[Federal Register Volume 78, Number 20 (Wednesday, January 30, 2013)]
[Rules and Regulations]
[Pages 6673-6724]
[FR Doc No: 2013-01288]

Vol. 78

Wednesday,

No. 20

January 30, 2013

Part IV

Environmental Protection Agency

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40 CFR Parts 60 and 63

 National Emission Standards for Hazardous Air Pollutants for
Reciprocating Internal Combustion Engines; New Source Performance
Standards for Stationary Internal Combustion Engines; Final Rule

Federal Register / Vol. 78, No. 20 / Wednesday, January 30, 2013 /
Rules and Regulations

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 60 and 63

[EPA-HQ-OAR-2008-0708, FRL-9756-4]
RIN 2060-AQ58

National Emission Standards for Hazardous Air Pollutants for
Reciprocating Internal Combustion Engines; New Source Performance
Standards for Stationary Internal Combustion Engines

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The EPA is finalizing amendments to the national emission
standards for hazardous air pollutants for stationary reciprocating
internal combustion engines. The final amendments include alternative
testing options for certain large spark ignition (generally natural
gas-fueled) stationary reciprocating internal combustion engines,
management practices for a subset of existing spark ignition stationary
reciprocating internal combustion engines in sparsely populated areas
and alternative monitoring and compliance options for the same engines
in populated areas. The EPA is establishing management practices for
existing compression ignition engines on offshore vessels. The EPA is
also finalizing limits on the hours that stationary emergency engines
may be used for emergency demand response and establishing fuel and
reporting requirements for certain emergency engines used for emergency
demand response. The final amendments also correct minor technical or
editing errors in the current regulations for stationary reciprocating
internal combustion engines.

DATES:  This final rule is effective on April 1, 2013. The
incorporation by reference of certain publications listed in this final
rule is approved by the Director of the Federal Register as of April 1,
2013.

ADDRESSES: The EPA has established a docket for this action under
Docket ID No. EPA-HQ-OAR-2008-0708. The EPA also relies on materials in
Docket ID Nos. EPA-HQ-OAR-2002-0059, EPA-HQ-OAR-2005-0029, and EPA-HQ-
OAR-2005-0030 and incorporates those dockets into the record for this
final rule. All documents in the docket are listed on the
www.regulations.gov Web site. Although listed in the index, some
information is not publicly available, e.g., Confidential Business
Information or other information whose disclosure is restricted by
statute. Certain other material, such as copyrighted material, is not
placed on the Internet and will be publicly available only in hard copy
form. Publicly available docket materials are available either
electronically through www.regulations.gov or in hard copy at the Air
and Radiation Docket, EPA/DC, EPA West, Room 3334, 1301 Constitution
Ave. NW., Washington, DC. The Public Reading Room is open from 8:30
a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The
telephone number for the Public Reading Room is<PHONE_NUMBER>, and the
telephone number for the Air Docket is<PHONE_NUMBER>.

FOR FURTHER INFORMATION CONTACT: Ms. Melanie King, Energy Strategies
Group, Sector Policies and Programs Division (D243-01), Environmental
Protection Agency, Research Triangle Park, North Carolina 27711;
telephone number<PHONE_NUMBER>; facsimile number<PHONE_NUMBER>; email
address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Background Information Document. On June 7,
2012 (77 FR 33812), the EPA proposed amendments to the national
emission standards for hazardous air pollutants (NESHAP) for stationary
reciprocating internal combustion engines (RICE) and the new source
performance standards (NSPS) for stationary engines. A summary of the
public comments on the proposal and the EPA's responses to the
comments, as well as the Regulatory Impact Analysis Report, are
available in Docket ID No. EPA-HQ-OAR-2008-0708.

SUPPLEMENTARY INFORMATION: Organization of This Document. The following
outline is provided to aid in locating information in the preamble.

I. General Information
    A. Executive Summary
    B. Does this action apply to me?
    C. Where can I get a copy of this document?
    D. Judicial Review
II. Summary of Final Amendments
    A. Total Hydrocarbon Compliance Demonstration Option
    B. Emergency Demand Response and Reliability
    C. Peak Shaving
    D. Non-Emergency Stationary SI RICE Greater Than 500 HP Located
at Area Sources
    E. Stationary CI RICE Certified to Tier Standards
    F. Definition for Remote Areas of Alaska
    G. Requirements for Offshore Vessels
    H. Miscellaneous Corrections and Revisions
III. Summary of Significant Changes Since Proposal
    A. Emergency Demand Response and Reliability
    B. Peak Shaving
    C. Non-Emergency Stationary SI RICE Greater Than 500 HP Located
at Area Sources
    D. Definition for Remote Areas of Alaska
    E. Requirements for Offshore Vessels
IV. Summary of Environmental, Energy and Economic Impacts
    A. What are the air quality impacts?
    B. What are the cost impacts?
    C. What are the benefits?
    D. What are the non-air health, environmental and energy
impacts?
V. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review and
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From
Environmental Health Risks and Safety Risks
    H. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act
    J. Executive Order 12898: Federal Actions to Address
Environmental Justice in Minority Populations and Low-Income
Populations
    K. Congressional Review Act

I. General Information

A. Executive Summary

1. Purpose of the Regulatory Action
    The purpose of this action is to finalize amendments to the NESHAP
for stationary RICE under section 112 of the Clean Air Act (CAA). This
final rule was developed to address certain issues that were raised by
various stakeholders through lawsuits, several petitions for
reconsideration of the 2010 RICE NESHAP amendments and other
communications. This final rule also provides clarifications and
corrects minor technical or editing errors in the current RICE NESHAP
and revises the NSPS for stationary engines, 40 CFR part 60, subparts
IIII and JJJJ, for consistency with the RICE NESHAP.
    This action is conducted under the authority of section 112 of the
CAA, ``Hazardous Air Pollutants'' (HAP), which requires the EPA to
establish NESHAP for the control of HAP from both new and existing
sources in regulated source categories.

2. Summary of the Major Provisions of the Regulatory Action
    After promulgation of the 2010 RICE NESHAP amendments, the EPA
received several petitions for reconsideration, legal challenges, other
communications raising issues related to practical implementation and
certain factual information that had not been brought to the EPA's
attention during the rulemaking. The EPA has considered this
information and comments submitted in response to the proposed
amendments, and believes that amendments to the rule to address certain
issues are appropriate. Therefore, the EPA is finalizing amendments to
40 CFR part 63, subpart ZZZZ, NESHAP for stationary RICE. The current
regulation applies to owners and operators of existing and new
stationary RICE at major and area sources of HAP emissions. The
applicability of the rule remains the same and is not changed by this
final rule. The EPA is also finalizing amendments to the NSPS for
stationary engines to conform with certain amendments finalized for the
RICE NESHAP. The key amendments to the regulations are summarized in
the following paragraphs.
    The EPA is adding an alternative compliance demonstration option
for stationary 4-stroke rich burn (4SRB) spark ignition (SI) engines
subject to a 76 percent or more formaldehyde reduction requirement.
Owners and operators of 4SRB engines will be permitted to demonstrate
compliance with the 76 percent formaldehyde reduction emission standard
by testing emissions of total hydrocarbons (THC) and showing that the
engine is achieving at least a 30 percent reduction of THC emissions.
The alternative compliance option provides a less expensive and less
complex, but equally effective, method for demonstrating compliance
than testing for formaldehyde.
    Certain stationary RICE are maintained in order to be able to
respond to emergency power needs. This action finalizes limitations on
the operation of emergency engines for emergency demand response
programs. The final rule limits operation of stationary emergency RICE
as part of an emergency demand response program to within the 100 hours
per year that were already permitted for maintenance and testing of the
engines. The limitation of 100 hours per year ensures that a sufficient
number of hours are available for engines to meet regional transmission
organization and independent system operator tariffs and other
requirements for participating in various emergency demand response
programs and will assist in stabilizing the grid during periods of
instability, preventing electrical blackouts and supporting local
electric system reliability. The final rule also limits operation of
certain emergency engines used to avert potential voltage collapse or
line overloads that could lead to the interruption of power supply in a
local area or region to 50 hours per year; this operation counts as
part of the 100 hours of year permitted for maintenance and testing of
the engine. This rule also establishes fuel and reporting requirements
for emergency engines larger than 100 horsepower (HP) used for this
purpose or used (or contractually obligated to be available) for more
than 15 hours of emergency demand response per calendar year.
    The EPA is finalizing management practices for owners and operators
of existing stationary 4-stroke SI engines above 500 HP that are area
sources of HAP emissions and where the engines are remote from human
activity. A remote area is defined as either a Department of
Transportation (DOT) Class 1 pipeline location,\1\ or, if the engine is
not on a pipeline, if within a 0.25 mile radius of the facility there
are 5 or fewer buildings intended for human occupancy. The EPA
determined that a 0.25 mile radius was appropriate because it is
similar to the area used for the DOT Class 1 pipeline location. This
final rule establishes management practices for these sources rather
than numeric emission limits and associated testing and monitoring.
This provision and the division of remote and non-remote engines into
two separate subcategories addresses reasonable concerns with
accessibility, infrastructure and staffing that stem from the
remoteness of the engines and higher costs that would be associated
with compliance with the existing requirements. Existing stationary 4-
stroke SI engines above 500 HP at area sources that are in populated
areas (defined as not in DOT pipeline Class 1 areas, or if not on a
pipeline, if within a 0.25 mile radius of the engine there are more
than 5 buildings intended for human occupancy) are subject to an
equipment standard that requires the installation of HAP-reducing
aftertreatment. The EPA has the discretion to set an equipment standard
as generally available control technology (GACT) for engines located at
area sources of HAP. Sources are required to test their engines to
demonstrate compliance initially, perform catalyst activity check-ups
and either monitor the catalyst inlet temperature continuously or
employ high temperature shutdown devices to protect the catalyst.
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    \1\ A Class 1 location is defined as an offshore area or any
class location unit that has 10 or fewer buildings intended for
human occupancy and no buildings with four or more stories within
220 yards (200 meters) on either side of the centerline of any
continuous 1-mile (1.6 kilometers) length of pipeline.
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    To address how certain existing compression ignition (CI) engines
are currently regulated, the EPA is specifying that any existing CI
engine above 300 HP at an area source of HAP emissions that was
certified to meet the Tier 3 engine standards \2\ and was installed
before June 12, 2006, is in compliance with the NESHAP. This provision
creates regulatory consistency between the same engines installed
before and after June 12, 2006. Engines at area sources of HAP for
which construction commenced before June 12, 2006, are considered
existing engines under the NESHAP.
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    \2\ See 40 CFR part 89--Control of Emissions From New and In-Use
Nonroad Compression-Ignition Engines.
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    The EPA is finalizing amendments to the requirements for existing
stationary Tier 1 and Tier 2 certified CI engines located at area
sources that are subject to state and locally enforceable requirements
requiring replacement of the engine by June 1, 2018. This addresses a
specific concern regarding the interaction of the NESHAP with certain
rules for agricultural engines in the San Joaquin Valley in California.
The EPA is allowing these engines to meet management practices under
the RICE NESHAP from the May 3, 2013, compliance date until January 1,
2015, or 12 years after installation date, but not later than June 1,
2018. This provision addresses concerns about requiring owners and
operators to install controls on their engines in order to meet the
RICE NESHAP, and then having to replace their engines shortly
thereafter due to state and local rules specifying the replacement of
engines. Owners and operators will have additional time to replace
their engines without having to install controls, but are required to
use management practices during that period.
    Another change the EPA is making is to broaden the definition of
remote area sources in Alaska in the RICE NESHAP. Previously, remote
areas were considered those that are not on the Federal Aid Highway
System (FAHS). This change permits existing stationary CI engines at
other remote area sources in Alaska to meet management practices rather
than numerical emission standards likely to require

aftertreatment. These remote areas have the same challenges as areas
not on the FAHS, and complying with the current rule would similarly be
prohibitively costly and potentially infeasible. In addition to area
sources located in areas of Alaska that are not accessible by the FAHS
being defined as remote and subject to management practices, any
stationary RICE in Alaska meeting all of the following conditions are
subject to management practices:
    (1) The only connection to the FAHS is through the Alaska Marine
Highway System, or the stationary RICE operation is within an isolated
grid in Alaska that is not connected to the statewide electrical grid
referred to as the Alaska Railbelt Grid, and
    (2) At least 10 percent of the power generated by the stationary
RICE on an annual basis is used for residential purposes, and
    (3) The generating capacity of the area source is less than 12
megawatts (MW), or the stationary RICE is used exclusively for backup
power for renewable energy.
    The last significant change the EPA is finalizing is to require
compliance with management practices rather than numeric emission
limits in the RICE NESHAP for existing CI RICE on offshore drilling
vessels on the Outer Continental Shelf (OCS) that become subject to the
RICE NESHAP as a result of the operation of the OCS regulations (40 CFR
part 55). The final amendments specify that owners and operators of
existing non-emergency CI RICE with a site rating greater than 300 HP
on offshore drilling vessels on the OCS are required to change the oil
every 1,000 hours of operation or annually, whichever occurs first;
inspect and clean air filters every 750 hours of operation or annually
and replace as necessary; inspect fuel filters and belts, if installed,
every 750 hours of operation or annually and replace as necessary; and
inspect all flexible hoses every 1,000 hours of operation or annually
and replace as necessary. Owners and operators can elect to use an oil
analysis program to extend the oil change requirement.
3. Costs and Benefits
    These final amendments will reduce the capital and annual costs of
the original 2010 amendments by $287 million and $139 million,
respectively. The EPA estimates that with these final amendments, the
capital cost of compliance with the 2010 amendments to the RICE NESHAP
in 2013 is $840 million and the annual cost is $490 million ($2010).
These costs are identical to the costs estimated for the amendments to
the RICE NESHAP proposed on June 7, 2012, since the changes from the
proposal do not affect the costs of the rule in the year 2013. The
capital and annual costs of the original 2010 final rule and the 2010
final rule with these final amendments incorporated into the rule are
shown in Table 1.

                          Table 1--Summary of Cost Impacts for Existing Stationary RICE
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Engine                                           2010 Final rule               2010 Final rule with
                                                                               these final
                                                                               amendments
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                                                                 Total Annual Cost
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SI...............................  $253 million ($2009)  $251 million ($2010)  $115 million ($2010).
CI...............................  $373 million ($2008)  $375 million ($2010)  $373 million ($2010).
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                                                                 Total Capital Cost
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SI...............................  $383 million ($2009)  $380 million ($2010)  $103 million ($2010).
CI...............................  $744 million ($2008)  $748 million ($2010)  $740 million ($2010).
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    These final amendments would also result in decreases to the
emissions reductions estimated in 2013 from the original 2010 RICE
NESHAP amendments. The reductions that were estimated for the original
2010 RICE NESHAP amendments were 7,000 tpy of HAP, 124,000 tpy of CO,
2,800 tpy of PM, 96,000 tpy of NOX and 58,000 tpy of VOC.
The estimated reductions in 2013 from the 2010 RICE NESHAP rulemaking
with these final amendments are 2,800 tons per year (tpy) of HAP,
36,000 tpy of carbon monoxide (CO), 2,800 tpy of particulate matter
(PM), 9,600 tpy of nitrogen oxide (NOX), and 36,000 tpy of
volatile organic compounds (VOC). The difference in the emission
reductions is primarily due to the changes to the requirements for
existing 4-stroke stationary SI RICE at area sources of HAP that are in
remote areas. These emission reduction estimates are identical to those
estimated for the June 7, 2012, proposed amendments to the RICE NESHAP.
The emission reductions of the original 2010 final rule and the 2010
final rule with these final amendments incorporated into the rule are
shown in Table 2.

                           Table 2--Summary of Reductions for Existing Stationary RICE
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                                                            Emission reductions (tpy) in the year 2013
                                                 ---------------------------------------------------------------
                                                          2010 Final rule           2010 Final rule with these
                    Pollutant                    --------------------------------        final amendments
                                                                                -------------------------------
                                                        CI              SI              CI              SI
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HAP.............................................           1,014           6,008           1,005           1,778
CO..............................................          14,342         109,321          14,238          22,211
PM..............................................           2,844             N/A           2,818             N/A
NOX.............................................             N/A          96,479             N/A           9,648
VOC.............................................          27,395          30,907          27,142           9,147
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    The EPA estimates the monetized co-benefits in 2013 of the original
2010 RICE NESHAP amendments with these final amendments incorporated to
be $830 million to $2,100 million (2010 dollars) at a 3-percent
discount rate and $740 million to $1,800 million (2010 dollars) at a 7-
percent discount rate. The benefits that were estimated for the
original 2010 RICE NESHAP amendments were $1,500 million to $3,600
million (2010 dollars) at a 3-percent discount rate and $1,300 million
to $3,200 million (2010 dollars) at a 7-percent discount rate. A
summary of the monetized co-benefits estimates for CI and SI engines at
discount rates of 3 percent and 7 percent for the original 2010 final
rule and the 2010 final rule with these final amendments incorporated
into the rule is in Table 3 of this preamble.

   Table 3--Summary of the Monetized PM2.5 Co-Benefits Final Amendments to the NESHAP for Stationary CI and SI
                                                     Engines
                                         [millions of 2010 dollars] a, b
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                                                               Total monetized co-
             Pollutant                 Emission reductions     benefits (3 percent   Total monetized co-benefits
                                         (tons per year)            discount)            (7 percent  discount)
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                                           Original 2010 Final Rules c
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Stationary CI Engines:
    Total Benefits.................  2,844 PM2.5 27,395 VOC  $950 to $2,300........  $860 to $2,100.
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Stationary SI Engines:
    Total Benefits.................  96,479 NOX 30,907 VOC.  $510 to $1,300........  $470 to $1,100.
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                                  2010 Final Rules With These Final Amendments
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Stationary CI Engines:
    Directly emitted PM2.5.........  2,818.................  $770 to $1,900........  $690 to $1,700.
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Stationary SI Engines:
    NOX............................  9,648.................  $62 to $150...........  $55 to $140.
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a All estimates are for the analysis year (2013) and are rounded to two significant figures so numbers may not
  sum across rows. The total monetized co-benefits reflect the human health benefits associated with reducing
  exposure to PM2.5 through reductions of PM2.5 precursors, such as NOX and directly emitted PM2.5. It is
  important to note that the monetized co-benefits do not include reduced health effects from exposure to HAP,
  direct exposure to NO2, exposure to ozone, ecosystem effects or visibility impairment.
b PM co-benefits are shown as a range from Pope, et al. (2002) to Laden, et al. (2006). These models assume that
  all fine particles, regardless of their chemical composition, are equally potent in causing premature
  mortality because the scientific evidence is not yet sufficient to allow differentiation of effects estimates
  by particle type.
c The benefits analysis for the 2010 final rules applied out-dated benefit-per-ton estimates compared to the
  updated estimates described in this preamble and reflected monetized co-benefits for VOC emissions, which
  limits direct comparability with the monetized co-benefits estimated for this final rule. In addition, these
  estimates have been updated from their original currency years to 2010$, so the rounded estimates for the 2010
  final rules may not match the original RIAs.

    We have not re-estimated the benefits for the final rule compared
to the proposal because the emission reductions estimated for the final
rule are the same as those estimated for the proposed amendments. Since
the June 7, 2012, reconsideration proposal, the EPA has made several
updates to the approach we use to estimate mortality and morbidity
benefits in the PM NAAQS Regulatory Impact Analysis
(RIA),3, 4 including updated epidemiology studies, health
endpoints, and population data. Although the EPA has not re-estimated
the benefits for this rule to apply this new approach, these updates
generally offset each other, and we anticipate that the rounded
benefits estimated for this rule are unlikely to be different than
those provided above.
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    \3\ U.S. Environmental Protection Agency (U.S. EPA). 2012a.
Regulatory Impact Analysis for the Proposed Revisions to the
National Ambient Air Quality Standards for Particulate Matter. EPA-
452/R-12-003. Office of Air Quality Planning and Standards, Health
and Environmental Impacts Division. June. Available at http://www.epa.gov/ttnecas1/regdata/RIAs/PMRIACombinedFile_Bookmarked.pdf.
    \4\ U.S. Environmental Protection Agency (U.S. EPA). 2012b.
Regulatory Impact Analysis for the Final Revisions to the National
Ambient Air Quality Standards for Particulate Matter. EPA-452/R-12-
003. Office of Air Quality Planning and Standards, Health and
Environmental Impacts Division. December. Available at http://www.epa.gov/pm/2012/finalria.pdf.
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    More detail regarding the air quality and cost impacts and the
benefits from this action can be found in section IV of this preamble.

B. Does this action apply to me?

    Regulated Entities. Categories and entities potentially regulated
by this action include:

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                                                  Examples of regulated
             Category               NAICS \1\           entities
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Any industry using a stationary           2211  Electric power
 internal combustion engine as          622110   generation,
 defined in the final amendments.        48621   transmission, or
                                                 distribution.
                                                Medical and surgical
                                                 hospitals.
                                                Natural gas
                                                 transmission.
                                        211111  Crude petroleum and
                                                 natural gas production.
                                        211112  Natural gas liquids
                                                 producers.
                                         92811  National security.
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\1\ North American Industry Classification System.

    This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be regulated by this
action. To determine whether an engine is regulated by this action,
owners and operators should examine the applicability criteria of this
final rule. For any questions regarding the applicability of this
action to a particular entity, consult the person listed in the
preceding FOR FURTHER INFORMATION CONTACT section.

C. Where can I get a copy of this document?

    In addition to being available in the docket, an electronic copy of
this final action will also be available on the Worldwide Web (WWW)
through the Technology Transfer Network (TTN). Following signature, a
copy of this final action will be posted on the TTN's policy and
guidance page for newly proposed or promulgated rules at the following
address: http://www.epa.gov/ttn/oarpg/. The TTN provides information
and technology exchange in various areas of air pollution control.

D. Judicial Review

    Under section 307(b)(1) of the CAA, judicial review of this final
rule is available only by filing a petition for review in the U.S.
Court of Appeals for the District of Columbia Circuit by April 1, 2013.
Under section 307(d)(7)(B) of the CAA, only an objection to this final
rule that was raised with reasonable specificity during the period for
public comment can be raised during judicial review. Moreover, under
section 307(b)(2) of the CAA, the requirements established by this
final rule may not be challenged separately in any civil or criminal
proceedings brought by EPA to enforce these requirements. Section
307(d)(7)(B) of the CAA further provides that ``[o]nly an objection to
a rule or procedure which was raised with reasonable specificity during
the period for public comment (including any public hearing) may be
raised during judicial review.'' This section also provides a mechanism
for us to convene a proceeding for reconsideration, ``[i]f the person
raising an objection can demonstrate to the EPA that it was
impracticable to raise such objection within [the period for public
comment] or if the grounds for such objection arose after the period
for public comment (but within the time specified for judicial review)
and if such objection is of central relevance to the outcome of the
rule.'' Any person seeking to make such a demonstration to us should
submit a Petition for Reconsideration to the Office of the
Administrator, U.S. EPA, Room 3000, Ariel Rios Building, 1200
Pennsylvania Ave. NW., Washington, DC 20460, with a copy to both the
person(s) listed in the preceding FOR FURTHER INFORMATION CONTACT
section, and the Associate General Counsel for the Air and Radiation
Law Office, Office of General Counsel (Mail Code 2344A), U.S. EPA, 1200
Pennsylvania Ave. NW., Washington, DC 20460.

II. Summary of Final Amendments

    This action finalizes amendments to the NESHAP for RICE in 40 CFR
part 63, subpart ZZZZ. This action also finalizes amendments to the
NSPS for stationary engines in 40 CFR part 60, subparts IIII and JJJJ.
The NESHAP for stationary RICE to regulate emissions of HAP was
developed in several stages. The EPA initially addressed stationary
RICE greater than 500 HP located at major sources of HAP emissions in
2004 (69 FR 33473). The EPA addressed new stationary RICE less than or
equal to 500 HP located at major sources and new stationary RICE
located at area sources in 2008 (73 FR 3568). Most recently,
requirements for existing stationary RICE less than or equal to 500 HP
located at major sources and existing stationary RICE located at area
sources were finalized in 2010 (75 FR 9648 and 75 FR 51570).
    The EPA is finalizing these amendments to address a number of
issues that have been raised by different stakeholders through
lawsuits, several petitions for reconsideration of the 2010 RICE NESHAP
amendments, and other communications. The EPA is also finalizing
revisions to 40 CFR part 60, subparts IIII and JJJJ for consistency
with the RICE NESHAP and to make minor corrections and clarifications.
The amendments that the EPA is finalizing in this action are discussed
in this section. The changes from the proposal to this final rule are
discussed in section III.

A. Total Hydrocarbon Compliance Demonstration Option

    The EPA is adding an alternative method of demonstrating compliance
with the NESHAP for existing and new stationary 4SRB non-emergency
engines greater than 500 HP that are located at major sources of HAP
emissions. Under these final amendments, the emission standard remains
the same, that is, existing and new stationary 4SRB engines greater
than 500 HP and located at major sources are still required to reduce
formaldehyde emissions by 76 percent or more or limit the concentration
of formaldehyde in the stationary RICE exhaust to 350 parts per billion
by volume, dry basis or less at 15 percent oxygen (O2). This
final rule adds an alternative compliance demonstration option to the
existing method of demonstrating compliance with the formaldehyde
percent reduction standard. The current method is to test engines for
formaldehyde. The alternative for owners and operators of 4SRB engines
meeting a 76 percent or more formaldehyde reduction is to test their
engines for THC showing that the engine is achieving at least a 30
percent reduction of THC emissions. Including this optional THC
compliance demonstration option reduces the cost of compliance
significantly while continuing to achieve the same level of HAP
emission reduction because the emission standards would remain the
same. As discussed in the June 7, 2012, proposal, data provided to EPA
indicate that a strong relationship exists between percentage
reductions of THC and percentage reductions of formaldehyde (the
surrogate for HAP emissions in the NESHAP) on rich burn engines using
non-selective catalytic reduction (NSCR). Data analyzed by the EPA
indicate that if the NSCR is reducing THC by at least 30 percent from
4SRB engines, formaldehyde emissions are guaranteed to be reduced by at
least 76 percent, which is the percentage reduction required for the
relevant engines. Indeed, the percentage reduction of formaldehyde is
invariably well above the 76 percent level, and is usually above 90
percent. Therefore, the EPA concluded that for SI 4SRB engines using
NSCR and meeting the NESHAP by showing a percentage reduction of HAP,
it would be appropriate to allow sources to demonstrate compliance with
the NESHAP by showing a THC reduction of at least 30 percent. Owners
and operators of existing stationary 4SRB engines less than or equal to
500 HP that are required to limit the concentration of formaldehyde in
the stationary RICE exhaust to 10.3 parts per million by volume, dry
basis (ppmvd) or less at 15 percent O2 do not have the
option to demonstrate compliance using THC and must continue to
demonstrate compliance by testing for formaldehyde following the
methods and procedures specified in the rule because the EPA could not
verify a clear relationship between concentrations of THC and
concentrations of formaldehyde in the exhaust from these SI 4SRB
engines.
    Owners and operators opting to use the THC compliance demonstration
method must demonstrate compliance by showing that the average
reduction of THC is equal to or greater than 30 percent. Owners and
operators of 4SRB stationary RICE complying with the

requirement to reduce formaldehyde emissions and demonstrating
compliance by using the THC compliance demonstration option must
conduct performance testing using Method 25A of 40 CFR part 60,
appendix A--Determination of Total Gaseous Organic Concentration Using
a Flame Ionization Analyzer. Measurements of THC at the inlet and the
outlet of the NSCR must be on a dry basis and corrected to 15 percent
O2 or equivalent carbon dioxide content. To correct to 15
percent O2, dry basis, owners and operators must measure
oxygen using Method 3, 3A or 3B of 40 CFR part 60, appendix A, or ASTM
Method D6522-00 (2005) and measure moisture using Method 4 of 40 CFR
part 60, appendix A, or Test Method 320 of 40 CFR part 63, appendix A,
or ASTM D6348-03. Because owners and operators are complying with a
percent reduction requirement, the method used must be suitable for the
entire range of emissions since pre and post-catalyst emissions must be
measured. Method 25A is capable of measuring emissions down to 5 ppmv
and is, therefore, an appropriate method for measuring THC emissions
for compliance demonstration purposes. The EPA is allowing sources the
option to meet a minimum THC percent reduction of 30 percent by using
Method 25A of 40 CFR part 60, appendix A to demonstrate compliance with
the formaldehyde percent reduction in 40 CFR part 63, subpart ZZZZ.

B. Emergency Demand Response and Reliability

    The EPA is finalizing certain revisions to the proposal regarding
use of existing engines for emergency demand response and system
reliability. Following is a summary of the prior requirements for these
engines, including those in the 2010 regulation, a discussion of the
information and input the EPA received in response to the proposal, and
a description of the provisions being finalized in this action.
    Existing emergency engines less than or equal to 500 HP located at
major sources of HAP and existing emergency engines located at area
sources of HAP were not regulated under the RICE NESHAP rulemakings
finalized in 2004 and 2008. They could operate uncontrolled for an
unlimited amount of time. The 2010 RICE NESHAP rulemaking for the first
time established requirements for these existing emergency engines,
requiring affected engines to comply by May 3, 2013, for stationary CI
RICE and October 19, 2013, for stationary SI RICE. Under the RICE
NESHAP requirements originally finalized in 2010, these existing
emergency stationary engines must limit operation to situations like
blackouts and floods and to a maximum of 100 hours per year for other
specified operations beginning with the applicable compliance date in
2013 for the engine. The limitation of 100 hours per year included
maintenance checks and readiness testing of the engine, as well as a
limit of 15 hours per year for use as part of a demand response program
if the regional transmission organization or equivalent balancing
authority and transmission operator has determined there are emergency
conditions that could lead to a potential electrical blackout, such as
unusually low frequency, equipment overload, capacity or energy
deficiency, or unacceptable voltage level. Under the 2010 regulation,
existing emergency engines were required to meet management practice
standards based on proper operation and maintenance of the engine;
meeting these standards would not require installation of
aftertreatment to control emissions.
    Soon after the 2010 rule was final, the EPA received petitions for
reconsideration of the 15-hour limitation for emergency demand response
that was finalized in the 2010 rule. According to one petition, the 15-
hour limit, while usually adequate to cover the limited hours in which
these engines are expected to be called upon, would not be sufficient
to allow these emergency engines to participate in emergency demand
response programs since some regional transmission organizations and
independent system operators require engines be available for more than
15 hours in order to meet emergency demand response situations. For
example, PJM's Emergency Load Response Program requires that emergency
engines guarantee that they will be available for 60 hours per year. By
contrast, another petition asked EPA to eliminate the emergency demand
response provision because of the adverse effects that the petitioner
believes would result from increased emissions from these engines. The
EPA received other comments that addressed the types of situations in
which engines are called upon for emergency demand response and system
reliability.
    The EPA believes that the emergency demand response programs that
exist across the country are important programs that protect the
reliability and stability of the national electric service grid. The
use of stationary emergency engines as part of emergency demand
response programs can help prevent grid failure or blackouts, by
allowing these engines to be used for limited hours in specific
circumstances of grid instability prior to the occurrence of blackouts.
A standard that requires owners and operators of stationary emergency
engines that participate in emergency demand response programs to apply
aftertreatment could make it economically infeasible for these engines
to participate in these programs, impairing the ability of regional
transmission organizations and independent system operators to use
these relatively small, quick-starting and reliable sources of energy
to protect the reliability of their systems in times of critical need.
Information provided by commenters on the proposal indicates that these
emergency demand response events are rarely called.\5\
---------------------------------------------------------------------------

    \5\ See document number EPA-HQ-OAR-2008-0708-1142 in the
rulemaking docket.
---------------------------------------------------------------------------

    The limited circumstances specified in the final rule for operation
of stationary emergency engines for emergency demand response purposes
include periods during which the Reliability Coordinator, or other
authorized entity as determined by the Reliability Coordinator, has
declared an Energy Emergency Alert (EEA) Level 2 as defined in the
North American Electric Reliability Corporation (NERC) Reliability
Standard EOP-002-3, Capacity and Energy Emergency, and during periods
where there is a deviation of voltage or frequency of 5 percent or more
below standard voltage or frequency. During EEA Level 2 alerts there is
insufficient energy supply and a true potential for electrical
blackouts. System operators must call on all available resources during
EEA Level 2 alerts in order to stabilize the grid to prevent failure.
Therefore, this situation is a good indicator of severe instability on
the system, which the EPA believes is appropriately considered an
emergency situation. Consistent normal voltage provided by the utility
is often called power quality and is an important factor in local
electric system reliability. Reliability of the system requires
electricity being provided at a normal expected voltage. The American
National Standards Institute standard C84.1-1989 defines the maximum
allowable voltage sag at below 5 percent. On the local distribution
level local voltage levels are therefore important and a 5 percent or
more change in the normal voltage or frequency is substantial and an
indication that additional resources are needed to ensure local
distribution system reliability.
    In addition to the circumstances described above, the EPA also
received comments on other situations where the

local transmission and distribution system operator has determined that
there are conditions that could lead to a blackout for the local area
where the ready availability of emergency engines is critical to system
reliability. These include situations where:
     The engine is dispatched by the local balancing authority
or local transmission and distribution system operator.
     The dispatch is intended to mitigate local transmission
and/or distribution limitations so as to avert potential voltage
collapse or line overloads that could lead to the interruption of power
supply in a local area or region.
     The dispatch follows reliability, emergency operation or
similar protocols that follow specific NERC, regional, state, public
utility commission or local standards or guidelines.

The EPA believes the operation of emergency engines in these situations
should be addressed in the final rule as well.
    Therefore, based on the EPA's review of the petitions and comments
that the EPA has received with respect to emergency demand response and
system reliability, the EPA has concluded that it is appropriate to
revise the provisions for stationary engines used in these limited
circumstances. The provisions the EPA is amending are in Sec. Sec.
63.6640(f) and 63.6675 of 40 CFR part 63, subpart ZZZZ. The final
amendments to those sections specify that owners and operators of
stationary emergency RICE can operate their engines as part of an
emergency demand response program within the 100 hours already provided
for operation for maintenance and testing. Owners and operators of
stationary emergency engines can operate for up to 100 hours per year
for emergency demand response and system reliability during periods in
which the Reliability Coordinator, or other authorized entity as
determined by the Reliability Coordinator, has declared an EEA Level 2
as defined in the NERC Reliability Standard EOP-002-3, Capacity and
Energy Emergency, and during periods where there is a deviation of
voltage or frequency of 5 percent or greater below standard voltage or
frequency. In addition, existing emergency stationary RICE at area
sources of HAP can operate for up to 50 hours per year if all of the
following conditions are met:
     The engine is dispatched by the local balancing authority
or local transmission and distribution system operator.
     The dispatch is intended to mitigate local transmission
and/or distribution limitations so as to avert potential voltage
collapse or line overloads that could lead to the interruption of power
supply in a local area or region.
     The dispatch follows reliability, emergency operation or
similar protocols that follow specific NERC, regional, state, public
utility commission or local standards or guidelines.
     The owner or operator has a pre-existing plan that
contemplates the engine's operation under the circumstances described
above; and
     The owner or operator identifies and records the specific
NERC, regional, state, public utility commission or local standards or
guidelines that are being followed for dispatching the engine. The
local balancing authority or local transmission and distribution system
operator may keep these records on behalf of the engine owner or
operator.
    For all engines operating to satisfy emergency demand response or
system reliability under the circumstances described above, the hours
spent for emergency demand response operation and local system
reliability are added to the hours spent for maintenance and testing
purposes and are counted towards the limit of 100 hours per year. If
the total time spent for maintenance and testing, emergency demand
response, and system reliability operation exceeds 100 hours per year,
the engine will not be considered an emergency engine under this
subpart and will need to meet all requirements for non-emergency
engines.
    As noted above, the EPA received comments expressing concerns about
the emissions from emergency engines, noting that the engines are
likely to be dispatched on days when energy demand is high, which often
coincides with days when air quality is poor. While the EPA is
sensitive to these concerns, the availability of these engines for a
more tailored response to emergencies may be preferable in terms of air
quality impacts than relying on other generation, including coal-fired
spinning reserve generation. After consideration of the concerns raised
in the comments, the EPA is finalizing provisions that require
stationary emergency CI RICE with a site rating of more than 100 brake
HP and a displacement of less than 30 liters per cylinder that operate
or are contractually obligated to be available for more than 15 hours
per year (up to a maximum of 100 hours per year) for emergency demand
response, or that operate for local system reliability, to use diesel
fuel meeting the specifications of 40 CFR 80.510(b) beginning January
1, 2015, except that any existing diesel fuel purchased (or otherwise
obtained) prior to January 1, 2015, may be used until depleted. The
specifications of 40 CFR 80.510(b) require that diesel fuel have a
maximum sulfur content of 15 ppm and either a minimum cetane index of
40 or a maximum aromatic content of 35 volume percent; this fuel is
referred to as ``ultra low sulfur diesel fuel'' (ULSD). This emission
reduction requirement was not part of the original 2010 rulemaking.
Although the EPA does not have information specifying the percentage of
existing stationary emergency CI engines currently using residual fuel
oil or non-ULSD distillate fuel, the most recent U.S. Energy
Information Administration data available for sales of distillate and
residual fuel oil to end users \6\ show that significant amounts of
non-ULSD are still being purchased by end users that typically operate
stationary combustion sources, including stationary emergency CI
engines. For example, in the category of Commercial End Use, sales data
for the year 2011 show that only 56 percent of the total distillate and
residual fuel oil sold was ULSD. The data provided for Electric Power
End Use show that 57 percent of total fuel sold was residual fuel oil.
For Industrial End Use, the percentage of total fuel that was residual
fuel oil was 26 percent. The EPA believes that requiring cleaner fuel
for these stationary emergency CI engines will significantly limit or
reduce the emissions of regulated air pollutants emitted from these
engines, further protecting public health and the environment.
Information provided to EPA by commenters \7\ showed that the use of
ULSD will significantly reduce emissions of air toxics, including
metallic HAP (e.g., nickel, zinc, lead) and benzene.
---------------------------------------------------------------------------

    \6\ U.S. Energy Information Administration. Distillate Fuel Oil
and Kerosene Sales by End Use. Available at http://www.eia.gov/dnav/pet/pet_cons_821use_dcu_nus_a.htm.
    \7\ See document number EPA-HQ-OAR-2008-0708-1459 in the
rulemaking docket.
---------------------------------------------------------------------------

    In addition to the fuel requirement, owners and operators of
stationary emergency CI RICE larger than 100 HP that operate or are
contractually obligated to be available for more than 15 hours per year
(up to a maximum of 100 hours per year) for emergency demand response
must report the dates and times the engines operate for emergency
demand response annually to the EPA, beginning with operation during
the 2015 calendar year. Owners and operators of these engines are also
required to report the dates, times and situations that the engines
operate to mitigate local transmission and/or

distribution limitations annually to the EPA, beginning with operation
during the 2015 calendar year. This information is necessary to
determine whether these engines are operating in compliance with the
regulations and will assist the EPA in assessing the impacts of the
emissions from these engines.
    The EPA is adding these requirements beginning in January, 2015,
rather than upon initial implementation of the NESHAP for existing
engines in May or October of 2013, to provide sources with appropriate
lead time to institute these new requirements and make any physical
adjustments to engines and other facilities like tanks or other
containment structures, as well as any needed adjustments to contracts
and other business activities, that may be necessitated by these new
requirements.
    The EPA is also amending the NSPS for stationary CI and SI engines
in 40 CFR part 60, subparts IIII and JJJJ, respectively, to provide the
same limitation for stationary emergency engines for emergency demand
response and system reliability operation as for engines subject to the
RICE NESHAP. The NSPS regulations currently do not include such a
provision for emergency demand response or system reliability
operation; the issue was not raised during the original promulgation of
the NSPS. The EPA is adding an emergency demand response and system
reliability provision under the NSPS regulations in these final
amendments. The EPA is revising the existing language in Sec. Sec.
60.4211(f) and 60.4219 of 40 CFR part 60, subpart IIII, and Sec. Sec.
60.4243(d) and 60.4248 of 40 CFR part 60, subpart JJJJ, to specify that
emergency engines must limit operation for engine maintenance and
testing and emergency demand response to a maximum of 100 hours per
year; 50 of the 100 hours may be used to operate to mitigate local
reliability issues, as discussed previously for the RICE NESHAP.
    The EPA is also finalizing amendments to the NSPS regulations that
require owners and operators of stationary emergency engines larger
than 100 HP that operate or are contractually obligated to be available
for more than 15 hours per year (up to a maximum of 100 hours per year)
for emergency demand response to report the dates and times the engines
operated for emergency demand response annually to the EPA, beginning
with operation during the 2015 calendar year. Owners and operators of
these engines are also required to report the dates, times and
situations that the engines operate to mitigate local transmission and/
or distribution limitations annually to the EPA, beginning with
operation during the 2015 calendar year. The EPA anticipates that in
most cases, the entity that dispatches the engines to operate, such as
the curtailment service provider or utility, will report the
information to the EPA on behalf of the facility that owns the engine.
Thus, the burden of the reporting requirement will likely be on the
entities that dispatch the engines. The EPA's burden estimate (see
section V.B Paperwork Reduction Act) assumes the dispatching entity
will report the date and hours dispatched without contacting individual
engine operators. Emergency engines subject to 40 CFR part 60, subpart
IIII are already required by subpart IIII to use diesel fuel that meets
the requirements of 40 CFR 80.510(b).
    The 2010 regulation specified that existing emergency engines at
area sources of HAP that are residential, commercial, or institutional
facilities were not subject to the RICE NESHAP requirements as long as
the engines were limited to no more than 15 hours per year for
emergency demand response. The EPA is specifying in the final rule that
existing emergency engines at area sources of HAP that are residential,
commercial, or institutional facilities are subject to the applicable
requirements for stationary emergency engines in the RICE NESHAP if
they operate or are contractually obligated to be available for more
than 15 hours per year (up to a maximum of 100 hours per year) for
emergency demand response, or they operate to mitigate local
transmission and/or distribution limitations. Information provided by
commenters on the 2010 regulation and the amendments proposed in June
2012 indicates that these engines typically operate less than 15 hours
per year for emergency demand response.
    For stationary emergency engines above 500 HP at major sources of
HAP that were installed before June 12, 2006, prior to these final
amendments, there was no emergency demand response provision and there
was no time limit on the use of emergency engines for routine testing
and maintenance in Sec.  63.6640(f)(2)(ii). Those engines were not the
focus of the 2010 RICE NESHAP amendments; therefore, the EPA did not
make any changes to the requirements for those engines as part of the
2010 amendments. For consistency, the EPA is now also revising 40 CFR
part 63, subpart ZZZZ to require owners and operators of stationary
emergency engines above 500 HP at major sources of HAP installed prior
to June 12, 2006, to limit operation of their engines for maintenance
and testing and emergency demand response program to a total of 100
hours per year. These engines would also be required to use diesel fuel
meeting the specifications of 40 CFR 80.510(b) beginning January 1,
2015, however, if the engine operates or is contractually obligated to
be available for more than 15 hours per year. Any existing diesel fuel
purchased (or otherwise obtained) prior to January 1, 2015 may be used
until depleted. In addition to the fuel requirement, owners and
operators of these engines must report the dates and times the engines
operate for emergency demand response annually to the EPA, beginning
with operation during the 2015 calendar year.
    More detail regarding the public comments regarding emergency
demand response and the EPA's responses can be found in the Response to
Public Comments document available in the rulemaking docket.

C. Peak Shaving

    In the June 7, 2012, proposal, the EPA proposed a temporary
provision for existing stationary emergency engines located at area
sources to apply the 50 hours per year that is allowed under Sec.
63.6640(f) for non-emergency operation towards any non-emergency
operation, including peak shaving. The peak shaving provision was
proposed to expire in April 2017. As discussed further in section
III.B, the EPA is not finalizing the proposed temporary 50-hour
provision for existing stationary emergency engines located at area
sources engaged in peak shaving and other non-emergency use as part of
a financial arrangement with another entity. However, in consideration
of the short time between this final rule and the May 3, 2013, or
October 19, 2013, compliance dates for affected sources, this final
rule includes a provision limiting the use of existing stationary
emergency engines located at area sources to 50 hours per year prior to
May 3, 2014, for peak shaving or non-emergency demand response to
generate income for a facility, or to otherwise supply power as part of
a financial arrangement with another entity if the engines are operated
as part of a peak shaving (load management) program with the local
distribution system operator and the power is provided only to the
facility itself or to support the local distribution system. This
extension provides additional time so that these sources that wish to
engage in peak shaving can come into compliance with the applicable
requirements for non-emergency engines.

D. Non-Emergency Stationary SI RICE Greater Than 500 HP Located at Area
Sources

    The EPA is finalizing amendments to the requirements that apply to
existing stationary non-emergency 4-stroke SI RICE greater than 500 HP
located at area sources of HAP emissions, which are generally natural
gas fired engines.
    The EPA is creating a subcategory for existing spark ignition
engines located in sparsely populated areas. Engines located in remote
areas that are not close to significant human activity may be difficult
to access, may not have electricity or communications, and may be
unmanned most of the time. The costs of the emission controls, testing,
and continuous monitoring requirements may be unreasonable when
compared to the HAP emission reductions that would be achieved,
considering that the engines are in sparsely populated areas. Moreover,
the location of these engines is such that there would be limited
public exposure to the emissions. The EPA believes that establishing a
subcategory for SI engines at area sources of HAP located in sparsely
populated areas accomplishes the agency's goals and is adequate in
protecting public health. The EPA is creating this subcategory using
criteria based on the existing DOT classification system for natural
gas pipelines. This system classifies locations based on their distance
to natural gas pipelines covered by the Pipeline and Hazardous
Materials Safety Administration regulations. The DOT system defines a
class location unit as an onshore area that extends 220 yards or 200
meters on either side of the centerline of any continuous 1-mile (1.6
kilometers) length of natural gas pipeline. The DOT approach further
classifies pipeline locations into Class 1 through Class 4 locations
based on the number of buildings intended for human occupancy. A Class
1 location is defined as an offshore area or any class location unit
that has 10 or fewer buildings intended for human occupancy. The DOT
classification system also has special provisions for locations where
buildings with four or more stories above ground are prevalent and
locations that lie within 100 yards (91 meters) of either a building or
a small, well-defined outside area (such as a playground, recreation
area, outdoor theater, or other place of public assembly) that is
occupied by 20 or more persons on at least 5 days a week for 10 weeks
in any 12-month period. To be considered remote under this final rule,
a source on a pipeline could not fall under these special provisions
and, in addition, must be in a Class 1 location. For those engines not
associated with pipelines, the EPA is using similar criteria. An engine
would be considered to be in sparsely populated areas if within 0.25
mile radius of the engine there are 5 or fewer buildings intended for
human occupancy.
    Owners and operators of existing stationary non-emergency 4-stroke
lean burn (4SLB) and 4SRB RICE greater than 500 HP at area sources that
are in sparsely populated areas as described above would be required to
perform the following:
     Change oil and filter every 2,160 hours of operation or
annually, whichever comes first;
     Inspect spark plugs every 2,160 hours of operation or
annually, whichever comes first, and replace as necessary; and
     Inspect all hoses and belts every 2,160 hours of operation
or annually, whichever comes first, and replace as necessary.
    Sources have the option to use an oil analysis program as described
in Sec.  63.6625(i) of the rule in order to extend the specified oil
change requirement. The oil analysis must be performed at the same
frequency specified for changing the oil in Table 2d of the rule. The
analysis program must at a minimum analyze the following three
parameters: Total Acid Number, viscosity, and percent water content.
The condemning limits for these parameters are as follows: Total Acid
Number increases by more than 3.0 milligrams of potassium hydroxide per
gram from Total Acid Number of the oil when new; viscosity of the oil
has changed by more than 20 percent from the viscosity of the oil when
new; or percent water content (by volume) is greater than 0.5. If none
of these condemning limits are exceeded, the engine owner or operator
is not required to change the oil. If any of the limits are exceeded,
the engine owner or operator must change the oil within 2 business days
of receiving the results of the analysis; if the engine is not in
operation when the results of the analysis are received, the engine
owner or operator must change the oil within 2 business days or before
commencing operation, whichever is later. The owner or operator must
keep records of the parameters that are analyzed as part of the
program, the results of the analysis, and the oil changes for the
engine. The analysis program must be part of the maintenance plan for
the engine.
    Owners and operators of existing stationary 4SLB and 4SRB area
source engines above 500 HP in sparsely populated areas would also have
to operate and maintain the stationary RICE and aftertreatment control
device (if any) according to the manufacturer's emission-related
written instructions or develop their own maintenance plan, which must
provide to the extent practicable for the maintenance and operation of
the engine in a manner consistent with good air pollution control
practice for minimizing emissions.
    Owners and operators of engines in sparsely populated areas would
have to conduct a review of the surrounding area every 12 months to
determine if the nearby population has changed. If the engine no longer
meets the criteria for a sparsely populated area, the owner and
operator must within 1 year comply with the emission standards
specified below for populated areas.
    For engines in populated areas, i.e., existing stationary 4SLB and
4SRB non-emergency engines greater than 500 HP at area sources that are
located on DOT Class 2 through Class 4 pipeline segments or, for
engines not associated with pipelines, that do not meet the 0.25 mile
radius with 5 or less buildings criteria, the EPA is revising the
requirements that were finalized in the 2010 rule. The EPA is adopting
an equipment standard requiring the installation of a catalyst to
reduce HAP emissions. Owners and operators of existing area source 4SLB
non-emergency engines greater than 500 HP in populated areas would be
required to install an oxidation catalyst. Owners and operators of
existing area source 4SRB non-emergency engines greater than 500 HP in
populated areas would be required to install NSCR. Owners and operators
must conduct an initial test to demonstrate that the engine achieves at
least a 93 percent reduction in CO emissions or a CO concentration
level of 47 ppmvd at 15 percent O2, if the engine is a 4SLB
engine. Similarly, owners and operators must conduct an initial
performance test to demonstrate that the engine achieves at least
either a 75 percent CO reduction, a 30 percent THC reduction, or a CO
concentration level of 270 ppmvd at 15 percent O2 if the
engine is a 4SRB engine. The initial test must consist of three test
runs. Each test run must be of at least 15 minute duration, except that
each test run conducted using appendix A to 40 CFR part 63, subpart
ZZZZ must consist of one measurement cycle as defined by the method and
include at least 2 minutes of test data phase measurement. To measure
CO, emission sources must use the CO methods already specified in
subpart ZZZZ, or appendix A to 40 CFR part 63, subpart ZZZZ. The THC
testing

must be conducted using EPA Method 25A.
    The owner or operator of both engine types must also use a high
temperature shutdown device that detects if the catalyst inlet
temperature is too high, or, alternatively, the owner or operator can
monitor the catalyst inlet temperature continuously and maintain the
temperature within the range specified in the rule. For 4SLB engines
the catalyst inlet temperature must remain at or above 450 [deg]F and
at or below 1,350 [deg]F. For 4SRB engines the temperature must be
greater than or equal to 750 [deg]F and less than or equal to 1,250
[deg]F at the catalyst inlet.
    Owners and operators must in addition to the initial performance
test conduct annual checks of the catalyst to ensure proper catalyst
activity. The annual check of the catalyst must at a minimum consist of
one 15-minute run using the methods discussed above, except that each
test run conducted using appendix A to 40 CFR part 63, subpart ZZZZ
must consist of one measurement cycle as defined by the method and
include at least 2 minutes of test data phase measurement. Owners and
operators of 4SLB engines must demonstrate during the catalyst activity
test that the catalyst achieves at least a 93 percent reduction in CO
emissions or that the engine exhaust CO emissions are no more than 47
ppmvd at 15 percent O2. Owners and operators of 4SRB engines
must demonstrate during the catalyst activity check that their catalyst
is reducing CO emissions by 75 percent or more, the CO concentration
level at the engine exhaust is less than or equal to 270 ppmvd at 15
percent O2, or THC emissions are being reduced by at least
30 percent.
    If the emissions from the engine do not exceed the levels required
for the initial test or annual checks of the catalyst, then the
catalyst is considered to be working properly. If the emissions exceed
the specified pollutant levels in the rule, the exceedance(s) is/are
not considered a violation, but the owner or operator would be required
to shut down the engine and take appropriate corrective action (e.g.,
repairs, clean or replace the catalyst, as appropriate). A follow-up
test must be conducted within 7 days of the engine being started up
again to demonstrate that the emission levels are being met. If the
retest shows that the emissions continue to exceed the specified
levels, the stationary RICE must again be shut down as soon as safely
possible, and the engine may not operate, except for purposes of start-
up and testing, until the owner/operator demonstrates through testing
that the emissions do not exceed the levels specified.

E. Stationary CI RICE Certified to Tier Standards

    The EPA is amending the requirements for any stationary CI engine
certified to the Tier 3 standards in 40 CFR part 89 (Tier 2 for engines
above 560 kilowatt (kW)) located at an area source and installed before
June 12, 2006. The EPA is finalizing amendments to specify that any
existing certified Tier 3 (Tier 2 for engines above 560 kW) CI engine
that was installed before June 12, 2006, is in compliance with the RICE
NESHAP. This amendment includes any existing stationary Tier 3 (Tier 2
for engines above 560 kW) certified CI engine located at an area source
of HAP emissions. Without these amendments, Tier 3 engines, which were
built to meet stringent emission standards, would not be able to comply
with the applicable RICE NESHAP emission standards for existing engines
without further testing and monitoring, and possible retrofit with
further controls, due to differences in the emission standards and
testing protocols in the RICE NESHAP versus the Tier 3 standards in 40
CFR part 89. However, an identical engine certified to the Tier 3
standards (or Tier 2 standards for engines above 560 kW) in 40 CFR part
89 that was installed after June 12, 2006, would not have to be
retrofit in order to comply with the NESHAP. The EPA believes that the
Tier 3 standards (Tier 2 for engines above 560 kW) are technologically
stringent regulations and believes it is unnecessary to require further
regulation of engines meeting these standards.
    The EPA is also amending the requirements for existing stationary
CI engines that are certified to the Tier 1 and Tier 2 standards in 40
CFR part 89, located at area sources of HAP, greater than 300 HP and
subject to a state or local rule that requires the engine to be
replaced. The EPA does not think it is appropriate to require emission
controls on a stationary CI engine that is going to be retired only a
short time after the rule goes into effect. These engines (equipped
with aftertreatment) could end up being in operation for less than 2
years or at most only 5 years before having to be replaced with a
certified Tier 4 engine. It would not be reasonable to require the
engine owner to invest in costly controls and monitoring equipment for
an engine that will be replaced shortly after the installation of the
controls. Consequently, the EPA is allowing these engines to meet
management practices from the applicable May 3, 2013, compliance date
until January 1, 2015, or 12 years after installation date (whichever
is later), but not later than June 1, 2018, after which time the CO
emission standards in Table 2d of 40 CFR part 63, subpart ZZZZ) apply.
The management practices include requirements for when to inspect and
replace the engine oil and filter, air cleaner, hoses and belts. The
complete details of which management practices are required are shown
in Table 2d of the rule. Owners and operators of these existing
stationary CI engines located at area sources of HAP emissions that
intend to meet management practices rather than the emission limits
prior to January 1, 2015, or 12 years after installation date, but not
later than June 1, 2018, must submit a notification by March 3, 2013,
stating that they intend to use this provision and identifying the
state or local regulation that the engine is subject to.

F. Definition for Remote Areas of Alaska

    The RICE NESHAP amendments finalized in 2010 specified less
stringent requirements for existing non-emergency CI engines at area
sources located in remote areas of Alaska. Remote areas are defined
under the 2010 rule as those not accessible by the FAHS. In this
action, the EPA is expanding the definition of remote areas of Alaska
to extend beyond areas that are not accessible by the FAHS. The EPA is
expanding the current definition because some areas that are accessible
by the FAHS face the same challenges as areas that are not accessible,
including high energy costs, extreme weather conditions, lengthy travel
times, inaccessibility, and very low population density. Many of these
areas are not connected to the electric grid and rely on back up diesel
generation to support fluctuating renewable energy systems. The energy
supply system is another area that is particularly different in Alaska
compared to the rest of the country where the majority of customers are
connected to the grid. These final amendments specify that existing
stationary CI engines at area sources of HAP in areas of Alaska that
are accessible by the FAHS and that meet all of the following criteria
will also be considered remote and subject to management practices
under the rule:
     The stationary CI engine is located in an area not
connected to the Alaska Railbelt Grid,
     At least 10 percent of the power generated by the engine
per year is used for residential purposes, and
     The generating capacity of the area source is less than 12
MW, or the engine

is used exclusively for backup power for renewable energy.
    The EPA is limiting the remote classification to engines that are
used at least partially for residential purposes, where the impact of
higher energy costs is of greatest concern. The classification is
further limited to sources that are used infrequently as backup for
renewable power, or that are at smaller capacity facilities, which are
generally in more sparsely populated areas.

G. Requirements for Offshore Vessels

    The EPA is revising the requirements in the RICE NESHAP for
existing non-emergency CI RICE greater than 300 HP on offshore vessels
that are area sources of HAP. Engines on vessels on the OCS in certain
circumstances become subject to the provisions of the RICE NESHAP as a
result of the operation of the OCS regulations at 40 CFR part 55. The
rationale for this revision is discussed further in section III.D. The
EPA is finalizing the following management practice requirements for
existing non-emergency CI RICE greater than 300 HP on offshore vessels
that are area sources of HAP:
     Change oil every 1,000 hours of operation or annually,
whichever comes first, except that sources can extend the period for
changing the oil if the oil is part of an oil analysis program as
discussed below and the condemning limits are not exceeded;
     Inspect and clean air filters every 750 hours of operation
or annually, whichever comes first, and replace as necessary;
     Inspect fuel filters and belts, if installed, every 750
hours of operation or annually, whichever comes first, and replace as
necessary; and
     Inspect all flexible hoses every 1,000 hours of operation
or annually, whichever comes first, and replace as necessary.
    These sources may use an oil analysis program in order to extend
the specified oil change requirement. The analysis program must at a
minimum analyze the following three parameters: Total Base Number,
viscosity and percent water content. The analysis must be conducted at
the same frequency specified for changing the engine oil. If the
condemning limits provided below are not exceeded, the engine owner or
operator is not required to change the oil. If any of the condemning
limits are exceeded, the engine owner or operator must change the oil
within two business days or before continuing to use the engine,
whichever is later. The condemning limits are as follows:
     Total Base Number is less than 30 percent of the Total
Base Number of the oil when new; or
     Viscosity of the oil has changed by more than 20 percent
from the viscosity of the oil when new; or
     Percent water content (by volume) is greater than 0.5.
    Owners and operators of these existing stationary CI RICE must
develop a maintenance plan that specifies how the management practices
will be met and keep records to demonstrate that the required
management practices are being met.

H. Miscellaneous Corrections and Revisions

    The EPA is making some minor corrections and clarifications to the
stationary engine rules to address miscellaneous issues. The revisions
are as follows:
     Revising Tables 1b and 2b of 40 CFR part 63, subpart ZZZZ
to correct language requiring the pressure drop to be at plus or minus
10 percent of 100 percent load for all engines. The engines that were
regulated in 2010 are not subject to the load requirements and
therefore the EPA is correcting these tables to make this clear.
     Adding a footnote to Table 1b of 40 CFR part 63, subpart
ZZZZ stating that sources can petition the Administrator for a
different temperature range consistent with Table 2b of the rule.
     Correcting rows 8 and 10 in Table 2d of 40 CFR part 63,
subpart ZZZZ to indicate that the requirements apply to non-emergency,
non-black start stationary RICE greater than 500 HP that are 4SLB and
4SRB that operate more than 24 hours per year, as intended in the
original rule.
     Revising the language in Sec.  63.6625(b) of 40 CFR part
63, subpart ZZZZ that states ``* * * in paragraphs (b)(1) through (5)
of this section'' to ``in paragraphs (b)(1) through (6) of this
section.''
     Changing Tables 2c and 2d of 40 CFR part 63, subpart ZZZZ,
where it currently specifies to inspect air cleaner, to also specify
that it must be replaced as necessary.
     Revising Sec.  63.6620(b) of 40 CFR part 63, subpart ZZZZ
to indicate that testing must be conducted within plus or minus 10
percent of 100 percent load for stationary RICE greater than 500 HP
located at a major source (except existing non-emergency CI stationary
RICE greater than 500 HP located at a major source) that are subject to
testing.
     Specifying that, as was intended in the rule adding these
requirements, the operating limitations (pressure drop and catalyst
inlet temperature) in Tables 1b and 2b of 40 CFR part 63, subpart ZZZZ
do not have to be met during startup.
     For consistency, and as provided in the original RICE
NESHAP for other stationary RICE, clarifying in 40 CFR part 63, subpart
ZZZZ that the existing stationary RICE regulated in 2010 (i.e., engines
constructed before June 12, 2006, that are less than or equal to 500 HP
located at major sources or engines located at area sources) must burn
landfill or digester gas equivalent to 10 percent or more of the gross
heat input on an annual basis in order to qualify as a landfill or
digester gas engine under the rule.
     Clarifying Sec.  60.4207(b) of 40 CFR part 60, subpart
IIII to specify that owners and operators of stationary CI engines less
than 30 liters per cylinder that are subject to the subpart that use
diesel fuel must use diesel fuel that meets the requirements of 40 CFR
80.510(b), except owners and operators may use up any diesel fuel
acquired prior to October 1, 2010, that does not meet the requirements
of 40 CFR 80.510(b) for nonroad diesel fuel.
     Adding appendix A to 40 CFR part 63, subpart ZZZZ, which
includes procedures that can be used for measuring CO emissions from
existing stationary 4SLB and 4SRB stationary RICE above 500 HP located
at area sources of HAP that are complying with the emission limits in
Table 2d of 40 CFR part 63, subpart ZZZZ.
     Reinstating the footnotes for Table 2 of 40 CFR part 60,
subpart JJJJ. The footnotes were inadvertently removed when the rule
was amended on June 28, 2011 (76 FR 37954).
     Adding ``part 60'' in Table 4 of the NESHAP, in row 2
where it refers to 40 CFR appendix A.
     Clarifying in Sec.  63.6625(a) of 40 CFR part 63, subpart
ZZZZ that a continuous emission monitoring system is only required to
be installed at the outlet of the control device for engines that are
complying with the requirement to limit the concentration of CO.
     Adding definitions of terms used in Equation 4 of Sec.
63.6620 of 40 CFR part 63, subpart ZZZZ.
     Clarifying that, as was intended in the rule adding these
requirements, all of the standards for stationary SI RICE in Sec.
60.4231(b) of 40 CFR part 60, subpart JJJJ are for stationary SI RICE
that use gasoline.
     Clarifying that, as was intended in the rule adding these
requirements, all of the standards for stationary SI RICE in Sec.
60.4231(c) of 40 CFR part 60, subpart JJJJ are for stationary SI RICE
that are rich burn engines that use liquified petroleum gas (LPG).

     Clarifying that, as was intended in the rule adding these
requirements, all of the standards for stationary SI RICE in Sec.
60.4231(d) of 40 CFR part 60, subpart JJJJ are for stationary SI RICE
that are not gasoline engines or rich burn engines that use LPG.
     Clarifying in Sec.  63.6625(b)(1) and the entries for
Sec.  63.8(c)(1)(i) and (iii) in Table 8 of 40 CFR part 63, subpart
ZZZZ that a startup, shutdown, and malfunction plan is not required for
a continuous parameter monitoring system.
     Clarifying in the entry for Sec.  63.10(b)(1) in Table 8
of 40 CFR part 63, subpart ZZZZ that the most recent two years of data
do not have to be retained on site.
     Revising footnote 2 of Table 2c and footnote 1 of Table 2d
of 40 CFR part 63, subpart ZZZZ to include a reference to Sec.
63.6625(j), as was intended in the rule addressing these requirements.

III. Summary of Significant Changes Since Proposal

A. Emergency Demand Response and Reliability

    The EPA proposed to limit operation of emergency stationary RICE as
part of an emergency demand response program to within the 100 hours
per year that is already permitted for maintenance and testing of the
engines. The EPA proposed that owners and operators of stationary
emergency engines could operate the engines for emergency demand
response when the Reliability Coordinator, or other authorized entity
as determined by the Reliability Coordinator, has declared an EEA Level
2 as defined in the NERC Reliability Standard EOP-002-3, Capacity and
Energy Emergencies, plus during periods where there is a deviation of
voltage or frequency of 5 percent or more below standard voltage or
frequency. After considering public comments received on the proposed
rule, the EPA is finalizing the proposed amendment to limit operation
for maintenance and testing and emergency demand response to no more
than 100 hours per year.
    The EPA received some comments in support of the provision for
emergency demand response operation, while other commenters opposed the
limitation. The commenters who supported the provision noted that the
engines are rarely called for emergency demand response, and that the
EPA has limited the emergency demand response operation to emergency
situations where a blackout is imminent. The commenters also noted that
the public health impacts created by a widespread power outage outweigh
the air quality impacts from the engines. The EPA agrees with the
commenters that it is appropriate to include a provision for operation
of emergency engines for a limited number of hours per year as part of
emergency demand response programs to help prevent grid failure or
blackouts. Preventing stationary emergency engines from being able to
qualify and participate in emergency demand response programs without
having to apply aftertreatment could force owners and operators to
remove their engines from these programs, which could impair the
ability of regional transmission organizations and independent system
operators to use these relatively small, quick-starting and reliable
sources of energy to protect the reliability of their systems.
    The commenters who opposed the provision for demand response
provided no significant argument that the conditions under which these
engines would be permitted to operate for emergency demand response
would not be emergency conditions. Commenters who opposed the provision
were concerned about the air quality and health impacts of emissions
from stationary engines. The commenters were concerned that recent
actions by the Federal Energy Regulatory Commission (FERC) that impact
demand response compensation in organized wholesale energy markets will
greatly increase the amount of demand response participating in
organized wholesale capacity markets. In response to the commenters,
the EPA notes that, prior to the 2013 compliance dates for existing
engines, there are no limitations on the hours of operation for those
engines. The standards that go into effect in 2013 will for the first
time establish requirements for these engines, including limitations on
their hours of operation in certain situations such as emergency demand
response, and ULSD fuel requirements which will reduce HAP emissions
from the engines. Regarding the FERC regulations and their effect on
use of demand response in capacity markets, these are comments more
appropriately directed towards the FERC. As noted above, the emergency
demand response situations during which the emergency engines may be
used for a limited number of hours per year are appropriately
considered emergency situations.
    Commenters were also concerned that these engines would be called
to operate for demand response on high ozone days, further contributing
to nonattainment with ozone standards. However, other commenters noted
that emergency demand response events do not predominantly occur on
ozone exceedance days. These commenters also note that some of the
commenters opposing use of emergency engines during emergency demand
response would benefit by such a limitation because other emission
sources may be used instead of the emergency engines, including sources
that some of these commenters may operate, and that the effect on total
emissions of using these alternative emission sources is not clear.
Concerns about contribution to ozone nonattainment by stationary
engines can be addressed through area-specific requirements such as
state-based State Implementation Plans that would be directed towards
ozone nonattainment areas. More detail regarding the public comments
and the EPA's responses can be found in the Response to Public Comments
document available in the rulemaking docket.
    As mentioned in the previous paragraph, in response to the concerns
about the air quality impact of emissions from emergency engines
operating in emergency demand response programs, and based on public
comments received on the proposed rule, the EPA is finalizing a
requirement for owners and operators of existing emergency CI
stationary RICE with a site rating of more than 100 brake HP and a
displacement of less than 30 liters per cylinder that use diesel fuel
and operate or are contractually obligated to be available for more
than 15 hours per year (up to a maximum of 100 hours per year) for
emergency demand response to use diesel fuel that meets the
requirements in 40 CFR 80.510(b) for nonroad diesel fuel. This fuel
requirement also applies to owners and operators of new emergency CI
stationary RICE with a site rating of more than 500 brake HP with a
displacement of less than 30 liters per cylinder located at a major
source of HAP that use diesel fuel and operate or are contractually
obligated to be available for more than 15 hours per year (up to a
maximum of 100 hours per year) for emergency demand response. Owners
and operators must begin meeting this ULSD fuel requirement on January
1, 2015, except that any existing diesel fuel purchased (or otherwise
obtained) prior to January 1, 2015, may be used until depleted. As
noted by commenters on the proposed amendments and as discussed in
section II.B, requiring the use of diesel fuel meeting the requirements
of 40 CFR 80.510(b) is expected to reduce the HAP emissions
significantly from the engines compared to emissions resulting from use
of unregulated diesel fuel. The fuel

requirement begins on January 1, 2015, in order to give affected
sources appropriate lead time to institute these new requirements and
make any physical adjustments to engines and other facilities like
tanks or containment structures, as well as any needed adjustments to
contracts and other business activities, that may be necessitated by
these new requirements.
    The final amendments also require owners and operators of emergency
stationary RICE larger than 100 HP that operate or are contractually
obligated to be available for more than 15 hours per year (up to a
maximum of 100 hours per year) for emergency demand response to submit
an annual report to the EPA documenting the dates and times that the
emergency stationary RICE operated for emergency demand response,
beginning with the 2015 calendar year. Commenters on the proposed
amendments recommended that the EPA gather information on the impacts
of the emissions from emergency engines during emergency demand
response situations. The EPA agrees that a reporting requirement will
increase the EPA's ability to ensure that these engines are operating
in compliance with the regulations and that it will provide further
information regarding the impacts of these engines on emissions. In
response to these comments, the EPA is establishing a requirement to
annually report to EPA the engine location and duration of operation
for emergency demand response. This information will be used by the
EPA, as well as state and local air pollution control agencies, to
assess the health impacts of the emissions from these engines and to
aid the EPA in ensuring that these engines comply with the regulations.
Additional discussion of the rationale for the fuel and reporting
requirements, as well as responses to other significant comments
regarding emergency engines engaged in emergency demand response, can
be found in the Response to Public Comments document in the docket.
    Public commenters, in particular the National Rural Electric
Cooperative Association (NRECA), indicated that the proposed EEA Level
2 and 5 percent voltage or frequency deviation triggers did not account
for situations when the local balancing authority or transmission
operator for the local electric system has determined that electric
reliability is in jeopardy, and recommended that the EPA include
additional situations where the local transmission and distribution
system operator has determined that there are conditions that could
lead to a blackout for the local area. The comments from NRECA
indicated that rural distribution lines are not configured in a typical
grid pattern, but instead have distribution lines that can run well
over 50 miles from a substation and regularly extend 15 miles or
longer. During periods of exceptionally heavy stress within the region
or sub-region, electricity from regional power generators may not be
available because of transmission constraints, according to the
commenter. The commenter indicated that in many cases, there may be
only one transmission line that feeds the rural distribution system,
and no alternative means to transmit power into the local system.
    In response to those comments and in recognition of the unique
challenges faced by the local transmission and distribution system
operators in rural areas, the EPA is specifying in the final rule that
existing emergency stationary RICE at area sources can be used for 50
hours per year as part of a financial arrangement with another entity
if all of the following conditions are met:
     The engine is dispatched by the local balancing authority
or local transmission and distribution system operator.
     The dispatch is intended to mitigate local transmission
and/or distribution limitations so as to avert potential voltage
collapse or line overloads that could lead to the interruption of power
supply in a local area or region.
     The dispatch follows reliability, emergency operation or
similar protocols that follow specific NERC, regional, state, public
utility commission or local standards or guidelines.
     The power is provided only to the facility itself or to
support the local transmission and distribution system.
     The owner or operator identifies and records the specific
NERC, regional, state, public utility commission or local standards or
guidelines that are being followed for dispatching the engine. The
local balancing authority or local transmission and distribution system
operator may keep these records on behalf of the engine owner or
operator.
    Engines operating in systems that do not meet the conditions
described here will not be considered emergency engines if they operate
for these purposes as part of a financial arrangement with another
entity.
    Stationary emergency CI RICE with a site rating of more than 100
brake HP and a displacement of less than 30 liters per cylinder located
at area sources that operate for this purpose are also required to use
diesel fuel meeting the specifications of 40 CFR 80.510(b) beginning
January 1, 2015, except that any existing diesel fuel purchased (or
otherwise obtained) prior to January 1, 2015, may be used until
depleted. Owners and operators of these engines are also required to
report the dates and times the engines operated for this purpose
annually to the EPA, beginning with operation during the 2015 calendar
year. The report must also identify the entity that dispatched the
engine and the situation that necessitated the dispatch of the engine.
Further discussion of the rationale for the changes is available in the
Response to Public Comments document in the docket.

B. Peak Shaving

    The EPA proposed a temporary provision for existing stationary
emergency engines located at area sources to apply the 50 hours per
year that is allowed under Sec.  63.6640(f) for non-emergency operation
towards any non-emergency operation, including operation as part of a
financial agreement with another entity. The peak shaving provision was
proposed to expire in April 2017. The purpose of the proposed provision
for peak shaving was to give sources an additional resource for
maintaining reliability while facilities are coming into compliance
with the NESHAP From Coal and Oil-Fired Electric Utility Steam
Generating Units (77 FR 9304, February 16, 2012). Based on public
comments received on the proposal, the EPA is not finalizing the
proposed provision for peak shaving in this action. As noted by the
commenters, operation for peak shaving does not fairly come under the
definition of emergency use as it is designed to increase capacity in
the system, rather than responding to an emergency situation such as a
blackout or imminent brownout. The EPA believes that peak shaving
activity and other activities designed to increase capacity should be
treated as part of long term capacity planning, not as use akin to
emergencies. The EPA agrees with commenters who state that allowance
for emergency engines to be used for peak shaving could well lead to
increased use of these engines, particularly in situations that are not
emergency situations. The EPA also agrees that use of internal
combustion engines for peak shaving is not based on emergency use, but
instead is generally based on the economic benefit gained by operating
the engine rather than another power source. The EPA agrees with the
commenters that there is not sufficient information on the record to
show that these engines are needed to maintain reliability while
facilities are coming

into compliance with the NESHAP From Coal and Oil-Fired Electric
Utility Steam Generating Units, and the commenters who supported the
limited temporary provision did not provide information to show that
rule would cause reliability issues that necessitate the operation of
these engines. The EPA believes that given this information, it is
appropriate to treat use of internal combustion engines as peak power
units not as emergency use but as normal power generation, and thus
believes it is appropriate to require emissions aftertreatment
requirements (or similar controls as appropriate for non-emergency
engines) for engines engaging in these activities for compensation.
Further discussion is available in the Response to Public Comments
document in the docket.
    However, in consideration of the short time between this final rule
and the May 3, 2013, or October 19, 2013 compliance dates for affected
sources, this final rule permits the use of existing stationary
emergency engines located at area sources for 50 hours per year through
May 3, 2014 for peak shaving or non-emergency demand response to
generate income for a facility, or to otherwise supply power as part of
a financial arrangement with another entity if the engines are operated
as part of a peak shaving (load management) program with the local
distribution system operator and the power is provided only to the
facility itself or to support the local distribution system. Owners and
operators of these engines, which have heretofore not been regulated,
may have taken actions based on the June 7, 2012, proposal that would
now leave them in danger of being in noncompliance with the applicable
requirements for the engine in the RICE NESHAP.

C. Non-Emergency Stationary SI RICE Greater Than 500 HP Located at Area
Sources

    The EPA proposed to require existing stationary non-emergency 4-
stroke SI RICE greater than 500 HP located at area sources of HAP that
are in sparsely populated areas to meet management practices. The
proposed management practices required the engine owner and operator to
change the oil and filter and inspect spark plugs, hoses and belts
every 1,440 hours of operation or annually, whichever comes first. The
proposed management practices were based on similar requirements for
existing non-emergency stationary SI RICE smaller than 500 HP. The EPA
received public comments indicating that the interval for performing
the management practices for engines larger than 500 HP should be every
2,160 hours of operation or annually, whichever comes first. Commenters
indicated that larger engines have increased capabilities compared to
smaller size engines, which allows engines to extend the maintenance
interval. Larger engines have increased oil capacities, use improved
oil grades/synthetics, and use oil sweetening systems, according to the
commenters. Commenters also noted that larger engines use better
quality, more expensive spark plugs that last longer than 1,440 hours,
and that less frequent maintenance intervals reduce the environmental
impacts associated with disposing waste oils and traveling to remote
locations. The EPA agrees with the arguments presented by the
commenters. Therefore, in this final rule, EPA is requiring engine
owners and operators to change the oil and filter and inspect spark
plugs, hoses and belts every 2,160 hours of operation or annually,
whichever comes first.
    For existing stationary non-emergency SI 4SRB RICE that are in
populated areas, the EPA proposed an equipment standard that required
the installation of NSCR to reduce HAP emissions. The proposed rule
required these engines to demonstrate that the catalyst achieves at
least a 75 percent CO reduction or a 30 percent THC reduction. The EPA
is retaining this requirement in this final rule, but is adding another
option in response to public comments that allows the owner and
operator of the engine to demonstrate that the catalyst achieves a CO
concentration level of 270 ppmvd at 15 percent O2. As noted
by the public comments, this represents a 75 percent reduction from
typical uncontrolled emissions from existing stationary non-emergency
SI 4SRB RICE and is the CO standard required for new SI 4SRB engines in
the NSPS for stationary SI engines. The EPA is also clarifying that, as
was intended in the original proposal, engines located in Class 4
locations are not considered remote. More detail regarding the public
comments and the rationale for these changes can be found in the
Response to Public Comments document, which is available in the docket
for this rulemaking.

D. Definition for Remote Areas of Alaska

    The EPA proposed to expand the definition of remote areas of Alaska
to extend beyond areas that are not accessible by the FAHS.
Specifically, the EPA proposed that areas of Alaska that are accessible
by the FAHS and that met all of the following criteria would also be
considered remote and subject to management practices under the rule:
(1) The stationary CI engine is located in an area not connected to the
Alaska Railbelt Grid; (2) at least 10 percent of the power generated by
the engine per year is used for residential purposes; and (3) the
generating capacity of the area source is less than 12 MW, or the
engine is used exclusively for backup power for renewable energy and is
used less than 500 hours per year on a 10-year rolling average. After
considering the public comments received on the proposed criteria, the
EPA is finalizing the first two criteria as proposed, but finalizing a
slightly different third criterion. In this final rule, existing CI
engines at area sources of HAP are considered remote if they meet the
first and second criteria above and they are either at a source with a
generating capacity less than 12 MW, or used exclusively for backup
power for renewable energy. Based on public comments received on the
proposal, the EPA is not finalizing the limitation that the engine be
used less than 500 hours per year on a 10-year rolling average.
Commenters indicated that basing the applicability on the previous 10
years of operation would ignore recent investments in renewable energy
that have significantly decreased engine hours of operation in recent
years. The EPA is also defining ``backup power for renewable energy''
in this final rule as engines that provide backup power to a facility
that generates electricity from renewable energy resources, as that
term is defined in Alaska Statute 42.45.045(l)(5). The rationale for
these changes can be found in the Response to Public Comments document
available in the docket.

E. Requirements for Offshore Vessels

    The RICE NESHAP does not on its face apply to mobile sources,
including marine vessels. However, the regulations applicable to
sources on the OCS, codified at 40 CFR part 55, specify that vessels
are OCS sources when they are (1) permanently or temporarily attached
to the seabed and erected thereon and used for the purpose of
exploring, developing or producing resources there from, within the
meaning of section 4(a)(1) of the OCS Lands Act (43 U.S.C. 1331, et
seq.); or (2) physically attached to an OCS facility, in which case
only the stationary sources aspects of the vessels will be regulated.
40 CFR 55.2. The OCS regulations provide that NESHAP requirements apply
to a vessel that is an OCS source where the provisions are ``rationally
related to the attainment and maintenance of the federal or state
ambient air quality standards or the

requirements of part C of title I of the Act.'' 40 CFR 55.13(e).
    The EPA received comments during the public comment period for the
June 7, 2012, proposal recommending that the RICE NESHAP be amended
such that for any existing non-emergency CI RICE above 300 HP on
offshore vessels on the OCS that become subject to the RICE NESHAP as a
result of the operation of the OCS regulations (40 CFR part 55), such
engines may meet the NESHAP through management practices rather than
numeric emission limits. This amendment was not contained or
contemplated in the June 7, 2012, proposal. However, the comments
indicated several significant issues related to application of the
NESHAP to regulation of existing marine vessel engines located in the
OCS as a result of the OCS regulations; in particular, whether the
numerical standards applicable to other CI engines located at area
sources (marine vessels located in the OCS are generally located at
area sources) are technologically feasible for existing marine engines
located in the OCS. Some commenters noted specific technological issues
relevant to engines on marine vessels in the OCS. The commenters
indicated that emission controls for existing CI RICE to meet the
NESHAP may be technically infeasible due to weight and space
constraints, catalyst fouling from the low-load engine operation
required by the U.S. Coast Guard, safety concerns regarding engine
backpressure and lack of catalyst vendor experience with retrofitting.
Commenters suggested that, to the extent marine vessel engines become
subject to the NESHAP as a result of the OCS regulations, these engines
should be subject to GACT requirements that the commenters believe are
more appropriate for these types of engines. The commenters indicated
that management practices similar to those currently required in the
rule for existing non-emergency stationary CI RICE smaller than 300 HP
are more appropriate as GACT for existing non-emergency stationary CI
RICE above 300 HP on vessels operating on the OCS.
    Based on these comments, the EPA published a reopening of the
comment period to take further comment on whether the RICE NESHAP
should be revised to require management practices for these vessels (77
FR 60341, October 3, 2012). Based on the comments received during the
two comment periods, the EPA agrees with the commenters that management
practices are more reasonable as GACT for existing non-emergency
stationary CI RICE larger than 300 HP on vessels operating on the OCS
and is finalizing management practices for these engines. The EPA did
not receive any public comments indicating that HAP emission controls
were generally available and had been demonstrated for the large
engines on the vessels. The final management practices include changing
the oil every 1,000 hours of operation or annually, whichever comes
first; inspecting and cleaning air filters every 750 hours of operation
or annually, whichever comes first, and replacing as necessary;
inspecting fuel filters and belts, if installed, every 750 hours of
operation or annually, whichever comes first, and replacing as
necessary; and inspecting all flexible hoses every 1,000 hours of
operation or annually, whichever comes first, and replacing as
necessary. Facilities have the option of using an oil analysis program
to extend the oil change requirement. Additional discussion of the
rationale for these changes can be found in the Response to Public
Comments document available in the docket.

IV. Summary of Environmental, Energy and Economic Impacts

A. What are the air quality impacts?

    The EPA estimates that the rule with the final amendments
incorporated will reduce emissions from existing stationary RICE as
shown in Table 4 of this preamble. The emissions reductions the EPA
previously estimated for the 2010 amendments to the RICE NESHAP are
shown for comparison. Reductions are shown for the year 2013, which is
the first year the final RICE NESHAP will be implemented for existing
stationary RICE.

                           Table 4--Summary of Reductions for Existing Stationary RICE
----------------------------------------------------------------------------------------------------------------
                                                        Emission Reductions (tpy)  in the year 2013
                                         -----------------------------------------------------------------------
                                                    2010 Final rule            2010 Final rule with these final
                Pollutant                ------------------------------------             amendments
                                                                             -----------------------------------
                                                 CI                SI                CI                SI
----------------------------------------------------------------------------------------------------------------
HAP.....................................             1,014             6,008             1,005             1,778
CO......................................            14,342           109,321            14,238            22,211
PM......................................             2,844               N/A             2,818               N/A
NOX.....................................               N/A            96,479               N/A             9,648
VOC.....................................            27,395            30,907            27,142             9,147
----------------------------------------------------------------------------------------------------------------

    The EPA estimates that more than 900,000 stationary CI engines will
be subject to the rule in total, but only a small number of stationary
CI engines are affected by the final amendments in this action. The EPA
did not estimate any changes in the reductions from the 2010 rule for
the amendments associated with emergency engines. To determine
emissions from emergency engines for the 2010 rule, the EPA estimated
that these types of engines would on average operate for 50 hours per
year. The average hours of operation for emergency engines is not
expected to change based on the final amendments and 50 hours per year
is still believed to be representative of average emergency engine
operation. Information provided by commenters demonstrated that these
engines have been operated very infrequently for emergency demand
response events.\8\ Therefore, the emissions previously calculated
remain appropriate.
---------------------------------------------------------------------------

    \8\ See document number EPA-HQ-OAR-2008-0708-1142 in the
rulemaking docket.
---------------------------------------------------------------------------

    It is estimated that approximately 330,000 stationary SI engines
will be subject to the rule in total; however, only a subset of
stationary SI engines are affected by the final amendments in this
action. The decrease in estimated reductions for SI engines is
primarily due to final amendments to the requirements for existing 4SRB
and 4SLB SI engines larger than 500 HP at area sources of HAP that are
in remote areas. Those engines were required by the 2010 rule to meet
emission limits that were expected to require the installation of
aftertreatment to reduce emissions; under these final amendments, those
engines are required

to meet management practices that would not require the installation of
aftertreatment. Further information regarding the estimated reductions
of this final rule can be found in the memorandum titled, ``RICE NESHAP
Reconsideration Final Amendments--Cost and Environmental Impacts,''
which is available in the docket (EPA-HQ-OAR-2008-0708). The EPA did
not estimate any impacts associated with the minor changes to the NSPS
for stationary CI and SI engines.

B. What are the cost impacts?

    The final amendments are expected to reduce the overall cost of the
original 2010 RICE NESHAP amendments. The EPA estimates that with these
final amendments incorporated, the cost of the rule for existing
stationary RICE will be as shown in Table 5 of this preamble. The costs
the EPA previously estimated for the 2010 amendments to the RICE NESHAP
are shown for comparison. The costs that were previously estimated are
shown in the original year ($2008 for CI and $2009 for SI), as well as
updated to 2010 dollars.

                          Table 5--Summary of Cost Impacts for Existing Stationary RICE
----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
Engine                                        2010 Final Rule                  2010 Final Rule
                                                                               with these
                                                                               Final Amendments
----------------------------------------------------------------------------------------------------------------
                                                Total Annual Cost
----------------------------------------------------------------------------------------------------------------
SI..........................  $253 million ($2009)...  $251 million ($2010)..  $115 million ($2010).
CI..........................  $373 million ($2008)...  $375 million ($2010)..  $373 million ($2010).
----------------------------------------------------------------------------------------------------------------
                                               Total Capital Cost
----------------------------------------------------------------------------------------------------------------
SI..........................  $383 million ($2009)...  $380 million ($2010)..  $103 million ($2010).
CI..........................  $744 million ($2008)...  $748 million ($2010)..  $740 million ($2010).
----------------------------------------------------------------------------------------------------------------

    Further information regarding the estimated cost impacts of the
final amendments, including the cost of the final amendments in 2010
dollars, can be found in the memorandum titled, ``RICE NESHAP
Reconsideration Final Amendments--Cost and Environmental Impacts,''
which is available in the docket (EPA-HQ-OAR-2008-0708). The EPA did
not estimate costs associated with the changes to the NSPS for
stationary CI and SI engines. The changes to the NSPS are minor and are
not expected to impact the costs of those rules.

C. What are the benefits?

    Emission controls installed to meet the requirements of this final
rule will generate benefits by reducing emissions of HAP as well as
criteria pollutants and their precursors, including CO, NOX
and VOC. NOX and VOC are precursors to PM2.5
(particles smaller than 2.5 microns) and ozone. The criteria pollutant
benefits are considered co-benefits for this rule. For this final rule,
the EPA was only able to quantify the health co-benefits associated
with reduced exposure to PM2.5 from emission reductions of
NOX and directly emitted PM2.5. The EPA has not
re-estimated the benefits from the proposal for this final rule because
the emission reductions have not changed since the reconsideration
proposal.\9\
---------------------------------------------------------------------------

    \9\ Since the June 7, 2012 reconsideration proposal, the EPA has
made several updates to the approach used to estimate mortality and
morbidity benefits, as demonstrated in the RIA for the PM NAAQS.
Changes include applying the concentration-response functions from
more recent epidemiology studies, adding some health endpoints, and
updating population data. Although the EPA has not re-estimated the
benefits for this rule by applying these changes, we anticipate that
the rounded benefits estimated for this rule are unlikely to be very
different than those provided here. Specifically, we anticipate that
the changes that would likely lead to small increases in the
benefits would likely be offset by changes that would likely lead to
small decreases in the benefits. References for the RIA for the PM
NAAQS are: (1) U.S. Environmental Protection Agency (U.S. EPA).
2012a. Regulatory Impact Analysis for the Proposed Revisions to the
National Ambient Air Quality Standards for Particulate Matter. EPA-
452/R-12-003. Office of Air Quality Planning and Standards, Health
and Environmental Impacts Division. June. Available at http://www.epa.gov/ttnecas1/regdata/RIAs/PMRIACombinedFile_Bookmarked.pdf.
(2) U.S. Environmental Protection Agency (U.S. EPA). 2012b.
Regulatory Impact Analysis for the Final Revisions to the National
Ambient Air Quality Standards for Particulate Matter. EPA-452/R-12-
003. Office of Air Quality Planning and Standards, Health and
Environmental Impacts Division. December. Available at http://www.epa.gov/pm/2012/finalria.pdf.
---------------------------------------------------------------------------

    The EPA previously estimated that the monetized co-benefits in 2013
of the stationary CI NESHAP would be $940 million to $2,300 million
(2008 dollars) at a 3-percent discount rate and $850 million to $2,100
million (2008 dollars) at a 7-percent discount rate.\10\ For stationary
SI engines, EPA previously estimated that the monetized co-benefits in
2013 would be $510 million to $1,200 million (2009 dollars) at a 3-
percent discount rate) and $460 million to $1,100 million (2009
dollars) at a 7-percent discount rate.\11\
---------------------------------------------------------------------------

    \10\ U.S. Environmental Protection Agency. 2010. Regulatory
Impact Analysis (RIA) for Existing Stationary Compression Ignition
Engines NESHAP: Final Draft. Research Triangle Park, NC. February.
http://www.epa.gov/ttn/ecas/regdata/RIAs/CIRICENESHAPRIA2-17-0cleanpublication.pdf.
    \11\ U.S. Environmental Protection Agency. 2010. Regulatory
Impact Analysis (RIA) for Existing Stationary Spark Ignition (SI)
RICE NESHAP: Final Report. Research Triangle Park, NC. August.
http://www.epa.gov/ttn/ecas/regdata/RIAs/riceriafinal.pdf.
---------------------------------------------------------------------------

    The final amendments are expected to reduce the overall emission
reductions of the rules, primarily due to the changes to requirements
for engines in remote areas. In addition to revising the anticipated
emission reductions, the EPA has also updated the methodology used to
calculate the co-benefits to be consistent with methods used in more
recent rulemakings, which is summarized below and discussed in more
detail in the CI and SI Final Reconsideration RIAs, the RIAs for this
rulemaking. The EPA estimates the monetized co-benefits of the final
amendments of the CI NESHAP in 2013 to be $770 million to $1,900
million (2010 dollars) at a 3-percent discount rate and $690 million to
$1,700 million (2010 dollars) at a 7-percent discount rate. For SI
engines, the EPA estimates the monetized co-benefits of the final
amendments in 2013 to be $62 million to $150 million (2010 dollars) at
a 3-percent discount rate and $55 million to $140 million (2010
dollars) at a 7-percent discount rate.
    Using alternate relationships between PM2.5 and
premature mortality supplied by experts, higher and lower co-benefits
estimates are plausible, but most of the expert-based estimates fall
between

these two estimates.\12\ A summary of the monetized co-benefits
estimates for CI and SI engines at discount rates of 3-percent and 7-
percent is in Table 6 of this preamble.
---------------------------------------------------------------------------

    \12\ Roman, et al., 2008. Expert Judgment Assessment of the
Mortality Impact of Changes in Ambient Fine Particulate Matter in
the U.S., Environ. Sci. Technol., 42, 7, 2268-2274.

   Table 6--Summary of the Monetized PM2.5 Co-Benefits Final Amendments to the NESHAP for Stationary CI and SI
                                                     Engines
                                         [Millions of 2010 dollars] a b
----------------------------------------------------------------------------------------------------------------
                                                               Total monetized co-
             Pollutant                 Emission reductions     benefits (3 percent   Total monetized co-benefits
                                         (tons per year)            discount)           (7 percent  discount)
----------------------------------------------------------------------------------------------------------------
                                          Original 2010 Final Rules \c\
----------------------------------------------------------------------------------------------------------------
Stationary CI Engines:
    Total Benefits.................  2,844 PM2.5, 27,395     $950 to $2,300........  $860 to $2,100.
                                      VOC.
Stationary SI Engines:
    Total Benefits.................  96,479 NOX, 30,907 VOC  $510 to $1,300........  $470 to $1,100.
----------------------------------------------------------------------------------------------------------------
                                  2010 Final Rules With These Final Amendments
----------------------------------------------------------------------------------------------------------------
Stationary CI Engines:
    Directly emitted PM2.5.........  2,818.................  $770 to $1,900........  $690 to $1,700.
Stationary SI Engines:
    NOX............................  9,648.................  $62 to $150...........  $55 to $140.
----------------------------------------------------------------------------------------------------------------
\a\ All estimates are for the analysis year (2013) and are rounded to two significant figures so numbers may not
  sum across rows. The total monetized co-benefits reflect the human health benefits associated with reducing
  exposure to PM2.5 through reductions of PM2.5 precursors, such as NOX and directly emitted PM2.5. It is
  important to note that the monetized co-benefits do not include reduced health effects from exposure to HAP,
  direct exposure to NO2, exposure to ozone, ecosystem effects or visibility impairment.
\b\ PM co-benefits are shown as a range from Pope, et al. (2002) to Laden, et al. (2006). These models assume
  that all fine particles, regardless of their chemical composition, are equally potent in causing premature
  mortality because the scientific evidence is not yet sufficient to allow differentiation of effects estimates
  by particle type.
\c\ The benefits analysis for the 2010 final rules applied out-dated benefit-per-ton estimates compared to the
  updated estimates described in this preamble and reflected monetized co-benefits for VOC emissions, which
  limits direct comparability with the monetized co-benefits estimated for this final rule. In addition, these
  estimates have been updated from their original currency years to 2010$, so the rounded estimates for the 2010
  final rules may not match the original RIAs.

    These co-benefits estimates represent the total monetized human
health benefits for populations exposed to less PM2.5 in
2013 from controls installed to reduce air pollutants in order to meet
this final rule. To estimate human health co-benefits of these rules,
the EPA used benefit-per-ton factors to quantify the changes in
PM2.5-related health impacts and monetized benefits based on
changes in directly emitted PM2.5 and NOX
emissions. These benefit-per-ton factors were derived using the general
approach and methodology laid out in Fann, Fulcher and Hubbell
(2009).\13\ This approach uses a model to convert emissions of
PM2.5 precursors into changes in ambient PM2.5
levels and another model to estimate the changes in human health
associated with that change in air quality, which are then divided by
the emission reductions to create the benefit-per-ton estimates.
However, for these rules, the EPA utilized air quality modeling of
emissions in the ``Non-EGU Point other'' category because the EPA does
not have modeling specifically for stationary engines.14 15
The primary difference between the estimates used in this analysis and
the estimates reported in Fann, Fulcher and Hubbell (2009) is the air
quality modeling data utilized. While the air quality data used in
Fann, Fulcher and Hubbell (2009) reflects broad pollutant/source
category combinations, such as all non-EGU stationary point sources,
the air quality modeling data used in this analysis has narrower sector
categories. In addition, the updated air quality modeling data reflects
more recent emissions data (2005 rather than 2001) and has a higher
spatial resolution (12 km rather than 36 km grid cells). The benefits
methodology, such as health endpoints assessed, risk estimates applied,
and valuation techniques applied did not change. As a result, the
benefit-per-ton estimates presented herein better reflect the
geographic areas and populations likely to be affected by this sector.
However, these updated estimates still have similar limitations as all
national-average benefit-per-ton estimates in that they reflect the
geographic distribution of the modeled emissions, which may not exactly
match the emission reductions in this rulemaking, and they may not
reflect local variability in population density, meteorology, exposure,