June 26, 1997
 

Ms. Mary D. Nichols                                           Mr. Steven A. Herman
Assistant Administrator                                       Assistant Administrator
Office of Air and Radiation                                 Office of Enforcement and
United States Environmental                               Compliance Assurance
Protection Agency                                               States Environmental
401 M Street, SW                                                Protection Agency
Washington, DC 20460                                       401 M Street, SW
                                                                            Washington, DC 20460
 

Dear Ms. Nichols/Mr. Herman:

            We are writing to request a meeting with you at your earliest convenience to bring focus and closure to issues associated with the integration of the federal air toxics program with California's air pollution control program.

            We have been working diligently with the United States Environmental Protection Agency (U.S. EPA) Region IX and various headquarter offices over the last several years to seek reasonable and practical solutions to integrate the new federal air toxics program into California's existing air toxics and criteria air pollutant control program. For the last six months, we have been working with the Section 112(l) Negotiating Team (Team).⁽¹⁾The Team's overall objective is to develop a consensus approach that ensures California's program will:
 

a)   streamline and eliminate duplicate requirements;
 

b)   provide controlled emissions that are at least equivalent to the National Emission
      Standards for Hazardous Air Pollutants;

c)   provide enforcement mechanisms that are practical, effective, and consistent with
      California's air pollution control program and adequate to assure compliance; and

d)   meet the identified needs of stakeholders.

            We expected to have workable solutions in place by June 30, 1997. Unfortunately, despite the tremendous time and hard work put forth by the U.S. EPA for the Team, it is evident that a practical solution is not likely to occur without your direct participation. We believe that the obstacles to finding an acceptable resolution are based on the following:
 

Ms. Mary D. Nichols/Mr. Steven A. Herman
June 26, 1997
Page Two
 
 

• The U.S. EPA's insistence that the only acceptable approach to ensuring that emission reductions are achieved is to incorporate each and every work practice standard and monitoring, recordkeeping, and reporting provision specified in the federal standard. This becomes a major hurdle because of the general inability to relate these standards and provisions to quantifiable emission reductions. Consequently, the default basis for evaluation becomes each and every provision in the federal standard. State and local requirements often are based on completely different approaches, which may entail prohibitory rules for both hazardous air pollutants and criteria air pollutants, permitting requirements, field inspections, and compliance assistance programs. Our experience is that such a rigid and inflexible approach to reviewing equivalency submittals precludes a workable equivalency process and must be changed to achieve a smooth integration of programs.

• The U.S. EPA's continued reluctance to recognize the expertise of state and local agency personnel. Our experience is that there are many situations that can be efficiently and effectively managed at the local level, without any compromise in public health. It is unrealistic to presume that the U.S. EPA has the resources necessary to address all of the site-specific interpretations that will undoubtedly result from implementation of the federal standards, yet the U.S. EPA continues to maintain that they must approve each and every modification to a federal standard. Certainly such an approach does not foster a workable partnership with state and local agencies.

• The prescriptive nature of the federal standards unnecessarily complicates the equivalency process. The federal standards often specify what equipment can be used to meet the federal requirements. Unfortunately, resource limitations often preclude a thorough evaluation of alternatives, resulting in substantial additional work that must be done in the equivalency process.

• The U.S. EPA's continued delays in developing amendments to the Subpart E regulation. Since the first meeting of the Team, we have been expecting to see the draft regulatory amendments to the Subpart E regulation. We view these amendments as critical to simplifying the equivalency process.

       Our experience with the chrome plating and gasoline distribution equivalency efforts exemplifies the difficulties we are having in finding workable solutions. We are particularly distressed by our continued inability to obtain approval of our draft chrome plating equivalency submittal. After two years of effort on what should have
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Ms. Mary D. Nichols/Mr. Steven A. Herman
June 26, 1997
Page Three
 

been a straightforward and simple effort, we are still "negotiating" issues that, in our opinion, have
little to do with achieving and maintaining emission reductions. These difficulties are in spite of the fact that the emission limitations in the federal rule are largely based on California's pioneering work on emission control technology conducted in the late 1980s.

            Over these past six months, we met with Ms. Felicia Marcus, Regional Administrator, Region IX, on three occasions and participated in six conference calls.⁽²⁾Subgroups of the Team participated in another three conference calls. In addition, we exchanged a dozen documents addressing different aspects of the Team's efforts. Despite these actions, a clear solution is not within reach. However, we believe that the potential for a clear win-win situation exists. Consequently, we are requesting a two-hour meeting with both of you to address these issues and seek your help to bring the process to closure by September 1997.

            Ms. Gail Ruderman Feuer, representing the Natural Resources Defense Council, is an active participant on the Team, is supportive of the negotiations, and is interested in participating in the meeting. We have also asked Mr. William Becker, Executive Director, State and Territorial Air Pollution Program Administrators, and the Association for Local Air Pollution Control Officers to participate in the meeting because we are aware that other states have similar concerns.

            It is critical that we find practical solutions to integrating the federal and state programs now. Several of the federal standards are already in effect and many will come into effect during 1997 and early 1998. In all cases, there are existing state or local regulations that already control hazardous air pollutant emissions from the sources that will be subject to the federal standards. Unless we act quickly, we will impose unnecessary regulatory burdens on California businesses and impose unnecessary administrative burdens on regulatory agencies, but will realize no commensurate environmental benefits.

            For your information, we have included three enclosures to this letter. The first is a proposed agenda for the meeting. The second provides a brief description of the integration issues and a chronology of significant events. The third is a letter dated December 4, 1996, to Ms. Marcus that outlines our fundamental position on equivalency issues.
 
 

 
 Ms. Mary D. Nichols/Mr. Steven A. Herman
June 26, 1997
Page Four
 

            Please be assured that the meeting is intended to compliment all of our efforts and help move the process along. As stated in the objectives, we are committed to achieving equivalent or better emission reductions for each federal emissions standard. Furthermore, we remain committed to continuing our efforts with the Team to develop solutions.

            We look forward to a positive response. If you have any questions, please call Mr. Mike Kenny, Executive Officer, Air Resources Board, at (916) 445-4383.

                                                                        Sincerely,
 

 /s/                                                                    /s/
Michael P. Kenny, Executive Officer            Pat Leyden, Deputy Executive Officer
Air Resources Board                                      South Coast Air Quality Management District
 
 

/s/                                                                     /s/
R. J. Sommerville, Director                            Barbara A. Lee, Air Pollution Control Officer
San Diego County Air Pollution                     Northern Sonoma County Air Pollution
Control District                                               Control District
 
 

/s/                                                                    /s/
Mike Carroll                                                   Michael D. Wang
Regulatory Flexibility Group                         Western States Petroleum Association

Enclosures

cc:      Ms. Felicia Marcus, U.S. EPA Region IX
           Mr. Steve Lipman, U.S. EPA-OAR
           Mr. David Howekamp, U.S. EPA Region IX
           Ms. Lydia Wegman, U.S. EPA-OAQPS
           Mr. Bruce Jordan, U.S. EPA-OAQPS
           Mr. Bruce Buckheit, U.S. EPA-OECA
           Mr. Michael Winer, U.S. EPA-OGC
           Mr. Mark Boese, San Joaquin Valley Air Quality Management District
           Ms. Gail Ruderman Feuer, Natural Resources Defense Council
           Mr. Bill Becker, STAPPA/ALAPCO
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Enclosure 1

Proposed Agenda

                                         Meeting Date/Time:       Be Determined

                                                         Location:       United States Environmental Protection Agency
                                                                               401 M Street, SW
                                                                               Washington, DC 

Enclosure 2

Summary of Issues and Brief Chronology of

Significant Events

• Despite the time and effort expended over the last several years, we and U.S. EPA have been unable to find a mutually acceptable approach for integrating the new federal air toxics program with California's existing air toxics and criteria air pollutant control program.

 Background:

• The federal section 112 program will ultimately result in approximately 120 new rules for California affecting thousands of sources. In California, districts already have prohibitory rules addressing a majority of the same source categories. These rules are usually based on the need to reduce emissions of criteria pollutants, although some such as chrome plating and ethylene oxide sterilizers are specific toxic rules. As such, we expect that the districts will be faced with the amendment of as many as 90 of their rules.
   
• While the Clean Air Act provided for approval of equivalent state regulations, it has been our experience that the resource intensive and prescriptive nature of the section 112(l) equivalency process is not workable. We are being asked to make demonstrations that go beyond the demonstrations made in the development of the NESHAP itself and to unequivocally show that alternative provisions are equal or more stringent to every single requirement in the NESHAP. In most cases, the demonstrations cannot be practically accomplished or are effectively meaningless. We do not believe that this was the Congressional intent in establishing section 112(l).
   
• Our experience is that there is little recognition that California has an existing and effective air pollution control program. We believe we have the capability to achieve the objectives of the federal air toxics program within the context of our existing regulatory framework and the good business practices of our industry. We are totally committed to ensuring that equivalent emission reductions are achieved and maintained through practically enforceable provisions.
   
• It is critical that we find practical solutions to integrating the federal and California programs now. Several of the federal standards are already effective and many will become effective during 1997 and early 1998. In all cases, there are existing State or district regulations that already control hazardous air pollutant emission from the sources that will be subject to the federal standards. Unfortunately, we have no reason to believe that we are close to finding solutions that would allow for a smooth integration of the federal and California programs.

 
   Summary of Efforts:

• The California Air Pollution Control Officers Association (CAPCOA) and the Air Resources Board (ARB) both have been raising integration issues with U.S. EPA for well over three years (see attached chronology of significant events). Over the last year alone, we have participated in over 100 telephone conference calls in the Subpart E reinvention effort. The Title III Work Group, comprised of representatives from ARB, CAPCOA, industry, environmental groups, and U.S. EPA Region IX representatives, met regularly from July 1996 thru March 1997. This group spent a great deal of time developing strawpersons for program approval and for rule substitution. Separate subgroups were formed to address chrome electroplating and gasoline distribution, in the context of rule substitution issues.
   
• In December 1996, a broad coalition of CAPCOA, ARB, and industry representatives sent a letter to U.S. EPA identifying integration problems and recommending solutions for integrating the federal and California Program. In March 1997, a high-level negotiating team consisting of representative from ARB, CAPCOA, Western States Petroleum Association, Regulatory Flexibility Group, Natural Resources Defense Council, U.S. EPA Region IX, and U.S. EPA headquarters met to initiate a process to seek acceptable solutions by June 30, 1997. Unfortunately, while some limited progress has been made, the messages that we have been trying to convey and the approaches that we believe have merit have been saddled with so many obstacles that they will likely be of no real, practical benefit. We generally find that the approaches are based on assuring that any solution will have extremely limited applicability instead of providing necessary flexibility to easily integrate the different programs.
   

Hurdles:

• The biggest hurdle we are facing is in the area of establishing alternative monitoring, recordkeeping, and reporting requirements. There are clearly differences between what the U.S. EPA is proposing and what is existing practice in the districts. We must weigh the value of imposing new and different requirements on California sources with the need to make sure that imposed requirements are understood and practically enforceable. We are willing to upgrade our compliance and enforcement measures where we believe they are inadequate, but we must do this in the context of our existing program.
   
• Another significant hurdle is the pervasive view among U.S. EPA that all of the NESHAP requirements are the minimum requirements necessary to regulate a particular source category. For example, we question the benefit of amending California's seven year old chrome plating rule to add over 40 pages of additional text, which almost exclusively addresses administrative requirements. We also note that oversight inspections of 80 chrome plating sources in California conducted between 1991 and 1995 indicated an 85 percent compliance rate with the emissions-related requirements of the existing chrome plating rule.

• Other significant hurdles include: the prescriptive nature of the federal standards; the limitations of the existing Subpart E regulation, the level, scope, and time required for equivalency demonstrations; the practical enforceability of the NESHAPs; and the delegation f authority to make appropriate implementations decisions.

 Consequences:

• If we cannot find acceptable solutions, we will be faced with duplicate regulatory programs, which creates uncertainty for the regulated industries, the regulatory agencies, and the public. We will also impose unnecessary regulatory burdens on industry and unnecessary administrative burdens on regulatory agencies.
   
• These consequences are of particular concern for those federal standards that are already effective or are going to become effective during 1997 or early 1998. For these federal standards, we already know that there are existing State or district regulations and permit requirements that will result in duplicative requirements.
   
• In addition, we expect that there will be substantial pressure placed on the California Legislature and regulatory agencies to accept only the federal program, resulting in the loss of California's ability to establish more health-protective standards and the nationwide loss of the proving ground for many of the federal standards.

CHRONOLOGY OF SIGNIFICANT EVENTS
INTEGRATION OF THE FEDERAL AIR TOXICS PROGRAM
WITH THE CALIFORNIA AIR POLLUTION CONTROL PROGRAM
June 1997

CHRONOLOGY OF SIGNIFICANT EVENTS
INTEGRATION OF THE FEDERAL AIR TOXICS PROGRAM
WITH THE CALIFORNIA AIR POLLUTION CONTROL PROGRAM
June 1997

Enclosure 3

Letter to Ms. Felicia Marcus Dated December 4, 1996

               (see letter from to U.S. EPA Region IX Felcia Marcus on 12/4/96 below.)