United States
Environmental Protection
Agency
Office of Air Quality Planning and Standards
Research Triangle Park, NC 27711
EPA-456/F-98-006
September 1998

                                         The
                               Regional
                              Transport
                               of Ozone
                                      New EPA
                                Rulemaking on
                                Nitrogen Oxide
                                     Emissions
                               EPA tracks emissions of six
                               principal air pollutants -
                               carbon monoxide, lead,
                               nitrogen oxides, particulate
                               matter, sulfur dioxide,
                               and volatile  organic
                               compounds. All have
                               decreased significantly
                               since passage of the Clean
                               Air Act in 1970 - EXCEPT
                               FOR NITROGEN OXIDES.

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      Facts About IMOX Emissions
                                                             New Regional  IMOX Transport Rule
      Emissions of nitrogen oxides (NOx) discharged into the
      atmosphere can pose significant adverse effects on human
      health and the environment. In an effort to limit these adverse
      impacts, the U.S. Environmental Protection Agency (EPA) issued
                                     a new regulation in
                                     September 1998 specifically
                                     aimed at reducing NOX
   Clean Air Act
  The Clean Air Act provides EPA and states
  with the responsibility to address air
  pollution from a variety of sources.  EPA
  has established National Ambient Air
  Quality Standards for six pollutants to
  provide protection against harmful levels
  that could impact public health and the
  environment. These pollutants are often
  referred to as the six "criteria" pollutants,
  and include carbon monoxide, lead,
  nitrogen dioxide, ozone, particulate
  matter, and sulfur dioxide. The pollutant
  ozone is not emitted directly into the air
  but is formed when NOX  and volatile
  organic compounds (VOC) react in the
  presence of sunlight. Ozone occurs at
  ground-level and can cause serious human
  health and environmental problems.  This
  new regional NOX transport rule is an
  important component of EPA's ozone
  reduction program.
                               emissions.

                               Nitrogen oxides are a class of
                               compounds made of nitrogen
                               and oxygen in varying
                               percentages.  Nitrogen
                               dioxide, one of six pollutants
                               tracked nationally, is included
                               in the family of nitrogen
                               oxides. NOx are emitted
                               from high temperature
                               combustion processes.
                               Sources include motor
                               vehicles, electric utilities, and
                               other industrial, commercial,
                               and residential sources that
                               burn fuels. In 1997, over 23
                               million tons of nitrogen
                               oxides were emitted into the
air in the United States. An important characteristic of NOX
emissions is that they can be transported long distances and
cause problems far from the original emissions source.
The Clean Air Act (Section 110) provides that each State
Implementation Plan (SIP) must contain provisions preventing
sources within the state from "contributing significantly to
nonattainment problems or interfering with maintenance" in
downwind states.  In other words, this provision addresses the
transport problems associated with ozone and pollutants such
as NOX that form ozone.

The Ozone Transport Assessment Group (OTAG), a collection
of the 37 eastern-most states and the District of Columbia,
along with industry representatives and environmental groups,
worked with EPA over a 2-year period to study the ozone
transport problem.  The recommendations from OTAG's work
form the basis of EPA's new regional NOX transport rule, signed
in September 1998. The OTAG recommendations focus on
achieving additional reductions of NOx , in order to meet the
National Ambient Air Quality Standards for ozone. The OTAG
recommendations do not identify measures for VOC, although
it is understood that some states may also need to reduce VOC
to achieve the ozone standards.

Affected States

The rule requires 22 states — Alabama, Connecticut, Delaware,
Georgia, Illinois, Indiana, Kentucky, Massachusetts, Maryland,
Michigan, Missouri, North Carolina, New Jersey, New York,
Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee,
Virginia, Wisconsin, and West Virginia, plus the District of
Columbia — to prepare new plans for reducing NOx emissions.
Because NOX includes a
number of different
compounds, the
environmental and health
effects are many and
diverse:
Environmental
and Health
Impacts of NOX     Ozone 
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                                        The overall purpose of
                                        the rule is to reduce
                                        regional transport of
                                        NOx that contributes to
                                        ozone nonattainment in
                                        multiple eastern states,
                                        not to reduce emissions
                                        from a specific source in
                                        a particular state.
                 22 states and the District of
                 Columbia to prepare State
                 reducing NOX emissions.
    Rule Provisions

    The rule assigns a summertime NOx emissions limit or budget
    for each affected state. EPA established the limits by determining
    the amount of NOX emissions that would remain in each state
          Timeline for complying with Regional NOX Transport Rule

           I September 1999 - 22 affected states, plus DC, submit plans to EPA

                     May 2003 - States put NOX controls in place

                               September 2007 - States meet overall NOXbudgets
    after reasonable, cost-effective control measures were applied.
    States are required to have controls in place on larger industrial
    sources by May 2003. Along with these controls and other
    necessary measures including mobile source controls, states
    must meet their overall NOx budgets by September 2007.
                              The rule does not prescribe how states should reduce emissions
                              to meet their NOx budget. Instead it allows states the flexibility
                              to develop customized plans that will most effectively and cost-
                              efficiently help them meet their reduction goals. Electric
                              utilities are likely to be one of the major sources targeted for
                              reductions. OTAG identified utilities as a major source for
                              achieving significant NOX reductions, and EPA's analysis agrees
                              with OTAG's recommendations. Emission reductions from
                              utilities and other large boilers would be more cost effective
                              in terms of dollars spent per ton of NOx reduced, particularly
                              when compared to sources that have already reduced emissions
                              substantially.

                              Market-based Emissions Trading
                              Program

                              As part of developing a cost-effective strategy, EPA  developed
                              a model market-based emissions trading program that states
                                                  may use in controlling NOx emissions.
                                                  This is a proven, cost-effective technique
                                                  for achieving overall emissions reductions
                                                  while providing flexibility to affected
                                                  sources. The program allows sources that
                                                  exceed their emissions reduction
                                                  requirements, or that achieve the required
                                                  reductions ahead of schedule, to sell
                              "credits" to other sources that cannot meet their limits. This
                              type of program already is being successfully implemented for
                              sulfur dioxide emissions in EPA's Acid Rain Program.
                                                                   too
Water Quality Deterioration
  nutrients used by aquatic plants and
  Additional nitrogen accelerates
  eutrophication, which leads to oxygen
  depletion, and reduces fish and
  shellfish populations.
Global Warming
• One member of the NOX family,
  nitrous oxide, is a greenhouse gas.
• It accumulates in the atmosphere with
  other greenhouse gases causing a
  gradual rise in the earth's temperature.
and other adverse changes to plant
                                                                 Toxic Chemicals
                                common organic chemicals, and even
                                ozone, to form a wide variety of toxic
                                chemicals.
                                Some of these toxic products may
                                cause biological mutations.
nitroarenes, and nitrosamines.
                                                               Visibility Impairment
                                 dioxide can block the
                                 transmission of light.
                                 Visibility impairment occurs in
                                 urban areas and on a regional
                                 scale in our national parks.

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New Transitional Classification

In 1997, EPA issued a new standard based on 8-hour
concentrations of ozone. EPA will designate areas as
"nonattainment" for the 8-hour standard in year 2000.  This
NOX transport rule is expected to help areas comply with EPA's
new 8-hour national air quality standard for ozone. Areas that
would normally be classified as "nonattainment" for the 8-
hour standard, but that eventually achieve attainment with
the 8-hour standard as a result of complying with the new
regional NOx transport rule, will be eligible for classification
as "transitional." This means that no or minimal additional
local emission reductions will be required, effectively reducing
the burden and cost associated with local controls. States
must submit implementation plans in 1999 and 2000 that
include control measures necessary to achieve the emissions
reductions required by the new NOX rule. In addition, to qualify
                   Ozone Transitional Areas Schedule
                   (Affected by NOX Transport Rule)
          September 1999 and May 2000 - States submit plans to EPA
            July 2000 - EPA designates areas as transitional for 8-hour ozone standards

                     May 2003 - States put additional controls in place

                               September 2007 - States meet overall NOX budgets
for the transitional classification, EPA will determine if the
area has air quality meeting the 0.12 ppm 1-hour ozone standard
by year 2000. This transitional classification will allow areas
to use the benefits of the new NOx transport rule. This rule
helps states achieve the 8-hour ozone standard earlier than
required by the Clean Air Act without having to use costly local
controls.

State  Petitions

The Clean Air Act (Section 126) allows downwind states to file
petitions with EPA, requesting EPA to take action to reduce
emissions from industrial sources in upwind states that
contribute significantly to nonattainment in the petitioning
states. In 1997, 8 northeastern states filed petitions identifying
sources of NOX in 22 states and the District of Columbia that
are subject to the new NOX rule, plus a few other states.  EPA
will take action in response to these petitions which will be
dependent in part on how states address emission reduction
requirements in the NOX transport rule.

Impacts

EPA anticipates that full implementation of the NOx transport
rule will reduce total emissions of NOX by an average of 28%
in the affected states and the District of Columbia. This rule
will remove about 1.2 million tons of NOx from the air. This
is roughly equivalent to getting 166 million cars off the road.

With regard to attainment status for the new 8-hour ozone
standard, implementation of the regional NOx reduction
program is expected to bring a majority of the new
nonattainment areas into attainment. Cost impacts depend on
                    the controls put in place by  the affected
                    states and the District of Columbia.  EPA
                    analyses show that reducing one ton of
                    NOX from electric utility plants costs
                    about $1500, significantly less per ton
                    than implementing local controls (which
                    range as high as $9500/ton). EPA
                    calculates that the costs of reducing
                    utility emissions could cause residential
                    electric rates to increase less than  2
percent. Utility restructuring during this same period, however,
is expected to substantially cut residential electric rates 20-30
percent, thus making the 1 percent increase negligible.
     FOR MORE INFORMATION

         EPA Office of Air Quality Planning and Standards
           Air Quality Strategies and Standards Division
            Ozone Policy and Strategies Group, MD-15
               Research Triangle Park, NC 27711
                       919-541-5526

             Homepage: http://www.epa.gov/airlinks
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