[Federal Register Volume 82, Number 12 (Thursday, January 19, 2017)]
[Notices]
[Pages 6509-6522]
[FR Doc No: 2017-01097]

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ENVIRONMENTAL PROTECTION AGENCY

[EPA-OAR-2016-0596; FRL-9958-48-OAR]
RIN 2060-AT22

Response to December 9, 2013, Clean Air Act Section 176A Petition
From Connecticut, Delaware, Maryland, Massachusetts, New Hampshire, New
York, Pennsylvania, Rhode Island and Vermont

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of proposed action on petition.

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SUMMARY: The Environmental Protection Agency (EPA) is proposing to deny
the Clean Air Act (CAA or Act) petition filed on December 9, 2013 (and
amended on December 17, 2013), by the states of Connecticut, Delaware,
Maryland, Massachusetts, New Hampshire, New York, Pennsylvania, Rhode
Island and Vermont. The petition requested that the EPA add the states
of

Illinois, Indiana, Kentucky, Michigan, North Carolina, Ohio, Tennessee,
West Virginia and Virginia to the Ozone Transport Region (OTR). As a
result of this denial, the geographic scope or requirements of the OTR
will remain unchanged.

DATES: Comments. Comments must be received on or before February 21,
2017.
    Public Hearing. If anyone contacts us requesting to speak at a
public hearing by January 30, 2017, we will hold a public hearing.
Additional information about the hearing would be published in a
subsequent Federal Register notice. For updates and additional
information on a public hearing, please check the EPA's Web site for
this notice at https://www.epa.gov/implementation-2008-national-ambient-air-quality-standards-naaqs-ozone-state.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2016-0596, at http://www.regulations.gov. Follow the online
instructions for submitting comments. Once submitted, comments cannot
be edited or removed from Regulations.gov. The EPA may publish any
comment received to its public docket. Do not submit electronically any
information you consider to be Confidential Business Information (CBI)
or other information whose disclosure is restricted by statute.
Multimedia submissions (audio, video, etc.) must be accompanied by a
written comment. The written comment is considered the official comment
and should include discussion of all points you wish to make. The EPA
will generally not consider comments or comment contents located
outside of the primary submission (i.e., on the Web, Cloud, or other
file sharing system). For additional submission methods, the full EPA
public comment policy, information about CBI or multimedia submissions,
and general guidance on making effective comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT: Questions concerning this proposed
notice should be directed to Ms. Gobeail McKinley, U.S. Environmental
Protection Agency, Office of Air Quality Planning and Standards, Air
Quality Policy Division, Mail code C539-01, Research Triangle Park, NC
27711, telephone<PHONE_NUMBER>; email at<EMAIL_ADDRESS>    To request a public hearing or information pertaining to a public
hearing on this document, contact Ms. Pamela Long, U.S. Environmental
Protection Agency, Office of Air Quality Planning and Standards, Air
Quality Policy Division, (C504-01), Research Triangle Park, NC 27711;
telephone number<PHONE_NUMBER>; fax number<PHONE_NUMBER>; email at:
<EMAIL_ADDRESS>(preferred method of contact).

SUPPLEMENTARY INFORMATION:

I. General Information

    Throughout this document wherever ``we,'' ``us,'' or ``our'' is
used, we mean the U.S. EPA.
    The information in this Supplementary Information section of this
preamble is organized as follows:

I. General Information
    A. Where can I get a copy of this document and other related
material?
    B. What acronyms, abbreviations and units are used in this
preamble?
II. Executive Summary of the EPA's Proposed Decision on the CAA
Section 176A Petition
III. Background and Legal Authority
    A. Ozone and Public Health
    B. Sections 176A and 184 of the CAA and the OTR Process
    C. Legal Standard for this Action
    D. The CAA Section 176A Petition and Related Correspondence
IV. The EPA's Proposed Decision on the CAA Section 176A Petition
    A. The CAA Good Neighbor Provisions
    B. The EPA's Interstate Transport Rulemakings under the Good
Neighbor Provision
    C. Additional Rules that Reduce NOX and VOC Emissions
    D. Rationale for the Proposed Decision on the CAA 176A Petition
V. Judicial Review and Determinations Under Section 307(b)(1) of the
CAA
VI. Statutory Authority

I. General Information

A. Where can I get a copy of this document and other related
information?

    In addition to being available in the docket, an electronic copy of
this document will be posted at https://www.epa.gov/implementation-2008-national-ambient-air-quality-standards-naaqs-ozone-state.

B. What acronyms, abbreviations and units are used in this preamble?

APA Administrative Procedures Act
CAA or Act Clean Air Act
CFR Code of Federal Regulations
CH4 Methane
D.C. Circuit United States Court of Appeals for the District of
Columbia Circuit
EGU Electric Generating Unit
EPA U.S. Environmental Protection Agency
FIP Federal Implementation Plan
FR Federal Register
NAAQS National Ambient Air Quality Standard
NEI National Emissions Inventory
NESHAP National Emission Standard for Hazardous Air Pollutants
NOX Nitrogen Oxides
NSPS New Source Performance Standard
NSR New Source Review
OMB Office of Management and Budget
OTAG Ozone Transport Assessment Group
OTC Ozone Transport Commission
OTR Ozone Transport Region
PM Particulate Matter
RACT Reasonably Available Control Technology
SIP State Implementation Plan
SO2 Sulfur Dioxide
UMRA Unfunded Mandates Reform Act
VOC Volatile Organic Compound

II. Executive Summary of the EPA's Proposed Decision on the CAA Section
176A Petition

    The EPA is proposing to deny a petition filed pursuant to CAA
section 176A(a) that requests the states of Illinois, Indiana,
Kentucky, Michigan, North Carolina, Ohio, Tennessee, West Virginia and
Virginia \1\ (the upwind states) be added to the OTR, which was
established pursuant to section 184 of the CAA. The petitioning states
of Connecticut, Delaware, Maryland, Massachusetts, New Hampshire, New
York, Pennsylvania, Rhode Island and Vermont (the petitioning states,
downwind states, or petitioners) submitted a technical analysis
intended to demonstrate that these nine upwind states significantly
contribute to violations of the 2008 ozone national ambient air quality
standard (NAAQS) in one or more of the current OTR states.
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    \1\ The parts of northern Virginia included in the Washington,
DC Consolidated Metropolitan Statistical Area are already in the
OTR. The petition seeks to add the remainder of the state of
Virginia to the OTR as well.
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    Section 176A(a) of the CAA provides the Administrator with the
authority to develop interstate transport regions for particular
pollutants where the Administrator determines that interstate transport
of air pollutants from one or more states contributes significantly to
violations of air quality standards in other states. The creation of
such an interstate transport region requires the establishment of a
transport commission with representatives from each state that make
recommendations for the mitigation of the interstate pollution.
Congress created one such transport region by statute in CAA section
184(a) in 1990 in order to address the interstate transport of ozone
pollution, referred to as the OTR. The statute establishes certain
minimum control requirements that apply to sources of emissions in each
state in the OTR intended to address transported ozone pollution and
provides the Ozone Transport Commission (OTC), comprised of
representatives of each state in the OTR, with the authority to
recommend

additional controls within the region. The downwind states' petition
seeks to expand the OTR to include additional states and would thereby
subject sources in those states to the requirements applicable in the
OTR.
    The CAA provides other provisions for addressing the interstate
transport of ozone pollution besides sections 176A and 184. In
particular, the Act includes a specific provision addressing how the
EPA and the states are to mitigate the specific sources of emissions
that contribute to interstate ozone pollution transport. Section
110(a)(2)(D)(i)(I) of the CAA, also referred to as the ``good
neighbor'' provision, requires that states develop state implementation
plans (SIPs) to prohibit emissions that will ``contribute significantly
to nonattainment in, or interfere with maintenance by, any other
state'' with respect to a NAAQS. Pursuant to this provision, states
have the primary responsibility for reducing the interstate transport
of pollutants, including ozone. Should the states fail to fulfill this
responsibility, the EPA is obligated to develop federal implementation
plans (FIPs) to ensure that appropriate emissions reductions are
achieved and that the air quality standards downwind are attained and
maintained. The CAA also contains a provision in section 126(b) that
permits states and political subdivisions to petition the Administrator
for a finding that any major source or group of stationary sources
emits in violation of the prohibition in the good neighbor provision.
In response to such a finding, the EPA may promulgate additional limits
on such sources, and these limits must then be included in a state's
good neighbor SIP pursuant to CAA section 110(a)(2)(D)(ii). This
provision provides a means for the EPA to mediate disputes between the
states regarding the compliance of specific sources with the
requirements of the good neighbor provision. As described in detail
later in this document, states and the EPA have historically used their
authority under CAA sections 110(a)(2)(D)(i)(I) and section 126 to
develop SIPs and FIPs that target specific sources of ozone precursor
emissions to address interstate ozone transport across the U.S.,
including with respect to air quality concerns stemming from interstate
transport of ozone within the OTR.
    Pursuant to these and other CAA authorities, the EPA and states
within and outside the OTR have taken significant actions independently
and in collaboration for many years to address ozone pollution problems
by reducing precursor emissions (i.e., nitrogen oxides (NOX)
and volatile organic compounds (VOC)) that contribute to the formation
of ozone. The EPA and states have promulgated a number of rules that
have already or are expected in the future to result in reductions in
ozone concentrations that will help areas attain the 2008 ozone NAAQS.
Several of these rules were developed specifically to address the
interstate transport of ozone pollution. With respect to the 2008 ozone
NAAQS, the EPA recently promulgated FIPs to address the requirements of
CAA section 110(a)(2)(D)(i)(I) to specifically address interstate
transport of ozone pollution in the eastern U.S. from power plants
during the ozone season.\2\ Other rules reduce ozone precursor
emissions to address other ozone pollution challenges (e.g., ozone
attainment demonstrations) and impact the interstate transport of ozone
pollution as a co-benefit. Further, several other state and federal air
quality regulations reduce emissions of other air pollutants, such as
rules targeted to reduce air toxics from industrial boilers, which
often also result in the reduction of ozone precursors (e.g.,
NOX) and thereby reduce interstate ozone transport as a co-
pollutant benefit.
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    \2\ See 81 FR 74504, October 26, 2016, Cross-State Air Pollution
Rule Update for the 2008 Ozone NAAQS.
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    Section 176A of the CAA provides the Administrator with discretion
to determine whether to establish a new transport region or expand an
existing transport region. The EPA has reviewed the request of the
petitioners in light of the control requirements that apply to sources
located in states now included in the OTR and that would apply to
states if they were added and the other statutory authorities provided
for addressing the interstate transport of ozone pollution. The EPA
proposes to deny the CAA section 176A petition to add states to the OTR
for the purpose of addressing the interstate ozone transport problem
with respect to the 2008 ozone NAAQS. The EPA believes that, based on
the reasons fully described in Section IV of this document, other CAA
provisions (e.g., CAA sections 110 or 126) provide a better alternative
pathway for states and the EPA to develop a targeted remedy to address
interstate ozone transport that focuses on the precursor pollutants and
sources most effective at addressing the nature of the downwind air
quality problems identified by the petitioning states. The states and
the EPA have historically and effectively reduced ozone and the
interstate transport of ozone pollution using these CAA authorities to
implement necessary emissions reductions. For purposes of addressing
interstate transport of ozone with respect to the 2008 ozone NAAQS, the
EPA believes that continuing its longstanding and effective utilization
of the existing and expected control programs under the CAA's mandatory
good neighbor provision embodied in CAA section 110(a)(2)(D)(i)(I) is a
more effective means of addressing regional ozone pollution transport
with respect the 2008 ozone NAAQS for the areas within the OTR that
must attain the NAAQS. Thus, the EPA believes that regulation pursuant
to these other CAA authorities together with the implementation of
existing EPA and state rules expected to further reduce precursor
pollutant emissions that contribute to the interstate transport of
ozone are the more effective means for addressing the interstate ozone
transport problem with respect to the 2008 ozone NAAQS. Accordingly,
the EPA is proposing to deny the CAA section 176A petition filed by the
petitioning states. This proposed denial is specific to the 2008 ozone
NAAQS, but the EPA notes that under different circumstances the OTR
provisions have been an effective tool for air quality management, and
could be similarly effective in the future. The EPA requests comment on
the proposed denial of the petition based on the EPA's preferred
approach to addressing interstate transport with respect to the 2008
ozone NAAQS pursuant to these other CAA authorities.

III. Background and Legal Authority

A. Ozone and Public Health

    Ground-level ozone causes a variety of negative effects on human
health, vegetation, and ecosystems. In humans, acute and chronic
exposure to ozone is associated with premature mortality and a number
of morbidity effects, such as asthma exacerbation. In ecosystems, ozone
exposure causes visible foliar injury, decreases plant growth, and
affects ecosystem community composition. Ground-level ozone is not
emitted directly into the air, but is a secondary air pollutant created
by chemical reactions between NOX, carbon monoxide (CO),
methane (CH4), and non-methane VOCs in the presence of
sunlight. Emissions from electric generating utilities (EGUs),
industrial facilities, motor vehicles, gasoline vapors, and chemical
solvents are some of the major anthropogenic sources of ozone
precursors. The potential for ground-level ozone formation increases
during periods with warmer temperatures and stagnant air masses;

therefore ozone levels are generally higher during the summer
months.\3\ Ground-level ozone concentrations and temperature are highly
correlated in the eastern U.S. with observed ozone increases of 2-3
parts per billion (ppb) per degree Celsius reported.\4\ Increased
temperatures may also increase emissions of volatile man-made and
biogenic organics and can indirectly increase anthropogenic
NOX emissions as well (e.g., through increased electricity
generation to power air conditioning).
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    \3\ Rasmussen, D.J. et al. (2011) Ground-level ozone-temperature
relationship in the eastern US: A monthly climatology for evaluating
chemistry-climate models. Atmospheric Environment 47: 142-153.
    \4\ Bloomer, B.J., J.W. Stehr, C.A. Piety, R.J. Salawitch, and
R.R. Dickerson (2009), Observed relationships of ozone air pollution
with temperature and emissions, Geophysical Research Letters, 36,
L09803.
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    Precursor emissions can be transported downwind directly or, after
transformation in the atmosphere, as ozone. Studies have established
that ozone formation, atmospheric residence, and transport occurs on a
regional scale (i.e., hundreds of miles) over much of the eastern U.S.,
with elevated concentrations occurring in rural as well as metropolitan
areas. As a result of ozone transport, in any given location, ozone
pollution levels are impacted by a combination of local emissions and
emissions from upwind sources. The transport of ozone pollution across
state borders compounds the difficulty for downwind states in meeting
the health-and-welfare based NAAQS. Numerous observational studies have
demonstrated the transport of ozone and its precursors and the impact
of upwind emissions on high concentrations of ozone pollution.
    While substantial progress has been made in reducing ozone in many
urban areas, regional-scale ozone transport is still an important
component of peak ozone concentrations during the summer ozone season.
Model assessments have looked at impacts on peak ozone concentrations
after potential emission reduction scenarios for NOX and
VOCs for NOX-limited and VOC-limited areas. For example, one
study \5\ concluded that NOX emission reductions strategies
would be effective in lowering ozone mixing ratios in urban areas and
another study showed NOX reductions would reduce peak ozone
concentrations in non-attainment areas in the Mid-Atlantic (i.e., a 10
percent reduction in electric generating unit (EGU) and non-EGU
NOX emissions would result in approximately a 6 ppb
reduction in peak ozone concentrations in Washington, DC).\6\
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    \5\ Jiang, G.; Fast, J.D. (2004) Modeling the effects of VOC and
NOX emission sources on ozone formation in Houston during
the TexAQS 2000 field campaign. Atmospheric Environment 38: 5071-
5085.
    \6\ Liao, K. et al. (2013) Impacts of interstate transport of
pollutants on high ozone events over the Mid-Atlantic U.S.
Atmospheric Environment 84, 100-112.
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    On March 12, 2008, the EPA promulgated a revision to the NAAQS,
lowering both the primary and secondary standards to 75 ppb.\7\ On
October 1, 2015, the EPA strengthened the ground-level ozone NAAQS,
based on extensive scientific evidence about ozone's effects on public
health and welfare.\8\ This document does not address any CAA
requirements with respect to the 2015 ozone NAAQS.
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    \7\ See National Ambient Air Quality Standards for Ozone, Final
Rule, 73 FR 16436 (March 27, 2008).
    \8\ See National Ambient Air Quality Standards for Ozone, Final
Rule, 80 FR 65292 (October 26, 2015).
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B. Sections 176A and 184 of the CAA and the OTR Process

    Subpart 1 of part D of title I of the CAA provides provisions
governing general plan requirements for designated nonattainment areas.
This subpart includes provisions providing for the development of
transport regions to address the interstate transport of pollutants
that contribute to NAAQS violations. In particular, section 176A(a) of
the CAA provides that, on the EPA's own motion or by a petition from
the Governor of any state, whenever the EPA has reason to believe that
the interstate transport of air pollutants from one or more states
contributes significantly to a violation of the NAAQS in one or more
other states, the EPA may establish, by rule, a transport region for
such pollutant that includes such states. The provision further
provides that the EPA may add any state or portion of a state to any
transport region whenever the Administrator has reason to believe that
the interstate transport of air pollutants from such state
significantly contributes to a violation of the standard in the
transport region.
    Section 176A(b) of the CAA provides that when the EPA establishes a
transport region, the Administrator shall establish an associated
transport commission, comprised of (at a minimum) the following:
Governor or designee of each state, the EPA Administrator or designee,
the Regional EPA Administrator and an air pollution control official
appointed by the Governor of each state. The purpose of the transport
commission is to assess the degree of interstate transport throughout
the transport region and assess control strategies to mitigate the
interstate transport.
    Subpart 2 of part D of title I of the CAA provides provisions
governing additional plan requirements for designated ozone
nonattainment areas. Consistent with CAA section 176A found in subpart
1, subpart 2 included specific provisions focused on the interstate
transport of ozone. In particular, CAA section 184(a) established a
single transport region for ozone--the OTR--comprised of the states of
Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire,
New Jersey, New York, Pennsylvania, Rhode Island, Vermont and the
Consolidated Metropolitan Statistical Area that includes the District
of Columbia and certain parts of northern Virginia.
    Section 184(b) of the CAA established certain control requirements
that each state in the OTR is required to implement within the state
and which require certain controls on sources of NOX and
VOCs statewide. These include the following. Section 184(b)(1)(A) of
the CAA requires OTR states to include in their SIPs enhanced vehicle
inspection and maintenance (I/M) programs.\9\ Section 184(b)(2) of the
CAA requires SIPs to subject major sources of VOCs in ozone transport
regions to the same requirements that apply to major sources in
designated ozone nonattainment areas classified as moderate, regardless
of whether the source is located in a nonattainment area. Thus, the
state must adopt rules to apply the nonattainment new source review
(NNSR) (pursuant to CAA section 173) and reasonably available control
technology (RACT) (pursuant to CAA section 182(b)(2)) provisions for
major VOC sources statewide. Section 184(b)(2) of the CAA further
provides that, for purposes of implementing these requirements, a major
stationary source shall be defined as any source that emits or has the
potential to emit at least 50 tons per year of VOCs. Under CAA section
184(b)(2) states must also implement Stage II vapor recovery programs,
incremental to Onboard Refueling Vapor Recovery achievements, or
measures that achieve comparable emissions reductions for both
attainment and nonattainment areas.\10\ These programs are required to
be implemented statewide in any state

included within the OTR, not just in areas designated as nonattainment.
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    \9\ Enhanced vehicle inspection and maintenance programs are
required in metropolitan statistical areas in the OTR with a 1990
Census population of 100,000 or more regardless of ozone attainment
status.
    \10\ See 72 FR 28772, May 16, 2012, Air Quality: Widespread Use
for Onboard Refueling Vapor Recovery and Stage II Waiver.
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    Section 182(f) of the CAA requires states to apply the same
requirements to major stationary sources of NOX as are
applied to major stationary sources of VOCs under subpart 2. Thus, the
same NNSR and RACT requirements that apply to major stationary sources
of VOC in the OTR also apply to major stationary sources of
NOX.\11\ While NOX emissions are necessary for
the formation of ozone in the lower atmosphere, a local decrease in
NOX emissions can, in some cases, increase local ozone
concentrations, creating potential ``NOX disbenefits.''
Accordingly, CAA section 182(f) provides for an exemption of the
NOX requirements where the Administrator determines that
such NOX reductions would not contribute to the attainment
of the NAAQS in a particular area. Areas granted a NOX
exemption under CAA section 182(f) may be exempt from certain
requirements of the EPA's motor vehicle I/M regulations and from
certain federal requirements of general and transportation
conformity.\12\
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    \11\ See 57 FR 55622 (Nitrogen Oxides Supplement to the General
Preamble, published November 25, 1992).
    \12\ As stated in the EPA's I/M (November 5, 1992; 57 FR 52950)
and conformity rules (60 FR 57179 for transportation rules and 58 FR
63214 for general rules), certain NOX requirements in
those rules do not apply where the EPA grants an area-wide exemption
under CAA section 182(f).
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    Additionally, under CAA section 184(c), the OTC may, based on a
majority vote of the Governors on the Commission, recommend additional
control measures not specified in the statute to be applied within all
or part of the OTR if necessary to bring any areas in the OTR into
attainment by the applicable attainment dates. If EPA approves such a
recommendation, under CAA section 184(c)(5) the Administrator must
declare each state's implementation plan inadequate and it must order
the states to include the approved control measures in their revised
plans pursuant to CAA section 110(k)(5) for the state to meet the
requirements of CAA section 110(a)(2)(D). If a CAA section 110(k)(5)
finding is issued, states have 1 year to revise their SIPs to include
the approved measures.
    States included in the OTR by virtue of CAA section 184(b)(1) were
required to submit SIPs to the EPA addressing these requirements within
2 years of the 1990 CAA Amendments, or by November 15, 1992. Section
184(b)(1) of the CAA further provides that if states are later added to
the OTR pursuant to CAA section 176A(a)(1), such states must submit
SIPs addressing these requirements within 9 months after inclusion in
the OTR.

C. Legal Standard for This Action

    Section 176A(a)(1) of the CAA states that the Administrator may add
a state to a transport region if the Administrator has reason to
believe that emissions from the state significantly contribute to a
violation of the NAAQS within the transport region. For the reasons
discussed in this section, the use of the discretionary term ``may'' in
CAA section 176A(a) means that the Administrator may exercise
reasonable discretion in implementing the requirements of the CAA with
respect to interstate pollution by determining whether or not to
approve or deny a CAA section 176A petition.
    The Administrator's discretion pursuant to CAA section 176A(a) has
been affirmed by the U.S. District Court for the District of Columbia
Circuit (D.C. Circuit). In Michigan v. EPA, plaintiffs challenged
whether the EPA may exercise its authority pursuant to CAA sections
110(k)(5) and 110(a)(2)(D) of the statute to address interstate
transport without first forming a transport commission pursuant to CAA
section 176A(b). 213 F.3d 663, 672 (2000). The D.C. Circuit held that
the agency shall only establish a transport commission ``if the agency
exercises its discretion to create a transport region pursuant to
section 176A(a).'' Id. The court explained that ``EPA can address
interstate transport apart from convening a 176A/184 transport
commission as subsection (a) provides that EPA `may' establish a
transport region . . . .'' Id. Thus, the court held that the statute
clearly provides that the discretion to create a transport region rests
with the Administrator. So, too, does the discretion to add states to
or remove states from a transport commission.
    Several courts have held that the use of similarly non-mandatory
language such as that found in CAA section 176A confers discretion on
the agency to grant or deny a petition so long as it is supported by a
``reasonable explanation.'' For example, in Massachusetts v.
Environmental Protection Agency, the Supreme Court was considering
whether the EPA's denial of a petition to regulate greenhouse gases
under CAA section 202(a)(1) was reasonable. 549 U.S. 497 (2007).
Section 202(a)(1) of the CAA states that the Administrator ``shall by
regulation prescribe (and from time to time revise) . . . standards
applicable to the emission of any air pollutant from any class or
classes of new motor vehicles or new motor vehicle engines, which in
his judgment cause, or contribute to, air pollution which may
reasonably be anticipated to endanger public health or welfare.'' The
EPA denied the petition, reasoning that the Act does not authorize the
agency to issue mandatory regulations to address global climate change.
Id. at 500. The Court concluded that the EPA has statutory authority to
regulate emissions of greenhouse gases, and that the phrases ``from
time to time'' and ``in his judgment'' conferred discretion on the
Administrator to determine whether to promulgate an endangerment
finding. Thus, ``[u]nder the clear terms of the Clean Air Act, EPA can
avoid taking further action . . . if it provides some reasonable
explanation as to why it cannot or will not exercise its discretion.''
Id. at 533. The Supreme Court confirmed that the review of an agency's
denial of a petition for rulemaking is very narrow: ``Refusals to
promulgate rules are . . . susceptible to judicial review, though such
review is extremely limited and highly deferential.'' Id. at 527-28
(quotations omitted). Further, the court explained that the EPA's
reason should conform to the authorizing statute, and that the agency
could avoid taking further regulatory action if it provides some
reasonable explanation as to why it cannot or will not exercise its
discretion. Id. at 533 (citations omitted).
    Consistent with Massachusetts, the D.C. Circuit has held that
agencies have the discretion to determine how to best allocate
resources in order to prioritize regulatory actions in a way that best
achieve the objectives of the authorizing statute. In Defenders of
Wildlife v. Gutierrez, the court rejected a challenge to the National
Marine Fisheries Service's (NMFS) denial of a petition for emergency
rulemaking to impose speed restrictions to protect the right whale from
boating traffic pursuant to section 553(e) of the Endangered Species
Act, which requires agencies to ``give an interested person the right
to petition for the issuance, amendment, or repeal of a rule.'' 532
F.3d 913 (D.C. Cir. 2008). The NMFS denied the petition on the grounds
that imposing such restrictions would divert resources from, and delay
development of, a more comprehensive strategy for protecting the whale
population. Id. at 916. The court determined that NMFS's explanation
for the denial was a reasonable decision to focus its resources on a
comprehensive strategy, which in light of the information before the
NMFS at the time, was reasoned and adequately supported by the record.
Id.

    Similarly, in WildEarth Guardians v. EPA, the court reviewed the
EPA's denial of a petition to list coal mines for regulation under CAA
section 111(b)(1)(A). 751 F.3d 651 (D.C. Cir. 2014). Section
110(b)(1)(A) of the CAA provides that, as a means of developing
standards of performance for new stationary sources, the EPA shall, by
a date certain publish ``(and from time to time thereafter shall
revise) a list of categories of stationary sources.'' (emphasis added)
The provision provides that the Administrator ``shall include a
category of sources in such list if in his judgment it causes, or
contributes significantly to, air pollution which may reasonably be
anticipated to endanger public health and welfare.'' The EPA denied the
petition, explaining that it must prioritize its actions in light of
limited resources and ongoing budget uncertainties, and that denial of
the petition was not a determination as to whether coal mines should be
regulated as a source of air pollutants. 751 F.3d at 650. The EPA also
noted as part of its denial that it might in the future initiate a
rulemaking to do so. The D.C. Circuit held that the language in CAA
section 111(b)(1)(A)--``from time to time'' and ``in his judgment''--
means that the Administrator may exercise reasonable discretion in
determining when to add new sources to the list of regulated
pollutants, and that such language afforded agency officials discretion
to prioritize sources that are the most significant threats to public
health to ensure effective administration of the agency's regulatory
agenda. Id. at 651.
    In each of these cases previously discussed, the acting agency has
been entitled to broad discretion to act on a pending petition so long
as the agency provided a reasoned explanation. Notably, as each of
these decisions focused on the case-specific circumstances relied upon
by the acting agency to deny the pending petition, the courts did not
speak to whether the agency might reach a different conclusion under
different circumstances. Like the statutory provisions evaluated by the
courts in these cases, the term ``may'' in CAA section 176A(a) means
that the Administrator is permitted to exercise reasonable discretion
in determining when to add new states to a transport region. While the
Administrator must adequately explain the facts and policy concerns she
relied on in acting on the petition and conform such reasons with the
authorizing statute, review of such a decision is highly deferential.
Thus, the agency is entitled to broad discretion when determining
whether to grant or deny such a petition.

D. The CAA Section 176A Petition and Related Correspondence

    On December 9, 2013, the states of Connecticut, Delaware, Maryland,
Massachusetts, New Hampshire, New York, Rhode Island and Vermont
submitted a petition under CAA section 176A requesting that the EPA add
to the OTR the states of Illinois, Indiana, Kentucky, Michigan, North
Carolina, Ohio, Tennessee, West Virginia and the portion of Virginia
currently not within the OTR. On December 17, 2013, the petition was
amended to add the state of Pennsylvania as an additional state
petitioner.
    The petitioning states submitted a technical analysis which the
petitioning states contend demonstrates that the nine named upwind
states significantly contribute to violations of the 2008 ozone NAAQS
in the OTR. The petitioning states acknowledge and include data used to
support rulemakings promulgated by the EPA that addressed interstate
transport with respect to both the 2008 ozone NAAQS and prior ozone
NAAQS in order to further support their request. Moreover, the
petitioners identified those areas that are designated nonattainment
with respect to the 2008 ozone NAAQS within and outside the OTR and
conducted a linear extrapolation to predict that certain areas will
continue to be in nonattainment or will have difficulty maintaining
attainment of the NAAQS after the EPA's 2008 ozone NAAQS final area
designations in 2012. The petitioning states' 2018 modeling showed
that, with on-the-way OTR measures, areas within the OTR and non-OTR
would continue to have problems attaining the 2008 ozone NAAQS. Lastly,
their 2020 modeling showed that with a 58 percent NOX and 3
percent VOC emissions reduction over the eastern U.S., there would only
be one area in New Jersey that could have trouble maintaining the
NAAQS.
    The petitioners further note that the OTR states have adopted and
implemented numerous and increasingly stringent controls on sources of
VOCs and NOX that may not currently be required for sources
in the upwind states. Petitioners contend that expansion of the OTR to
include these upwind states will help the petitioning states attain the
2008 ozone NAAQS. The petitioning states include two case studies that
identify the types of measures adopted throughout the current OTR
including mobile source and stationary source control measures that
have been enacted to minimize emissions of NOX and VOCs. The
petitioners contend that the expansion of the OTR is warranted so that
the downwind states and the upwind states can work together to address
interstate ozone transport for the 2008 ozone NAAQS. Also, the
petitioners assert that without immediate expansion of the OTR,
attainment of the 2008 ozone NAAQS in many areas in the U.S. will
remain elusive.
    At the time the petition was submitted, the EPA's most recent
effort to address the interstate transport of ozone pollution was
subject to litigation in the D.C. Circuit. As discussed in more detail
later in this document, the EPA issued the Cross-State Air Pollution
Rule (CSAPR) pursuant to section 110(a)(2)(D)(i)(I) of the CAA in order
to address interstate transport with respect to the 1997 ozone NAAQS as
well as the 1997 and 2006 fine particulate matter (PM2.5)
NAAQS. 76 FR 48208 (August 8, 2011). On August 21, 2012, the D.C.
Circuit issued a decision in EME Homer City Generation, L.P. v. EPA,
696 F.3d 7 (D.C. Cir. 2012), vacating CSAPR based on several holdings
that would have limited the EPA's authority pursuant to section
110(a)(2)(D)(i)(I). The petitioners subsequently submitted the section
176A petition. Thereafter, on April 29, 2014, the Supreme Court issued
a decision reversing the D.C. Circuit's decision and upholding the
EPA's interpretation of its authority pursuant to CAA section 110. EPA
v. EME Homer City Generation, L.P., 134 S. Ct. 1584 (2014).
    Since the petition was submitted, the EPA has received
correspondence from both the upwind states and the petitioning states
regarding the EPA's pending action on the petition. On February 14,
2014, the EPA received a letter from the environmental commissioners
and directors representing the states of Illinois, Ohio, Indiana,
Tennessee, Kentucky, Virginia, Michigan, West Virginia and North
Carolina (in collaboration with LADCO) disagreeing with the basis for
the petition and requesting that the EPA deny the petition. On May 29,
2015, the EPA received a letter from the Midwest Ozone Group urging
that the EPA consider recent air quality, on-the-books measures between
now and 2018 and other related information prior to any action on the
petition. On July 7, 2015, the EPA received a letter from state
representatives from the states of Ohio, Kentucky, Indiana, West
Virginia, North Carolina and Michigan communicating the progress of the
voluntary dialogue called the State Collaborative on Ozone Transport
(SCOOT) that according to the letter, resulted in commitments, from

utilities in the upwind states to operate NOX controls
during the summer of 2015. The upwind states believed that the requests
from some Northeast states to sign a memorandum of understanding to
require additional emission control and reporting requirements from
facilities and place such requirements into SIPs to be unnecessary and
requested that the CAA section 176A petition be withdrawn by the
petitioning states or denied by the EPA given the forecasted air
quality improvements and declining ozone trends. On October 30, 2015,
the EPA received a letter from environmental commissioners (or their
designated representatives) from the petitioning states that provided
an update on the SCOOT process and responded to the July 7, 2015,
letter expressing a need for federally enforceable commitments from
states to operate exiting controls.
    On April 6, 2016, the EPA received a letter from the petitioning
states requesting immediate action to grant the CAA section 176A
petition. The letter acknowledged the EPA's recent proposal to update
the CSAPR to address interstate transport for the 2008 ozone NAAQS and
urged the EPA to grant the petition because the proposed rulemaking
would only partially address ozone transport problems in the eastern
U.S. Further, the letter noted that granting the petition will also
facilitate efforts to attain the 2015 ozone NAAQS, as well as future
updates to the ozone NAAQS. On May 16, 2016, the EPA received a letter
from the upwind states of Ohio, Kentucky, Indiana, West Virginia and
Michigan requesting that the EPA deny the petition, claiming that the
technical information used to support the petition was not comparable
to current air quality and noting the EPA's proposed transport rule to
address the 2008 ozone NAAQS. These communications can be found in the
docket for this action.

IV. The EPA's Proposed Decision on the CAA Section 176A Petition

    This section describes the basis for the EPA's proposed denial of
this CAA section 176A petition. Section IV.A of this document describes
the alternative authorities provided by the CAA for addressing the
interstate transport of ozone pollution and the flexibilities those
provisions provide. Section IV.B of this document describes EPA's
historical use of these authorities to address the interstate transport
of ozone pollution and the advantages of those rulemakings for
addressing current ozone nonattainment problems. Section IV.C of this
document describes other measures that have achieved, and will continue
to achieve, significant reductions in emissions of NOX and
VOCs resulting in lower levels of transported ozone pollution that
impact downwind attainment and maintenance of the 2008 ozone NAAQS.
Finally, Section IV.D of this document describes the EPA's rationale,
based on these considerations, for proposing to deny this CAA section
176A petition.
    As explained more fully later, the EPA believes an expansion of the
OTR is unnecessary at this time and would not be the most efficient way
to address the remaining interstate transport issues for the 2008 ozone
NAAQS in states currently included in the OTR. Additional local and
regional ozone precursor emissions reductions are expected in the
coming years from already on-the-books rules (see Sections IV. B and C
of this document for more details) and as described elsewhere in this
document, the EPA has the authority through other CAA provisions
(including CAA sections 110 and 126) to develop a more effective remedy
to address the particular pollutants and sources for this air quality
situation.

A. The CAA Good Neighbor Provisions

    The CAA provision that states and the EPA have used most for
addressing interstate transport is section 110(a)(2)(D)(i)(I), often
referred to as the ``good neighbor'' or ``interstate transport''
provision, requires states to prohibit certain emissions from in-state
sources if such emissions impact the air quality in downwind states.
Specifically, in keeping with the CAA's structure of shared state and
federal regulatory responsibility, CAA section 110(a)(2)(D)(i)(I)
requires all states, within 3 years of promulgation of a new or revised
NAAQS, to submit SIPs that contain adequate provisions prohibiting any
source or other type of emissions activity within the state from
emitting any air pollutant in amounts which will contribute
significantly to nonattainment in, or interfere with maintenance by,
any other state with respect to any NAAQS. Thus, each state is required
to submit a SIP that demonstrates the state is adequately controlling
sources of emissions that would impact downwind states' air quality
relative to the NAAQS in violation of the good neighbor provision.
    Once a state submits a good neighbor SIP, the EPA must evaluate the
SIP to determine whether it meets the statutory criteria of the good
neighbor provision, and then approve or disapprove, in whole or in
part, the state's submission in accordance with CAA section 110(k)(3).
In the event that a state does not submit a required SIP addressing the
good neighbor provision, the EPA publishes in the Federal Register a
``finding of failure to submit'' that a state has failed to make the
required SIP submission. If the EPA disapproves a state's SIP
submission or if the EPA issues a finding of failure to submit, then
the action triggers the EPA's obligations under section 110(c) of the
CAA, to promulgate a FIP within 2 years, unless the state corrects the
deficiency, and the EPA approves the plan or plan revision before the
EPA promulgates a FIP. Thus, in the event that a state does not address
the good neighbor provision requirements in a SIP submission, the
statute provides that the EPA must address the requirements in the
state's stead.
    Section 110(k)(5) of the CAA also provides a means for the EPA to
reopen previously approved SIPs, including good neighbor SIPs, if the
EPA determines that an approved SIP is substantially inadequate to
attain or maintain the NAAQS, to adequately mitigate interstate
pollutant transport, or to otherwise comply with requirements of the
CAA. The EPA can use its authority under CAA section 110(k)(5) to call
for re-submission of the SIP to correct the inadequacies under CAA
110(a)(2)(D)(i)(I), and if the state fails to make the required
submission, the EPA can promulgate a FIP under CAA section 110(c) to
address the inadequacies.
    Finally, section 126 of the CAA provides states with an additional
opportunity to bring to the EPA's attention specific instances where a
source or a group of sources in a specific state may be emitting in
excess of what the good neighbor provision would allow. Section 126(b)
of the CAA provides that any state or political subdivision may
petition the Administrator of the EPA to find that any major source or
group of stationary sources in upwind states emits or would emit any
air pollutant in violation of the prohibition of CAA section
110(a)(2)(D)(i).\13\ Petitions submitted pursuant to this section are
referred to as CAA section 126 petitions. Section 126(c) of the CAA
explains the impact of such a finding and establishes the conditions
under which continued operation of a source subject to such a finding
may be permitted. Specifically,

CAA section 126(c) provides that it would be a violation of section 126
of the Act and of the applicable SIP: (1) For any major proposed new or
modified source subject to a CAA section 126 finding to be constructed
or operate in violation of the good neighbor prohibition of CAA section
110(a)(2)(D)(i); or (2) for any major existing source for which such a
finding has been made to operate more than 3 months after the date of
the finding. The statute, however, also gives the Administrator
discretion to permit the continued operation of a source beyond 3
months if the source complies with emission limitations and compliance
schedules provided by the EPA to bring about compliance with the
requirements contained in CAA sections 110(a)(2)(D)(i) and 126 as
expeditiously as practicable but no later than 3 years from the date of
the finding. Where the EPA provides such limitations and compliance
schedules, it promulgates these as a revision to the upwind state's
good neighbor SIP, and CAA section 110(a)(2)(D)(ii) further requires
that good neighbor SIPs ensure compliance with these limitations and
compliance schedules.\14\
---------------------------------------------------------------------------

    \13\ The text of CAA section 126 codified in the U.S. Code cross
references CAA section 110(a)(2)(D)(ii) instead of CAA section
110(a)(2)(D)(i). The courts have confirmed that this is a
scrivener's error and the correct cross reference is to CAA section
110(a)(2)(D)(i), See Appalachian Power Co. v. EPA, 249 F.3d 1032,
1040-44 (D.C. Cir. 2001).
    \14\ The EPA has received, but not yet acted upon, several CAA
section 126 petitions from a number of the petitioning states
regarding the contribution of specific EGUs to interstate ozone
transport with respect to the 2008 and 2015 ozone NAAQS. Petitions
have been submitted by Delaware, Maryland, and Connecticut. The list
of EGUs identified in one or more of these petitions includes EGUs
operating in Pennsylvania, West Virginia, Ohio, Kentucky, and
Indiana.
---------------------------------------------------------------------------

    The flexibility provided by these statutory provisions is different
from that provided by the requirements imposed upon states in the OTR.
With limited exceptions described previously, states in the OTR must
impose a uniform set of requirements on sources within each state.
While the OTR states may impose additional requirements with the
consent of the OTC and the EPA, the states generally must comply with
the minimum requirements imposed by the statute. The good neighbor
provision, by contrast, provides both the states and the EPA with the
flexibility to develop a remedy targeted at a particular air quality
problem, including the flexibility to tailor the remedy to address the
particular precursor pollutants and sources that would most effectively
address the downwind air quality problem. As described later, the EPA
has previously promulgated four interstate transport rulemakings
pursuant to these authorities in order to quantify the specific
emission reductions required in certain eastern states in order to
comply with the requirements of CAA section 110(a)(2)(D)(i)(I) with
respect to downwind nonattainment and maintenance concerns with respect
to the NAAQS for ozone and PM2.5. In Section IV.B. of this
document, the EPA describes the importance of these transport rules as
they relate to regional ozone pollution transport.

B. The EPA's Interstate Transport Rulemakings Under the Good Neighbor
Provision

    In order to address the regional transport of ozone pursuant to the
CAA's good neighbor provision under section 110(a)(2)(D)(i)(I), the EPA
has promulgated four regional interstate transport rules focusing on
the reduction of NOX emissions, as the primary meaningful
precursor to address regional ozone, from certain sources located in
states in the eastern half of the U.S.\15\ \16\ States and the EPA have
implemented the emission reductions required by these rulemakings
pursuant to the various authorities for implementing the good neighbor
provision, including CAA sections 110(a)(1), 110(c), 110(k)(5) and 126.
---------------------------------------------------------------------------

    \15\ For purposes of these rulemakings, the western U.S. (or the
West) consists of the 11 western contiguous states of Arizona,
California, Colorado, Idaho, Montana, Nevada, New Mexico, Oregon,
Utah, Washington and Wyoming.
    \16\ Two of these rulemakings also addressed the reduction of
NOX and SO2 emissions for the purposes of
addressing the interstate transport of particulate matter pollution
pursuant to the good neighbor provision.
---------------------------------------------------------------------------

    In each of these rulemakings, the EPA identified those sources and
pollutants that were most effective in addressing the particular air
quality problem identified through the course of the EPA's analysis.
This allowed the EPA to craft targeted remedies that provided efficient
and effective means of addressing the particular air quality problem.
In each of the regional transport rules, the EPA analysis has continued
to demonstrate that NOX is the ozone precursor that is most
effective to reduce when addressing regional transport of ozone in the
eastern U.S. The EPA has also focused each rule on those sources that
can most cost-effectively reduce emissions of NOX, such as
EGUs and, in one rule, certain large non-EGUs. These rulemakings
demonstrate that the EPA has used and is continuing to use its
authority under CAA section 110(a)(2)(D)(i)(I) to target those sources
and precursors that most efficiently address the particular interstate
ozone transport problem. Accordingly, the EPA believes that it is
unnecessary to include additional states, and sources within those
states, in OTR in order to address the current nonattainment situation
for the 2008 ozone NAAQS in the petitioning states. Prior to the EPA's
promulgation of some of those federal transport rules, the EPA worked
with states and provided guidance to help states submit approvable good
neighbor SIPs to address the CAA good neighbor provision. States have
the first responsibility to address these CAA requirements pursuant to
section 110(a)(1), and the EPA issued those transport rules only after
states had the opportunity to address their CAA interstate transport
obligation. While some states have state-developed and EPA-approved
good neighbor SIPs, other states are covered by EPA-issued FIPs.
1. NOX SIP Call
    Through a 2-year effort (starting in 1995 and ending in 1997) known
as the Ozone Transport Assessment Group (OTAG), the EPA worked in
partnership with the 37 eastern-most states and the District of
Columbia, industry representatives, and environmental groups to address
the interstate transport of ozone pollution. OTAG identified and
evaluated flexible and cost-effective strategies for reducing long-
range transport of ozone and ozone precursors. Based on the OTAG
process, the EPA engaged in a rulemaking to promulgate a final action
commonly referred to as the NOX SIP Call in order to address
the requirements of the good neighbor provision (CAA section
110(a)(2)(D)(i)(I)) with respect to the 1979 1-hour ozone NAAQS and the
1997 8-hour ozone NAAQS. 63 FR 57356 (October 27, 1998). The rule
required 22 eastern states and the District of Columbia to amend their
SIPs and limit NOX emissions that contribute to ozone
nonattainment. The rule set a NOX ozone season emission
budget for each covered state, essentially a cap on all ozone season
NOX emissions in the state. Covered states were given the
option to participate in a regional allowance trading program, known as
the NOX Budget Trading Program (NBP) in order to achieve
most of the necessary emissions reductions.
    Through the OTAG process, the states concluded that widespread
NOX reductions were necessary to enable areas to attain and
maintain the ozone NAAQS.\17\ The OTAG's recommendations identified
control

measures for states to achieve additional reductions in emissions of
NOX but did not identify such measures for VOC, beyond the
EPA's promulgation of national VOC measures, at that time. The OTAG
Regional and Urban Scale Modeling and Air Quality Analysis Work Groups
reached the following relevant conclusions (with which the EPA agreed):
Regional NOX emissions reductions are effective in producing
ozone benefits; the more NOX emissions reduced, the greater
the benefit to air quality; and VOC controls are effective in reducing
ozone locally and are most advantageous to urban nonattainment areas.
The EPA concluded in its rulemaking that, ``a regional strategy
focusing on NOX reductions across a broad portion of the
region will help mitigate the ozone problem in many areas of the East
.'' 63 FR 57381. The EPA did not propose any new SIP requirements for
VOC reductions for the purpose of reducing the interstate transport of
ozone, however, the agency suggested that states may consider
additional reductions in VOC emissions as they develop local attainment
plans.
---------------------------------------------------------------------------

    \17\ See 62 FR 60320, November 7, 1997, Notice of proposed
rulemaking, Finding of Significant Contribution and Rulemaking for
Certain States in the Ozone Transport Assessment Group Region for
Purposes of Reducing Regional Transport of Ozone.
---------------------------------------------------------------------------

    In order to quantify necessary NOX emission reductions,
the EPA developed statewide NOX emissions budgets based on
recommendations from OTAG on how to cost-effectively reduce emissions
from utilities and other sources of NOX. Thus, the EPA
established NOX emission budgets based on the conclusion
that EGUs and large non-EGU point sources could cost-effectively
achieve emissions reductions by the implementation of controls costing
$2,000 per ton of NOX emissions reduced, including controls
such as selective catalytic reduction (SCR) and selective non-catalytic
reduction (SNCR) that could be required on a number of units in the
OTAG region. Although the NOX SIP Call did not specify which
sources must reduce NOX, consistent with OTAG's
recommendations, the EPA encouraged states to consider controls on EGUs
and large non-EGU point sources under an allowance trading program as a
cost effective strategy for complying with the NOX emissions
budgets.
    At the time the NOX SIP Call was finalized, the EPA had
already approved good neighbor SIPs for many states with respect to the
1-hour ozone standard. Accordingly, the EPA initiated a SIP call
pursuant to CAA section 110(k)(5) requiring states covered by the rule
to amend their SIPs in order to limit NOX emissions that
significantly contribute to ozone nonattainment in other states
consistent with the budgets finalized in the rule.
    In parallel with issuing the SIP call, the EPA reviewed petitions
submitted pursuant to CAA section 126(b) by eight states requesting
that the EPA find that stationary sources in upwind states contribute
significantly to ozone nonattainment in the petitioning states. Because
the section 126 petitions raised many of the same issues as those being
addressed in NOX SIP call, the EPA coordinated its response
to the CAA section 126 petitions with the NOX SIP Call
rulemaking. The EPA issued findings that NOX emissions in
twelve states and the District of Columbia contribute significantly to
nonattainment of the 1-hour ozone NAAQS in three downwind states, but
the EPA determined that it was appropriate to postpone CAA section 126
findings pending the resolution of the NOX SIP call process.
64 FR 28250 (May 25, 1999). Accordingly, the EPA issued a rule
providing that the findings would automatically be deemed made with
regard to sources from a given state should that state fail to submit a
SIP revision as required by the NOX SIP Call. The rulemaking
further established the NBP as the remedy that would apply pursuant to
CAA section 126(c) for any state subject to such a finding.
    The D.C. Circuit subsequently issued two orders affecting
implementation of the NOX SIP Call: (1) An order remanding
the 1997 8-hour ozone standard to the EPA, American Trucking Ass'ns v.
EPA, 175 F.3d 1027, reh'g granted in part and denied in part, 195 F.3d
4 (D.C. Cir.1999), rev'd in part sub nom. Whitman v. American Trucking
Ass'ns, 531 U.S. 457, 121 S.Ct. 903 (2001), and (2) an order staying
the NOX SIP Call deadline pending further litigation,
Michigan v. EPA, No. 98-1497 (D.C. Cir. May 25, 1999) (order granting
stay in part). In response to these court decisions, the EPA took two
actions. First, the EPA indefinitely stayed the technical
determinations of the prior section 126 action as they applied to the
8-hour ozone NAAQS, pending further developments in the litigation. 65
FR 2674, 2685 (January 18, 2000). Second, with respect to the 1-hour
standard, the EPA made the requested findings of significant
contributions, granting the relevant portions of the section 126
petitions. Id. at 2684-85. The EPA further imposed the NBP on affected
sources as the remedy pursuant to section 126(c). Id. at 2686.
    Ultimately, the NOX SIP Call was largely upheld by the
D.C. Circuit in Michigan v. EPA, 213 F.3d 663 (D.C. Cir. 2000), cert.
denied, 532 U.S. 904 (2001).\18\ States chose to use the NBP to achieve
the majority of the NOX reductions required by the
NOX SIP Call. Subsequent rules have required additional
reductions from certain sources regulated by the NOX SIP
Call, but the rules have not replaced the NOX SIP Call
reduction requirements and the rule remains in effect.
---------------------------------------------------------------------------

    \18\ The EPA's January 18, 2000, action on the CAA section 126
petitions was also challenged and upheld by the D.C. Circuit in
Appalachian Power Company v. EPA, 249 F.3d 1032 (2001).
---------------------------------------------------------------------------

2. Clean Air Interstate Rule (CAIR)
    The CAIR was published in May 2005 and addressed both the 1997
PM2.5 and the 1997 ozone standards under the good neighbor
provision. 70 FR 25162 (May 12, 2005). CAIR required SIP revisions in
28 eastern states and the District of Columbia to ensure that certain
emissions of sulfur dioxide (SO2) and/or NOX--
important precursors of regionally transported PM2.5
(SO2 and NOX) and ozone (NOX)--were
prohibited.
    The rule set statewide emission budgets for large EGUs that reduced
emissions of annual SO2 and annual NOX
(particulate matter precursors) and summertime NOX (ozone
precursor). As in the NOX SIP Call, the EPA identified
reductions in NOX emissions as the most efficient and
effective way to achieve the greatest reduction of interstate ozone
pollution. Id. at 25185-8, 25195. The EPA also determined that
emissions reductions from EGUs were the most cost-effective and
efficient means of achieving necessary NOX emissions
reductions. 70 FR 25173. As in the NOX SIP Call, affected
states were given the option to participate in a regional allowance
trading program to satisfy their SIP obligations.
    When the EPA promulgated the final CAIR, the EPA also issued a
national rule finding that certain states had failed to submit SIPs to
address the requirements of CAA section 110(a)(2)(D)(i) with respect to
the 1997 PM2.5 and the 1997 ozone NAAQS by the CAA deadline
for those standards of July 2000. 70 FR 21147. The findings of failure
to submit triggered a 2-year clock for the EPA to issue FIPs to address
the good neighbor provision with respect to those standards, and the
EPA subsequently promulgated FIPs to ensure that the emission
reductions required by CAIR would be achieved on schedule. 71 FR 25328
(April 28, 2006). Upon review, the D.C. Circuit determined that CAIR
was ``fundamentally flawed,'' and the rule was remanded to the EPA to
be replaced ``from the ground up.'' North Carolina v.

EPA, 531 F.3d 896, 929 (D.C. Cir. 2008), modified on reh'g, 550 F.3d
1176.
3. CSAPR
    In response to the court's remand of CAIR, on July 6, 2011, the EPA
promulgated CSAPR, which requires certain states to significantly
improve air quality by reducing power plant emissions that contribute
to ozone and/or fine particle pollution in other states. CSAPR requires
sources in a total of 28 states to reduce annual SO2
emissions, annual NOX emissions and/or ozone season
NOX emissions to assist in attaining the 1997 ozone and
PM2.5 and 2006 PM2.5 NAAQS. 76 FR 48208. The EPA
found that each CSAPR state had failed to submit a complete SIP or the
EPA disapproved a submitted SIP for the relevant NAAQS. To accomplish
implementation aligned with the applicable NAAQS attainment deadlines,
the EPA promulgated FIPs for each affected state which require affected
sources to participate in the regional allowance trading program to
achieve the necessary emission reductions. These states have the option
of replacing each FIP with a SIP that could achieve the same emissions
reductions in other ways.
    CSAPR set emissions budgets for certain states according to the
applicable NAAQS--annual NOX and annual SO2
budgets for PM2.5, and ozone season NOX budgets
for ozone--to eliminate a state's significant contribution or
interference with maintenance of a NAAQS in other states. With respect
to the ozone NAAQS, the EPA determined that NOX emissions
had the most meaningful interstate impacts based on air quality
modeling that examined upwind state emissions of all ozone precursors
(including VOCs and NOX). 75 FR 45230 (August 2, 2010) and
76 FR 48222. Moreover, the EPA noted that the other recent assessments
of ozone, for example those conducted for the Regulatory Impact
Analysis for the ozone standards in 2008, continue to show the
importance of NOX emissions on ozone transport. 75 FR 45236.
Accordingly, the EPA quantified NOX emissions budgets for
each affected state by quantifying the emissions reductions achievable
by applying cost-effective controls to EGUs. 76 FR 48256. The EPA
determined that controls at other sources were generally not available
at similar cost levels.
    The timing of CSAPR's implementation was affected by a number of
court actions. CSAPR was the subject to nearly four years of litigation
in both the D.C. Circuit and the Supreme Court. CSAPR was generally
upheld by the courts, but for the remand of certain state budgets, and
implementation of the trading programs began in 2015. See EPA v. EME
Homer City Generation, L.P., 134 S. Ct. 1584 (2014); EME Homer City
Generation, L.P. v. EPA, 795 F.3d 118 (D.C. Cir. 2015).
4. The CSAPR Update To Address the 2008 Ozone NAAQS
    On October 26, 2016, the EPA published an update to CSAPR intended
to respond to the D.C. Circuit's remand of certain NOX ozone
season budgets from the original CSAPR and to address the good neighbor
provision with respect to the 2008 ozone NAAQS. 81 FR 74504 (CSAPR
Update). The CSAPR Update requires 22 states to reduce ozone season
NOX emissions that significantly contribute to nonattainment
or interfere with maintenance of the 2008 ozone NAAQS in certain
downwind states. The EPA found that each CSAPR state had failed to
submit a complete SIP or the EPA disapproved a submitted SIP for the
2008 ozone NAAQS. To accomplish implementation aligned with the
applicable attainment deadline for the 2008 ozone NAAQS, the EPA
promulgated FIPs for each of the 22 states covered by CSAPR Update
which require affected sources to participate in the regional allowance
trading program to achieve the necessary emission reductions beginning
with the 2017 ozone season.
    The CSAPR Update analysis found that emissions from eight of the
nine states named in the section 176A petition, in addition to a number
of other states, were linked to downwind projected nonattainment and/or
maintenance receptors, in the eastern U.S., in 2017 with respect to the
2008 ozone NAAQS. 81 FR 74506, 74538-39. For one state named in the CAA
section 176A petition, North Carolina, the EPA determined in the CSAPR
Update that the state was not linked to any downwind receptors and,
therefore, will not significantly contribute to nonattainment or
interfere with maintenance of the 2008 ozone NAAQS in any other state
pursuant to the good neighbor provision. 81 FR 74506, 74537-38.
    For those states linked to downwind air quality problems, the EPA
evaluated timely and cost-effective emissions reductions achievable in
each state in order to quantify the amount of emissions constituting
each state's significant contribution to nonattainment and interference
with maintenance of the standard pursuant to the good neighbor
provision. The EPA focused its analysis on: (1) Emissions reductions
achievable by 2017 in order to assist downwind states with meeting the
applicable attainment deadline for the 2008 ozone NAAQS (81 FR 74521),
(2) reductions in only NOX emissions, consistent with past
ozone transport rules (81 FR 74514), and (3) achievable, cost effective
NOX emissions reductions from EGUs. The EPA, therefore,
calculated emissions budgets for each affected state based on the cost-
effective NOX emissions reductions achievable from EGUs by
the 2017 ozone season.
    The EPA concluded that the emissions reductions achieved by
implementation of the budgets constitute a portion of most affected
states' significant contribution to nonattainment or interference with
maintenance of the 2008 ozone NAAQS at these downwind receptors. 81 FR
74508, 74522.\19\ However, because downwind air quality problems were
projected to remain after implementation of the quantified emissions
reductions, the EPA could not determine that it had fully quantified
the affected states' emissions reduction obligations pursuant to the
good neighbor provision to the extent upwind states remain linked to
the downwind receptors and further emission reductions from EGUs and
non-EGUs could be available. In order to determine the level of
NOX control stringency necessary to quantify those emissions
reductions that fully constitute each state's significant contribution
to downwind nonattainment or interference with maintenance, the EPA
explained in promulgating the final CSAPR Update that it must evaluate
further emission reductions from EGU and non-EGU strategies that can be
implemented on longer timeframes. The CSAPR Update represents a
significant first step by the EPA to quantify states' emission
reduction obligations under the good neighbor provision for the 2008
ozone NAAQS. Even though the CSAPR Update did not fully address upwind
states' emission reduction obligation pursuant to the good neighbor
provision, the implementation of the emissions budgets quantified in
that rule will help to resolve a number of projected air quality
problems in the Philadelphia, Pennsylvania, Jefferson County, Kentucky
and Hamilton County, Ohio areas and will help make progress to reduce
upwind

contributions to high ozone levels in Baltimore, Maryland, and the New
York City area (including parts of Connecticut and New Jersey).
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    \19\ For one state named in the CAA section 176A petition,
Tennessee, the EPA determined that the emissions reductions required
by the CSAPR Update would fully address the state's significant
contribution to nonattainment and interference with maintenance of
the 2008 ozone NAAQS in other states.
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    The EPA is continuing the work necessary to address its remaining
obligation to promulgate FIPs fully addressing the good neighbor
provision with respect to the 2008 ozone NAAQS for 21 states. The EPA
intends to continue to collect information and undertake analyses to
evaluate potential future emission reductions from non-EGUs and EGUs
that may be necessary to fully quantify each state's interstate
transport obligations for the 2008 ozone NAAQS in a future action.\20\
The EPA expects to continue to fulfill its obligation to promulgate
FIPs fully addressing interstate transport with respect to the 2008
ozone NAAQS consistent with the authority and flexibility provided by
the good neighbor provision to tailor a remedy based on those sources
and precursor pollutants (i.e., NOX) that can most
effectively address the downwind air quality problems identified by the
EPA's analysis.
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    \20\ Moreover, in support of this effort, on December 28, 2016,
the EPA shared updated preliminary modeling information providing
air quality projections for areas in the contiguous U.S. for the
2015 ozone NAAQS, which the EPA anticipates will assist states with
the development of SIPs. See, ``Notice of Availability of the
Environmental Protection Agency's Preliminary Interstate Ozone
Transport Modeling Data for the 2015 Ozone National Ambient Air
Quality Standard (NAAQS)'' available at: https://www.epa.gov/airmarkets/notice-data-availability-preliminary-interstate-ozone-transport-modeling-data-2015-ozone.
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C. Additional Rules That Reduce NOX and VOC Emissions

    In addition to the significant efforts to implement the good
neighbor provision for the 2008 and prior ozone NAAQS described in
Section IV.B of this document, there are numerous federal and state
emission reduction rules that have already been adopted which have
resulted or will result in the further reduction of ozone precursor
emissions, including emissions from states named in the section 176A
petition. Many of these rules directly require sources to achieve
reductions of NOX, VOC, or both, and others require actions
that will indirectly result in such reductions. As a result of these
emissions reductions, the interstate transport of ozone has been and
will continue to be reduced over time.
    The majority of man-made NOX and VOC emissions that
contribute to ozone formation in the U.S. comes from the following
sectors: on-road and nonroad mobile sources, industrial processes
(including solvents), consumer and commercial products, and the
electric power industry. In 2014, the most recent year for which the
National Emissions Inventory (NEI) is available, on-road and nonroad
mobile sources accounted for about 56 percent of annual NOX
emissions; and the electric power industry (EGUs) accounted for about
13 percent. With respect to VOCs, industrial processes (including
solvents) accounted for about 48 percent of manmade VOC emissions; and
mobile sources accounted for about 27 percent.\21\ \22\
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    \21\ The VOC percentages are for manmade VOCs only. Emissions
from natural sources, such as trees, also comprise around 70 percent
of total VOC emissions nationally, with a higher proportion during
the ozone season and in areas with more vegetative cover.
    \22\ For more information, see the ``2014 NEI Summary
Spreadsheet'' in the docket.
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    The EPA establishes emissions standards under various CAA
authorities for numerous classes of automobile, truck, bus, motorcycle,
earth mover, aircraft, and locomotive engines, and for the fuels used
to power these engines. The pollutant reduction benefits from new
engine standards increase each year as older and more-polluting
vehicles and engines are replaced with newer, cleaner models. The
benefits from fuel programs generally begin as soon as a new fuel is
available. Further, the ongoing emission reductions from mobile source
federal programs such as those listed previously will provide for
substantial emissions reductions well into the future, and will
complement state and local efforts to attain the 2008 ozone NAAQS.
    There are several existing national rules that continue to achieve
emission reductions through 2025 and beyond with more protective
emission standards for on-road vehicles that include: Control of Air
Pollution from Motor Vehicles: Tier 3 Motor Vehicle Emission and Fuel
Standards; \23\ Control of Air Pollution from New Motor Vehicles: Tier
2 Motor Vehicle Emissions Standards and Gasoline Sulfur Control
Requirements; \24\ Control of Air Pollution from New Motor Vehicles:
Heavy-Duty Engine and Vehicle Standards and Highway Diesel Fuel Sulfur
Control Requirements; \25\ Model Year 2017 and Later Light-Duty Vehicle
Greenhouse Gas Emissions and Corporate Average Fuel Economy Standards;
\26\ Model Year 2012-2016 Light-Duty Vehicle Greenhouse Gas Emission
Standards and Corporate Average Fuel Economy Standards; \27\ Greenhouse
Gas Emissions and Fuel Efficiency Standards for Medium- and Heavy-Duty
Engines and Vehicles--Phase 2; \28\ Phase 1 Greenhouse Gas Emissions
Standards and Fuel Efficiency Standards for Medium- and Heavy-Duty
Engines and Vehicles \29\ and Control of Hazardous Air Pollutants from
Mobile Sources.\30\
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    \23\ 81 FR 23414 (April 28, 2014).
    \24\ 65 FR 6698 (February 10, 2000).
    \25\ 66 FR 5002 (January 18, 2001).
    \26\ 77 FR 62624 (October 15, 2012).
    \27\ 75 FR 25324, (May 7, 2010).
    \28\ 81 FR 73478, (October 25, 2016).
    \29\ 76 FR 57106, (September 15, 2011).
    \30\ 72 FR 8428, (February 26, 2007).
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    Similarly, already adopted regulations for non-road engines and
equipment that will achieve further reductions include: Control of
Emissions of Air Pollution from Nonroad Diesel Engines and Fuel; \31\
Republication for Control of Emissions of Air Pollution from Locomotive
Engines and Marine Compression-Ignition Engines Less Than 30 Liters per
Cylinder; \32\ Control of Emissions from New Marine Compression-
Ignition Engines at or Above 30 Liters per Cylinder; \33\ the
International Maritime Organization's Emission Control Area to Reduce
Emissions from Ships in the U.S. Caribbean; Control of Air Pollution
From Aircraft and Aircraft Engines; \34\ Emission Standards and Test
Procedures; Control of Emissions from Nonroad Large Spark-Ignition
Engines, and Recreational Engines (Marine and Land-Based); \35\ and
Control of Emissions from Nonroad Spark-Ignition Engines and
Equipment.\36\
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    \31\ 69 FR 38958, (June 29, 2004).
    \32\ 73 FR 37096, (June 30, 2008).
    \33\ 75 FR 22896, (April 30, 2010).
    \34\ 77 FR 36342, (June 18, 2012).
    \35\ 67 FR 68242, (November 8, 2002).
    \36\ 73 FR 59034, (October 8, 2008).
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    Similarly, a number of already-adopted stationary source rules will
drive further regional reductions in ozone precursor emissions,
including: boiler maximum achievable control technology standards under
CAA section 112 and the Mercury and Air Toxics Standards. These rules
target specific sources and have the co-benefit of reducing ozone
precursors which also reduce interstate ozone pollution transport. For
example, the measures to address Regional Haze best available retrofit
technology determinations often include power plant pollution controls
that can achieve NOX reductions of at least 80 to 90 percent
from a particular source.
    Other existing rules that will achieve NOX and VOC
emissions reductions include: New Source Performance Standards (NSPS)
for reciprocating internal combustion engines; NSPS for gas turbines;
NSPS for process heaters;

Hospital/Medical/Infectious Waste Incinerators: New Source Performance
Standards and Emission Guidelines: Final Rule Amendments; and
NOX Emission Standard for New Commercial Aircraft Engines.
The EPA's regulations for commercial, industrial and solid waste
incinerators set standards for NOX and several air toxics
for all commercial incinerators, as required under CAA section 129. Air
toxics rules for industrial boilers will yield co-benefit
NOX reductions as a result of tune-ups and energy efficiency
measures, especially from boilers that burn coal.
    The EPA expects existing federal and state rules, and also those
that may be promulgated in the future, will have the co-benefit of
reducing ozone precursor emissions even if they do not directly address
interstate transport of ozone pollution. These rules will result in
reductions in ozone concentrations that will help areas attain the 2008
ozone NAAQS. For example, the Regional Haze Rule requires states to
revise their regional haze SIPs \37\ to assess whether additional
measures are necessary for continued visibility progress. On December
14, 2016, the EPA signed a final rule that could influence state
regional haze plans to include measures to further reduce
NOX in light of its role as a visibility impairing
pollutant.\38\ Further, to address interstate transport with respect to
the 2015 ozone NAAQS, states are required to submit additional SIPs
addressing the good neighbor provision by October 2018. Measures
designed to address the interstate transport of ozone with respect to
the 2015 standard will necessarily assist with addressing interstate
transport with respect to the less-stringent 2008 standard. Lastly, in
response to actions such as the 2012 PM2.5 SIP Requirements
Rule and nonattainment designations under the 2010 primary
SO2 NAAQS, many states will be submitting SIPs that reduce
pollution, some of which reduce ozone precursor emissions as a co-
benefit.
---------------------------------------------------------------------------

    \37\ The EPA extended the due date to 2021, but is not changing
dates for the implementation of further pollution reductions needed
to address regional haze, which are required over the 2018-2028 time
frame. See https://www.epa.gov/visibility/final-rulemaking-amendments-regulatory-requirements-state-regional-haze-plans.
    \38\ See https://www.epa.gov/sites/production/files/2016-12/documents/regional_haze_2060-as55_final_preamblerule_final_12-14-16_disclaimer_0.pdf.
---------------------------------------------------------------------------

    As a result of the rules and programs listed previously, various
other state programs and efforts, and wider economic trends, ozone
levels across the nation and the OTR have been declining. Ozone levels
across the nation are expected to further decline over the next several
years due to emissions controls already in place. The EPA's emissions
projections in support of the 2015 ozone NAAQS modeling show declining
emissions of NOX and VOCs between 2017 and 2025. In the
states comprising the OTR plus the nine upwind states named in the CAA
section 176A petition, total NOX emissions over the upcoming
7-year period (2017-2025) are expected to decline by almost 20 percent
on average and VOC emissions are expected to decline by more than 10
percent on average over the same period.

D. Rationale for the Proposed Decision on the CAA 176A Petition

    The EPA is proposing to deny the CAA section 176A petition because
we believe that the statute provides other, more effective means of
addressing the impact of interstate ozone transport on the states
within the OTR with respect to the 2008 ozone NAAQS. As described in
Section IV of this document, the statute provides several provisions
that allow states and the EPA to address interstate ozone transport
with a remedy better tailored to the nature of the air quality problem,
focusing on those precursor emissions and sources that most directly
impact downwind ozone nonattainment and maintenance problems and which
can be controlled most cost-effectively. The EPA and states are
actively using these provisions, as demonstrated by the numerous
federal and state measures that have reduced, and will continue to
reduce, the VOC and NOX emissions that contribute to ozone
formation and the interstate transport of ozone pollution. The EPA does
not believe that it is necessary to add more states to the OTR at this
time in order to effectively address transported pollution in the OTR
relative to the 2008 ozone NAAQS.
    While the Act contains several provisions, both mandatory and
discretionary, to address interstate pollution transport, the EPA's
decision whether to grant or deny a CAA section 176A petition to expand
an existing transport region is discretionary. Section 176A of the CAA
states that the Administrator may add any state or portion of a state
to an existing transport region whenever the Administrator has reason
to believe that the interstate transport of air pollutants from such
state significantly contributes to a violation of the standard in the
transport region. The EPA does not dispute that certain named upwind
states in the petition might significantly contribute to violations of
the 2008 ozone NAAQS in one or more downwind states. However, the EPA
believes that it can fully and more effectively address the upwind
states' impacts on downwind ozone air quality through the good neighbor
provision and the various statutory provisions that provide for its
implementation. The EPA has already taken steps to address interstate
transport with respect to the 2008 ozone NAAQS through the promulgation
of the CSAPR Update, which reduces emissions in the 2017 ozone season
and beyond. The EPA used the authority of CAA sections
110(a)(2)(D)(i)(I) and 110(c) to tailor a remedy focused on the
precursor pollutant most likely to improve ozone levels (currently
NOX) and those sources that can most cost-effectively reduce
emissions (i.e., EGUs). The EPA further implemented the remedy through
an allowance trading program that achieves necessary emission
reductions while providing sources with the flexibility to implement
the control strategies of their choice.
    We believe that the continued use of the authority provided by the
good neighbor provision to address the interstate transport of ozone
pollution plus other regulations that are already in place will permit
the states and EPA to achieve necessary additional reductions to
address the 2008 ozone NAAQS without the need to implement the
additional requirements that inclusion in the OTR would entail. As
described in Section IV.A and B of this document, this approach to
address the interstate transport of ozone is a proven, efficient, and
cost-effective means of addressing downwind air quality concerns that
the agency has employed and refined over nearly two decades. However,
the EPA notes that the addition of states to the OTR pursuant to the
section 176A authority--and the additional planning requirements that
would entail--could be given consideration as an appropriate means to
address the interstate transport requirements of the CAA should the
agency depart from its current approach to addressing these
requirements.
    As described in this document, the CAA provides the agency with the
authority to mitigate the specific sources that contribute to
interstate pollution through the approval of SIPs or promulgation of
FIPs to satisfy the requirements of the good neighbor provision, CAA
section 110(a)(2)(D)(i)(I), and through the related petition process
under section 126. This authority gives the EPA and states numerous
potential policy approaches to address interstate pollution transport
of ozone, and the EPA has consistently and repeatedly used its
authority under CAA section 110(a)(2)(D)(i)(I) to approve state plans

for reducing ozone transport or to promulgate its own federal
implementation plan to specifically target the sources of ozone
transport both within and outside the OTR. The NOX SIP call,
CAIR, CSAPR, CSAPR Update and numerous individual SIP approvals
demonstrate that the EPA has a long history of using its section 110
authority to specifically address interstate pollution transport in a
targeted way that is tailored to a specific NAAQS and set of pollution
sources which are the primary contributors to interstate pollution
transport. As described in Section IV.B of this document, using the
authority of the good neighbor provision has allowed the EPA to focus
its efforts on pollution sources that are responsible for the largest
contributions to ozone transport and that can cost-effectively reduce
emissions, and also enables the agency to focus on NOX as
the primary driver of long range ozone transport--an approach the
courts have found to be a reasonable means of addressing interstate
ozone transport. EPA v. EME Homer City Generation, L.P., 134 S. Ct. at
1607 (affirming as ``efficient and equitable'' the EPA's use of cost to
apportion emission reduction responsibility pursuant to the good
neighbor provision); Michigan v. EPA, 213 F.3d at 688 (``EPA reasonably
concluded that long-range ozone transport can only be addressed
adequately through NOX reductions'').
    As explained previously, it does not appear that adding states to
an OTR under CAA section 176A will afford the states and EPA with the
flexibility to focus on specific sources and ozone precursor emissions
tailored to address the downwind state's current air quality and needed
remedy to achieve attainment of the 2008 NAAQS. The statute prescribes
a specific set of controls for a variety of sources to control
emissions of both VOCs and NOX. CAA section
110(a)(2)(D)(i)(I) on the other hand permits the EPA and the regulated
community the flexibility to focus controls on specific sources and
pollutants that most efficiently address the air quality problem being
targeted. The EPA determined in the CSAPR Update that regional
NOX emissions reductions from upwind states are the most
effective means for providing ozone benefits to an area in the OTR
currently violating the 2008 ozone NAAQS, and that NOX
reductions can be most efficiently achieved by focusing on those
sources that can cost-effectively reduce emissions. Accordingly, the
EPA does not believe that the requirements imposed upon states added to
the OTR would be the most effective means of addressing any remaining
interstate transport concerns with respect to the 2008 ozone NAAQS.
    The implementation of controls within the OTR, when combined with
the numerous federal and state emission reduction programs that have
already been adopted that have resulted in the reduction of ozone
precursor emissions either directly or as a co-benefit of those
regulations, have helped to significantly reduce ozone levels. These
programs will continue to reduce ozone precursor emissions and ozone
concentrations both within and outside of the OTR over many years to
come. However, the EPA believes the most efficient way to address the
current 2008 ozone NAAQS nonattainment and interstate transport
problems is to continue to rely on the ability to flexibly target the
necessary reductions through this combination of targeted programs such
as the implementation of the CSAPR Update Rule, the further utilization
of the CSAPR framework, development of local attainment plans, and
consideration of additional emissions limitations resulting from action
on CAA section 126 petitions.
    As discussed in Section III.C. of this document, CAA section 176A
provides that the Administrator may exercise reasonable discretion in
administering the agency's regulatory agenda by determining whether or
not to approve or deny a section 176A petition, so long as the EPA's
action is supported by a reasonable interpretation within the context
of the statute. The EPA has reviewed the request of the petitioners to
add additional states to the OTR in light of required control
strategies for ozone transport regions and the other statutory tools
available to the agency and states to address the interstate transport
of ozone pollution. The agency believes that continuing its
longstanding and effective use of the existing and expected control
programs under the CAA's mandatory good neighbor provision embodied in
section 110(a)(2)(D)(i)(I), including implementation of the CSAPR
Update beginning in 2017 and technical work now underway to establish a
full remedy for the 2008 NAAQS as well as to implement the good
neighbor provision for the more stringent 2015 NAAQS, is a more
effective approach for addressing regional interstate ozone transport
problems relative to the 2008 ozone standard.
    The EPA is proposing to deny the petitioning states' request to add
additional states to the OTR for the purpose of addressing interstate
transport of the 2008 ozone NAAQS at this time. The agency will instead
continue to use other authorities available within the CAA in order to
address the long range interstate transport of ozone pollution. This
document is specific to the 2008 ozone NAAQS, but the EPA notes that
under different circumstances the OTR provisions have been an effective
tool for air quality management, and could be similarly effective in
the future for addressing interstate transport of ozone pollution.
Accordingly, nothing in this document should be read to limit states'
ability to file a different petition under 176A or to prejudge the
outcome of such a petition if filed. The EPA requests comment on the
proposed denial of the petition based on the EPA's preferred approach
to addressing interstate transport with respect to the 2008 ozone NAAQS
pursuant to these other CAA authorities.\39\
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    \39\ The EPA's proposal as to the pending section 176A petition
is focused on the appropriate mechanism to address interstate
transport issues relative to the 2008 ozone NAAQS rather than the
scope of remaining air quality problems or the level of controls
necessary to address any such problems. Comment on any
determinations made in prior rulemaking actions to identify downwind
air quality problems relative to the ozone NAAQS or to quantify
upwind state emission reduction obligations relative to those air
quality problems, including the EPA's decision to focus on certain
precursor emissions or sources, are not within the scope of this
proposal. To the extent the EPA evaluates these issues in a future
rulemaking to address remaining air quality problems relative to the
2008 ozone NAAQS, comments will be welcomed in the context of that
rulemaking.
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V. Judicial Review and Determinations Under Section 307(b)(1) of the
CAA

    Section 307(b)(1) of the CAA indicates which Federal Courts of
Appeal have venue for petitions of review of final actions by the EPA.
This section provides, in part, that petitions for review must be filed
in the Court of Appeals for the District of Columbia Circuit if (i) the
agency action consists of ``nationally applicable regulations
promulgated, or final action taken, by the Administrator,'' or (ii)
such action is locally or regionally applicable, if ``such action is
based on a determination of nationwide scope or effect and if in taking
such action the Administrator finds and publishes that such action is
based on such a determination.'' The EPA finds that any final action
related to this document is ``nationally applicable'' and of
``nationwide scope and effect'' within the meaning of CAA section
307(b)(1). Through this document, the EPA interprets section 176A of
the CAA, a provision which has nationwide applicability. In addition,
this document is a response to a petition which would, if granted,
extend

regulatory requirements to nine states in multiple different circuits,
and if denied could impact the 13 states within the ozone transport
region established in CAA section 184. This proposed action also
discusses at length prior EPA action and analyses concerning the
transport of pollutants between the different states under CAA section
110. For these reasons, the Administrator determines that, when
finalized, this action is of nationwide scope and effect for purposes
of section 307(b)(1). Thus, pursuant to CAA section 307(b) any
petitions for review of any final action regarding this document would
be filed in the Court of Appeals for the District of Columbia Circuit
within 60 days from the date any final action is published in the
Federal Register.

VI. Statutory Authority

    42 U.S.C. 7401 et seq.

    Dated: January 11, 2017.
Gina McCarthy,
Administrator.
[FR Doc. 2017-01097 Filed 1-18-17; 8:45 am]
 BILLING CODE 6560-50-P