MEETING MINUTES

FACA SUBCOMMITTEE FOR DEVELOPMENT OF

OZONE/PM/REGIONAL HAZE IMPLEMENTATION PROGRAMS

September 26 and 27, 1996

Marriott Waterside Hotel, Norfolk, Virginia

Opening Remarks

William Hamilton [Designated Federal Officer, U.S. Environmental Protection Agency (EPA)] introduced and opened the session with a review of the agenda and anticipated changes.

Sally Shaver (EPA) addressed the group. Ms. Shaver apologized for the absence of John Seitz. Ms. Shaver reviewed the schedule and time lines indicating that two new meetings were being scheduled to allow adequate debate and comments on the proposals being generated by the FACA Subcommittee Work Groups. The additional meetings were scheduled to ensure that concerns raised from subcommittee members could be aired and debated. Ms. Shaver restated the guiding principle of the subcommittee: to allow an open discussion of the issues being developed in Work Groups. This meeting was intended for discussion; no actions were anticipated. Subcommittee members were encouraged to discuss new issues outside of the regular scheduled meetings as they develop.

The two new meetings are scheduled in Dallas on October 29 and 30, 1996, and in Denver on November 19 and 20, 1996. She also anticipates a short meeting to coincide with the CAAAC meeting tentatively scheduled for early December.

Some issues concerning legal opinions expressed by the Work Groups were being addressed by OGC but as yet there have been no definitive rulings. Ms. Shaver commended the Work Groups for coming to terms with difficult and challenging proposals.

Alan Krupnick (Resources for the Future) then addressed the group. Mr. Krupnick asked for discussions of the principles and noted that process details could be addressed over time. Mr. Krupnick stressed the importance of costs associated with any actions or recommendations considered by the Subcommittee. Mr. Krupnick stated that there have been significant costs incurred to date in Clean Air Act programs and that the additional costs to implement more stringent standards likely would be significant. Mr. Krupnick informed the Subcommittee that a small working group had been formed to review potential costs and to ensure that costs were considered in the larger deliberations of the Subcommittee.

Sally Shaver then presented a brief overview of the principles established for the PM interim policy. A handout was given to all attendees and Subcommittee members were encouraged to review that handout for more detailed discussions on the following day. Ms. Shaver stated that there had been some questions about the ozone interim policy expressed by members but that those issues had not yet been resolved.

Discussion of Areas of Influence Approach -- Don Theiler (Wisconsin)

Mr. Theiler began by stating that a regulatory approach based on Areas of Influence (AOIs) and Areas of Violation (AOVs) was still a work in progress. His presentation was to be viewed as a status report on the ideas of the Work Group.

The concept had evolved into a three step process (described below). In an earlier version of the concept of AOI/AOV, the AOV was treated as distinct from the AOI. The AOI would contain anthropogenic and natural sources that could contribute to observed violations of standards. All areas within a defined AOI would be required to participate in planning, even when the boundaries of the AOI cross State borders. This planning would lead to the concept of a Spatially Integrated Plan, or SPIP. Mr. Theiler stressed that not all sources in an AOI would necessarily be subject to controls. The impact of each source and the costs to control specific sources are examples of considerations that would effect the decisions about which sources to control.

The three step approach involves:

1.	There would be large planning areas to include all 48 contiguous States and the District of Columbia

2.	Within the large planning areas, the participants would define AOIs and establish the States that are included in each AOI. All States in the AOI would be required to participate in the development of the SPIP. It is recognized that there will likely be cases of overlapping AOIs.

3.	Individual actions would be worked out within the context of the SPIP.

Mr. Theiler presented options for planning areas and AOIs that were considered by the Work Group. He noted that at first the concept was thought to be pretty straightforward, but when details were discussed, it was apparent that the concept was complex. Members of the Work Group were asked to guess at AOIs by hand on a map; when all pollutants were considered, it was obvious that there would some large, complex, multi-pollutant AOIs. One result was that the suggestion of initially having two large planning areas to cover the east and west might not be such a bad idea. This idea of two large planning areas was retained; all States in those planning areas would work out and agree to the AOIs. It was suggested that the experience of OTAG and the Grand Canyon Visibility Commission be used to formulate approaches for those planning area activities.

The principles addressed thus far concerning AOI and AOV concepts were summarized by Mr. Theiler:

Develop planning regions, which would determine AOIs.

Expect some large integrated AOIs for multiple AOVs and multiple pollutants.

Recommend the use of some kind of back trajectory or other models for establishing AOIs. Ted Russell suggested some new ideas that are being discussed in the Work Group. Planning regions would have to specify the techniques they would be used to determine their AOIs.

Each State in an AOI would have to participate in the planning phase for a SPIP, and would prepare a SIP that would be consistent with the principles and objectives of the SPIP.

Some AOIs may be very local issues, so the Work Group included the possibility of allowing States to opt out of the planning and SPIP process if they agree to take on the responsibility for those local AOVs by themselves. Mr. Theiler offered the example of a small isolated valley that has a PM	problem resulting primarily from wood stoves or unpaved roads.

Comments from the Subcommittee on the Areas of Influence Approach

Larry Feldcamp (Baker and Botts) asked whether the process was to give a recommendation. The answer was no, this is an update on the progress of the Work Group, not a call for final decision. Information presented here should be used to promote ideas on ways to organize the planning area process. There is a need for further discussion on planning areas with help from the STWG.

Christine Shaver (Environmental Defense Fund) asked how this process would connect to New Source Review issues. She questioned the last point about opting out, noting that it is necessary to be careful not to cause problems downwind. The answer was that the opt out process would be applied only to an AOV, not to an AOI. Even an area that opts out for an AOV would still have to participate in planning if they were included in an AOI related to another AOV. Ms. Shaver suggested that there might be a technical issue about average vs. episodic conditions, which might have quite different meteorological influences.

Bradford Smith (Environmental Elements Corporation) asked what would be the effect on existing SIPs. Sally Shaver answered that interim policy requires that all SIPs stay in force until new SIPs are submitted and approved. Mr. Smith suggested that this concept includes an assumption that State boundaries are no longer of concern. The answer was that all States in a planning area and AOI would have to agree to the regional plan; then each State also would have to develop a SIP that would be consistent with the plan. Only the SIP would be submitted for approval. Mr. Smith encouraged EPA to consider this idea.

Georgia Callahan (Texaco) anticipated problems and bureaucracy issues in the AOI planning process. Especially, if States ended up split in two or more large planning areas.

Robert Palzer (Sierra Club) questioned how easy it would be and how many States would seek and qualify for the opt out provision. Mr. Palzer encouraged EPA to be cautious in allowing these opt out opportunities; sometimes States define problems too narrowly. Mr. Palzer noted that in the case of wood smoke in the isolated valley, there also might be prescribed burning that could contribute to nonattainment conditions.

Vincent Brisini (Pennsylvania Electric) began by reviewing the notions that AOIs would be larger than AOVs, that AOIs could be interspersed, and that some sources in an AOI would not be required to control because of size, cost, or some other reason. He questioned how a source could be in the AOI but be determined to not contribute to the corresponding violation problem. He suggested that AOIs should be defined by geography alone, and plans would determine which sources in an AOI need controls to achieve the standard. The choice of tools used to determine if an area and source are contributing are important and should even consider natural sources in defining areas. He urged a consideration of source-based or geography-based AOIs, and linked it to the issues addressed in Recommendation II on page 6 of the AOI handout.

Ted Russell (Georgia Institute of Technology) urged that the plans consider all sources in an AOI, not only those that would be included in an inventory.

Alan Krupnick offered the idea of a matrix plan. The planning could be based on sensitivity analyses to define the most important contributing sources everywhere. AOIs would be defined based on their potential to contribute to AOVs.

David Hawkins (National Resources Defense Council) suggested that modeling results to date show that any single source has only a minimal impact on nonattainment in regional issues. He urged the Subcommittee to be careful to define emission strengths high enough to observe their influences if sensitivity analyses are used to define AOI and contributing sources.

Richard Phelps (Eastman Chemicals) said that, in getting down to the nitty gritty of how to establish an AOI, the Subcommittee needed much more work to be accurate. He raised a concern about fine particle analyses, and said that this issue needs a lot more work and discussion.

Shawn Kendall (Phelps Dodge) expressed concern for regional haze. He stated that the Clean Air act requires EPA to do two things: to remedy existing impairment and to prevent future impairment. Experience shows certain meteorological conditions result in no haze, largely because of source density upwind. If these areas are left out of consideration, it will be difficult to account for future conditions, i.e., new sources could be built in areas where there are none now and might cause future impairment.

Greg Shaefer (ARCO Coal) encouraged the adoption of the opt out provision. In the Base Programs Work Group this issue is not linked to new source review. He thought that the revised New Source Review policy recommends consideration of sources within 100 km of observed violations.

David Hawkins questioned the process for decision making on AOI and the ultimate allocation of control requirements among AOI. He suggested that some mechanism is needed to reach agreement on these issues to put together an AOI plan. It could be a multi-state document that would have some binding force with SIPs. He worried that it might take some time for involved States to agree to a regional plan; in the meantime there might be no further emissions reductions. Mr. Hawkins urged EPA to continue to mandate some form of emissions reduction while agreements are reached. He referred to a statement in the paper that there would not be automatic assignments of requirements for all sources in any AOI. Mr. Hawkins urged that there be another side to encourage progress in the interim until all plans are adopted. The neglect of such a consideration could result in a freeze on actions during the interim phase.

Mr. Hawkins also brought up the idea of a dispute resolution mechanism recognizing that it might be difficult to achieve consensus among several States. He wanted some process available to negotiate around these inevitable disagreements.

Christine Shaver responded to Hawkins comments. She said that one approach is to create an incentive program through which an area could get rid of an existing regulation or program that it does not like after new programs are put in place and achieve some level of effectiveness through the AOI plan. Ms. Shaver expressed interest in incentives for continuing progress during the interim implementation phase.

Molly Moss (Department of the Interior) commended the group for addressing the realities of complex nonattainment problems and recognizing that there are different kinds of violations. The suggested approach has the ability to deal with clean areas, overlapping pollutants, etc. But it is a daunting task to find the tools necessary to define the AOIs. She questioned how much time and cost would be involved in accomplishing these goals, reiterating that it is good to consider flexibility and look at control costs in the planning phases.

Ben Hennecke (CAAAC) suggested that maybe it was time to start talking about who pays. Consensus issues are tough, especially with multi-state issues: it comes down to how to pay for it. This is an institutional issue. He suggested that the essence is a simpler one than the one being addressed. For some industries it might be favorable to pay for some upwind controls to shame contributing sources into spending their money on controls. This approach may be more favorable than several years of work to develop regional plan.

Jim Souby (Western Governor's Association) urged that whatever happens that some form of science be used to define AOIs. Problems in implementation are related to the process of regulatory development. A regional approach is important to focus on real solutions.

Alan Krupnick raised the point about the economic influence resulting from a strategy on emissions trading. Issues of who pays can be addressed by emissions trading in a way that considers equity effects. The most cost effective reduction is independent of the initial assignment of credits or permits if trading is allowed. He asked the Work Group to consider trading issues in revised papers. Mr. Krupnick suggested that the Institutional, NSR, and Strategies Work Groups be involved.

Beverly Hartsock (Texas Natural Resources Commission) suggested that the idea that all States are involved in the initial planning is a good idea. There will be a balancing act to make the areas large enough to get all significant source affecting an AOV but not so large that they make a group hard to handle. She went back to the planning area concept of east and west areas and noted that some States in the middle of the country do not automatically identify with either east or west problems.

David Hawkins cautioned against oversimplifying the process to identify AOIs and their contributing sources. He suggested that models for allocating emissions reductions are not very sophisticated and that a second approach of using the Title IV example that emissions trading will automatically drive "good enough" reductions may not be directly applicable to ozone, PM, or haze. Mr. Hawkins urged that two approaches be kept and decisions be based on consideration of both ideas.

Alan Krupnick called for there to be some expenditure to review existing model results from OTAG, SIPs, RIAs, etc., to see whether trading is likely to be effective. He also raised the idea of something other than one-for-one trades; for example a one-for-two trade that depends on the locations and types of sources involved to ensure that the programs are focused on specific problems.

Richard Dworek (U.S. Steel) referred to the concept of AOV and AOI, noting that the AOI should be as small as possible based on monitoring data. This approach avoids going back to the old problem of current nonattainment areas trying to address two separate problems.

David Hawkins questioned whether there had ever been a consensus and stated that he does not agree that AOVs should be as small as possible. Monitoring data are spotty, and he is not convinced that all areas of bad air quality are captured by current monitoring networks.

Richard Dworek added that the monitoring Work Group is recommending more monitoring sites.

Alan Krupnick summed up the discussions up to that point by suggesting that a list of issues be returned to Theiler's group for further consideration. The group's issue paper will come up again in October or November, at which point the Subcommittee will try to close out on discussions on the subject for Phase I. The coordination group will review the issues and offer guidance to Work Group.

Donna Lamb (USDA Forest Service) indicated that the work on this issue up to now has included representation from the STWG.

David Hawkins asked a process question about the statement that AOVs are not linked to specific control needs. He expressed the opinion that environmental groups are opposed to that concept and suggested that there is a need to retain some ongoing controls in AOVs; additional options should be discussed. Mr. Hawkins emphasized the need to ensure that progress continues; it is important for crystallizing Phase I issues. Environmental groups will not accept recommendations that violation areas have no automatic controls. The notion that this concern can be addressed later is unacceptable; environmental groups cannot agree without knowing what constitute the issues for later consideration.

Discussion of Institutional Mechanisms -- Christine Shaver

Ms. Shaver's presentation started with a statement of assumptions: new standards will require regional strategies; some new mechanism is needed to implement regional programs; the structure and function of the new mechanism depends on several factors; and these factors need to be identified and addressed so that the regional planning mechanism is efficient, effective, and achievable.

Initially, her group looked at some of the experience from OTAG and GCVTC were explored to see whether those mechanisms would work. Those mechanisms were rejected in favor of an approach that involved identifying what is needed and selecting the mechanism based on those needs.

There was an early decision to involve everyone in the process and to be as inclusive as possible with stakeholders and the public. The role each group will play is subject to later definition. The issues of who votes and how actions would be triggered were raised. Other issues included how binding agreements should be, how disputes would be resolved, and how the public would be involved.

These questions raised the larger issues of what authority should be given to the regional institution and what limits if any should be imposed. Ms. Shaver acknowledged that whatever authority is given needs to be clearly defined. She noted that is must be effective and ensure that there is no duplication of efforts that are underway elsewhere.

Options for the regional institution considered by Ms. Shaver's group were:

Quasi-regulatory authority in which decisions taken by the group become binding

Non-regulatory mechanism similar to interstate compacts, which raises legal and consent issues.

Advisory function in which the regional institution gives recommendations to EPA and then EPA uses its Federal regulatory authority to act.

Options for functions are:

Identify and evaluate strategies and consider cost effectiveness.

Foster communication and helping to set up meetings.

Serve as a information clearinghouse and meeting convener.

Address funding issues.

Improve analytical tools.

Promote consistency of data and analysis and reporting methods, with the option to review SIPs for technical support.

Provide technical support on common issues.

Address technical issues and leave analysis for some other body to make decisions, act as a policy body, or function in some combination of the two.

Play a role in market management (maybe one of the most important issues), which could involve taking a central active role in design and management of the market; playing a development role that would leave the implementation to the States; or only providing technical support.

Ms. Shaver's group also evaluated characteristics of the process to determine whether is something new needed or existing organizations do the job. The assessment of roles and functions of existing organizations was not confined to air quality organizations but was open to all organizations with a similar charge. If these organizations have sufficiently different purposes they may need to be changed so much that it would be difficult to use them as models. Her group recognized that new organization could be designed to meet specific needs, but also might cause problems relative to existing groups and time and schedule constraints.

The assessment of other organizations considered their purpose, mechanics, operation, authority, relations with other organizations, activities, and achievements. Functions considered were monitoring, inventories, modeling, strategy development, compliance, performance monitoring, and outreach activities.

Ms. Shaver said that the assessment of needs and organizations is ongoing. There will be formal recommendations to the Subcommittee but the group wants to wait until some other decisions are made that would affect either the function or roles of a regional institution.

Comments from the Subcommittee on Institutional Mechanisms

Richard Hayslip (Salt River Project) asked whether the level of authority would supplant State planning process. The answer was that the group is not proposing anything yet but rather exploring all options. Hayslip suggested that a regional body could make choices but leave implementation to the States. States retain authority to implement and enforce actions except in the case of a market system.

Jim Souby asked whether the group was considering a newly elected body. The answer was that this may be a good idea. Independence is hard to achieve on regional basis. State authorities might still support separate agenda.

Greg Green (Oregon DEQ) noted the possibility of establishing requirements for the authority to determine principles but leaving choices on actions to separate programs. The negative side of that kind of flexibility is that it allows separate choices, which could cause a lot of argument.

Patrick Raher (Hogan and Hartson) raised the example of the Federal government giving responsibility for scenic rivers to local/regional bodies made up of elected and appointed members. That program seems to work; maybe it should be considered as an option. Mr. Raher said that there could be elected officials but we also should consider having at least State air staff on the body because of their experience and history.

David Hawkins suggested that existing State authorities have a history and accepted authority and political legitimacy. These characteristics are important to making a program work especially when making decisions about who pays. He suggested that the Subcommittee seek feedback from politicians. The answer to his comment was that the group is including a sufficient number of stakeholders and legislative staff to get a consensus.

Richard Dworek suggested that a regional idea approach is okay but that the standards are national standards. This implies the need for some Federal control or guidelines to even the field especially for activities to support and establish a minimum monitoring network.

Vincent Brisini noted that political legitimacy is more important than authority. He used OTAG as an example. He did not believe that a planning region function needed a lot of authority. Basing decisions on a majority opinion might not work. One approach would be to promote a group that makes recommendations and ask EPA to step in with some penalty when one party fails to live up to the agreement. It only takes one person to decide on an AOI and to specify the performance issues. The regional body would not need authority but it would need political clout. Mr. Brisini suggested a technical component that would have credibility with legal authorities to make and implement policy.

Concerning trading, Mr. Brisini said that we needed a common currency but States would be allowed to distribute the currency. This approach would leave the system with a tradeable currency that could move across State borders. He closed with the statement that he did not agree with option I under principles.

Beverly Hartsock stressed the need for a regional role to promote consistency. When making comparison assessments maybe we could use regional EPA findings as part of a model, and oversee coordination to effectively use limited resources.

Alan Krupnick offered a comment about the process. He saw the regional group acting in a support role to help other groups form policy consistent with the successes of other regional compacts.

Nader Mansour (Southern California Edison) raised a concern about other issues of the regional support structure other than planning, particularly an emissions trading policy. He suggested other options such as accounting, credits tracking,and enforcement in trading analyses. He asked whether enforcement would stay with States, and the answer was yes. He suggested that some form of regional identity might also be considered, noting that the question goes back to whether we want the authority for trading to remain with the States. The trading concept is in three levels: definition, tracking, and enforcement. Mr. Mansour suggested that this process needs to work in layers but that all enforcement should be organized on the lowest political level possible.

Bradford Smith offered that the Chesapeake Bay Compact could be used as an example. He suggested that the group look at the level of government from which the impetus for regulation comes.

Molly Ross said that these ideas appear to be relatively simple but there are multi-stakeholder groups with different agenda. The most important first step is to get all stakeholders to buy in to a common goal or vision. Science will not dictate solutions; a human values component will affect decisions. The issue centers on what motivates political legitimacy and buy-in on the political level.

Greg Schaefer wanted to add a section to address funding issues and explore equity among regions. He asked about performance standards and how they would relate to technology based standards. Alan Krupnick answered that performance standards would specify some conditions or operational procedures instead of being based on technical equipment specifications.

Richard Hayslip asked when will there be specifics, understanding that there are other issues to address. He observed that as soon as there are agreements on AOVs/AOIs there could be a beginning to developing standards. A strategy should be included in the standards for regional institutions. If market approaches are considered in the standards, for instance, they will place specific needs on these institutions. If there is agreement to develop SPIPs and the regional organizations are charged with developing the SPIPs, that would define some clear functions and structures for consideration.

David Mobley (EPA) added that in the context of the overall Work Group there are several specific discussions ongoing that will help to pull all of the issues back together in a bigger picture.

Sally Shaver offered that the coordination group look at summarizing other activities ongoing and communicate those to the Subcommittee to help them understand how specific issue paper discussions fit in to the overall plan.

Nader Mansour suggested that there needs to be some mechanism that would encourage States to cooperate.

Charles Goodman (SCS) questioned just how far this discussion could go without knowing more about the new standards. He saw the possibility that this type of discussion could end up with recommendations to rewrite the Clean Air Act. He questioned just how much could be done. Sally Shaver intervened and clearly stated that there was no desire to rewrite the CAA, but that this discussion should focus on the assumption that there are transport problems that will require multi- State cooperation to address.

Bill Becker (STAPPA/ALAPCO) said that there is a need to analyze what the costs to State governments would be to participate in this type of regional institution. He suggested that the Subcommittee explore innovative ways to generate revenue to help pay for the costs that will be experienced to implement these types of organizations.

Discussion of New Source Review (NSR) Issues -- Greg Schaefer (ARCO)

The presentation started with a review of the principles:

Integrate new source policy into the AOI concept.

Do not duplicate efforts taken up in the NSR reform process.

Promote maximum cost effectiveness.

Promote flexibility for regional concerns.

Focus on conceptual issues not on details.

The following assumptions were imposed to guide the discussions:

AOI and SPIP concepts will be used in some form.

The SPIP would evaluate all sources in an AOI with a new view so it is important to consider new sources.

Four options were presented in the paper:

Option 2 focuses on different planning and control requirements in the AOI; prevents stationary source growth in implementation areas; recognizes some sources of importance; and tries to promote flexibility. Its weaknesses are that it may re- establish competitive differential within an AOI; and there is the complexity of establishing relevant areas within an AOI.

Option 4 promotes flexibility within the SPIP, using cap and trade with a banking program; promoting technology drivers; allowing trading with a phase toward multi- pollutant trading, requiring that trades impose there is no effect on local air quality; and estimating budgets by source category. Advantages of Option 4 are that it simplifies permitting, removes siting disincentives, and promotes market decisions. Its disadvantages are that it requires developing a common currency, imposes complexity in budget allocations, and raises problems of equivalency.

Comments from the Subcommittee of New Source Review (NSR) Issues

Glen Cass (California Institute of Technology) said that inherent in the assumption about market programs is that sources will hold a permit. What happens in areas where unpermitted fugitive sources cause problems? How would those case be regulated? The answer was that the group recognized that in some areas of the country trading programs might not work. Also, this paper recognized that new and major modifications would be dealt with in NSR process. The Work Group had thought to look at growth of fugitive sources especially for PM fine problems.

Bradford Smith said that there was an advantage to Option 4. Trading removes disincentives to siting sources. That issue should be combined with NSR reform. Sometimes this approach could offer a cheaper way to find emissions reductions within an AOI.

Beverly Hartsock asked how this proposal related to NSPS and NSR. It seemed that a cap and trade program would do away with NSR.

Christine Shaver said that the paper did not deal with an interim transition period, but that transition policy handles that issue. She wanted to ensure that those issues were not lost in the transition period. There was still a need to address hot spot areas when trading was in place. This was particularly important in the West. The discussion seemed to be contradictory in the paper.

Molly Ross noted that the technology driving aspects are in the details of plans. Taking these out was moving away for longer goals. She asked the group to do some analysis to show that cap and trade would result in technology improvements.

Alan Krupnick said that analyses available for SO2 trading were clear that innovative measures are found to lower SO2 emissions.

Molly Ross said that there would also be advantages for advances in the technology industry that might have pay offs in other applications. She addressed the second part of NSR, increments relative to PSD. All of the discussion so far had been focused on nonattainment issues. PSD and increments would be taken up in the discussions for phase 2 activities.

Vincent Brisini said that some sources would not fit into the cap and trade model. The currency was established for source categories first, not between sources. It would be important to establish a consistent currency. If a cap and trade system was set up for new sources it would let existing sources slip through more easily. Mr. Brisini said that maybe a declining cap would force technology, but a direct translation of SO2 experience to NOx and VOC was not straightforward. For instance, he noted that significant reductions for NOx are not possible simply from fuel switching. Mr. Brisini agreed with Mr. Krupnick about the generality of the SO2 experience and the fact that it was not directly applicable for NOx and SO2. The hot spot issues were not addressed directly in OTC but that program did lead to a 1-to-1 trade, and experience showed that the effectiveness of cap and trade was a robust market.

Robert Palzer expressed a concern for all of the things that are left for resolution later; these issues should be called out directly in the paper.

John Elston (New Jersey) said there was still a need to identify specific emissions reductions for specific sources and address the issue of how to decide on those in a cap and trade policy. So far there was no discussion about how to allocate credits, but that those decisions will come from State agencies.

Ben Hennecke questioned cap and trade policy saying that when it came down to it no one would want to be included.

Bill Becker expressed concern with the idea of allowing new sources to opt out of NSR and use BACT instead of LAER. He proposed that there be a distinction between trading away existing sources and trading away new sources. The rationale was that it was always more expensive to catch up later. The cheapest time to control to the maximum is when you build. The recommendation from NSR reform was to retain the BACT LAER concept. Industry and States were allowed access to the BACT/LAER clearinghouse to understand the legitimacy of existing controls and understanding the State issue about not allowing control beyond Federal minimum requirements. Ultimately, what would be important to industry was certainty. They were not as concerned about stringency but were very interested in knowing exactly what would be expected of them.

Robert Wyman (Latham and Watkins) provided an example about a small business in the Los Angeles Basin. They want to move but have to go through NSR. Their costs to achieve LAER is $1.5 million, so they will consider moving to Arizona instead.

This ended the discussion on Thursday evening at 7:00 PM.

Opening Discussion on Friday Morning

Continued Comments from the Subcommittee on New Source Review Issues

Conrad Schneider (NRCM) agreed with the objections to the proposal provided in the memo. Many objections to these proposals have been raised all along. He was concerned that some comments are not being communicated to the larger group, and offered a proposal. When a Work Group brings forth a recommendation Work Group members should be polled for agreement and objections given in writing and included in the record. The final report to EPA should include all of those objections to Work Group recommendations. He followed with a general comment objecting to changes in the NSR program. He stated that NSR was one clear success story of air legislation. The growth that has been experienced over the past 20 years has not been matched by equal growth in emissions and he attributed that largely to the NSR program. Before it is scrapped there should be an understanding of why it had been successful and what the result might be.

Greg Schaefer asked how to conduct the polling in the process. Mr. Schneider answered that polling would only be conducted for formal recommendations whether or not each participant was present through all of the detailed discussions.

Donna Lamb said that, recognizing that there was a separate ongoing effort to reform NSR, it was not clear how this issue paper fit into the overall NSR reform process. She expressed a concern that some mechanism be put into place in interim. That process should not be linked so closely with the NSR reform effort. She suggested that this forum state a principle that new sources needed to be clean and measures taken should be consistent with the AOI concept. Also the position needed to address PSD issues in addition to health issues.

Alan Krupnick expressed a concern over the definition of how clean is clean.

Donna Lamb responded that she had previously brought up the issue of how clean is clean in the broader context of the AOI issue. There was a broader issue here about the relationship of new sources concerning nonattainment areas and PSD issues. The overall NSR program and reform process dealt with the other criteria pollutants in addition to ozone, PM, and haze and therefore this process should not be linked so closely to the separate NSR reform process.

Charles Goodman suggested there should be an explicit discussion about source coverage in this context. He also expressed a concern over PM fine monitoring and suggested that the Federal reference method should address speciation.

David Hawkins said that NRDC would not agree with the recommendation because they did not believe that the proposal would produce the results suggested. They opposed the language suggesting that NSR be dropped for a fully adequate budget to attain the standard. The issue paper used the language "significant progress toward attainment" and this in conjunction with the attainment date proposal that recommends no clear specified attainment date leaves a program that could lose its goal of some definite attainment target. It would be dangerous to assume that loose plans would be finished. As an example, there had been some congratulations for a recent approval of the California SIP, but in that SIP there was no clear responsibility for achieving the stated emissions reductions. He suggested that there could be a similar situation if NSR was dropped. Mr. Hawkins summarized his issue be saying that this proposal identified NSR only in terms of attainment issues, but that was not all that NSR does. He advocated new source regulations as two strategies, one to respond to the best understanding of the current and expected air quality situation and one to promote continuing emissions reductions. That two-purpose system was good because it provided backup measures to continue progress if the best plans approved did not fully achieve their goals.

Mr. Hawkins also expressed his opinion about problems with treating the new source issue only from a perspective of nonattainment. First, he stated that the standards might not be set at the right level. He cited the current standard revision process as an example. Second, strategies based on best understanding might not be adequate to achieve goals. Air quality planning was a complex science that was not fully understood. Third, there were lots of other forces at work that could serve to derail progress toward clean air. Political pressures could work to cause friction in real world settings. In air quality issues there was an accumulation of effects that resulted in failure to achieve standards. Under the proposal new sources in an interim period might not be subject to maximum controls. The issue paper only looked at local and PSD issues in a cursory way, but did not offer a recommendation. He called for having those recommendations worked out and included in the paper.

Mr. Hawkins said the proposal was not adequate in terms of increments for PSD, especially in light of the fact that there were no increments for ozone. The increments analysis alone was not enough. Each source considered alone might not violate the increment, but several sources together could result in increased exposures for certain populations. He viewed PSD as a two edged approach.

Mr. Hawkins also raised concern over the timing of budgets under the cap and trade proposal. In that approach attainment was delayed for 5 or 10 years, but in the interim, sources would be operating and contributing emissions immediately. This could delay improvements in air quality and increase exposures for lots of people for many years. He offered an example from the experience of the growth accommodation rule. States that adopted this rule did not require maximum emissions controls on new sources and the result was delayed achievement of improvements in exposures of people. NRDC had a basic opposition and took the position that new sources should be built to accommodate the maximum emissions controls possible to protect current and future generations. The current proposal was akin to making the atmosphere a free dump and NRDC viewed that attitude as being irresponsible. In the end efforts to minimize pollution could always be viewed as a attempt to achieve the best possible results for people.

Greg Schaefer expressed a strong objection to the statement that the proposal was irresponsible. He stated that treating only stationary sources was not enough to achieve standards and expressed the view that efforts to make the maximum progress when combined with other measures would be responsible policy. He used a diagram as an example.

David Hawkins questioned the implication that the proposal was an effort to encourage sources to locate in the AOV instead of the AOI and stated that it did not matter, any new sources should be controlled to the maximum regardless of where they were located. He suggested that it sounded like dropping NSR was a bribe to encourage acceptance of the idea of the AOI.

Alan Krupnick claimed that NSR had been and was a social engineering tool to discourage new source siting in areas where additional emissions would be detrimental. He viewed this proposal not so much as a bribe but as a method to encourage trading as rapidly as possible. This might be one way to foster that encouragement as quickly as possible. He reiterated the underlying issue that the new standards would likely result in many new large nonattainment areas, the costs of control would be high, and there needed to be some considerations to try to minimize compliance costs.

Molly Ross agreed that there is an issue of large costs, but that the costs resulted from the fact that there were large areas in poor air quality and that correcting those also could have large monetary benefits. The concept of the AOI was a great additive concept. The AOI could address long range transport issues, with some abilities to trade to get controls on large distant sources. But that concept should be viewed as an additive component, particularly when considered in terms of other pollutants such as SO2 and acid rain. The idea of imposing maximum controls on new sources would give economic flexibility to future generations and reduce the negative effects of uncertainty. A maximum control policy covered all of what we do not know. She suggested that NSR gives industry certainty in what was expected -- they needed to minimize emissions. This could be worked out to offer incentives for those industries that did good things in good faith. She claimed that the diagram was misleading in its simplicity and that in fact there would be many overlapping AOIs and AOVs and all causes and effects needed to be considered in the policy.

Vincent Brisini expressed the opinion that if the policy moved to cap and trade that there would need to be buy-in from many levels. In the end NSR allowed emissions growth. A cap and trade program would not allow emissions growth. The cap and trade concept was moving forward. A declining cap program would be continuously reducing emissions regardless of economic growth and the issue really was how low to set the cap and how well will technology improvements responded to the needs. He also asked whether there was a need for another layer of bureaucracy if some other existing mechanism already worked.

John Elston offered the following example. New Jersey has been in nonattainment forever. NSR has become the normal routine for business in New Jersey. The certainty of NSR offered industry the advantage of knowing what was expected of them if they located in New Jersey. Industry worked with economic growth agencies in locating sites, and issues such as available labor market and tax basis were more important than NSR in locating new sources. There had been lots of work done up front to encourage economic growth. Industries were concerned with avoiding uncertainty and delays. A cap and trade program would introduce some uncertainty and that was the biggest problem with a cap and trade policy. The uncertainty would be greater if cross sector trading was allowed.

Tom Godar (American Lung Association) offered a comment about costs. The American Lung Association used to view their responsibility to protect individuals with some lung impairment from the effects of air pollution, but now they viewed their constituency as everyone. The costs for disease were high. As an example, costs were approximately, $1,000 per emergency room visit for asthma, and $5,000 to $6,000 if hospitalization was required. Nationwide these and other disease costs added up to significant total costs. He viewed this as an argument about two useful approaches that would not necessarily have to be exclusive. It was established that emergency room visits for asthmatics increase during atmospheric inversions and the resulting costs were in the billions. He urged EPA not to abandon a program that was already shown to work. The costs of exposure illnesses would increase so he urged that the group maintain consideration of both NSR and cap and trade.

Robert Palzer agreed. There were costs involved regardless of what was done from a control perspective. The longer controls were delayed the larger the illness costs would be. The group talked about giving up command and control approaches but still advocated I&M and other command and control approaches in other sectors. Any efforts to force maximum reductions in emissions at the outset was better than a program that could result in delays.

Vincent Brisini believed that there was a big issue about cap and trade and that was that no one would want to participate in cap and trade. The reasons were uncertainty and issues about allocating the budgets would be difficult. Throwing out NSR was a bad idea. The problem came down to finding the best way to get the lowest emissions and how that could be done with a diminishing cap policy. One approach was NSR without offsets and one was NSR with offsets.

Beverly Hartsock offered the opinion that States have come to expect the issue of NSR and BACT/LAER in which regulations use the market by implication, that is, that new source control was always cheaper than retrofit control. She expressed a concern about how cap and trade programs could be certain to foster technology improvement compatible with environmental goals. Ms. Hartsock suggested that the policy not close options. In some cases, opportunities for maximum control are only feasible at time of construction. Eliminating NSR would close the option in those cases.

Larry Feldcamp said that the NSR reform process did not consider any of these alternate options since they were required to work within the limitations of the current system. The work on the issue paper was an attempt to think beyond the current system, to get better options and build flexibility to meet the needs of AOIs. He believed there was a need to remove the mandated controls but not to avoid emissions reductions. The result should encourage the maximum control at the best cost. There was a need to link this issue to other categories. There needed to be discussion about specific controls. BACT might be OK but offsets and LAER concepts needed some flexibility to make AOIs and cap and trade work.

Ben Hennecke suggested that everyone take a deep breath and see whether the group was creating a debate when in fact everyone was in basic agreement. He suggested that it was a false idea to give industry the certainty and that it was necessary to give up something to get the AOI. Mr. Hennecke said that it also was a false idea that everyone had learned a lot and would not repeat the same mistakes. The concept of shared failure locked people in to thinking in narrow possibilities. He suggested that the real problem with NSR was in getting decisions and technical approval. He advocated changes in the model but only when they made sense. No industry would volunteer that they want to revert to 1970s technology; sometimes the current NSR program impeded progress. The result should focus on programs to achieve the best results possible in the maximum number of cases.

Sarah Pierce Sandler (Eastman Kodak) stated that the reduction or elimination of NSR should not result in dirty sources since most new sources would be covered by MACT standards and controls would already be required. Also sources were covered by TRI which would be expanded to NOx and SOx; no company would want to put out data that showed they were increasing their emissions. Cap and trade would have additional peripheral benefits. As an example, for a small industry with an organic solvent process LAER was flame incineration and 98 percent control. The company could use carbon bed adsorption with 95 percent control and then could recover the solvent, whereas all of the solvent is gone in incineration. The additional 3 percent control target could easily be found somewhere else. LAER also sometimes discouraged biofiltration. The cap and trade with a high percentage control that was not quite up to LAER could still be as effective if other reductions were required from some other source. Ms. Sandler expressed continued concern over the issues about backsliding specifics in interim period and how to set budgets in a cap and trade program.

Patrick Raher admitted that his comments were biased from his involvement in the NSR reform process. In that subcommittee, views were expressed indicating that NSR was a good base and that its problems were in delays and the time it took for approval. The real focus should be on improving the LAER determination procedures. NSR should not be thrown out. It should be retained initially to provide certainty and to keep a base program in place. Later EPA could see whether cap and trade could replace the LAER concept. One issue was to review how LAER effects the market for trades; if it did impede trades it should be altered.

Nader Mansour reviewed the diagram. A source located in an AOI gets BACT and increment. Under that plan NSR allows an emissions increase. A cap and trade in the AOI would result in no net increase in the AOI. He expressed confusion because he sees cap and trade as better.

Robert Wyman expressed the opinion that making clean air a high priority was not in question, but it was an issue to look at the big picture. We would be asking the country to do something very large and expensive to address the revised standards. We should ensure that there was the political will to get this done. The only way to do that was to promote the programs that would result in the cheapest costs. Should LAER be on the table as an incentive? He said yes, do not throw it out but there needed to be a better understanding of the rest of the program to be clear. The LAER issue debate came down to one of scope and degree not about encouraging maximum control.

Bradford Smith offered that the debate was interesting and stated that there was no assurance that the current level of commercial control technology was capable of achieving the new standards. One issue was encourage progress to find new approaches for control through innovative controls and operating procedures. The current system discourages innovation and instead encouraged industry to do the minimum it had to do at the cheapest cost. In short industry did what was cheapest not necessarily what was best. The idea that BACT and LAER were the best options and resulted in the safest conditions was misleading; we should learn from past experience.

[Did not get speakers name] said that so far in the discussion NSR had been used as a code word for new industrial source review. Most visible emissions now resulted from area and fugitive sources. There was already insufficient planning for area and complex sources. There could be significant improvements if the process considers all sources.

David Hawkins expressed the observation that the debate was not over a choice between cap and trade and NSR, but over the confidence that could be given to any one system alone to be sure that the appropriate results are achieved. He and NRDC were not arguing against the concept of cap and trade, but rather they were arguing against a decision to rely on it to the exclusion of other programs that were known to work. The reliability of the cap and trade program was the issue. When faced with the prospect that neither program alone would reliably achieve the standard it was appropriate to include all approaches to fill out the program and achieve the maximum possible effect. His concern with cap and trade was an issue of responsibility in that the authority for design and possible implementation was being given to an institution that did not yet exist. Mr. Hawkins added that in considering the design and implementation of a cap and trade program past experience indicated that when governments were given authorities and made subject to the rules they had a way of creating opportunities to avoid those rules.

Sally Shaver ended the current discussion and added that EPA appreciated all of the comments received. She proposed that the Work Group review the comments and include additions in a revision to the issue paper, specifically, more details about cap and trade provisions. EPa also had some responsibility to provide clarifying positions and would provide fee back to the Work Group almost immediately.

Overview of PM Interim Transition Policy -- Sally Shaver

The handout was reviewed and summarized.

Comments from the Subcommittee Members PM Interim Transition Policy

Steve Gerritson (LADCO) addressed option E dealing with substitutions and pointed out that there were two types of substitutions offered in the ozone interim policy, one of which was based on source locations. He asked whether there was any discussion about looking outside the nonattainment areas for controls in the PM program.

David Hawkins commented that the current requirements allowed looking at sources outside the nonattainment areas and that those provisions would be in effect through the interim period.

John Elston commented that in the work related to a PM fine standard it had been suggested that there might not be a design value for PM2.5. EPA was looking at alternatives expressed as "design value or equivalent" for the approval of a maintenance plan. He addressed option H and the language about a revised increment for PM. He had a comment on the process and suggested that everyone be given a chance to comment on these ideas in the future.

Sally Shaver suggested that they needed comments within a week for them to be included in the next revision because of court-imposed deadlines related to the PM standards.

Joe Williams (WESTAR) commented about item 1.a under option D. He questioned the need for a redesignation and inferred SIP if the area already had data to establish attainment of any new PM10 standard.

Jim Souby suggested that the discussions leading to that option implied something less than the full paper work requirements of a SIP. If the term redesignation implied a revised SIP and formal maintenance plan then maybe they needed to work on the wording.

Patrick Raher commented that if an area was designated as nonattainment then there was a need for redesignation and revised SIP. He gave the example of 7 out of 8 nonattainment areas in Washington now showing data that were in compliance. He wondered whether for a new standard they would be able to use that data to show attainment without the need for redesignation relative to the old standard. The policy would require the development of a maintenance plan. He interpreted this paragraph (D.1.a.) to require that a maintenance plan was provided. He why require maintenance plan under a revised standard when the statute requires maintenance plans anyway. This particular case required a change in status.

Jim Souby commented that items C and D were related to current nonattainment areas.

Joe Williams still questioned the need for a redesignation for a new standard and all of the SIP requirements associated with the redesignation.

Richard Hayslip suggested that the paperwork for an existing SIP was already in place and that it could be used to represent the maintenance plan.

Joe Paisie (EPA OAQPS) commented briefly on a clarification of the process related to nonattainment areas.

Richard Hayslip commented again that this was an issue related to a change in the standard. If the monitoring data showed compliance with a new standard there should be no need for the redesignation process; the area can simply be called attainment.

Robert Palzer asked for a copy of the natural events policy that was mentioned in reference to the interim PM policy option G.

Discussion of Attainment Dates -- Herb Williams

Mr. Williams began by recognizing that there was not full concurrence with the recommendations in the attainment dates issue paper; there were many reservations about details. He said that the issue paper was an attempt to promote thinking outside both the historical and current frameworks. Mr. Williams quickly went through overheads and focused on their first assessment: that it would take 9 to 10 years to complete an effective planning cycle. Discussions on specifying attainment dates were then based on that amount of time for a planning cycle. The final recommendations suggested a flexible specification of attainment date based on making progress and implementing reductions in the plan. Because of obvious disagreements among participants, the issue was opened to debate.

Comments from the Subcommittee Members:

Christine Shaver expressed very strong opposition to the idea of eliminating attainment dates. She suggested that the fact that this option made it to a recommendation indicated that there was a failure in the process. Ms. Shaver wondered how that recommendation came out without any dissent from the Work Group. She explained that throughout past programs the only thing that kept areas on track and making progress was the looming attainment date. She expressed skepticism for the "trust us" approach, and reiterated that attainment dates were needed to drive programs. Ms. Shaver argued that setting a standard and telling regions or States to comply would not work without the stipulation to achieve it by a certain date.

Ron White (American Lung Association) said that the ALA shares Ms. Shaver's negative opinion of the recommendation. This idea was not even close to something with which the ALA would agree. The ALA believes that attainment dates were fundamental to programs and essential to drive progress. This issue was critical to the ALA for agreeing to other issues as well.

John Elston suggested that the presentation from the Work Group does not represent consensus of all members and asked for a forum through which dissenting voices could have their opinions included in the record. He urged that the paper include more options and specific proposals.

David Hawkins offered the opinion that there were other issues imbedded in this issue, and that attainment dates were a central element of any planning process and the workability of any process. He went on to state that there was no way that the Subcommittee would achieve a consensus on eliminating attainment dates. A date for attainment was essential, and without it any plan would be adrift as a program with an objective but not a need. An attainment date was essential to drive reasonable further progress and to measure RFP. The issues that should be taken from this paper were:

Who sets the date? Previously it had been Congress. A central authority provided the safeguard that freed areas to perform the hard work needed to achieve compliance dates in the required time. If left to local officials, the dates would slide. A central authority prevented local frictions from having too much influence. If the process made it too easy to relax, there was the risk of letting the dates continually slip. The paper gave the impression that the issue of dates was not taken seriously.

What date would be set? This group could suggest some appropriate changes. The exact date was not necessary now and in fact should wait until the standards were known. It depended on what the standard was and on analysis of the implications of various dates.

What would be the interim measures? The length of time for achieving standards would have a direct influence on what got done. Extra time could be used for two purposes: either to do more work or to do less work. The current system promoted more work in exchange for more time, but the final known attainment date was needed to provide compliance incentives.

Vincent Brisini said that this was an example of why everyone had to be involved in the discussions. Agreement to a concept did not mean agreement to details. He said the paper did not ignore the idea of dates, but rather offered flexibility to make the dates achievable. The time-to- attain issue here was tied to planning cycles. The essence of the paper was to distinguish between areas that tried and failed and areas that failed to try: the system now treats both cases essentially the same. The paper was an attempt to move away from that. It was especially important in the concept of Areas of Influence where there needed to be a way to punish only one State that was not doing its part in the SPIP, not the current way that would penalize an entire area. To understand the recommendation in the paper, people needed to be involved in the overall discussion and debate. Most of the negative issues were discussed and those discussions led to the final recommendation.

Beverly Hartsock said that at first all areas had the same date. Then the plans moved to staggered attainment dates to take severity of nonattainment into account. This next step allowed a specific planning date for each planning area, again in response to the particular issues of that area. In some cases, attainment dates resulted in staff time used for discussing the legal implications of missing an attainment date; that time could be used to build programs. In Texas, they have defined areas in or near nonattainment, which allows some flexibility in the nonattainment concept. More progress could be made when local areas felt that they were a part of the process. She cites the water program as an example where there were water quality goals, not nonattainment levels.

Donna Lamb noted that this discussion reminded her of trying to establish time lines for the regional haze program where time lines were not yet specific. It was not clear how the absence of dates would effect ozone and PM programs. The idea of planning cycles seemed to imply some linear development when in fact some programs could be run in parallel. She would like to see some specific information about a large planning cycle and targets.

Conrad Schneider expressed some basic objections. The concept of AOI was difficult but maybe not in terms of specifying dates. In OTAG, all activities on the table were based on attainment dates; they would not have been able to get going without some specified dates. He wondered what a SIP would look like if there was the possibility to negotiate dates. Attainment dates were used as a wall to push areas for planning. This problem became more severe because there would be some time required to set out the AOV/AOI regions, probably through enhanced monitoring. In the meantime, there would be thousands more hospital admissions and occurrences of disease. He suggested that maybe a new paradigm was needed. However, under the existing process, dates were needed; to promote fast track actions, dates need to be certain.

Charles Goodman expressed opinion that the paper had a lot of good points. The overriding principle was to protect health and work out the details over time.

Ben Hennecke gave the view that a lot of participants liked the idea of dates. If you do not attain, the consequences were not too severe. He expressed a personal view that it was more important to make reductions instead of meetings. He wanted to make plans in the context of how soon reductions were realized and how much emissions were reduced. Mr. Hennecke also wanted to think about declining targets from what we know now, not after new standards were in place. He acknowledged that maybe the paper had missed some steps. Proposers were assuming that some good things had already happened early in the 10 year planning cycle. Some of the comments might not consider that possibility. The Work Group should give some specific ideas, settle on a few key principles on which everyone agree, and let the detailed issue papers develop the rest of the program in the context of those overall principles. In any case, the reasonable progress target should refer to improved monitoring data.

James Lents (SCAQMD) suggested that the discussions needed to be concerned with three programs over the entire country. Predetermined dates were required to get things moving. Internally set dates would be difficult and unworkable. RFP progress had to be determined in relation to a goal; there was good value in setting dates.

David Hawkins suggested tabling the discussion for now and bringing it up during discussions of control strategies. Any agreement about attainment dates would depend on the standard and the programs proposed to achieve those dates. A variety of options could be used, although he would not accept the idea of no defined attainment dates.

Georgia Callahan expressed the opinion that we cannot delay addressing this and other difficult issues. If these issues were not addressed, then we did not have a clear view of where the process was going. Even though this was a tough issue it needed to be discussed.

Steve Gerritson said that it was unfortunate that this proposal had been tagged as the "no-date proposal". The Work Group discussions viewed the planning cycle concept as being more stringent that the existing Act. The discussions imply that within the 10 year cycle, attainment was expected unless external conditions contribute some definite reason to miss attainment. It was not an avenue of escape. He agreed that there was a need for deadlines, but also agreed that there was a real need for flexibility. He felt that the discussions on this issue had suffered from different individuals having different levels of participation in the development of the issue paper. The real problem was larger or separate from the attainment date issue. This FACA Subcommittee was not doing what it was intended to do. It needed a session or a subgroup to chart where the process was going or at least a direction and give some specifics on guiding principles to drive the Subcommittee.

Larry Feldcamp observed that each of the issue papers was a building block of the total implementation policy. One of them was the AOV/AOI concept. The group needed to know what the other building blocks were and what others were needed. Maybe the group needed to define the mission for the next several months and pull together ideas of how to institute implementation.

There appeared to be some miscommunication about the no-date proposal. The process recognized ahead of time the need to extend attainment dates. Some other good ideas were promoted, such as using models to provide direction for planning principles but relying on monitoring to show progress. Mr. Feldcamp suggested referring the issue to the coordination group for guidance to the issue paper writers, which would include an option with a date and a focus on the AOI/AOV principle. He urged agreement on moving toward pulling separate papers into a larger version available to the whole group.

The agenda listed group discussions for two more issue papers covering the Regional Haze Program and the Integration of Implementation Programs. The length and depth of discussion on the issues addressed previously used nearly all of the allowed time. A decision was made to allow the scheduled speakers to present an update and status of the Regional Haze and Integration Issue Papers, but discussion and comments on these papers were delayed until the next scheduled meeting of the FACA Subcommittee.

Regional Haze Program -- Donna Lamb

Ms. Lamb explained there was a copy of this issue paper on the TTN. Over the past week or two there had been several good comments submitted on that version of the paper. Those comments had not been included in the version of the issue paper distributed to the Subcommittee. The plan was to complete discussions on a revised issue paper during the scheduled October meeting of the Subcommittee.

The paper addressed the following elements that had been identified as important in planning for the Regional Haze Program:

Goals and objectives

Time lines

Planning areas

Monitoring analyses

Control strategies

Institutional mechanisms.

The current version of the paper addressed elements of a new program and therefore did not have much to say on the interim period. The goals were determined to be consistent with Section 169A of the CAA. The experience of the GCVTC was viewed as a model for initiation of the process. Those goals were presented in the issue paper and read as follows: "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 air pollution". Further the Act specified that visibility impairment consisted of "reduction in visual range and atmospheric discoloration."

The Work Group identified the following steps:

Develop pros and cons of actions.

Discuss options for implementation.

Make recommendations.

Restate objectives after that review.

Develop components of integrated analysis.

Discuss monitoring, speciation, modeling, and emissions factors.

Address regional and seasonal issues.

The paper talked about the IMPROVE network for PM2.5 monitoring with speciation and the representativeness of monitoring sites, and discusses detailed information needs. The discussion of strategies addressed both long-term and Best Available Retrofit Technology (BART). The Work Group recognized other approaches to control technology specific to haze in the context of the AOI concept.

In addressing the main issues the group assumed that many of the issues related to regional haze planning areas would be addressed at least in part in the designations paper. Similarly, ideas for institutional mechanisms to address haze issues would be discussed in the institutional mechanisms paper, and that control strategies including BART and long-term strategies would be taken up in future issue papers dealing specifically with strategies. The paper addressed some options concerning time lines but the group was not clear yet on how to approach this issue for regional haze. A significant issue was how to integrate haze programs into other programs.

Comments from the Subcommittee on the Regional Haze Program

Beverly Hartsock requested a copy of the presentation slides. She also asked about how and when to offer comments, whether comments would be received early, or whether everyone should wait until the issue came up in a future Subcommittee meeting. The answer was that members were encouraged to offer any comments they had soon and that all of them would then be discussed at the next meeting.

Vincent Brisini requested that since the issue paper would likely undergo some revision that there be time scheduled for another presentation at the next meeting before discussion was opened up.

Presentation on Integration of Implementation -- Donna Lamb and Robert Kappelman

Mr. Kappelman said the paper was organized in three sections. First was a discussion of why integration makes sense. Second it addressed the data and tools needed to perform an integrated analysis. Third was an assessment of potential integrated control options. It was recognized that integration could mean different things to different people. It could be interpreted as integration of the science and technology, involvement of intergovernmental agencies, or integration of control strategies. There were components of all these interpretations in the issue.

A discussion of why integration made sense followed. This list of factors was offered; they are developed in more detail in the paper:

Identifies common sources and precursors

Points out relationships among solutions to each problem

Facilitates actions on larger regional scales

Make the planning process more efficient

Facilitates the consideration of related mandates

Could be structured to lessen administrative burdens

Could lower costs of controls and increase overall effectiveness of programs

Allows industry to see the whole picture and be better prepared for what they will face in the future.

There was a summary of the ideas that were addressed in consideration of data needed and tools required to perform an integrated analysis. At first some in the group thought that the whole process of integration was fairly intuitive, while others thought of it was fairly complex. In all cases it was felt that completing the best possible analysis of the issues from the start would result in the best strategy in the end. The data and tools needs could be categorized in three groups: monitoring; modeling/analysis; and control strategies. There would be opportunities to mix these groups into an integrated approach to some cases, while in other cases specific issues might not lend themselves to integration.

Some discussions of the potential limitations of integration were presented. They included local PM problems; winter PM and summer ozone problems; and regional haze issues in areas where there were no NAAQS violations. It would be impossible to understand the opportunities for integration and the cases where integration was not valid until the analyses are completed.

Two reasons were given to support the idea of integration now and not later. First, it would help in defining monitoring network objectives, defining AOVs, tracking transport contributions, and developing control strategies. Second the program design process would facilitate meeting several objectives in parallel.

The third part of the paper had not yet been developed as well. Mr. Kappelman recognized that an analysis of data needs and availability would help to understand the needs related to control strategies and to identify those issues with multi-pollutant and/or precursor implications. Those issues should be addressed first.

Comments from the Subcommittee Members on Integration of Implementation

Molly Moss commented that the Subcommittee needs to stay focused on implementation issues and what needs to be done to get ready for and establish an implementation plan. She suggested that some of the negative opinions about options expressed might result from the premise that the planning was for a new paradigm. This Subcommittee should focus on issues that would help figure out the principles for guidance and implementation.

Sally Shaver then summed up the meting and presented some action items. She thanked everyone for their participation, opinions, suggestions, and comments. She gave her view that it was a good discussion that addressed important issues, and that it was very valuable to EPA to have the benefit of Subcommittee members' ideas and views. Ms. Shaver summarized the next steps:

More work needs to be done on some of the papers.

EPA needs to focus the process on the comments and to clearly articulate the goals of the Subcommittee.

From the discussion it appeared that there were some important issues that had not been addressed. She suggested that those issues were undercover or hiding.

EPA needed to review the proceedings and offer some guidance to Work Groups and the larger Subcommittee.

Ms. Shaver restated that there were some other issue papers being worked on or discussed and that these need to be listed so the whole group could have a better idea of the entire process. There was an RFP paper that obviously needed to be linked to the attainment dates issues and to other components. There also was a need for an area and mobile sources issue paper. There was a subgroup working on economic incentives for mobile sources. So far these other components had not been integrated into this process. She asked for suggestions for other issue papers and subgroups that might help focus the process and clarify issues relative to the entire process.

Ben Hennecke suggested there might be a need to review or address approaches to model new behaviors in light of the new features being discussed in this forum. For example how States and local agencies could be convinced to start viewing programs from the perspective of the AOIs. There was a need to model these new behaviors.

Greg Green added that there was a need to promote and be concerned about public outreach needs.

Alan Krupnick and William Hamilton then wrapped up and adjourned the meeting.