     November 13, 2006

Mr. William Wehrum

Acting Assistant Administrator for Air and Radiation

U.S. Environmental Protection Agency

1200 Pennsylvania Avenue, NW

Mail Code: 6101A

Washington, DC 20460

Mr. Daniel Reifsnyder

Acting Deputy Assistant Secretary for Oceans and

     International Environmental Scientific Affairs

U.S. Department of State

2201 C Street, NW

Washington, DC 20520

			Re:  2007 Critical Use Exemptions for Methyl Bromide

Dear Messrs. Wehrum and Reifsnyder:

	I am writing in regard to the pending proposed regulations to establish
2007 critical use exemptions for methyl bromide, and in follow-up to the
18th Meeting of the Parties to the Montreal Protocol earlier this month
in New Delhi.  The purpose of this letter is to call upon EPA to carry
out the stockpile-related commitments made in New Delhi without further
delay in the final 2007 exemption rule.

	At the 18th MOP, the United States met with strong expressions of
concern by other countries about the size of American stockpiles of
methyl bromide.  In response, the U.S. renewed and increased its
commitment to account for stockpiles.  First, in Decision XVIII/13,
paragraph 6, the U.S. “renew[ed] its commitment to ensure that the
criteria in paragraph 1 of decision IX/6 are applied when licensing,
permitting or authorizing critical use of methyl bromide and, in
particular, the criterion laid down in paragraph 1(b) (ii) of decision
IX/6.”

Further, the U.S. amplified this commitment in a statement to the
plenary made at the time of the adoption of the critical use exemption
decision  The Report of the Meeting summarizes Mr. Reifsnyder’s
comments thusly:  “In the context of decision IX/6, the United States
had been seeking to reduce and eliminate stocks of methyl bromide
produced before the 2005 phase-out. To the extent consistent with
national and international law, his Government intended to increase its
efforts to accelerate the phase-out of those pre-existing stocks.”

The first available opportunity to carry out these commitments is in the
final 2007 exemption rule.  This will also be the only opportunity to
demonstrate action on these commitments before the Parties convene again
in June to consider the U.S.’s next exemption nominations.  Thus, it
is important that EPA demonstrate in the final 2007 rule that the
government is serious about living up to these renewed and increased
stockpile commitments.

It is also important that EPA act now to stop the diversion of methyl
bromide stockpiles into the hands of users who do not have critical use
exemptions.  As demonstrated below, there is now reason to believe that
a very large amount of stockpiles was used in 2005 by persons without
critical use exemptions.

As in previous comments, NRDC calls on EPA to take two steps in the
final 2007 rules.  The first step is to reduce the amount of production
and import of new methyl bromide permitted in 2007 to account for the
existence of ample stockpiles. The second step is to limit access to
stockpiles only to persons with approved critical uses.  Both steps are
within EPA’s authority under Section 604(d)(6) of the Clean Air Act.

In the remainder of this letter, I will first address pertinent legal
issues.  I will then review certain factual and policy issues that arose
in the New Delhi meeting.

Legal Issues

NRDC submits that a construction of Section 604(d)(6) that disregards
the political commitments made in the Montreal Protocol Decisions is an
unreasonable construction under Step 2 of Chevron v. NRDC, 467 U.S. 837
(1984).  Likewise, acting contrary to those political commitments is
arbitrary and capricious under Section 307(d)(9) of the Act.

As an initial matter, NRDC recognizes that a panel of the D.C. Circuit
has ruled that that the Decisions of the Parties under the Montreal
Protocol are “political commitments,” not “law.”  NRDC v. EPA,
464 F.3d 1 (D.C. Cir. 2006).  Thus, the panel rejected a Chevron Step 1
argument that the Clean Air Act unambiguously incorporated the
Protocol’s exemption decisions as binding law.  See 464 F.3d at 8
(“The ‘decisions’ of the Parties-post-ratification side agreements
reached by consensus among 189 nations-are not ‘law’ within the
meaning of the Clean Air Act and are not enforceable in federal
court.”)  Even under this ruling, however, it remains EPA’s duty to
give Section 604(d)(6) a reasonable construction under Chevron Step 2,
and to act in a non-arbitrary, non-capricious manner.  The Executive
Branch’s “political commitments” are relevant to both points.

Section 604(h) and Section 604(d)(6) of the Act were enacted in 1998,
the year following the Montreal Protocol Parties’ adoption of Article
2H and the accompanying Decision IX/6 in 1997.  Section 604(h) bans
methyl bromide on the schedule in effect under the Protocol as of the
date of enactment, i.e., no further production and consumption is
allowed after December 31, 2004.  Section 604(d)(6) provides for
exemptions for “critical uses” – the same term used in Article
2H(5) of the Protocol.  EPA is authorized – but not compelled – to
issue exemptions for methyl bromide production, importation and
consumption “[t]o the extent consistent with the Montreal Protocol.”

(a)  Chevron Step 2 analysis.  Even if the Decisions of the Parties are
not directly incorporated into U.S. law under Section 604(d)(6), Chevron
Step 2 still requires EPA to interpret Section 604(d)(6)  in a
reasonable manner.  Even if there is some range of discretion in the
terms “[t]o the extent consistent with the Montreal Protocol,” EPA
must supply a construction that is reasonable in light of Congressional
intent and in light of the agreements – the “political
commitments” – that the Executive Branch has subsequently made.  In
other words, those Executive Branch “political commitments”
constrain the range of interpretations of Section 604(d)(6) that the
Executive Branch may reasonably adopt.

As a matter of Congressional intent, it is apparent from the language of
Sections 604(h) and 604(d)(6), and from the sequence of events leading
to the adoption of those provisions, that Congress was fully aware of
the process that the Montreal Protocol Parties (including the U.S.) had
agreed upon for making critical use exemptions, embodied in the Protocol
adjustment made in 1997.  Section 604(h) unquestionably directly
incorporated into the Clean Air Act the schedule contained in Protocol
Article 2H.   Thus, under Section 604(h) production and consumption of
methyl bromide must be “zero” after December 31, 2004.  Section
604(d)(6) – by authorizing EPA to “exempt production, importation,
and consumption of methyl bromide for critical uses” only “[t]o the
extent consistent with the Montreal Protocol” – demonstrates
Congress’s awareness of the Decision-based process the Montreal
Protocol Parties had agreed on for making critical use exemptions from
the “zero” limit.

As a matter of Executive Branch intent, the U.S. has repeatedly
committed to issue domestic exemptions only after seeking, and
obtaining, exemptions under the Protocol via Decisions of the Parties.
The U.S. has also repeatedly committed to the use-the-stockpile-first
policy.  The commitment to that policy was made in Decision IX/6, para
1(b)(ii), adopted in 1997, which states that “production and
consumption, if any, of methyl bromide for critical uses should be
permitted [after 2004] only if … [m]ethyl bromide is not available in
sufficient quantity and quality from existing stocks.”  In every
subsequent critical use decision, including the one governing 2007
exemptions, the U.S. has agreed to “ensure that the criteria in
paragraph 1 of decision IX/6 are applied when licensing, permitting or
authorizing critical use of methyl bromide.”  Each of these Decisions,
with some minor wording differences, has specifically emphasized the
para 1(b)(ii) obligation to reduce production to account for stockpiles.
 And, as mentioned above, the U.S. heightened its commitment during the
most recent Meeting of the Parties by promising increased efforts to
phase out the stockpiles to the extent consistent with national and
international law.

NRDC submits that any construction of Section 604(d)(6)’s consistency
requirement which does not require EPA to comply with these repeated
political commitments is an unreasonable construction of the law.
Simply put, EPA cannot reasonably construe Section 604(d)(6) in a manner
inconsistent with the political commitments that the U.S. government has
willingly and repeatedly entered into in the Protocol Decisions.

In the proposed rules for 2004, EPA suggested that the word
“available” could be interpreted to authorize EPA to fence off
various amounts of the stockpile – amounts asserted appropriate for
supply chain considerations, exports, emergencies, and use by
non-critical users – and not count them when determining how much
methyl bromide production and importation to allow.  NRDC maintains that
this is an irrational construction and application of the term
“available.”  There is no indication in the record of the 1997
negotiations leading to the adjustment and Decision IX/6, nor in the
record of the negotiations on any of the subsequent critical use
exemption decisions, that the U.S. or other Parties intended to tuck
such enormous discretion into this one word.  As the Supreme Court said
in Whitman v. American Trucking Assns, 531 U.S. 457, 468 (2002),
“Congress, we have held, does not alter the fundamental details of a
regulatory scheme in vague terms or ancillary provisions—it does not,
one might say, hide elephants in mouseholes.”  The same rule goes for
the Executive Branch when it interprets its own political commitments.

(b)  Arbitrary and capricious analysis.  The same analysis flows under
the arbitrary and capricious test set forth in Clean Air Act Section
307(d)(9).  EPA has a duty to act rationally under Section 604(d)(6) –
to take actions that consider all the relevant factors and provide a
reasonable explanation of the agency’s decision.  NRDC submits that it
is arbitrary and capricious to continue allowing production and import
of methyl bromide when available stocks exceed the annual critical use
amount.  As will be shown in the next section of this letter, EPA has
not offered a rational basis for the agency’s past and now-proposed
actions.

	(c)  Authority to restrict use by non-critical users.  As a final legal
point, NRDC wishes to address the argument that EPA does not have
authority to bar non-critical users from accessing stockpiles.  NRDC
submits that this authority flows from Section 604(d)(6) itself.

Section 604(d)(6a) permits EPA to issue exemptions by rules that are
consistent with the Montreal Protocol.  The U.S. has repeatedly agreed
and committed to allow methyl bromide production and import only if
stockpiles are insufficient to meet the amounts allowed for critical
uses.  It is inconsistent with that commitment to allow use of the
stockpiles by non-critical users, because that results in increasing
production and import above the levels contemplated by the agreements.
In light of those commitments – even if they are viewed as only
political commitments – that result is both an unreasonable
construction of Section 604(d)(6) and arbitrary and capricious behavior.

In contrast, Section 604(d)(6) can reasonably be interpreted to give EPA
the authority to protect the interests of the critical users for whom
the stockpiles are to be reserved.  Restricting use of the stockpile to
bona fide critical users operating within the authorized critical use
amounts is a rational and necessary way to protect the ozone layer from
unnecessary production while at the same time protecting the interests
of the critical users.

As a final matter, some of the stockpile holders apparently are claiming
that any regulation restricting the sale of their stocks to only
critical users would be an unconstitutional taking.  This is a meritless
claim.  For example, the Supreme Court has repeatedly held that
regulatory restrictions do not effect a taking merely because they
reduce the economic value of property.  A reduction in value must be
nearly complete to constitute a regulatory taking, and even then there
are significant exceptions, for example, for the abatement of common law
nuisances.  See e.g., Lingle v. Chevron U.S.A. Inc., 544 U.S. 528
(2005).

In this case, it is not at all clear that the action NRDC is seeking
would reduce the value of the stockpiles that these entities now hold.
Barring sale of stocks to non-critical users would not prevent the sale
of those stocks to critical users.  Indeed, if EPA limited production
and import of new methyl bromide to account for stockpiles, and if EPA
also barred non-critical users from access to existing stocks, the
market value of the stocks might be unaffected, or might even increase.
But there is no reasonable scenario in which these actions would reduce
the value of the stocks to, or even near, zero.

Factual and Policy Issues

	(a) Updating Stocks Accounting.  Attached is a table showing data on
stockpiles, critical uses, and production and import of methyl bromide
for the years 2005 through 2007.  This table is similar to one NRDC
prepared before the New Delhi meeting, but it has been modified to take
into account certain data that became available during the meeting.
(Because this letter is focused on 2007, this version of the table does
not address later years.)

The first modifications concern the data for 2005.  The top line for
2005 is based on the amount that the EPA regulations authorized for
critical uses and for production and import in 2005.  The line below, in
brackets, reflects figures reported by the U.S. to the Parties for 2005,
with a substantially lower amount reported for actual critical uses in
that year, and with a slightly smaller amount reported for production
and import.  In both cases, the year-end stocks amount is the same –
the amount EPA made public in September, or 9,974 metric tons.

The second modification of the data for 2005 is the entry of a figure
– under 500 tons – for the amount of stockpiles exported to both
developed and developing countries combined.  While NRDC does not
possess the exact figure that was provided to other countries during the
meeting, I have been assured that the sum of the exports to both groups
of countries was less than 500 tons.

Here are the major conclusions that emerge from the updated table
regarding production, critical use, and stockpiles in 2005:

Stockpiles going into 2005 greatly exceeded the actual critical uses in
2005.  No production was needed in 2005.

Counting stockpiles, new production, and imports, the total supply of
methyl bromide available in 2005 exceeded critical uses by 13,437 metric
tons – nearly 30 million pounds.

The amount of stockpiles needed for exports to both developed and
developing countries was small – under 500 metric tons.

It is now apparent that (after accounting for exports) as much as about
3,000 metric tons – 6.6 million pounds – of methyl bromide was used
in 2005 by persons who did not have critical use exemptions.

Here are the major conclusions that emerge from the updated table
regarding 2006:

Stockpiles going into 2006 greatly exceeded authorized critical uses in
2006.  No production was needed in 2006.

Stocks at the end of 2006, before accounting for exports and diversion
to non-critical users, should be as much as 8,723 metric tons – nearly
19.2 million pounds.

It is unlikely that exports from stockpiles will rise in 2006.

There are no publicly available data yet for 2006 on the amount of
stockpiled methyl bromide being diverted into the hands of persons who
do not have critical use exemptions.  Diversions to non-critical users
should be smaller in 2006 than 2005, based on representations to NRDC in
New Delhi by an EPA staff person involved in reviewing critical use
nominations.  The staff person suggested that the reported 2005 CUE use
was lower than expected because some qualified critical users purchased
stocks instead of the full amount they were allowed through the CUE
system.  The delegation member thought this was a first-year
learning-the-rules phenomenon that should taper off in 2006.

If diversions of stocks to non-critical users in 2006 are only half what
they were in 2005, then there will be more than 6,700 metric tons –
14.7 million pounds – of stocks available at the beginning of 2007.

If the diversion of stocks to non-critical users is on the same scale as
in 2005, there will still be more than 5,200 metric tons – 11.4
million pounds – of methyl bromide stocks available at the beginning
of 2007.

If EPA takes any issue with these figures, it is incumbent on the agency
to supply corrections or supplementary data.

(b) Stockpile Policy Considerations.  In New Delhi, the U.S. delegation
offered a number of reasons for its large stockpile.  None of these
considerations provide a rational basis for not reducing new production
and import in conformity with the U.S.’s policy commitments.

(i) Supply chain inventories.  Mr. Reifsnyder’s intervention claimed
the need for a “supply chain inventory” of three to four months, if
I recall correctly.  This is less than prior suggestions that as much as
a year’s supply of methyl bromide is needed for the “supply chain
inventory.”  Three to four months is an improvement but still larger
than necessary to keep the supply chain functioning.  The typical
industry practice for similar chemicals is to keep no more than two or
three months supply in the supply chain inventory.

No other country with critical use exemptions has maintained a total
stockpile, including supply chain inventory, exceeding 20 percent of its
annual critical use amount.  Simple calculations from Table 5 in the
September report of the Technological and Economic Assessment Panel
(TEAP) demonstrate that stocks in other critical use exemption (CUE)
countries in 2005 totaled 20 percent or less of those countries’ CUE
amounts.  Yet the U.S. stockpile was 170 percent of the U.S. CUE amount
in 2005.  An annotated version of Table 5 appears on the next page.

(ii) Emergencies.  Mr. Reifsnyder also claimed that the stockpiles are
needed as a reserve against the hypothetical catastrophic accident
causing a prolonged loss of production at the Chemtura plant.  The
hypothetical catastrophic plant accident with a prolonged production
outage, of course, never happened, and no one seriously fears it.
Moreover, in the unlikely event of this catastrophe, even critical users
have options.  The first option would be for Ameribrom to step up
imports.  Further, in almost every instance, the U.S. nomination notes
the existence of alternative chemicals that could do most of the job
done by methyl bromide, albeit sometimes at higher cost.  Those options
could fill in on at least a temporary basis.

Mr. Reifsnyder also said that the stockpile is needed to cope with
emergencies like Hurricane Katrina, after which some fields in the
Southeast needed to be re-fumigated prior to re-planting.  Mr.
Reifsnyder made no reference, however, to a country’s authority under
the Protocol to issue emergency exemptions of up 80 tons of methyl
bromide, as often as necessary, without prior approval in emergency
circumstances.

NRDC observes that these two potential reasons for keeping an emergency
stockpile expose a rather large logical problem.  If the stockpile is to
be available to address either kind of emergency, it must be segregated
and placed off-limits for other uses.  In particular, it cannot be
allowed to be used by non-critical users, for if the emergency stockpile
has been eaten up by other users, it will not be there when needed.
Thus, in order to have any rational basis for keeping a stockpile for
these emergency purposes, EPA must bar the use of the emergency reserve
for any other purposes.

(iii) Exports.  Mr. Reifsnyder’s intervention also explained that some
amounts of methyl bromide stockpiles were needed for exports to
developing and developed countries.  First, there is no reason why those
export amounts should not be satisfied from critical use production.
Second, as already noted, the amount of stocks exported to both
categories of countries appears to have been less than 500 metric tons
in 2005 – a very small part of the stockpile.

	(iv) Feedstocks.  Members of the U.S. delegation also mentioned the
potential use of methyl bromide stockpiles as feedstocks in
manufacturing processes outside the Chemtura production plant.  The U.S.
delegation, however, was unable to supply NRDC (or apparently the other
Parties) with any figures on feedstock uses.

(v)  Use by non-critical users.  The last factor to consider is use of
stockpiles by persons not eligible for critical use exemptions.  Merely
to state this issue is to indicate the irrationality of EPA’s
position.  It makes no sense for Congress to create, and for the U.S. to
agree to, a highly restricted system of critical use exemptions for
post-2004 methyl bromide use, and then to allow unlimited access to
stockpiles for others who did not apply for or qualify for critical use
exemptions.

Allowing stockpile access to non-critical users conflicts with the
obvious meaning of Decision IX/6, which allows new production, “if
any,” “only if … [m]ethyl bromide is not available in sufficient
quantity and quality from existing stocks.”  As demonstrated in the
previous section of these comments, this appears to be far and away the
dominant usage of the stockpiles.  Approximately 3,000 metric tons –
7.6 million pounds – of methyl bromide stockpiles appear to have been
diverted to non-critical users in 2005. Never before have we had
evidence of the scale of such use.  Allowing unrestricted use of the
stocks by persons who do not have critical use exemptions is plainly
arbitrary and capricious.

Conclusion

For all these reasons, NRDC calls on EPA to act now, in the final 2007
exemption rule, to take the following actions to fulfill its renewed and
amplified commitments to account for stockpiles in conformity with
Decision IX/6.  The final 2007 regulations should:

Reduce new production and import for 2007 to zero, or near zero, on
account of the availability of existing stocks.

Bar non-critical users from using stockpiled methyl bromide.

Sincerely,

David D. Doniger

Policy Director

NRDC Climate Center

Attachments:  Table

		Report of the 18th Meeting of the Parties

		Report of the Technological and Economic Assessment Panel

U.S. Stocks Exceed Critical Uses Every Year – No Need for New
Production

(all figures in metric tons)

Each year stocks on-hand Jan. 1  exceed amounts allowed for critical
uses	Big stock surpluses remain	But U.S. allows new production anyway
Leaving large stocks on-hand Dec. 31

Year	Stocks

Jan. 1 a	CUEs b	Jan. 1 stocks minus CUEs 	New production and import c
Stock surplus plus new production d	Minus non-critical uses, exports e
Equals stocks Dec. 31 f

2005

12,994

 9,553

[7,170]

 3,441

[5,824]

 7,659

[7,613]

 11,100

[13,437]

 1,126

[3,463] 	Since  exports = < 500 tons, non-critical uses = about

3000 tons

 9,974 g

2006

  9,974

 8,074

 1,900

 6,823

   8,723

 ?

Up to 8,723

2007 (projected)

Up to 8,723

 6,681

 Up to 2,042

 4,301 - 4,616 h

 Up to 6,658

 ?

Up to 6,658

Source:  NRDC, based on EPA and MBTOC data.

a Stock figures for January 1, 2005 and 2006 reported by EPA,
HYPERLINK "http://www.epa.gov/ozone/mbr/index.html"
http://www.epa.gov/ozone/mbr/index.html .  Figures for 2007 projected by
NRDC.  As explained in the table and these notes, stocks at start of
2007 depend on stock amounts diverted to non-critical users and exported
in earlier years (see notes d - f).

b CUEs amounts as authorized by EPA  for 2005 and 2006 and proposed by
EPA for 2007.

c Production and import authorized by EPA for 2005 and 2006 and proposed
– but not yet authorized – by EPA for 2007.

d Jan. 1 stocks minus CUEs plus new production/import.  This figure does
not account for amounts of stocks exported or diverted to non-critical
uses.  (Exports from new production for basic domestic need are not
included in this accounting.)

e EPA has not officially reported the amount of stocks diverted to
non-critical users or the amount of stocks exported.  Figures provided
during New Delhi talks indicate that total stockpile exports to
developing and developed countries were less than 500 metric tons.
Thus, the total diverted to non-critical users was approximately 3000
metric tons.   Stock amounts diverted to non-critical uses and exported
in 2006 are not yet known.

f  Stock amount at end of 2005 as reported by EPA (see note a).  Stock
amounts at end of 2006 and 2007 expressed as a maximum, dependent on the
amount diverted to non-critical uses and exported.

g EPA reports an additional 443 metric tons were left over at the end of
2005.  EPA has proposed to deduct that amount from 2007 production.

h Figure reflects deduction for 443 metric tons left over in 2005 (see
note g).

 Please include this letter as a supplementary comment in the docket for
the 2007 proposed rules.

 United Nations Environment Programme, Report of the Eighteenth Meeting
of the Parties to the Montreal Protocol on Substances that Deplete the
Ozone Layer at pp. 39-41, UNEP/OzL.Pro.18/10 (Nov. 8, 2006) (attached to
this letter for inclusion in the docket).

 Id. at 61 (paragraph 224).

 While NRDC today makes the alternative arguments described above, these
comments should not be taken as acceptance that the D.C. Circuit opinion
is good law.  NRDC is considering whether to seek rehearing of the panel
opinion from the D.C. Circuit or review by the Supreme Court.

 Section 604(d)(6) provides:

To the extent consistent with the Montreal Protocol, the Administrator,
after notice and the opportunity for public comment, and after
consultation with other departments or instrumentalities of the Federal
Government having regulatory authority related to methyl bromide,
including the Secretary of Agriculture, may exempt the production,
importation, and consumption of methyl bromide for critical uses.

 Congress also should be presumed to have been aware of the criteria for
exemption decisions that the Parties had agreed in Decision IX/6, given
the fact that Decision IX/6 was adopted simultaneously with Article 2H
as a package.  Thus, even if the D.C. Circuit panel were correct that
Section 604(d)(6) does not directly incorporate future Decisions of the
Parties into law, it is apparent that Congress intended EPA’s own
exemption decisions to be guided by – in short to be “consistent
with” – the process the Parties agreed on.

 That proposal was not promulgated, but neither has it gone away, as we
see it being implicitly revived in Mr. Reifsnyder’s comments to the
Meeting of the Parties, and, at least in part, in the 2007 proposal.

 This table is also a revision of one included in NRDC’s supplemental
comments of September 21, 2006.

 The U.S. delegation also asserted in New Delhi that some amount of
stockpiles – NRDC never heard a specific figure – was sold for
“feedstock” uses.  This number appears to be very small, if it
exists at all.  Use of methyl bromide as a feedstock at the Great Lakes
plant is not even counted as production, assuming it is consumed in the
follow-on chemical process.  The only example of a feedstock use from
stockpiles mentioned by U.S. representatives during the New Delhi
meeting was the possible use of a small amount in the manufacture of
halogen light bulbs.  NRDC has seen no data on the amounts involved or
to document that it came from stockpiles.

 Report of the Technology and Economic Assessment Panel, “Evaluations
Of 2006 Critical Use Nominations for Methyl Bromide and Related
Matters” at 18 (Table 5) (Sept. 2006).  A copy of the report is
attached for the record.

 As noted above, feedstock amounts consumed without emissions within the
Chemtura plant do not count as production.

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[Federal Register: March 12, 2009 (Volume 74, Number 47)]
[Notices]
[Page 10728-10729]
[DOCID:fr12mr09-43]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. EL09-38-000]

California Municipal Utilities Association; Cities of Anaheim,
Azusa, Banning, Colton, Pasadena, and Riverside, CA; City and County of
San Francisco; Northern California Power Agency; Sacramento Municipal
Utility District; Modesto Irrigation District; Transmission Agency of
Northern California, Complainants, v. California Independent System
Operator Corporation, Respondent; Notice of Complaint

March 5, 2009.
    Take notice that on March 4, 2009, the California Municipal
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Commission's Rules of Practice and Procedure, alleging that the absence
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considered by the Commission in determining the appropriate action to
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    Comment Date: 5 p.m. Eastern Time on March 16, 2009.

Kimberly D. Bose,
Secretary.
 [FR Doc. E9-5260 Filed 3-11-09; 8:45 am]

BILLING CODE 6717-01-P


[Federal Register Volume 76, Number 213 (Thursday, November 3, 2011)]
[Rules and Regulations]
[Pages 68103-68106]
[FR Doc No: 2011-28388]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R09-OAR-2011-0463; FRL-9481-1]

Revisions to the California State Implementation Plan, San
Joaquin Valley Unified Air Pollution Control District

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: EPA is finalizing approval of revisions to the San Joaquin
Valley Unified Air Pollution Control District (SJVUAPCD) portion of the
California State Implementation Plan (SIP). This revision was proposed
in the Federal Register on June 30, 2011 and concerns volatile organic
compound (VOC) and particulate matter (PM) emissions from commercial
charbroilers. We are approving a local rule that regulates these
emission sources under the Clean Air Act as amended in 1990 (CAA or the
Act).

DATES: Effective Date: This rule is effective on December 5, 2011.

ADDRESSES: EPA has established docket number EPA-R09-OAR-2011-0463 for
this action. Generally, documents in the docket for this action are
available electronically at http://www.regulations.gov or in hard copy
at EPA Region IX, 75 Hawthorne Street, San Francisco, California. While
all documents in the docket are listed at http://www.regulations.gov,
some information may be publicly available only at the hard copy
location (e.g., copyrighted material, large maps, multi-volume
reports), and some may not be available in either location (e.g.,
confidential business information (CBI)). To inspect the hard copy
materials, please schedule an appointment during normal business

hours with the contact listed in the FOR FURTHER INFORMATION CONTACT
section.

FOR FURTHER INFORMATION CONTACT: David Grounds, EPA Region IX, (415)
972-3019<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Throughout this document, ``we,'' ``us'' and
``our'' refer to EPA.

Table of Contents

I. Proposed Action
II. Public Comments and EPA Responses
III. EPA Action
IV. Statutory and Executive Order Reviews

I. Proposed Action

    On June 30, 2011 (76 FR 38340), EPA proposed to approve the
following rule into the California SIP.

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            Local agency               Rule No.             Rule title              Amended         Submitted
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SJVUAPCD...........................         4692   Commercial Charbroiling....      09/17/2009         05/17/10
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    We proposed to approve this rule because we determined that it
complied with the relevant CAA requirements. Our proposed action
contains more information on the rules and our evaluation.

II. Public Comments and EPA Responses

    EPA's proposed action provided a 30-day public comment period.
During this period, we received a comment from the following party.
    1. Sarah Jackson, Earthjustice, letter dated August 1, 2011. The
comments and our responses are summarized below.
    Comment #1: Earthjustice asserts that EPA must disapprove Rule 4692
for failure to satisfy CAA requirements for reasonably available
control technology (RACT) and reasonably available control measures
(RACM) because the rule does not require reasonable controls on under-
fired charbroilers (UFC).
    Response #1: For the reasons discussed in our proposed rule (76 FR
38340) and further below, we disagree and continue to believe that Rule
4692 requires all control measures that are ``reasonably available''
for implementation in the San Joaquin Valley (SJV), considering
technical and economic feasibility. We respond more specifically below
to Earthjustice's assertions regarding the technical and economic
feasibility of UFC controls.
    Comment #2: Earthjustice asserts that reductions from this source
category played a significant role in SJVUAPCD's plan to reduce
PM2.5 levels in the SJV, but the current rule reduces
emissions by only 0.02 tons/day--less than 1% of what was promised in
SJVUAPCD's 2008 PM2.5 plan.
    Response #2: As discussed in our proposal, EPA evaluated Rule 4692
to determine whether it complies with the enforceability requirements
of CAA section 110(a) and whether EPA's approval of it into the SIP
would satisfy the requirements concerning attainment and reasonable
further progress (RFP) in CAA section 110(l). Although this rule is not
subject to the specific ozone RACT control requirement in CAA 182(b)(2)
and (f), we also evaluated the control requirements in the rule to
determine whether it requires all measures that are ``reasonably
available'' for implementation in the SJV, considering technical and
economic feasibility. We did not evaluate the emission reductions
associated with this rule as such an evaluation belongs in the context
of EPA's action on the State/District's RACM demonstration for the
relevant NAAQS. For this reason, we did not propose to make a
regulatory determination with respect to RACM in this rulemaking.
Instead, we evaluated only the control requirements in the rule and
considered whether additional controls for this particular source
category are demonstrated to be technically and economically feasible
for implementation in the area at this time. As stated in the Technical
Support Document (TSD) for our proposal, EPA will take action in
separate rulemakings on the State's RACM demonstration for the relevant
NAAQS based on an evaluation of the control measures submitted as a
whole and their overall potential to advance the applicable attainment
dates in the SJV. See Technical Support Document For EPA's Direct Final
Rulemaking For the California State Implementation Plan, San Joaquin
Valley Unified Air Pollution Control District Rule 4692, Commercial
Charbroiling, EPA Region 9, June 9, 2011, page 4 (TSD).
    Comment #3: Earthjustice contends that SJVUAPCD's May 2009 Rule
4692 staff report states that UFC control is reasonably available and
cost-effective at as little as $5,800 per ton PM reduced, and that
SJVUAPCD subsequently abandoned UFC control based on inflated new cost
information. Earthjustice also asserts that the October 2009 staff
report does not include UFC emission reduction estimates needed to
recalculate UFC control cost-effectiveness. Finally, Earthjustice
asserts that even using the new inflated cost information and the May
2009 emission estimates, UFC control is still more cost-effective than
chain-driven charbroiler controls that SJVUAPCD and EPA are approving
in Rule 4692 as reasonable.
    Response #3: The $5,800/ton estimate provided in SJVUAPCD's May
2009 staff report references a draft staff report that relies on 2007
estimates from the Bay Area Air Quality Management District
(BAAQMD).\1\ This was the low end of a range of estimates that BAAQMD
had developed; the high end of BAAQMD's cost estimates were over
$100,000/ton. See response to comment 5 below. In 2009, SJVUAPCD
revised the low end of the range in the draft staff report by
increasing it to $22,300/ton, based on updated information including
cost quotes from vendors of control equipment. SJVUAPCD's revised cost-
effectiveness analysis still resulted in cost-per-ton estimates for UFC
controls within the range of estimates developed by BAAQMD and the
South Coast Air Quality Management District (SCAQMD). We believe these
cost estimates were performed following standard accepted procedures
and the commenter has not provided specific information to demonstrate
otherwise.
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    \1\ Final Draft Staff Report for Proposed Amendments to Rule
4692, SJVUAPCD, May 21, 2009, pages C-4 and C-5.
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    Comment #4: Earthjustice comments that appendix C to SJVUAPCD's
October 2009 staff report assigns emission reductions of 0.453 tons per
year (tpy) per restaurant to potential UFC controls but never explains
the basis for this estimate or why it is used instead of BAAQMD's
estimate, which is based on scientific studies. Earthjustice asserts
that 1.44 tons per day (tpd) (the median of the range provided in
SJVUAPVD's May 21, 2009 staff report) is a more appropriate estimate of
emission reductions from UFC controls.
    Response #4: In response to EPA's inquiry regarding SJVUAPCD's
cost-effectiveness evaluation, the District provided additional
information to explain the cost-effectiveness analyses in its August
2009 and September 2009 staff reports.\2\ Specifically, SJVUAPCD
identified the sources of its emission

factor data and explained the assumptions underlying its calculations
of the incremental cost-effectiveness of UFC controls. SJVUAPCD used
information from Dun & Bradstreet on the number of restaurants
operating within SJV, together with other reasonable assumptions about
the numbers of UFC units and the quantities and types of meats grilled
at these restaurants, to develop a ``composite'' emission factor for
the source category, which provided the basis for its estimate of 0.453
tpy in potential PM2.5 reductions per restaurant from the
use of UFC controls. The SJVUAPCD notes that Earthjustice appears to
have estimated PM10 instead of PM2.5 emissions,
which increased the emission reduction estimates, and to have relied on
less accurate estimates of the quantity of meat cooked and emission
factors for various charbroiled meats. We have reviewed the additional
information provided by SJVUAPCD and concur with the District that
additional UFC controls have not been demonstrated to be ``reasonably
available'' considering technical and economic feasibility in the SJV
area at this time.
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    \2\ Email from Sandra Lowe-Leseth (SJVUAPCD) to David Grounds
(EPA), September 22, 2011, with attachment.
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    Comment #5: Earthjustice comments that except for the wet scrubber,
no explanation is given for why SJVUAPCD's estimates for UFC control
cost are much higher than BAAQMD's.
    Response #5: As explained in our TSD, SJVUAPCD's cost estimates for
UFC controls are within the range of cost estimates that other
California districts have developed for similar controls. See TSD at 4.
SJVUAPCD estimates that the cost of UFC controls ranges from $22K-$58K/
ton PM2.5 reduced,\3\ BAAQMD estimates $17K-$143K/ton VOC or
PM,\4\ and SCAQMD estimates $8K-$34K/ton PM.\5\ The commenter has
provided no specific information to indicate otherwise.
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    \3\ Final Staff Report for Amendments to Rule 4692, SJVUAPCD,
October 8, 2009, pages 2 and C-6.
    \4\ Staff Report for Regulation 6, Rule 2, BAAQMD, November
2007, page 26 (BAAQMD Staff Report).
    \5\ Preliminary Draft Staff Report: Proposed Amended Rule 1138,
SCAQMD, August 2009, Table 4.
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    Comment #6: Earthjustice comments that BAAQMD concluded that UFC
control is cost-effective and adopted control requirements in 2007.
Earthjustice also asserts that EPA's claim that UFC controls are not
reasonably available because none have yet been certified to comply
with BAAQMD's rule ``is absurd since * * * certification is not
required until the rule limits take effect in 2013.''
    Response #6: We explained in our TSD our reasons for concurring
with SJVUAPCD's conclusion that UFC control is not reasonably available
for implementation within the SJV at this time.\6\ These include
SJVUAPCD's cost-effectiveness analysis of UFC controls and concerns
regarding the technical feasibility of UFC controls. We also noted that
we are unaware of any other federal or state regulation or guidance
suggesting UFC control is reasonably available for the commercial
charbroiling industry except for BAAQMD's Regulation 6 Rule 2. We
therefore disagree with Earthjustice's suggestion that the absence of
compliance certifications under the BAAQMD's rule provided the only
basis for our conclusion. As to BAAQMD's rule, we noted that most
facilities in the Bay Area are too small to trigger the UFC control
requirements of Regulation 6 Rule 2 and that no facilities had yet
certified compliance with these limits. This information is relevant to
our evaluation of technical feasibility because, until the BAAQMD
confirms that sources are complying with the UFC control requirements,
we have only limited information indicating that such controls are
demonstrated to be technically feasible for the commercial charbroiling
industry. It appears, however, that a large number of facilities (200)
may be subject to BAAQMD's UFC control requirement \7\ and will be
required to certify by 2013 whether they are complying with the UFC
control requirements of that rule. We encourage the District to
reevaluate Rule 4692 at the earliest opportunity, taking into account
the most recent information about the technical and economic
feasibility of UFC controls, and to adopt all reasonably available
control measures for commercial charbroiling that will expedite
attainment of the PM2.5 and ozone NAAQS in the SJV.
---------------------------------------------------------------------------

    \6\ EPA TSD, pages 4-5.
    \7\ BAAQMD Staff Report, page 18.
---------------------------------------------------------------------------

    Comment #7: Earthjustice asserts that actual controls have been
installed in California and provide empirical data on costs and
emission reductions, and further claims that EPA and SJVUAPCD are
ignoring this data and relying on conflicting information that lacks
any reasonable basis.
    Response #7: We do not dispute that UFC controls have been
installed at facilities in California.\8\ As discussed in our responses
above, however, SJVUAPCD explained the basis for its assessment of the
economic feasibility of UFC controls in SJV, including the empirical
data underlying these evaluations, and we concur with the District's
conclusion based on these evaluations that UFC control is not
reasonably available in the SJV at this time.
---------------------------------------------------------------------------

    \8\ See Final Staff Report for Amendments to Rule 4692,
SJVUAPCD, October 8, 2009, pages 11-12.
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III. EPA Action

    No comments were submitted that change our assessment that the
submitted rule complies with the relevant CAA requirements. Therefore,
as authorized in section 110(k)(3) of the Act, EPA is fully approving
this rule into the California SIP.

IV. Statutory and Executive Order Reviews

    Under the Clean Air Act, the Administrator is required to approve a
SIP submission that complies with the provisions of the Act and
applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a).
Thus, in reviewing SIP submissions, EPA's role is to approve State
choices, provided that they meet the criteria of the Clean Air Act.
Accordingly, this action merely approves State law as meeting Federal
requirements and does not impose additional requirements beyond those
imposed by State law. For that reason, this action:
     Is not a ``significant regulatory action'' subject to
review by the Office of Management and Budget under Executive Order
12866 (58 FR 51735, October 4, 1993);
     Does not impose an information collection burden under the
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Is certified as not having a significant economic impact
on a substantial number of small entities under the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.);
     Does not contain any unfunded mandate or significantly or
uniquely affect small governments, as described in the Unfunded
Mandates Reform Act of 1995 (Pub. L. 104-4);
     Does not have Federalism implications as specified in
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Is not an economically significant regulatory action based
on health or safety risks subject to Executive Order 13045 (62 FR
19885, April 23, 1997);
     Is not a significant regulatory action subject to
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of Section 12(d) of the
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272
note) because application of those requirements would

be inconsistent with the Clean Air Act; and
     Does not provide EPA with the discretionary authority to
address disproportionate human health or environmental effects with
practical, appropriate, and legally permissible methods under Executive
Order 12898 (59 FR 7629, February 16, 1994).
    In addition, this rule does not have tribal implications as
specified by Executive Order 13175 (65 FR 67249, November 9, 2000),
because the SIP is not approved to apply in Indian country located in
the State, and EPA notes that it will not impose substantial direct
costs on tribal governments or preempt tribal law.
    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report, which includes a copy of the rule,
to each House of the Congress and to the Comptroller General of the
United States. EPA will submit a report containing this action and
other required information to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller General of the United States prior
to publication of the rule in the Federal Register. A major rule cannot
take effect until 60 days after it is published in the Federal
Register. This action is not a ``major rule'' as defined by 5 U.S.C.
804(2).
    Under section 307(b)(1) of the Clean Air Act, petitions for
judicial review of this action must be filed in the United States Court
of Appeals for the appropriate circuit by January 3, 2012. Filing a
petition for reconsideration by the Administrator of this final rule
does not affect the finality of this action for the purposes of
judicial review nor does it extend the time within which a petition for
judicial review may be filed, and shall not postpone the effectiveness
of such rule or action. This action may not be challenged later in
proceedings to enforce its requirements (see section 307(b)(2)).

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by
reference, Intergovernmental relations, Ozone, Particulate matter,
Reporting and recordkeeping requirements, Volatile organic compounds.

    Dated: September 30, 2011.
Jared Blumenfeld,
Regional Administrator, Region IX.

    Part 52, Chapter I, Title 40 of the Code of Federal Regulations is
amended as follows:

PART 52--[AMENDED]

0
1. The authority citation for Part 52 continues to read as follows:

    Authority: 42 U.S.C. 7401 et seq.

Subpart F--California

0
2. Section 52.220 is amended by adding paragraph (c)(379)(i)(C)(5) to
read as follows:

Sec.  52.220  Identification of plan.

* * * * *
    (c) * * *
    (379) * * *
    (i) * * *
    (C) * * *
    (5) Rule 4692, ``Commercial Charbroiling,'' amended on September
17, 2009.
* * * * *
[FR Doc. 2011-28388 Filed 11-2-11; 8:45 am]
BILLING CODE 6560-50-P