MEETING MINUTES

FACA SUBCOMMITTEE FOR OZONE, PARTICULATE MATTER AND REGIONAL HAZE IMPLEMENTATION PROGRAMS

November 19 and 20, 1996

Denver, Colorado

Opening Remarks - William Hamilton, U.S. Environmental Protection Agency, Designated Federal Official for the FACA Subcommittee

Mr. Hamilton introduced Alan Krupnick (Resources for the Future). He announced that John Seitz would not be present for this meeting, and that Sally Shaver would be taking Mr. Seitz's place.

Sally Shaver (U.S. Environmental Protection Agency) asked for introductions from the head table. She then gave an overview of the agenda for this meeting: more discussions on AOIs and AOVs, and presentations on PM-fine Designations, Attainment Dates, Integrated Implementation, and Regional Haze. Ms. Shaver announced that Dave Howecamp, Susan Studlien, and Tom Maslany, who are EPA regional air directors, have been added to the Subcommittee. Bruce Hill has also been added to the group to replace Conrad Schneider.

Ms. Shaver said that EPA was still looking at a proposal date of November 29 for both the ozone and PM standards. She could not give any more details about the announcement at that time. EPA was also planning to promulgate the interim implementation policy on November 29. There would be a public comment period for each policy. Ms. Shaver spoke about a memo from Mary Nichols to Mary Gade. She said that the memo was sent to reinforce EPA's interest in maintaining the current schedule even though OTAG was several months behind schedule.

Alan Krupnick said that comments today on the questions would be included in a Phase I report. The Subcommittee did need to begin to reach consensus on these issues.

Pat Raher (Hogan and Hartson) deferred the report from the Coordination Committee.

Communications and Outreach Work Group Update -- Tom Curran (EPA)

Highlights

Tom Curran laid out the Work Group's plan for reaching closure of its Phase 1 activities and reported on outreach activities since the October FACA Committee meeting.

Ron White reported that they had heard strong concerns from States about the lack of information available to them, a sentiment that was echoed by other participants as well. They were concerned that they would not be able to answers to detailed questions posed by the media.

There was considerable discussion about what would happen when the proposed rules were promulgated and whether State and local governments would have information about the rules in advance of their release.

Several Subcommittee members commented that there was a lack of clarity about what EPA's role was in information creation and dissemination and what role the Subcommittee was supposed to play. A number of Subcommittee representatives said they felt as though they had insufficient information to respond to calls that they would get from their constituents once the proposals were released. They were very interested in having fact sheets available to them before the date that the proposals were to be published, and wanted to know exactly what would be in those fact sheets.

Both industry representatives and public interest group representatives felt that EPA was already too late in getting information out and would have to work very hard to counteract impressions that already had been formed. The consensus was that EPA needed to be more proactive in its information delivery.

Tom Curran's presentation first addressed how the Work Group would reach closure of its Phase 1 activities:

February 1996November 1996January 1997Internal Communication

TTN

WWWAdvice to EPA

Communication Strategy

Material Review

FACA ProductsWG: 1-pager

Review/Revise

CG Review

Subcommittee Review

Out

He noted that there had been no changes in the communication strategy since the Subcommittee's Dallas meeting. Mr. Curran then reported on outreach activities since the October meeting:

Revised the WWW Home Page (11/14/96)

Made STAPPA/ALAPCO Conference Call (11/14/96)

- Status

- What information will be available

Conducted EPA Regional Office Outreach

- Weekly communications conference calls

- Region 4 Meeting (11/14)

Ron White (American Lung Association)

Mr. White said the Work Group was refining the communications plan that was formulated at the Dallas meeting. The Phase I report, which was supposed to be completed by this meeting, had been delayed but progress was being made. They spent a considerable amount of time yesterday discussing what information was available with respect to the upcoming proposal, and how the proposal was linked to the FACA process. Mr. White said he heard some very strong concerns from the States that the currently available information was severely lacking; this sentiment was echoed by non-State personnel. They were concerned that the media would be asking some very specific questions with reference to this standard. The availability of information to provide responses to these issues was simply not available at this time. The Work Group felt the need to link information about the FACA process to the standard promulgation.

Mr. White said that EPA would be making fact sheets available groups prior to the release of the standard. He said they would try to link the FACA process to the standard in these scheduled information releases. His Work Group was going to revise and publish a document that would summarize the standards and pertinent issues, and explain how the FACA process was linked to all of these issues. This document should be released in January.

Comments from the Subcommittee on the Communications and Outreach Work Group Report

Bill Becker (STAPPA/ALAPCO) said that one of the most important links of the communications strategy was not communicating information after the fact, but preparing the States before the release of the standard proposals. Even though the policy was still in OMB and the numbers might change, he said EPA should and could be doing more information dissemination prior to the release of the standards. He would have every EPA region call every State whose counties were potential violators of the new standard. It did not have to be formal communication, but simply a heads-up call. EPA must get this information to State and local governments in advance of the public release of the standard. Mr. Becker urged the Subcommittee to get as much information as possible and as early as possible to the public.

Bradford Smith (Environmental Elements Corporation) asked whether this was the time to ask questions and elaborate on the communications strategy.

Alan Krupnick said that it was appropriate to discuss those questions now.

Ron White noted that if he had left the impression that there were major problems with the communications strategy, then that was misleading.

Alan Krupnick asked the Work Group to modify the language of question one to read "For the FACA...."

Bradford Smith said that the promulgation of the rules was the joint responsibility of this Subcommittee and EPA. He thought they needed to discuss today what the Subcommittee would be doing between now and next Friday [when the proposed standards would be published].

Sally Shaver asked Ron White to elaborate on the disconnect to which he earlier referred.

Ron White said there was confusion between FACA and the actual implementation of the standard.

Tom Curran noted that all of the questions would not be answered on November 29; the implementation issues would most likely be answered down the road sometime.

Ron White said there was a good deal of frustration right now regarding this process. There were some things that could be handled in the immediate future, and there were others that would be handled during Phase II.

Sally Shaver said she was not sure how all of this information was to be disseminated. She asked whether this process should be a part of the Outreach Work Group's responsibility.

Ron White said they were willing to accept this role if the information was made available to them. They just had to be careful not to violate the administrative concerns of EPA. If there was nonsensitive information that could be released, then by all means they should be doing this.

Tom Curran said that EPA continued to work very closely with State and Local governments; they were the primary customers. He said EPA was working very closely with STAPPA. However, it was going to be the responsibility of STAPPA to get information to its constituents.

Bill Becker talked about the November 14th conference call. He said OAQPS did a wonderful job, but really did not tell STAPPA members anything. There were 60 people on the call, and OAQPS was not allowed to present information regarding the standard. Mr. Becker noted that STAPPA was having a call next Tuesday, and they were expecting 100 people. He hoped that the rule would be "leaked" by that time. Mr. Becker said the worst case scenario was for environmental officials or the governor to read in the newspaper first.

David Howecamp (EPA) said there was a limit to the number of questions for which EPA could prepare.

Bill Becker said he only raised questions that could be answered today.

Carter Keithly (Hearth Products Association) asked whether there would be a press conference and if so would the Subcommittee be notified in advance.

Sally Shaver said she thought there would be a press conference, but not on the 29th; it would probably be the following week. As these materials were available, EPA could send them out to Subcommittee members. She said she would send them out as soon as she had them ready.

Alan Krupnick asked about the fact sheets that were being prepared, wanting to know whether there was one for new nonattainment areas highlighting what they could expect.

Tom Curran said he was not entirely sure exactly what was in the packages. He said he would make a call and ask Jeff Clark exactly what was in the packages and get them out to the Subcommittee.

Alan Krupnick said the information for the fact sheet could be very generic. It could be simply what a nonattainment area could expect, but not identify which areas were nonattainment. Mr. Krupnick asked Mr. Curran to report back to the Subcommittee the next day on what he found out.

Pat Raher wanted to ask EPA to come back to the FACA Subcommittee with some answers. He said that this was not FACA's standard, this was the Agency's standard, and it was the responsibility of the Agency to get this information to the public, not FACA's. He noted that Mr. Howecamp could not even talk intelligently to people in his jurisdiction, because EPA and OMB were being extremely close-mouthed on the new policy and its contents. These were very basic questions, and the public needed to know the EPA's response. Referring to the conference the following week, Mr. Raher said that the areas that could potentially be classified as nonattainment needed to be identified and an appropriate timeline needed to be put forward then. As FACA Subcommittee members, they were going to inundated with calls from constituents about a standard they knew nothing about.

Tom Curran asked whether the Subcommittee wanted more information about potential nonattainment areas than the maps currently available.

Sally Shaver said EPA needed to give them a timeline for when they would be designated nonattainment, and then outline the Phase I and Phase II issues.

Bill Becker said he was sure that EPA faced more constraints than those of which he was aware. He noted that everyone did not have access to the TTN and the World Wide Web. There were currently five maps up there with a whole wealth of scenarios presented. Mr. Becker said somebody simply needed to get on the phone and say that there were possibly five areas in this or that State that could potentially be nonattainment.

Sally Shaver said she was referring to something in English that could be interpreted by the governor's office.

Bill Becker said he would not call the governors, he would call the air directors.

Marvin Lowry (Georgia) said he echoed the sentiments of Bill Becker. He asked exactly what would be available in terms on fact sheets on the 29th.

Sally Shaver said she would report back to the Subcommittee the next morning. EPA might in fact have this information currently available; she needed to check.

Jim Souby (Western Governors Association) said that fact sheets were important, but EPA needed to get off the dime. Especially in the West, he said he would be surprised if there was a single governor who did not already have information from his or her respective constituencies. There were a good number of people already discussing these issues. It was not the FACA Subcommittee's business, but they could not be blind to this entire process. He said EPA was already late, impressions had already been made, and it was going to be difficult to turn around.

David Hawkins (NRDC) supported Mr. Souby's contention that EPA had much to do to counteract existing impressions.

Bradford Smith said that EPA was in a big hole and needed to work very hard to get out of it.

Alan Krupnick said that FACA could address a lot of the fundamental questions that would be asked. He asked whether everybody was finding the strategy reasonably acceptable and whether they wanted to talk to any of the points that had been raised.

Bradford Smith said the Subcommittee and EPA needed to admit that there was an gap. It certainly would not be the last time that EPA would move toward promulgating a policy when gaps existed.

Ron White said his Work Group had discussed the next milestones and the need to get ahead of the curve. The next milestone would be in June 1997. He thought they could continue to provide advice to EPA. They had made a lot of recommendations on this standard; what EPA did with these recommendations was beyond their control. They could only offer advice; they could not make EPA accept it.

Bradford Smith said they needed to focus on more proactive delivery of information. There was a lot of information available to this process. He noted that his aim was not to be critical.

Tom Curran said that one of the points his Work Group discussed yesterday was that as the Subcommittee closed on issues, there had essentially been no FACA products. As they reached closure and had FACA products, EPA could become more proactive in its approach.

Jean Vernet (DOE) said it would be helpful if Ms. Shaver could discuss what additional information EPA expects to come out relating more directly to the FACA process with respect to implementation.

Sally Shaver noted that there was the Interim Implementation Plan and the Advance Notice of Proposed Rulemaking, both of which were information documents.

Georgia Callahan (Texaco) said she thought they had to be careful to separate the roles of the Subcommittee and those of EPA. She would not support the blending of these roles. EPA must drive the proposal process and the development of materials.

Christine Shaver (EDF) asked what EPA would tell a city that currently had a problem but under the new standard might not have a problem. She wanted to know whether EPA would tell them to continue as they had been doing or to relax their controls. Ms. Shaver also asked speakers to identify the group(s) they were representing.

Shawn Kendall (Phelps-Dodge) said they needed to communicate to the States so that they could get feedback. As for the standards issue, he thought EPA was doing exactly what it needed to be doing -- getting a proposal out that they could comment on. He thought EPA was doing a great job and said it was unlikely that the proposal on the 29th would be the end of the process.

Sally Shaver thanked Mr. Kendall and asked to return to Christine Shaver's statement. She said the reason they were all there was that everyone had different points of view. They said from the outset that the standards would not be debated at Subcommittee meetings, but that there would be forums for the public to comment on the standards.

Christine Shaver said the FACA Subcommittee's charter was to find ways to do things quicker, cheaper, and better. She noted that the Subcommittee tended to hold on to things and really did not move forward.

Sally Shaver said that she would agree, but that they must focus on how to attain the revised standard. That was the underlying principle for FACA.

Alan Krupnick said he would not attempt to wrap-up the discussion. He noted that there were some gaps identified in the strategy, that it was not sufficiently anticipatory in advance of the proposal. Otherwise he was not hearing major concerns, and suggested that the Subcommittee could accept this Work Group's report for the Phase I report.

Content-Related Principles for Developing Work Group Issue Papers -- Pat Raher

Highlights

Pat Raher presented 9 principles developed by the Coordination Group to address content-related questions that had arisen when Work Groups were developing their issue papers.

The Subcommittee made a considerable number of comments about the principles:

Principle #1 -- Public interest group representatives were concerned that the inclusion of "cost-effective" could be used to rule out some types of control strategies up front and that cost effectiveness had more to do with implementation. There also was some discussion of whether cost-effectiveness and efficiency were the same idea.

Principle #3 -- A public interest group representative suggested that the word "fixed" be inserted before "deadlines". This led to discussion about whether fixed deadlines would inhibit Work Group efforts by implying command and control.

Principle #4 -- Many public interest group representations wanted Principle 4 removed because it might prematurely exclude the development of regional institutions. There seemed to be agreement on deleting this principle or rewording it substantially.

Principle #5 -- Several Subcommittee members questioned the definition of "slope of progress" as used in this principle.

Principle #6 -- There was considerable discussion of market-based programs. They were concerned about the effect of this principle on the NSR process, and discussed whether the principle should be kept, the second statement dropped, or the principle rewritten. The Subcommittee seemed to agree on letting the Coordination Group re-word the principle to address their concerns.

Principle #9 -- The point of discussion on this principle was the notion of achievement and whether it should be changed to reasonable further progress.

The result of the discussion was that the Coordination Group agreed to re-work the principles and present them at a later date.

Mr. Raher opened by saying that in addition to style and format issues, there were content issues that needed to be addressed. These principles were the attempt of the Coordination Group to address these issues.

1. Progress towards attainment of revised NAAQS and achievement of regional haze requirements wa to be achieved in an expeditious, scientifically sound, and cost-effective manner.

2. In the event of a State's or other responsible institution's failure to plan and implement plans, or failure to participate in planning, within the designated timeframes, the Federal government must take timely action to remedy the situation.

3. All options/recommendations must be based upon deadlines for planning, implementing, and attaining the NAAQS and implementing regional haze requirements.

4. Consistent with the provisions of the CAA, State, local, and tribal governments, and to the extent possible other institutional mechanisms, would retain primacy for development, implementation, and enforcement of plans designed to attain the NAAQS and to make reasonable progress toward regional haze goals.

5. Timely environmental progress must assured, which meant that air quality improvements would be no less rapid than required under the current NAAQS. Early Federal, State and local actions to improve PM fine air quality should be identified. (e.g., the glideslope approach)

6. Control measures should be environmentally protective, cost effective, and provide flexibility to the extent feasible. To this end, market-based programs should be considered for reducing emissions in addition to technology-based performance requirements on all sources.

7. Planning requirements and control strategies must address the transport of precursor emissions.

8. Opportunities for integration of planning and implementation for ozone, PM, and haze that achieve better environmental results and lower costs should be fully pursued.

9. Planning and implementation proposals should identify methods for early and continued involvement of potentially affected interests, to the maximum extent possible, to assist in the attainment of the revised NAAQS and achievement of regional haze programs requirements.

Mr. Raher said these statements were broad in nature, and they were intended to guide Work Groups. They wanted to assure that these types of issues were answered in the Work Group reports. The Coordination Group was seeking comments so that they could get these principles back out to the individual Work Groups.

Comments from the Subcommittee on the Content-Related Principles for Developing Work Group Issue Papers

Bob Palzer (Sierra Club) suggested wording changes for Principle #7. He said that in some cases they were discussing emissions; they dealt with a great deal of secondary pollutants and not the primary emissions. He would change the wording to reflect "pollutants and their precursors".

Harvey Jeffries (University of North Carolina) said his Work Group would be much happier if they struck the transport concept altogether. It should proceed from a scientifically consistent explanation of the pollutant and the area of violation. Not all problems were transport dominant. The current wording implied that transport had to be involved in any consideration. The emphasis should be on the appropriate cause of the problem.

Pat Raher told Mr. Jeffries that he did not follow the discussion. Mr. Raher asked whether there was a need for people to use sound science to determine emissions.

Harvey Jeffries replied that he detested the phrase "sound science".

Pat Raher said he thought the Coordination Group was simply trying to say that they would consider transport where it was important, and not consider it where it was not important.

Harvey Jeffries said that it got to be a mess when one focused on transport. If it was transport then fine, if it was not, then there was no need to discuss it.

David Hawkins suggested that they identify the relative roles of transported emissions and locally emitted pollutants. He said if they failed to acknowledge transport, as they had in the past, he thought the process would fail.

Harvey Jeffries said they must explain why there was a problem, and the solution must have a scientific basis.

Pat Raher asked whether Mr. Jeffries, Mr. Hawkins, and he could work this issue out and represent it to the Subcommittee tomorrow.

David Hawkins said he believed that they had changed Principle #1 slightly last night, which was not reflected in this printing. (i.e., to "science-based" as opposed to "scientifically sound".) Also, after discussing Principle #4, he thought they had determined that it was premature to issue it as a principle because it might hamper institutional mechanisms.

Pat Raher told Mr. Hawkins that Sally Shaver fully agreed with him, but he, Mr. Raher, would not. There was a disagreement among the Work Group co-chairs. Mr. Raher would allow them to remove Principle #4 as Mr. Hawkins suggested.

Nader Mansour (Southern California Edison) asked whether the Subcommittee could pursue things outside of the CAA.

Sally Shaver noted that at the beginning they had said if the Subcommittee made suggestions outside of the CAA, EPA would like to hear them, but would reserve the right either to pursue them or not pursue them. Thinking outside of the current legislation was not "off the table" at this time.

David Mobley (EPA) thought the approach was good but questioned the consistency of Principle #4.

Alan Krupnick said that the argument for dropping #4 was the exclusion of regional institutions as an acceptable approach.

David Mobley said they needed to know what could be implemented given the current statute and what could not.

Pat Raher said he thought they should move to strike this principle because of the primacy issue, and then work this afternoon to revamp it.

Robert Wyman (Latham and Watkins) said he did not know how much to read into Principle #6. If there were market programs that would replace technology-based requirements, would that be outside of the bounds of this principle as currently written?

Pat Raher said Mr. Wyman had identified an issue that had not been properly resolved. He noted that Bill Becker was discussing it the previous evening.

Bill Becker said he was coming from a slightly different perspective. He thought they had put the issue to bed some time ago with respect to technology-based approaches. He wanted to make sure that this principle did not pre-judge the NSR process. Mr. Becker was not saying that marketbased approaches should not play a role.

Robert Wyman said that this principle should not pre-judge what the Subcommittee and the Work Groups were doing. The principle should not preclude discussion. The slope of progress under Principle #5 also concerned him. He wondered what slope they were talking about -- did they mean no backsliding?

David Hawkins said he thought the language reflected his efforts, at least in part. It was a fairly simple principle, at least for ozone. The new ozone standard was being promulgated because the current standard was insufficient to protect public health. What the principle meant was that they were not going to allow a slower rate of progress to clean air than what existed currently under the Clean Air Act.

Robert Wyman asked what the rate of progress should be for PM-fines. He noted nothing had been said about this issue.

David Hawkins responded that the language in the principle was not intended to extrapolate a line beyond the current attainment schedules. It simply said that there could not be an outcome that was dirtier than what was currently in the Act.

Pat Raher wanted to go back to Principle #6 and suggest two things: (1) they could drop the last statement; or (2) they could maintain the last sentence and modify the rest of the principle.

Robert Wyman said that he would support the latter.

Shawn Kendall suggested that they keep the original statement and replace the "all" in the last sentence with the word "all new" (i.e., NSPS).

Pat Raher said that Mr. Kendall was raising an issue that referred to the minimum level that was the ongoing debate under NSR. He said they could address this issue now or on a case-specific basis.

Robert Wyman responded that they were going to be discussing a wide variety of control strategies in the following discussions. He thought they should not pre-judge this principle.

Shawn Kendall said that if they did not have NSPS, he thought the market could be severely upset.

David Hawkins said that these were all interesting comments and pointed out that they obviously did not have agreement. He recommended that they delete this principle or rephrase it so that the Work Group could fully evaluate all of the alternatives for various technologies, providing a template that would allow the Subcommittee to discuss and consider all options.

Pat Raher said he would like to adopt something along the latter statement and would not advocate deleting the principle.

Shawn Kendall said that if they simply kept the first sentence, then they would have the best of both worlds.

Pat Raher said he thought the principle was sensitive, but he would try to re-work it before tomorrow.

Shawn Kendall said he had some comments on regional haze throughout. In Principle #9, the word achievement bothered him. He said they should be discussing reasonable progress toward achieving regional haze goals. In Principle #1, Mr. Kendall wanted to change the notion of achievement to reflect reasonable progress towards regional haze goals.

Christine Shaver asked whether there were other things that could be considered achieving progress.

Shawn Kendall said no, they were basically dealing with control strategies. He said the problem was that in the CAA it states that they achieve no man-made impairments to visibility. Mr. Kendall did not believe they could ever achieve that goal.

David Hawkins said that the Coordination Group discussed this specific language the previous night. He noted that the regional haze program requirements referred to statutory requirements.

Shawn Kendall said he did not have a problem with that on the last principle, but it still bothered him on the first principle.

David Baron (Arizona Center for Law in the Public Interest) noted that he had some suggested changes on a number of the principles. On Principle #3, he would propose inserting the word "fixed" before the word "deadlines".

Shawn Kendall asked David Baron whether the fixed deadlines applied to regional haze.

David Baron said yes, they did.

Bradford Smith said he had a problem with saddling the Work Groups with the concept of fixed deadlines at the outset: it implied command and control.

David Baron said he did not think it implied anything that was not currently in the Act. He understood that Principle #4 was gone, but in discussing State primacy, he did not think they should eliminate the potential for some type of national control strategies.

Bruce Hill (Appalachian Mountain Club) said he thought that concept was included in the last sentence of Principle #5.

David Baron referred to Principle #1, saying he would like to remove the term "cost effective". He said cost effectiveness was a red flag. If they subjected every proposal here to cost effectiveness review, then there would be a lot of game playing and it would exclude the consideration of strategies that could be cutting edge technologies.

Shawn Kendall replied that he had a problem with this change, noting that reasonable progress in regional haze did require the consideration of cost.

David Baron replied that he was not saying that cost-effectiveness be precluded, simply that it was not required for every issue.

Pat Raher questioned Mr. Baron, saying that he did not read it as a requirement for costeffectiveness considerations.

David Baron said he did not think they should be using cost effectiveness analyses to rule out specific control strategies. It should not be a guiding principle for all programs at all times.

Bradford Smith expressed concern that they were straying from the intent of the principles. These were the content-related ones; there were process-related principles as well.

David Baron asked why they needed the language. He did not want somebody in a Work Group saying a proposal could not be discussed because it was not cost effective.

Robert Wyman said he still thought cost effectiveness was a very important principle They must recommend to EPA the most cost-effective procedures to attain the standards. It was fundamental to attain these health-based standards.

Georgia Callahan said that if they dropped the opening statement, she thought it would deal with David Baron's concerns.

David Baron said he did not think that would cure his concerns. He did not think that a strategy should be precluded because it was deemed not cost effective by someone's test.

Bradford Smith said they were dealing with implementation here, not standard setting. He had a lot of trouble moving away from the concept of cost effectiveness - they were charged to do things "better, faster, cheaper". Thus, he supported leaving this in.

David Hawkins said it seemed to him that David Baron's reading of the language was correct; it said progress was to be achieved in a manner that met the enumerated criteria, one of which was cost effectiveness. Mr. Hawkins said David Baron was correct that things could be excluded because they were deemed not to be cost effective. If they struck the words cost effective from this language, they did not preclude the use of cost effectiveness in the evaluation process. However, as it was written, it was a clause of exclusion. There was no policy disagreement, it was one of exclusion and the way the principle was drafted. They agreed on the objective of the drafting, and it seemed to him that David Baron's analysis of the language was correct.

Pat Raher said what this principle was meant to do, was to state that there were certain charges to the Work Group. EPA could do anything it wanted -- it could accept their recommendations or reject them. To strike these words, they might as well strike the entire first principle.

David Hawkins said he understood the anxiety about striking the words cost effective. He suggested that there were a couple of possible fixes here. Principle #6 had the language of cost effectiveness; perhaps they could wordsmith Principle #1 to make it crystal clear.

Alan Krupnick said that if they could accept it in Principle #6, then he wondered why it was not acceptable in #1.

David Hawkins said that as he understood things, it was a measure of assessing the degree of progress toward a goal. Cost effectiveness applied to the methods of achieving air quality improvement was good.

Alan Krupnick said that might well be true, but then they should also drop the concept of sciencebased.

Shawn Kendall said they had four or five words creating problems. They wanted things that were scientifically based, expeditious, and cost effective - they needed to move towards the consideration of all of these principles, not any one.

David Baron said he thought #6 was off the table.

Alan Krupnick replied no, it was going to be reworked.

Dave Howecamp said he thought Mr. Hawkins was raising a good point. There could be a discrepancy between deadlines and cost-effectiveness.

Bruce Craig (NGSA) noted that these principles were drafted for papers on implementation. Cost effectiveness in that context was most useful in evaluating control strategies, and he would prefer keeping this language.

Glen Cass (California Institute of Technology) said he was confused. If they accepted efficiency, he did not understand why they could not accept cost effectiveness.

Alan Krupnick said he remembered raising this point at a previous Coordination Group meeting. He was told that efficiency was not equatable with cost effectiveness. However, among economists they would be considered synonyms.

Rich Halvey (Western Governors Association) said that efficiency includes cost and other things.

Pat Raher asked David Baron if the use of efficiency was acceptable as long as they allowed the discussion of cost effective measures.

David Baron replied that he just did not want them to be using a litmus test for cost effectiveness determinations.

Georgia Callahan said as long as he was making this a litmus test, why not use them all.

Bob Palzer asked if the word efficiency was synonymous with cost effectiveness, then why did not they simply strike cost effectiveness from the principle.

Alan Krupnick said if they were going to accept efficiency and not accept cost effectiveness, then it obviously meant something different. Thus, he thought cost effectiveness should be retained.

Bob Palzer said he did not want something to be thrown out simply because it was not cost effective.

Bradford Smith submitted for consideration the addition of a sentence in one of the principles that would speak to the issue of cost effectiveness and not to the extent that it would become preclusive.

Robert Wyman said he thought to remove cost effectiveness was a disservice to the discussion.

David Hawkins noted that the word efficiency had a little more flexibility than cost effectiveness. Efficiency discussions were generally more robust and conclusive. He noted that they had said that they would not allow preclusion of cost effectiveness if it was not listed.

Alan Krupnick suggested that perhaps they should drop everything after the word "achieve". He said they all want progress, so they should put a period after achieve and end it.

Shawn Kendall said that if they dropped cost effectiveness, then he wanted to drop expeditious and scientifically sound.

Glen Cass asked whether they could put some adjectives in front of efficiency to remove the ambiguities. For example, he suggested the words "economically efficient".

David Hawkins said that Principle #1 was supposed to encapsulate the purpose of the entire Subcommittee, which was a better rate of progress toward environmental goals.

Sally Shaver said that it seemed to her that when they talked about progress, the rate was determined by a lot of factors. For example, if one could get to point A in three years for $10 million and could get to point A in four years for $5 million, then these things should be considered by this Subcommittee so that they can be discussed. How would they get this balanced concept into their discussions? She said that some seemed to want everything and want it now, but EPA needed to try and get the best thinking from all the groups at this table.

David Hawkins said that "expeditious" was not a synonym for "we want it all and we want it now". It was not a concept that had time as its only metric. Progress achieved in an expeditious manner did not preclude cost effectiveness and efficiency. This could be stated in Principle #1 or in another principle.

Pat Raher said there was obviously a split here in their thinking. Mr. Cass's language suggested that they look at both economic and administrative efficiency - was that doable for David Hawkins and David Baron?

David Baron said he would prefer that the language go in Principle #6, as opposed to #3 even with Glen Cass's additions. He said he still feared this litmus test approach.

Alan Krupnick suggested breaking down the word expeditious into its parts and including these parts in one sentence.

David Baron said he still had not heard an answer to putting this into Principle #6.

Alan Krupnick said it was a different issue. Principle #6 was dealing with control measures. It said that the control measures needed to be cost effective, i.e., as one got closer to attainment, control measures would become increasingly costly. Principle #1 was about how fast one was using things and moving toward the standards.

David Baron said if that was the case then he thought they had a fundamental disagreement.

Pat Raher said the Coordination Group would re-work this issue and re-present it at a later date to the Work Group.

William Hamilton said that he understand that David Baron had more comments and suggested that he get these comments to Pat Raher in time to be included in the re-draft.

LUNCH BREAK

Implementation Process -- Joe Paisie (EPA)

Highlights

Joe Paisie made a presentation on how the rest of the standards-setting process would proceed through Phases 1 and 2.

There was very little discussion on the presentation. One Subcommittee member commented on how helpful Mr. Paisie's work was to the Subcommittee. A second member asked how issue papers were chosen to include in the timeline, which Mr. Paisie said were chosen based on several considerations, including EPA's original list, the progress of Work Group discussions, and EPA's current thinking on the process.

Mr. Paisie presented slides to show how the rest of the standards process would proceed through Phases 1 and 2. He presented two approaches: 1) timeline approach, which started in June 1997 when the NAAQS would supposedly be promulgated and was a linear way to look at process; and 2) flow chart approach, which used the Conceptual Model and began with analysis of monitoring data, setting goals and defining the process to reach those goals.

Mr. Paisie showed a slide that dealt with AOI/AOV and the types of questions that EPA would need to address. The questions included:

Should the current nonattainment approach be changed?

How should AOVs be identified?

How should AOIs be identified?

How will EPA draw boundaries for AOIs?

Mr. Paisie also looked at the inventory of issues and issue papers that the Subcommittee had dealt with or was facing and showed them according to Phase I (14) or Phase II (20).

Mr. Paisie also presented a slide on the communication strategy, which he said would be put up on the Internet along with a 6-8 page narrative.

The preliminary FACA Subcommittee timeline was laid out by issue and the proposed future meeting schedule. Mr. Paisie said they needed closure first.

Comments from the Subcommittee on the Implementation Process

Alan Krupnick asked for comments on this general approach.

Bradford Smith said it was nice to see things getting focused and urged Joe Paisie to continue.

Beverly Hartsock asked how he picked the papers that were on your flow chart.

Joe Paisie said they were simply papers that had been discussed. It did not mean that they were all still active and "on the table". Some of these papers were identified in EPA's early Phase I guidance, such as NSR, designations process, and particulate matter designations. Some of the other papers came out of Work Group discussions, such as exposure based monitoring. For the Phase II papers, they were issues that were in play right now. The process flow chart was a summary of EPA's thoughts at this time and place in the process.

Area of Influence (AOI) and Area of Violation (AOV) Concept Paper -- Don Theiler (Wisconsin DNR)

Highlights

Don Theiler made a presentation designed to consolidate issues raised at previous meetings, introduce new terminology and concepts, and outline unresolved issues. He first presented the definitions of AOV and AOI. Several Subcommittee members commented on these definitions, asking about source culpability and how they would get all involved parties to the table and keep them there.

Mr. Theiler then presented his Work Group's concept of a regional plan, formerly the SPIP, and described the three steps in the AOI/AOV process: identify the AOI through the Sub-national Designation Region; develop the regional plan, and prepare SIPs/TIPs based on that plan.. He also presented options for Sub-national Designation Regions.

The Subcommittee commented on what incentives and authority existed to ensure that all affected parties participated in the regional planning process. Subcommittee members questioned who would decide which parties needed to be included in planning and what EPA's role would be in making those decisions. There was considerable comment about whether it was appropriate to start big, including everyone who might possibly be affected by the AOI determination and then eliminating unaffected participants, or whether to make advance determinations of who the most likely players would be, adding others if necessary. The Subcommittee requested information about the legal implications of Mr. Theiler's proposals. Questions were raised about the relationship between AOIs/AOVs and nonattainment areas under current standards. There was additional discussion of whether AOVs would have mandatory or voluntary controls. Several Subcommittee members asked how monitoring would be addressed in AOIs and AOVs, and also wanted to understand how this process would interact with New Source Review.

Mr. Theiler said his presentation was designed to consolidate issues raised at the July 25 and September 19 Subcommittee meetings, introduce some new terminology and a few new concepts, and outline some unresolved issues. His Work Group's basic approach was to separate the concepts of violation and influence and establish a stepped planning process to resolve violations.

Area of Violation (AOV)

AOV is the region which exceeds the ambient air quality standard.

AOV may or may not be a part of the AOI.

AOV is identified primarily by monitoring, although modeling can be used.

Co-AOVs may occur for fine particulates and ozone.

Class I areas are equivalent to AOVs.

Area of Influence

AOI is the domain containing anthropogenic and non-anthropogenic sources potentially contributing to AOVs.

States and tribes that are part of an AOI are required to prepare a regional plan, which will replace SpIP in their terminology.

AOI designation does not mean regulation in the entire area.

Jim Lents (SCAQMD) questioned what Mr. Theiler meant by the last statement.

Bruce Hill said he understood that the Science and Technical Support Work Group agreed that they did not have the capability to determine individual source culpability.

Don Theiler said he thought that the tools were available and that science could support this approach. He thought what Mr. Hill was talking about was identifying individual sources and their influence on, say, ozone.

Bruce Hill said then Mr. Theiler was talking about source categories, and not individual sources.

Don Theiler said no, he was discussing sources.

Sally Shaver asked whether the paper precluded the concept of regulation within an entire area.

Don Theiler said if in fact an AOI was designated and went through the planning process, it was possible that the control region would not be the entire AOI. This control region could change as more data, data analysis, and modeling were reviewed. They did not want to say AOI means regulation per se.

Bill Becker asked how they would keep people at the table who did not want to be there.

Don Theiler said he thought there would have to be some type of hammer to force this interaction take place. If they chose not to play, then perhaps EPA would be asked to represent them.

Pat Raher said if anyone failed to participate, then the basic principles called for the Federal government to step in an act accordingly.

Bill Becker asked how Mr. Theiler would make EPA come to the table if they did not want to be there.

Don Theiler agreed that was a real dilemma. He then went on to describe the regional plan.

Regional Plan

This is a new term, formerly referred to as a SPIP.

The Plan would be a document that would contain a set of recommendations to EPA.

It would not be a directly enforceable document.

It would provide the framework in which SIPS and TIPS need to fit; it is not a substitute for SIPS and TIPS.

The document would be a framework upon which EPA can base SIP/TIP calls.

Beverly Hartsock asked whether there would be a regional plan developed for each AOI.

Don Theiler said not necessarily. They could have one regional plan that would serve more than one AOI and/or Class I area. The Regional Plan at a minimum would contain the following:

Definition of the control region

Level of control/culpability for each of tribes/states covered by AOI New source control	recommendations

Conformity requirements where they would apply

Market-based incentive program recommendations if market-based incentives were desired	in this regional plan

Recommendations for Federal regulatory actions.

John Elston (New Jersey) said they really needed incentives to get the regional mechanism in place and operational. Without such a mechanism, organization, or incentives in place, he feared the entire AOI/AOV concept was doomed to failure.

Alan Krupnick said they had to break these things up into manageable pieces. The issue of keeping everyone at the table was important.

Christine Shaver asked whether EPA had adequate authority to make participation happen. She said her Work Group was focusing on these issues. The issue of incentives to get people to organize and meet was another whole question. The discussions were taking place, but there were no hard and fast answers at this time.

John Elston said he still maintained that this was perilous route to take.

Don Theiler said he hoped they would set up a process that provided the necessary incentives to get people to the table. He thought the institutional mechanisms paper and the market-based incentives papers were working toward this goal.

Shawn Kendall said this was the only approach to deal with regional haze issues. He said they might find that they wanted to make allocations by States and tribes, or they might not want to do it in this manner. There could be options associated with defining culpability.

David Hawkins said he thought that it would be very difficult to separate out the actions from the forcing issues on this entire AOI/AOV matter. When he compared this approach to the current Act, he saw a lot of things that were missing. It all started with the designation of areas that had specific air quality problems. There were very important elements in the existing CAA that had resulted in great strides in air quality improvement over recent years, and these elements seemed to be missing from this approach.

Alan Krupnick said this was a clear example of signing onto one element of a package. Each group had its own individual agenda that it wanted to see in the package before it signed on for the long haul. He said they needed to begin to draw these concepts to closure.

Don Theiler said they had discussed reasonable further progress determination in detail.

Dennis Lawler (Illinois EPA) asked whether Federal regulatory action was a wish list from the States.

Don Theiler said no, he thought this type of Federal intervention was necessary. He then proceeded to describe the three step AOI process.

Step I - Identify AOI

Sub-national Designation Region is a new term that was formerly called Sub-national Planning Region.

There is a process to bring all potentially affected States to the table to determine who stays	at the table.

Define AOI without delay using the best tools and data available.

Localized AOIs - within a single State, consolidate regional planning and SIP/TIP steps into one step.

Integrated AOIs would include overlapping AOIs, multiple pollutants or "co-AOIs", and regional haze.

Beverly Hartsock asked when they would determine who would or would not be at the table.

Don Theiler said he thought they needed to be at the table from the moment that culpability was established.

Beverly Hartsock said she was trying to understand the dynamics of this process.

Don Theiler said the control region would be identified, and then the AOI could be modified down the road. Obviously, this would be a very dynamic process.

Beverly Hartsock asked whether there were there any discussions about EPA's role in all of this.

Don Theiler said yes, one of the alternatives they identified was to allow EPA to use its judgement to determine who would stay at the table once the discussions were started.

Beverly Hartsock asked how they thought that would work.

Don Theiler replied that EPA probably would determine up front who should be at the table.

Bruce Hill asked why they would start with a crude approach and then refine, instead of doing a better job initially of defining who should be at the table.

Shawn Kendall said essentially this was the way the GCVTC was operated.

Bradford Smith said his interpretation was that a subdivision of the AOI had to prove the negative, that it did not belong at the table. It was his opinion and experience that this was generally very difficult to do.

Don Theiler said they did that all the time, starting big and then working down to a more manageable, smaller group.

David Hawkins said he was interested in their assessment of the OTAG process, and how painfully slow this process could be/had been. He asked what would be the original convening body.

Don Theiler said the original convening body was not currently defined/resolved. If they looked at the OTAG process, he thought that it was a good example.

David Hawkins said his perception from the OTAG process was that it had not been possible to determine a State's involvement until some very refined tools were developed and tested. It appeared to be a very slow, methodical process.

Don Theiler said that Jerry Golden had brought up a very interesting concept the previous day. He indicated that the collection of data in advance of the situation would provide States with the incentive to do early data collection and analysis, so they could argue their involvement/exclusion from the table. They simply needed to put all the rules on the table in advance, and let the States begin to gather their information.

Beverly Hartsock said the planning process alone was an unmanageable process for States located in the middle of the country. They simply did not have the resources to play in all of these planning processes.

Ted Russell said there were tools available to do a timely and concise determination of these issues.

Pat Raher asked whether anybody was looking at whether there were natural groupings or boundaries for the individual pollutants.

Shawn Kendall said that in terms of the regional haze issue in the West, one of the recommendations was to include entire States, rather than splitting the country right down the middle and splitting the states of Texas, Oklahoma, Nebraska, etc.

Beverly Hartsock said no, David Hawkins, they were not going to split-up the State of Texas into 5 smaller States. However, until proven otherwise, they would be involved in the decision for the AOIs for both Los Angeles and New York because of being in the middle of the country. She wondered how long these planning processes would go before Texas could be excused from the table.

Don Theiler said boundaries must be defined first; then the original States must come to the table; then the refinement process would begin. There was no way to make everyone happy. They had laid out five options at the end of the paper for doing this.

Step II - Regional Plan

During planning process, refine tools and generate additional data needed to prepare a Regional Plan.

AOI may be adjusted during regional planning process.

Plan must identify attainment framework and regional haze controls.

Step III - SIPs/TIPs

Prepare SIPs/TIPs based on recommendations contained in the Regional Plan.

Federal actions may also be required in Step III.

Regional Plan should provide maximum flexibility for SIP/TIP development.

Mr. Theiler said many issues remain to be addressed: identification of designation regions; techniques/guidance for identifying the AOI; and the concept of Reasonable Further Progress, among many others.

Options for Sub-national Designation Regions

Put 100th meridian States in the East or West.

Put 100th meridian States in both regions.

Create a third region.

Split 100th meridian States.

Use a case by case flexible approach.

David Hawkins asked whether they had identified timelines for these scenarios.

Don Theiler said no, but he thought it would be approximately six months from the time the AOV was designated until the AOI could be determined and the appropriate people brought to the table. The overall process should take approximately four years. Mr. Theiler emphasized that this was a personal answer, not a Work Group answer.

Richard Hayslip (Salt River Project) expressed concern that in the GCVTC work, they found that nearfield sources contributed most significantly to violation problems. He would concur with what Harvey Jeffries said that morning; they needed to get away from the concept that long-range transport was the catch-all, end-all solution to this problem.

Don Theiler said the concept paper that he put forward did deal with these issues.

Pat Raher noted that Mr. Jeffries said to use the best scientifically-based determination of what was causing the problem, and then use this to develop the appropriate control strategy.

Tim O'Brien (Ford Motor Company) said he would agree with David Hawkins, but a related comment would be that before too long, they would need to have a legal group supporting the Subcommittee. They did not want lawyers constraining their development processes, but they did not want to be ignorant of legal issues either.

Sally Shaver said that since the initial work began in July, EPA personnel had been working with EPA's Office of General Counsel, which was looking into the legalities of working AOI/AOV into the current CAA. So far there were no show stoppers in the process. The CAA in its current configuration had a good deal of flexibility built into it. Ms. Shaver asked for volunteers from the Subcommittee to assess this.

Tim O'Brien said he would be interested in receiving some feedback from the OGC discussions.

Sally Shaver said she would be happy to provide this. In response to Mr. Hawkins's response on the timelines, one of the things that she had thought about was getting to the AOV designations as quickly as possible, and then possibly allowing the acceleration of the AOI designation process.

Dave Howecamp asked whether the issue of mandatory measures was being considered by Mr. Theiler's Work Group.

Don Theiler said that issue would come up under Phase II. Was that reasonable further progress? They were not sure and hoped to address this in a Phase II paper.

Shawn Kendall suggested that they add an option designating the 11 western States as one region and the rest of the country in some other manner. All in all, he thought this was "a wonderful piece of work".

David Baron noted that Sally Shaver said EPA was looking at nonattainment areas as part of this process. He was confused as to whether they were talking about AOIs as nonattainment areas.

Sally Shaver said no, nonattainment areas would be synonymous with AOVs, not AOIs. Nonattainment areas currently were tied to the 0.12 standard and the CAA-mandated classification standards. This was where they would allow some flexibility, but not total flexibility.

David Baron said that Section 172 of the Act laid out generic requirements for all nonattainment area SIPS. He asked whether those requirements applied to an AOV under this concept.

Don Theiler said not under the way it was written. If the AOV was part of the AOI, which was part of the control region, nothing would be in place. It did not automatically kick in the regulatory band wagon. This was not necessarily a foreign concept.

David Baron said there seemed to be a dichotomy here from what Ms. Shaver was saying and what Mr. Theiler's group was saying.

Sally Shaver said she wanted to see it completed before she would buy into anything.

David Hawkins said he thought he was hearing that this was a Phase II issue, but this was not what he heard Mr. Theiler saying. They were asking people to buy into an unclear concept. Mr. Theiler was saying that the concept of AOI/AOV does not mean automatic controls.

Don Theiler said an AOV does not mean automatic inclusion in the AOI and the control/planning region.

Sally Shaver said she would like to see Don Theiler's group show both inside and outside the box thinking.

David Hawkins asked what the problem was with the current approach of saying one had a monitored exceedance, which triggered mandatory control programs.

Bill Becker said he thought many of the concerns might go away if they made an assumption about removing the preclusion statements that they had been discussing.

Don Theiler said they could go back to assuming that AOVs were part of AOIs and thus the control region.

Alan Krupnick said he did not think that this approach was an adequate representation of what was included in the CAA.

Bill Becker said he did not hear any objection from anyone saying that they were opposed to having some mandatory controls in AOVs. They had been focusing more on AOIs and control regions. If this concept did not have support from the environmental groups and perhaps others, then they had a problem on our hands. It was not foreign to include mandatory controls in AOVs.

David Baron asked what would happen when different States got together and started talking about reducing transport within the AOI.

Don Theiler said this was an institutional issue.

BREAK

Alan Krupnick said that from discussions over break, he thought they should return to Mr. Theiler and a proposed strategy.

Don Theiler said one of things talked about was to take the concept paper back to the Work Group and discuss some of the issues, especially RFP and AOV, and bring a progress report back to the Subcommittee.

David Baron asked whether the discussion would include mandatory measures.

Don Theiler answered yes.

Alan Krupnick asked for comments on this suggestion.

Bradford Smith said he was somewhat supportive. His concern was that in discussions heretofore there had been an intellectual point of view that an AOV was innocent until proven guilty. He would not want to see them go to the other extreme and thought there could be a real service provided by thinking it through. In their collective experience, most areas that were in violation contributed to that violation in some fashion. Mr. Smith thought they should use the premise that AOVs contributed to violations in some form until something was proven otherwise.

Robert Wyman supported Mr. Theiler's recommendation and supported looking into legal questions. He also reminded them that they should not constrain their discussion to the current CAA.

Sally Shaver said that according to discussions with OGC, EPA believes that these concepts can fit into the Act.

Don Theiler said he thought lawyers would have to be a part of discussion.

Beverly Hartsock asked what it would do to other papers that depend on AOI/AOV if they remanded this paper to be worked on more.

Sally Shaver said there was a time issue here, primarily the proposal of Phase I by June 1997. She was not sure what option was being recommended today.

Bob Smith asked whether the FACA group accepted responsibility that in some instances sources outside of a nonattainment area contributed. This was a core principle and it had never really been discussed.

Shawn Kendall said when they looked at mandatory measures areas he assumed this did not mean Class I areas. In terms of regional planning, there was a need for AOIs to be broad. For regional haze they needed to look at equity. For example Los Angeles already had lots of controls. If reasonable progress said one had to have 50 ton reductions in Los Angeles and 50 ton reductions elsewhere, that would not be fair because Los Angeles had reduced a significant amount already. The Subcommittee must have a good feel for what programs were doing already.

David Hawkins thanked Mr. Theiler and the Work Group for putting together a framework. There were still issues that needed to be addressed. He asked how they would get areas to monitor that needed to start monitoring. He said his concerns were focused on whether a concept could succeed in achieving its objective. Mr. Hawkins agreed that there were nonattainment areas that were not solely responsible for their problems. He suggested that the Work Group look at base measures. There was a fundamental policy issue about whether there should be a up front measures that precede the SIP process. Mr. Hawkins also suggested that the Work Group look at the idea of base level of reduction of emissions in an AOI.

Dave Howecamp said he had a similar question. One of the key issues was NSR and what would be done about it. He asked Mr. Theiler if he saw his group working on NSR.

Don Theiler said yes, they would have to come together at some point.

Christine Shaver said they needed to merge institutional mechanisms with AOI/AOV as well as NSR. Otherwise, they would be back at this impasse at the next meeting. Within the National and Regional Strategies Work Group at least, they needed to start merging these issues.

Sally Shaver said she would like to see a discussion on NSR review tomorrow, and then see these three groups (i.e., NSR, institutional mechanisms, and AOI/AOV) come together over the next six weeks, so that progress could be made prior to the Subcommittee's meeting in February.

Alan Krupnick said so, the answers to the two questions are no and no.

David Baron said he would agree with David Hawkins's last comments. For the purposes of the remand group, Sally Shaver identified things that OGC was considering for nonattainment areas, specifically NSR. He thought this list should be much longer. Mobile sources, conformity, requirements for RACT, contingency measures, RFP, etc., should all be included in this process. He could not favor any proposal that wiped out these types of programs out.

Sally Shaver said when she made the statement about nonattainment areas, she meant that the areas had to be designated, but that they did not necessarily have to be called nonattainment areas.

Don Theiler said he put together a presentation on how the real world was dealing with nonattainment areas. He asked this subcommittee to allow him 30 minutes to revisit this issue at the next meeting.

PM-Fine Designations - Joe Paisie

Highlights

Joe Paisie presented information on PM-fine designations focusing on two options: 1) the rolling method, which involves making preliminary designations at promulgation, interim designations after two years of data are available, and final designations when three years of data are available; and 2) the early response methods, which would select areas because of a high probability to exceed the new NAAQS and set a time certain attainment date.

The Subcommittee members raised concerns about how sufficient monitors were going to be put in place to gather the needed data, how much the monitoring would cost, and who would pay for it.

A public interest group representative raised the point that, while they seemed concerned with the cost to an area that began implementing emission reduction measures that were later deemed unnecessary, they had not addressed the cost associated with delaying controls in a region where they subsequently were needed. He was troubled that the proposed approaches seemed to get away from EPA's traditional approach for setting an exceedance limit and subsequent designation as nonattainment. Public interest group representatives also said that EPA should not limit its actions because of concerns about public reaction to their policies; rather EPA should make the decisions and then explain to the public why those actions are cost effective and worthwhile.

A State representative emphasized the need to look at the labor and manpower requirements needed to collect data and analyze them properly. Without additional money, it would not happen. Another State representative said that the real issue was when the planning process should start and suggested revisiting the idea of unclassifiable areas.

Representatives from academia argued that the problems with gathering monitoring data were not a function of scientific limitations but rather of management limitations.

Mr. Paisie came back the second day with a revised presentation and outlined nine principles that he believed were raised the previous day dealing with data collection frequency and methods, cost of monitoring and data analysis, schedule for designations, incentives, the planning process, speciated data, and implementation of controls.

Public interest group representatives were concerned about language implying that the designation process could take three years, a concern that was shared by an EPA representative.

Industry representatives raised issues about what data EPA would accept and the role of nonreference method data. The also were concerned about sampling frequency, and disagreed about what the time frame for data collection should be.

State, EPA, and public interest group representatives supported the linkage between the designation and planning processes.

State representatives wanted to ensure that designations were not made based on insufficient data. They also did not want to be precluded from taking voluntary preemptive measures o implementing credits for an early reduction program. States said they did not want to have to wait for speciated data before beginning their actions.

A Federal agency representative noted that there might be controls that could be put in place for ozone and regional haze before PM rules were implemented, which was supported by State and public interest group representatives.

Mr. Paisie showed several slides in his presentation. In one he pointed out that EPA prefers to use three years of data to make designations

Comments on Previous Draft

Science sector is against Ratio Method.

State/Industry sector wants designations based on three years of data.

Environmental sectors wants progress towards cleaner air.

Option 1: Rolling Method

Preliminary designations are made at promulgation based on all available data.

When two years of data are available, interim designation is made.

High population exposure areas get monitors first.

Final designation will be made when three years of data are available.

Pros: decisions based on actual data; control strategy development not destroyed

Bill Becker asked whether there would not be a disincentive for monitoring with this approach.

Joe Paisie said that this was a possibility.

Beverly Hartsock asked whether this meant that all three options (e.g. attainment, nonattainment, unclassifiable) were viable.

Joe Paisie said yes.

David Baron asked whether they were ruling out the ratio method in this option.

Joe Paisie said yes, based on what they heard from the STSWG.

Glen Cass noted that inherent in all of these discussions was the case that they could not put out enough monitors in the first year.

Joe Paisie said they had outlined this issue in the paper. The money available was 105 Grant program funds. So, to some extent, that was where the monitoring dollars would come from.

Glen Cass asked for a total amount of dollars to run some internal consistency checks.

Joe Paisie said he did not have these numbers.

Bill Becker asked if someone could report back to this committee on the dollar amount involved here. Clearly they did not have $40 million in the 105 Grant pool, so it was important to understand what level of funding was required to do this thing the correct way. They should not necessarily look at it as a zero-sum game for the EPA or the States.

Joe Paisie said they would still have the fundamental problem of deploying the monitors, collecting the data, and then doing the analyses.

John Elston said money was only one component of this puzzle, and all the pieces needed to be integrated and timed appropriately to make the program work. This could very well be a five or six year program, if the funds were available at the front end of this process. Sound science was important, but to build a powerful comprehensive program was more than a money issue.

Joe Paisie continued his presentation.

Option 2: Early Response Method

Areas would be selected because of a high probability to exceed the new NAAQS.

Processes would be linked to a time certain attainment date

Integration Implications: EPA is exploring the linkages of PM, ozone, and regional haze.

Mr. Paisie then asked what the Subcommittee's recommendation was between the two options.

Alan Krupnick said he was having a hard time comparing these two options. There were elements that he liked and elements that he disliked. The simplest example was speciation -- it was discussed in the early response method and not in the rolling method.

Joe Paisie said it was not truly an either/or issue. They could mix and match however they chose.

Dennis Lawler asked whether they were locked into the ratio method in an area where there were no existing PM-fine data.

Joe Paisie said realistically, yes. It would not be an exact use of the ratio data, but would be a more scientifically robust approach.

Tim O'Brien said he was interested in "consensus at the last meeting" on the use of moving forward without actual data. To move forward without actually having data was dangerous in his opinion.

Joe Paisie said that in terms of moving forward, he thought they had had the unclassifiable approach laid on the table. They took this off the table after the last meeting, and adopted the two methods currently under discussion.

Dennis Lawler asked if an area was unclassifiable for the first two years whether it would have an impact on the use of the rolling method.

Joe Paisie said no, that would be an interim designation.

David Hawkins said he wanted to probe a little on this question of the scientifically valid methodology. He also thought the relationship of designation to the beginning of the planning process was missing. Mr. Hawkins wondered why they were not looking more aggressively at an alternative that used a common sense approach to identify area most likely to violate the new standard with varying levels of certainty. There appeared to be a disconnect from the traditional EPA approach for nailing down the limit for exceedance and subsequent designation as nonattainment. Also, this struck him as a one-sided discussion of this issue. Analytically, this was an error of omission problem. They could start a process of emission reduction measures in an area where it was not necessary. However, what were the costs associated with not beginning controls in a region where the controls were necessary -- they had not discussed the costs associated with these types of delays. Mr. Hawkins said yes, early designation did carry the risk of implementing programs that might not be productive, but delaying designation carried its own set of risks.

Joe Williams (WESTAR) asked whether NSR, LAER, and offsets would be operational under this interim period.

Joe Paisie said this paper was not intended to address those types of issues. The integration piece was simply an obvious one that fell out of the question of timing.

Richard Phelps (Eastman Company) said he thought that David Hawkins had identified that it was risky to designate on limited data. One way to reduce this risk was to run the data through some type of extreme value analysis.

Shawn Kendall asked what monitoring frequency was expected under this option.

Joe Paisie said this crossed the line between the Federal Reference Method and implementation issues. It was a fuzzy gray line at this time.

Shawn Kendall said he had a concern about the idea that they had a piece of hardware sitting there that they were not using. It would seem to him that they were collecting data approximately 16 percent of the time and missing the remaining 84 percent of the data. Should they not look at deploying a monitor early, increasing the frequency of monitoring (e.g., daily), doing this for a year, and then only speciating the top 10 percent of the data readings? If they had a problem, then drop the high-frequency monitoring while they came up with a control strategy.

Bob Palzer said he liked Shawn Kendall's approach. He asked whether they had looked at using non-reference methods for this process (e.g., nephelometer readings) in conjunction with other ratioing techniques. If the data existed and were being collected on a daily basis, then the statistical comparisons should be rather straightforward.

Bruce Hill said nephelometers were fine, but they had to be heated. The Harvard Impactor could be a better technique. However, he seconded the idea of making more concentrated measurements within the first year.

Richard Phelps said quite often the sampling method did greatly affect the quality of the data. Nephelometry was at best a stretch when considering PM-fine concentrations. Thus, he would caution the Subcommittee not to even enter that realm of risk.

John Taunton (Exxon) said he could endorse initiating a planning process early-on in the measurement process. On the other hand, he had a problem with Mr. Hawkins's concept of initiating controls in the same time frame.

Beverly Hartsock said when they talked about all of these things, they must also consider the labor and manpower necessary to collect the data and analyze them properly. They were talking about an intensive process with no new monies being put on the table. No matter what they tried to write into these papers, without additional monies, it simply would not happen.

David Baron said public acceptance of control strategies was key since some controls would change the way things were done. He thought some of these controls would be very popular (e.g., diesel emission controls). He agreed that there would be others that would be unpopular. If they had an area that had a pretty good monitoring data base for PM-fines, and the probability of violation was extraordinarily high, as he read this, they did not have to start with the full planning method right away. - Was this a correct read on this issue?

Joe Paisie said they were not trying to answer this question in the paper, as he recalled it.

Sally Shaver noted that the paper said the interim strategy would begin immediately.

David Baron asked what the difference was between the interim and the final control strategies.

Joe Paisie said controls would evolve as the data became available, and asked whether this answered Mr. Baron's question.

David Baron said no. He asked whether the interim plan was the same for Los Angeles as for another city that might not be as likely to violate.

Joe Paisie said that they had gone back and looked at the Act to determine how much flexibility they had.

Sally Shaver said they did have an approach to implement the planning process as soon as possible to protect health and welfare issues. This way, they could get as much of the planning done as soon as possible, so that there would be minimal delays in actually implementing the process.

David Baron said that an interim designation denoted some lesser planning requirements. He could accept the interim designation as long as this was not a weakening of the process.

Joe Paisie said they wanted to strike a balance between early action and environmental progress.

Sally Shaver said as long as David Baron supported the approach, they could work with the wording.

John Taunton said everybody around this table would support enhanced I/M programs.

Shawn Kendall responded to the nephelometer comment. He said he could not develop a control strategy from nephelometer data, it did not tell him where the particle came from, but it could tell him where he needed a speciated PM-fines monitor. As for the money, his company had to write a huge Title V check each year. He wondered if there was another option for this funding.

Rich Halvey said that somebody had asked the question about the ratio method and its use with the PM-10 process. He wondered how many areas were identified as probable violators and turned out to be in attainment, or were not identified and then found to be in nonattainment. Additionally, Mr. Halvey thought that 300 to 500 monitors was a fairly minimal level of spatial coverage. He thought they might be required to use monitoring and ratio techniques in order to meet the goals of this initiative.

David Hawkins said he thought that the Subcommittee needed to evaluate the policies based on what they thought would make sense, and then implement them in a fashion that would created public acceptance. Some strategies would upset the public, regardless of how robust the monitoring was. It was not responsible to say that they needed to be concerned about public opinion. If this Subcommittee was going to delay designations for the purpose of gathering more information, then it must be shown that the delays were cost effective and worthwhile.

Glen Cass said the STSWG discussed the fact that the data issue was not a function of science limitations but more simply a function of management fallacies. The technologies were available, and the means were available to analyze these types of data. Economies of scale would only drive these costs down, not up. The cost of analyzing the monitors was $10,000 per year for each monitoring site for every sixth day PM-fine monitoring, including speciation. Thus, for economies of scale, to add 500 monitors, they were talking about $5 million dollars annually; this was not going to break the bank of the United States. The San Joaquin Valley was a perfect example of how money could be appropriated for environmental research, modeling, and data collection.

Mr. Cass further contended that the real barrier was management. The answer was people were scared to do something that they had not done before. However, if they could copy what someone else had done, then perhaps they would be motivated to do so. They needed to provide good management to accomplish this goal. If they tried to establish 50 labs in 50 States, it would fail. The country needed to establish two or three centrally located laboratories to do these types of analyses. This was a management problem and not a science issue. And of course it was possible to make scientific mistakes.

Joe Williams said he did not want to diminish the need for good quality monitoring data. He was looking at Option 1, where it talked about control strategy development. He thought they could move forward on the development of SIPs. The real question here was when they should start the planning process. He suggested that they might want to revisit the issue of unclassifiable.

Bruce Hill said he was in total agreement with STSWG's opinion on monitoring. In the monitoring of PM-fine one was talking about a gravimetric response; it was not as complicated as doing VOCs. Visibility data were potentially robust enough to initiate planning for regional haze in some areas.

Alan Krupnick said they were not ready to answer this question yet. He asked what elements they wanted to have in an option for PM-fines. Mr. Krupnick said he did not hear anyone saying that cost issues should not be considered. They needed a brief analysis of fundamental funding, analytical, and administrative requirements for implementing this monitoring program. They needed to put this in one place. To the extent that they could not come to agreement on the problems, they could propose two trains of thought - one that was ideal, and the other that was more realistic. Mr. Krupnick thought they should be using all available data to make designations - this was what he heard everyone saying.

Nader Mansour said it would be helpful to stop making this a dichotomous decision. There was not a one-size fits all solution to this problem.

Alan Krupnick asked whether the Subcommittee wanted to spend some time on this issue the next day.

Bradford Smith asked Mr. Paisie if he could take the two slides that describe the two options and combine them into one.

Joe Paisie replied that he could do that.

Alan Krupnick said that the issue would be revisited in the morning and called on volunteers to help Joe Paisie.

November 20, 1996

Alan Krupnick began the second day of the meeting by reviewing the schedule, saying that in July 1997, EPA would issue the Phase I implementation guidelines; if they backed up 90 days for OMB review, they would be in March 1997. The Subcommittee's next meeting was in February 1997. Thus, EPA must begin immediately on these materials, which meant that Sally Shaver and Mr. Krupnick might have to cut off some of the discussions.

Sally Shaver noted that she had a lot of the materials that had already gone out to EPA regions. As other materials became available, EPA would be releasing them to the Subcommittee. If Subcommittee members had ideas, she asked that they please submit them to Tom Curran that day.

PM Designations -- Joe Paisie

Mr. Paisie presented information following from the previous day's discussions.

The PM-fine monitoring program needed adequate financial and management support.

The designation process must be completed within three years; designations will drive data collection.

Incentives were needed to monitor in areas initially designated as in attainment.

The planning process should begin as soon as possible when data indicate the need.

Speciated monitoring data were needed for planning and controls.

Reports were needed on resource requirements for implementing PM monitoring.

Monitoring more frequently than once in six days was desirable.

Controls should not be implemented until after final designations.

Alan Krupnick told the Subcommittee that if they had specific changes, they needed to speak up. They needed to compile a list of major elements that the Subcommittee would like to see in the Phase I report.

Bill Becker said they needed to know how much it would cost. The last principle was a factfinding mission to determine what the cost was. They needed to know whether Glen Cass was correct (i.e., $5 million) or OAQPS was correct (tens of millions of dollars).

Shawn Kendall said he did not think the concept of financial and management support was needed. He said that it was a no-brainer -- if one did not have it, one did not have a program.

David Hawkins said he thought this bullet should be supplemented to read that EPA should investigate more frequent data collection. It should not be simply listed as desirable, rather it should be a part of the three-year data collection effort.

Richard Phelps said he would agree that the time frame could be compressed. However, some type of meteorological filter would have to be applied.

David Hawkins said this could be taken to mean that the designation process would take three years; he did not agree with this.

David Baron commented on whether the designation process must be completed within three years and said he would like to suggest some new language. It should say that areas with high probability of nonattainment should be designated at the time of promulgation of the new NAAQS.

Alan Krupnick noted that they did have a discussion about this the previous day.

Sally Shaver said what she saw missing was the use of any available data in high probability regions to go ahead and expedite the designation process. She also did not like the three-year statement.

Alan Krupnick said he would agree to amend this to say "no later than three years" on the designation process.

Greg Schaefer (Arco) said they had been collecting data for several years. Would EPA accept these data, or would they come back and say they were not usable because they were not collected with a reference monitor? He said this needed to be a two-way street.

Joe Paisie said that seemed to be the dilemma with using non-reference method data. He did not know the answer to this question. He was not sure what legal challenge this type of approach could withstand.

Alan Krupnick suggested that they could put a placeholder in the agenda on this point.

Sally Shaver asked whether the concept of using available data was captured in this concept list.

Alan Krupnick replied not really, which was why he said they needed a placeholder for this issue.

Bruce Hill asked whether they should recommend that in the first few years they investigate the equivalency of methods and the compatibility of differing methods.

Joe Paisie said he was not sure about the Federal Reference Method. In terms of using existing data, he simply did not know.

Dennis Lawler said he just wanted to make sure that there were a lot areas in the country where there were simply no PM-fine data, especially in the middle of the country. They simply could not backtrack to using the reference method.

David Baron said areas with high probability of nonattainment needed to be designated at the time of promulgation.

Joe Williams contended that they had this discussion at the previous meeting and that it needed to be stricken from the record.

Alan Krupnick asked whether they could amend this to "areas with three years of valid data ...."

David Hawkins wanted to know who was the "we" that discussed this issue with Mr. Williams.

Sally Shaver said the point was to begin the planning process as soon as possible - they did discuss this at the last meeting. It seemed to her that if EPA had the authority under Phase I to designate planning regions, then it could then impose some basic planning requirements on these regions.

Jean Vernet wondered what happened to the gubernatorial designations.

Bob Palzer wanted to support Sally Shaver's suggestion; he thought it made a lot of sense.

John Elston agreed with Sally Shaver that this was the linkage between the designation and planning processes. He thought this would work toward getting them good data. He would like to couple this with the timely environmental progress principle, which they discussed yesterday. This began to address another issue related to implementation that got very little attention yesterday.

David Hawkins said he did not see anything in the Dallas minutes which indicated the removal of early designations and asked whether he was correct in this.

Alan Krupnick said Mr. Hawkins was correct, there was no consensus.

David Baron suggested that they remove the time frame and simply say "areas with valid data ...."

Glen Cass said he thought they should replace the word "valid" with "sufficient". The question of valid data could bring up conflicts with FRM data.

Sally Shaver said she would prefer saying "as soon as possible", and not "the time of promulgation". She thought that Jean Vernet's comment reminded them that the current law was not able to support this approach.

Alan Krupnick asked whether Sally Shaver meant "as soon as possible after promulgation".

Sally Shaver said yes, that is acceptable.

Steve Gerritson (Lake Michigan Air Director's Consortium) said he was not against the change.

Joe Williams said he would support it as long as it was consistent with the one above about not designating without sufficient data.

Alan Krupnick asked about the incentives bullet, wondering whether it was really needed based on what Sally Shaver had said.

David Baron agreed that perhaps they did not need this bullet. It raised a contentious issue with regard to incentives.

Alan Krupnick said okay, this one was struck from the list.

Donna Lamb (USDA Forest Service) said that if they looked at the integrated planning approach, there might be some controls that could be put in place for ozone and regional haze before one could implement the PM rules.

Bill Becker thought that was an excellent point; the regulation of heavy duty engines was a perfect example.

Alan Krupnick said that was a Federal initiative. What they were looking for here was the involvement of State and local governments.

Bill Becker noted that Federal regulators must also be involved, even in the AOI issue.

Bob Palzer said he agreed with Donna Lamb; wherever they identified a situation where controls would be useful, they should be implemented.

Nader Mansour said the wording here was confusing. It seemed to imply controls in general. They had controls in place for current standards, and would continue to have them in place. He asked whether they were discussing new controls here.

Joe Paisie said yes, that was what they were talking about - new controls for the new standard.

Alan Krupnick said okay, they would add "new" to this principle.

David Hawkins said he was not sure where they were at this point. He objected to the sweeping nature of this statement. No matter how sensible and effective they were, they had to wait until after final designations were available.

Alan Krupnick said they still needed some sense of the higher standard of proof.

David Hawkins repled that the only reason they needed a higher standard of proof would be the availability of identifiable measures of nonattainment.

Sally Shaver asked whether there were certain control measures that did make sense (e.g., local controls). She opposed the statement that they were going to do everything immediately.

Greg Green (Oregon DEQ) suggested that they already did have a balance in the program. He would recommend striking this concept altogether.

Tim O'Brien said that was one way, but he also thought they might amend the statement to say the "consideration of designation status".

David Hawkins proposed another working: "EPA should explore options during the designation process".

Dick Schoenberg (U.S. Department of Transportation) said he thought that there were ways to continue this process without mandatory controls.

John Elston said Principle #5 from yesterday spoke to this issue.

Greg Green said he would agree with that, but if this statement was included, it could limit some States from taking any voluntary preemptive measures.

Bradford Smith said he thought they could live with this; early implementation could be encouraged.

Beverly Hartsock said she was getting the feeling that early action was not encouraged.

David Hawkins said he did not think that they should rule out anything at this time.

Greg Schaefer asked about credits for an early reduction program.

Nader Mansour commented that the Subcommittee should think about "encourage, explore, identify" - any of these words would fit into this principle nicely.

Greg Schaefer suggested, "Early reductions should be explored..."

David Hawkins was concerned that incentives limited potential actions.

Sally Shaver asked David Hawkins if he wanted to say "encouraged and suggested".

David Hawkins offered, "Early options for controls during the designations process should be employed and encouraged."

Shawn Kendall said there was a reason for this statement being included. It prevented unnecessary local controls in a regional planning process. He did not know that this issue needed to be here. If one was in attainment, a control program was not necessary. He also suggested that EPA should be looking at a higher sampling frequency over a shorter time period.

Richard Phelps disagreed with Shawn Kendall. He said he hated to see the temporal frame compressed so much. Mr. Phelps contended that they had overlooked Joe Williams's suggestion about changing the bullet on designation - "data collection should drive designations."

Greg Schaefer suggested higher frequency monitoring "where practical". Arco's operations were predominantly rural, and doing more monitoring in the winter months simply was not practical.

Beverly Hartsock commented on the notion of more frequent monitoring as a solution. She cautioned against using this to supplement the three-year process.

Alan Krupnick suggested, "Consider more frequent monitoring..." to accommodate Richard Phelps and Beverly Hartsock. He suggested they move to speciated monitoring.

Beverly Hartsock said she was not arguing against speciated data, but this bullet did not have it listed as a requirement. She cautioned against making this a requirement.

David Baron said he thought he was agreeing with Ms. Hartsock. He did not want this to be interpreted that there could not be controls until they had speciated data. Speciated data should be used in conjunction with planning and controls.

Pat Raher said he thought the STSWG would be discussing the need for speciation.

Glen Cass said he knew the concern was that the need for speciation might delay air quality improvements. However, interests would be best served when the control programs worked, and this was not possible without speciated data. Everyone's best interests were served here with a better, faster, cheaper system or model to handle this issue.

David Baron said he did not think he was disagreeing with Glen Cass, but these data should not be pre-conditions for controls.

Shawn Kendall said he like David Baron's last statement -- "speciated monitoring data should be required to assist in planning and control program design".

Bill Becker said he would like to strengthen the financial requirements statement.

Attainment Dates -- Herb Williams

Highlights

Herb Williams made his presentation the Base Programs and Policies Work Group and the Attainment Dates Ad Hoc Sub-group. The focus of his presentation was on elements for consideration in Phase II.

The Subcommittee was initially concerned about the elements that were presented and figuring out which ones were principles and which were factors for consideration. They then went through the elements individually.

There was disagreement between industry and public interest group representative about whether date certain as a driver was useful only after the planning process.

Public interest group representatives supported the imposition of penalties for failure to reach attainment, although they acknowledged that flexibility could be useful in some situations. They noted that flexibility in attainment dates seemed inconsistent with the date certain concept. An industry representative supported the concept of penalizing organizations that dragged their feet, but he was concerned about what would happen to entities that put forth good faith effort but could not meet attainment because of circumstances beyond their control.

The concept of planned reductions received attention from the Subcommittee. A public interest group representative that they needed more information before they could have discussions about planned reductions. Several Subcommittee members commented on the importance of timing.

Mr. Williams made his presentation for the Base Programs and Policies Work Group. He first reported on the Attainment Dates Ad Hoc Sub-group. Their recommendation for Phase I was that they needed to know level of the standard and thus wanted to delay the attainment dates recommendation to Phase II after they knew the level of the standard. In the interim period, they recommended identifying concepts and elements for consideration and/or inclusion in the Phase II final report.

Concepts/Elements for Consideration/Inclusion in Phase II Attainment Dates Recommendation

Date certain as the driver

Interim dates (due dates for planning process elements)

AOI/AOV approach

Reasonable planning cycle

Timing of initiation of planning process

Flexibility

Scaled/targeted consequences

Targeted RFP - reductions of ambient levels

Planned emissions reductions

Achievability (stringency) of standards

Eligibility criteria for flexibility

Contingency measures

Mid-cycle reviews and adjustments

Incentives (safe harbor) - early attainment/reductions

End-of-cycle review, assessment and future planning.

Concepts/Elements for Consideration/Inclusion

Integration of approach to new NAAQS/regional haze

Public expectations

Costs/benefits

Transport

Meteorological conditions (e.g. variability, natural events policy, international transport, etc.)

Mr. Williams said his Work Group was interested in feedback from the Subcommittee on its recommendation.

Alan Krupnick asked whether there were options other than deletions and amendments on these 21 points. He needed some clarification on some of these principles. The first question was would they be moving toward defining final attainment dates paper in Phase II.

Beverly Hartsock said it seemed fine to her.

Alan Krupnick said great, then they were all in agreement on this question.

Tim O'Brien said it was not really clear what the drivers were at this point. He wondered if they were factors for consideration in the Phase II process.

Alan Krupnick said he thought that was a very useful point. Some were factors to be considered, and others were principles.

Herb Williams said he would agree with this.

Alan Krupnick said he thought they should identify which ones were factors for consideration and which were principles.

Tim O'Brien said he thought it was premature to be making policy decisions.

Alan Krupnick asked to hear some other points on this.

Date Certain

Nader Mansour said date certain as a driver was useful only if it occurred after the planning process. Otherwise, date certain was a formula for failure.

David Hawkins disagreed with Mr. Mansour's comment. He said the current structure of the Act was sufficient to make adequate progress.

Shawn Kendall said that for regional haze some things needed to added, particularly a long-term review of the progress being made, because regional haze does not have a date certain approach as its driver.

Interim Dates

No comments

AOV/AOI

Alan Krupnick asked what was meant by saying one could have a different schedule.

Herb Williams said that was one possibility. Another approach was different sized AOIs that were affecting different AOVs -- it was really a flexibility issue.

Reasonable Planning Cycle

No comments

Timing

No comments

Flexibility

David Hawkins commented on flexibility in both Items f and g in the original document. He thought the penalties for failure to reach attainment were good and necessary in this system. The current Act had in it a methodology for dealing with real consequences, for example, the emissions fees that kick in for areas that fail to attain. He would advocate flexibility, but there must be accountability for failure to meet the prescribed goals.

Tim O'Brien said he agreed with Mr. Hawkins's comments on accountability. The other side of this formula was also important, the so-called positive incentives. Too often in the past, regulators had used the "something bad won't happen to you if you do what we tell you".

Dave Howecamp said there was another penalty currently in the Act, the bump-up penalty. It was not a well-liked penalty, but was included in the current version of the Act.

Alan Krupnick said he had sympathy for the general idea that was expressed in this paper because of the science involved here -- the uncertainties associated with meteorological variability, etc. However, he wondered how they would determine whether an area was truly making a good-faith effort at improving air quality.

Herb Williams said the only discussions they had on this were the proper States coming to the table and doing what was required through the planning process.

David Baron said he agree with David Hawkins. This flexibility (Item f) and the extension of attainment dates raised a red flag for him, and appeared inconsistent with the Date Certain concept discussed earlier.

Shawn Kendall agreed with the concept that people should not be rewarded for dragging their feet. However, there would be groups that put forth a good effort and for reasons beyond their control something goes wrong. He thought there was an equity issue that needed to be discussed prior to doing away with this idea. As an example, Mr. Kendall offered El Paso, Texas, where they could not control what was transported in from Juarez, Mexico.

David Hawkins said the El Paso situation was unique and was dealt with in the Act as a special case and should continue to be dealt with in this manner.

Bruce Craig suggested that they extend current accountability measures for AOVs into AOIs

Beverly Hartsock said she was pleased to see flexibility in scale-targeted consequences. They had not used the current sanctions very effectively. She thought EPA could have had more appropriate tools for dealing with sanctions and thus improved accountability.

John Elston said EPA had published numerous documents on flexibility and asked whether these documents were still appropriate and/or useful for the Subcommittee to review.

Sally Shaver said she thought the guidance that was currently available should be a starting point for all of this.

Steve Gerritson said there really needed to be a hammer that forced some type of action. However, there also needed to be flexibility. Accountability was good, but they should err on the side of caution.

Alan Krupnick commented that there was another paper on the economic sanctions authored by Steve Gerritson that would dovetail nicely with this discussion.

Tim O'Brien asked whether this paper was going to provide incentives as well as sanctions.

Alan Krupnick answered yes.

Targeted RFP

Jim Lents said it was so difficult to see reductions in ambient levels that in the short term he did not think they could tell much. Perhaps over 5-7 years one could make some progress.

Alan Krupnick said there was an RFP paper that was just beginning, which would look at emissions.

David Hawkins said that as he understood this recommendation, part of the planning would be to identify specified air quality improvement objectives between now and the implementation date. He thought this would be a good idea. RFP expressed as emissions reductions would also be a good indication of progress.

Herb Williams said they had discussed David Hawkins's comments, and that was why emission reductions and RFP were broken out.

Planned Reductions

David Hawkins said this difficulty needed to be discussed. It would be a waste of effort, given the information that would be available in the next six months. They needed to evaluate inventories, data collection, etc., before making these types of discussions. They would learn by doing through this process.

Robert Wyman said he was interested in David Hawkins's comments. He thought they were intertwined with Nader Mansour's comments, and Mr. Wyman did not want to see the issue removed from the table.

Sally Shaver said she thought this was linked more to the current legislation, where certain areas needed more time than others to attain the standard.

Jean Vernet said the BPAP Work Group was starting an issue paper on classifications drafted by Eric Skelton.

Jim Lents said they were going to know fairly quickly once the standard was released what their situation was; they just did not want to be put in an impossible situation.

Alan Krupnick said that for Items l through u only burning comments would be accepted because they had only 10 minutes left. Other comments should be sent in writing.

Dave Howecamp asked what was meant by "safe harbor".

Herb Williams replied that if an area had done all of the things that were required, they would be given the time to see what effect the controls had prior to sanctions and further requirements being imposed.

Joe Paisie said this was more in line for early reductions and early planning, where there was a mid-cycle review planned. Thus, at this mid-cycle review, they would be in a "safe harbor" situation, to make mid-course corrections.

Alan Krupnick said this was a reasonable place to use the concepts of cost-benefit analysis. David Hawkins had reminded them numerous times about the large benefits relative to costs for PM; and he would remind them of the large costs relative to benefits for the ozone side of the coin. He said they would rework the issues that they had comments on, and the others would remain as is.

BREAK

Integrated Implementation -- Bob Kappleman (Jacksonville Electric Authority)

Highlights

Bob Kappleman made the initial presentation on what integration means, why it is important, and what the integrated implementation process would involve. Then Donna Lamb made a presentation on the tools that would be used and the next steps of the Work Group.

State representatives expressed concerns about the deleterious effects of too much complexity and wondered whether there would be some basic guidelines that would apply to all regional institutions. A public interest group representative took the position that there should be national guidelines applied to everyone with each regional body adding to those guidelines.

An EPA representative emphasized the importance of an integrated approach, but expressed concerns about integration delaying implementation of the proposed standards.

Industry representatives were generally in favor of guidelines tailored to each specific region, or a mix of national and regional guidelines.

The Subcommittee endorsed proceeding with a policy of integrated implementation.

Mr. Kappleman opened by saying his Group wanted come to closure on this issue and move forward.

Integration means different things to different people

Integration of the science and technology (e.g., monitoring and modeling)

Integration of intergovernmental activities (e.g., across States)

Why Integrate

Common precursors, sources, chemistry, and transport

Relationships between solutions

Large geographic scales

Less administrative burden and fewer societal impacts

Lowers cost and increased control strategy effectiveness

Provides opportunity to give affected industries the entire picture over time and to make good, sound choices.

Integrated Implementation - 4 step process

1. Integrate collection of data where appropriate.

2. Integrate data analysis.

3. Develop a plan.

4. Implement the plan.

Integration is not a one-size fits all approach.

Tools for Integration -- Donna Lamb

Components of Integrated Analysis

Monitoring	Emissions inventories

Modeling	Regional variability

Speciation	Seasonal variability

Data Tools Needed for Integrated Analyses: Options

1. Pollutant by pollutant

2. Uniform nationwide guidelines

3. Uniform nationwide guidelines supplemented with regional needs

4. Regional guidelines with minimal formatting guidance to facilitate the sharing of information.

Recommendations

1. Implement regional guidelines with minimal formatting guidance to facilitate information sharing (monitoring, modeling, and emission inventories).

2. Speciate monitoring data regardless of whether integration is used.

Donna Lamb said her Group worked with STSWG to identify data needs and come up with tool or resource timelines to identify what was available now and what they could anticipate being available down the road.

Alan Krupnick asked for questions.

Shawn Kendall raised the issue on emission inventories on page 9. What was used for the visibility monitoring in the West was a detailed, speciated inventory. He thought the rest of this document was good work.

Steve Gerritson said the more this got institutionalized, the more danger that less would happen became a reality. If they increased the level of complexity, it was much more likely that nothing would get done.

Donna Lamb said they did not talk necessarily about timelines in this particular paper. She said she would probably cover this issue more completely in the regional haze paper.

Alan Krupnick said that it was more than just about timelines. To really take this seriously, they were definitely increasing complexity.

Bob Kappleman said part of this was how one finished - a lot of times they did not do it right at first, but could correct it in the end. A lot of concern in the public sector was around delays in attainment dates, etc. They would get there, they just wanted to get there as efficiently as possible. This was not a panacea if it was done correctly. Overall, they should get a more cost effective solution through integration.

Shawn Kendall said as far as timing, the emission inventory was the missing link that took up a majority of their time. It took a great deal of time to get all the data into a common format. He did not know whether they could develop a one-size fits all solution to this problem.

Alan Krupnick asked whether anyone wanted to speak against any of these issues regarding tradeoffs.

Sally Shaver said she did not want to speak against it, she just thought this was a complex issue, and it would be difficult to explain to the public if they did not use an integrated approach. The public breathed air pollution, not PM, ozone, and regional haze. However, in terms of timing, she was concerned that integration implied inherent delays.

Alan Krupnick said on the second question, they had a specific recommendation, that was, Option 4. He asked for discussion.

Beverly Hartsock said she did not want to speak against the concept of regional guidelines, but wondered if there would be some continuity with defining regional guidelines across the country.

Donna Lamb said the opinion of the group was yes.

John Elston said the words "minimum guidelines" in Option 4 concerned him -- perhaps they could change this.

David Hawkins said he did not think this should be a choice between national and regional guidelines. Rather there should be national guidelines that were amplified by regional guidelines.

Alan Krupnick asked whether that was a vote for Option 3.

David Hawkins said he was not sure, because he did not have Option 3 in front of him.

Alan Krupnick asked Donna Lamb to speak to this.

Donna Lamb said Option 3 was basically national guidelines which the regions could supplement, whereas Option 4 was tailored for specific regions. For example, some areas were in need of reactive VOCs, and other areas would not require this. Thus, it would be regionally specified and not a national requirement.

Greg Schaefer said he voted for the regional approach.

Bradford Smith asked whether they really had distinctions without differences. He would propose a mix of Options 3 and 4 -- delete the last sentences in each and then combine them.

Beverly Hartsock asked whether they were talking about East and West as the two regions.

Donna Lamb said absolutely not, they were discussing vague subregions.

Alan Krupnick asked whether the Group had thought at all about timing issues, especially if they were to consider Bradford Smith's option.

Donna Lamb said no, they had not really talked about this. She thought there was a paper in Phase II that would deal with these issues.

Alan Krupnick asked whether a 3-4 combination was where they were headed.

Shawn Kendall said from the emission inventory standpoint, these should probably be nationwide regardless of the form of the option that the Subcommittee accepted. One needed to know the nature of the control strategies to make effective changes in emission inventories.

David Mobley said EPA tried to collect the emission control information with inventory data. EPA was preparing guidance that would build on the concept that Shawn Kendall just discussed, and it would be going to State, local, and regional personnel.

Alan Krupnick said the 3-4 combination seemed acceptable to the Subcommittee. On question #3, he told Donna Lamb that they needed some more answers.

Future Work

1. Draft a list of detailed information needs (e.g., tools and timelines paper).

2. Assess the potential of integrated controls.

David Mobley said what they were trying to address was the degree to which they should move forward in developing these guidelines. Should they use an integrated approach or do them separately? As EPA developed the guidance for the available tools, should it use an integrated approach or do them separately?

Alan Krupnick said so, integration or no integration?

Glen Cass said there were at least two kinds of integration: (1) within pollutant categories, integration of emissions inventories, models, and analyses; and (2) integration across pollutant categories.

Alan Krupnick asked Glen Cass whether he voted for integration from the start.

Glen Cass said absolutely.

Alan Krupnick asked whether there were any other comments. There were none, so he said good, then they agreed on this issue. He added that there was little in the paper on economic modeling and instrument design.

Donna Lamb said they had put those into the last item in the paper under control strategies. She asked if what Alan Krupnick was saying was that there was an economic component of the analysis phase.

Alan Krupnick said of course.

Regional Haze -- Donna Lamb

Highlights

Donna Lamb presented implementation issues and options for quantitative objectives in regard to regional haze. The recommendation of the Work Group was institutional mechanism that included States, Tribes, FLMs, the public, and other stakeholders in determining objectives.

A State representative asked how regional haze was supposed to relate to the integration of the standard setting process. She also was concerned about the secondary standard issues here and what would constitute an enforceable document. A second State representative wondered about the distinctions between integration and visibility issues.

Industry representatives raised issues about specific targets, institutional mechanisms, the incorporation of non-NAAQS issues into a visibility program, measurements of progress, the role of BART, and legal issues surrounding regional haze.

An EPA representative said asked whether EPA was considered a stakeholder in the process. EPA personnel also discussed the need for the regional haze program to improve welfare, as mandated by the Clean Air Act, not just visibility.

A Federal agency representative liked the idea of moving away from the terminology of BART and allowing as much innovation as possible. The representative liked the fact that BART allowed one to look at a whole suite of alternatives, but raised the possibility that this could be a Phase II issue.

The Subcommittee generally agreed that this issue paper needed additional work and was not up to the standards of the other papers.

National Goal

National visibility goal from Section 169A of the CAA: "the prevention of any future, and the remedying of any existing, impairment of visibility in mandatory Class I Federal areas which impairment results from manmade pollution."

Implementation Issues

Quantitative Objectives	Recommendation

Institutional Mechanisms

Individual or Grouped	Recommendation

Reasonable Progress Criteria	Recommendation

Planning	Recommendation

Progress Reports	Recommendation

Aerosol and Visibility

Monitoring Networks	Recommendation

Long-term Strategies	Recommendation

BART	Recommendation

Developing Quantitative Objectives: Options

(1)EPA specifies improvement needed.

(2)FLMs provide information on impairment and set objectives.

(3)Institutional mechanism, which would include State(s), Tribe(s), FLMs, broad-based public representation, and other stakeholders, would determine objectives.

Recommendation: Option 3

Beverly Hartsock asked how this fit with the discussion they just had on integration.

Donna Lamb said the issue was that for ozone and PM, there would be a NAAQS. For regional haze, there was no standard, and thus this was the process to follow to reach the national goal for regional haze. For example, for San Gregonia Wilderness, just outside of Los Angeles, this would be a very laborious, intensive process. For other areas, it would be rather simple to see where they were and what was necessary to reach the national goal.

Beverly Hartsock asked how this Group was supposed to interact with the integration of the standard setting process.

Donna Lamb said this was not necessarily tied to the control strategies. This came later in the reasonable progress section. It was simply what they needed in order to address the national visibility goal. She thought it would come into focus.

Jean Vernet was confused by a comment about a visibility transport commission. VTCs were actually making recommendations to EPA on how they intended to meet their quantitative objectives.

Donna Lamb said there was an opportunity here to start the process early, without having to use the whole concept of a visibility transport commission.

Dave Howecamp said he noticed FLMs listed in the recommendation and wondered what EPA's participation would be in this option? Was it an oversight to leave out EPA? Was EPA considered a stakeholder in this process?

Donna Lamb said she did not know, but it was something they would look at in some more detail. Perhaps it could be addressed under the Institutional Mechanisms umbrella.

Alan Krupnick said that they had sort of an embarrassing situation. The 45 minutes allocated for this paper was clearly not enough time to cover all of these recommendations, so Bruce Polkowsky was going to tee-up the critical issues.

Key Issues for Regional Haze Program -- Bruce Polkowsky (EPA)

Mr. Polkowsky began by saying that EPA must set criteria for measuring reasonable progress.

Key Issues

Verify impairment reductions with emissions and monitoring data.

Document steady progress at review intervals.

Adjust program, as appropriate, based on visibility and non-visibility program progress reviews (regional haze is a periodic process).

Make continuing improvement to both remedy existing and prevent future impairment.

Take costs into account.

Take adverse impacts into account.

Take beneficial impacts into account.

Enhance monitoring and modeling to ensure control effectiveness.

Coordinate monitoring, administration and funding.

Shawn Kendall noted they might want to add equity and social impacts to the fifth point.

Sally Shaver said she thought the regional haze paper needed a timeline and EPA involvement consistent with the principles outlined for the FACA process. They also needed to improve welfare in this process, not just visibility.

Bruce Polkowsky said that in the staff paper, they were obligated to look at health effects and they were doing this. They recommended to the EPA Administrator in their response that they needed to address welfare effects everywhere.

Joe Williams said either 2 or 4, with respect to progress, needed to have something added that dealt with how they addressed or measured this progress.

Shawn Kendall said with respect to the second bullet, it would be appropriate to state that the recommendations included specific targets, whether they were long-term goals or specific progress targets.

Bruce Polkowsky said he thought the periodic review would ensure that this was in fact taking place.

Shawn Kendall said that the GCVTC addressed some of these issues.

John Elston said in the East, they were not really involved in regional haze issues. It seemed to be very closely related to the integration issue they had discussed earlier. How did they distinguish between integration and visibility issues?

Bruce Polkowsky said that scientifically he thought the distinction was there, it simply needed to be integrated into the picture.

Richard Hayslip said another opportunity for integration was with the plume section of the visibility statutes. He asked how they would incorporate non-NAAQS issues into a visibility program.

Bruce Polkowsky said he thought that when the planning areas were formed, then they could deal with some of those issues. When the reductions were implemented, then they could assess their impacts on regional haze - they would definitely get credit for these programs on the regional scale.

Greg Schaefer asked whether they needed to define reasonable progress in the recommended criterion.

Bruce Polkowsky said AQRVs mean things related to Class I areas. Visibility was defined as a welfare issue in the CAA. If they met these criteria as outlined above, then they would meet reasonable progress criteria. These needed to be fleshed out a bit, but this would be done in the rule-making process.

Bradford Smith said the thing that was missing was any discussion of the slope to measure this progress.

Bruce Polkowsky said the slope issue was what Donna Lamb discussed earlier. It was defined on a periodic basis, relative to what people could agree was acceptable for visibility perception. They could be prescriptive, and mandate 5 dv per year, but it was their opinion that this should be flexible.

Bradford Smith these criteria should include "the acceptance of this public body's determination of reasonable progress".

Shawn Kendall said reasonable progress was taking all things in balance. One simply did not use a single metric. It was a sense of value that all of the participants must have and agree upon. Here what they were looking at were guidelines the Agency could use to set these reasonable progress goals.

Alan Krupnick said that if these criteria were for EPA, then he was confused. Did not the stakeholders need to have the same criteria?

Bruce Polkowsky said yes, EPA would take these criteria and do its best job of implementing them.

Donna Lamb said they addressed what EPA would be looking at and what the implementation group would be looking at. Thus, what EPA might say in a rule could potentially be slightly different than what the implementation group might adopt. She said these were general concepts, that EPA probably needed to wordsmith a bit.

Beverly Hartsock said they needed to have a criterion for the stakeholder group, and this needed to be one of the basic criteria here. If this group was not viewed as being representative of the entire area, then it was not going to be acceptable - this objective needed to be written down. Who speaks for the States? The tribes? The FLMs? Secondly, Ms. Hartsock was concerned about the secondary standard issues here. Would there be areas of violation other than Class I areas selected to participate in this planning process?

Bruce Polkowsky said no, the areas of violation in this process were the Class I areas. They needed more work on defining the AOIs and the overall planning process. The ultimate goal here was to improve visibility in the Class I areas. However, overall nationwide visibility would benefit from this process - this was addressed in the EPA Staff Paper and in the National Academy of Sciences report.

Joe Williams said there were scores of Class I areas in the West and asked whether they were all impaired.

Bruce Polkowsky said the FLM should probably respond to this.

Donna Lamb said yes, they were.

Jean Vernet was confused on the application of this criteria to the SIP and regional plan and asked whether they were talking about both plans here.

Bruce Polkowsky said EPA would judge what comes in from the States. These were the criteria by which EPA would judge whatever was coming in.

Alan Krupnick said he heard that they were in basic agreement on these criteria, with some refinement of some rough issues.

Bruce Polkowsky said the issue was that BART applied to any source that applied to visibility impairment. If they went back to the Act, they had to deal with sources that caused visibility impairment.

Robert Wyman had a number of questions, which did not necessarily mean that they were concerns, just questions. He asked whether the identification of BART singled this process out, or was it a whole suite of control processes.

Donna Lamb said they considered BART when considering the regional haze aspects of the Act. BART was the first step in the process. The idea here was to move away from the terminology of BART and allow as much innovation as possible. Ms. Lamb liked the fact that BART allowed one to look at a whole suite of alternatives. However, she thought this could be a Phase II issue.

Bruce Polkowsky said EPA had to let them know this in the rulemaking process.

Alan Krupnick said David Hawkins preferred Option 3 (he had to leave the room until after lunch).

Shawn Kendall said the whole purpose of the regional haze program was to develop regional haze plans. BART was designed to handle the exceptions. Thus, Option 1 needed to be left in place.

Bruce Polkowsky replied that the Act said that if sources were contributing to impairment, then BART had to be considered. Essentially it asked, had one reached BART or had one done something better than that.

Shawn Kendall said this was not consistent with what they had done in the GCVTC. It essentially said that BART was the rule, and they could forget about the other options.

Bruce Polkowsky said no, BART was not the rule, they simply had to look at it.

Alan Krupnick asked whether Option 4 was consistent with the Act.

Bruce Polkowsky said yes, to the best of his knowledge.

Joe Williams encouraged the group to go with Option 4. The innovative strategies part of getting reductions in a BART-like manner would prove to be very successful - they had a good example of this in Washington.

Beverly Hartsock said when it was changed to SPIP or RP, she got confused. These were not supposed to be enforceable documents. She had three different planning processes in place at this time.

Shawn Kendall said the idea was that you had a central coordinated planning group developing overall planning rules. A recommendation would move forward from the planning group to EPA and the States.

Bruce Polkowsky said in the regional haze issue, they would look at source categories. It would be impossible to do this on a source by source basis.

Donna Lamb said the paper was written and finalized before Don Theiler's presentation yesterday. So, to the extent that he had modified the role of the regional planning group, it would require her Group to make some changes. This paper did not reflect all of the current thinking on AOI and AOV that was presented yesterday.

Beverly Hartsock said she did not have any problem with innovative strategies. She was not sure what she was voting on or agreeing to at this point, given that this paper was not currently up to snuff with other papers.

[Unknown] said since Dave Hawkins suggested Option 3, he would like to have a little more discussion on this, and he thought the record should show that this decision was not unanimous.

Robert Wyman said BART had traditionally dealt with very specific sources. He would prefer to change the wording to reflect regional haze control strategies. BART implied something different than what they were trying to do here.

Nader Mansour said regional haze was a different part of the Act. He would like to have a brief presentation at the next meeting on the legal aspects of regional haze.

Sally Shaver said they would do this at the next meeting.

Alan Krupnick said they had not reached consensus so they would leave this open.

LUNCH BREAK

Pat Raher requested that Subcommittee members send any comments on the Content-Related Principals for Developing Work Group Issue Papers to Sally Shaver. These comments would be addressed at the next Coordination Group meeting. Mr. Raher noted that the following changes would be made to the principles as a result of the day's discussion:

(1)The principles will not favor any one factor for achieving progress over another factors.

(2)There will be no change to the second principle.

(3)The Subcommittee members are asked to comment on fixed deadlines as a part of the planning and implementation processes.

(4)This principle will be totally eliminated. A new principle will be developed that talks about CAA requirements.

(5)This principle will be changed slightly. The second sentence will be rewritten to assure inclusion of the "slope concept" identified by David Hawkins.

(6)This principle will be rewritten extensively.

(7)This principle will be rewritten to address Harvey Jeffries' concern that we must use the best science.

(8)There will be minor changes to this principle.

(9)There will be minor changes to this principle.

Glen Cass asked Mr. Raher to elaborate on principle #5. He asked if this refers to the rate of progress.

Pat Raher responded no, the statutory language was taken out specifically.

New Source Review (NSR) -- Greg Schaefer, Bruce Craig

Greg Schaefer and Bruce Craig spoke about integrating NSR into the AOI/AOV structure.

Bruce Craig said the purpose of this paper was to reconcile some of the apparent problems with the way NSR works today versus the new AOI/AOV concept. The NRSWG and BPAPWG had sought to evaluate issues such as bright line location bias and to provide incentives for sources to meet the required emission reductions. Mr. Craig presented the following assumptions of the group developing the NSR issue paper:

•We were not trying to duplicate any work by the FACA Subcommittee established to investigate NSR.

•They should work to maximize the cost effectiveness of integrating NSR into the AOI/AOV structure.

•The approach should provide flexibility to reflect unique aspects of various regions as their requirements may be different.

•Any program should result in real reductions using market principals where appropriate.

Bill Becker agreed with the first principle and added he would use the term "avoid inconsistencies" with the NSR FACA Subcommittee.

Alan Krupnik asked Bill Becker to hold his discussion on the topic until Pat Raher's discussion on the NSR FACA Subcommittee.

Greg Schaefer listed the following four options regarding NSR:

•The planning and control requirements would be the same in the AOI as the AOV.

•Allow the SPIP to determine the scope and breadth of the strategy within the AOI.

•New sources that comply with NSPS and offset emissions would not be subject to PSD requirements within the AOI.

•Attainment strategy would use market base- incentives above some type of technology floor.

Greg Schaefer said that his group has focused on Option 2 and the variations of Option 4. Mr. Schaefer noted the advantages associated with Option 2 include preventing stationary source emissions growth in the AOI, and recognizing that sources within an AOI may not have the same impact. Mr. Schaefer noted that Option 2 had the disadvantages of potential competitive differential in the AOI and complexity in identifying the relevant areas of the AOI. Mr. Schaefer said the advantages for Option 4 are that it has the potential for establishing a trading and banking program; establishes an attainment level budget on new and existing sources to achieve the NAAQS; replaces technology drivers with an equivalent market system for compliance; and would allow future consideration of trading between source categories and interpollutant trading. Disadvantages of Option 4 as stated by Mr. Schaefer were difficulty in getting a common currency and the complexity in setting budgets and allocations.

Mr. Schaefer presented the following new slide with technology floor options:

•Retain NSPS as technology floor.

•Select BACT as technology floor.

•Choose some other technology floor mechanism.

Greg Schaefer noted the this slide was the main addition to the presentation since the Norfolk FACA meeting.

Bruce Craig said that with respect to perceived problems with trading and NSR requirements, an attainment level strategy must be developed that includes a budget for all sources in the area.

Pat Raher presented an overview of the current NSR package assuming the process was unchanged by this Subcommittee. He noted there were a number of people present who also are on the NSR FACA Subcommittee. Mr. Raher said the proposed NSR package was released in July 1996 with the final expected to be completed by 1998. He noted there are two types of sources affected: new sources and major modifications to existing sources. Mr. Raher presented four categories of rule changes:

•Applicability

•Technology

•Class I areas

•Applicability of 1990 Amendments.

Dave Hawkins said that it is important to clarify that a lot of the options proposed by EPA were not agreed upon by the FACA Subcommittee.

Pat Raher presented examples from the four categories identified above.

Alan Krupnik asked whether the options being proposed by the NSR issue paper were consistent with the work of the NSR FACA Subcommittee.

Pat Raher responded that as one talked about a technology floor then it was consistent with the NSR FACA Subcommittee. He added that some determination had to be made because the proposed regulations did not have a trade-out mechanism.

Dave Hawkins said there was inconsistency between these recommendations and those in the proposed rule making. He stated that the NSR proposal was trying to improve function of Federal Land Managers (FLMs) and to provide clarity when dealing with air quality related values. He noted this was inconsistent with the options presented to this FACA Subcommittee on eliminating PSD.

Mark Scruggs commented that Option 3 did not show up in the presentation Bruce Craig and Greg Schaefer made on NSR. He added that it was difficult to figure out the role of FLMs in an AOI.

Bruce Craig said that the Class I area PSD issue was intentionally not addressed. He said they had a challenge on how to deal with Class I areas. For example, would they designate Class I areas?

Dave Hawkins said that maybe he was misreading the presentation.

Bruce Craig noted there was an option to avoid PSD if one agreed to obtain offsets.

Alan Krupnik asked Shawn Kendall if the GCVTC addressed new sources.

Shawn Kendall replied not specifically.

Richard Hayslip said there was a trajectory: if new sources wanted to buy in they could.

Greg Schaefer said with regard to Class I areas and FLMs, the group did not spend a lot of time on Option #3.

Alan Krupnik asked if there was any consensus from the NSR group.

Bruce Craig said it was hard to deal with the AOI concept.

Greg Schaefer said there was not a lot of agreement on Option 3.

Robert Wyman said that the NSR FACA Subcommittee was not asked to address the role of NSR in a robust market program. This Subcommittee was not told it could think "outside the box." Mr. Wyman said that he would hate to see this FACA Subcommittee constrained by the NSR Subcommittee. He added that whether or not a technology floor was appropriate depended on market based program.

Alan Krupnik asked Robert Wyman whether he had a proposal.

Richard Wyman suggested that the Subcommittee table the discussion on NSR until they had better ideas on the market program.

Dave Howecamp said the options listed were "outside the box." He asked whether someone from OGC was looking at what lies in/out of the box.

Sally Shaver responded that the staff in OGC were looking at this. She noted most of these options would require changes in the CAA.

Alan Krupnik said that this did not preclude the FACA Subcommittee from going forward.

Donna Lamb said there were some issues in the current CAA which they needed to clarify.

Greg Schaefer said that his group started on this but the main thrust should be focused on NSR. He added that PSD would be looked at Phase II.

Alan Krupnik restated Robert Wyman's proposal to table this discussion until better ideas on the market program were developed. He asked if there were any comments. He said that the Subcommittee could seek support for the general idea of some technology requirements but could table the specifics until some later time.

Robert Wyman said that suggestion was consistent with his recommendation.

David Hawkins said that he would supplement Robert Wyman's original proposal to table. He spoke in opposition to backing off from general technology-based requirements. He said that as the working group went forward the terminology was not accurate. They should call it a technology-based performance standard, not a technology floor. His final comment was recognition of Case 4 where the technology-based performance standards approach the robust market-based approach. He noted this was a hedging strategy designed to deal with programs in the real world. He identified the need to examine whether market systems were going to be described with sufficient strategy that they could walk away from hedging strategy.

Bruce Craig said that they had not eliminated the hedging strategy but there must be an affirmation of the system.

David Hawkins said that his point was that they were not in a position to eliminate a design component that dealt with surprises.

Alan Krupnik asked whether they did not have to let the trading program run for a while to see how it would work.

David Hawkins responded that they had to have real world operational experience before tossing out design components. The advantage of technology based programs was that they delivered something concrete. When they worked well they produced innovation.

Alan Krupnik said that to a certain extent we were talking about same thing with NSR.

David Hawkins responded that they had a real world track record, adding that some times it caused problems for industry.

Robert Wyman said there was a need to distinguish between strategies that were appropriate 20 years ago and strategies needed for the future. They were debating what the program should look like in the next 20 years. He said they needed to identify what type of backstop measures were appropriate adding that NSR might not be appropriate. He concluded they should have this discussion at a later date.

Bill Becker thanked the work group for expanding the options and suggested that he thought some kind of market-based approach could supplement a technology-based approach. However, he said, imagine if they came up recommendations and gave them to EPA. Another FACA subcommittee then would be formed that tossed out those recommendations when there really was not much disagreement over it. He said that would leave a sour taste in some people's mouth. He stated they needed a minimum performance-based approach. He noted the NSR FACA Subcommittee was satisfied to be within the box. Mr. Becker suggested that as they went forward they seek flexibility in market-based approaches but not replace performance-based requirements. He said that he supported Option B with BACT as a technology floor.

Greg Schaefer said that he liked the idea of tying performance-based approaches into incentives to see what they could come up with. He felt that they should continue in this direction but asked for help from the Subcommittee.

David Hawkins responded that it was appealing to see some flexibility. He suggested that additional flexibility might be give when benefits were shown. He encouraged the Subcommittee to think about this approach.

Greg Schaefer replied he would give David Hawkins a call later to follow up on this suggestion.

Sally Shaver commented that there were legal problems with LAER and the AOV. She noted there was concern about the role of the FLM, AQRVs, and PSD increment. Ms. Shaver was intrigued by what David Hawkins suggested regarding NSR. She said she would like to see this paper developed further and these issues addressed

Alan Krupnik noted this moved the NSR issue to Phase II.

Sally Shaver said that anything with regard to NSR would take place after the interim period (after five or six years) so this Subcommittee was not treating the NSR FACA Subcommittee badly. Ms. Shaver appreciated everyone's endurance in attending monthly meetings. She noted that EPA would be preparing for the next FACA Subcommittee meeting, which was scheduled for midFebruary, she and her staff would work with the Work Group chairs to fully flesh out timelines and strategies and come back in six weeks with next year's schedule. She said there were things remanded to the Work groups that would be worked on. There was a CAAC meeting in December where an oral report would be presented. The written report would come at next CAAC meeting.

Alan Krupnik said that Beverly Hartsock had to go but did make a suggestion for a January meeting.

Sally Shaver overruled the request and noted the next meeting was scheduled for mid-February.

The meeting was adjourned.