1 8-Hour Ozone NAAQS Implementation (This presentation is based on the version of the proposed rule that has been signed by the Administrator. This has not been reviewed by EPA management.) John Silvasi USEPA OAQPS draft June 13, 2003

2 Counties violating the 8-hr ozone NAAQS Data

3 CHRONOLOGY 7/18/97 – Final NAAQS for O3 & PM published Nov 1998 – Draft Planning Guidance—provided for implementation under less prescriptive subpart 1 (CAA) (OMB reviewed/commented on draft) May 1999 – US Court of Appeals in DC ruled against NAAQS and implementation approach Feb – US Supreme Court –Upheld NAAQS –Ruled against EPA implementation approach –Ruled EPA can’t ignore CAA subpart 2 provisions (more prescriptive than subpart 1)

4 CHRONOLOGY March 2002 –US Court of Appeals in DC upheld NAAQS Since Supreme Court ruling, EPA– –Developed numerous internal options for how to implement 8-hr O3 NAAQS to meet Supreme Court ruling and still provide some flexibility as we originally desired. –Held 3 public meetings on major issues with selected best options at the time –Developed draft proposed rulemaking Next step: propose rule early 2003.

5 Timelines for 8-Hour Ozone and PM2.5 Implementation Programs ActionOzonePM2.5 EPA proposes implementation rule June 2003Fall 2003 States/Tribes recommend designations July 2003Feb EPA finalizes implementation ruleDec. 2003Fall 2004 EPA finalizes designationsApril 2004*Dec State/Tribal plans dueApril 2007Dec Attainment dates  Activity timelines merging in the future … *Early action compact areas would receive deferred effective date

6 PRINCIPLES FOR DEVELOPING PROPOSED APPROACH Incentives for expeditious attainment of 8-hour standard Reasonable attainment deadlines Basic, straightforward structure–communicated easily Consistent with CAA and Supreme Court decision Provide flexibility to states Emphasize national and regional measures; reduce the need for more expensive local controls Smooth transition from 1-hr O3 NAAQS to 8-hr O3 NAAQS

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8 Topics for the rule include…. Area classification approaches …what subpart to use Attainment dates Transition from 1-hr to 8-hr NAAQS Anti-backsliding Flexibility vs mandatory controls Ozone transport issues Modeling & attainment demonstrations Reasonable further progress requirements Reasonably available control measures/technology Conformity New Source Review Optimizing for O3 and PM Tribal issues

9 RECONCILING SUBPARTS 1 AND 2; CLASSIFICATION AND ATTAINMENT DATES Option 1–Classify 8-hr nonattainment areas based on 8-hr ozone (O 3 ) design values –Uses 8-hr design values–more accurately reflects the magnitude of the 8-hour ozone problem –All 8-hr nonattainment areas would be classified under subpart 2. In general, areas classified under subpart 2 would need to meet subpart 2 requirements for their classification level and would have attainment dates in subpart 2 –Requires a regulatory change of subpart 2's classification table to reflect 8-hr rather than 1-hour design value thresholds. –Thresholds for each classification (e.g., moderate, serious, etc.) would be the same percentage above the 8-hour standard as the current statutory thresholds are above the 1-hour standard.

10 **For 8-hr ozone standard, EPA proposing to interpret the maximum period for attainment starting from date of designation.

11 RECONCILING SUBPARTS 1 AND 2; CLASSIFICATION AND ATTAINMENT DATE—cont’d Option 2 – 2-step approach (EPA’s preferred option) –Step 1: Separate areas into two groups based on whether their 1-hour design value would require them to be placed in subpart 2. –Group 1 < ppm –Group 2 $ ppm –Step 2: Classify areas. Group 1 areas (generally, those meeting the 1-hour standard), would be regulated under subpart 1. For these areas, EPA could develop a classification scheme (see issue below). Group 2 areas would receive subpart 2 classifications according to their 8-hr ozone design value. –Would result in over half of the hypothetical nonattainment areas being covered by subpart 1 (with less specific SIP requirements). –Attainment dates for subpart 1 areas—AEAP but no later than 5 yrs from designation; can obtain add’l 5 year extension

12 RECONCILING SUBPARTS 1 AND 2; CLASSIFICATION AND ATTAINMENT DATE—cont’d Proposed Incentive Feature–applicable to either classification option. –Allows an area to qualify for a lower classification by demonstrating it will meet the attainment date of the lower classification (through national or local measures) –Could be done via EPA regional/national modeling or a State’s demonstration using EPA-approved modeling (but taking comment on whether regional-scale modeling is appropriate for this purpose) –Would solicit comment on whether the demonstration would have to be done prior to initial classification or whether it could be submitted afterward, in which case EPA would reclassify the area.

13 These hypothetical nonattainment areas do not reflect–nor are they intended to prejudge–8-hour ozone non-attainment areas. The names and boundaries for the 8-hour non- attainment areas have not yet been determined. These hypothetical areas were developed to help compare the possible results of various classification options under consideration in implementing the 8-hour standard. The hypothetical areas are the larger of C/MSAs or 1-hour nonattainment areas except for the Los Angeles CMSA, which is divided into three 1-hour nonattainment areas. Violating counties adjacent to a nonattaining C/MSA were included in that hypothetical area. If a violating county is adjacent to a C/MSA without a monitored violation, the C/MSA and the violating county were combined into the hypothetical nonattainment area. Air quality data is based on the period , except in cases of incomplete recent data. The design value for the area is based on the monitor with the highest design value in the area. A hypothetical nonattainment area may contain several 1-hour nonattainment/maintenance areas.

14 RECONCILING SUBPARTS 1 AND 2; CLASSIFICATION AND ATTAINMENT DATE—cont’d Classification of Subpart 1 areas –Preferred Option–No classification program. –Would consider an overwhelming transport classification on a case-by- case basis Would allow more time to fully attain due to transport.

15 1-Year Attainment Date Extensions Both subpart 1 and subpart 2 provide for two 1- year attainment date extensions for areas in limited circumstances where they do not attain by their attainment date. Section 172(a)(2)(C) under subpart 1—area must have complied with all requirements in SIP, and no more than a minimal number of exceedances of the relevant NAAQS Section 181(a)(5) under subpart 2–similar provision, but provides for only one exceedance of the standard in the year preceding the extension year.

16 1-Year Attainment Date Extensions 8-hour standard is a concentration standard, not an exceedance form, so EPA needs to interpret provision. EPA would apply the subpart 1 test, i.e., whether there was a minimal number of exceedances. For both subparts, EPA proposes that the area would be eligible for the first of the 1-year extensions under the 8- hour standard if, for the attainment year, the area’s 4th highest daily 8-hour average is ppm or less. An area that has received the first of the 1-year extensions under the 8-hour standard would be eligible for the second extension if the area’s 4th highest daily 8-hour value, averaged over both the original attainment year and the first extension year, is ppm or less.

17 Transition/Anti-Backsliding–Areas Designated Nonattainment under the 8- hour Standard–Background Section 110(l) – EPA may not approve a SIP revision if it interferes with any applicable requirement concerning attainment and reasonable further progress or any other requirement of the CAA Section 193 – prohibits modification of control requirements in an implementation plan in effect before 11/15/90 unless such a modification would ensure equivalent or greater emissions reductions.

18 Transition/Anti-Backsliding–Areas Designated Nonattainment under the 8- hour Standard—Background (cont’d) In addition, 1991 designations for pre- CAAA nonattainment areas and classifications for all 1-hour ozone nonattainment areas were “by operation of law,” so the requirements that apply (by virtue of that) would continue to apply (e.g., for an area whose 1-hr classification is higher than its 8-hr classification).

19 Transition/Anti-Backsliding–Areas Designated Nonattainment under the 8- hour Standard—Background (cont’d) Section 172(e) applies when EPA revises a NAAQS and makes it less stringent. Specifies that States cannot relax or avoid control obligations that apply in nonattainment area SIPs. Because Congress specifically mandated that such control measures need to be adopted or retained even when EPA relaxes a standard, EPA believes that Congress did not intend to permit States to remove control measures when EPA revises a standard to make it more stringent.

20 Transition from 1-hour to 8-hour Standard–Ensuring Continued Momentum in States’ Efforts Toward Cleaner Air Discusses which obligations would remain in effect for areas designated nonattainment under the 1-hour ozone NAAQS. Proposes two alternatives for revoking the 1-hour ozone standard: revocation in whole and revocation in part.

21 Transition/Anti-Backsliding–Areas Designated Nonattainment under the 8- hour Standard–Proposal All areas designated 8-hr nonattainment remain subject to certain obligations that applied by virtue of the area’s classification for the 1-hour standard (e.g., where the area’s 1- hour classification was higher than classification for the 8-hour standard) Subpart 2 obligations include major source thresholds, inspection/maintenance programs and fuel programs. NOx SIP call requirements would also be retained under EPA proposal. Obligations would not apply to portions of an 8-hour ozone nonattainment area that was not a part of a 1-hour ozone nonattainment area. EPA is soliciting comment on: Should areas that have not met a 1-hour planning obligation (e.g., attainment demonstration or ROP plan) remain subject to that obligation? (e.g., due to past failure or a recent bump-up)

22 Transition/Anti-Backsliding–Areas Designated Attainment under the 8- hour Standard–Proposal Would not remain subject to the nonattainment NSR offset and major source thresholds that applied due to their classification for the 1 hour standard. Control obligations that applied by virtue of the area’s 1- hour classification would remain. Obligated to submit a maintenance plan under section 110(a)(1). Not required to meet outstanding attainment demonstration and ROP requirements, if they remain in attainment. If area violates 8-hour standard and does not have an approved maintenance plan for the 8-hour standard under section 110(a)(1), those obligations will once again apply.

23 Transition/Anti-Backsliding–Areas Designated Attainment under the 8- hour Standard–Proposal (cont’d) Need contingency measures in their section 110(a)(1) maintenance plans but not under section 175A – these contingency measures need not include an obligation to implement all control obligations in the previously approved SIP. All areas designated attainment for the 8-hour ozone NAAQS–requirement to demonstrate conformity to the 1-hour standard would no longer apply once the 1-hour standard is revoked or determined not to apply for that purpose.

24 Transition/Anti-Backsliding – Concerning the NO x SIP Call – Proposal States must continue to adhere to the emission budgets established by the NO x SIP Call after the 1-hour standard is revoked in whole or in part. EPA not proposing to revoke or modify its section 126 regulation.

25 Transition/Anti-Backsliding–Obligations under Part D of Title I of the CAA that Cease after Revocation of 1-hour Standard– Proposal Areas would not be obligated to continue to demonstrate conformity for the 1-hour standard once the 1-year grace period for application of conformity for the 8-hour standard has elapsed. EPA would no longer make findings of failure to attain the 1-hour standard and, therefore, also would not reclassify areas to a higher classification for the 1-hour standard based on a failure to meet the 1- hour standard.

26 Transition/Anti-Backsliding–Duration of Obligations under the 1-hour Standard–Proposal These measures would not expire. Two options for when the State may relegate these measures to contingency measures: –Option 1. When the area achieves the level of the 1-hour ozone standard (even if the area has not yet attained the 8-hour standard). –Option 2. When the area attains the 8-hour standard and is designated attainment (regardless of when, if ever, the area attains the 1-hour standard).

27 Transition/Anti-Backsliding–Mechanism to Effect the Transition from the 1-hour to the 8- hour Standard–Background 40 CFR 50.9(b) currently (but being stayed due to litigation)–1-hour standard revoked after All litigation on the 8-hour ozone standard is completed and EPA determines that an area has air quality meeting the 1- hour standard. EPA reconsidering this approach. Transportation conformity and ensuring continued implementation of the 1-hour program are the most significant issues regarding the timeframe for phasing out the 1-hour ozone standard.

28 Transition/Anti-Backsliding– Mechanism to Effect the Transition from the 1-hour to the 8-hour Standard Proposing 2 mechanisms For both mechanisms, EPA is proposing that the revocation of the 1-hour standard would occur 1 year following designations for the 8-hour NAAQS. –Option 1: Complete revocation of the 1-hour standard. –Option 2: Partial revocation of 1-hour standard. Both mechanisms are designed to accomplish the same policy ends (ensure continued applicability of subpart 2 requirements and ensure continued air quality improvement, while shifting focus toward implementation of the 8- hour standard).

29 Transition/Anti-Backsliding–Mechanism to Effect the Transition from the 1-hour to the 8-hour Standard Option 1: Complete revocation of the 1-hour standard (our preferred option) –EPA would revoke the 1-hour standard and the associated designations and classifications 1 year following the effective date of the designations for the 8-hour NAAQS. –Anti-backsliding provisions would still apply.

30 Transition/Anti-Backsliding–Mechanism to Effect the Transition from the 1-hour to the 8- hour Standard Option 2: Partial revocation of 1-hour standard. –EPA would retain the 1-hour standard and its associated designations and classifications for limited purposes (those discussed above under anti-backsliding) until the area meets the 1-hour standard. Obligations include subpart 2 requirements, including major source thresholds, inspection/maintenance programs and fuel programs, plus NOx SIP call requirements. –For all remaining purposes, EPA would revoke the 1- hour standard and the associated designations and classifications 1 year after the effective date of designations for the 8-hour standard.

31 FLEXIBILITY FOR PRESCRIBED REQUIREMENTS OF SUBPART 2 EPA may have some limited ability to change or limit subpart 2 controls, consistent with the statutory language, but EPA cannot broadly waive those requirements. Also, case law may provide EPA with some flexibility to waive federally applicable requirements on a case-by- case basis where application of these requirements would produce an “absurd result.”

32 FLEXIBILITY FOR PRESCRIBED REQUIREMENTS OF SUBPART 2—cont’d We would propose that subpart 2 requirements would apply to all areas covered under subpart 2 consistent with the area’s classification. We also propose to consider allowing case-by-case waivers of specific subpart 2 requirements when sufficient evidence is presented that absurd results would occur if an area were subject to a specific subpart 2 requirement

33 Ozone Transport We intend to investigate the extent, severity and sources of interstate ozone transport that will exist after the NOx SIP Call and the Section 126 rule are implemented in The Agency believes that any additional requirements for reducing the transport of ozone or ozone precursors should be considered along with the need to reduce interstate pollution transport that contributes to unhealthy levels of PM2.5 in downwind areas. Under this approach, any additional reduction in ozone transport would be accomplished through legislation such as Clear Skies or through a separate rulemaking, not through the 8-hour ozone implementation rule.

34 Modeling & Attainment Demonstration An attainment demonstration SIP consists of –Technical analyses to locate and identify sources of emissions that are causing violations within nonattainment areas, –Adopted measures with schedules for implementation, –Commitment in some cases, to perform a mid- course review, and –Contingency measures to cover emissions shortfalls in RFP plans and failures to attain.

35 Modeling & Attainment Demonstration Multi-pollutant assessments (one-atmosphere modeling) –Many factors affecting formation and transport of secondary fine particles (i.e., PM2.5 components) are the same as those affecting formation and transport of ozone. –EPA taking comment on whether or not ozone attainment demonstrations should include multi-pollutant assessments.

36 Modeling & Attainment Demonstration Areas with early attainment dates –Section 182(a) does not require (marginal) areas with early attainment dates (within 3 years after designation) to perform photochemical grid modeling, –EPA is proposing to allow such areas to rely on existing modeling

37 Modeling & Attainment Demonstration Areas with later attainment dates –Areas with attainment dates more than 3 years after designation would be required to do an attainment demonstration SIP. –Local, regional and national modeling developed to support Federal or local controls may be used provided the modeling is consistent with EPA’s modeling guidance.

38 REASONABLE FURTHER PROGRESS RFP is the CAA requirement to phase in emission reductions from the time of SIP development to the attainment date. Subpart 1 contains a more general requirement “... annual incremental reductions in emissions... for the purpose of ensuring attainment... by the applicable date.” Subpart 2, provides much more specificity regarding the base year emission inventory upon which reasonable further progress was to be planned for and implemented, the increments of emission reductions required over which time periods, and the process for determining whether the RFP milestones were achieved.

39 REASONABLE FURTHER PROGRESS (cont’d) FR will cover several issues; –Requirement for 15% VOC reductions in first 6 years –Baseline year for starting (2002) –Moderate areas—timing of ROP reductions relative to attainment date –Timing of submission of ROP plan –CAA requirements for creditability of control measures –Subpart 1 RFP –Cases where 8-hr NA area encompasses & is larger than current 1-hr NA area

40 REASONABLE FURTHER PROGRESS Issue 1 RFP issue 1–for subpart 2 areas, should VOC emission reductions alone be required for the initial 15 percent progress period? –Option 1. Continue to require 15 percent VOC reductions within 6 years of base year from all moderate and above 8-hour ozone nonattainment areas. After 6 years, all areas classified serious or above would be required to achieve a 9 percent reduction every 3 years via combined VOC/NOx emissions, i.e., an avg. of 3 percent per year. –Option 2. (Preferred approach) Exempt areas that have approved 15 percent plans under the 1-hour ozone standard from an additional 15 percent VOC-only requirement. Moderate areas are held to RFP under subpart 1 (see 2 options below). (Serious and above areas would need to do 3% per year NOx/VOC ROP from 2002)

41 REASONABLE FURTHER PROGRESS Issue 1 Option 1 (cont’d) Moderate areas only: –1 st 6 years: 2002 (base year) to 2008—15% VOC reduction (period would run from the last day of the base year (12/31/02)) –“Subpart 1” RFP from 2008 to 2010 attainment date Serious & above areas: from 2008 to attainment: –15% ROP SIP: 1 st 6 years: 2002 (base year) to 2008— 15% VOC reduction (period would run from the last day of the base year (12/31/02))—due 2 years after designation –9% VOC and/or NOx reductions every three years. Plans for post-15% ROP due 3 years after designation.

42 REASONABLE FURTHER PROGRESS Issue 2 Baseline year –Proposing 2002 –2002 emission inventory would be available at the time of designation (2004). –EPA issued recent memorandum on this.

43 REASONABLE FURTHER PROGRESS Issue 3 Timing of ROP reductions relative to attainment date –For areas moderate and higher, the 15 percent reduction would run from the last day of the base year (12/31/02) through (Some moderate areas may need to do RFP under subpart 1) –Moderate areas would be required to meet attainment around April 2010 (i.e., 6 years after the area is designated nonattainment). –This leaves a gap between the end of the 6- year period for the ROP requirement and the attainment date. Subpart 1 RFP (see issue below) would apply from end of 2008 to 2010 attainment date.

44 REASONABLE FURTHER PROGRESS Issue 3 Serious & above areas from end of 2008 to attainment date –Need to provide 9% VOC and/or NOx emission reduction over each subsequent 3-year period beyond 2008 through the attainment year (e.g, 2013 for a serious area).

45 REASONABLE FURTHER PROGRESS Issue 4 Timing of the submission of the RFP plan –Subpart 2 required 15% VOC plan in 1993 (~2 years after designations under CAAA of 1990) –Post 1996 plans were due in –To ensure timely reductions & consistency with CAA, EPA is proposing that 15% VOC or first 6 year 18% NOx/VOC ROP plans be submitted 2 years after nonattainment designation (i.e., in 2006). –Plans for Subpart 2 “after 6 year” NOx/VOC ROP or Subpart 1 RFP would be due 3 years after designation (i.e., in 2007)

46 REASONABLE FURTHER PROGRESS Issue 5 Creditable measures –CAA imposes limits on creditability toward ROP—basically no measures that should have been adopted prior to 1990 CAAA are creditable, nor are federal measures in existence prior to 1990 CAAA creditable. –Same principle still applies—federal measures put in place after 1990 CAAA are creditable (e.g., Tier 2 federal tailpipe standards) for emission reductions that occur after baseline year

47 REASONABLE FURTHER PROGRESS Issue 6 Issue 6: RFP for subpart 1 areas 3 cases depending on attainment date: –Attain date <= 3 years after designation –Attain date > 3 and <= 6 years after desig. –Attain date > 6 years after desig.

48 REASONABLE FURTHER PROGRESS Issue 6 (Subpart 1 areas) Case 1: Attain date <= 3 years after designation (similar to marginal areas under subpart 2) –Area requires no separate RFP requirement

49 REASONABLE FURTHER PROGRESS Issue 6 (Subpart 1 areas) Case 2: Areas with attain date > 3 and <= 6 years after designation (similar to moderate areas under subpart 2) 2 Options: –Option 1: SIP would have to provide all reductions needed for attainment by attainment date. submitted with attainment demo—3 years after designation –Option 2: Similar requirement as for moderate areas (a specific % reduction from baseline within 6 years after base year), but NO x could be substituted for VOC Submitted 2 years after designation Proposing 15% but would entertain comment on other percentages. Remainder of measures providing for reductions needed for attainment would be submitted with attainment demonstration 3 years after designation.

50 REASONABLE FURTHER PROGRESS Issue 6 (Subpart 1 areas) Case 3: Areas with attain date > 6 years after designation (similar to serious and above areas under subpart 2) (attain date <= 10 years after designation under subpart 1) –Generally, show RFP for certain increments from the baseline emission inventory year out to the attainment date. –Amount of the progress requirement/emissions reductions for each 3-year period would be proportionate to the time between the base year and the attainment date. –However, the first increment of reduction would have to be 6 years after the base year and be submitted 2 years after designation and be a specified percent of the base year inventory (proposing 15% but will take comment on other percentages) –Plan for remaining increments would have to be submitted with attainment demo (3 years after designation).

51 REASONABLE FURTHER PROGRESS Issue 7 Issue 7: 8-hr O3 NA areas that encompass and are larger than 1-hr O3 NA areas –Develop a new baseline for the 8-hour standard nonattainment area (the old 1-hour standard nonattainment area and the newly added portion of the 8-hour standard nonattainment area) and new RFP emission reduction targets for the entire 8-hour standard nonattainment area. –Anti-backsliding would still keep measures & timing same in old 1-hr area –After 1-hr std is revoked (in full or for purposes of ROP), old milestone targets would not have to be achieved, only new targets under 8-hr std.

52 Reasonably Available Control Technology (RACT) Subpart 2 areas: current requirements as under 1-hr standard Subpart 1 areas—Option 1 –Areas similar to marginal areas: same as for marginal areas under subpart 2 –Areas similar to moderate & higher areas: same as for moderate and above areas. Subpart 1 areas—Option 2 –RACT is what is needed for attainment (’98 approach) Ozone Transport Regions: all areas (nonattainment & attainment) required to apply RACT

53 Reasonably Available Control Technology (RACT) (cont’d) Previous source-specific RACT determinations– –If originally resulted in no control, RACT determination would have to be revisited. NOx as an O3 precursor– –Required for subpart 1 areas RACT submission–due 2 years after nonattainment designation

54 Reasonably Available Control Technology (RACT) (cont’d) Proposed approach for NO x RACT determinations in areas affected by the NO x SIP Call. –Where a nonattainment area is located in a State with an EPA-approved cap- and-trade program, EPA proposes that sources subject to the cap-and-trade program already meet the NO x RACT requirements.

55 Proposed approach for NO x RACT determinations in areas affected by the NO x SIP Call (cont’d) –In cases where States have adopted controls consistent with the NO x SIP Call for cement kilns (i.e., 30 percent reduction), the State may choose to accept the NO x SIP Call requirements as meeting the NO x RACT requirements for the 8-hour standard

56 Proposed approach for NO x RACT determinations in areas affected by the NO x SIP Call (cont’d) –Also, through the NO x SIP Call or other programs (e.g., new source review) States may have adopted control measures for specific NO x sources that equal or exceed RACT requirements. –For these sources, States may choose to submit, as part of its NO x RACT SIP revision, documentation that the previously adopted control measure meets the RACT requirement, where applicable.

57 Proposed approach for NO x RACT determinations in areas affected by the NO x SIP Call (cont’d) –Finally, in developing the NO x SIP Call, States may have considered control measures for sources not in the cap-and-trade program–or may consider additional sources in responding to the second phase of the NO x SIP Call. –States can submit a demonstration as part of their RACT submittal showing that the weighted average emission rate from sources in the nonattainment area subject to RACT– including sources reducing emissions to meet the NO x SIP Call requirements–meet RACT requirements.

58 NOx Waiver Provision EPA proposes to apply the NOx requirements and waiver provisions in section 182(f) for 8-hour ozone nonattainment areas under subpart 2 and OTRs EPA also proposes to apply NOx requirements and waiver provisions for areas under subpart 1.

59 Transportation Conformity Conformity does not apply for the 1- hour standard once it is revoked: –Rationale: conformity only applies in nonattainment and maintenance areas; once the standard is revoked, areas are no longer nonattainment for the 1-hour standard.

60 Transportation Conformity (cont’d) Does conformity apply for the 1-hour standard in 1-hour std. maintenance areas (after revocation of 1-hr std)? – EPA proposing that conformity would not apply for 1-hour standard maintenance areas.

61 Transportation Conformity (cont’d) How do the revocation options affect conformity implementation? –All 8-hr areas receive one-year grace period from time of designations before conformity applies for new standard –Under the first transition option: Revoke 1- hour standard one year after the effective date of designations for the 8-hour standard (at end of conformity grace period). Therefore, conformity requirements for the 1-hour standard end at the time conformity applies for the 8-hour standard; avoids conformity applying for two standards at once.

62 Transportation Conformity (cont’d) How do the revocation options affect conformity implementation? (cont’d) –Under the second transition option: Revoke 1- hour standard for limited purposes (including conformity) one year after the effective date of designations for the 8-hour standard (at end of conformity grace period). Same effect as first transition option: conformity requirements for the 1-hour standard end at the time conformity applies for the 8-hour standard; avoids conformity applying for two standards at once.

63 Transportation Conformity (cont’d) EPA is not proposing changes to the transportation conformity rule in this proposed rulemaking. EPA plans to conduct future rulemaking to establish specific conformity tests under the 8-hour standard. EPA intends to complete that rulemaking prior to area designations under the 8- hour standard and will provide the public with the opportunity to comment on the proposed changes.

64 General Conformity In a separate action, EPA is currently reviewing and plans to revise the General Conformity Regulations. No part of the rule is anticipated to be specific to the 8-hour ozone NAAQS.

65 New Source Review 3 options being proposed: –Status quo NSR (subpart 1 areas get subpart 1 NSR; subpart 2 areas get subpart 2 NSR) –A more flexible “Transitional” NSR program for areas that submit early SIPs and that attain early (subpart 1 areas)—covered under 40 CFR 51, Appendix S –A Clean Air Development Community program that would allow a more flexible NSR program

66 New Source Review Transitional NSR Eligibility–area must– –Be attaining the 1-hour ozone standard; –Be designated under subpart 1, not subpart 2, of part D; –Have submitted an attainment plan that includes control measures under the NO x SIP Call where applicable; and –Have submitted an attainment plan containing any additional local control measures needed for attainment of the 8-hour standard. –(cont’d)

67 New Source Review Transitional NSR (cont’d) Eligibility (cont’d) –States will have to submit an attainment plan by the date of designation under the 8-hour NAAQS in –These plans must commit the State to implement by December 31, 2005, all measures necessary to bring the nonattainment area into attainment –Meet a 2007 attainment date

68 New Source Review Transitional NSR (cont’d) Eligible areas covered under Appendix S (40 CFR 51) Features: –Major source applicability threshold—100 TPY. –Control: BACT instead of LAER –Case by case offsets not required, but State must show source does not contribute to the existing violation (e.g., through having control strategy address the growth) –Statewide compliance requirement –Comment solicited on need for backstop provision

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70 New Source Review–Clean Air Development Communities Option CADC–uses development patterns characterized by compact building design, mixing of land uses, and transportation choices, which can reduce vehicle travel and air pollutant emissions from vehicles A new source that moves into an already developed area will be able to use existing infrastructure without new infrastructure construction (roads, sewer lines, etc.) which increases air emissions and other environmental impacts. It will result in reduced VMT, and will not open up new areas to development and sprawl.

71 New Source Review–Clean Air Development Communities Option (cont’d) Section 173(a)(1)(B) replaces the traditional requirement that a new or modified stationary source in a nonattainment area obtain offsets with a growth allowance concept in specially designated zones to which “economic development should be targeted.”

72 New Source Review–Clean Air Development Communities Option (cont’d) Two options are proposed to recognize the air quality benefits which can accrue when areas site new sources and plan development in a manner that results in overall reduced emissions. The EPA would define a community that changes its development patterns in such a way that air emissions within the non- attainment area are demonstrably reduced as a "Clean Air Development Community" (CADC).

73 New Source Review–Clean Air Development Communities Option (cont’d) Areas that qualify as CADCs would obtain certain flexibilities in implementing Clean Air Act programs. Comment is requested on the options listed here and on other possible ways under the Clean Air Act for encouraging development that will result in lower emissions.

74 New Source Review–Clean Air Development Communities Option (cont’d) Option 1: A CADC would have a more flexible NSR program by 1) being subject to subpart 1 NSR as opposed to subpart 2 NSR; 2) lowering NSR major source thresholds for these areas to make them similar to the thresholds for PSD areas; and 3) allowing areas that meet certain development criteria (development zones) to receive NSR offsets from State offset pools. Option 2: A CADC would be able to receive a pool of NSR offset credits equal to the reduced emissions from new development patterns. Credits from the pool could be provided to any new or modified source in a "development zone" as offsets.

75 Tribal Considerations Unlike States, Tribes are not required to develop implementation plans. Specifically, the TAR, adopted in 1998, provides for the Tribes to be treated in the same manner as a State in implementing sections of the CAA. If a Tribe elects to do a TIP, EPA will work with the Tribe to develop an appropriate schedule which meets the needs of each Tribe, and which does not interfere with the attainment of the NAAQS in other jurisdictions.

76 Tribal Considerations (cont’d) TAR indicates that EPA is ultimately responsible for implementing CAA programs in Indian country, as necessary and appropriate, if Tribes choose not to. The TAR also provides flexibility for the Tribe in the preparation of a TIP to address the NAAQS. If a Tribe elects to develop a TIP, the TAR offers flexibility to Tribes to identify and implement – on a Tribe-by-Tribe, case- by-case basis – only those CAA programs or program elements needed to address their specific air quality problems.

77 Ensuring an Optimal Mix of Controls for Ozone, PM 2.5, and Regional Haze? Ozone precursors also affect PM 2.5 & regional haze Current draft modeling/attainment demo guidance encourages States to integrate ozone control strategies with strategies designed later to attain the NAAQS for PM 2.5 and to meet reasonable progress goals for regional haze

78 WEB SITE ozone/o3imp8hr/

79 “Applicable Requirements” under subpart 2 These are the mandatory requirements based on an area’s classification A summary of them appears in the following table

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83 RFP/ROP SYNOPSIS Subpart 2 Areas Option 1–continue to require 15% even if they already have 1-hr 15% plan 1st submission date2 years after designation Requirementdevelop new 15% VOC plan ; 2nd submission date3 years after designation Requirement–moderate areassubpart 1 RFP from 2008 to attainment date (i.e., all additional reductions implemented by attainment date) Requirement–serious & above areas additional 3%/year NOx/VOC reductions for each 3 year period after 2008 out to attainment date

84 RFP/ROP SYNOPSIS Subpart 2 Areas (cont’d) Option 2–areas with approved 15% plans for 1-hr NAAQS (Preferred approach) Case 1: Moderate areas submission datesame as for subpart 1 RFP (see 2 options below) Requirementdevelop subpart 1 RFP plan (see 2 options below)

85 RFP/ROP SYNOPSIS Subpart 2 Areas (cont’d) Option 2–areas with approved 15% plans for 1-hr NAAQS Case 2: Serious & above areas 1st submission date2 years after designation Requirementfirst 6 years after baseline–show 18 % NOx and/or VOC reductions ( ) 2nd submission date3 years after designation Requirementadditional 3%/year NOx/VOC reductions for each 3 year period after 2008 out to attainment date

86 RFP/ROP SYNOPSIS Subpart 1 Areas Case 1: Areas with attainment dates 3 years or less after designation Treatment similar to RFP for areas under subpart 2 classified as marginal (no separate RFP/ROP requirement–would have to attain by attainment date) Case 2: Areas with attainment dates between 3 to 6 years after designation–2 Options (* We don’t state a preference for either option) Option 1: Submission date3 years after designation RequirementSIP must show all emission reductions would be implemented by its attainment date

87 RFP/ROP SYNOPSIS Subpart 1 Areas (cont’d) Case 2 (cont’d): Areas with attainment dates between 3 to 6 years after designation Option 2: 1st Submission date2 years after designation RequirementSIP must show 15%* VOC and/or NOx reductions over first 6 years after baseline ( ) 2nd Submission date3 years after designation (with attainment demonstration) RequirementAdditional measures that would provide the remaining portion of the emissions reductions needed for attainment by the attainment date.

88 RFP/ROP SYNOPSIS Subpart 1 Areas (cont’d) Case 3: Areas with attainment dates beyond 6 years after designation (treatment similar to serious) 1st Submission date2 years after designation RequirementSIP must show 15%* VOC and/or NOx reductions over first 6 years after baseline ( ) 2nd Submission date3 years after designation (with attainment demonstration) RequirementFor each 3 year period after 2008, an additional increment of progress (NOx/VOC) proportional to time between the end of the first increment (in 2008) to the attainment date.