United States Environmental Protection Agency
          Office of Air Quality Planning and Standards 
          Research Triangle Park, North Carolina 27711


Date:     May 4, l982

SUBJECT:  Region III's State Air Director's Modeling Workshop

FROM:     Richard G. Rhoads, Director /s/ 
          Monitoring and Data Analysis Division (MD-14)

TO:       Ray Cunningham, Chief
          Air Programs and Energy Branch, Region III

     Tom Helms and I appreciated the opportunity to discuss
modeling issues with our States in February, and your April 17
memo summarizing those discussions will be most helpful as we
attempt to resolve the issues.  Recognizing that "ultimate
resolution" may never occur, I want to take this opportunity to
clarify and expand on some of the issues that arose during the
course of the meeting and to provide some of my personal views on
those issues.  Also, I want to provide you with a brief status
report on some of our modeling activities.  Please note my
"personal views" are for discussion purposes only, and are not
intended to create or modify Agency policy, since complex
technical and legal issues may be involved.  

     I will address the principal issues in the order listed in
your April 7 memo:

     1.  Consistency vs. Flexibility

         As a long-term goal, I expect that most States would
adopt a Modeling Guideline (similar to EPA's, Connecticut's, or
Maryland's) which EPA could approve as part of the State's
"Generic SIP."  Also, as permitted by the "Guideline on Air
Quality Models," State guidelines would allow flexibility where
technical uncertainty or the need for case-by-case technical
judgement exists.  However, to minimize interstate disputes,
these guidelines should be carefully reviewed and differences
between adjacent States should be minimized before the EPA
approval is granted.  Also, to ensure equitable treatment of air
pollution sources by all States, no source should find it
advantageous to locate in certain States because they take a
liberal view of CAA requirements.  After EPA approval, the State
would be legally bound to follow the guideline.  Even though EPA
would not review individual State decisions, some overview would
be desirable since decisions could tend to establish precedents
for similar sources or terrain/climate settings in other parts of
the country.  One way to handle the overview is through a
systematic audit program, though we have reservations about how
effective such programs really are.  We would like to explore
this matter with you further, and consider the pros and cons of
various options.

        Regardless of whether an audit or related program
existed, the State would bear the burden for justifying its
decisions to the public, industry, and other States (which would
likely require a Section 126 type of action).  EPA would not
routinely be involved after the State guideline was approved.  If
gross misuse of discretion, or if numerous clear technical errors
became apparent in a State's actions, EPA would have authority to
withdraw approval of the guideline or could find the SIP
deficient.  I do not anticipate that EPA would unilaterally
initiate action to disapprove a State's decision (except possibly
to protect a Class I area).  Instead, I expect that an industry,
a citizen's group, or another State would object to the decision
and essentially force EPA to take a position.  
     
         Under this concept, the degree of consistency vs.
flexibility for intra-state decisions would be defined by the
State's guideline.  For intra-state issues, I anticipate that EPA
would be reluctant to overturn a State's decision.  Differences
between adjoining States, though, should be minimized.  Where
there is a clear difference of technical opinion, it is likely
that EPA Regional Offices will have to assume the role of
arbitrator and attempt to resolve the conflict, as has been done
in the past.  

         During the interim period, while EPA continues to make
permitting and individual and SIP emission limit decisions, EPA
Regional Offices must exhibit a high degree of consistency in
order to comply with Section 301 of the Clean Air Act.  In these
actions, I believe that EPA has the burden to show valid
technical reasons if there are apparent inconsistencies among its
individual decisions.  

         We are sympathetic to the need for flexibility in
interpreting modeling results.  Assuming that similar
concentration estimates are calculated by the parties involved,
reasoned judgments are desirable.  Modeling should not be the
sole basis for decisions in all cases.  However, for the interim,
we are bound by the CAA and probably by EPA regulations.  Over
the next several years as these laws and regulations are reviewed
and revised, additional flexibility will almost certainly be
forthcoming.  Nevertheless, the reasonable interpretation of
concentration estimates within the flexibility allowed by current
regulations is desirable and encouraged.

     2.  Use of Model Uncertainty in Decision-Making

         EPA is devoting considerable effort to quantifying the
uncertainty in models.  The initial results of that effort should
be available about October 1, 1982.  We also have in-house and
contractual efforts underway to define ways in which uncertainty
could be incorporated into the decision-making process. 
Preliminary results of this work will be available in about 1
year.  This work is considering not only error bounds, but also
other statistical concepts and is concerned with the application
and interpretation of these techniques.  

         I recognize that some States will desire to use only
"best estimates" in order to provide firm criteria and certainty
to their program, and to avoid the potential for litigation on
decisions that are based on other than the "best estimate."  I
also recognize the desire of other States to consider factors
other than uncertain air quality estimates in their decision
process.  There is no easy resolution of the dilemma other than
to provide each State with the factual information on uncertainty
and allow them to use it as they see fit.  The first time any
decision is based on other than the "best estimate," litigation
is nearly inevitable.  I would caution any State to consult with
EPA, and to make sure that the decision is clearly defensible as
being in the public interest before explicitly accounting for
modeling uncertainty in a regulatory decision.  

         It should be noted that explicit consideration of
uncertainty implies that we will accept some probability, or
"risk," that the ambient standards will be violated.  We are
moving in that direction now.  The form of the revised ozone
standard implies that a 0.25 probability of violation in any 1
year may be acceptable.  A similar probability appears to be
implied by our proposal to approve emission limits for copper
smelters based on the "multi-point rollback" technique.*  Draft
issue papers on the ExEx modeling technique discuss acceptance of
probabilities of violation of 0.1 (for primary standards) and 0.2
(for secondary standards).  Clearly, as the air pollution control
community departs from the concept that a standard may never be
exceeded, we must address the issue of what constitutes an
acceptable risk.  Consensus on definition of an acceptable risk
will in turn make it much easier to incorporate model uncertainty
into our decision-making process.  

         As progress on our efforts to quantify uncertainty and
to incorporate uncertainty into our control programs is made, we
will keep you informed.  We will make an effort to promptly
revise our guidance in these areas as new policies evolve.

-------------------------
     *See December 17, 1981 CFR notice on New Mexico Plan for Nonattainment
Areas.

     3.  Clearinghouse

         It is a credit to the capability of our people that the
States were "astonished" that the clearinghouse is staffed with
only two people.  So far, we seem to be able to handle the demand
with that staffing level.  This is in large measure due to the
willingness of the Regional Office staffs to carefully screen
issues before referring them to the clearinghouse.  In essence,
the Regional Offices already augment the clearinghouse staff in
their efforts to ensure consistency.  We assume that the Regional
Offices will take on an expanded clearinghouse role to ensure
consistency as the States assume greater modeling
responsibilities.  

         It may become necessary to increase clearinghouse
resources in the future.  If that becomes necessary, we consider
the clearinghouse of sufficient importance that we would increase
the staff even in the face of reduced overall resources. 
Similarly if there is a broader range of issues (or more issues
of a particular type) with which the clearinghouse should be
dealing, we would like to consider your thoughts and those of
Region III States on the matter.

         However, I hope that our efforts to delegate increased
responsibility and authority to the States, possibly by approval
of State Modeling Guidelines, will alleviate some of the
increased clearinghouse burden which you anticipate.  If that
does not happen, then we should seriously consider options such
as the standing work group which you mentioned.  


     4.  Miscellaneous

         The need for guidance on the review of modeling studies
is appropriate for our consideration.  We would like to review
this need with you in more detail and perhaps include it in our
clearinghouse activities for FY-83.  

         We consider a newsletter or notebook to be a good idea
and have examined various options for initiating this type of
information transfer.  However, it is uncertain whether such a
broad dissemination of information is consistent with EPA's
current policy on publications, unless formal clearance is
obtained.  We will be happy to consider any ideas you have on the
matter.  In the interim "Regional Office Workshop Reports" of the
type we have sent to you in the past may have to suffice.  

         Finally we think the idea of regionalized State
workshops is worthy of further consideration.  Perhaps the
several Regional Office workshops that have been held in the past
could serve as a model.  States with mutual concerns in the Ohio
River Valley and Appalachians could serve as a trial workshop. 
Would you be interested in coordinating such a workshop with
Regions IV and V for sometime in early FY-83?  We would like to
explore this matter further with you.

cc:  W. Barber
     T. Helms
     D. Tyler