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PO Box 1070, Frankfort, KY 40602  Phone 502.875.2428, Fax 502.875.2845

KRC Comments On Proposal To End Northern Kentucky Vehicle Emissions Testing  Posted: August 13, 2004

Kentucky Resources Council, Inc.

Post Office Box 1070

Frankfort, Kentucky 40602

(502) 875-2428 phone (502) 875-2845 fax

e-mail: fitzKRC@aol.com

www.kyrc.org

August 12, 2004

John Lyons, Director By Email and mail

Division for Air Quality

803 Schenkel Lane

Frankfort, Kentucky 40601

Ms. Kay Prince, Air Programs Branch By Email and mail

U.S. Environmental Protection Agency

Sam Nunn Atlanta Federal Center

61 Forsyth Street SW

Atlanta GA 30365

Re: Proposed Amendment To 1-Hour Ozone SIP

For Northern Kentucky Counties

Dear Mr. Lyons and Ms. Prince:

These comments are submitted on behalf of the Board and membership of the Kentucky Resources Council, Inc., concerning the request by the Commonwealth of Kentucky, Division for Air Quality, for parallel processing of a proposed amendment to the State Implementation Plan (SIP) for ozone.

In that submittal, which was transmitted by July 16, 2004 cover letter from Secretary LaJuana Wilcher to EPA Region IV Regional Administrator Palmer, Kentucky described the proposed amendment to the SIP in this manner:

Kentucky wishes to remove the vehicle emissions testing program from

the active part of the SIP control measures to the contingency measure

portion of the SIP, effective December 31, 2004. Kentucky is proposing

to incorporate into the SIP, equivalent and contemporaneous emission

reductions that replace the emission reductions documented to occur from the

vehicle emissions testing program.

July 16, 2004 Letter to R.A. Palmer, p. 1.

KRC submits these comments both as part of the comment period on the proposed SIP amendment to the Commonwealth of Kentucky and to EPA Region IV and as formal comments on the proposed amendments to 401 KAR 59:185, which is the “New solvent metal cleaning equipment” regulation that is proposed to replace in part the emissions lost to the proposed termination of the vehicle inspection/maintenance (I/M) program.

Specific Comments

The proposed amendment to the current State Implementation Plan (SIP) to eliminate the I/M program as a maintenance control measure, requires that the agency demonstrate to EPA that the elimination of the measure will be offset by other comparable reductions in emissions resulting in equal or better clean air benefit, and also that the elimination of the measure will not interfere with progress towards attainment of the new 8-hour ozone standard. The amendment fails to satisfy both obligations.

The proposed termination of the current I/M program will result in the emission of an additional .78 tons per summer day of volatile organic compounds (VOCs) and .29 tons per summer day (tpsd) of Oxides of Nitrogen (NOx), as well as 12.5 tons of Carbon Monoxide (CO) per summer day in year 2005, requiring that the Commonwealth identify measures to compensate for these lost reductions in that year in throughout the maintenance period.

Section 110(l) of the Clean Air Act prohibits approval by the Administrator of any SIP revision that “would interfere with any applicable requirement concerning attainment and reasonable further progress (as defined in section 7501 of this title), or any other applicable requirement of this chapter.” EPA has notified the Commonwealth of Kentucky, in the context of the belated amendment to the Jefferson County ozone SIP, that both the 1-hour ozone standard, with which Northern Kentucky is in attainment, and the 8-hour ozone standard, for which Northern Kentucky’s counties are designated as “nonattainment”, are “applicable requirements.”

Section 110(l) is intended to prevent backsliding in progress towards maintaining or achieving attainment with air quality standards. If the only applicable standard were the 1-hour ozone standard, in order for alternative reductions to be substituted for those obtained through a control measure in an approved SIP, those substituted reductions would need to be “equivalent emissions reductions, both locally and regionally[.]” Letter of March 19, 2004 from Beverly Bannister, Director, Air Pesticides and Toxics Management Division, Region IV EPA to Director, Louisville Metro Air Pollution Control District, p. 1. Equivalent reductions must be “surplus, quantifiable, enforceable and permanent[,]” and the revised set of controls must be shown to result in equivalent or better air quality benefits.

The 8-hour standard for ozone, and the fine particulate standard, both of which are “applicable” requirements, complicates the required demonstration by the state and complicates approval of elimination of any current control measure by EPA. Since the attainment demonstrations required of nonattainment areas (including Northern Kentucky’s counties of Boone, Campbell and Kenton) have not yet been submitted, Kentucky has not yet identified those additional reductions (if any) that will need to be achieved in order to demonstrate attainment of the more stringent 8-hour standard in the required timeframe.

EPA indicated in a May 11, 2004 letter to the Metro Louisville Air Pollution Control District that a “strict interpretation” of Section 110(l) would delay any approval of changes to SIP control measures since 110(l) would allow EPA to approve a SIP revision removing a SIP requirement only after determining through development of appropriate demonstrations that it would not interfere with applicable requirements concerning attainment and reasonable further progress. Since that attainment demonstration was not yet made, EPA indicated a belief that such a “strict interpretation is [not] necessary or appropriate[]” and that

[p]rior to the time that attainment demonstrations are due for the new standards,

EPA believes it is appropriate to interpret 110(l) to allow substituting equivalent

emissions reductions for a control measure in the SIP. EPA believes that it

would be defensible to interpret the statute as allowing such a substitution, so

long as actual emissions in the air are not increased. We believe that this

would represent noninterference with the obligation to demonstrate attainment

of the new standards in the period prior to submission of the attainment plan. Our

Office of General Counsel advises that in order to defend this interpretation,

the equivalent reductions would have to represent actual new emissions

reductions achieved in a contemporaneous time frame to the time the

existing SIP measure is terminated, in order to preserve the status quo level of

emissions in the air. Thus, an area could not claim as substitute emissions

reductions those reductions that had already occurred and achieved actual

reductions in the air at a time not contemporaneous with the termination of the

existing SIP control measure.

The May 11, 2004 letter continued, in language that is particularly relevant to the proposed use by the Commonwealth of a portion of the “reductions” achieved with Newport Steel shut in the Wilder facility’s electric arc furnace:

Although we cannot give you a firm definition of “contemporaneous” for this

purpose, we believe a rule of reason would apply.

Finally, the May 11, 2004 letter disallowed the use of those control measures that were being installed by sources pursuant to Federal requirements as part of a Federal control measure:

Additionally, a State cannot claim a promulgated Federal control measure

for equivalent reductions. These Federal control measures will occur in any

event without any state action. Thus, such reductions would not provide

equivalent new excess reductions to substitute for termination of an existing

State program. Furthermore, without an approved attainment demonstration,

it is not known what measures the area needs in order to attain the new

NAAQS.

With this background, KRC submits these specific comments.

I. EPA Should Defer Approval of A SIP Revision Until the Cabinet Makes The Attainment Demonstration For the 8-Hour Ozone Standard And Demonstrates That The I/M Program Is Not Necessary To Achieve That Standard

EPA has acknowledged that a “strict” (or one might say a plain) reading of Section 1001(l) would prohibit approval of a proposed SIP revision to remove a maintenance measure adopted to maintain the 1-hour ozone SIP, until that state had undertaken the attainment demonstration for the 8-hour ozone standard and demonstrated that the elimination of the measure would not result in interference with reasonable further progress towards attainment of the standard.

KRC believes this “strict” interpretation is the only interpretation consistent with the plain language and intent of the Act, and that removal of an approved and implemented control measure controlling both precursors of ozone and particulates, at a time when it is not known what additional reductions will be needed to attain the 8-hour ozone and fine particulates standard, is of questionable legality. Until EPA completes the guidance on what constitutes “interference” (guidance which the May 12, 2004 memo from Tom Helms to Air Program Managers indicated is under development), it is difficult to understand how the EPA could defend an ad-hoc finding of “non-interference.”

The Commonwealth’s effort to remove the I/M program prior to adopting an attainment strategy for the 8-hour standard is unwise as well. What the Commonwealth is proposing is to remove from the array of measures available to meet the new standard, a currently implemented and effective control measure, without knowing what additional reductions may be needed and what control measures are available and at what cost.

There are a limited number of available tools for reducing ozone precursors from the affected airshed. Prior to removing the I/M program from the array of available control measures, the attainment demonstration for the new standards should first be developed and the I/M program be shown to be truly surplus to those measures (either in place or to be adopted) needed to meet and maintain the new standard. It would do a great disservice to the region if the I/M measure were removed in the short term, only to prove necessary (from a cost or availability standpoint) to achieve the more rigorous ozone and particulate standards, necessitating significant restart costs, a shifting of emissions control costs to other sectors, or imposition of more intrusive controls on on-road mobile sources.

Both a plain reading of Section 110(l) and SJR 3 appear to require that the Cabinet first determine whether the I/M program will be necessary for achievement of the 8-hour ozone standard prior to approval of removal of the measure from the current SIP.

The designation of the northern Kentucky counties under the 8-hour ozone standard has been finalized, and the fine particulate designation is due by years’ end. The new standards are “applicable requirements” under federal law. Additionally, under Section 4 of SJR 3, because the area served by the Northern Kentucky Emissions Check testing program has been redesignated as nonattainment under the 8-hour ozone standard, the Cabinet is required to formulate a SIP for the ozone standard “that does not rely upon a vehicle emissions testing program, unless the same is required by law or necessary for the approval of the State Implementation Plan.” The implementation strategy for the 8-hour ozone standard does not require an I/M program as one of the mandated control measures for the nonattainment category into which the northern Kentucky counties have been designated. Whether the measure is “necessary”, however, requires the Cabinet to undertake an attainment demonstration to determine both the necessity and availability of additional control measures to achieve the newer standard.

II. Assuming That The May 11, 2004 Intepretation Is Permissible, The Proposed SIP Amendment Falls Short of Providing Equivalent, Surplus, Quantifiable, Permanent And Enforceable Emissions Reductions To Offset The Loss Of The I/M Reductions

Assuming, arguendo, that the EPA interpretation of Section 110(l) is a permissible one and that in the absence of the attainment demonstration for the 8-hour standard, control measures for the 1-hour ozone maintenance plan can be removed and other reductions substituted, the Commonwealth’s submittal fails to provide equivalent, surplus, quantifiable and enforceable emissions reductions to offset those lost in the event of shutdown of the I/M program. If the I/M program terminated, approximately ¾ of a ton of additional VOCs and almost 1/3 of ton of additional NOx will be present in the summer air each day than would have been present had the I/M program been continued.

As mentioned previously, to change an accepted control strategy in the SIP, there must be a demonstration of how air quality will be affected both locally and in applicable downwind area for the applicable criteria pollutants. The proposal must demonstrate that the revised strategy or set of controls will result in equivalent or better air quality benefits. The submission by the Commonwealth fails to do so.

A. Newport Steel Reductions Cannot Be Used

The Commonwealth’s plan proposes to take credit for the shutdown of the electric arc furnace from the Newport Steel Wilder facility. Relying on a February 20, 2004 letter from the company indicating that it had permanently shutdown the furnace and other steel manufacturing-related equipment, the Division proposes to “utilize” .29 tpsd as “compensating NOx emissions reductions for 2005” and “0.07 tpsd as compensating VOC emission reductions for 2005.”

The proposed use of those reductions is inappropriate for two independent and sufficient reasons. First, the reductions arising from the cessation of manufacturing operations did not occur in a contemporaneous time frame. According to Todd Russo, with the Enforcement Branch in Region IV EPA, Newport Steel Corporation notified the Division for Air Quality and EPA by letter on April 1, 2001 that it had ceased operations. The reductions that had been achieved were in place fully three years prior to this SIP submittal and would have occurred in any event. They are not compensating, excess, offsetting reductions.

Additionally, the use of historical emissions numbers is inappropriate since, if the facility had restarted, actual emissions would have been lower under the terms of a pending enforcement order. The determination of the facility to make the cessation of manufacturing permanent was a business decision that presumably rested on a number of factors. One of those factors, however, was an Administrative Order entered into with state and federal regulators that would have required the facility, if it restarted operations, to potentially limit emissions potential or to install additional controls. The use of emissions numbers from before the cessation of operations is inappropriate since the emissions “available” from the decision not to restart operations would have been lower than historical emissions.

Emissions reductions that occurred from the termination of manufacturing operations at the Newport Steel Wilder facility cannot be used to offset proposed elimination of a control measure years later.

B. Reliance On NOx SIP Call Reductions Would Be Inappropriate

While disclaiming any intent to rely on the reductions to compensate for removing the I/M program, the SIP submittal notes that “significant NOx emission reductions are occurring due to” controls being installed by utilities in response to the NOx SIP Call.

The Commonwealth is correct in both statements – there are regional reductions being achieved in NOx emissions that may benefit nonattainment areas by reducing boundary emissions, and it is entirely inappropriate to rely on those reductions to offset the losses in emissions reductions from terminating the I/M program.

The legal reasons that the “NOx SIP Call” reductions cannot be used are twofold – first, the reductions would not be considered “permanent” or “enforceable” absent an Agreed Order from a utility pledging to make the compliance strategy permanent, coupled with permanent retirement of equivalent NOx allowances; and second, the reductions are

(as noted in the May 11 EPA letter) not surplus, since the reductions occurred under a federally promulgated requirement and would have occurred notwithstanding. Additionally, assuming that the use of those NOx emission reductions were appropriate, appropriate modeling and analysis would be needed to demonstrate that reductions of NOx from stack height emissions would yield the same or better air quality benefit in ozone formation reduction as from ground-level exhaust emissions of NOx.

C. The Commonwealth Has Not Demonstrated That Proposed Reductions Due To 401 KAR 59:185 Are Surplus, Quantifiable, Or Enforceable

The Division for Air Quality proposes to rely on the adoption of regulatory language in 401 KAR 59:185 establishing a vapor pressure limit for solvents used in cold cleaning degreasing operations in the three counties, to generate .71 tpsd of VOC reductions to offset much of what would be lost from terminating the I/M program.

The use of these proposed reductions is questionable for a number of reasons, but before turning to those reasons, KRC expresses a certain degree of frustration with the lack of state response to basic information requests necessary for commenters or EPA to determine whether the reductions claimed to follow from these proposed revisions will in fact occur.

By e-mail letter dated July 27, 2004, KRC requested of the Division of Air Quality certain information needed to assess the proposed SIP Amendment. The letter stated in pertinent part:

I am also writing to inquire as to the documentation supporting the calculations in the SIP revision. Specifically, I would appreciate a response to these requests and a copy of any supporting documentation that would answer these questions:

1. When did Newport Steel cease active daily operations? I understand that they sent a letter indicating that they were permanently closed on February 20, 2004, but am curious whether they operated up until that date at full production, or whether they had previously curtailed or ceased production and if so, when actual cessation or curtailment occurred. If you don't know, could you provide a contact for Newport Steel's environmental compliance section that might?

2. Has Newport Steel forfeited all air emissions permits or have those permits lapsed or been terminated such that a successor could not acquire the facility and the permit?

3. Has Newport Steel entered into a binding order or agreement not to restart operations?

4. Were the NOx and VOC emissions projected from the Newport Steel facility measured or estimated?

5. Were the emissions from that facility spread evenly across the year or were they higher or lower during certain seasons, months, times of day?

6. Has the Cabinet modeled the equivalency of ozone formation potential from smokestack emissions of CO, NOx and VOCs from Newport Steel with those ground-level emissions of the same pollutants from vehicles?

7. What is the basis for the Cabinet's assumption that implementing a cold cleaning degreasing regulation will yield 1.34 tons per day of reductions in the three northern Kentucky counties?

8. Does the Cabinet possess an inventory of suppliers and users of these solvents who would be affected by the regulation?

9. Does the Cabinet have supporting documentation concerning the number of "sources" overall that will be affected; the number of gallons of solvent(s) used in the processes of those sources, and which sources may already have installed the storage, use and recovery procedures that would be required by the regulation?

9 (sic). How does the Cabinet intend to monitor and enforce the regulation? Will permits be required for sources using cold cleaning degreasing solvents? How frequently will such facilities be inspected?

10. How will the Cabinet determine and demonstrate that the claimed reductions are being achieved?

Thank you in advance for providing answers to the questions and the supporting documentation necessary to determine whether the proposed SIP revision will provide, as it is required to, permanent, surplus, enforceable and equivalent reductions sufficient to offset the lost emissions reductions of CO, NOx and VOC from ending the vehicle testing program.

I am copying EPA Region IV with this information request, and requesting of that agency that to the extent that the answers and supporting documentation are not available, that the SIP revision request be deemed incomplete pending development and submittal of such documentation.

The agency response, in a letter dated July 30, 2004, was that

we consider this part of your letter to be a submission with the public comment

period and will respond to your questions when the comment period expires at

the end of August.

With all due respect. the items identified by KRC are not merely comments but are informational items essential to a determination by the public and by EPA as to whether the proposed SIP revision meets the requirements of Section 110 of the Clean Air Act. Due to the failure of the agency to include that information in its SIP submittal package, the revision should be determined to be incomplete unless and until the information is produced and made public.

Based on the limited information provided by the state and the additional information available from the public record, KRC submits these comments concerning the proposal to use the amendments to 401 KAR 59:185 as substitutes for the reductions lost from terminating the I/M program.

Among the reasons that the proposed emissions reductions from amendments to 401 KAR 59:185 do not appear to be appropriate for use are these:

a. The proposed reductions from the current form of the regulation are not surplus. 401 KAR 59:185 is, to the best that commenter can determine, a part of the current SIP, having been approved on June 23, 1994. (59 F.R. 32343). As a current control measure that is part of the SIP, such emissions reductions as may have been achieved by the past application of the regulation when the area was nonattainment and those yet being achieved cannot be considered new or surplus. Only such reductions are can be demonstrated to be surplus, enforceable, quantifiable and permanent from the amendments to the regulation (if any) would be available.

b. The Commonwealth has failed to demonstrate that the proposed amendments to the existing regulation will yield quantifiable, enforceable and permanent reductions.

The emissions factors used to project current emissions from cols solvent degreasing are not grounded in actual use data, but appear to have been based on generalized per-capita estimates. There has been no inventory provided to the public for review, of facilities that are actually currently using solvent-based degreasing processes, whether those facilities are operating at higher vapor pressures, nor of facilities selling such solvents for use by facilities in the area. The actual usage and emissions from solvent-based degreasing has not been assessed, and the applicability of historic emissions data has not been validated.

The proposed amendments lack enforceability as well. The Cabinet has not adopted a permitting or licensing process for area sources emitting VOCs from cold solvent degreasing processes by which to determine compliance of users with the vapor pressure and workplace limits. No indication has been provided of the number, location, size and type of degreasing equipment and processes used by actual facilities within the affected counties, nor of the manpower needed to conduct compliance inspections of the facilities to determine whether the new vapor pressure limits will be met. Absent the most rudimentary information concerning solvent sales and usage, the proposed amendments are not enforceable, and actual emissions reductions are not quantifiable. The proposed restrictions and reporting obligations on solvent vendors is likewise problematic absent a demonstration of how such users (located both within and outside the affected area) will be identified, how reporting and vapor limits compliance will be monitored, and how limits will be enforced as a practical matter.

Finally, assuming that the Commonwealth provides documentation of actual reductions that will be achieved, an inventory or sources and vendors, and mechanisms to monitor and enforce compliance in order to yield real, quantifiable and permanent reductions, the proposed regulation amendment provides that compliance with the new vapor pressure limits will not be required until December 15 2007 for sources that become subject to the regulation. The SIP Amendment provides no offsetting reductions for those lost by terminating the I/M program at the end of 2004 and until the enhanced regulation becomes enforceable.

In short, the quantifiable, enforceable emissions reductions of the I/M program are proposed to be replaced by a regulatory measure that assumes the current level of emissions based on generalized per-capita assumptions rather than a genuine inventory, and proposes new regulatory limits un an as-yet unidentified regulated population of vendors and users with no proposed strategy for enforcement and monitoring of the new limits.

The proposal falls far short of the mark.

III. The Existing SIP, Including the I/M Program, Must Be Maintained Pending

EPA Review of The SIP Amendment

As a cautionary note, KRC believes it appropriate to underscore that the I/M program, as a maintenance plan component of the approved SIP, must be maintained until EPA approves termination of that control measure. Once a pollution reduction measure is included in an approved “state implementation plan” is must be maintained and enforced as a matter of federal law and cannot lawfully be ended until EPA approval is first sought and obtained. A state that unilaterally ends enforcement of a portion of the SIP plan subjects the state to EPA sanctions, including loss of highway money. Additionally, a state law that interferes with the state’s obligation to maintain the SIP is void under the U.S. Constitution. Sweat v. Hull, 200 F.Supp. 2d 1162 (D. Ariz. 2001); Clean Air Council v. Mallory, 226 F.Supp.2d 705 (E.D. Pa. 2002). Kentucky Resources Council v. US EPA, 304 F.Supp.2d 920, 930 (WD Ky. 2004). In the event that the Cabinet undertakes any action to terminate the Northern Kentucky Emissions Check program prior to or absent lawful approval by U.S. EPA of such a SIP revision, KRC reserves the right to initiate a citizen suit or to seek other appropriate remedies to assure that the SIP obligations are followed.

In closing, KRC recognizes that the existing I/M program has vocal opponents, as well as supporters who understand that notwithstanding the minor annoyance of having one’s car periodically tested, achieving healthful air quality requires reductions from on-road mobile sources as well as other sources of ozone pollutant precursors, and that vehicle maintenance monitored through I/M programs is part of the emission control equation. The wisdom of eliminating I/M programs from the array of available controls is a matter to be debated in the arena of politics, public health and economic policy. Reductions in ozone pollution impose economic costs on sources, just as non-control imposes costs on the public in the form of increased illness and pollution-related death. Within legal limits, a community must decide whether the costs of non-maintenance of cars should be paid by small or large businesses, which is the result of the proposed strategy in the SIP amendment.

The legality of eliminating the current I/M program as a control measure, however, depends on demonstrations of equivalency in pollution reductions achieved elsewhere and non-interference with achievement of health-based air quality goals. The Commonwealth’s submittal falls short in both regards and cannot be approved as submitted. Thank you for your consideration of these comments.

Cordially,

Tom FitzGerald

Director

cc: Carl Millanti, DAQ

John Gowins, DAQ



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