2006, and August 16, 2007. These
revisions amend existing sections and create a new section in Title 30
of the Texas Administrative Code (TAC), Chapter 101--General Air
Quality Rules, Subchapter H--Emissions Banking and Trading, Division
4--Discrete Emission Credit Banking and Trading, referred to elsewhere
in this notice as the Discrete Emission Reduction Credit (DERC)
Program. The October 24, 2006, submittal creates a new section for
international emission reduction provisions and amends existing
sections to prohibit the generation and use of DERCs from shutdown
activities and further clarify procedures for using emission protocols.
The August 16, 2007, submittal amends two sections of the DERC program
to update cross-references to recently recodified 30 TAC Chapter 117
provisions. Additionally, EPA is proposing to find that the Texas
Commission on Environmental Quality (TCEQ) has satisfied all elements
of our September 6, 2006, final conditional approval of the DERC
program with the submittal of the October 24, 2006, SIP submittal; and
as such, the DERC program conditional approval is proposed for full
approval. EPA has determined that these SIP revisions comply with the
Clean Air Act and EPA regulations, are consistent with EPA policies,
and will improve air quality. This action is being taken under section
110 and parts C and D of the Federal Clean Air Act (the Act or CAA).
DATES: Comments must be received on or before April 29, 2010.
ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R06-
[[Page 15649]]
OAR-2010-0148, by one of the following methods:
(1) https://www.regulations.gov: Follow the on-line instructions for
submitting comments.
(2) E-mail: Mr. Jeff Robinson at robinson.jeffrey@epa.gov. Please
also cc the person listed in the FOR FURTHER INFORMATION CONTACT
paragraph below.
(3) U.S. EPA Region 6 ``Contact Us'' Web site: https://epa.gov/region6/r6coment.htm. Please click on ``6PD'' (Multimedia) and select
``Air'' before submitting comments.
(4) Fax: Mr. Jeff Robinson, Chief, Air Permits Section (6PD-R), at
fax number 214-665-6762.
(5) Mail: Mr. Jeff Robinson, Chief, Air Permits Section (6PD-R),
Environmental Protection Agency, 1445 Ross Avenue, Suite 1200, Dallas,
Texas 75202-2733.
(6) Hand or Courier Delivery: Mr. Jeff Robinson, Chief, Air Permits
Section (6PD-R), Environmental Protection Agency, 1445 Ross Avenue,
Suite 1200, Dallas, Texas 75202-2733. Such deliveries are accepted only
between the hours of 8:30 a.m. and 4:30 p.m. weekdays except for legal
holidays. Special arrangements should be made for deliveries of boxed
information.
Instructions: Direct your comments to Docket ID No. EPA-R06-OAR-
2010-0148. EPA's policy is that all comments received will be included
in the public docket without change and may be made available online at
https://www.regulations.gov, including any personal information
provided, unless the comment includes information claimed to be
Confidential Business Information (CBI) or other information the
disclosure of which is restricted by statute. Do not submit information
through https://www.regulations.gov or e-mail, if you believe that it is
CBI or otherwise protected from disclosure. The https://www.regulations.gov Web site is an ``anonymous access'' system, which
means that 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 https://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 along with any disk or CD-ROM
submitted. 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 and any form of encryption and should be free of any
defects or viruses. For additional information about EPA's public
docket, visit the EPA Docket Center homepage at https://www.epa.gov/epahome/dockets.htm.
Docket: All documents in the docket are listed in the https://www.regulations.gov index. Although listed in the index, some
information is not publicly available, e.g., CBI or other information
the disclosure of which is restricted by statute. Certain other
material, such as copyrighted material, will be publicly available only
in hard copy. Publicly available docket materials are available either
electronically in https://www.regulations.gov or in hard copy at the Air
Permits Section (6PD-R), Environmental Protection Agency, 1445 Ross
Avenue, Suite 700, Dallas, Texas 75202-2733. The file will be made
available by appointment for public inspection in the Region 6 FOIA
Review Room between the hours of 8:30 a.m. and 4:30 p.m. weekdays
except for legal holidays. Contact the person listed in the FOR FURTHER
INFORMATION CONTACT paragraph below to make an appointment. If
possible, please make the appointment at least two working days in
advance of your visit. A 15 cent per page fee will be charged for
making photocopies of documents. On the day of the visit, please check
in at the EPA Region 6 reception area on the seventh floor at 1445 Ross
Avenue, Suite 700, Dallas, Texas.
The State submittal related to this SIP revision, and which is part
of the EPA docket, is also available for public inspection at the State
Air Agency listed below during official business hours by appointment:
Texas Commission on Environmental Quality, Office of Air Quality,
12124 Park 35 Circle, Austin, Texas 78753.
FOR FURTHER INFORMATION CONTACT: If you have questions concerning
today's proposed rule, please contact Ms. Adina Wiley (6PD-R), Air
Permits Section, Environmental Protection Agency, Region 6, 1445 Ross
Avenue (6PD-R), Suite 1200, Dallas, TX 75202-2733. The telephone number
is (214) 665-2115. Ms. Wiley can also be reached via electronic mail at
wiley.adina@epa.gov.
SUPPLEMENTARY INFORMATION: Throughout this document wherever, any
reference to ``we,'' ``us,'' or ``our'' is used, we mean EPA.
Table of Contents
I. What Action Is EPA Taking?
II. What Did Texas Submit?
III. What Is EPA's Evaluation of These SIP Revisions?
IV. What Is EPA's Evaluation of the TCEQ's Response to the DERC
Conditional Approval?
V. Final Action
VI. Statutory and Executive Order Reviews
I. What Action Is EPA Taking?
We are proposing to approve severable portions of two revisions to
the Texas SIP submitted by the TCEQ on October 24, 2006 and August 16,
2007, specific to the DERC Program. The DERC Program, conditionally
approved by EPA on September 6, 2006, establishes an open market
trading program to provide flexibility for sources in complying with
certain State and Federal requirements. In an open market trading
program, a source generates emission credits by reducing its emissions
during a discrete period of time. These credits, called discrete
emission credits, or DECs, in the Texas program, are quantified in
units of mass. Discrete emission credit (DEC) is a generic term that
encompasses reductions from stationary sources (discrete emission
reduction credits, or DERCs) and reductions from mobile sources (mobile
discrete emission reduction credits, or MDERCs).\1\ The revisions we
are proposing to approve amend existing sections and create a new
section in the DERC Program at Title 30 of the Texas Administrative
Code (TAC), Chapter 101--General Air Quality Rules, Subchapter H--
Emissions Banking and Trading, Division 4--Discrete Emission Credit
Banking and Trading. The October 24, 2006 submittal creates a new
section for international emission reduction provisions and amends
existing sections to prohibit the generation and use of DERCs from
shutdown activities and further clarifies procedures for using emission
protocols. Additionally, EPA is proposing to find that the TCEQ has
satisfied all elements of our September 6, 2006 final conditional
approval of the DERC program with the submittal of the October 24, 2006
SIP submittal; and as such, the DERC program conditional approval is
proposed for full approval.\2\ The severable portions of the August 16,
2007 submittal that we are proposing to approve non-substantively
revise the DERC Program to correctly update the
[[Page 15650]]
cross-references to the stationary source nitrogen oxide
(NOX) rules found in the Texas SIP at 30 TAC Chapter 117 as
a result of the non-substantive recodification of Chapter 117 approved
by EPA as part of the Texas SIP on December 3, 2008 (see 73 FR 73562).
Additionally, in both the October 24, 2006 and August 16, 2007 SIP
submittals TCEQ has made several non-substantive revisions to update
grammar and document style. Consequently, we are proposing to approve
the revisions to the Texas SIP at 30 TAC sections 101.372(a),
101.372(d), 101.372(f), 101.372(j), 101.373(a), 101.376(c)(4), and
101.378(b) and the creation of new section 101.375 submitted on October
24, 2006. Additionally, we are proposing to approve revisions to the
Texas SIP at 30 TAC sections 101.372(d) and 101.376(d) submitted on
August 16, 2007 by the TCEQ.
---------------------------------------------------------------------------
\1\ In this action, when we refer to the program as the ``DERC
Rule'' or the ``DERC Program'' we are speaking of the entire
Discrete Emission Credit Banking and Trading Program, which
encompasses both DERCs and MDERCs.
\2\ Today's action proposes to find that the TCEQ has satisfied
all conditions of the September 6, 2006 final DERC conditional
approval. See 71 FR 52703. This action is separate from, and
unrelated to, the Dallas/Fort Worth 1997 8-hour Ozone Attainment
Demonstration conditional approval finalized by EPA on January 14,
2009, at 74 FR 1903.
---------------------------------------------------------------------------
II. What Did Texas Submit?
We are proposing to approve severable portions of two revisions to
the Texas SIP specific to the DERC Program. The first revision we are
proposing action on was adopted by the TCEQ on October 4, 2006, and
submitted to EPA on October 24, 2006. At the same time that TCEQ
adopted and submitted revisions to the DERC Program, revisions were
also adopted and submitted for the Emission Credit Banking and Trading
Program (referred to elsewhere in this notice as the Emission Reduction
Credit (ERC) Program) and the Emissions Banking and Trading of
Allowances (EBTA) Program. The revisions to the ERC and EBTA Programs
are specific to separate, distinct trading programs and, as such, are
severable from the DERC Program revisions. We are not proposing to act
upon the severable revisions to the ERC Program at 30 TAC Chapter 101,
Subchapter H, Division 1, sections 101.302, 101.305, and 101.306. EPA
is processing a separate rulemaking to address the 2006 and 2007 ERC
Program revisions (see EPA-R06-OAR-2010-0417). EPA has not yet taken
action on the EBTA Program at 30 TAC Chapter 101, Subchapter H,
Division 2 and therefore is not proposing action today on the repeal
and replacement of section 101.338 and the revisions to section
101.339. The second revision upon which we are proposing action was
adopted by the TCEQ on July 25, 2007, and submitted to EPA on August
16, 2007. Also at this time TCEQ adopted and submitted revisions to the
general air quality definitions, the ERC Program, and the System Cap
Trading (SCT) Program. We are not acting today upon revisions to the
general air quality definitions at 30 TAC Chapter 101, Subchapter A,
section 101.1 because the DERC Program does not rely upon them
(therefore the revisions are severable from the DERC Program) and
previous revisions to section 101.1 are still pending for review by
EPA. We are also not acting today upon the revisions to the ERC Program
at 30 TAC Chapter 101, Subchapter H, Division 1, sections 101.302 and
101.306 because these revisions are severable from the DERC program and
the October 24, 2006 SIP revision is still under EPA review. EPA
intends to take a separate rulemaking action to address the 2006 and
2007 ERC Program revisions (see EPA-R06-OAR-2010-0417). EPA has not yet
taken action on the System Cap Trading Program at 30 TAC Chapter 101,
Subchapter H, Division 5 and therefore is not acting today upon the
severable revisions to sections 101.383 and 101.385.
A copy of the October 24, 2006 and August 16, 2007 SIP submittals
as well as our Technical Support Document (TSD) can be obtained from
the Docket, as discussed in the ``Docket'' section above. A discussion
of the specific Texas rule changes that we are approving is included in
the TSD and summarized below.
A. October 24, 2006 SIP Submittal
1. 30 TAC Chapter 101, Subchapter H, Division 4, Section 101.372--
General Provisions
The existing SIP-approved version of section 101.372 was adopted by
the TCEQ on December 13, 2002, and conditionally approved by EPA on
September 6, 2006 (see 71 FR 52703). The revisions to section
101.372(a) and (f) adopted by the TCEQ on October 4, 2006, delete the
information pertaining to international emission reductions and move
these provisions to new section 101.375. Additionally, section
101.372(d)(1)(C)(vi) is revised to clarify EPA's approval process of
the quantification protocols for the DERC Program. Several non-
substantive revisions for grammar and style were also made by the TCEQ
in this submittal.
2. 30 TAC Chapter 101, Subchapter H, Division 4, Section 101.373--
Discrete Emission Reduction Credit Generation and Certification
The existing SIP-approved version of section 101.373 was adopted by
the TCEQ on November 10, 2004, and conditionally approved by EPA on
September 6, 2006 (see 71 FR 52703). The revisions to section
101.373(a) prohibit the generation of DERCs from shutdown activities;
specifically, section 101.373(a)(1) is amended to delete permanent
shutdowns as a method of generating DERCs and section 101.373(a)(2) is
amended to update the prohibited generation strategy list to include
permanent shutdowns.
3. 30 TAC Chapter 101, Subchapter H, Division 4, Section 101.375--
Emission Reductions Achieved Outside the United States
On October 4, 2006, TCEQ adopted new section 101.375. This new
section contains the previously SIP-approved international emission
reduction provisions from sections 101.372(a) and (f) and updates the
international provisions consistent with the requirements of Texas
Senate Bill 784.
4. 30 TAC Chapter 101, Subchapter H, Division 4, Section 101.376--
Discrete Emission Credit Use
The existing SIP-approved version of section 101.376 was adopted by
the TCEQ on November 10, 2004, and conditionally approved by EPA on
September 6, 2006 (see 71 FR 52703). The proposed SIP revision adopted
by the TCEQ on October 4, 2006, amends section 101.376(c)(4) to update
cross-references to 30 TAC Chapter 106 in the list of prohibited DEC
use strategies.
5. 30 TAC Chapter 101, Subchapter H, Division 4, Section 101.378--
Discrete Emission Credit Banking and Trading
The existing SIP-approved version of section 101.378 was adopted by
the TCEQ on December 13, 2002, and conditionally approved by EPA on
September 6, 2006 (see 71 FR 52703). The revisions to section
101.378(b) revise the lifetime of a discrete emission credit to
prohibit the use of discrete emission credits generated from shutdowns;
specifically, section 101.378(b)(1) states that discrete emission
credits generated from shutdowns prior to September 30, 2002, will be
available for use until September 8, 2010, and section 101.378(b)(2)
prohibits the use of shutdown discrete emission credits generated after
September 30, 2002.
B. August 16, 2007 SIP Submittal
1. 30 TAC Chapter 101, Subchapter H, Division 4, Section 101.372--
General Provisions
The revisions to section 101.372 adopted by the TCEQ on July 25,
2007, further revise the revisions adopted by the TCEQ on October 4,
2002. The 2007 revisions non-substantively amend section
101.372(d)(1)(A) to correctly cross-reference the recodified stationary
source nitrogen oxide (NOX) rules to the
[[Page 15651]]
Texas SIP at 30 TAC Chapter 117. Additionally, section 101.372(d)(1)(B)
was non-substantively amended to include the correct title for the
stationary source volatile organic compound rules to the Texas SIP at
30 TAC Chapter 115.
2. 30 TAC Chapter 101, Subchapter H, Division 4, Section 101.376--
Discrete Emission Credit Use
The revisions to section 101.376 adopted by the TCEQ on July 25,
2007, further revise the revisions adopted by the TCEQ on October 4,
2002. The 2007 revisions non-substantively amend section
101.376(d)(2)(A) to correctly cross-reference the recodified stationary
source NOX rules to the Texas SIP at 30 TAC Chapter 117.
III. What Is EPA's Evaluation of These SIP Revisions?
A. October 24, 2006 SIP Submittal
1. 30 TAC Chapter 101, Subchapter H, Division 1, Section 101.302--
General Provisions
The October 4, 2006, revisions to sections 101.372(a), 101.372(d),
101.372(f) and 101.372(j) are approvable. Sections 101.372(a) and
101.372(f) were revised to delete the information pertaining to
international emission reductions and relocate these provisions to new
section 101.375. This consolidation of the international emission
reduction provisions improves the clarity of the DERC Program by
creating a new section specific to international emission reductions.
Section 101.372(d)(1)(C)(vi) was revised to clarify EPA's role in the
approval of emission quantification protocols. While the previous SIP-
approved provisions were accurate and consistent with EPA's Economic
Incentive Program (EIP) Guidance (``Improving Air Quality with Economic
Incentive Programs'' (EPA-452/R-01-001, January 2001)), the revised
language has been restructured to more closely follow the provisions
for approving emission quantification protocols at section 5.2(c) of
the EIP Guidance. The non-substantive revisions to sections
101.372(d)(1)(C)(iv) and 101.372(j) update the formatting and grammar
of the DERC General Provisions.
The revisions to section 101.372 described above were made pursuant
to TCEQ's September 8, 2005, commitment letter for the DERC Program
conditional approval (included in the docket for this action). In this
commitment letter, TCEQ committed to revising, among others things,
section 101.372 to more clearly require EPA approval for international
emission reduction transactions and to clarify the EPA's role in
approving emission quantification protocols. Please see section IV. of
this notice for a discussion of how the TCEQ has addressed the elements
of DERC conditional approval and the September 8, 2005, commitment
letter.
2. 30 TAC Chapter 101, Subchapter H, Division 4, Section 101.373--
Discrete Emission Reduction Credit Generation and Certification
The October 4, 2006, revisions to sections 101.373(a)(1) and
101.373(a)(2) are approvable. The revisions to section 101.373(a)(1)
and (a)(2) amend the allowable and prohibited generation strategy lists
to reflect that permanent shutdowns are a prohibited DERC generation
strategy. These amendments are consistent with the Open-Market Trading
provisions at section 7.5(b) of the EIP Guidance.
The revisions to section 101.373 described above were made pursuant
to TCEQ's September 8, 2005, commitment letter for the DERC Program
conditional approval (included in the docket for this action). In this
commitment letter, TCEQ committed to revising the DERC program to
prohibit the future generation of DERCs from shutdowns. Please see
section IV. of this notice for a discussion of how the TCEQ has
addressed the elements of DERC conditional approval and the September
8, 2005, commitment letter.
3. 30 TAC Chapter 101, Subchapter H, Division 4, Section 101.375--
Emission Reductions Achieved Outside the United States
New section 101.375 adopted on October 4, 2006, is approvable. EPA
finds that in addition to relocating the SIP-approved international
emission reduction language from section 101.372, new section 101.375
has expanded the scope of our original DERC program approval to allow
the use of international reductions in lieu of DERCs to occur in
attainment areas within 100-km of the Texas-Mexico border, consistent
with the requirements of Texas Senate Bill 784. However, the continued
requirement at section 101.375 for EPA approval before any such use is
consistent with the intent of our DERC program conditional approval on
September 6, 2006. EPA approval continues to be through a case-specific
SIP revision that must clearly demonstrate through a detailed CAA
section 110(l) analysis that the use of such international reductions
will not jeopardize attainment or maintenance of the National Ambient
Air Quality Standards or any other applicable standards. As noted in
our September 6, 2006, final conditional approval of the DERC Program
``* * * international trades present an especially difficult case. For
instance, currently there is no mechanism for demonstrating that
reductions made in another country are surplus or enforceable.
Nonetheless, emission reductions in other countries could offer
substantial air quality benefits in the United States.'' See 71 FR
52703, 52705. In approving this revision to the DERC program, ``EPA is
recognizing the concept of international trading and describing a
framework (i.e., the submission of a SIP revision demonstrating among
other things the validity and enforceability of foreign reductions) for
such trading, in the event that a suitable and approvable mechanism is
ever developed for resolving concerns including enforceability and
surplus. Until such a mechanism is developed and approved by EPA,
however, EPA will not approve international trades under the DERC
rule.'' See 71 FR 52703, 52705. Further, it is important to note, that
even though we are approving the use of international reductions in
lieu of DERCs along the Texas-Mexico border, the use of these
reductions must still meet the requirements of the CAA. Therefore, the
international reductions are not available for use as Federal NSR
offsets since section 173(c)(1) of the CAA requires that offset
reductions come from the same nonattainment area as the proposed source
or modification or another nonattainment area with an equal or higher
nonattainment classification.
4. 30 TAC Chapter 101, Subchapter H, Division 4, Section 101.376--
Discrete Emission Credit Use
The October 4, 2006, revisions to section 101.376(c)(4) are
approvable. TCEQ correctly updated the cross-references to Chapter 106
in response to our final conditional approval notice. In our final
notice we stated that ``We are not approving section 101.376(c)(4) into
the Texas SIP because the cross-references to 30 TAC Chapter 106 Permit
by Rule, sections 106.261(3) or (4) or section 106.262(3) are incorrect
and do not exist in State law, the Texas SIP, or the Texas Federal
Operating Permits program. Consequently, unless and until the State
adopts and submits a revision to EPA for approval as a SIP revision and
EPA approves it, the use of discrete emission credits to exceed the
provisions in certain types of pre-construction permits termed Permits
by Rule is not available under the Texas SIP.''
[[Page 15652]]
While EPA has not approved sections 106.261 and 106.262 into the
Texas SIP, we are able to approve the revisions to section
101.376(c)(4). By approving the revisions to section 101.376(c)(4) we
are not approving a use of DERCs that conflicts with the Texas SIP,
rather we are approving a listed prohibition of DERC usage that would
further support the Texas SIP. Additionally, if an owner or operator of
a facility wished to use DERCs in a manner that exceeded limitations
from sections 106.261 or 106.262, the use would have to be approved by
TCEQ and EPA; EPA anticipates our approval would only occur through a
case-specific SIP revision following a demonstration from the owner/
operator that useage of DERCs in this manner would not undermine the
attainment strategy of the area or constitute a violation of CAA
section 110(l).
5. 30 TAC Chapter 101, Subchapter H, Division 4, Section 101.378--
Discrete Emission Credit Banking and Trading
The October 4, 2006, revisions to section 101.378 are approvable.
The revisions to section 101.378(b)(1) and (b)(2) limit the lifetime of
certain discrete emission credits generated from shutdowns. Discrete
emission credits generated from shutdowns prior to September 30, 2002,
remain available for use until September 8, 2010. Any discrete emission
credits certified from shutdowns after September 30, 2002, may not be
used. These amendments are consistent with the Open-Market Trading
provisions at section 7.5(b) of the EIP Guidance.
The revisions to section 101.378 described above were made pursuant
to TCEQ's September 8, 2005 commitment letter for the DERC Program
conditional approval (included in the docket for this action). In this
commitment letter, TCEQ committed to revising the DERC program to
restrict the lifetime of previously generated shutdown DERCs. Please
see section IV. of this notice for a discussion of how the TCEQ has
addressed the elements of DERC conditional approval and the September
8, 2005 commitment letter.
B. August 16, 2007 SIP Submittal
1. 30 TAC Chapter 101, Subchapter H, Division 4, Section 101.372--
General Provisions
The July 25, 2007 revisions to section 101.372(d)(1)(A) and (B) are
approvable. As demonstrated further in our TSD, the non-substantive
revisions to section 101.372(d)(1)(A) correctly cross-reference the
recodified stationary source NOX rules in the Texas SIP at
30 TAC Chapter 117. The non-substantive revisions to section
101.372(d)(1)(B) correctly update the titles of the stationary source
VOC rules in the Texas SIP at 30 TAC Chapter 115. These non-substantive
revisions do not affect the approved emission quantification protocols
established for the DERC Program.
2. 30 TAC Chapter 101, Subchapter H, Division 1, Section 101.376--
Discrete Emission Credit Use
The July 25, 2007 revisions to section 101.376(d)(2)(A) are
approvable. As demonstrated further in our TSD, these non-substantive
revisions correctly cross-reference the recodified stationary source
NOX rules in the Texas SIP at 30 TAC Chapter 117. These non-
substantive revisions do not affect the emission use calculations
established for the DERC Program.
IV. What Is EPA's Evaluation of the TCEQ's Response to the DERC
Conditional Approval?
A. What is a conditional approval?
Under section 110(k)(4) of the Clean Air Act, EPA may conditionally
approve a plan based on a commitment from the State to adopt specific
enforceable measures within one year from the date of approval. The
conditional approval remains in effect until EPA takes its final
action--either a final approval or disapproval.
If EPA determines that the revised rule is approvable, EPA will
propose approval of the rule through a notice and comment rulemaking.
After responding to comments received, EPA will publish a final
approval of the rule and the conditional approval is no longer in
effect. However, if the State fails to meet its commitment within the
one year period, then EPA must proceed with a disapproval action. EPA
will propose disapproval of the rule through notice and comment
rulemaking, and will finalize the disapproval after responding to all
comments received. Note that EPA will conditionally approve a certain
rule only once. Subsequent submittals of the same rule that attempt to
correct the same specifically identified problems will not be eligible
for conditional approval.
B. What are the terms of the DERC program conditional approval?
EPA conditionally approved the DERC program on September 6, 2006.
Our conditional approval was based on a commitment letter submitted by
the TCEQ on September 8, 2005. The September 8, 2005 commitment letter
included the following provisions that the TCEQ agreed to address by
December 1, 2006. Additionally, TCEQ agreed to comply with these
commitments during the conditional approval period. Specifically, TCEQ
agreed to not approve any trades involving the types of reductions
described in item (3) below, not approve any use of discrete shutdown
credits that were generated after September 30, 2002, and to require
the waiver described in item (4) below for generators and users of
discrete emission credits.
1. Revise 30 TAC Sec. 101.373 to prohibit the future generation of
DERCs from permanent shutdowns and to allow DERCs generated and banked
from permanent shutdowns prior to September 30, 2002 to remain
available for use for no more than five years from the date of this
letter.
2. The TCEQ will perform a credit audit to remove from the
emissions bank all DERCs generated from permanent shutdowns after
September 30, 2002. Even if the shutdown itself occurred before
September 30, 2002, no DERCs can be generated from that event after
September 30, 2002.
3. Revise 30 TAC Sec. Sec. 101.302(f), 101.372(f)(7) and
101.372(f)(8) to clarify that EPA approval is required for individual
transactions involving emission reductions generated in another state
or nation, as well as those transactions from one nonattainment area to
another, or from attainment counties into nonattainment areas. The TCEQ
further understands that the EPA would require a state implementation
plan revision prior to approving a transaction between another state or
nation, as well as, those transactions between counties not located
within the same nonattainment area.
4. The TCEQ will revise Form DEC-1, Notice of Generation and
Generator Certification of Discrete Emission Credits; Form MDEC-1,
Notice of Generation and Generator Certification of Mobile Discrete
Emission Credits; and Form DEC-2, Notice of Intent to Use Discrete
Emission Credits, to include a waiver to the Federal statute of
limitations defense for generators, and users of DERCs and mobile
discrete emission reduction credits (MDERCs). Please be reminded that
there is currently no applicable state statute of limitations in the
State of Texas. In addition, the TCEQ will maintain its current policy
of preserving all records relating to DERC and MDERC generation and use
for a minimum of five years after the use strategy has ended.
5. Revise 30 TAC Sec. Sec. 101.302 and 101.372 to clarify that a
proposed quantification protocol may not be used
[[Page 15653]]
if the TCEQ Executive Director receives a letter from the EPA objecting
to the use of the protocol during the 45-day adequacy review period or
if the EPA proposes disapproval of the protocol in the Federal
Register.
6. Revise 30 TAC Sec. 101.306 to specify that Emission Reduction
Credits may be used within the highly reactive volatile organic
compounds Emissions Cap and Trade program as an annual allocation of
allowances as provided under 30 TAC Sec. 101.399.
C. Were the terms of the DERC conditional approval met?
Following is an analysis of each DERC program element of the
September 8, 2005, commitment letter and TCEQ's response. EPA is not
including the ERC program elements (see commitments 3, 5, and 6 above)
in our analysis of the DERC conditional approval. The ERC and DERC
programs operate independently of each other and have been approved as
separate, stand alone programs by EPA. The submission of these ERC
provisions will not impact the functionality of the DERC program nor
were these revisions to the ERC program necessary for the DERC program
to be considered consistent with EPA regulations, policy and guidance.
EPA has evaluated the October 24, 2006, ERC program revisions in a
separate rulemaking (see EPA-R06-OAR-2010-0147).
1. Revise 30 TAC Sec. 101.373 to prohibit the future generation of
DERCs from permanent shutdowns and to allow DERCs generated and banked
from permanent shutdowns prior to September 30, 2002, to remain
available for use for no more than five years from the date of this
letter.
TCEQ met this commitment of the conditional approval. TCEQ adopted
the appropriate provisions and submitted the revised rules as a SIP
revision within the time frame. TCEQ adopted revisions to section
101.373 that removed shutdowns as a method of generation and added the
following language under the list of prohibited generation activities
at section 101.373(a)(2): ``permanent or temporary shutdowns or
permanent curtailment of an activity at a facility''. TCEQ adopted
revisions to section 101.378(b)(1) that revise the lifetime of a DEC.
Section 101.378(b)(1) states that ``Discrete emission credits generated
from shutdown strategies prior to September 30, 2002, will be available
for use until September 8, 2010.''
Note that the DERC calculation procedures at sections
101.373(c)(1), (3), and (4) discuss how DERCs are calculated from
shutdowns. Additionally, section 101.373(d)(3)(c) discusses how to
certify the generation of DERCs from shutdown activities. EPA believes
that the inclusion of this language was an oversight on TCEQ's part
when responding to our conditional approval commitments. The DERC
program at section 101.373(a)(2)(A) clearly prohibits the generation of
DERCs from shutdowns. Therefore, EPA feels that TCEQ should remove this
language at their earliest convenience, but that the prohibition on
generation of shutdown DERCs is not impacted by this erroneous
calculation.
2. The TCEQ will perform a credit audit to remove from the
emissions bank all DERCs generated from permanent shutdowns after
September 30, 2002. Even if the shutdown itself occurred before
September 30, 2002, no DERCs can be generated from that event after
September 30, 2002.
TCEQ met this commitment of the conditional approval. TCEQ adopted
the appropriate provisions and submitted the revised rules as a SIP
revision within the time frame. TCEQ confirmed in a letter dated
February 5, 2010, that the credit audit was performed in January 2006
(this letter is available in the docket for this rulemaking).
Additionally, TCEQ adopted two revisions to the SIP that will ensure
that shutdowns after September 30, 2002, do not generate DERCs. First,
the revision to section 101.373(a)(2) prohibits the future generation
of DERCs from shutdowns (as discussed in item 1 above). Second, the
TCEQ revised section 101.378(b)(2) so that ``Discrete emission credits
certified from facility shutdowns after September 30, 2002, may not be
used.''
3. Revise 30 TAC Sec. Sec. 101.372(f)(7) and 101.372(f)(8) to
clarify that EPA approval is required for individual transactions
involving emission reductions generated in another state or nation, as
well as those transactions from one nonattainment area to another, or
from attainment counties into nonattainment areas. The TCEQ further
understands that the EPA would require a state implementation plan
revision prior to approving a transaction between another state or
nation, as well as, those transactions between counties not located
within the same nonattainment area.
TCEQ met the DERC-specific portion of this commitment. Section
101.372(f) outlines the geographic scope of the DERC rule and generally
provides that, with the exception of international reductions pursuant
to section 101.375, only reductions generated in the State of Texas can
be certified as DERCs. Section 101.372(f)(7) was unchanged by TCEQ and
continues to provide that reductions from other counties, states, or
nations can be used in any attainment or nonattainment county provided
a demonstration showing improvement in air quality has been approved by
the TCEQ ED and EPA. The use of international reductions under section
101.372(f)(7) is further modified by the restrictions at section
101.375.
Section 101.372(f)(8) was moved to new section 101.375. Section
101.375 establishes two ways that a facility could use an international
reduction. First, a facility could use reductions of a criteria
pollutant or precursor of criteria pollutant to meet requirements of
the same criteria pollutant. This option would be used if a facility
had a NOX requirement in Texas and could find NOX
reductions in Mexico or an ozone requirement in Texas and could find
VOC reductions in Mexico. Alternately, a facility could use reductions
of a criteria pollutant or its precursors to substitute for reductions
in other criteria pollutants. For example, this situation would be one
in which a source could be subject to a PM2.5 requirement and wants to
use CO reductions to satisfy the requirement. Generally, both of these
uses (the same criteria pollutant or the substitution) requires
approval by EPA and the TCEQ ED; the source must demonstrate that the
reduction is real, permanent, enforceable, quantifiable, and surplus to
any applicable Mexican, Federal, State, or local law; demonstrate that
the use of the reduction does not cause localized health impacts;
submit all supporting information for calculations and modeling; and be
located within 100km of the Texas-Mexico border.
There are additional requirements for the case where a facility
wants to substitute the international reduction of a criteria pollutant
or its precursor for the obligations of a different criteria pollutant
(the example above in which the facility used CO reductions for a PM2.5
requirement). The facility must either show that the reduction is
substituted for the reduction requirement of another criteria pollutant
and the substitution results in a greater health benefit and is of
equal or greater benefit to the overall air quality of the area; or,
the source must show that the reduction of a criteria pollutant (or
precursor) for which the area is nonattainment is substituted for
another criteria pollutant (or precursor) requirement for which an area
is nonattainment.
Even though section 101.372(f)(7) was not revised, EPA approval is
clearly required for uses of reductions from other counties, states, or
other nations.
[[Page 15654]]
Uses of international reductions under section 101.372(f)(7) are
further modified by the restrictions at section 101.375, which also
clearly require EPA approval.
4. The TCEQ will revise Form DEC-1, Notice of Generation and
Generator Certification of Discrete Emission Credits; Form MDEC-1,
Notice of Generation and Generator Certification of Mobile Discrete
Emission Credits; and Form DEC-2, Notice of Intent to Use Discrete
Emission Credits, to include a waiver to the Federal statute of
limitations defense for generators, and users of DERCs and mobile
discrete emission reduction credits (MDERCs). Please be reminded that
there is currently no applicable state statute of limitations in the
State of Texas. In addition, the TCEQ will maintain its current policy
of preserving all records relating to DERC and MDERC generation and use
for a minimum of five years after the use strategy has ended.
TCEQ met this commitment of the conditional approval. In a letter
dated February 5, 2010, the TCEQ stated that even though the commitment
included modifying Form MDEC-1, such form has never been created.
However, Form MDEC-1 will include a waiver of the Federal statute of
limitations defense if at any time in the future the TCEQ creates said
form. Also in the February 5, 2010, letter, the TCEQ stated that the
Forms DEC-1 and DEC-2 were modified in or before February 2007, but
that the exact modification date could not be determined since the TCEQ
does not keep copies of old versions of the form. Additionally, the
TCEQ modified Form DEC-3, Notice of Use of Discrete Emission Credits,
to include the same waiver of the Federal statute of limitations
defense even though modification of Form DEC-3 was not part of the
commitment. Copies of the modified DEC-1, DEC-2, and DEC-3 forms were
included with the letter. Note that the February 5, 2010, letter and
attachments is available in the FDMS docket for this action.
The TCEQ confirmed that during the time period between September
2006 and February 2007, there were no DERC generations submitted. So,
even though Form DEC-1 was not revised until February 2007, there was
not an instance where DERC generation did not have the appropriate
waiver. However, between September 2006 and February 2007, there were
18 DEC-2 forms submitted to the TCEQ without the waiver of Federal
statute of limitations defense language. But, under the DERC program,
any notification of intent to use DERCs submitted on a DEC-2 form, must
be followed by a notification of use through the submission of a DEC-3
form. All 18 DEC-2 forms were followed by submissions of the DEC-3
forms with the appropriate waiver language.
Even though the DEC-1 and DEC-2 forms were not modified by the
December 2006 deadline specified in the commitment letter, EPA finds
that the intent of this commitment has been satisfied. The intent of
this commitment was to ensure that all DERC generation and use
activities were covered by a waiver of the Federal statute of
limitations defense. Since no DERCs were generated during this time,
there was no need for a DEC-1 form. The 18 DEC-2 forms provide
notification that a source intends to use DERCs, the verification that
the use occurred is through the submission of a DEC-3 form. TCEQ
verified that all 18 DEC-2 forms were followed by the submission of a
modified DEC-3 form--thereby covering all DERC usage activities with
the waiver of the Federal statute of limitations defense.
5. Revise 30 TAC Sec. 101.372 to clarify that a proposed
quantification protocol may not be used if the TCEQ Executive Director
receives a letter from the EPA objecting to the use of the protocol
during the 45-day adequacy review period or if the EPA proposes
disapproval of the protocol in the Federal Register.
TCEQ met this commitment of the conditional approval. TCEQ adopted
the appropriate provisions and submitted the revised rule as a SIP
revision within the time frame. TCEQ revised section 101.372(d)(vi) to
state that ``quantification protocols shall not be accepted for use
with this division if the executive director receives a letter
objecting to the use of the protocol from the EPA during the 45-day
adequacy review or the EPA proposes disapproval of the protocol in the
Federal Register.''
V. Final Action
EPA is proposing to approve severable revisions to the Texas SIP
submitted on October 24, 2006, and August 16, 2007. Specifically from
the October 24, 2006 submittal, EPA is approving the amendments to
section 101.372(a) and (f) that move the international emission
reduction requirements to a new section, the amendments to section
101.372(d)(1)(C)(vi) that clarify EPA's role in approving emission
quantification protocols, the amendments to section 101.373 to prohibit
the generation of DERCs from shutdowns, the amendment to section
101.376(c)(4) that updates the cross-references to Chapter 106
provisions, the amendments to section 101.378(b) to limit the lifetime
of previously generated shutdown DERCs, and non-substantive revisions
to sections 101.372(d) and 101.372(j). EPA is also proposing to approve
provisions for international emission reductions at new section 101.375
submitted on October 24, 2006. The October 24, 2006, DERC Program
revisions satisfy the elements of the September 8, 2005, commitment
letter; as such, EPA is proposing the DERC program for full approval.
Additionally, we are proposing to approve the following nonsubstantive
revisions to the Texas SIP submitted on August 16, 2007: revisions to
sections 101.372(d)(1)(A) and 101.376(d)(2)(A) to update the cross-
references to recently recodified provisions in 30 TAC Chapter 117 and
revisions to section 101.372(d)(1)(B) to update the cross-referenced
title to provisions in Chapter 115.
In a separate rulemaking, EPA is proposing action on the severable
ERC Program revisions at 30 TAC sections 101.302, 101.305, and 101.306
submitted on October 24, 2006, and 30 TAC sections 101.302 and 101.306
submitted on August 16, 2007 (see EPA-R06-OAR-2010-0417).
At this time, EPA is not taking action on the revisions to the
Emissions Banking and Trading of Allowances Program at 30 TAC sections
101.338 and 101.339 submitted on October 24, 2006. EPA is also not
taking action at this time on the revisions to the general air quality
definitions at 30 TAC Section 101.1 or the revisions to the System Cap
Trading Program at 30 TAC sections 101.383, and 101.385 submitted on
August 16, 2007. These severable revisions remain under review by EPA
and will be addressed in separate actions.
VI. Statutory and Executive Order Reviews
Under the Clean Air Act, 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 Clean Air Act.
Accordingly, this 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 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);
[[Page 15655]]
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 Clean Air Act; 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, 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, Air pollution control, Intergovernmental
relations, Nitrogen oxides, Ozone, Reporting and recordkeeping
requirements, Volatile organic compounds.
Authority: 42 U.S.C. 7401 et seq.
Dated: March 18, 2010.
Lawrence E. Starfield,
Acting Regional Administrator, Region 6.
[FR Doc. 2010-6801 Filed 3-29-10; 8:45 am]
BILLING CODE 6560-50-P
