U.S. House of Representatives: Committee on Energy and Commerce, Republicans Prepared Witness Testimony: Methier, Ronald

Subcommittee on Energy and Air Quality
July 22, 2003
09:30 AM
2123 Rayburn House Office Building

Mr. Ronald Methier
Chief
Georgia Department of Natural Resources Environmental Protection Division Air Protection Branch
4244 International ParkwaySuite 120
Atlanta, GA, 30354

My name is Ronald Methier. I am the Chief of the Air Protection Branch of the Georgia Environmental Protection Division. On behalf of the State of Georgia, I would like to thank you for this opportunity to testify on what is a very important issue, not only to the people of Georgia, but I believe to the people of the United States as a whole.

You have asked me to address the bump-up policy under Title 1 of the Clean Air Act. As you know, we have been grappling with this policy in Georgia for several years. The Atlanta Ozone Non-Attainment Area is one of fifteen (15) Serious ozone non-attainment areas that failed to attain the one-hour National Ambient Air Quality Standard for ground-level ozone by the 1999 attainment date established in the Clean Air Amendments of 1990. Atlanta faced a number of challenges during the 1990s that prevented attainment. But its failure to attain can also be attributed in significant part to the problem of "downwind transport." For this reason, Atlanta applied for and received an extension of its attainment date under EPA's Extension Policy for non-attainment areas affected by downwind transport.[1] EPA's recent decision to rescind that policy, as a result of litigation, will result in a "bump-up" that is both unfair and counter-productive.

The most basic rationale for EPA's Extension Policy is the recognition that the original, 1999 attainment date was never intended to stand alone. The 1999 attainment date was supposed to be the culmination of a cooperative effort between EPA and the States. The states were assigned responsibility for preparing State Implementation Plans to control local emissions. At the same time, Congress recognized that air pollution does not respect political boundaries. Therefore, Congress assigned EPA the responsibility to adopt a regional plan to prevent upwind emissions from interfering with attainment in downwind states.

Unfortunately, EPA was unavoidably delayed in its effort to adopt effective regional transport controls. The delay was caused by EPA's discovery of gaps in the data and scientific understanding of the formation and transport of ozone. After a monumental effort by EPA and the affected states, these gaps have now been filled. The result is known as the "NOx SIP Call Rule," which is scheduled to be implemented by 2004. The best available models predict that Atlanta will attain the one-hour standard for ground-level ozone as soon as the NOx SIP Call Rule is implemented.

The NOx SIP Call rule represents a tremendous step forward, but it came five years too late. Atlanta was supposed to attain by 1999. Because the NOx SIP Call Rule has not yet been implemented, Atlanta continues to be significantly affected by emissions that blow into the area from out-of-state.[2]

Meanwhile, Georgia has made tremendous progress in controlling emissions at the local level. Atlanta's air quality is steadily improving despite exponential growth. The Clean Air Act Amendments of 1990 classified non-attainment areas based on air quality at that time, which put Atlanta in the "serious" classification. If Atlanta were reclassified based on data through 2002, it would be considered a "moderate" non-attainment area. With the continued air quality progress we are seeing this year, the end of 2003 monitoring data could classify the area as "marginal."

Under these circumstances, EPA was right to extend the attainment date for Atlanta. EPA needed to extend the attainment date for Atlanta to adjust the statutory scheme to account for EPA's own delay in addressing the problem of downwind transport. Extending the attainment date also prevented Atlanta from being forced to adopt new local control measures that are at best superfluous, and at worst counter-productive.

Proposed legislation to codify the Extension Policy is attached behind Tab A. Additional background is provided below.

Fundamentally, the bump-up provision will have unintended consequences if it is applied to areas that fail to attain as a result of upwind emissions. By design, bump-up limits the state's ability to evaluate and adopt local emissions controls. This provision is based on the assumption that non-attainment can be attributed to the state's failure to adopt a State Implementation Plan with adequate local emissions controls. This assumption does not hold for downwind areas affected by transport.

The Clean Air Act Amendments of 1990 classified ozone non-attainment areas into five categories and assigned "attainment dates" to each classification.[3] Each State was required to develop a State Implementation Plans ("SIP") to bring its non-attainment areas into attainment by the applicable attainment date. As a rule, the the Act left it to the states, subject to the approval of EPA, to determine the content of the SIP. Congress did, however, prescribe certain elements that were required to be included. These requirements correspond to the area's classification as a Marginal, Moderate, Serious, Severe, or Extreme. The requirements, which are set forth at 42 U.S.C. § 7511a(a)-(e), become very prescriptive for the higher classifications.

The "bump-up" provision is designed to force the states to remedy deficiencies in the SIP. Thus, if an area fails to attain by the applicable attainment date, it is "bumped up" to the next higher classification.[4] As a result, the state is forced to adopt the emissions control measures that are prescribed for the next higher classification. This is the only legal consequence of missing the attainment date. No other penalties apply.[5] The Act does not generally impose penalties for nonattainment because the emphasis in the Act is on planning and adaptive management, not punishment.[6]

Bump-up does not make sense if there are no deficiencies in the SIP to remedy. This is the case for areas that are significantly affected by downwind transport. In such areas, the local emissions controls may be perfectly sufficient. In Atlanta, for example, EPA has confirmed that Georgia EPD has already adopted all "reasonably available control measures" at the local level.[7] These controls are projected to bring Atlanta into attainment as soon as the NOx SIP Call Rule is implemented in 2004. If we fail to attain in 2004, we will need to reevaluate the SIP and incorporate additional local emissions controls. It would be premature and counter-productive, however, to make this judgment before the NOx SIP Call rule is implemented.

It is important to note that Georgia's resistance to getting bumped up is not just a fairness issue. We wholeheartedly agree that we must do everything practicable at the local level to control emissions. For this reason, Georgia EPD has already adopted the Severe-area controls that would have any beneficial effect on the ozone situation in Atlanta.[8] Our problem is that the remaining Severe-area requirements will do nothing to help clean the air, and might actually make it worse.

This situation highlights an overall problem with Subpart 2 of the Clean Air Act Amendments of 1990, which is that the ozone provisions are far too prescriptive. The ozone problem is too local and too complicated for a one-size-fits-all solution. What works for Chicago might not work for Atlanta. In fact, the prescription for Severe areas is not right for Atlanta. One requirement in particular - the requirement for Severe Areas to use Federal Reformulated Gasoline ("Federal RFG") - could actually impede our progress toward clean air.

When the Clean Air Act was amended in 1990, it seemed appropriate to mandate a one-size-fits-all solution to the ozone problem. At that time, most scientists believed that ozone was best controlled by reducing emissions of volatile organic compounds ("VOCs").[9] We now know, however, that this strategy is not right for Atlanta.

EPA confirmed this finding in a study prepared jointly with the National Academy of Sciences. The report was submitted in accordance with Section 185B of the Clean Air Act, which directed EPA to study and report on the relative benefits of VOC and NOx controls in reducing ozone levels. EPA submitted its "185B Report" to Congress in July 1993.

Focusing specifically on Atlanta, 185B Report concludes that certain areas can best control ozone by reducing NOx emissions. This shift in focus stemmed from an increased awareness of the role of biogenic VOCs (i.e., VOCs from natural sources such as trees) in the formation of ozone. In essence, the 185B Report found that ozone in Atlanta is "NOx limited," given the abundance of natural VOCs in the atmosphere. From a practical standpoint, this means that it is far more effective to control ozone by reducing NOx emissions than by reducing VOC emissions.[10]

EPA immediately recognized the significance of this finding. EPA noted in particular that the Atlanta studies "cast uncertainty on past emissions control strategy approaches" - including some that had been mandated by the Clean Air Act Amendments of 1990.[11] EPA elaborated as follows:

The important conclusion from this analysis is that, as pointed out by [the National Academy of Sciences] and agreed by EPA, the latest evidence suggests that the ozone precursor control effort should focus on NOx controls in many areas [particularly but not only in Atlanta]. The development and implementation of control programs should not be hindered by a bias favoring one control direction over another. This is extremely significant because it raises questions regarding the effectiveness of the VOC and NOx control programs mandated by the current CAA.[12]

This new understanding is directly relevant to the basic rationale for the Extension Policy. Further studies have confirmed that emissions control programs that Georgia EPD would be required to adopt if Atlanta were bumped up to Severe would not improve air quality. Indeed, while most of these control measures are merely superfluous, a few are actually counter-productive.

Of the items prescribed for Severe non-attainment areas, the most counter-productive is the requirement to use Federal RFG. Severe areas are required to use Federal Reformulated Gasoline or "Federal RFG" within one year of being bumped up to Severe.[13] Unfortunately, Federal RFG is not the right fuel solution for Atlanta. The problem with Federal RFG is that it is designed to reduce VOC emissions, as opposed to NOx emissions. Specifically, Federal RFG is required to reduce VOC emissions by at least 25% in comparison with conventional gasoline.[14] By contrast, the only Federal RFG requirement pertaining to NOx is that NOx emissions must be "no greater than" the level of such emissions from conventional gasoline.[15] Federal RFG is obviously not the right fuel solution for a NOx-limited area like Atlanta.[16]

Georgia EPD has adopted a fuel program that is superior to Federal RFG for Atlanta's conditions because it is specifically designed to reduce NOx emissions.[17] The program, which is being implemented in two phases, will reduce NOx emissions by 12.0%, or 23.54 tpd (VOCs and toxics will be reduced by more than 25%) by September 2003.[18]

Georgia Gasoline is a critical part of Georgia EPD's strategy to improve air quality through NOx reductions and to bring Atlanta into attainment with the ozone standard by 2004.[19] Georgia EPD and EPA have both determined that Georgia's low-sulfur program is "necessary for the Atlanta nonattainment area to achieve the [national ambient ozone standard] in a timely manner."[20] EPA has further determined that, compared to all other potentially available control measures, Georgia's fuel program is the most reasonable and practicable measure available to reduce emissions from ozone precursors in the Atlanta area.[21]

If Atlanta is bumped up to Severe, Atlanta will lose the benefits of this necessary control measure, which will be displaced by Federal RFG.[22] NOx emissions from motor vehicles in this area would very likely increase, producing an increase in ozone concentrations.[23]

Fortunately, the RFG problem is easy to fix. Even if the Extension Policy is not codified, the RFG problem could be solved by granting Atlanta a two-year extension on the requirement to adopt Federal RFG as a Severe area. This short extension would solve Georgia's RFG problem because the benefits of Georgia's low-sulfur program will phase-out as a new federal low-sulfur mandate phases in. The federal low-sulfur program will be fully phased-in in 2006. Therefore, by the Fall of 2006, Georgia EPD should be able to revoke the state low-sulfur rule, and adopt federal RFG, without any adverse consequences to the region's air quality.[24]

Proposed legislation is included behind Tab B. Note that this legislation has been drafted to solve Atlanta's problem without having any adverse impact on the nationwide RFG program. This fix would not require a permanent change to any substantive provision of the RFG program, and would not affect any other area.[25]

Another example of a misguided mandate is the penalty provision of 185.[26] If Atlanta is bumped up to Severe and then fails to attain by 2005, Georgia EPD will be forced to impose exorbitant penalties on major stationary sources within the Atlanta non-attainment area. Section 185 is unfair because it would penalize businesses for a problem that is totally beyond their control.

It would be wrong to penalize major stationary sources in Atlanta, which range from large power plants and auto assembly plants down to small businesses, because these businesses are not the problem. Unlike some other areas of the country, the biggest contributor to ozone in Atlanta is the transportation sector. We have already imposed strict emissions limits on the major stationary sources, requiring them to adopt the best emissions control technologies available. These businesses have done their part by complying with these strict permit limits. Under Section 185, however, compliance with strict permit limits would be no defense. Businesses in full compliance with their permits would still be fined millions of dollars on an annual basis.[27] By our calculations, 63 businesses in full compliance with their permits would pay a total of over $52,000,000 per year if we fail to attain by 2005. This result is highly punitive and unfair. Indeed, it is arbitrary in the extreme to penalize businesses for a problem that is beyond their control.

Even worse, Section 185 would require us to penalize these businesses for emissions of both NOx and VOCs.[28] It makes no sense to impose penalties for VOC emissions in a NOx-limited area that has, by necessity, adopted a NOx-control strategy.

Finally, this Committee has asked me to give my views concerning the ability of EPA, states and local areas to address downwind attainment problems in the future. In my view, the NOx SIP Call Rule will solve this problem for Atlanta and many other areas. That is exactly what the NOx SIP Call Rule was designed to do. The Extension Policy is necessary because the NOx SIP Call Rule was delayed, but the NOx SIP Call Rule is now on schedule to be implemented in 2004.

Furthermore, even if the NOx SIP Call Rule does not prove to be 100% effective, we now have the data and the modeling technology necessary to make any necessary adjustments to this rule. We are far ahead of where we were in 1994 when EPA first began to develop regional transport controls. EPA has now filled the "data gap" that was the original and primary cause of delay.

The Extension Policy is a direct result of the "data gap" that EPA identified in its 1993 report to Congress in accordance with Section 185B. Among other subjects, the 185B Report sought to identify the "basic information" that would be required to use photochemical grid models to evaluate attainment strategies.[29] EPA concluded that "high quality emissions, air quality and meteorological data bases" would be "critical for deriving credible model conclusions."[30] The report also noted, however, that such data bases did not exist at the time.[31] This "data gap" had to be filled before these models could be used to evaluate ozone control strategies.[32] However, the first Attainment Demonstration SIPs were due in just over a year.[33] EPA later confirmed that it would be difficult or impossible for many states to comply with this submission deadline because the necessary technical information did not exist.[34] Therefore, EPA extended the deadline for states to submit their Attainment Demonstration SIPs.[35]

EPA explained its decision to extend SIP submission deadlines to Congress in an oversight hearing in 1995. EPA explained that it was faced with two choices:

To reduce ozone to healthful levels in many cities east of the Mississippi River, there are two choices: (1) ignore the quality of the air blowing in from upwind areas and require cities to develop stricter, more costly programs to maintain healthy air; or (2) work to find cost-effective ways of reducing emissions "blowing in" from power plants and other sources in upwind areas so that downwind cities do not have to take extreme or unnecessarily costly steps to clean up pollution they did not create to try to maintain healthy air quality. Clearly the latter is the common sense approach.[36]

To take advantage of the extension policy that EPA described to Congress, states were required to make an "enforceable commitment" to participate in a "multi-state consultative process" to address the problem of ozone transport.[37] This consultative process took the form of the Ozone Transport Assessment Group ("OTAG"), which was convened in 1995 to conduct "the most comprehensive analysis of ozone transport ever conducted."[38] OTAG was a monumental effort, requiring coordination of representatives of 37 states east of the Rocky Mountains, along with representatives from EPA, industry and environmental groups.

OTAG filled the data gap, and thus made it possible to address the problem of ozone transport. However, the group was not able to reach consensus on specific NOx emissions controls that should be imposed on sources in upwind states to enable downwind states to attain. When OTAG concluded its work in June 1997, the group still had not developed a regional strategy to address the problem of ozone transport. That responsibility reverted back to EPA. EPA issued its notice of proposed rulemaking on November 7, 1997.[39] After an extended notice-and-comment period, the NOx SIP Call Rule was finally promulgated on October 27, 1998.[40]

The NOx SIP Call Rule represents the solution to the problem of ozone transport, but it came too late for Atlanta and numerous other Marginal, Moderate, and Serious areas.[41] As EPA explained in its Notice of Proposed Rulemaking for the NOx SIP Call:

The amount of time that is necessary to assure that the rulemaking proposed today is well considered by all affected parties, added to the amount of time necessary for the States to adopt the required SIP revisions, and the amount of lead-time necessary to implement the required controls, means that those controls cannot be expected to be in place in time to assist the serious areas in reaching their attainment date.[42]

Implementation of the NOx SIP Call was delayed even further by litigation after the rule was promulgated. On August 30, 2000, the D.C. Circuit affirmed the NOx SIP Call Rule in most respects, but delayed its implementation an additional year to give upwind states time to comply.[43] As a result, downwind areas like Atlanta must wait until May 31, 2004 for relief from upwind emissions.

In summary, the Extension Policy is a necessary out-growth of the data gap and the subsequent history of extensions that have already been granted by EPA. It would be unfair and counter-productive to hold the states to the original schedule as if these federal delays had not occurred. Indeed, the Extension Policy is the only way to preserve the original statutory scheme and to prevent the "bump up" mechanism from having unfair and counter-productive consequences that Congress surely did not intend.

Finally, despite these problems, I am happy to report that the Clean Air Act is working. The air in Atlanta is getting cleaner. It will be even cleaner still once the NOx SIP Call Rule takes effect in 2004. It is a testament to EPA that the agency took the time to do NOx SIP Call right instead of rushing to an incomplete solution. My only concern is that, by taking the time to do the job right, EPA has inadvertently put the States in a position of being penalized for delays beyond their control. Instead of penalizing the states by bumping them up, we should acknowledge their progress in working with EPA to bring the NOx SIP Call to fruition, and we should extend their attainment dates to allow all parties to reap the benefits of this collective effort.

Section 181 of the Clean Air Act (42 U.S.C.7511) is amended by adding the following new subsection at the end thereof:

''(ii) an upwind area in another State that the Administrator has found to be significantly contributing to nonattainment in the downwind area in violation of section 110(a)(2)(D) and for which the Administrator has established requirements through notice and comment rulemaking to eliminate the emissions causing such significant contribution.

''(B) The term 'current classification' means the classification of a downwind area under this section at the time of the determination under paragraph (2).

"(C) The term "affected by transport" means that the downwind area is affected by transport from the upwind area to a degree that affects the downwind area's ability to attain.

''(2) EXTENSION.-If the Administrator determines that any area is a downwind area with respect to ozone and that the criteria of paragraph (3) are satisfied, the Administrator, in lieu of reclassification under paragraph (b)(2)(A), shall extend the attainment date for such downwind area in accordance with paragraph (5).

''(3) CRITERIA FOR APPROVAL.-(A) In order to extend the attainment date for a downwind area under this subsection, the Administrator must approve a demonstration that the applicable implementation plan for the downwind area, as revised if necessary -

''(i) complies with all requirements of this Act applicable under the current classification of the downwind area, and

''(4) PRIOR RECLASSIFICATION DETERMINATION.-Attainment date extensions previously granted by the Administrator under the policy entitled Extension of Attainment Dates for Downwind Transport Areas, 64 Fed. Reg. 14,444 (March 25, 1999), shall be deemed effective upon the effective date of this legislation, notwithstanding any prior or pending court action concerning the authority of the Administrator to issues such extensions. For areas that have previously been reclassified under subsection (b)(2)(A), the reclassification shall be withdrawn upon approval by the Administrator of the demonstration referred to in paragraph (3), and the attainment date shall be extended in accordance with paragraph (5) upon such approval. In such instances the 'current classification' used for evaluating the demonstration under paragraph (3) shall be the classification of the downwind area under this section immediately prior to such reclassification.

''(5) EXTENDED DATE.-The attainment date extended under this subparagraph shall provide for attainment of the national ambient air quality standard for ozone in the downwind area as expeditiously as practicable but no later than the date on which the last reductions in pollution transport necessary for attainment in the downwind area are required to be achieved by the upwind area or areas.

"(6) REVISED ATTAINMENT DATES FOR AREAS RECLASSIFIED PURSUANT TO 7511(b).- If an area that has received an extension under this paragraph is subsequently reclassified pursuant to 7511(b), the attainment date for the reclassified area shall be November 15 in the fifth year after date of such reclassification.".

TAB B
Proposed Amendment to the Clean Air Act
To Fix Problems Caused by Federal RFG

If an area that has received a waiver under 42 U.S.C. § 7545(c)(4)(C)[50] becomes a "covered area"[51] as a result of reclassification under 42 U.S.C. § 7511(b),[52] the Governor of such state may petition the Administrator to extend the effective date of the prohibition under 42 U.S.C. § 7545(k)(5)[53] for up to one year. Such petitions shall be granted if the fuel formulation approved for use within the covered area under 42 U.S.C. § 7545(c)(4)(C) would achieve reductions in ozone concentrations greater than or equal to the reductions achieved by Reformulated Gasoline. The Administrator shall act on such petitions within 90 days of receipt. The Administrator may renew such extensions for 2 additional one-year periods.[54]

[1] Extension of Attainment Dates for Downwind Transport Areas, 64 Fed. Reg. 14441 (Mar. 25, 1999) ("Extension Policy").

[2] Our modeling demonstrates that transported NOx contributes as much as 23% to the average ozone exceedance in the Atlanta nonattainment area. See Georgia's State Implementation Plan for the Atlanta Ozone Non-Attainment Area (July 17, 2001) ("Attainment Demonstration SIP") at 3-37. The Attainment Demonstration SIP is available on the Georgia DNR website at http://www.dnr.state.ga.us/dnr/environ/plans_files/plans/sip_narrative.pdf.

[3] The attainment dates range from 1993 for Marginal nonattainment areas to 2010 for Extreme areas; for Serious areas, the date assigned was 1999. 42 U.S.C. § 7511(a)(1) (Table 1).

[4] See 42 U.S.C. § 7511(b)(2).

[5] See Testimony of Mary D. Nichols, Assistant Administrator, Office of Air and Radiation, Before the Subcommittees on Oversight and Investigations and Health and Environment of the Committee on Commerce, House of Representatives (Nov. 9, 1995) (hereinafter Nichols Testimony).

[6] There are exceptions to this rule, but they apply only to Severe areas, which are not subject to bump-up under § 181(b). See 7 U.S.C. § 7511(b)(4) & 7511d.

[7] See Attainment Demonstration SIP, supra n.2 at 3-35.

[8] See Tab C, Affidavit of Harold F. Reheis, former Director of Georgia EPD.

[9] Ozone is a "secondary" pollutant that is created in the atmosphere when volatile organic compounds ("VOCs") and oxides of nitrogen ("NOx") combine in sunlight. The reaction is sensitive to atmospheric conditions like humidity and temperature. Because average summer temperatures are comparatively high in Atlanta, conditions in this area are particularly conducive to the formation of ozone.

[10] Based on sensitivity analyses included in Attainment Demonstration SIP for Atlanta, the ratio is approximately 4 to 1: reducing NOx emissions by 1 tpd will achieve the same effect as reducing VOC emissions by 4 tpd. Attainment Demonstration SIP, Table 5-13 (http://www.dnr.state.ga.us/dnr/environ/plans_files/plans/sip_table5-13.pdf).

[11] See 185B Report at p. 3-11.

[12] Id. at p. 3-28.

[13] 42 U.S.C. § 7545(k)(5), CAA § 211(k)(5), prohibits the use of "conventional gasoline," as opposed to Reformulated Gasoline, in "covered areas." 42 U.S.C. § 7545(k)(10)(D), CAA § 211(k)(10)(D), states that "[e]ffective one year after the reclassification of any ozone nonattainment area as a Severe ozone nonattainment area under section [42 U.S.C. § 7511(b), CAA § 181(b)], such Severe area shall also be a 'covered area' for purposes of this subsection."

[14] See 42 U.S.C. § 7545(k)(3)(B).

[16] Reheis Aff. at 21.

[17] See Approval and Promulgation of Air Quality State Implementation Plans; Georgia: Control of Gasoline Sulfur and Volatility, 66 Fed. Reg. 8,200, 8,201 (Feb. 22, 2002) ("Final Preemption Waiver").

[18] Reheis Aff. at 22. See also Approval and Promulgation of Air Quality State Implementation Plans; Georgia: Control of Gasoline Sulfur and Volatility, 66 Fed. Reg. 63,982, 63,983 cols. 1-2 (Dec. 11 2001) ("Proposed Preemption Waiver").

[20] See Final Preemption Waiver, 66 Fed. Reg. at 8,201.

[21] See Proposed Preemption Waiver, 66 Fed. Reg. at 63,984 col. 3.

[22] While Georgia EPD might have the legal authority to require distributors to continue to comply with the Georgia fuel rules, even after the Federal RFG rules take effect within the 13-county nonattainment area, it would not be practical to impose such a requirement. Doing so would place tremendous stress on the storage and distribution facilities within the Atlanta area. Similar complications have led to distribution bottlenecks and extreme price spikes in other areas. For this reason, the Director of Georgia EPD has concluded that Georgia's low-sulfur Gasoline program will probably have to be abandoned altogether if Atlanta is bumped up to Severe. See Reheis Aff. 23.

[23] See Reheis Aff. at 24.

[24] Assuming that Atlanta is bumped up by January 1, 2004, gasoline distributors will be required to sell federal RFG by January 1, 2005. This could lead to an increase in NOx emissions during the critical 2005 summer ozone season. By the 2006 summer ozone season, the federal low-sulfur standards should have phased-in sufficiently to prevent this negative impact.

[25] Georgia EPD was required to obtain a "preemption waiver" under 42 U.S.C. § 7545(c)(4)(C), CAA § 211(c)(4)(C) to adopt the low-sulfur fuel rule described above. See Approval and Promulgation of Air Quality State Implementation Plans; Georgia: Control of Gasoline Sulfur and Volatility, 66 Fed. Reg. 8200 (Feb. 22, 2002). None of the other states facing bump-up to Severe have applied for a waiver.

[26] 42 U.S.C. § 7511d.

[27] The penalty is $7,800 ($5,000 adjusted for inflation) for each and every ton of NOx and VOC emissions in excess of 80% of the "baseline amount." The baseline amount is the lower of (i) "actual emissions" during the attainment year; or (ii) emissions allowed under the permit during the attainment year. See 42 U.S.C. § 7511d.

[28] The text of the penalty applies only to VOCs. See 42 U.S.C. § 7511d. However, a separate provision states that all SIP provisions that apply to major stationary sources of VOCs apply equally to major stationary sources of NOx. 42 U.S.C. § 7511a(f).

[29] See 42 U.S.C. § 7511f.

[32] See Memo from Mary D. Nichols to Regional Air Directors (Sept. 1, 1994) ("1994 Nichols Memorandum") at 1-3. The 1994 Nichols Memorandum is available on EPA's website at http://www.epa.gov/ttn/oarpg/t1/memoranda/mnozone.pdf

[33] 42 U.S.C. § 7511a(c)(2). The SIP is actually the total collection of rules and regulations and control strategies that have been approved by EPA and that are in effect at any one time. The Clean Air Act Amendments of 1990 include many deadlines for specific SIP revisions to incorporate specific programs and/or to make specific demonstrations. We refer to the SIP submitted to fulfill the attainment requirement of 42 U.S.C. § 7511a(c)(2)(a) as the "Attainment Demonstration SIP."

[34] See Memo from Mary D. Nichols to Regional Air Directors (Sept. 1, 1994) ("1994 Nichols Memorandum") at 1-3. The 1994 Nichols Memorandum is available on EPA's website at http://www.epa.gov/ttn/oarpg/t1/memoranda/mnozone.pdf; NOx SIP Call, 63 Fed. Reg. 57356 col. 1 (Oct. 27, 1998) ("NOx SIP Call").

[35] 1994 Nichols Memorandum at 3; NOx SIP Call, 63 Fed. Reg. at 57,361 col. 1.

[36] See Nichols Testimony, supra note 5 , at 126.

[37] Id.; 1995 Nichols Memorandum at 2. (See Memo from Mary D. Nichols to Regional Administrator, Regions I-X (March 2, 1995) ("1995 Nichols Memorandum")).

[38] See NOx SIP Call, 63 Fed. Reg. at 57,362.

[39] See 62 Fed. Reg. 60,318 (Nov. 7, 1997).

[40] NOx SIP Call, 63 Fed. Reg. at 57,358 col. 2.

[41] Because the "Serious," "Moderate," and "Marginal" attainment dates have all passed, all remaining non-attainment areas would already have been bumped up to Severe if not for EPA's common-sense policy of extending attainment dates. In fact, of the 53 ozone non-attainment areas nationwide, only 13 are either Severe or Extreme. Three of the Severe areas were only recently bumped up, following EPA's abandonment of the Extension Policy. The remaining areas are Serious (19 areas with a 1999 attainment date); Moderate (12 areas with a 1996 attainment date); and Marginal (20 areas with a 1993 attainment date). This information is available on EPA's website at http://www.epa.gov/oar/oaqps/greenbk/oindex.html#List5.

[42] 62 Fed. Reg. 60,318, 60,328 cols. 2-3 (emphasis added).

[43] See Michigan v. EPA, No. 98-1497 (D.C. Cir. Aug. 30, 2000).

[44] See generally 1995 Nichols Memorandum.

[45] 1995 Nichols Memorandum at 3.

[47] NOx SIP Call Rule, 63 Fed. Reg. at 57,358 col. 1-2.

[48] 66 Fed. Reg. 7904 (Jan. 26, 2001).

[49] EPA approved the Attainment Demonstration SIP on May 7, 2002. See Approval and Promulgation of Implementation Plans; Georgia 1-hour Ozone Attainment Demonstration, Motor Vehicle Emissions Budgets, Reasonably Available Control Measures, 68 Fed. Reg. 30,574 (May 7, 2002). EPA has now vacated its approval, however, as a result of its decision that it can no longer defend the Extension Policy.

[50] 42 U.S.C. § 7545(c)(4)(C), CAA § 211(c)(4)(C), provides EPA with the authority to grant a "preemption waiver" to allow states to adopt state-specific fuel rules. Georgia EPD received a waiver for Georgia's low-sulfur gasoline on February 22, 2002. See Approval and Promulgation of Air Quality State Implementation Plans; Georgia: Control of Gasoline Sulfur and Volatility, 66 Fed. Reg. 8200 (Feb. 22, 2002).

[51] 42 U.S.C. § 7545(k)(5), CAA § 211(k)(5), prohibits the use of "conventional gasoline," as opposed to Reformulated Gasoline, in "covered areas." 42 U.S.C. § 7545(k)(10)(D), CAA § 211(k)(10)(D), states that "[e]ffective one year after the reclassification of any ozone nonattainment area as a Severe ozone nonattainment area under section [42 U.S.C. § 7511(b), CAA § 181(b)], such Severe area shall also be a 'covered area' for purposes of this subsection."

[52] 42 U.S.C. § 7511(b), CAA § 181(b), is the "bump up" provision, which provides for Serious non-attainment areas to be reclassified as Severe upon a finding of non-attainment.

[54] Note that there is a similar provision in the Clean Air Act for areas that "opt-in" to the RFG program. See 42 U.S.C. § 7545(k)(6)(B), CAA § 211(k)(6)(B). For such areas, EPA has the authority to delay the effective date of the prohibition in 42 U.S.C. § 7545(k)(5), CAA § 211(k)(5), for one additional year. The extension can be renewed for two additional years.

'Bump-Up' Policy Under Title I of the Clean Air Act