Project XL Site-Specific Rulemaking for Georgia-Pacific Corporation's Facility in Big Island, VA

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Direct final rule.

SUMMARY:

Under the Project XL program, the EPA is supporting a project for the Georgia-Pacific Corporation facility located in Big Island, Virginia. The terms of the project are defined in the “Georgia-Pacific Corporation Big Island, Virginia Project XL Final Project Agreement” (FPA). The EPA is issuing this rule, applicable only to the Georgia-Pacific Big Island facility, to help implement the project.

Under the terms of the FPA, Georgia-Pacific will install and operate the first commercial scale, black liquor gasification system in the United States. Use of this system will provide superior air emissions reductions and energy benefits compared to the use of conventional technology for recovering pulping chemicals from black liquor wastes in the pulp and paper industry. Once installed and successfully operating, the black liquor gasification system is expected to easily meet emission standards that apply (specifically the National Emission Standards for Hazardous Air Pollutants From Chemical Recovery Combustion Sources at Kraft, Soda, Sulfite, and Stand-Alone Semichemical Pulp Mills, promulgated in the Federal Register on January 12, 2001 (66 FR 3179)). However, since the system will be the first demonstrated on a commercial scale in the United States, there is some risk that it ultimately will not operate successfully. If this event occurs, Georgia-Pacific may require temporary relief from the otherwise applicable emissions standards. Without this relief, Georgia-Pacific would not proceed to commercialize the gasification technology. This action provides a limited extension to the date of compliance with the standards for the Big Island facility if the system is not successful.

DATES:

This direct final rule will be effective on June 25, 2001, without further notice, unless EPA receives adverse comments by April 25, 2001. Written comments must be received by April 25, 2001. Anyone requesting a public hearing must contact the EPA no later than April 5, 2001. If a public hearing is held, it will be on April 28, 2001, at 10:00 a.m. Requests to present oral testimony must be made by April 16, 2001. Persons interested in requesting a hearing, attending a hearing, or presenting oral testimony at a hearing should call Mr. David Beck at (919) 541-5421. If we receive any adverse comment, we will publish a timely withdrawal in the Federal Register informing the public that this direct final rule will not take effect.

ADDRESSES:

By U.S. Postal Service, send comments (in duplicate if possible) to: Air and Radiation Docket and Information Center (6102), Attention Docket Number A-2000-42, U.S. EPA, 1200 Pennsylvania Avenue, NW., Washington, DC 20460. In person or by courier, deliver comments (in duplicate if possible) to: Air and Radiation Docket and Information Center (6102), Attention Docket Number A-2000-42, U.S. EPA, 401 M Street, SW., Washington, DC 20460. The EPA requests that a separate copy of each public comment be sent to the contact person listed below.

Comments also may be submitted electronically by sending electronic mail (e-mail) to: a-and-r-docket@epa.gov. Electronic comments must be submitted as an ASCII file avoiding the use of special characters and any form of encryption. Comments also will be accepted on diskette in WordPerfect or ASCII file format. All comments in electronic form must be identified by the docket number (No. A-2000-42). No confidential business information should be submitted through e-mail. Electronic comments may be filed online at many Federal Depository Libraries.

If a public hearing is held, it will take place at the EPA Office of Administration Auditorium, Research Triangle Park, North Carolina.

FOR FURTHER INFORMATION CONTACT:

Mr. David Beck, Office of Environmental Policy Innovation (MD-10), U.S. EPA, Research Triangle Park, NC 27711, telephone number (919) 541-5421, e-mail: beck.david@epa.gov.

SUPPLEMENTARY INFORMATION:

The EPA is publishing this rule without prior proposal because we view this as a noncontroversial rule and do not anticipate adverse comment. However, in the “Proposed Rules” section of today's Federal Register, we are publishing a separate document that will serve as the proposal in the event adverse comments are filed. This rule will be effective on June 25, 2001, without further notice unless we receive any adverse comment by April 25, 2001. The amendment provision for extended compliance times for Georgia-Pacific's Big Island facility, as described in the XL project FPA, is crucial to the company's plan to commercialize black liquor gasification. Given the economic and environmental benefits presented by this technology, its use could eventually become widespread in the pulp and paper industry. The draft FPA, including all details of the project, was made available for public comment through a Federal Register notice on May 8, 2000 (65 FR 26606). No adverse comments were received as a result of that notice, and the FPA subsequently was signed by the EPA, the U.S. Department of Agriculture (USDA) Forest Service, Georgia-Pacific, and Virginia's Department of Environmental Quality.

Outline

I. Overview

A. Project XL

B. Georgia-Pacific Project Description

II. Amendments to the MACT II Rule

A. Georgia-Pacific's Flexibility Need

B. Rule Changes

1. Definitions

2. Compliance Extensions

3. Recordkeeping and Reporting Requirements

C. Rationale for the Compliance Flexibility

III. Administrative Requirements

A. Executive Order 12866: Regulatory Planning and Review

B. Regulatory Flexibility Act (RFA), as Amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C. 601 et seq.

C. Paperwork Reduction Act

D. Unfunded Mandates Reform Act

E. Executive Order 13045: Protection of Children from Environmental Health Risks and Safety Risks

F. Executive Order 12875: Enhancing Intergovernmental Partnerships

G. Executive Order 13084: Consultation and Coordination with Indian Tribal Governments

H. National Technology Transfer and Advancement Act of 1995 (NTTAA)

I. Congressional Review Act

I. Overview

A. Project XL

This site-specific regulation will help implement a project developed under Project XL, an EPA initiative to allow regulated entities to achieve better environmental results at less cost. Project XL—Excellence and Leadership—was announced on March 16, 1995, as a central part of the National Performance Review and the EPA's effort to reinvent environmental protection (60 CFR 27282, May 23, 1995). Project XL provides private and public regulated entities an opportunity to develop a limited number of their own pilot projects, which afford them regulatory flexibility but also produce environmental protection that is superior to what would be achieved through compliance with current and reasonably anticipated future regulations. These efforts are crucial to the Agency's ability to test new regulatory strategies that reduce regulatory burden and promote economic growth while achieving better environmental and public health protection. The Agency intends to evaluate the results of this and other Project XL projects to determine which specific elements of the project(s), if any, should be more broadly applied to other regulated entities for the benefit of both the economy and the environment.

Under Project XL, participants in four categories—facilities, industry sectors, governmental agencies, and communities—are offered the flexibility to develop common sense, cost-effective strategies that will replace or modify specific regulatory requirements on the condition that they produce and demonstrate superior environmental performance. To participate in Project XL, applicants must develop alternative pollution reduction strategies pursuant to eight criteria: superior environmental performance; cost savings and paperwork reduction; local stakeholder involvement and support; test of an innovative strategy; transferability; feasibility; identification of monitoring, reporting and evaluation methods; and avoidance of shifting risk burden. They must have the full support of affected Federal, state and tribal agencies to be selected. For more information about the XL criteria, readers should refer to 60 FR 27282, May 23, 1995 and 62 FR 19872, April 23, 1997, and the September 1999 document “A Guide to Writing Final Project Agreements under Project XL.”

The XL program is intended to allow the EPA to experiment with untried, potentially promising regulatory approaches, both to assess whether they provide benefits at the specific facility affected, and whether they should be considered for wider application. Such pilot projects allow the EPA to proceed more quickly than otherwise would be possible when undertaking changes on a nationwide basis. As part of this experimentation, the EPA may try out approaches or legal interpretations that depart from or are even inconsistent with longstanding Agency practice, so long as those interpretations are within the broad range of discretion enjoyed by the Agency in interpreting statutes that it implements. The EPA may also modify rules, on a site-specific basis, that represent one of several possible policy approaches within a more general statutory directive, so long as the alternative being used is permissible under the statute.

Adoption of such alternative approaches or interpretations in the context of a given XL project does not, however, signal the EPA's willingness to adopt that interpretation as a general matter, or even in the context of other XL projects. It would be inconsistent with the forward-looking nature of these pilot projects to adopt such innovative approaches prematurely on a widespread basis without first determining whether or not they are viable in practice and successful in the particular projects that embody them. Furthermore, as EPA indicated in announcing the XL program, the Agency expects to adopt only a limited number of carefully selected projects. These pilot projects are not intended to be a means for piecemeal revision of entire programs. Depending on the results in these projects, EPA may or may not be willing to consider adopting the alternative interpretation again, either generally or for other specific facilities.

The EPA believes that adopting alternative policy approaches and interpretations, on a limited, site-specific basis and in connection with a carefully selected pilot project, is consistent with the expectations of Congress about EPA's role in implementing the environmental statutes (so long as the Agency acts within the discretion allowed by the statute). Congress' recognition that there is a need for experimentation and research, as well as ongoing reevaluation of environmental programs, is reflected in a variety of statutory provisions, such as sections 101(b) and 103 of the CAA.

Each XL project relies on the input from a project stakeholder group, which usually includes representatives from the project sponsor, EPA, the involved State environmental agency, environmental groups, local community representatives, and other parties with an interest in the project. The stakeholder group works out the provisions of the FPA, which includes the details of the project, a timetable for completion, and the responsibilities of the signatories. The FPA is a statement of the plans and intentions of each signatory with respect to the project, but is not a legally binding document. The stakeholder group for the Georgia-Pacific project included representatives from the EPA, the Virginia Department of Environmental Quality, the USDA Forest Service, the U.S. Department of Energy (DOE), a local environmental group, the Big Island community, and, of course, Georgia-Pacific. A notice that the draft FPA for the Georgia-Pacific project was available for public comment appeared in the Federal Register on May 8, 2000. No comments were received on the draft FPA, and the final FPA was signed on May 31, 2000 by Georgia-Pacific, the EPA, the Virginia Department of Environmental Quality, and the USDA Forest Service (the final FPA has been posted on EPA's website at: http://www.epa.gov/ProjectXL/georgia/index.htm ). In the agreement, EPA committed to undertake this rulemaking.

B. Georgia-Pacific Project Description

Georgia-Pacific owns and operates a non-sulfur, non-bleaching pulp and paper mill at Big Island, Virginia. The facility produces two products: corrugating medium, which is used by box manufacturing plants to make the fluted inner layer of corrugated boxes; and linerboard, which is used for the inside and outside layers of the boxes. Corrugating medium is made from semi-chemical (sodium carbonate/sodium hydroxide) hardwood pulp and secondary (recycled) fiber, and linerboard is made from fiber recycled from old corrugated containers, clippings and rejects from corrugated container manufacturing plants, and some mixed office waste paper. The secondary fiber operations supply 100 percent of the fiber for the linerboard mill and about 20 percent of the fiber for the corrugating medium mill. Overall, the mill produces an average 870 tons per day of corrugating medium and 730 tons per day of linerboard.

The mill is located in Bedford County, adjacent to the James River and approximately 20 miles northwest of Lynchburg, Virginia. A principal concern for this area is air quality due to the close proximity of the James River Face Wilderness. The James River Face Wilderness is about 3 miles to the northwest of the mill and under the CAA was classified a Federal Class I air quality area. The USDA Forest Service, a signatory to the FPA, is the designated Federal Land Manager for assuring that the air quality related values for this Class I area are maintained.

The population of Big Island is approximately 400. The population within a 5-mile radius is about 2,100. Within a 25-mile radius of the mill (which includes the city of Lynchburg) is a population of approximately 111,500.

The mill currently handles the spent (“black”) liquor from wood pulping operations by reducing liquor water content using a conventional multiple effect evaporation train and combusting the concentrated (about 60 percent solids) liquor in two smelters. Molten smelt is drawn from the smelters and dissolved in water to recover the sodium carbonate. This solution is used to make up the cooking liquor added to the hardwood chips going to the digesters (cooking vessels) to produce the pulp. Exhaust gases from the smelters pass through a venturi scrubber and are then discharged to the atmosphere.

The mill currently is subject to two emission standards. The first is the so-called “Cluster Rule,” promulgated on April 15, 1998 (40 CFR part 63 subpart S) under the CAA. That rule sets performance standards for regulated emission sources in pulp and paper production plants and is based on maximum achievable control technology (MACT). A second MACT based standard applicable to pulp and paper mills (National Emission Standards for Hazardous Air Pollutants From Chemical Recovery Combustion Sources at Kraft, Soda, Sulfite, and Stand-Alone Semichemical Pulp Mills or “MACT II”), was promulgated in the Federal Register on January 12, 2001 (66 FR 3179) specifically to address hazardous air pollutant emissions from combustion sources associated with the recovery of pulping chemicals. Georgia-Pacific's two existing smelters (a type of semi-chemical combustion unit) are subject to the second rule.

The MACT II rule contains a performance standard to be met, but does not specify a particular technology that must be used. The current emissions from Georgia-Pacific's two existing smelters at Big Island are above the HAP emission standard in the MACT II rule. For Georgia-Pacific's Big Island facility to meet the standard in the MACT II rule, the smelters would have to be upgraded substantially. The age and physical condition of the smelters dictates that they either be rebuilt with additional emission control devices or replaced, such as with a conventional recovery boiler commonly used in the industry. Of these two options, Georgia-Pacific would choose to replace the smelters with conventional recovery technology. However, Georgia-Pacific also investigated a third alternative for chemical recovery, replacing the smelters with a PulseEnhanced^TM, steam reforming black liquor gasification system, developed by Stone Chem, Inc. This technology uses steam reforming to convert the organics in black liquor to a hydrogen-rich gas fuel, leaving the residual pulping chemicals (primarily sodium carbonate) for reuse. The gas can then be used as a clean burning energy source for heat in the gasification unit and as an alternative boiler fuel, replacing fossil-fuel based (non-renewable) natural gas. Implementation of such a gasification system is expected to allow the Big Island facility to reduce emissions well below the MACT II HAP emission standards, and to significantly lower emissions of other criteria pollutants, compared to installation of conventional technology.

The signatories to the FPA believe that gasification of black liquor represents a new and better approach for the chemical recovery process and eliminates many of the deficiencies of the conventional recovery furnace and fluid bed combustion technologies. The benefits of gasification to the paper industry generally are expected to include: increased efficiency in energy conversion and chemical recovery, elimination of the smelt-water explosion hazard, reduced operation and maintenance costs, and significantly lower environmental emissions. The emissions expected to be reduced include: particulates (PM, PM₁₀), sulfur dioxide (SO₂), total reduced sulfur (TRS), nitrogen oxides (NO_X), volatile organic compounds (VOC), carbon monoxide (CO), hazardous air pollutants (HAP), and greenhouse gases, specifically carbon dioxide (CO₂). These benefits are particularly attractive to pulp mills such as Georgia-Pacific's at Big Island that use a semi-chemical non-sulfur process that requires auxiliary fossil fuel to sustain combustion of the black liquor. Projected benefits to the Big Island facility and surrounding areas include significant reductions in NO_X, VOC, CO, and particulates. Table 1 below is taken from the FPA and compares actual emissions from the existing smelters to estimated emissions from use of conventional recovery boiler technology and a new gasification system.

Note:

The emissions are based on combustion of 400,000 lbs per day of black liquor solids).

Although HAP emissions are not listed separately in the table, the HAPs emitted at the facility are organic and, therefore, included in the value for VOC.

Although Georgia-Pacific's feasibility analysis indicated the risks of attempting to construct and operate the new technology would be within acceptable limits from a technical standpoint, the company had two other concerns. The first concern was the cost of the project. Estimated costs to complete a gasification project, the first of its kind, were quite high and considerably more than costs for installing a new conventional recovery boiler. Therefore, Georgia-Pacific sought and has received some co-funding help from the U.S. Department of Energy (DOE). The second concern involved compliance with the MACT II rule. With this demonstration of a new technology come risks that the technology ultimately will not be successful. If this situation occurs, Georgia-Pacific may not have a functioning replacement for their smelters in time to meet the MACT II compliance date, which is March 13, 2004. Therefore, the FPA for this XL project contains EPA's commitment to undertake a rulemaking to provide temporary relief from the MACT II compliance date for this situation (and also for a defined time period in which Georgia-Pacific will run the new gasification system on black liquor from a Kraft pulp mill, to fulfill an obligation under their funding agreement with DOE). The nature of this relief and the rationale for it are discussed more fully in section III.B of this preamble.

As indicated by the schedule in the FPA, Georgia-Pacific has begun preliminary construction activities at Big Island for the black liquor gasification system. The construction schedule calls for completion of equipment installation by August 30, 2002 and completion of activities leading to startup by September 1, 2003. Of course this schedule is subject to some uncertainties, especially considering the technology is being installed for the first time at this scale. Delays may occur not only in the procurement and installation of equipment, but also in the start-up of the system. The system is complex, and individual components must be operated and adjusted before the entire system can be started. Georgia-Pacific anticipates additional adjustments as operation of the entire system is attempted and as production is gradually increased toward capacity.

If the gasification system cannot be operated successfully, Georgia-Pacific will construct a conventional recovery boiler. This will take approximately three years from the time the gasification system is declared a failure. After either successfully starting up the gasification system and conducting the Kraft liquor trials or declaring the gasification system a failure and constructing and starting up a conventional recovery boiler, Georgia-Pacific will shut down and decommission the existing smelters.

II. Amendments to the MACT II Rule

A. Georgia-Pacific's Flexibility Need

There are no current full-scale commercial applications of the black liquor, steam-reforming gasification technology of the type proposed by Georgia-Pacific. Therefore, there is a risk that the gasification system will fail. Although Georgia-Pacific considers this an unlikely occurrence, it is possible that despite Georgia-Pacific's best efforts, the system may never perform as expected or to a level sufficient to warrant continued operation. If this happens, Georgia-Pacific will construct a standard chemical recovery boiler in lieu of a gasification system to comply with MACT II, and will need to continue to operate the existing smelters while the standard recovery boiler is constructed. For this situation also, Georgia-Pacific requested the flexibility to operate the existing smelters past the MACT II compliance date for existing sources.

In addition to the situation described above, Georgia-Pacific requested the flexibility to operate the existing smelters for a short time after the MACT II compliance date, as necessary, to allow Georgia-Pacific to conduct limited trials of the new gasification system on black liquor from a Kraft pulp mill. Kraft mill black liquor has characteristics different from those of the liquor generated by Georgia-Pacific's semi-chemical pulp mill. The Department of Energy is interested, as is EPA, in the potential for widespread use of the gasification technology in the pulp and paper industry. However, the vast majority of pulp mills are of the Kraft type, and only a dozen or so mills in the U.S. are of the semi-chemical type. Therefore, the Department of Energy, in their contract with Georgia-Pacific to fund part of the cost of the gasification system, requested the trials to see how well the new technology could handle Kraft black liquor.

Georgia-Pacific has not requested any other Federal regulatory flexibility. The company intends to comply with all other CAA requirements, including those for new source review of the gasification system construction.

B. Rule Changes

The amendments to the MACT II rule to help implement the Georgia-Pacific XL project are discussed below.

Note:

As is the case with other Federal emission standards, EPA intends to delegate authority to implement the provisions of the MACT II rule to the States, and these amendments specifically to Virginia.

1. Definitions

The startup of a new emissions unit is an important event because it defines the point in time that the new unit must be in compliance with an applicable hazardous air pollutant standard. The General Provisions for part 63 (40 CFR part 63 subpart A) defines startup as follows: “Startup means the setting in operation of an affected source for any purpose.” This definition would apply to the startup of the gasification system at Big Island. Georgia-Pacific raised a concern with this general definition, particularly with the possible connotation of operation “for any purpose.” Under this definition, the company felt that the gasification system could be deemed by an enforcement agency to have achieved “startup” before the many components operated together as a system and within the specifications of the manufacturer. Startup of the new gasification system at Big Island likely will occur only after a protracted period of operating and adjusting the many parts of the system, first individually and then all together; a period Georgia-Pacific calls commissioning. The EPA agrees, in this instance, that the General Provisions definition of startup could lead to some confusion as to when startup occurs, especially considering that this new, complex gasification technology has never been started up before on a commercial scale. Therefore, a definition of “startup” applying only to the gasification system at Big Island, has been added to § 63.861—Definitions. The definition makes clear that startup of the new gasification unit will occur at the end of the commissioning period.

2. Compliance Extensions

Paragraph (c) is added to § 63.863—Compliance Dates to allow compliance date extensions for the Georgia-Pacific Big Island plant in the event of failure of the gasification system and also during the time of the Kraft liquor trials. The compliance extensions are described more fully below.

In the event the gasification system is a failure, the amendments provide Georgia-Pacific a compliance extension for the existing smelters of up to three years from the date the gasification system is declared a failure, but no later than March 1, 2007. The three years provides the company time to build and start up a new conventional recovery boiler to replace the existing smelters. March 1, 2007 is the longest possible duration of the extension, since it is three years after the latest date Georgia-Pacific agreed to declare that the system has failed. To obtain this extension, Georgia-Pacific must provide a notice to the Administrator stating that the system has failed and describing the events leading to that declaration.

Finally, Georgia-Pacific, according to their contract with the Department of Energy, must operate the new gasification system for up to 500 hours using black liquor from a donor Kraft pulp mill. While the gasification system is processing Kraft liquor, the existing smelters must operate to process the black liquor generated by the Big Island plant. Although the Kraft trials will last up to 500 hours, the trials may not run continuously for that period of time. Separate trials may last only a few hours. Between trials various system components may be adjusted in an effort to improve system performance or find optimum performance. Therefore, the total elapsed time to accumulate up to 500 hours of Kraft liquor trials may be as high as 1500 consecutive hours. The smelters must operate during this entire period. If the trials occur after the MACT II compliance date, the amendments allow the existing smelters to operate for up to 1500 hours during the Kraft trials, without the MACT II standard applying. Prior to conducting Kraft liquor trials, Georgia-Pacific must notify the Administrator of the 1500-hour time period in which it intends to conduct the trials (and operate the existing smelters).

3. Recordkeeping and Reporting Requirements

Under § 63.866—Recordkeeping requirements, a new paragraph ((c)(7)) requires Georgia-Pacific to record the hours the existing smelters operate during the Kraft liquor trials. This requirement will allow enforcement of the 1500 maximum duration of a compliance waiver for the existing smelters during Kraft liquor trials.

Paragraph (a)(2) has been added to § 63.867—Reporting requirements—to specify notices Georgia-Pacific must send to the EPA Administrator (or his/her authorized representative, such as a State that has been delegated authority to implement the provisions of the rule), prior to invoking one of the compliance extensions.

To obtain the three year extension to build a conventional recovery unit in the event the gasification system fails, Georgia-Pacific must submit a notice providing the date the company declared the system a failure and the reasons why the technology was not successful. The decision to declare the new gasification system a failure rests with Georgia-Pacific alone, since only the company will know the technical information pertaining to failure of the system. Although the decision is theirs, Georgia-Pacific will declare the system a failure only after exhausting all possibilities for success and only as a last resort. Despite funding help from DOE, the company will be spending tens of millions of dollars on the gasification system, and failure of the system means Georgia-Pacific will have to spend additional tens of millions of dollars to scrap the failed system and construct a conventional recovery boiler. Thus, the company has considerable incentive to make the technology work.

Also, prior to conducting any trials using Kraft black liquor, Georgia-Pacific must submit a notice that: (1) Identifies the period in which the trials will take place and (2) explains why the trials could not be run prior to the compliance date applicable to the existing smelters.

C. Rationale for the Compliance Flexibility

For certain defined circumstances (see sections III.B.2 and III.B.3 of this preamble), the rule amendments allow Georgia-Pacific to operate their existing smelters beyond the MACT II standard's compliance date, which is 3 years after the effective date of the standard. Of course, EPA is aware that section 112(i)(3)(A) of the CAA states that compliance with a MACT standard shall be no later than 3 years from the standard's effective date. However, EPA notes that the special circumstances in this instance warrant the flexibility.

First, as described above, without this flexibility, Georgia-Pacific would not proceed to construct the black liquor gasification system. The new gasification system, if successful at Georgia-Pacific's Big Island facility, is expected to produce significant environmental benefits, including reductions in emissions of all regulated air pollutants. These reductions extend beyond those expected from conventional recovery boilers, which are commonly used in the industry and can meet the MACT II standard. (See section II.B.2 of this preamble for a discussion of emission reduction benefits.)

These emission reduction benefits include the effects of the gasification system's greater energy efficiency. The system will convert black liquor into a hydrogen rich gas. Some of this gas will be used to fuel the pulsed heaters providing energy to the gasification process and the remaining gas will be combusted in a boiler to produce steam. Steam generated by the gasification system will offset steam currently generated at Big Island by fossil fuel combustion. Although a conventional recovery boiler also will produce steam, the gasification system at Georgia-Pacific's Big Island facility is expected to do so with somewhat greater energy efficiency, lower air pollution levels, and significantly lower annual operating costs.

Successful completion of this XL project will show this technology to be capable of providing full chemical recovery capacity for a semi-chemical mill. This includes demonstration of the reliability and operational flexibility of the gasification system and all of the associated equipment. Once the technology is demonstrated, the industry can apply it at other pulp and paper facilities to obtain better energy conversion, improved safety, and environmental performance. The Big Island semi-chemical mill is similar in characteristics to 12 other mills in the U.S. producing virgin pulp for containers. Success of black liquor gasification at Big Island and success of the scheduled Kraft liquor trials will contribute significantly to its implementation in the much larger number of Kraft mills. Success also may pave the way for commercial scale application of gasification to the conversion of non-wood liquors, sludges, and agricultural wastes to energy.

In addition to producing steam, gasification technology could be used to generate onsite electricity, thereby offsetting a pulp mill's demand for electricity purchased from the utility grid. By configuring the black liquor gasification system to burn the product gas in a combined cycle gas turbine system, the energy released would be harnessed to generate clean electricity. Although Georgia-Pacific's facility at Big Island is not large enough to make combined cycle energy production economically viable, Kraft process pulp mills in the U.S. are large enough. For a Kraft facility employing black liquor gasification and combined cycle energy production, the reduction in fossil fuel use and greenhouse gas generation would be dramatic.

Compared to average utility grid emissions, generating electricity from a gasification unit would result in lower emissions of combustion related air pollutants. Displacing old, coal based utility boilers with a biomass based fuel, in this instance black liquor, would significantly lower emissions of CO₂, a pervasive greenhouse gas that can contribute to global climate change. When this technology is successfully demonstrated with combined cycle energy generation and assuming utilization of currently available biomass, studies show that the energy savings could transform the domestic Pulp and Paper Industry from being a net importer of 6 gigawatts of electrical power to a net exporter. The studies also indicate that successful development and deployment of gasification technology would result in a decrease in greenhouse gas emissions of 18 million metric tons per year.

(Source: The Forest Products Industry Gasification Combined Cycle Initiative, American Forest & Paper Association (AF&PA) Agenda 2020, July 1998, www.agenda2020.org ).

Over the next 10 to 15 years, the industry expects that a large fraction of the existing conventional chemical recovery boilers will reach the end of their useful life and have to be replaced. If black liquor gasification has become a proven technology by the time replacement decisions are made, a large-scale conversion to the new technology could occur.

Beyond the environmental and energy benefits described above, black liquor gasification has a safety benefit over conventional chemical recovery technology. In the gasification process, concentrated black liquor is pyrolyzed in a fluid bed gasifier through indirectly applied heat, liberating a hydrogen rich gas. Sodium carbonate pellets formed during the pyrolysis are drawn from the fluidized bed into a dissolving tank to reconstitute “green” liquor for recycle to the pulping process. Other gasification or conventional recovery technologies employ flame combustion within a reactor vessel or an intermediate smelt phase. The formation of smelt carries the potential for smelt-water explosions, which are a major safety concern in the operation of conventional recovery boilers. The steam reforming, black liquor gasification process to be constructed at Big Island does not produce a smelt phase and, thus, eliminates the potential for smelt-water explosions.

In short, EPA sees that significant environmental, economic, and safety benefits would accrue from successful completion of this XL project, not only at the Big Island plant but potentially nationwide. Nonetheless, these potential benefits must be measured against any potential adverse effects from undertaking the project. Under this project, the potential exists for operation of the existing smelters at Big Island beyond the time they otherwise would have been shut down. Specifically, during the project and under certain situations, current HAP emissions from the existing smelters may continue beyond the MACT II compliance date (March 13, 2004). As stated before, current smelter HAP emissions are above those that would be allowed under the MACT II standard. Without this XL project, Georgia-Pacific would replace the smelters with conventional chemical recovery technology on or before the compliance date. The amounts of “excess” smelter emissions that actually will occur under this XL project depend on how well the construction and startup of the gasification system proceeds.

It is quite possible that Georgia-Pacific will be able to construct and successfully start up the unit according to their current schedule, which allows for several months of commissioning activities leading to startup. Under such a scenario, Georgia-Pacific could shut down the smelters before the MACT II compliance date and not need any compliance flexibility.

Even if Georgia-Pacific is able to start up the new system according to schedule, it is probable that the Kraft liquor trials will occur, at least in part, after the MACT II compliance date. These trials cannot be run until Georgia-Pacific has started up the gasification system and run it for some period under stable operation. Therefore, it is likely that the Kraft trials will require the smelters to operate for up to 1500 hours after the compliance date.

The worst case scenario, which also is the least likely, occurs if Georgia-Pacific is unable to successfully operate the gasification system. If this occurs, Georgia-Pacific would have to construct a new conventional recovery boiler, and would be allowed up to three years to do so. Under such a scenario, the existing smelters would operate until the new conventional unit has achieved startup, which could be as long as March 1, 2007.

Of all the possibilities, the most probable scenario is that the new gasification system will be started up prior to the MACT II compliance date, but the Kraft liquor trials will occur after that date. This means that the greatest likelihood is that the public surrounding the Big Island facility will experience smelter emissions up to 1500 hours longer than they would without this XL project, of course with the prospect of much lower emissions from success of the gasification system.

In summary, the Agency has considered the expected environmental and energy benefits, safety improvement, reduced operation and maintenance costs, and high potential for transfer to the rest of the pulp and paper industry expected from a successful demonstration of the black liquor gasification technology at Georgia-Pacific's Big Island facility. The Agency also has weighed the possibility of allowing the existing emissions from the smelters, which are higher than allowed by the MACT II standard, to persist for a limited time beyond the MACT II compliance date. Finally, the Agency has noted the solid support for the project from all stakeholders involved in the project, including those representing the communities near the Big Island plant. Based on all available information, the Agency has concluded that it is in the best interest of the environment and public health and welfare to grant the regulatory flexibility requested by Georgia-Pacific to undertake this XL project. In the event that the gasification technology should fail, the Agency would regard the Georgia-Pacific mill as a different type of mill essentially part of its own subcategory—a mill that had attempted to operate using a method of pulping liquor recovery—gasification—different from that used by any other source. In the event of failure of gasification, this unique source would then be accorded the statutory 3 year compliance period to use conventional recovery boiler technology to achieve the MACT II emission standard. In addition, as EPA indicated in the MACT I rule, there are rare circumstances where the three year compliance date can serve as such a disincentive to pollution control as to no longer properly be considered MACT. See 63 Federal Register at 18527-528 (acting to avoid discouraging mills from installing advanced water treatment technologies). EPA is similarly acting here to assure that the compliance date not serve as a disincentive to the potentially great benefits of gasification technology. (This same rationale serves to justify any potential compliance extension needed to test the new gasification unit at Big Island, Virginia on kraft mill black liquor.)

The compliance flexibility afforded by these amendments to the MACT II rule is limited to the existing smelters at the Big Island facility, and only for this XL demonstration project.

III. Administrative Requirements

A. Executive Order 12866: Regulatory Planning and Review

Because this rule affects only one facility, it is not a rule of general applicability and therefore not subject to OMB review and Executive Order 12866. In addition, OMB has agreed that review of site specific rules under Project XL is not necessary.

B. Regulatory Flexibility Act (RFA), as Amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C. 601 et seq.

The Regulatory Flexibility Act (RFA) generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements unless the agency certifies that the rule will not have significant economic impact on a substantial number of small entities. Small entities include small businesses, small not-for-profit enterprises, and small governmental jurisdictions. This final rule would not have a significant impact on a substantial number of small entities because it only affects one source, the Georgia-Pacific plant at Big Island, VA, which is not a small entity. Therefore, I conclude that this action will not have a significant economic impact on a substantial number of small entities.

C. Paperwork Reduction Act

This action applies only to one company, and therefore requires no information collection activities subject to the Paperwork Reduction Act, and therefore no information collection request (ICR) will be submitted to OMB for review in compliance with the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.

D. Unfunded Mandates Reform Act

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local and tribal governments and the private sector. Under section 202 of the UMRA, EPA generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures to State, local, and tribal governments, in the aggregate, or to the private sector, of $100 million or more in any one year. Before promulgating an EPA rule for which a written statement is needed, section 205 of the UMRA generally requires EPA to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost-effective or least burdensome alternative that achieves the objectives of the rule. The provisions of section 205 do not apply when they are inconsistent with applicable law. Moreover, section 205 allows EPA to adopt an alternative other than the least costly, most cost-effective or least burdensome alternative if the Administrator publishes with the final rule an explanation why the alternative was not adopted. Before EPA establishes any regulatory requirements that may significantly or uniquely affect small governments, including tribal governments, it must have developed under section 203 of the UMRA a small government agency plan. The plan must provide for notifying potentially affected small governments, enabling officials of affected small governments to have meaningful and timely input in the development of EPA regulatory proposals with significant Federal intergovernmental mandates, and informing, educating, and advising small governments on compliance with the regulatory requirements.

As noted above, this rule is limited to Georgia-Pacific's plant in Big Island, Virginia. The EPA has determined that this rule does not contain a Federal mandate that may result in expenditures of $100 million or more for State, local, and tribal governments, in the aggregate, or the private sector in any one year. Thus, today's rule is not subject to the requirements of sections 202 and 205 of the UMRA. Nevertheless, in developing this rule, EPA worked closely with the Virginia Department of Environmental Quality and received meaningful and timely input in the development of this rule. The EPA also has determined that this rule contains no regulatory requirements that might significantly or uniquely affect small governments.

E. Executive Order 13045: Protection of Children From Environmental Health Risks and Safety Risks

Executive Order 13045, “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997) applies to any rule that: (1) Is determined to be “economically significant,” as defined under Executive Order 12866; and (2) concerns an environmental health or safety risk that EPA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, the Agency must evaluate the environmental health or safety effects of the planned rule on children, and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the Agency. The EPA interprets E.O. 13045 as applying only to those regulatory actions that are based on health or safety risks, such that the analysis required under section 5-501 of the Order has the potential to influence the regulation. This action is not subject to E.O. 13045 because it is not economically significant as defined in E.O. 12866, and in fact applies only to one source, Georgia-Pacific's facility in Big Island, Virginia. Additionally, this action promotes lower emissions compared to the emissions that would otherwise exist at that facility.

F. Executive Order 13132 (Federalism)

Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.”

This direct final rule does not have federalism implications. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. Today's rule amends a previously established compliance date, under certain circumstances, for one entity, Georgia-Pacific Corporation's facility in Big Island, Virginia. Thus, this rule does not create any mandates nor impose any enforceable duties on the States in general or the Commonwealth of Virginia specifically. It also will not affect the national government's relationship with the States or the distribution of power among various levels of government. Thus, Executive Order 13132 does not apply to this rule. Nevertheless, in developing this rule, EPA worked closely with the Virginia Department of Environmental Quality and received meaningful and timely input in the development of this rule.

G. Executive Order 13175 (Consultation and Coordination with Indian Tribal Governments)

Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 6, 2000), requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” “Policies that have tribal implications” is defined in the Executive Order to include regulations that have “substantial direct effects on one or more Indian tribes, on the relationship between the Federal government and the Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes.”

This direct final rule does not have tribal implications. It will not have substantial direct effects on tribal governments, on the relationship between the Federal government and Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes, as specified in Executive Order 13175. Today's rule does not significantly or uniquely affect the communities of Indian tribal governments. This direct final rule affects only the Georgia-Pacific Corporation's facility in Big Island, Virginia. It does not affect any communities of Indian tribal governments and there are no such communities located in the vicinity of the Georgia-Pacific facility. Thus, Executive Order 13175 does not apply to this rule.

H. National Technology Transfer and Advancement Act of 1995 (NTTAA)

Section 12(d) of NTTAA, Public Law 104-113, section 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. The NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary standards.

This rulemaking does not involve technical standards. Therefore, EPA is not considering the use of any voluntary consensus standards.

I. Congressional Review Act

The Congressional Review Act, 5. U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. Section 804 exempts from section 801 the following types of rules (1) rules of particular applicability; (2) rules relating to agency management or personnel; and (3) rules of agency organization, procedure, or practice that do not substantially affect the rights or obligations of non-agency parties. 5 U.S.C. 804(3). EPA is not required to submit a rule report regarding today's action under section 801 because this is a rule of particular applicability.

List of Subjects in 40 CFR Part 63

• Environmental protection
• Air pollution control
• Hazardous substances
• Intergovernmental relations
• Reporting and recordkeeping requirements

For the reasons set out in the preamble, title 40, chapter I of the Code of Federal Regulations is amended as follows.

PART 63—NATIONAL EMISSION STANDARDS FOR HAZARDOUS AIR POLLUTANT SOURCE CATEGORIES

1. The authority citation for part 63 continues to read as follows:

Authority: 42 U.S.C. 7401, et seq.

Subpart MM—National Emission Standards for Hazardous Air Pollutants; Standards for Hazardous Air Pollutants From Chemical Recovery Combustion Sources at Kraft, Soda, Sulfite, and Stand-Alone Semichemical Pulp Mills

2. Amend § 63.861 by adding in alphabetical order a definition for “Startup” to read as follows:

3. Amend § 63.863 by revising paragraph (a) and adding paragraph (c) to read as follows:

4. Amend § 63.866 by adding paragraph (d) to read as follows:

5. Amend § 63.867 by revising paragraph (a) to read as follows:

6. Amend Table 1 to Subpart MM by revising the entries for “63.6(c)” and “63.6(i)” to read as follows: