Regional Reports: Region 9

Eric Hiser
TESTLaw Practice Group,
von Oppenfeld, Hiser & Freeze, P.C.
Phoenix, Arizona
Ehiser@testlaw.com

I. NSR Reform Update

The Bush administration's recently announced that the NSR Reform proposal is the subject of considerable discussion throughout Region 9, but so far most state and local agencies have not taken "official" positions on the proposal. There appears to be general agreement that the clean unit exemption, plant-wide applicability limits (PALs), and pollution control project exclusion are generally workable, but there is considerable concern about implementation. For example, several agencies have informally questioned the length of the proposed clean unit exemption period, support a periodic "ratchet down" of PALs and have questioned the basis for excluding "major" projects at either clean units or PAL facilities where there is a "real opportunity" to achieve additional emissions reductions. Many of these comments are echoed by the Western environmental community.

Most of the concern expressed by Western agencies appears directed at the proposed addition of a "cost-based" safe harbor provision to the routine maintenance, repair and replacement exemption. Few agencies appear wholly comfortable with the proposed safe harbor, with many believing that substantial increases in emissions may occur as a result of providing a cost-based safe harbor. Another concern, less often voiced, is a concern that the agencies may be poorly placed to challenge businesses' claims about whether particular projects meet "safe harbor" limits. Many industry participants have a related, but opposite, concern that the safe harbor cost based test will effectively limit allowable routine maintenance, repair and replacement, despite EPA assurances that this is not the intent of the program.

No real consensus yet appears to exist on the impact of the proposed abandonment of the actual to potential test. Industry generally supports the abandonment of this test, while the agencies are more ambivalent. Until the Administration proposes the actual method for quantifying emissions, the debate on this issue will probably remain in a low simmer.

II. Judicial Developments

A. California

In United States v. Catalina Furniture, Civil Action No. CIV-02-03974 (C.D. Cal.), the parties entered into a consent decree to resolve alleged violations of the Clean Air Act at a facility located in La Mirada, California owned by Capital and operated by Catalina. Catalina leased the facility along with four spray booths from Capital. Capital transferred its permits for the spray booths to Catalina. Catalina installed an additional eleven spray booths. The complaint alleged that Catalina failed to obtain permits to construct or operate the spray booths; that Catalina failed to install equipment to meet LAER; that Catalina failed to obtain emission reduction credits; that Capital allowed the operation of its spray booths without obtaining permits or installing necessary control equipment; and that Capital illegally attempted to transfer its permits. Catalina has ceased operations at the facility and its assets have been sold. Catalina agreed to pay a civil penalty of $50,000, plus interest and Capital agreed to pay a civil penalty of $30,000 plus interest. Capital surrendered its permits for the four spray booths and relinquished any right to emission reduction credits. Catalina agreed not to re-commence operations at the La Mirada facility. Catalina also agreed that if it begins operations of coating equipment in the South Coast Air Basin in California it will obtain permits and limit emissions by using ultra-low VOC content coatings.

On May 14, 2002, EPA entered into a settlement agreement with the plaintiffs in Association of Irritated Residents v. U.S. EPA, No. 02-70160, Medical Alliance for Healthy Air v. Whitman, No. 02-70177, and Communities for a Better Environment v. U.S. EPA, No. 02-70191 (9th Circuit) over the EPA's full approval of the part 70 operating permit programs in 34 air districts in the state of California, published at 66 FR 63503 (Dec. 7, 2001). In the settlement, EPA agreed to issue a Notice of Deficiency for all 34 district programs based on the exclusion of certain agricultural sources. See discussion below.

III. Regulatory Developments

A. Arizona

1. Attainment Designations

Bullhead City PM10 Nonattainment Area. EPA proposed to approve the moderate area plan and maintenance plan for the Bullhead City area in Arizona and to revise the boundaries and redesignate the area from nonattainment to attainment for PM10.

Maricopa County PM10 Nonattainment Area. On July 25, 2002, EPA approved the serious area particulate matter (PM-10) plan for the Maricopa County portion of the metropolitan Phoenix (Arizona) PM-10 nonattainment area, granted Arizona's request to extend the Clean Air Act deadline for attaining the annual and 24-hour PM-10 standards in the area from 2001 to 2006. On July 2, 2002, EPA determined that the Maricopa County PM-10 nonattainment area SIP was substantially inadequate to attain the 24-hour particulate (PM-10) air quality standard at the Salt River monitoring site, a small subarea of the nonattainment area and issued a SIP call. 67 Fed. Reg. 44369 (July 2, 2002).

Payson Area PM10 Nonattainment Area. EPA approved the moderate area plan and maintenance plan for the Payson area in Arizona and redesignated the area from nonattainment to attainment for PM10. 67 Fed. Reg. 43013 (June 26, 2002).

2. SIP Revisions

Maricopa County Environmental Services Department. EPA approved MCESD's fugitive dust rules, Woodburning Restrictions Ordinance, and commitments by Maricopa County jurisdictions to implement PM-10 controls. 67 Fed. Reg. 48717 (July 25, 2002). EPA proposed limited approval and limited disapproval of Rule 331, solvent cleaning, with disapproval related to failure to reference EPA guidance and lack of clarity in boiling point effects, among others. 67 Fed. Reg. 38630 (June 5, 2002).

B. California

1. Title V Developments
Statewide Pursuant to 40 CFR 70.10(b)(2)(i), on July 24, 2002, EPA proposed to withdraw, in part, approval of the following 34 Clean Air Act Title V Operating Permits Programs in the state of California: Amador County Air Pollution Control District (APCD), Bay Area Air Quality Management District (AQMD), Butte County AQMD, Calaveras County APCD, Colusa County APCD, El Dorado County APCD, Feather River AQMD, Glenn County APCD, Great Basin Unified APCD, Imperial County APCD, Kern County APCD, Lake County AQMD, Lassen County APCD, Mariposa County APCD, Mendocino County APCD, Modoc County APCD, Mojave Desert AQMD, Monterey Bay Unified APCD, North Coast Unified AQMD, Northern Sierra AQMD, Northern Sonoma County APCD, Placer County APCD, Sacramento Metro AQMD, San Diego County APCD, San Joaquin Valley Unified APCD, San Luis Obispo County APCD, Santa Barbara County APCD, Shasta County APCD, Siskiyou County APCD, South Coast AQMD, Tehama County APCD, Tuolumne County APCD, Ventura County APCD, and Yolo-Solano AQMD. EPA based its proposed action on its finding that the State's agricultural permitting exemption at Health and Safety Code 42310(e) "unduly restricts the 34 local districts' ability to adequately administer and enforce their Title V programs, which have previously been granted full approval status." Therefore, EPA proposed to withdraw approval of those portions of the 34 district Title V programs that relate to sources that would be subject to Title V but for the state agricultural exemption ("state-exempt major stationary agricultural sources"). EPA proposes to implement a partial federal operating permits program under 40 CFR part 71 ("Part 71 program") for state-exempt major stationary agricultural sources. Comments on this proposed action must be received in writing by Sept. 3, 2002. 67 Fed. Reg. 48426 (July 24, 2002).

2. Attainment Determinations

San Joaquin Valley Unified APCD. On July 23, 2002, EPA issued a notice that the San Joaquin Valley did not attain the 24-hour and annual particulate matter (PM-10) NAAQS and issued a SIP Call, due December 31, 2002, for revisions that provide for attainment of the national PM-10 standards in the San Joaquin Valley and achieve five percent annual reductions in PM-10 or PM-10 precursor emissions as required by CAA Section 189(d). 67 Fed. Reg. 48039 (July 23, 2002).

Santa Barbara County APCD. On July 1, 2002, EPA proposed to determine that the County had attained the 1-hour ozone air quality standard by the deadline required by the Clean Air Act and proposed to approve 1-hour ozone contingency measures as revisions to the Santa Barbara portion of the SIP. 67 Fed. Reg. 44128 (July 1, 2002).

3. SIP Revisions

Bay Area AQMD. EPA approved Rule 8-34 on VOC emissions from solid waste landfills into the SIP. 67 Fed. Reg. 44062 (July 1, 2002). EPA proposed to partially approve and partially disapprove Rule 8-16, solvent cleaning operations, with partial disapproval based on an annual calculation, which EPA believed was not practically enforceable. 67 Fed. Reg. 37630 (June 5, 2002). EPA approved Rule 9-11, Nitrogen Oxides and Carbon Monoxide From Electric Power Generating Steam Boilers. 67 Fed. Reg. 35434 (May 20, 2002).

El Dorado County APCD. EPA approved EDCAPCD Rule 244 on VOC emissions from crude oil separation and storage operations, liquid reactive organic compound storage, and organic liquid loading and transport. 67 Fed. Reg. 45066 (July 8, 2002).

Great Basin APCD. EPA approved revisions to Rule 432 concerning the emission of particulate matter (PM-10) from open burning/open detonation (OB/OD) of propellants, explosives, and pyrotechnics (PEP). 67 Fed. Reg. 39616 (June 10, 2002).

Imperial County APCD. EPA approved updated definitions in the APCD rules. 67 Fed. Reg. 45064 (July 8, 2002).

Lake County APCD. EPA approved a number of rules on the emission of particulate matter (PM-10) from open fires and prescribed burning. 67 Fed. Reg. 40867 (June 14, 2002).

Monterrey Bay Unified APCD and South Coast AQMD. EPA approved revisions to the Monterey Bay Unified APCD (MBUAPCD) (Rule 416) and South Coast Air Quality Management District (SCAQMD) (Rule 1102) SIPs for VOC emissions from solvent cleaning operations and dry cleaners using solvent other than perchloroethylene. 67 Fed. Reg. 46876 (July 17, 2002).

San Joaquin Valley Unified APCD. EPA approved rules 4661 (general organics), 4662 (solvent degreasing), and 4663 (solvent cleaning). 67 Fed. Reg. 47701 (July 22, 2002). EPA also approved Rule 4602 - Motor Vehicle and Mobile Equipment Coating Operations; Rule 4604 - Can and Coil Coating Operations; Rule 4606 - Wood Products Coating Operations; Rule 4607- Graphic Arts; and, Rule 4684 - Polyester Resin Operations. 67 Fed. Reg. 42999 (June 26, 2002). EPA also approved Rule 4603 on VOC emissions from surface coating of metal parts and products. 67 Fed. Reg. 42726 (June 25, 2002). EPA also approved Rule 4101, opacity, 67 Fed. Reg. 39659 (June 10, 2002), and 4653, adhesives, 67 Fed. Reg. 30591 (May 7, 2002).

Santa Barbara County APCD. EPA approved SBCAPCD Rules 325 and 326 as revisions to the SIP for VOC emissions from crude oil separation and storage operations, liquid reactive organic compound storage, and organic liquid loading and transport. 67 Fed. Reg. 45066 (July 8, 2002).

South Coast AQMD. EPA approved revisions to Rule 1102 for VOC emissions from solvent cleaning operations and dry cleaners using solvent other than perchloroethylene. 67 Fed. Reg. 46876 (July 17, 2002). EPA approved Rule 1150.1 for VOC emissions from landfills. 67 Fed. Reg. 44062 (July 1, 2002). EPA approved in part and disapproved in part Rule 1131 on VOC emissions from food product manufacturing and processing operations. The disapproval was for inadequate criteria for approval of alternative measures. 67 Fed. Reg. 43004 (June 26, 2002). EPA approved Rules 1158 and 1186 concerning storage, handling, and transport of coke, coal and sulfur; and from paved and unpaved roads and livestock operations. 67 Fed. Reg. 39616 (June 10, 2002). EPA also proposed to approve Rule 518.2, Federal Alternative Operating Conditions. 67 Fed. Reg. 38626 (June 5, 2002), and Rule 442, Usage of Solvents, 67 Fed. Reg. 36152 (May 23, 2002). EPA also proposed conditional approval of SCAQMD's NOx and SOx RECLAIM program rules (2000-2020). 67 Fed. Reg. 31998 (May 13, 2002).

Tehama County APCD. EPA approved Rules 4:31 and 4:37 on emissions from industrial, institutional and commercial boilers, steam generators and process heaters and stationary gas turbines. 67 Fed. Reg. 34405 (May 17, 2002).

Ventura County APCD. EPA approved a revision to the Ventura County APCD SIP for VOC emissions from soil decontamination operations. 67 Fed. Reg. 46596 (July 16, 2002). EPA proposed to approve revisions to the permitting and new source review (NSR) rules (10 and 226.1-.4, .6 & .11) and determined that the revisions corrected deficiencies in the Dec. 7, 2000, limited approval and limited disapproval (65 FR 76567), thereby deferring the imposition of sanctions. 67 Fed. Reg. 42500 & 42516 (June 24, 2002). EPA also approved Rule 74.6, surface cleaning and degreasing, 67 Fed. Reg. 38396 (June 4, 2002), and Rule 74.19, graphic arts, 67 Fed. Reg. 36125 (May 23, 2002).

C. Nevada

EPA proposed to approve the redesignation of the current single unclassifiable area for PM10 into numerous individual areas to be consistent with the area definitions for other pollutants. EPA also proposed approval of a subdivision of one of those areas, hydrographic area 61 (Boulder Flat), into two areas. EPA also proposed to delete certain total suspended particulate (TSP) area designations that are no longer necessary. 67 Fed. Reg. 21194 (Apr. 30, 2002).