98-236: Air Quality: EPA's Ozone Transport Rule, OTAG,
and Section 126 Petitions -- A Hazy Situation?

Larry Parker and John Blodgett
Specialists
Environment and Natural Resources Policy Division

Updated June 15, 1999

CONTENTS

Summary

Background
The Ozone Transport Assessment Group
OTAG Assessment Results
OTAG Recommendations

Size of Transport Region
Utility NOx Controls
Non-Utility Stationary Source NOx Control
Federal Emission Control Measures
Specific State Actions
Trading Program

EPA's Revised NAAQS for Ozone
Ozone Transport Rule
Model NOx Cap and Trade Program
Proposed Federal Implementation Plans (FIPs)
Section 126 Petitions
Implementation Schedules and Challenges
Conclusion
Footnotes

List of Tables

Table 1. Seasonal NOx Emissions Budget for States Making a Significant Contribution to Downwind Ozone Nonattainment

Table 2. Proposed Schedule for Section 126 and Section 110 Actions

Background

Interstate transport of air pollutants is not a new problem. However, the 1990 Clean Air Act Amendments (CAAA) provided the Environmental Protection Agency (EPA) and the states with new tools to address the problem. One of those tools is section 176A, a provision that permits the EPA, either on its own or by petition from any state, to establish a transport region to address regional pollution problems contributing to violations of a primary National Ambient Air Quality Standard (NAAQS). A commission of EPA and state officials is constituted to make recommendations to EPA on appropriate mitigation strategies. Based on the commission's findings and recommendations, EPA is required under section 110(k)(5) to notify affected states of inadequacies in their current state implementation plans and to establish deadlines (not to exceed 18 months) for submitting necessary revisions (commonly known as a SIP call).

Besides authorizing administratively-created transport regions, the 1990 CAA Amendments statutorily created an Ozone Transport Region (OTR) in the Northeast (section 184). This provision required specific additional controls for all areas (not only nonattainment areas) in that region, and established the Ozone Transport Commission (OTC) for the purpose of recommending to EPA regionwide controls affecting all areas in the region.

In addition, the 1990 CAA Amendments rewrote the provisions of Sec. 126 regarding interstate transport of pollution. Under Section 126(b), any state or political subdivision may petition EPA for a finding that any major source or group of stationary sources located in another state are emitting pollutants that "significantly contribute" to the nonattainment of a NAAQS by their state. EPA is to respond to the petition within 60 days. If the petition is granted, the offending sources must cease operations within 3 months unless the sources comply with emission controls and compliance schedules as determined by EPA to bring them into compliance with the section.

The Ozone Transport Assessment Group

In 1995, EPA issued a planning guidance memorandum for ozone nonattainment areas classified serious or above. Among its provisions was a call for a 2-year regional assessment of ozone transport and control strategies. The goal was to reach consensus between EPA and the affected states on necessary additional regional and other emission reductions to achieve attainment in ozone transport areas. Based on results, states would submit plans by mid-1997 for appropriate local and regional controls to achieve attainment. If no consensus were reached, EPA stated it would use its authority under the Clean Air Act (CAA) to ensure the required reductions are achieved (particularly Section 126 and/or section 110).⁽¹⁾

Following a recommendation of the Environmental Council of the States (ECOS) for a national work group on ozone, EPA, the 37 easternmost states and the District of Columbia, industry representatives, and environmental groups formed an Ozone Transport Assessment Group (OTAG) partnership, which initially met in May, 1995. The policy arm of OTAG consisted of the state environmental commissioners from the 37 states and the District of Columbia and senior EPA officials. It was this Policy Group that voted on the proposals to be included in recommendations to the states and EPA.

To develop the necessary assessment data, OTAG created three subgroups and six workgroups to address modeling and assessment issues, strategies and controls, along with outreach and communications. Each subgroup held open working meetings to receive input from various stakeholders. The recommendations of these subgroups were submitted to the Policy Group via joint sessions of the Strategies and Controls and Modeling and Assessment Subgroups. The final OTAG meeting was June 19, 1997.⁽²⁾

OTAG Assessment Results

OTAG analytical work began with the development of an improved emissions inventory from which extensive modeling of ozone transport could be conducted. Based on that modeling, two workgroups reached several conclusions with respect to ozone transport and the anticipated benefits from increased nitrogen oxide (NOx) and volatile organic compound (VOC) control. Among those findings particularly relevant in light of EPA's new 8-hour ozone National Ambient Air Quality Standard (NAAQS)⁽³⁾ are the following:

• The perceived contribution of ozone transport is strongly dependent on how the ozone "problem" is defined. Local emissions are more important with respect to peak 1-hour concentrations than with respect to lower concentration thresholds and concentrations assessed over longer averaging times (8-hour or seasonal averages), where larger areas and longer distance scales become increasingly important.
• The central portion of the [37-State] OTAG domain is unique with respect to ozone and ozone transport. It persistently has elevated ozone levels producing an "ozone pool." Transport in any direction from this region has been implicated with high ozone levels in neighboring areas.
• High ozone levels in the southern portion of the OTAG domain are typically associated with stagnant [pollutant] transport conditions resulting in shorter transport scales than on average. In contrast, high ozone levels in the northern portion of the OTAG domain are more typically associated with higher speed and persistent transport conditions from inside the OTAG domain across state lines.
• The proposed 8-hour ozone standard [now finalized] will result in significantly more closely adjacent nonattainment areas across the OTAG domain. This will make ozone transport more critical with respect to nonattainment than it is under the current [now previous] standard.⁽⁴⁾

OTAG Recommendations⁽⁵⁾

Of the 37 states that constituted OTAG, 32 voted in favor of the final recommendations with Alabama, Kentucky, Michigan, Virginia, and West Virginia voting against. Those recommendations covered numerous areas, ranging from utility controls to increased research.

Size of Transport Region. Which states should comprise the ozone transport region was debated continuously during OTAG deliberations. Particularly, states west of the Mississippi River and some southern states argued that their emissions had little or no effect on ozone transport. OTAG recommended that these "coarse-grid" states be exempt from OTAG-related controls. These states include North Dakota, South Dakota, Nebraska, Kansas, Oklahoma, Texas, Minnesota, Iowa, Arkansas, Louisiana, Mississippi, and Florida, as well as parts of Maine, New Hampshire, Vermont, New York, Michigan, Wisconsin, Missouri, Alabama, and Georgia.

OTAG did recommend that Iowa work with Wisconsin in developing implementation plans for southwestern Wisconsin; that Kansas work with Missouri on implementation plans for Kansas City; and, that Oklahoma, Texas, Arkansas, and Louisiana share modeling results with Missouri.

Utility NOx Controls. Increasing NOx control on utility plants was one of the most contentious issues within OTAG. The final recommendation reflects this contention by being wide enough to cover all points of view. Specifically, OTAG recommended a range in the 26 "fine grid" states between current Clean Air Act controls (i.e., existing requirements) to the lesser of 85% reduction from 1990 rates or a .15 lb/mmBtu performance standard (a significant increase in stringency). It is arguable how such a wide range provided any guidance to EPA on implementing regional controls. Essentially, the range gave EPA a free hand in deciding on appropriate tonnage levels in its proposed Ozone Transport Rule, discussed later.

OTAG did recommend that any statewide tonnage levels proposed by EPA be revised if additional subregional modeling or air quality analyses justified it. Likewise, OTAG recommended that EPA consider any submitted comments and subregional modeling with respect to proposed statewide tonnage levels prior to finalizing SIP calls.

Non-Utility Stationary Source NOx Control. OTAG's recommendations for non-utility stationary sources mirrored those for the utility sources. Dividing non-utility facilities into medium and large sources, OTAG recommended that large sources be controlled in proportion to how much utility sources are controlled. If utility sources are required to reduce 55%, large non-utility sources should be required to reduce 55%. This parallel requirement weakens as the utility reductions increase; for an 85% utility source reduction, OTAG recommended only a 70% reduction for large non-utility sources.

Requirements for medium sources are also based on utility source requirement, but considerably less stringent. For 55%-65% utility reductions, no medium non-utility control is recommended. For 75%-85% utility reduction, OTAG recommended that medium non-utility sources be required to install reasonably available control technology (RACT), a determination made by the states based on EPA guidance. As with the utility control recommendations, OTAG urged flexibility if additional modeling and air analyses warrant it.

Federal Emission Control Measures. In OTAG's view, the federal government has a major role in assisting states achieve compliance, particularly with respect to new stationary source control and mobile source control. OTAG outlined nine specific areas where the federal government should develop, adopt, and implement stringent national NOx and/or VOC control requirements to assist the OTAG region in achieving compliance with the ozone NAAQS. These areas include architectural and industrial maintenance coatings, consumer and commercial products, autobody refinishing, reformulated gasoline, small engines, heavy duty highway engines, heavy duty non-road diesel engines, and locomotive engines.

OTAG also recommended that EPA act on some fuel-related items. These recommendations included EPA (1) adopting a rule on an appropriate fuel sulfur standard to improve long-term performance of emission control devices, (2) evaluating emission benefits and other effects of cetane adjustments on current diesel engines and adopting standards as appropriate, and (3) considering and potentially adopting new diesel fuel standards by the year 2004 through existing deliberative processes.

Finally, OTAG supported and encouraged adoption of a National Low Emission Vehicle Program.

Specific State Actions. OTAG also recommended that "fine grid" states consider adopting enhanced inspection and maintenance (I&M) program in urban areas with populations greater than 500,000, the continued use of reformulated gasoline (RFG) in both mandated and opt-in areas, among other provisions.

Footnotes

1. ^(back)Nichols, Mary D. "Ozone Attainment Demonstration," U.S. EPA: Assistant Administrator for Air and Radiation, March 2, 1995.

2. ^(back)Background on OTAG and its final report are available via EPA's web site at http://www.epa.gov/ttn/otag/

3. ^(back)For a summary of the new ozone NAAQS, see CRS Report 97-721 ENR, Air Quality Standards: EPA's Final Ozone and Particulate Matter Standards. For a longer discussion, see CRS Report 97-8 ENR, Air Quality: EPA's New Ozone and Particulate Matter Standards.

4. ^(back)Air Quality Analysis Workgroup. OTAG Air Quality Analysis Workgroup Results Summary. http://capita.wustl.edu/otag/Reports/ExecSumm/AQASUM3.html

5. ^(back)OTAG's recommendations are attached to EPA's proposed Ozone Transport Rule as Appendix B. 62 Federal Register 60376-60379, November 7, 1997.

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