[Federal Register: January 10, 2008 (Volume 73, Number 7)]
[Rules and Regulations]
[Page 1915-1953]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr10ja08-13]
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Part II
Environmental Protection Agency
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40 CFR Part 63
National Emission Standards for Hazardous Air Pollutants for Source
Categories: Gasoline Distribution Bulk Terminals, Bulk Plants, and
Pipeline Facilities; and Gasoline Dispensing Facilities; Final Rule
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 63
[EPA-HQ-OAR-2006-0406, FRL-8512-3]
RIN 2060-AM74
National Emission Standards for Hazardous Air Pollutants for
Source Categories: Gasoline Distribution Bulk Terminals, Bulk Plants,
and Pipeline Facilities; and Gasoline Dispensing Facilities
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
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SUMMARY: This action promulgates national emission standards for
hazardous air pollutants for the facilities in the gasoline
distribution (Stage I) area source category. We are promulgating these
emission standards for hazardous air pollutants pursuant to Clean Air
Act section 112(c)(3) and 112(d)(5). We are adding two regulations that
address the facilities contained in this area source category. The
first includes requirements for bulk distribution facilities, i.e.,
gasoline distribution bulk terminals, bulk plants, and pipeline
facilities. The second includes requirements for loading of storage
tanks at gasoline dispensing facilities. We are also incorporating by
reference four test methods. This action also finalizes our decision
not to regulate the above noted facilities under Clean Air Act section
112(c)(6).
DATES: These final rules are effective on January 10, 2008. The
incorporation by reference of certain publications listed in the rule
is approved by the Director of the Federal Register as of January 10,
2008.
ADDRESSES: EPA has established a docket for this action under Docket ID
No. EPA-HQ-OAR-2006-0406. All documents in the docket are listed on the
http://www.regulations.gov Web site. Although listed in the index, some
information is not publicly available, e.g., confidential business
information or other information whose disclosure is restricted by
statute. Certain other material, such as copyrighted material, is not
placed on the Internet and will be publicly available only in hard copy
form. Publicly available docket materials are available either
electronically through http://www.regulations.gov or in hard copy at the Air
and Radiation Docket in the EPA Headquarters Library, EPA West
Building, Room 3334, 1301 Constitution Ave., NW., Washington, DC. The
Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through
Friday, excluding legal holidays. The telephone number for the Public
Reading Room is (202) 566-1744. The Air and Radiation Docket and
Information Center's Web site is: http://www.epa.gov/oar/docket.html.
The electronic mail (e-mail) address for the Air and Radiation Docket
is: a-and-r-Docket@epa.gov, the telephone number is (202) 566-1742, and
the Fax number is (202) 566-9744.
FOR FURTHER INFORMATION CONTACT: General and Technical Information: Mr.
Stephen Shedd, Office of Air Quality Planning and Standards, Sector
Policies and Programs Division, Coatings and Chemicals Group (E143-01),
EPA, Research Triangle Park, NC 27711, telephone: (919) 541-5397,
facsimile number: (919) 685-3195, e-mail address: shedd.steve@epa.gov.
Economic Analysis Information: Mr. Tom Walton, Office of Air
Quality Planning and Standards, Health and Environmental Impacts
Division, Air Benefit and Cost Group (C339-01), EPA, Research Triangle
Park, NC 27711, telephone: (919) 541-5311, facsimile number: (919) 541-
0242, e-mail address: walton.tom@epa.gov.
Compliance Information: Ms. Maria Malave, Office of Compliance, Air
Compliance Branch (2223A), EPA, Ariel Rios Building, 1200 Pennsylvania
Avenue, NW., Washington, DC 20460, telephone: (202) 564-7027, facsimile
number: (202) 564-0050, e-mail address: malave.maria@epa.gov.
SUPPLEMENTARY INFORMATION:
Outline. The information presented in this preamble is organized as
follows:
I. General Information
A. Does this action apply to me?
B. Where can I get a copy of this document?
C. Judicial Review
II. Background Information
III. Summary of Final Rules and Changes Since Proposal
A. Applicability and Compliance Dates
B. Summary of Emission Limits and Management Practices
C. What are the testing and initial compliance requirements?
D. What are the notification, recordkeeping, and reporting
requirements?
E. Summary of Major Changes Since Proposal
IV. Additional Actions
A. Title V Permitting Requirements
B. Not Regulating This Source Category Under CAA Section
112(c)(6)
V. Summary of Comments and Responses
A. Applicability
B. Selection of Regulatory Alternative
C. Bulk Terminals
D. Testing and Monitoring
E. Control Costs and Cost Analyses Performed
F. Notifications, Reporting, and Recordkeeping
VI. Summary of Environmental, Energy, Cost, and Economic Impacts
A. What are the air impacts?
B. What are the cost impacts?
C. What are the economic impacts?
D. What are the non-air environmental and energy impacts?
VII. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review
B. Paperwork Reduction Act
C. Regulatory Flexibility Act
D. Unfunded Mandates Reform Act
E. Executive Order 13132: Federalism
F. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
G. Executive Order 13045: Protection of Children From
Environmental Health Risks and Safety Risks
H. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
I. National Technology Transfer and Advancement Act
J. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations
K. Congressional Review Act
I. General Information
A. Does this action apply to me?
The regulated categories and entities affected by these final rules
include:
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Examples of regulated
Category NAICS \a\ entities
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Industry....................... 324110 Operations at area
493190 sources that transfer
486910 and store gasoline,
424710 including bulk
447110 terminals, bulk
447190 plants, pipeline
facilities, and
gasoline dispensing
facilities.
Federal/State/local/tribal
governments .
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\a\ North American Industry Classification System.
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This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be affected by the
national emission standards. To determine whether your facility will be
affected by the national emission standards, you should examine the
applicability criteria in these final rules. If you have any questions
regarding the applicability of the national emission standards to a
particular entity, consult either the air permit authority for the
entity or your EPA regional representative as listed in 40 CFR 63.13.
B. Where can I get a copy of this document?
In addition to being available in the docket, an electronic copy of
these final rules is also available on the World Wide Web through the
Technology Transfer Network (TTN). Following signature, a copy of these
final rules will be posted on the TTN's policy and guidance page for
newly proposed or promulgated rules at the following address: http://www.epa.gov/ttn/oarpg/.
The TTN provides information and technology
exchange in various areas of air pollution control.
C. Judicial Review
Under section 307(b)(1) of the Clean Air Act (CAA), judicial review
of these final rules is available only by filing a petition for review
in the United States Court of Appeals for the District of Columbia
Circuit by March 10, 2008. Under section 307(b)(2) of the CAA, the
requirements established by these final rules may not be challenged
separately in any civil or criminal proceedings brought by EPA to
enforce these requirements.
Section 307(d)(7)(B) of the CAA further provides that ``[o]nly an
objection to a rule or procedure which was raised with reasonable
specificity during the period for public comment (including any public
hearing) may be raised during judicial review.'' This section also
provides a mechanism for us to convene a proceeding for
reconsideration, ``[i]f the person raising an objection can demonstrate
to the EPA that it was impracticable to raise such objection within
[the period for public comment] or if the grounds for such objection
arose after the period for public comment (but within the time
specified for judicial review) and if such objection is of central
relevance to the outcome of the rule.'' Any person seeking to make such
a demonstration to us should submit a Petition for Reconsideration to
the Office of the Administrator, U.S. EPA, Room 3000, Ariel Rios
Building, 1200 Pennsylvania Ave., NW., Washington, DC 20460, with a
copy to both the persons(s) listed in the preceding FOR FURTHER
INFORMATION CONTACT section, and the Associate General Counsel for the
Air and Radiation Law Office, Office of General Counsel (Mail Code
2344A), U.S. EPA, 1200 Pennsylvania Ave., NW., Washington, DC 20460.
II. Background Information
On December 14, 1994 (59 FR 64303), we promulgated national
emission standards for hazardous air pollutants (NESHAP) for major
source facilities within the gasoline distribution source category (see
40 CFR part 63, subpart R (Major Source NESHAP)). The Major Source
NESHAP imposed control requirements on sources within the source
category that met the definition of major sources, e.g., a source that
emits 10 tons per year or more of any individual hazardous air
pollutant (HAP) or 25 tons per year or more of any combination of HAP.
Gasoline vapors normally contain nine HAP: benzene, ethylbenzene,
hexane, toluene, xylenes, isooctane, naphthalene, cumene, and methyl
tert-butyl ether. Some gasoline distribution terminals and pipeline
facilities were found to be major sources by themselves or to be
located at major sources. Gasoline storage tanks at bulk terminals and
pipeline breakout stations, loading racks at bulk terminals, vapor
leaks from gasoline cargo tanks, and equipment components in gasoline
service were emission sources that were regulated under the Major
Source NESHAP. Area sources of HAP emissions within the source category
(many bulk terminals and pipeline breakout stations and all pipeline
pumping stations, bulk plants, and gasoline dispensing facilities (GDF)
(service stations, convenience stores, and other retail outlets)) are
not subject to the Major Source NESHAP.
Section 112(k)(3)(B) of the CAA requires EPA to identify at least
30 HAP which, as the result of emissions from area sources,\1\ pose the
greatest threat to public health in urban areas. Consistent with this
provision, in 1999, in the Integrated Urban Air Toxics Strategy
(Strategy), EPA identified the 30 HAP that pose the greatest potential
health threat in urban areas, and these HAP are referred to as the
``urban HAP.'' See 64 FR 38706, 38715-716, July 19, 1999. Section
112(c)(3) requires EPA to list sufficient categories or subcategories
of area sources to ensure that area sources representing 90 percent of
the emissions of the 30 urban HAP are subject to regulation. EPA listed
the source categories that account for 90 percent of the urban HAP
emissions in the Strategy.\2\
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\1\ An area source is a stationary source of HAP emissions that
is not a major source.
\2\ Since its publication in the Integrated Urban Air Toxics
Strategy in 1999, the area source category list has undergone
several amendments.
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CAA Section 112(d) standards include new and existing source
maximum achievable control technology (MACT) standards, health
threshold standards, and generally available control technology or
management practices (GACT) standards for area sources. The standards
that are the subject of these final rules are based on GACT pursuant to
CAA section 112(d)(5).
Gasoline vapors contain two HAP (benzene and ethylene dichloride
(EDC)) included among the 30 area source HAP listed under the Strategy.
The gasoline distribution (Stage I) area source category was listed in
the Strategy because the facilities in this category contributed
approximately 36 percent of the national emissions of benzene and 2
percent of the EDC emissions from stationary area sources. We are
adding two subparts to 40 CFR part 63 to address the benzene emissions
from the facilities in this area source category. As explained in the
proposed rule, EDC emissions are no longer emitted from facilities in
this area source category as a result of the lead phase-down provisions
of section 218 of the CAA. We received no comments on this matter;
therefore, we are taking no further action regarding EDC emissions in
this rulemaking.
III. Summary of Final Rules and Changes Since Proposal
This section summarizes the final rules and identifies and
discusses changes since proposal. For changes that were made as a
result of public comments, we have provided explanations of the changes
and the rationale in the responses to comments in section V of this
preamble.
A. Applicability and Compliance Dates
These final rules apply to any existing or new gasoline
distribution facility that is an area source. 40 CFR part 63, subpart
BBBBBB applies to bulk gasoline terminals, pipeline facilities, and
bulk gasoline plants. 40 CFR part 63, subpart CCCCCC applies to GDF.
The owner or operator of an existing area source must comply with all
the requirements of these final rules by January 10, 2011. The owner or
operator of a new area source must comply with these final rules by
January 10, 2008 or upon initial startup, whichever is later.
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B. Summary of Emission Limits and Management Practices
40 CFR part 63, subpart BBBBBB requires that area source bulk
gasoline terminals and pipeline breakout stations \3\ that meet the
applicability criteria in 40 CFR 63.11081 control emissions from large
storage tanks (those at or above 20,000 gallons capacity) by using
either specified floating roofs and seals or a closed vent system and
control device to reduce emissions by 95 percent. Small storage tanks
(those below 20,000 gallons capacity) must be covered.
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\3\ See 40 CFR 63.11100 for the definitions of the specific
facilities regulated under subpart BBBBBB.
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40 CFR part 63, subpart BBBBBB also requires that cargo tank
loading rack emissions located at bulk gasoline terminals with gasoline
throughputs above 250,000 gallons per day be reduced to a level of 80
milligrams (mg), or less, per liter of gasoline loaded into cargo
tanks. Those bulk terminals with gasoline throughputs below 250,000
gallons per day must use submerged filling for the loading of cargo
tanks.
Additionally, bulk terminal owners or operators with gasoline
throughputs above 250,000 gallons per day must not allow the loading of
cargo tanks that do not have the appropriate vapor tightness testing
documentation. Before loading at an affected bulk terminal, the owner
or operator of a cargo tank must present documentation of passing the
vapor tightness test to demonstrate, using EPA Reference Method 27, or
equivalent, that they meet a maximum pressure or vacuum decay rate of 3
inches of water, or less, during a 5-minute test period.
At bulk plants, 40 CFR part 63, subpart BBBBBB requires the use of
submerged filling of gasoline storage tanks and cargo tanks.
40 CFR part 63, subpart BBBBBB also requires the implementation of
a monthly equipment leak inspection at bulk terminals, bulk plants,
pipeline breakout stations, and pipeline pumping stations. The
standards allow a sight, sound, and smell inspection of all equipment
components in gasoline liquid or vapor service. In the final rule, all
leaking equipment components must be repaired within a specified time
period.
40 CFR part 63, subpart CCCCCC requires controls at GDF nationwide
depending on the GDF's monthly gasoline throughput. All GDF must
perform specified good management practices to check for and minimize
evaporation of gasoline. All those GDF above 10,000 gallons per month
throughput must also employ submerged filling of gasoline storage
tanks. The submerged filling requirement is met by either bottom
filling the storage tank or by using a fill pipe to load the storage
tank that extends to no more than 12 inches from the bottom of the
storage tank for fill pipes installed on or before November 9, 2006,
and no more than 6 inches from the bottom of the storage tank for fill
pipes installed after November 9, 2006. Additionally, those GDF with a
monthly throughput of 100,000 gallons, or more, must also use vapor
balancing when filling their gasoline storage tanks.
Additionally, under the final rule, GDF that have tanks with a 250
gallon capacity or less, regardless of monthly throughput, are only
required to perform the good management practices to check for and
minimize evaporation of gasoline described in section 63.11116(a);
these tanks are not required to comply with either the submerged fill
or vapor balancing requirements of the final rule.
C. What are the testing and initial compliance requirements?
40 CFR part 63, subpart BBBBBB requires that control devices being
used to reduce emissions from loading racks at bulk terminals be tested
to demonstrate that they comply with the emission limit. Closed vent
systems and control devices used to reduce emissions from storage tanks
also have to be tested to demonstrate that they comply with the
emission limit. Other options for demonstrating compliance with the
rule include using recent performance tests or providing documentation
that the devices are complying with enforceable State, local, or tribal
rules or operating permits that contain requirements at least as
stringent as this final rule.
Affected facilities that use control devices (vapor processors) to
comply with the emission limits for storage tanks or loading racks at
bulk terminals are required to monitor operating parameters to
demonstrate continuous compliance with the emission limits. The
monitored operating parameter values must be determined during a
performance test or by engineering assessment. An operating parameter
monitoring approach approved by the Administrator and included in an
enforceable operating permit is allowed as an alternative.
Annual inspections of storage tank roofs and seals are required for
bulk terminals and pipeline breakout stations. Such inspections must be
conducted using either the procedures required in 40 CFR part 60,
subpart Kb, Standards of Performance for Volatile Organic Liquid
Storage Vessels (Storage Vessels New Source Performance Standards
(NSPS)) or the procedures required in 40 CFR part 63, subpart WW
(National Emission Standards for Storage Vessels (Tanks)--Control Level
2).
In addition, each owner or operator of a bulk gasoline terminal is
required to monitor the loading of gasoline into gasoline cargo tanks
to limit the loading to vapor-tight gasoline cargo tanks. The owner or
operator of each gasoline cargo tank loading at an affected bulk
terminal is required to perform vapor tightness testing on each cargo
tank to demonstrate compliance with the maximum allowable pressure and
vacuum change of 3 inches of water, or less, in 5 minutes. Vapor
tightness testing must be performed using EPA Reference Method 27.
Railcar cargo tanks may also use the ``Railcar Bubble Leak Test
Procedures'' specified in the rule.
40 CFR part 63, Subpart CCCCCC requires that the owner or operator
of GDF meeting the applicability criteria for vapor balancing
demonstrate initial compliance with this emission limit by conducting
an initial performance test on the vapor balance system. The rule also
contains other options for demonstrating compliance with this emission
limit, such as using recent performance tests or providing
documentation that the vapor balance systems are complying with
enforceable State, local, or tribal rules or operating permits that
contain requirements at least as stringent as this final rule.
Each owner or operator must also determine, at the time of
installation and every 3 years thereafter, the leak rate and cracking
pressure of pressure-vacuum vent valves installed on gasoline storage
tanks and must conduct a static pressure test on gasoline storage
tanks.
D. What are the notification, recordkeeping, and reporting
requirements?
Affected sources that are subject to the control requirements under
these final rules are required to submit four types of notifications or
reports as set forth in the General Provisions: (1) Initial
Notification; (2) Notification of Compliance Status; (3) periodic
reports; and (4) other reports. The Initial Notification alerts the
regulatory authority of applicability for existing sources or of
construction for new sources. This notification also includes a
statement as to whether the facility can achieve compliance by the
required compliance date. The Notification of Compliance Status
demonstrates that compliance has been achieved. This
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notification contains the results of initial performance tests and a
list of equipment subject to the standard. Periodic reports are
required on a semi-annual basis. The semi-annual compliance report
informs the regulatory authority of the results of required inspections
or additional testing results. An excess emissions report, if
applicable, must be submitted with the semi-annual compliance report
and is required if excess emission events occur. Excess emission events
include events such as the loading of a cargo tank that does not have
documentation of vapor tightness testing, deviations from acceptable
operating parameter values, or equipment leaks that are not repaired
within the required time.
Other reports are also required under the General Provisions,
generally on a one-time basis, for events such as a notification before
a performance test or a storage vessel inspection. Reporting these
events allows the regulatory authority the opportunity to have an
observer present.
Reporting requirements for owners or operators of bulk plants and
GDF are limited in most cases to the Initial Notification and the
Notification of Compliance Status. Those bulk plants that are located
in States that require the use of submerged fill would not be required
to submit these notifications. The same is true for GDF located in
States or counties that already require submerged fill or submerged
fill plus vapor balancing.
Records required under these final rules must be kept for 5 years.
These include records of cargo tank vapor tightness test
certifications, records of storage tank and equipment component
inspections, and records of monthly throughput.
E. Summary of Major Changes Since Proposal
As a result of the public comments received in response to the
November 9, 2006 proposal, we have made several changes in the final
rules for this source category. This section presents a summary of the
major changes since proposal. Additional discussion of the details of
the changes and the rationale for making these changes is presented in
section V of this preamble.
As proposed, 40 CFR part 63, subpart BBBBBB applied to both bulk
facilities nationwide and GDF in Urban 1 and Urban 2 areas. We also
requested comment on whether to require vapor balancing at GDF in Urban
1 areas and provided rule text in the docket. In order to simplify the
final rules, we have included the requirements for bulk facilities in
subpart BBBBBB and have included all requirements for GDF in a separate
subpart (40 CFR part 63, subpart CCCCCC).
We have made some changes to the requirements for bulk facilities.
Internal floating roof storage tanks at bulk terminals and pipeline
breakout stations will not have to be equipped with secondary rim seals
(as proposed) if they have vapor mounted primary seals. Also, we are
clarifying that storage tanks below 20,000 gallons in capacity require
a cover, and those at or above 20,000 gallons in capacity require the
controls as proposed and mentioned above.
We have also made some changes to the requirements for loading
racks at bulk terminals. We proposed a requirement that all bulk
terminals meet an 80 mg per liter (mg/l) emission standard for loading
racks. Based on comments received, however, the type of control
required in the final rule depends on the daily gasoline throughput of
the bulk terminal. Loading racks at bulk terminals with daily gasoline
throughputs of less than 250,000 gallons are required to use submerged
filling; those at or above a daily gasoline throughput of 250,000
gallons are required to meet the 80 mg/l standard.
Additionally, we requested comment and supporting information on
alternative parameter monitoring approaches for vapor processors used
to meet the 80 mg/l standard for bulk terminal loading racks. After
consideration of the public comments, we have decided to include
presence of flame monitoring (as was proposed) for thermal oxidizers,
and vacuum level monitoring for carbon adsorbers, as alternatives for
monitoring the performance of vapor processors. We also took comments
and requested data on additional requirements for these alternative
monitoring approaches. We have incorporated these additional periodic
equipment and maintenance inspections of the vapor processor systems
into the final rule.
No major changes since proposal have been made to the requirements
for pipeline facilities or bulk plants.
For GDF (40 CFR part 63, subpart CCCCCC), we have incorporated
changes to the submerged fill requirements and the vapor balance
requirements on which we requested comments. The final rule contains
specific requirements for GDF nationwide depending on the GDF's monthly
gasoline throughput. All GDF, regardless of size, must implement
management practices that will minimize vapor releases to the
atmosphere. GDF with a monthly gasoline throughput of 10,000 gallons or
more must also use submerged fill when loading their storage tanks. In
addition to the requirements described above, GDF with a monthly
gasoline throughput of 100,000 gallons or more must use vapor balancing
when loading the storage tank. Subpart CCCCCC also contains
requirements applicable to gasoline cargo tanks.
IV. Additional Actions
In today's final rulemaking, we are also finalizing two additional
actions that were announced at proposal. These final actions address
title V permit requirements and our decision not to regulate the
gasoline distribution (Stage I) area source category under CAA section
112(c)(6).
A. Title V Permitting Requirements
Section 502(a) of the CAA provides that EPA may exempt one or more
area source categories from the requirements of title V if the
Administrator finds that compliance with such requirements is
``impracticable, infeasible, or unnecessarily burdensome'' on such
categories. EPA must determine whether to exempt an area source from
title V at the time we issue the relevant CAA section 112 standard (40
CFR 70.3(b)(2)). In this action, we are finalizing the proposed
exemption of gasoline distribution area sources from the requirement to
apply for and obtain a title V permit as a result of being subject to
these final rules. We justified this finding at proposal and did not
receive any negative comments during the public comment period
regarding this issue. In fact, we received two positive comments
supporting the exemption. As a result, gasoline distribution area
sources are not required to obtain title V permits because of being
subject to these final rules. However, if such sources are otherwise
required to obtain title V permits, e.g., due to being part of a major
source defined under title V (40 CFR 70.2, 40 CFR 71.2, and 40 CFR
63.2), they must apply for and obtain title V permits. The
applicability criteria for title V are in 40 CFR 70.3(a) and (b) and 40
CFR 71.3(a) and (b). We are adding additional regulatory text to this
rule to clarify the above.
B. Not Regulating This Source Category Under CAA Section 112(c)(6)
On November 8, 2002 (67 FR 68124), the Gasoline Distribution (Stage
I) Area Source category was added to the list of source categories for
development of standards under CAA section 112(c)(6) toward the 90-
percent requirement for polycyclic organic matter (POM). One
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surrogate for POM is the sum of 16 polynuclear aromatic hydrocarbon
compounds (16-PAH) measured in EPA Test Method 610. Naphthalene is the
only 16-PAH estimated and reported in the 1990 inventory that is
emitted from gasoline distribution facilities. As explained in the
proposal preamble, we have revised the 1990 inventory of naphthalene
from this source category downward based on additional data received.
Based on that information, we have concluded that gasoline distribution
facilities (area sources) contribute only 0.02 percent of the total 16-
PAH (1.73 tons out of 8,051 tons) and are not needed to meet the 90-
percent requirement for POM in CAA section 112(c)(6). This action
finalizes our decision not to regulate this source category under CAA
section 112(c)(6) since we fully justified this conclusion at proposal
and did not receive any negative comments at proposal.
V. Summary of Comments and Responses
The gasoline distribution area source rules were proposed on
November 9, 2006 (71 FR 66064). The 60-day public comment period ended
on January 8, 2007, and we received 36 comment letters. Comments were
received from industry representatives, trade associations, State and
local air pollution control agencies, environmental groups, air
pollution control device vendors, and private citizens. The final rules
reflect our consideration of all of the comments received on the
proposed action. This section summarizes the significant comments and
those that resulted in changes in the final rules. Our responses to
comments not specifically addressed in this preamble are presented in
the Response to Comments Document, which is available in Docket No.
EPA-HQ-OAR-2006-0406.
A. Applicability
1. Area Sources
Comment: One commenter questioned whether EPA intended the area
source rules to apply to facilities that are major sources and that
have GDF on site for refueling of their vehicles (fleet vehicle
refueling centers). Another commenter stated that EPA should clarify
that the proposed rule does not apply to gasoline distribution major
sources.
Response: The gasoline distribution (Stage I) area source rules
apply to those gasoline distribution facilities that qualify as area
sources. Facilities that are major sources (emit >= 10 tons per year of
one HAP or emit >= 25 tons per year of any combination of HAP) as a
result of their gasoline distribution activities, or as a result of any
other activities, would not be subject to these final area source
rules. We have clarified in the final rules that these rules only apply
to area sources.
2. GACT Versus MACT Approach
Comment: One commenter stated that EPA's own interpretation of CAA
section 112(d)(5) allowed it to set GACT standards ``when the
imposition of MACT is determined to be unreasonable,'' (60 FR 4948,
4953, January 25, 1995) and that because EPA did not offer any
technological or economic reasons why MACT was unreasonable for this
source category, the selection of GACT rather than MACT was arbitrary
and capricious.
Response: EPA disagrees with the commenter's assertion. The
commenter has taken the phrase cited above in a prior Federal Register
notice out of context and erroneously asserts that EPA must first
justify why it is not setting a MACT standard before it can issue a
GACT standard for a particular area source category.
In the Federal Register notice cited above, EPA promulgated final
rules limiting the discharge of chromium compound emissions from both
major sources and area sources in the hard chromium electroplating,
decorative chromium electroplating and chromium anodizing tanks source
categories. In developing that rulemaking, we first established the
MACT standards for the major sources in each source category. Once we
determined the standards for major sources, which must be based on
MACT, we then evaluated what the standards should be for area sources.
At that time, EPA recognized that it had authority to issue GACT
standards for area sources. In determining what was GACT for those area
sources, EPA considered the standards it had just set for the major
sources and evaluated the technical feasibility of imposing the major
source requirements on the area sources.
Additionally, since EPA could consider cost in setting a GACT
standard, EPA also evaluated whether the cost of imposing the major
source standards on the area sources in those source categories would
be reasonable. The statements in the prior Federal Register notice
concerning CAA section 112(d)(5) were focused on the factual
circumstances of that rule, which involved the simultaneous
promulgation of major and area source standards. We did not, in that
rulemaking, conduct a thorough analysis of the requirements for setting
a GACT standard under CAA section 112(d)(5).
As recognized in the Federal Register notice cited above, and in
this final rule, Congress gave EPA explicit authority to issue
alternative emission standards for area sources in section 112(d)(5) of
the CAA. Specifically, CAA section 112(d)(5), which is entitled
``Alternative standard for area sources,'' provides:
With respect only to categories and subcategories of area
sources listed pursuant to subsection (c) of this section, the
Administrator may, in lieu of the authorities provided in paragraph
(2) and subsection (f) of this section, elect to promulgate
standards or requirements applicable to sources in such categories
or subcategories which provide for the use of generally available
control technologies or management practices by such sources to
reduce emissions of hazardous air pollutants. (Emphasis added.)
There are two critical aspects to CAA section 112(d)(5). First, CAA
section 112(d)(5) applies only to those categories and subcategories of
area sources listed pursuant to CAA section 112(c). The commenter does
not dispute that EPA listed the Gasoline Distribution (Stage I) Area
Source category pursuant to CAA section 112(c)(3). Second, CAA section
112(d)(5) provides that for area sources listed pursuant to CAA section
112(c), EPA ``may, in lieu of '' the authorities provided in CAA
section 112(d)(2) and 112(f), elect to promulgate standards pursuant to
CAA section 112(d)(5). CAA Section 112(d)(2) provides that emission
standards established under that provision ``require the maximum degree
of reduction in emissions'' of HAP (also known as MACT). CAA Section
112(d)(3), in turn, defines what constitutes the ``maximum degree of
reduction in emissions'' for new and existing sources. See CAA section
112(d)(3).\4\ Webster's dictionary defines the phrase ``in lieu of'' to
mean ``in the place of'' or ``instead of.'' See Webster's II New
Riverside University (1994). Thus, CAA section 112(d)(5) authorizes EPA
to promulgate standards under CAA section 112(d)(5) that provide for
the use of generally available control
[[Page 1921]]
technologies or management practices (GACT), instead of issuing MACT
standards pursuant to CAA section 112(d)(2) and (d)(3). The statute
does not set any condition precedent for issuing standards under
section 112(d)(5) other than that the area source category or
subcategory at issue must be one that EPA listed pursuant to CAA
section 112(c), which is the case here.\5\
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\4\ Specifically, section 112(d)(3) sets the minimum degree of
emission reduction that MACT standards must achieve, which is known
as the MACT floor. For new sources, the degree of emission reduction
shall not be less stringent than the emission control that is
achieved in practice by the best-controlled similar source, and for
existing sources, the degree of emission reduction shall not be less
stringent than the average emission limitation achieved by the best-
performing 12 percent of the existing sources for which the
Administrator has emissions information. CAA section 112(d)(2)
directs EPA to consider whether more stringent--so called beyond-
the-floor limits--are technologically achievable considering, among
other things, the cost of achieving the emission reduction.
\5\ CAA section 112(d)(5) also references CAA section 112(f).
See CAA section 112(f)(5) (entitled ``Area Sources'' and providing
that EPA is not required to conduct a review or promulgate standards
under CAA section 112(f) for any area source category or subcategory
listed pursuant to CAA section 112(c)(3) and for which an emission
standard is issued pursuant to CAA section 112(d)(5)).
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The commenter argues that EPA must provide a rationale for why
issuing MACT standards for this area source category is
``unreasonable'' before it can issue GACT standards under CAA section
112(d)(5). The commenter is incorrect, however. Had Congress intended
that EPA first conduct a MACT analysis for each area source category,
and only if cost or some other reason made applying the MACT standard
``unreasonable'' for the category would EPA be able to issue a standard
under CAA section 112(d)(5), Congress would have stated so expressly in
CAA section 112(d)(5). Congress did not require EPA to conduct any MACT
analysis, floor analysis, or beyond-the-floor analysis before the
Agency could issue a CAA section 112(d)(5) standard. Rather, Congress
authorized EPA to issue GACT standards for area source categories
listed under CAA section 112(c)(3), and that is precisely what EPA has
done in this rulemaking.
Although EPA has no obligation to justify why it is issuing a GACT
standard for an area source category as opposed to a MACT standard, EPA
must set a GACT standard that is consistent with the requirements of
CAA section 112(d)(5) and have a reasoned basis for its GACT
determination. In determining what constitutes GACT for a particular
area source category, EPA evaluates the control technologies and
management practices that reduce HAP emissions that are generally
available for the area source category.\6\ The legislative history
supporting CAA section 112(d)(5) provides that EPA may consider costs
in determining what constitutes GACT for the area source category.\7\
EPA cannot consider cost in setting MACT floors, pursuant to CAA
section 112(d)(3). Area sources differ from major sources, which is why
Congress permitted EPA to consider costs in setting GACT standards for
area sources under CAA section 112(d)(5), but did not permit that
consideration in setting MACT floors for major sources. This important
dichotomy between CAA section 112(d)(3) and CAA section 112(d)(5)
provides further evidence that Congress sought to do precisely what the
title of CAA section 112(d)(5) states--provide EPA the authority to
issue ``[a]lternative standards for area sources.'' EPA properly issued
standards for this area source category under CAA section 112(d)(5),
and as demonstrated below, EPA has a reasoned basis for each of its
GACT determinations.
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\6\ As explained above, in developing GACT for the area sources
subject to this rule, EPA analyzed both the control technologies and
management practices used by area sources in the category to reduce
HAP and the control approaches employed by the major sources in this
category to reduce HAP.
\7\ Additional information on the definition of ``generally
available control technology or management practices'' (GACT) is
found in the Senate report on the 1990 amendments to the CAA (S.
Rep. No. 101-228, 101st Cong. 1st session, 171-172). That report
states that GACT is to encompass:
* * * Methods, practices, and techniques which are commercially
available and appropriate for application by the sources in the
category considering economic impacts and the technical capabilities
of the firms to operate and maintain the emissions control systems.
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Finally, even accepting, for arguments sake, the commenter's
assertion that EPA must provide a rational basis for setting a GACT
standard as opposed to a MACT standard, we did so in the proposed rule.
In the proposal, we explained that we can and do consider costs and
economic impacts in determining GACT. We also explained that the
facilities in the source categories at issue here are already well
controlled for the Urban HAP for which the source category was listed
pursuant to CAA section 112(c)(3). We believe the consideration of
costs and economic impacts is especially important for the well-
controlled facilities in this area source category because, given
current well-controlled levels, a MACT floor determination, where costs
cannot be considered, could result in only marginal reductions in
emissions at very high costs for modest incremental improvement in
control for this area source category.
Comment: One commenter encouraged EPA to reevaluate GACT based on
the cost-effectiveness of controls for volatile organic compounds (VOC)
as a function of the source's throughput instead of using the cost-
effectiveness of controls for benzene. The commenter believes doing so
would demonstrate that more stringent emission standards and monitoring
requirements (similar to the MACT) are warranted for all but the
smallest of facilities. The commenter pointed out that in 1980, when
EPA developed the Control Technique Guidelines (CTG) for VOC control in
ozone non-attainment areas, $2,000 per ton was considered reasonably
available control technology (RACT). With inflation over the past 26
years, it should be in the range of $6,000 per ton. According to the
commenter, since benzene constitutes only about 1 percent of the VOC
emissions, the cost-effectiveness of these controls for VOC will be
about 100 times better. The commenter prefers applicability thresholds
based on throughput, rather than geographical boundaries, as proposed.
The commenter believes that the proposed GACT neglects consideration of
the risk posed by individual sources to the local communities. The
commenter also encouraged EPA to consider more stringent requirements
for ``new sources.''
Another commenter pointed out that, in addition to benzene
exposure, VOC from gasoline fueling play a role in the formation of
ground level ozone (smog). The commenter stated that EPA should
consider the full scope of air pollution concerns that are affected by
emissions from gasoline distribution and should design its Stage I
regulations to maximize the amount of reductions achieved for both air
toxics and ozone precursor emissions.
Response: We understand the commenters' desires for achieving
greater VOC emission reductions in this rulemaking. We agree that VOC
emissions contribute to other air pollution concerns and appreciate the
State and local agencies' efforts in addressing these emissions through
their regulatory programs. We also agree that an analysis of the
impacts of this rule based strictly on the control of VOC would yield
different cost-effectiveness values and potentially support requiring
more stringent control technologies for these facilities. In fact, we
did calculate VOC impacts during our analysis of the proposed and final
regulatory alternatives and these values are presented in the
supporting documentation. But, as explained in other sections of this
preamble, the primary focus of these area source rules is fulfilling
our obligations under CAA section 112(c)(3) for regulating stationary
sources of benzene. While the controls finalized today will achieve
reductions in both HAP and VOC emissions, we appropriately focused on
the HAP cost-effectiveness values in determining what is GACT for
facilities in this area source category.
Based on comments received, we have reconsidered the use of
gasoline throughput for determining what is GACT for these facilities
and have
[[Page 1922]]
incorporated multiple throughputs into the final rules. The final rules
require controls at affected facilities nationwide, thus, addressing
the impacts of benzene emissions from this area source category
regardless of geographical boundaries.
In the final rules we distinguish between new and existing sources
for the submerged fill requirements applicable to bulk gasoline plants
and GDF. See 40 CFR 63.11086, 40 CFR 63.11117, and 40 CFR 63.11118 for
the specific requirements. Control requirements at the remaining
facilities (bulk gasoline terminals, pipeline breakout stations, and
pipeline pumping stations) apply equally to both new and existing
sources.
3. Proposed Exemptions
Comment: One commenter stated that CAA section 112(d)(5) does not
authorize EPA to base GACT decisions on whether it believes that
control technologies are or are not cost-effective but, rather,
intended EPA to consider ``economic impacts.'' Therefore, EPA's
decision not to require a control level of 35 mg/l for loading racks,
1-inch pressure drop testing for cargo tanks, and vapor balancing of
storage tanks at bulk plants and GDF, based on cost-effectiveness
rather than technological or economic impact issues, is unlawful.
Response: We disagree with the commenter's interpretation that CAA
section 112(d)(5) does not authorize EPA to consider cost-effectiveness
as well as economic impacts in determining what is GACT for the
affected facilities in an area source category. The legislative history
supporting CAA section 112(d)(5) provides that EPA may consider costs
in determining what constitutes GACT for the area source category (see
footnote 7). Area sources differ from major sources, which is why
Congress permitted EPA to consider costs, including cost-effectiveness,
in setting GACT standards for area sources under CAA section 112(d)(5),
but did not permit that consideration in setting MACT floors for major
sources. The commenter did not cite any specific language in the CAA
that prevents us from considering cost-effectiveness as well as other
economic impacts in determining the level of control that constitutes
GACT for an area source category. We believe EPA properly considered
cost-effectiveness in each of its GACT determinations for this area
source category under CAA section 112(d)(5). See also Husqvarna AB v.
EPA, 349 U.S. App. D.C. 118, 254 F.3d 195, 201 (DC Cir. 2001) (finding
EPA's decision to consider costs on a per ton of emissions removed
basis reasonable because CAA section 213 did not mandate a specific
method of cost analysis).
Comment: One commenter stated that because the CAA requires
standards for all sources in a category, EPA's refusal to set standards
for storage tanks with a capacity less than 20,000 gallons is unlawful.
The commenter stated that EPA does not claim that no control technology
is generally available for storage tanks with a capacity less than
20,000 gallons or provide any reason that they cannot employ the same
technology that is used by larger storage tanks.
Response: In response to this comment, EPA reexamined its GACT
determination for storage tanks with a capacity less than 20,000
gallons. As explained above, determining what constitutes GACT involves
considering the control technologies and management practices that are
generally available to the facilites in the area source category. We
also consider standards applicable to major sources in the same
industrial sector to determine if the control technologies and
management practices are transferable and generally available to area
sources. We further consider the costs and economic impacts of
available control technologies and management practices on that source
category.
In the proposed and final rule, we distinguished storage tanks
based on size and developed a 20,000 gallon capacity threshold. This
size threshold is similar to the threshold used in several other
standards that apply to storage tanks, including 40 CFR part 60,
subpart Kb and the Gasoline Distribution Major Source NESHAP. As
explained in the 1994 ``Alternative Control Techniques Document:
Volatile Organic Liquid Storage in Floating and Fixed Roof Tanks''
(EPA-453/R-94-001), 20,000 gallons is generally considered to be the
breakpoint between horizontal and vertical tanks. The document reports
that most storage tanks below 20,000 gallons are horizontal rather than
vertical and a large percentage of these tanks are also underground
tanks.
In the final rule, we are requiring storage tanks with a capacity
of 20,000 gallons or more to have floating roof and seal technologies.
In response to this comment, we re-evaluated the application of these
same controls on tanks with a capacity less than 20,000 gallons and
determined that these control approaches do not represent GACT for
tanks with a capacity less than 20,000 gallons. First, for horizontal
tanks, which are generally tanks with a capacity below 20,000 gallons,
the floating roof technology is not technically feasible. Horizontal
tanks do not have perpendicular sides; this precludes the application
of floating roof technology to these tanks. Second, our analysis shows
that the cost-effectiveness of requiring the application of floating
roof technology to vertical storage tanks below the 20,000 gallon size
is, at best, about $8,000 per ton of HAP.
Instead, in the final rule, we are requiring that facilities using
storage tanks with a capacity below 20,000 gallons follow certain
management practices for controlling emissions. See 40 CFR 63.11087 for
those specific requirements.
Comment: One commenter believes it is not necessary to regulate GDF
that are already using submerged fill, especially when required by an
enforceable State, local, or tribal rule or permit. The commenter
believes that facilities already have safety, economic, and
environmental reasons to minimize spills, clean them up quickly, and
prevent gasoline from remaining in the environment; thus, according to
the commenter, additional emission reductions achieved by including
these management practices in the final rule might not be significant.
The commenter recommends that EPA evaluate the potential for emission
reductions achievable by requiring these management practices and, if
minimal emission reductions would result, EPA could either entirely
exclude tanks already equipped with a submerged fill system, or exclude
tanks covered by a submerged fill requirement in an enforceable State,
local, or tribal rule or permit. In either case, the commenter suggests
that the provision in the proposed 40 CFR 63.11085(f) would become an
exclusion in the proposed 40 CFR 63.11081.
Another commenter believes that GDF should be excluded from any and
all proposed and final regulatory alternatives because most States/
regions with unacceptable levels of VOC and HAP already require Stage I
controls which include submerged filling of underground storage tanks.
The commenter believes that including GDF in the applicability of the
proposed rule will inordinately increase the amount of paperwork
(requiring the submittal of Initial Notifications and Notification of
Compliance Status to dozens of States and local agencies) with little
to no environmental benefit. The commenter believes that GDF should be
regulated at the State and local level as they are today.
Response: By suggesting that we should not set Federal emission
[[Page 1923]]
standards, the commenters ignore the language of the statute. The CAA
requires that EPA set Federal emission standards under CAA section
112(d) for source categories listed under CAA section 112(c)(3), and
that is precisely what we are doing here. GDF are affected facilities
within the gasoline distribution (Stage I) area source category. These
facilities formed part of the basis for listing this area source
category; hence, EPA is promulgating rules regulating emissions from
these facilities. As summarized in section III.B of this preamble, 40
CFR part 63, subpart CCCCCC requires controls at GDF nationwide
depending on their monthly gasoline throughput. All GDF must employ
certain management practices. GDF with monthly throughput of 10,000
gallons or more must use submerged fill when loading their storage
tanks. GDF with a monthly throughput of 100,000 gallons or more must
also install a vapor balance system. These controls are GACT for these
facilities in this area source category.
We agree with the concept of reducing the reporting and
recordkeeping burden on affected facilities. We have taken steps in the
proposed and final rules to minimize these burdens by not requiring
notifications or reports from facilities that are already operating in
compliance with enforceable State, local, or tribal rules and permits
that include requirements that are at least as stringent as those
contained in these final rules.
Comment: Two commenters support exempting bulk plants and pipeline
pumping facilities because emissions from pipeline pumping stations are
insignificant and because the recordkeeping and reporting would
represent a burden with no benefit. The commenters stated that if EPA
does not agree to fully exempt bulk plants and pipeline pumping
stations, at the very least, those facilities that do not have a
storage tank or loading rack subject to controls should be exempted
from the equipment leak requirements.
Response: As explained above, by suggesting that we should not set
Federal emission standards for these facilities, the commenters ignore
the language of the statute. The CAA requires that EPA set Federal
emission standards under CAA section 112(d) for source categories
listed under CAA section 112(c)(3), and that is precisely what we are
doing here. Bulk plants and pipeline pumping stations are affected
facilities within the Gasoline Distribution (Stage I) Area Source
category. These facilities formed part of the basis for listing this
area source category; hence, EPA is promulgating rules regulating
emissions from these facilities. As such, 40 CFR part 63, subpart
BBBBBB includes requirements for controls at these facilities based on
what EPA determined was GACT for each facility.
We have, however, taken steps to reduce the reporting and
recordkeeping burden on these facilities. The requirement to submit a
combined Initial Notification/Notification of Compliance Status is the
only routine reporting requirement imposed on these facilities. No
periodic reports are required as part of the equipment leak inspection
program as long as leaks are repaired in a timely manner. We believe
that the potential safety and environmental benefits of an equipment
leak inspection program justify the minimal expense involved.
4. Nationwide Coverage Versus Urban Area Coverage for Standards
Comment: Several commenters stated that they were strongly opposed
to EPA's intended approach to narrow the application of CAA section
112(d) area source rules to urban areas, while other commenters were
opposed to broadening the applicability of the rules to all areas.
One commenter stated that because CAA section 112 does not
authorize EPA to decline to set standards for any sources within a
category of sources that it has listed pursuant to CAA section 112(c),
the threshold for sources that are not in urban areas (as well as those
below the proposed size applicability thresholds) would be unlawful.
One commenter stated that there is little justification apparent in
the proposed rule for mandating submerged fill for loading of storage
tanks in non-urban areas. The commenter claimed that to do so would
result in additional costs to GDF, while achieving minimal reductions
in emissions. The commenter stated that, as a matter of law, the
Agency's discretion is limited to imposing area source controls to area
sources located within urban areas.
One commenter believes that EPA should apply the rule in accordance
with the expressed intent of Congress, which was to reduce ``risks to
public health in urban areas.'' Therefore, according to this commenter,
the rule should apply only to facilities that are located in or near
urban areas. The commenter also stated that health risk should be taken
into account in evaluating cost-effectiveness, and risk-distance issues
should be considered. The commenter provided an analysis of their
recommended use of a risk-distance look-up table to determine
applicability of the rule.
Other commenters stated that regardless of whether residential
populations are urban or rural, individuals living in close proximity
to GDF are subjected to elevated exposures to HAP and, given the trend
of building very high volume throughput GDF, the level of exposure is
likely to remain high and even increase.
One commenter urged EPA to follow conventional approaches in
determining the scope of controls, and, in so doing, apply proposed
Regulatory Alternatives (RA) 2 and 3 to all counties nationwide. The
commenter urges EPA in this rulemaking, and in future area source
rulemakings, to apply area source standards uniformly in all counties
nationwide, particularly in circumstances where the area source
category is ubiquitous, as is the case with gasoline distribution.
Another commenter stressed that the impacts of emissions from
gasoline distribution and dispensing facilities are localized and would
be similar for most urban and rural areas. The commenter stated that
the cost of controlling these facilities would be the same in rural or
urban settings as well; therefore, because the costs and environmental
impacts are the same, there does not appear to be any rationale for
treating rural and urban facilities differently.
One commenter stated that the fact that some State and local
agencies already regulate these sources does not relieve EPA of its
obligation to reduce emissions under CAA section 112. According to
another commenter, many State and local agencies cannot be more
stringent than the Federal government. The commenter further stated
that once a Federal rule is promulgated, some agencies must change
their regulations to make them consistent with those of the Federal
government, which could result in backsliding if the State or local
rule was more stringent to begin with.
Two comments expressed opposition to limiting the geographic scope
of the proposed regulatory alternatives to reduce the ``overall cost of
the rule.''
Response: After consideration of all comments related to the issue
of nationwide versus urban applicability of the proposed standards for
submerged fill and vapor balancing at GDF (proposed RA 2 and 3), we
believe a nationwide approach is appropriate given the facts and
circumstances of this particular area source category. As suggested by
commenters, the final rule requires GDFs nationwide to control HAP
emissions, and those control requirements differ depending on the
monthly throughput of the GDF, which
[[Page 1924]]
is a reasonable factor for distinguishing between GDF. As explained in
other responses and sections of this preamble, the final rule requires
all GDF, regardless of size, to implement certain management practices
to reduce vapor evaporation. Additionally, GDF with a monthly
throughput of 10,000 gallons or more must use submerged fill, while GDF
with a monthly throughput of 100,000 gallons or more must install vapor
balance systems.
As proposed, the rule would have only required controls at GDF
located in Urban 1 and Urban 2 areas. Some commenters suggested further
narrowing the applicability of the rule to GDF based on the health
risks and distance to the population of individual facilities. However,
facilities located in Urban 1 and Urban 2 areas were the basis for
listing area source categories pursuant to section 112(c)(3) of the
CAA. We are currently under court-ordered deadlines to complete issuing
standards for all listed area source categories. Changing our focus
would mean recreating an area source category list which may differ
significantly from the current list, greatly hindering our effort to
complete our obligation by the court-ordered deadlines. Therefore, we
believe that revisiting the basis for listing the area source
categories is inappropriate at this time. And, as further explained
below, we believe the particular facts for this area source category
indicate that GDF nationwide should implement controls based on their
monthly gasoline throughput.
We believe that the CAA provides the Agency with the authority to
regulate area sources nationwide. As explained in the Strategy and the
proposed rule, we interpret these provisions as providing EPA authority
to regulate listed area source categories on a nationwide basis.
Indeed, in several other area source rules, EPA has exercised this
discretion and issued rules of nationwide applicability, as it has done
here. See, e.g., 72 FR 26 (January 3, 2007); 72 FR 2930 (January 23,
2007); 72 FR 38864 (July 16, 2007).
A rule of nationwide applicability is particularly appropriate here
because control costs are not expected to differ in rural vs. urban
settings, so the control's cost-effectiveness is the same, and economic
impacts are equally distributed. In addition, after reviewing the
public comments and the additional analyses presented in support of
those comments, we determined that the controls discussed above are
commercially available as they are being used by many bulk facilities
and GDF, and they are cost-effective (considering the source type and
size thresholds noted above) for bulk facilities and GDF.
Therefore, consistent with CAA section 112(d)(5), the final rule
establishes standards that reflect the application of generally
available control technology or management practices, and we properly
considered cost-effectiveness and other economic impacts in determining
what constitutes GACT for this area source category.
The commenter also suggested that we should consider health risks
in making our GACT determination for each facility. In the 1990 CAA
Amendments, Congress established a two-phase approach for setting HAP
emission standards. Sierra Club v. EPA, 353 F.3d 976, 980 (DC Cir.
2004). The first phase is the initial standard setting phase, which is
the phase at issue in this rulemaking.\8\ In this phase, the standards
are technology-based, and this is true regardless of whether we issue
MACT standards under CAA section 112(d)(2) and (d)(3), or GACT
standards under CAA section 112(d)(5).\9\ See Senate Report at 148
(1989); Sierra Club v. EPA, 353 F.3d at 980.
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\8\ The second phase of standard setting involves a risk-based
analysis. Specifically, CAA section 112(f)(2) requires EPA to
determine--8 years after issuance of the initial MACT standard--
whether residual risks remain that warrant more stringent standards
than achieved through MACT. CAA section 112(f)(5) provides that the
Agency shall not be required to conduct a residual risk for area
sources for which EPA has issued a GACT standard.
\9\ CAA section 112(d)(4) does provide, however, that with
respect to pollutants for which the EPA Administrator has
established a health threshold, EPA can consider such threshold in
setting standards under CAA section 112(d). Benzene is a carcinogen
and is, thus, not a pollutant for which the Administrator has
established a health threshold, and, therefore, CAA section
112(d)(4) is not relevant to this category.
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In this final rule, EPA is establishing emissions standards for
this area source category under CAA section 112(d)(5), which authorizes
EPA to set emissions standards based on GACT for a listed area source
category. The legislative history describes GACT as ``methods,
practices, and techniques which are commercially available and
appropriate for application by sources in the category considering
economic impacts and the technical capabilities of the firms to operate
and maintain the emissions control systems.'' S. Rep. No. 101-228, at
171 (1989) (Senate Report). Consistent with the statute and the
legislative history, in determining GACT, we evaluated the control
technologies and management practices that reduce benzene emissions
from the Gasoline Distribution (Stage I) Area Source category, and we
assessed the costs of implementing such approaches. We did not consider
health impacts or risks in determining GACT for the facilities in this
area source category, as the commenter recommended, nor were we
required by statute to do so. However, we note that health risk did
play a role in this process in that the determination of which
pollutants to regulate and from which categories was governed by the
statutory requirement to regulate sources accounting for 90 percent or
more of the 30 HAP that present the greatest health threat in urban
areas.
Regarding the comment concerning whether State and local
regulations may be more stringent than Federal regulations, we
recognize that this could be an issue in a few States. As an initial
matter, however, for the reasons described herein, we believe the
record for this final rule fully supports the GACT determinations that
we made for the affected facilities. A survey conducted by STAPPA-
ALAPCO in 2002 showed that only two States, Idaho and South Dakota,
were precluded from issuing State regulations more stringent than
Federal rules. Twenty four other States have similar restrictions but
include a variety of exceptions such as: (1) Pre-existing rules; (2)
when significant benefits can be achieved; or (3) when the requirements
are needed to meet State Implementation Plan (SIP) commitments. We
believe that most States that have elected to implement standards more
stringent than the GACT standards finalized today for the gasoline
distribution (Stage I) area source category will be able to justify
maintaining their standards based on VOC reduction benefits or ozone
non-attainment requirements.
B. Selection of Regulatory Alternative
Comment: Two commenters recommended that if proposed RA 2 or RA 3
are considered, that the throughput volume of the GDF storage tanks be
taken into consideration and explicitly expressed in the regulatory
text. In the commenters' view, GDF should be re-defined to address
commercial or commercial-like operations only. The commenters further
asserted that facilities with storage tanks between 250 and 2,000
gallons that do not have high volume throughputs should not be
regulated as the reduction in emissions will not be significant if the
facility is filling the tanks only once or twice a year. One commenter
stated that, using AP-42 emission factors, a rough estimate of the
cost-effectiveness for a throughput of 1,000 gallons per year over the
15-year life of the tank is $79,000 dollars per ton of VOC and
$1,100,000 dollars per ton of HAP.
[[Page 1925]]
Two of the commenters stated that if EPA adopts either proposed RA
2 or RA 3, it would pose unnecessary regulatory burdens, conflict with
most State RACT requirements, and likely prove to be ineffective in
controlling ozone-causing vapors. One commenter stated that if EPA
adopts either proposed RA 2 or RA 3, the NESHAP should be limited to
GDF with storage tanks of greater than 1,000 gallons capacity.
One commenter stated that, with very few exceptions, State/local
RACT rules set tank capacity thresholds much higher than 250 gallons.
In objecting to proposed RA 2 and 3, the commenters stated: (1) The 250
gallon NESHAP applicability threshold under proposed RA 2 and 3 for GDF
is lower than all but two State RACT regulatory applicability
thresholds; (2) establishing a NESHAP threshold lower than most RACT
regulations will lead to confusion on the part of small owners of small
tanks who would be subject to the NESHAP, but not the RACT requirements
in most urban areas; (3) many manufacturing facilities operate numerous
small-capacity gasoline dispensing units to fuel a variety of fire
protection, maintenance, fleet and pool vehicles, as well as small non-
road equipment such as forklifts, landscaping/mowing equipment,
portable generators, and portable pumps. The commenter explained that
these fueling operations should be exempt from the NESHAP because the
proposed rule would conflict with State and local RACT requirements
under SIP for the ozone National Ambient Air Quality Standards, and
thus would require retrofits to the fueling areas.
Response: These commenters raise several issues related to the
application of the proposed rule to GDF, and especially to small GDF.
First, we believe that the preamble to the proposed rule is clear that
EPA intended for the proposed rule to cover both public and private
GDF. The types of storage tanks found at private refueling facilities
are the same as those found at large and small retail GDF. Likewise,
the potential for emissions and emission reductions and the control
technology is the same.
Second, as proposed, the rule required submerged fill on storage
tanks of greater than 250 gallons capacity. This threshold level for
control was based on a review of applicable State and local rules and
is believed to be consistent with existing requirements that cover a
large portion of the country. For the final rule, we considered the
comments above by analyzing the costs and cost-effectiveness at these
small tanks. Under CAA section 112(d)(1), we can distinguish among
classes, types, and sizes of sources within a source category. We have
finalized different requirements for the smallest of storage tanks
because the HAP cost-effectiveness of submerged fill climbs
significantly as the throughput of a tank becomes very small. If you
assume a 250 gallon capacity tank is loaded once a week (1,000 gallons
a month), which is an unusually high number of loadings, the resulting
cost-effectiveness for submerged fill would be well above $36,000 per
ton of HAP reduced. Using the threshold in many State VOC rules for
vapor balancing (10,000 gallons per month) the cost-effectiveness is
$12,000 per ton of HAP reduced. Therefore, we agree with the
commenters' concern and the final rule distinguishes between GDF based
on the monthly throughput of the facility. Specifically, we are
adopting a facility-wide threshold that distinguishes between GDF with
a monthly throughput of 10,000 gallons per month or more and those
below this threshold. In addition, we are retaining from the proposal
that submerged fill is not required for individual tanks with a 250-
gallon capacity independent of monthly throughput. However, under the
final rule, all GDF, including those with throughput less than 10,000
gallons per month and tanks with a 250-gallon capacity or less, are
required to perform the management practices to minimize evaporation.
The submerged fill and management practices requirements reduce
nationally 150 tons of HAP annually, including 5 tons of benzene
emissions. The cost of both the submerged fill for larger GDF and
management practices for all GDF is a capital cost of $3 million
nationally, but an annual cost credit of almost $500,000 nationally
because the value of the recovered gasoline ($1.73 million) is higher
than the annual control costs ($1.26 million). In addition to
establishing these monthly throughput levels, we have maintained the
reduced requirements for notifications, reporting, and recordkeeping
that were proposed for GDF.
Comment: Many commenters expressed their preference for proposed RA
3 and several offered recommendations on variations of the Stage I
vapor balancing requirements for GDF. One commenter suggested an annual
throughput threshold of 200,000 gallons for Stage I vapor balancing
applicability. The commenter further suggested that this applicability
threshold should be on a calendar year basis with onsite records of
monthly throughput required for all GDF, even those below the 200,000
gallon threshold. Two commenters stated that any requirement for Stage
I vapor balancing should specify that, unless otherwise approved by the
air pollution control agency having jurisdiction, only California Air
Resources Board (CARB) certified Stage I vapor balancing equipment
should be allowed at GDF.
One commenter recommended that Stage I vapor balancing be
universally required within 2 years of adoption of 40 CFR part 63,
subpart BBBBBB for tanks above a specified size and throughput and that
all new GDF storage tanks and all new delivery trucks be equipped with
Stage I vapor balancing equipment. Another commenter believes that all
GDF (urban and rural) with throughputs greater than 10,000 gallons per
month should be required to install and operate a vapor balance system.
Two other commenters expressed opposition to proposed RA 3 and
stated that they believe that vapor balancing is not cost-effective and
is substantially more difficult to implement than submerged fill. The
commenters claim that proposed RA 3 would impose significant costs on
GDF to achieve only marginal gains over submerged filling.
Two additional commenters stated that proposed RA 3 would cover a
high percentage of above-ground tanks that are not easily retrofitted
with Stage I vapor recovery. Specifically, the commenter stated that
retrofitting small above-ground tanks with vapor recovery poses two
practical difficulties. First, most small above-ground tanks were not
designed with fittings that will accommodate a vapor recovery line.
According to the commenter, for these tanks, vapor recovery retrofit
would require either cutting and welding to install new fittings or
tank replacement. Second, because the fittings in above-ground tanks
are elevated above grade, any fuel that enters the vapor recovery line
does not drain readily. The commenter noted that this would cause vapor
blockage and ineffective vapor recovery. The commenter further
indicated that many States do not approve vapor recovery systems for
any above-ground tanks for this reason.
Response: After considering all of the comments, we have concluded
that GDF vapor balancing at GDF is cost-effective and should be
required for GDF with throughputs greater than or equal to 100,000
gallons per month. We have not made any significant changes since the
proposal on how we implement the vapor balancing requirements. Also, we
believe our unit costs are representative of the installed control
costs.
As indicated by the proposal preamble and several commenters,
[[Page 1926]]
vapor balancing is required by many State and local agencies and is,
therefore, already generally available and in widespread use. About 62
percent of the national volume of gasoline is vapor balanced at GDF.
\10\ Given that most of these vapor balance systems were installed to
control VOC instead of HAP (nearly 100 percent of gasoline vapor versus
about 5 percent, respectively), we analyzed the HAP emissions reduction
and costs for different sized GDF. We concluded that a monthly
throughput could be developed to reasonably estimate the size of the
GDF, thereby enabling us to better determine what is GACT for the
different sizes of GDF. In our evaluation, some emission and cost
parameters changed (HAP content and interest rate, see section VI of
this preamble). We concluded from our cost and emission reduction
analysis that when vapor balancing is applied to facilities with
throughput levels above 100,000 gallons per month, the HAP cost-
effectiveness is about $3,700 per ton of HAP reduced as opposed to the
cost-effectiveness of the 10,000 gallon per month threshold analyzed at
proposal (about $9,000 per ton). The national emission reductions and
costs just for vapor balancing are about 2,600 tons of HAP reduced, at
a capital cost of $44 million and an annualized cost of $9.3 million
per year. In total, for all bulk facilities and all GDF requirements,
the total national impacts of today's final rules are 4,900 tons of HAP
reduced, at a capital cost of $75 million. The annualized capital,
operating and maintenance, and compliance costs are $20 million;
however, there is a $26.5 million per year credit for the recovered
gasoline, resulting in a total annualized cost credit of $6.5 million
per year for these final rules.
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\10\ As reported at proposal, vapor balancing is already used at
GDF in areas where about 68 percent of the gasoline is consumed.
However, some smaller facilities are exempted from this requirement,
thus, about 62 percent of the gasoline delivered to GDF is actually
controlled with vapor balancing.
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As described in the proposal preamble (71 FR 66073, November 9,
2006), we evaluated various vapor balancing requirements and selected
an implementation approach for the proposed and final rules that
included management practices rather than requiring each owner or
operator to test the efficiency of installed vapor balance systems. We
also proposed, and included in the final rules, that owners or
operators may use other equipment configurations if they successfully
demonstrate to the Administrator through performance testing, as
specified in the final rules, that their system is capable of reducing
emissions from the loading of their storage tanks by 95 percent. We
also allow owners or operators to demonstrate compliance with the
requirements of the final rule by informing EPA that the facility has
installed CARB or other State certified vapor balance systems. We do
not, however, require that only CARB certified systems be allowed as
suggested by the commenter. This approach of allowing owners or
operators to demonstrate that their chosen vapor balance systems are
effective is used by many State and local agencies and we believe that
the added flexibility is beneficial, and, therefore, have not made
implementation changes to what was proposed.
We believe that vapor balancing is GACT for these GDF. The
technology of vapor balancing has been effectively applied to storage
tanks at bulk plants (nearly all having above-ground tanks) and GDF for
many years. The commenter who claimed that vapor balancing would be
difficult or costly for many facilities, especially those with above-
ground tanks, did not provide any supporting data or cost estimates,
and we do not have any information that supports these claims. Our
analysis of the cost of installing a vapor balance system was based on
an average cost that included about $2,000 in labor costs plus $2,500
in capital costs, based on estimates obtained from the States of
California and Texas. While it is possible that some facilities may
incur costs greater than these, we believe that they represent the
upper end of the range of ``typical'' costs for installing a vapor
balance system. In fact, one State agency submitted a vendor's cost
estimate of $1,044 plus labor for a submerged fill and vapor balance
system. Thus, we believe that not only is vapor balance technology
available, but that the cost we analyzed is a reasonable estimate.
C. Bulk Terminals
1. Alternative To Comply With 40 CFR Part 63, Subpart WW
Comment: Two commenters stated that EPA should modify the rule to
allow for facilities to comply with either NSPS subpart Kb \11\ of 40
CFR part 60 or NESHAP subpart WW \12\ of 40 CFR part 63 for both
internal and external floating roof tanks. In addition, the commenters
stated that the rule language and Table 2 should be revised to allow
for compliance with subpart WW in lieu of subpart Kb for those tanks
subject to subpart Kb and to provide facilities the option to switch
from subpart Kb to subpart WW. The commenters also suggested that the
regulation should be clarified to reflect that a facility may choose to
comply with subpart WW in lieu of subpart Kb for tanks subject to
controls only under the proposed area source rule (with deck fitting
controls waived if the tank is subject to controls only under the area
source rule). The commenters explained that the ability to comply with
either rule is important because subpart WW provides clarity in areas
where subpart Kb is unclear. The commenters stated that these
clarifications are particularly important with respect to ladder/
guidepole combinations on internal floating roof tanks. According to
the commenters, these devices are commonly used with internal floating
roof tanks, yet were not addressed in prior rulemakings. The commenters
claim that while subpart WW allows for an equivalency demonstration on
the basis of emission factors and specifies test methods for
determining emission factors, subpart Kb is unclear on equivalency
demonstration.
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\11\ 40 CFR part 60, subpart Kb, Standards of Performance for
Volatile Organic Liquid Storage Vessels (Storage Vessels New Source
Performance Standards (NSPS)).
\12\ 40 CFR part 63, subpart WW, National Emission Standards for
Storage Vessels (Tanks)--Control Level 2.
---------------------------------------------------------------------------
Response: The final rule for these storage tanks was based on
portions of 40 CFR part 60, subpart Kb, which applies to storage tanks
installed after 1984. EPA determined that these requirements are GACT
for the storage tanks in this area source category and have, therefore,
included them in the final rule. Alternatively, the final rule allows
affected facilities the option of complying with applicable provisions
in 40 CFR part 63, subpart WW, as EPA believes these requirements are
equivalent to the applicable provisions in subpart Kb. See Table 1 in
40 CFR part 63, subpart BBBBBB for the specific requirements from these
subparts that storage tanks at bulk facilities must implement as GACT
under this area source rule.
Additionally, recognizing that certain facilities may be
simultaneously subject to 40 CFR part 60, subpart Kb and this area
source rule, the final rule specifies that owners or operators of
facilities that are subject to both subparts, and who are currently
operating in compliance with all applicable requirements in subpart Kb,
will be deemed in compliance with this area source rule.
However, we are not incorporating the commenter's recommendation
that facilities subject to subpart Kb should instead be allowed to
comply with 40
[[Page 1927]]
CFR part 63, subpart WW. We do not have the authority to allow owners
or operators subject to standards under different CAA provisions
(section 111 and section 112) to choose which regulations will apply to
their facilities. Facilities must comply with all applicable
regulations.
In addition, we disagree with the commenters claim that the
requirements of 40 CFR part 60, subpart Kb are unclear. We believe, and
industry agreed in the Storage Tank Emission Reduction Partnership
Program agreement (65 FR 19891, April 13, 2000), that the subpart Kb
wording of ``no visible gap'' means that the slotted guidepoles are
required to be controlled.
2. Control of Guidepoles
Comment: One commenter recommended that the final rule require that
rim seals and guidepoles be controlled on all external floating roof
tanks (EFRT) and that no other deck fitting controls be required. The
commenter presented emissions and emissions reduction estimates that
they believe supports their position that EFRT guidepoles are the
primary source of deck fitting emissions. In their example case of a
tank equipped with a slotted guidepole, 99 percent of the potential
emission reductions from the control of deck fittings are attributable
to control of the slotted guidepole. The commenter also presented
information to support their conclusion that the control of guidepoles
is a cost-effective measure, whereas the control of other deck fittings
is not cost-effective.
Response: We evaluated the commenter's recommendation, and the
supporting materials they provided, and decided not to revise the final
rule as requested. We believe that the commenter is correct that
guidepoles are the largest single source of emissions from deck
fittings, based on typical emission factors presented by the commenter,
and that controls are available and required by many rules. Thus, we
agree that they should be controlled under this rule. We also agree
that, in most typical cases, the emissions from all other deck fittings
are lower. However, we do not agree that all of the other deck fittings
should be allowed to remain uncontrolled.
The primary reason for our position on the control of deck fittings
is the difficulty in determining the point at which an ``opening'' in
the deck becomes large enough to be a serious concern. For example, a
loose-fitting cover on an access hatch may not be a significant source
of emissions if the openings or gaps around the cover are small.
However, if the same cover had a gap twice as large, the emissions
would be much greater and would probably warrant controls. The process
of determining when a gap around a cover actually becomes equivalent to
an opening in the deck would be very difficult, not only for facility
personnel, but also for enforcement personnel.
Another factor that we considered in making the decision to require
deck fitting controls is the variable nature of the emissions from
EFRT. While the emission factors used to estimate emissions from EFRT
are believed to provide reliable estimates for the typical tank, there
may be case-by-case factors that have a significant impact on
emissions. For example, the relative locations of two or more gaps or
openings in the deck may lead to the ``channeling'' of air currents
that significantly increase the emission rate. The position of a gap or
opening relative to the prevailing wind direction (whether the opening
is normally shielded or exposed) may also influence the emission rate.
As mentioned earlier, and for the reasons discussed above, we
believe that the final rule should require control of all deck
fittings. Because the cost of installing fitting controls on all deck
fittings is low, and, as proposed, we are allowing up to 10 years for
the installation of these controls so that the fittings can be
installed at a time when the tank is out of service and appropriate
service staff are on site, we believe that this requirement is
reasonable.
D. Testing and Monitoring
1. Continuous Monitoring and CEMS on Vapor Processors
Comment: One commenter recommended that EPA consider allowing
Continuous Parameter Monitoring Systems in cases where the facility
owner or operator can demonstrate that the monitored parameter is
sufficient to ensure compliance with the standards. The commenter
stated that parameter monitoring is already in place at most, if not
all, of these facilities in their State. Several other commenters
support alternative monitoring options for vapor combustion and carbon
adsorption units. The commenters claim that these alternatives, coupled
with comprehensive annual inspections and adequate maintenance programs
and the more frequent compliance testing requirements in the proposal,
should be reasonable to assure compliance with the proposed emission
limits. The commenters provided emissions testing data to support their
claims that the alternative monitoring options were an effective means
of ensuring continuing compliance. They also provided specific
recommendations on inspection and maintenance requirements that they
believe should be included in the alternative monitoring option.
Response: We have reviewed the data provided by the commenters and
believe that the alternative monitoring options will be acceptable for
ensuring compliance with the final rule. The devices used to control
gasoline vapors emitted from loading racks at bulk terminals are almost
exclusively thermal systems or carbon adsorbers. Thermal systems
achieve very high removal efficiencies in this source category because
the vapor stream being controlled is extremely combustible. The data
provided by the commenters show that as long as a pilot flame is
present to ignite the vapors, these systems consistently achieve
controlled emission levels far below the level required by the final
rule. The performance of carbon adsorbers has, likewise, been shown by
the commenter's data to remain sufficiently high when the system vacuum
levels are maintained at the appropriate levels.
The commenters also recommended that numerous specific components
of the control systems be inspected periodically (daily, for most
items) and maintained as necessary as a means of assuring that the
devices continue to perform as designed. Most of the commenter's
recommendations have been incorporated into the final rule. The
commenters did, however, recommend that the daily inspections occur
during each ``manned day of operation.'' We did not limit the
inspections to manned days of operation, but require them for each day
of operation. We believe that at least the routine daily inspections
should be conducted during each day that the facility is in operation,
regardless of whether the facility has operators on site, to assure
continuous compliance. For those facilities with no on-site personnel,
the owner or operator can choose not to use this alternative monitoring
approach, they can choose to have someone visit the site daily, or they
can install monitoring equipment necessary to record the specified
parameters on a daily basis.
The proposed rule specified in 40 CFR 63.11092(d) that operation of
the vapor processing system in a manner exceeding or going below the
monitored operating parameter value constituted a violation of the
emission standard for the applicable loading rack. As with the major
source MACT standard for this source category, we continue to require
[[Page 1928]]
that operation of the system at times when specific monitored
parameters exceed or go below the applicable monitored parameter value
be reported as a violation of the emission standard. However, we did
consider what the continuous compliance status should be if the
additional (to parameter monitoring) periodic maintenance and
inspection procedures reveal operational problems. The commenters
stated that problems discovered during maintenance and inspections
should trigger corrective actions, but should not be considered
violations of the emission standard. Because we have no data to support
a direct relationship between the maintenance and inspection procedures
and the actual emission rates, we agree with the commenters and believe
that the results of these procedures should be viewed as indicators of
proper operation rather than violations of the emission standard.
To ensure that proper maintenance and inspection procedures are
followed, we have included in the final rule a requirement that owners
or operators prepare a monitoring and inspection plan. The plan must
contain a description of each item to be included in the periodic
inspections and must define the normal operation of each item. The plan
must also specify conditions that would be considered malfunctions,
describe the corrective actions to be taken to correct any malfunction,
and define what the owner or operator considers to be a timely repair
for each potential malfunction. For the timing of necessary corrective
actions, we have used the corrective action timing from the recently
proposed NESHAP for Iron and Steel Foundries (72 FR 52984, September
17, 2007). We are requiring that facilities initiate corrective action
to determine the cause of a problem within 1 hour, initiate corrective
action to fix the problem within 24 hours, and complete all corrective
actions to fix the problem as soon as practicable (and as specified in
the monitoring and inspection plan). Thus, problems discovered during
inspections will be monitored and recorded by being subject to
corrective actions according to a monitoring and inspection plan that
the owner or operator is required to develop. Owners or operators will
be required to maintain a record of all corrective actions and report
them semi-annually.
We believe that, when combined with the periodic maintenance and
inspection requirements, the monitoring for the presence of a flame in
a thermal system and vacuum level in a carbon adsorber will provide
adequate assurance of continuing compliance with the final rule. We
have, therefore, incorporated the commenter's recommended options for
alternative parameter monitoring and periodic inspections (and
associated corrective action) into the final rule.
2. Past Performance Tests
Comment: One commenter supports EPA's willingness to accept past
performance tests, but requests that performance tests completed within
the 5 previous years be accepted. Many States require permit updates on
a 5-year cycle, so some facilities may have performance tests only
every 5 years.
Response: When we proposed to accept performance tests conducted
within the past 3 years, we considered that time period to be
representative of typical permit cycles. After consideration of the
commenter's request, we agree with the commenter that 5 years is a more
typical permit cycle and we have revised the provision in the final
rule to more accurately correspond to the typical 5-year cycle for most
State permits. In the final rule, we specify that we will accept
performance testing completed up to 5 years prior to submittal under 40
CFR 63.11092 rather than the 3 years that was proposed.
E. Control Costs and Cost Analyses Performed
1. Loading Racks
Comment: Two commenters stated that the costs of installing control
devices at loading racks is significantly more than was estimated in
EPA's cost analysis of the 80 mg/l control level. One of the commenters
stated that there were currently about 20 small uncontrolled loading
racks in use and submitted estimates of the costs to convert these
uncontrolled loading racks to bottom loading and to add a vapor
processor system. The commenter also stated that the HAP cost-
effectiveness for converting these uncontrolled loading racks was very
poor and suggested that a throughput threshold of 2 million barrels per
year was justified based on HAP cost-effectiveness. Three commenters
support the requirement of submerged fill for ``small'' bulk gasoline
terminals rather than routing vapors from the loading rack to a vapor
control device. The commenters claim that this level of control is
appropriate because these smaller facilities are typically located in
rural areas as designated by the urbanized area plus offset and urban
cluster definition (40 CFR 63.761), and, as such, do not pose an
unacceptable health risk to urban areas. One of these commenters also
presented data and concluded that the cost and cost-effectiveness of
converting uncontrolled splash loading facilities to submerged, top-
loading facilities was very reasonable.
Response: In the proposed rule, all bulk terminals would have been
required to control loading rack emissions to 80 mg/l, or less, with a
vapor processor. We reviewed both the cost data provided by the
commenter and the data we used to develop the proposal and then
considered the appropriateness of establishing a daily throughput for
bulk terminals in the final rule. We have placed a memorandum
documenting our analysis in the docket (Docket No. EPA-HQ-OAR-2006-
0406).
Based on our review of the information provided by the commenter,
and our analysis of their recommendation to include a daily throughput
for bulk terminals required to meet the 80 mg/l loading rack standard,
we have decided to revise the final rule. Because of the large capital
investment required for installing these controls (over $3 million per
facility), the resulting HAP cost-effectiveness is greater than $10,000
per ton for facilities with a gasoline throughput of less than 250,000
gallons per day. We are, therefore, including in the final rule a
different requirement for those terminals with an average gasoline
throughput less than 250,000 gallons per day (about 2 million barrels
per year).
Specifically, we determined that GACT for these low throughput
facilities is submerged fill systems for outgoing loads. We believe
that both the initial capital investment and the HAP cost-effectiveness
of this requirement are reasonable. The capital investment is about
$25,000 per facility and the annualized cost of the capital investment
is about $2,400. However, because the value of the recovered product is
about $75,700 per year, the net annualized cost of control is a credit
of about $73,000 per year. The resulting HAP cost-effectiveness is a
credit of almost $11,000 per ton. The requirement to use submerged fill
will result in greater than 50 percent reduction in emissions compared
to the splash fill base case. The impacts of controls on bulk terminals
(submerged fill for terminals below 250,000 gallons per day throughput,
80 mg/l vapor processors terminals above 250,000 gallons per day, and
leak testing of vapor recovery tank trucks loaded at terminal) in the
final rule is a reduction of 190 tons of HAP per year at a capital
[[Page 1929]]
cost of $500,000 and a cost credit of $1.4 million in annualized cost
(because of the value of the gasoline vapor recovered (about $1.5
million)).
Although the commenters claim that these sources are located in
rural areas, the decision to include this level of control for small
bulk terminals was based on our re-analysis of the costs of control
rather than on location. As was discussed in the response to an earlier
comment, we believe that the development of area source standards that
apply nationwide in all areas is appropriate given the facts and
circumstances of this particular source category.
2. Internal Floating Roof Tanks
Comment: One commenter submitted facility data used to develop
estimates of the cost, HAP reductions, and HAP cost-effectiveness of
adding a secondary seal to internal floating roof tanks (IFRT) that
have vapor mounted primary seals. The commenter provided capacity and
throughput data for nine storage tanks. The commenter did not provide
any specific recommendations for changes to the proposed rule, but
stated that the cost-effectiveness for this control measure was very
poor.
Response: As a result of our review of the data provided by the
commenter, and a re-evaluation of the costs we estimated during the
development of the proposal, we have decided to revise the final rule.
In our examination of the impacts of storage tank controls prior to
proposal, we combined the estimated impacts for IFRT and EFRT and
considered the combined impacts. The impacts of the proposed rule, when
all storage tank types are combined, were considered to be reasonable.
However, the commenter is correct that the cost-effectiveness of adding
secondary rim seals to an IFRT with an existing vapor mounted primary
rim seal, when considered separately from the other tank types, is
estimated to be greater than $150,000 per ton of HAP reduced. The final
rule will, therefore, require that IFRT have a primary seal but will
not require a secondary seal.
F. Notifications, Reporting, and Recordkeeping
Comment: One commenter supported the proposal to waive the
requirements for submission of Initial Notification and Notification of
Compliance Status for bulk plants and GDF and suggests this waiver be
expanded to include pipeline breakout stations and pipeline pumping
stations.
The commenter also suggests that all facilities be allowed to
submit reports only when there are deviations to report rather than
being required to submit semi-annual reports even if there are no
deviations during the period. The commenter stated that if there were
no deviations, there would be no report. The commenter noted that EPA
wrote in the preamble to the proposed rule ``there are approximately
1,800 pipeline breakout stations nationwide.'' The commenter points out
that this would result in 3,600 new semi-annual reports to agencies
each year, placing undue burden on facilities and agencies. The
commenter suggested that, as an alternative, only terminals and bulk
plants should be required to submit semi-annual reports. The commenter
stated that the regulatory requirements proposed for pipeline breakout
stations, pipeline pumping stations, and GDF are easily auditable
(e.g., log of equipment leak inspections, installation of submerged
fill) and should not require semi-annual reporting. The commenter also
stated that EPA should clarify that delay of repair is allowed with
proper documentation and that the Administrator's approval is not
required.
Response: Our intent in not requiring the submission of Initial
Notification and Notification of Compliance Status for bulk plants and
GDF was to reduce the burden on small businesses. We also believe this
provision is appropriate because of the relative ease with which an
inspector can determine if these facilities are meeting either
submerged fill or vapor balancing requirements of the rule. However, it
is more difficult to determine compliance with the storage tank
requirements and equipment leak inspection requirements for pipeline
breakout stations and pipeline pumping stations. We believe that it is
reasonable to require these larger facilities to submit notifications
certifying their status. These facilities are also typically not small
businesses, the commenter did not provide data to support their
position, and the reporting burden is not expected to be a significant
burden.
With regard to the commenter's position that only reports of
deviations be required rather than semi-annual reporting, we agree that
for some source types these reports may not be necessary. Thus, we have
revised the periodic reporting requirements in the final rule to
require that pipeline pumping stations and bulk plants must only
submit, on a semi-annual basis, any occurrences of an equipment leak
for which no repair attempt was made within 5 days or for which repair
was not completed within 15 days after detection. If there are no such
occurrences, no semi-annual report is required. However, the monthly
equipment leak inspections must be performed and a record of the
inspections must be kept. We have made this revision because, other
than monthly equipment leak inspections, the only control measure
typically required at these facilities is the use of submerged fill at
bulk plants. Because submerged fill equipment is not expected to
deteriorate significantly over time and is not subject to operating
variables that impact emissions, we do not believe that semi-annual
reporting is necessary. Likewise, as the commenter pointed out, the
monthly equipment leak requirements include the maintenance (recording
of the inspection event) of an inspection log which is required to be
readily accessible to an inspector. We also considered that there are a
large number of these facilities and that a significant number of the
semi-annual reports would only be reporting that no delays in repair
occurred. Therefore, as long as the equipment leak inspections are
performed and documented, and as long as there are no delays in needed
repairs, we do not believe that any reporting is necessary.
We have not, however, changed the requirement for semi-annual
reporting by bulk terminals and pipeline breakout stations because we
view these reports as necessary to ensure that facilities operate and
maintain their storage tanks (and loading racks at bulk terminals)
according to the provisions of the rule.
Finally, in response to the commenter's suggestion, we have
clarified in the final rule that Administrator approval is not
necessary for a facility to utilize the delay of repair provisions in
the rule. Instead, the facility must document why repair within 15 days
was not feasible, and provide that explanation in its next semi-annual
report. We would point out, however, that this requirement may be
implemented by a delegated authority under 40 CFR 63.11099 and that the
reasons for a delay in repairs must be properly documented and must be
acceptable to the delegated authority. If the documentation is not
acceptable to the delegated authority, the delay in repair may be
considered a violation of the standards.
VI. Summary of Environmental, Energy, Cost, and Economic Impacts
As discussed earlier, gasoline distribution activities are carried
out at several different types of facilities. These include bulk
terminals, pipeline breakout stations, pipeline pumping stations, bulk
plants, and GDF. Our analysis of the gasoline distribution industry led
us to estimate that there
[[Page 1930]]
were approximately the following numbers of affected area sources
incurring costs (and emission reductions) within each type of facility:
20 bulk terminals, 1,600 cargo tanks, 400 pipeline breakout stations,
1,800 pipeline pumping stations, 390 bulk plants, and 9,900 GDF. The
following paragraphs present our estimates of the impacts that these
final rules would have on these facilities.
A. What are the air impacts?
Nationwide, gasoline distribution facilities emit annually an
estimated 475,000 tons of VOC and 22,800 tons of HAP (including 800
tons of benzene). As discussed earlier, gasoline no longer contains EDC
so there are no longer any emissions of EDC from this source category.
We estimate that, after the final rules are implemented, annual HAP
emissions will be reduced by 4,900 tons, which includes 175 tons of
benzene, from about 14,000 facilities. The final rules will also reduce
VOC emissions by 103,000 tons per year, which represents about a 22
percent reduction in emissions of these pollutants, compared to the
baseline. At proposal, we did a separate analysis of the impacts of the
proposed Mobile Source Air Toxics Rule (MSAT), but since the MSAT rule
is now final, it is considered as part of the baseline. Instead of the
total HAP content of gasoline vapor, including 0.27 percent benzene (as
used in our analysis at proposal), the MSAT rule will reduce it to
about 0.17 percent. Also, we assume that MTBE will be completely phased
out of the gasoline pool. The net effect is that the HAP content will
be reduced from about 7.3 percent (estimated at proposal) to about 4.8
percent in gasoline vapor. Thus, all impact estimates reported in this
notice reflect the impacts after full implementation of the MSAT rule
and the elimination of MTBE in gasoline.
We project that any adverse air impacts associated with this rule
will be insignificant. Using national data from all stationary benzene
emission sources in the 1999 National Air Toxic Assessment (NATA) and
ratioing them to the national benzene emissions from this source
category, we approximate that this rule will reduce about 22 percent of
the current benzene emissions from these sources, resulting in a
reduction of incidences of cancer from benzene exposure by 0.08 cases
per year. These cancer incidence reduction approximations are
considered a very rough estimate because no exposure analysis was
performed for this source category and the 1999 NATA data should be
used cautiously, as the overall quality and uncertainties of the NATA
results will vary from location to location, as well as from pollutant
to pollutant. In addition, EPA's Scientific Advisory Board has
cautioned the Agency against using the results of the NATA assessment
for regulatory purposes. Further information on the limitations of NATA
is discussed at the following Web site: http://www.epa.gov/ttn/atw/nata1999/index.html
.
B. What are the cost impacts?
The cost of implementing the final rules for gasoline distribution
area source facilities would include the capital and annualized costs
to control storage tanks, loading racks, equipment leaks, and cargo
tanks, as well as the costs of complying with the testing, monitoring,
reporting, and recordkeeping requirements. Since proposal we changed
the interest rate used in our cost analysis to amortize the initial
costs. The annualized cost estimates presented in the proposal are
based on a 10 percent interest rate. As we reported in the proposed
rule, cost documentation, the interest rate that the Agency uses for
cost analyses such as these should have been 7 percent. We committed to
correct that over-estimate in the final analyses. We have also
corrected the cost analysis to incorporate the changes discussed in
section III of this preamble and to incorporate the simplified
monitoring, reporting, and recordkeeping requirement costs discussed in
the proposal cost documentation. Thus, the cost analyses reported below
and elsewhere in this notice includes these changes.
The final rules are estimated to result in capital expenditures of
approximately $75 million. The annualized cost of the capital
expenditures is estimated to be about $7.5 million. Annual operating
and maintenance costs are estimated at about $4.1 million. We have
estimated the annual costs of testing, monitoring, reporting, and
recordkeeping to be about $8.4 million. Because of the value ($26.5
million) of the product that is either recovered or prevented from
evaporating, however, we estimate that the annualized cost of the final
rules is a credit of about $6.5 million.
C. What are the economic impacts?
These final rules affect area sources from pipeline transportation,
bulk stations and terminals, local and long-haul trucking, and gasoline
stations which make up the gasoline distribution industry. We performed
an economic impact analysis with methodology based on a single-market
partial-equilibrium analysis of the national gasoline market. The
analysis estimates changes in gasoline prices and outputs for affected
sources under the control requirements in the final rules. The results
of our analyses are stated below.
The compliance cost results in an insignificant increase in
gasoline prices. This price increase is less than 1 cent per gallon
(less than 0.001 percent).
Given these small increase in prices, the corresponding reductions
in gasoline consumption are also minor. The estimated annual reduction
is less than 3 million gallons per year.
The overall total annual surplus changes (social costs/gains),
which reflect changes in consumer and producer behavior in response to
the compliance costs of the final rule, is a net gain of $6.5 million.
For more information, please refer to the Economic Impact Analysis
report that is in the public docket for these rules.
D. What are the non-air environmental and energy impacts?
Water quality would not be affected by implementation of these
rules. These final rules do not contain any requirements related to
water discharges or wastewater collection, and no additional gasoline
is expected to enter these areas as a result of these rules. We project
that the implementation of the required management practices will
result in a decrease in the release of gasoline to the environment, but
we have not quantified this reduction.
We also project that there will be no significant solid waste
impact. Neither thermal oxidizers nor condensers generate any solid
waste as a by-product of their operation. When carbon adsorption
systems are used, the spent activated carbon that cannot be further
regenerated may be disposed of in a landfill, which would contribute a
small amount of solid waste.
The control devices used to control emissions from loading racks
and some storage tanks use electric motor-driven blowers, dampers, or
pumps, depending on the type of system, in addition to electronic
control and monitoring systems. The installation of these devices would
have a small negative energy impact. We believe, however, that there
will be very few, if any, new installations of these control devices as
a result of these rules. Also, because the liquid being controlled by
these systems is gasoline, and some of the applied control measures
would keep this fuel in the distribution system, they would have a
positive impact on this form of energy. We estimate that these rules
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would prevent a total of approximately 35 million gallons of gasoline
from being lost to evaporation annually.
VII. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review
Under Executive Order 12866 (58 FR 51735, October 4, 1993), this
action is a ``significant regulatory action.'' The Executive Order
defines ``significant regulatory action'' as one that is likely to
result in a rule that may ``raise novel legal or policy issues arising
out of legal mandates, the President's priorities, or the principles
set forth in the Executive Order.'' Accordingly, EPA submitted this
action to the Office of Management and Budget (OMB) for review under
Executive Order 12866 and any changes made in response to OMB
recommendations have been documented in the docket for this action.
B. Paperwork Reduction Act
The information collection requirements in these final rules have
been submitted for approval to OMB under the Paperwork Reduction Act,
44 U.S.C. 3501, et seq. An Information Collection Request (ICR)
document has been prepared by EPA and has been assigned EPA ICR number
2237.02. A copy may be obtained from Susan Auby, Collection Strategies
Division (2822T), EPA, 1200 Pennsylvania Avenue, NW, Washington, DC
20460, or by calling (202) 566-1672. A copy may also be downloaded from
the public docket for this action (Docket ID number EPA-HQ-OAR-2006-
0406), which can be found in http://www.regulations.gov. The
information collection requirements are not enforceable until OMB
approves them.
The information to be collected for the final area source rules are
based on notification, recordkeeping, and reporting requirements in the
NESHAP General Provisions in 40 CFR part 63, subpart A, which are
mandatory for all operators subject to national emission standards.
These recordkeeping and reporting requirements are specifically
authorized by section 114 of the CAA (42 U.S.C. 7414). All information
submitted to the EPA pursuant to the recordkeeping and reporting
requirements for which a claim of confidentiality is made is
safeguarded according to EPA policies set forth in 40 CFR part 2,
subpart B.
These final rules require performance testing of control devices
used to control emissions from loading racks at bulk terminals and from
some storage tanks at bulk terminals and pipeline breakout stations.
They also require annual inspections of storage tanks at bulk terminals
and pipeline breakout stations and collection of cargo tank vapor
tightness documentation by bulk terminals. In addition, the rules
require periodic pressure testing of vapor balance equipment at GDF.
Finally, monthly equipment leak inspections at bulk terminals, pipeline
breakout stations, pipeline pumping stations, and bulk plants are
required. These final rules do not require any notifications or reports
beyond those required by the General Provisions. The recordkeeping
requirements require only the specific information needed to determine
compliance. We have taken steps to minimize the reporting and
recordkeeping requirements for the smaller facilities (bulk plants and
GDF) that are affected by these final rules.
The annual monitoring, reporting, and recordkeeping burden to
affected sources for this collection (averaged over the first three
years after the effective date of the promulgated rule) is estimated to
be about 129,700 labor hours per year, with a total annual cost of $8.4
million per year. Most of this burden will be spread over approximately
14,000 facilities that will be required to keep records and file
reports. Of this total burden, however, about 68,500 labor hours (and
$4.5 million) will be incurred by about 4,200 of the larger, bulk
distribution facilities. Depending on the facility type, these
estimates include two one-time notifications, a one-time performance
test and report for control devices, periodic equipment inspections,
and semi-annual compliance reporting. We did not receive any comments
on the proposed ICR, therefore, the ICR has only been updated to
reflect any changes in affected sources and reporting and recordkeeping
discussed earlier in this notice. Burden means the total time, effort,
or financial resources expended by persons to generate, maintain,
retain, or disclose or provide information to or for a Federal agency.
This includes the time needed to review instructions as well as the
time to develop, acquire, install, and use technology and systems for
the purposes of collecting, validating, and verifying information,
processing and maintaining information, and disclosing and providing
information; adjust the existing ways to comply with any previously
applicable instructions and requirements; train personnel to be able to
respond to a collection of information; search data sources; complete
and review the collection of information; and transmit or otherwise
disclose the information.
An agency may not conduct or sponsor, and a person is not required
to respond to a collection of information unless it displays a
currently valid OMB control number. The OMB control numbers for EPA's
regulations in 40 CFR are listed in 40 CFR part 9. When this ICR is
approved by OMB, the Agency will publish a technical amendment to 40
CFR part 9 in the Federal Register to display the OMB control number
for the approved information collection requirements contained in these
final rules.
C. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) generally requires an agency
to prepare a regulatory flexibility analysis of any rule subject to
notice and comment rulemaking requirements under the Administrative
Procedure Act or any other statute unless the agency certifies that the
rule will not have a significant economic impact on a substantial
number of small entities. Small entities include small businesses,
small organizations, and small governmental jurisdictions.
For the purposes of assessing the impacts of these final rules on
small entities, small entity is defined as: (1) A small business whose
parent company has less than $25 million in revenue (NAICS 447110,
Gasoline Stations with Convenience Stores), less than $23.5 million in
revenue (NAICS 484220 and 484230, Hazardous Materials Trucking [except
waste], local and long-distance), and less than $8.0 million in revenue
(NAICS 447190, Other Gasoline Stations), and fewer than 100 employees
(NAICS 424710, Petroleum Bulk Stations and Terminals), and 1,500
employees (NAICS 486910, Pipeline Transportation of Refined Petroleum
Products) based on Small Business Administration size standards; (2) a
small governmental jurisdiction that is a government of a city, county,
town, school district or special district with a population of less
than 50,000; and (3) a small organization that is any not-for-profit
enterprise which is independently owned and operated and is not
dominant in its field. Under these definitions, approximately 60,000
gasoline distribution firms are considered small entities. For more
information, refer to http://www.sba.gov/size/sizetable2002.html. The
economic impacts of the regulatory alternatives are analyzed based on
the consumption of gasoline. However, for the small business impact
analysis, these impacts are described in terms of comparing the
compliance costs to sales
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revenues for representative entities. For more detail, see the current
Economic Impact Analysis in the public docket.
After considering the economic impacts of these final rules on
small entities, I certify that the final rules will not have a
significant economic impact on a substantial number of small entities.
This certification is based on the economic impact of the final rules
to affected small entities in the entire gasoline distribution
industry. The small entities directly regulated by these final rules
are industries within the NAICS codes 424710, 447110, 447190, 484220,
and 484230. We have determined that Pipeline Transportation of Refined
Petroleum Products (NAICS 486910) does not contain any small business
entities and, therefore, is not included in the small business impact
analysis. For the regulatory alternatives analyzed, all gasoline
distribution industry categories that contain small business entities
are expected to have an average annual cost to sales ratio of less than
one percent with cost impacts for all regulated small entities ranging
from a cost savings to less than 0.61 percent of sales. In addition, no
other adverse impacts are expected to occur to these affected small
businesses.
For more information on the small entity economic impacts
associated with the final decisions for gasoline distribution
industries affected by this action, please refer to the Economic Impact
and Small Business Analyses in the public docket.
Although these final rules will not have a significant economic
impact on a substantial number of small entities, EPA nonetheless has
tried to reduce the impact of these final rules on small entities. When
developing the standards, we took special steps to ensure that the
burdens imposed on small entities were minimal. We conducted meetings
with industry officials to discuss regulatory options and the
corresponding burden on industry, such as recordkeeping and reporting.
D. Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector. Under section 202 of the UMRA, EPA
generally must prepare a written statement, including a cost-benefit
analysis, for proposed and final rules with ``Federal mandates'' that
may result in expenditures to State, local, and tribal governments, in
the aggregate, or to the private sector, of $100 million or more in any
one year. Before promulgating an EPA rule for which a written statement
is needed, section 205 of the UMRA generally requires us to identify
and consider a reasonable number of regulatory alternatives and adopt
the least costly, most cost-effective, or least burdensome alternative
that achieves the objectives of the rule. The provisions of section 205
do not apply when they are inconsistent with applicable law. Moreover,
section 205 allows EPA to adopt an alternative other than the least
costly, most cost-effective, or least burdensome alternative if the
Administrator publishes with the final rule an explanation why that
alternative was not adopted. Before EPA establishes any regulatory
requirements that may significantly or uniquely affect small
governments, including tribal governments, it must have developed under
section 203 of the UMRA a small government agency plan. The plan must
provide for notifying potentially affected small governments, enabling
officials of affected small governments to have meaningful and timely
input in the development of regulatory proposals with significant
Federal intergovernmental mandates, and informing, educating, and
advising small governments on compliance with the regulatory
requirements.
Based on the cost and economic impact analyses discussed in
sections VI.B and C, and the paperwork analysis in section VII.B of
this preamble, EPA has determined that these final rules do not contain
a Federal mandate that may result in expenditures of $100 million or
more to State, local, and tribal governments in the aggregate, or to
the private sector in any one year. Thus, these final rules are not
subject to the requirements of sect