Regulation of Fuel and Fuel Additives: Extension of California
Enforcement Exemptions for Reformulated Gasoline to California Phase 3
Gasoline
[Federal Register: August 11, 2004 (Volume 69, Number 154)]
[Proposed Rules]
[Page 48827-48835]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr11au04-34]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 80
[OAR-2003-0217; FRL-7800-3]
RIN 2060-AK04
Regulation of Fuel and Fuel Additives: Extension of California
Enforcement Exemptions for Reformulated Gasoline to California Phase 3
Gasoline
AGENCY: Environmental Protection Agency (EPA).
ACTION: Notice of proposed rulemaking.
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SUMMARY: We are proposing to exempt refiners, importers, and blenders
of gasoline subject to the State of California's Phase 3 reformulated
gasoline (CaRFG3) regulations from certain enforcement provisions in
the Federal reformulated gasoline (RFG) regulations. We are proposing
this action because we believe that gasoline complying with the CaRFG3
regulations will provide emissions benefits equivalent to Federal Phase
II RFG and because California's compliance and enforcement program will
in practice be sufficiently rigorous to assure that the standards are
met. Since the Federal RFG program began in 1995, California refiners,
importers and blenders have been continuously exempted from certain
enforcement-related requirements such as recordkeeping and reporting,
and certain sampling and testing requirements. This proposal would
extend those exemptions, which are applicable to California Phase 2
gasoline, to CaRFG3. This proposal also restores the definition of
``California gasoline'' which was erroneously deleted.
DATES: Comments or a request for a public hearing must be received by
October 12, 2004.
ADDRESSES: Submit your comments, identified by Docket ID No. OAR-2003-
0217, by one of the following methods:
? Federal eRulemaking Portal: http://www.regulations.gov.
Follow the on-line instructions for submitting comments.
? Agency Web site: http://www.epa.gov/edocket. EDOCKET,
EPA's electronic public docket and comment system, is EPA's preferred
method for receiving comments. Follow the on-line instructions for
submitting comments.
? E-mail: a-and-r-Docket@epa.gov.
? Fax: (202) 566-1741.
? Mail: OAR-2003-0217, Environmental Protection Agency,
Mailcode:6102T, 1200 Pennsylvania Ave., NW., Washington, DC 20460.
? Hand Delivery: EPA/DC, EPA West, Room B102, 1301
Constitution Ave., NW., Washington, DC. Such deliveries are only
accepted during the Docket's normal hours of operation, and special
arrangements should be made for deliveries of boxed information.
Instructions: Direct your comments to Docket ID No. OAR-2003-0217.
EPA's policy is that all comments received will be included in the
public docket without change and may be made available online at
http://www.epa.gov/edocket, including any personal information
provided, unless the comment includes information claimed to be
Confidential Business Information (CBI) or other information whose
disclosure is restricted by statute. Do not submit information that
you consider to be CBI or otherwise protected through EDOCKET,
regulations.gov, or e-mail. The EPA EDOCKET and the Federal
regulations.gov Web sites are ``anonymous access'' systems, which means
EPA will not know your identity or contact information unless you provide
it in the body of your comment. If you send an e-mail comment directly to
EPA without going through EDOCKET or regulations.gov, your e-mail address
will be automatically captured and included as part of the comment that is
placed in the public docket and made available on the Internet. If you
submit an electronic comment, EPA recommends that you include your name
and other contact information in the body of your comment and with any
disk or CD-ROM you submit. If EPA cannot read your comment due to
technical difficulties and cannot contact you for clarification, EPA
may not be able to consider your comment. Electronic files should avoid
the use of special characters, any form of encryption, and be free of
any defects or viruses. For additional information about EPA's public
docket visit EDOCKET on-line or see the Federal Register of May 31,
2002 (67 FR 38102).
Docket: All documents in the docket are listed in the EDOCKET index
at http://www.epa.gov/edocket. Although listed in the index, some
information is not publicly available, i.e., CBI or other information
whose disclosure is restricted by statute. Certain other material, such
as copyrighted material, is not placed on the Internet and will be
publicly available only in hard copy form. Publicly available docket
materials are available either electronically in EDOCKET or in hard
copy at the Air Docket, EPA/DC, EPA West, Room B102, 1301 Constitution
Ave., NW., Washington, DC. The Public Reading Room is open from 8:30
a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The
telephone number for the Public Reading Room is (202) 566-1744, and the
telephone number for the Air Docket is (202) 566-1742.
FOR FURTHER INFORMATION CONTACT: Anne Pastorkovich, Attorney/Advisor,
Transportation and Regional Programs Division, Office of Transportation
and Air Quality (6406J), Environmental Protection Agency, 1200
Pennsylvania Ave., NW., Washington, DC 20460; telephone number: (202)
343-9623; fax number: (202) 343-2801; e-mail address:
pastorkovich.anne-marie@epa.gov.
SUPPLEMENTARY INFORMATION:
I. General Information
A. Does This Action Apply to Me?
Regulated categories and entities potentially affected by this
proposed action include:
[[Page 48828]]
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NAICSs SIC codes
Category codes \a\ \b\ Examples of potentially regulated parties
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Industry...... 324110 2911 Petroleum refiners.
Industry...... 422710 5171 Gasoline Marketers and Distributors.
422720 5172
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\a\ North American Industry Classification System (NAICS).
\b\ Standard Industrial Classification (SIC) system code.
This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be regulated by this
proposed action. This table lists the types of entities that EPA is now
aware could be potentially regulated by this action. Other types of
entities not listed in the table could also be regulated. To determine
whether an entity is regulated by this proposed action, one should
carefully examine the RFG provisions at 40 CFR part 80, particularly
Sec. 80.81 dealing specifically with California gasoline. If you have
questions regarding the applicability of this proposed action to a
particular entity, consult the person listed in the preceding FOR
FURTHER INFORMATION CONTACT section.
B. What Should I Consider as I Prepare My Comments for EPA?
1. Submitting CBI. Do not submit this information to EPA through
EDOCKET, regulations.gov or e-mail. Clearly mark the part or all of the
information that you claim to be CBI. For CBI information in a disk or
CD-ROM that you mail to EPA, mark the outside of the disk or CD-ROM as
CBI and then identify electronically within the disk or CD ROM the
specific information that is claimed as CBI). In addition to one
complete version of the comment that includes information claimed as
CBI, a copy of the comment that does not contain the information
claimed as CBI must be submitted for inclusion in the public docket.
Information so marked will not be disclosed except in accordance with
procedures set forth in 40 CFR part 2.
2. Tips for Preparing Your Comments. When submitting comments,
remember to:
i. Identify the rulemaking by docket number and other identifying
information (subject heading, Federal Register date and page number).
ii. Follow directions--The agency may ask you to respond to
specific questions or organize comments by referencing a Code of
Federal Regulations (CFR) part or section number.
iii. Explain why you agree or disagree; suggest alternatives and
substitute language for your requested changes.
iv. Describe any assumptions and provide any technical information
and/or data that you used.
v. If you estimate potential costs or burdens, explain how you
arrived at your estimate in sufficient detail to allow for it to be
reproduced.
vi. Provide specific examples to illustrate your concerns, and
suggest alternatives.
vii. Explain your views as clearly as possible, avoiding the use of
profanity or personal threats.
viii. Make sure to submit your comments by the comment period
deadline identified.
II. Current Status and Basis for California Enforcement Exemptions
Section 211(k) of the Federal Clean Air Act (the Act) directs the
EPA to establish requirements for reformulated gasoline (RFG) to be
used in specified ozone nonattainment areas, as well as ``anti-
dumping'' requirements for conventional gasoline used in the rest of
the country. The areas covered by the Federal RFG program in California
are San Joaquin Valley, Los Angeles, San Diego, and Sacramento.\1\ The
RFG provisions of the Act require EPA to promulgate regulations to
reduce the emissions of ozone forming volatile organic compounds (VOCs)
and toxic air pollutants from gasoline-fueled motor vehicles. Such
regulations must also require that there be no increase in the emission
of oxides of nitrogen (NOX) over baseline levels. Finally,
gasoline subject to the RFG requirements must meet certain content
standards for oxygen, benzene and heavy metals.
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\1\ See http://www.epa.gov/otaq/rfgmap.jpg for a map and listing
of RFG covered areas and 40 CFR 80.70 for a listing of covered areas
by state. A copy of the map has been placed in the docket for this
rulemaking.
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The RFG program was designed to be implemented in two phases. The
Phase I program was in effect from January 1, 1995, through December
31, 1999. The Phase II program, which began on January 1, 2000, and is
currently in effect, is similar to the Phase I program, but requires
even greater reductions in emissions of VOC, toxics and NOX.
The regulations for RFG and conventional gasoline may be found at 40
CFR part 80, subparts D, E, and F.
On September 18, 1992, the California Air Resources Board (CARB)
adopted regulations establishing California's state Phase 2
reformulated gasoline program (``California Phase 2 RFG''), which
became effective March 1, 1996. These regulations established a
comprehensive set of gasoline specifications designed to achieve
reductions in emissions of VOCs, NOX, carbon monoxide (CO),
sulfur dioxide, and toxic air pollutants from gasoline-fueled motor
vehicles.\2\ The California Phase 2 RFG regulations set standards for
eight gasoline parameters--sulfur, benzene, olefins, aromatic
hydrocarbons, oxygen, Reid vapor pressure (RVP), and distillation
temperatures for the 50 percent and 90 percent evaporation points (T-50
and T-90, respectively). These regulations also provide for the
production and sale of alternative gasoline formulations, with
certification under the CARB program based on a predictive model or on
vehicle emission testing.
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\2\ California's reformulated gasoline regulations, including
California Phase 2 and Phase 3, are at Title 13, California Code of
Regulations (CCR), section 2250 et seq. (May 1, 2003). A copy of
these regulations have been placed in the docket.
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EPA previously adopted enforcement exemptions for California Phase
2 gasoline under the Federal Phase I RFG program.\3\ In doing so, we
concluded: (1) That the emission reductions resulting from the
California Phase 2 standards would be equal to or greater than the
Federal Phase I RFG standards (i.e., the standards that were applicable
from January 1, 1995, through December 31, 1999),
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\3\ See 59 FR 7758 (February 16, 1994) and 63 FR 34818 (June 26, 1998).
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(2) That the content standard for benzene under California Phase 2
would be equivalent in practice to the Federal Phase I content standard
and that the oxygen content standard of 2.0 weight percent would be
achieved in Federal RFG areas, and
(3) That the CARB's compliance and enforcement program was designed
to be sufficiently rigorous to ensure that Federal Phase I requirements
would be met in practice.
Consequently, while the Federal Phase I RFG standards continued to
apply in California, EPA exempted
[[Page 48829]]
refiners, importers, and blenders of gasoline sold in California from
many of the enforcement-related provisions of the Federal Phase I RFG
regulations.
The exemptions applied to the gasoline they sold for use in
California and included the following provisions in 40 CFR part 80:
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Requirement exempted Citation at 40 CFR 80.xx
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Compliance Surveys \4\............... 80.68
Independent Sampling & Testing....... 80.65(f)
Designation of Gasoline.............. 80.65(d)
Marking of Conventional Gasoline..... 80.65(g) and 80.82
Downstream Oxygenate Blending........ 80.69
Recordkeeping........................ 80.74 and 80.104
Reporting............................ 80.75 and 80.105
Product Transfer Documents........... 80.77
Parameter Value Reconciliation 80.65(e)(2)
Requirements.
Reformulated Gasoline and 80.65(c)
Reformulated Gasoline Blendstock for
Oygenate Blending (RBOB) Compliance
Requirements.
Annual Compliance Audit Requirements. 80.65(h)
Compliance Attest Engagement Subpart F
Requirements.
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\4\ 40 CFR 80.81(e)(2) was amended to include a limited oxygen survey
provision to ensure that the 2.0 weight percent standard would be
achieved in Federal RFG areas. This is because some California Phase 2
gasoline sold outside of Federal RFG areas might not contain the 2.0
weight percent oxygen content. See 63 FR 34818, 34820-34822 (June 26,
1998). Under this NPRM, the oxygen survey provisions would remain
appropriately applied to CaRFG3.
California refiners, importers, and blenders were not granted
exemption from these Federal enforcement requirements with regard to
gasoline delivered for use outside California, because the California
Phase 2 standards and the CARB enforcement program do not apply to
gasoline exported from California.
The original California enforcement exemptions expired on December
31, 1999 when the Federal Phase II RFG started. The exemptions expired
because they were based on a comparison of California Phase 2 gasoline
and Federal Phase I RFG. An appropriate equivalency determination
comparing California Phase 2 and Federal Phase II gasolines would have
been premature in 1994, when the final RFG regulations were issued.
However, on September 15, 1999, we published a direct final rule
continuing the California enforcement exemptions beyond December 31,
1999.\5\ We took this action after comparing California Phase 2
gasoline and Federal Phase II RFG. In brief, we concluded:
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\5\ 64 FR 49992 (September 15, 1999).
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(1) That the emissions reductions resulting from the California
Phase 2 RFG standards would be equal to or greater than the reductions
from the Federal Phase II RFG standards;
(2) That the content standards for benzene under California Phase 2
would be equivalent in practice to the Federal Phase II content
standard and that the oxygen content standard of 2.0 weight percent
would be achieved in Federal RFG areas, and
(3) That the CARB's compliance and enforcement program was designed
to be sufficiently rigorous to ensure that Federal Phase II
requirements would be met in practice.
III. Description of Today's Proposed Action
A. California's Phase 3 Gasoline Rulemaking Activities
On August 3, 2000, California first promulgated the new California
Phase 3 RFG (``CaRFG3'') regulations, which included a prohibition on
the use of methyl tertiary-butyl ether (MTBE) by December 31, 2002. On
March 21, 2001, we received a written request from the California Air
Resources Board (CARB) requesting extension of the California
enforcement exemptions of 40 CFR 80.81 to CaRFG3. In that letter, CARB
explains that its CaRFG3 regulations were adopted in response to
Governor Gray Davis's issuance of Executive Order D-5-99, directing the
phase-out of methyl tertiary-butyl ether (MTBE) as an additive in
California gasoline by December 31, 2002.
Since March 21, 2001, CARB has completed a series of rulemakings
that amended their CaRFG3 regulations. Many of these amendments were
made necessary by a postponement of the MTBE phase-out and to
accommodate the use of ethanol. The MTBE phase-out was delayed until
December 31, 2003 by Governor Gray Davis's issuance of a second
Executive Order D-52-02.\6\ The CaRFG3 regulations and all standards
discussed in this notice represent the May 1, 2003, version of the
California Reformulated Gasoline Regulations, title 13, California Code
of Regulations, section 2250 et seq.
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\6\ A copy of the Executive Order has been placed in the docket.
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B. EPA's Analysis and Conclusions Regarding California's Phase 3
Gasoline Regulations
In order to determine whether to apply the Federal enforcement
exemptions of 40 CFR 80.81 should be applied to CaRFG3, we considered:
(1) Whether the emissions reductions resulting from CaRFG3 would be
equal to or greater than the reductions from Federal Phase II RFG standards;
(2) Whether the content standard for benzene under CaRFG3 would be
equivalent in practice to the Federal Phase II content standard and
whether the oxygen content standard of 2.0 weight percent would be met
in Federal RFG areas; and
(3) Whether CARB's compliance and enforcement program is designed
to be sufficiently rigorous to ensure that the Federal Phase II
requirements would be met in practice.
Considering these factors is appropriate and consistent with the
analyses we used when we previously granted enforcement exemptions to
refiners, importers, and blenders of California Phase 2 gasoline under
both the Federal Phase I and Phase II RFG programs.\7\
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\7\ See 59 FR 7813 (February 16, 1994) as amended at 59 FR 36965
(July 20, 1994), 59 FR 39289 (August 2, 1994), 59 FR 60715 (November
28, 1994), 63 FR 34825 (June 26, 1998), 64 FR 49997 (September 15,
1999), and 66 FR 17263 (March 29, 2001).
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To determine whether CaRFG3 emissions reductions that are
equivalent to or greater than Federal Phase II RFG, we have evaluated
the CaRFG3 standards and the Federal Phase II complex model standards
and considered whether possible CaRFG3 formulations to the Federal
Phase II RFG
[[Page 48830]]
emissions reduction standards. Compliance with performance standards
under the Federal RFG program is determined by using the Phase II
Complex Model. The Complex Model predicts VOC, toxics and
NOX emissions reductions in gasoline relative to the
emissions of 1990 baseline gasoline.\8\ These reduction percentages are
compared to RFG performance standards. The Federal performance
standards applicable to VOC-controlled RFG designated for VOC control
region 1 apply to California areas covered by the Federal RFG program.\9\
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\8\ ``Baseline gasoline'' refers to a general set of properties
representative of a refiner's fuel in 1990. The purpose of
establishing a baseline is to prevent any degradation in the quality
of gasoline in areas in which reformulated gasoline is not required.
For a discussion of baselines, please refer to the RFG and anti-
dumping final rule, 59 FR 7798 (February 16, 1994).
\9\ See 40 CFR 80.41 and 80.71.
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California's Phase 2 RFG regulations established specifications for
eight gasoline parameters: sulfur, benzene, olefins, aromatic
hydrocarbons, oxygen, RVP, T50 and T90. These parameters are expressed
as flat limits and, for some parameters, as averaging limits and caps.
The CaRFG3 regulations revised certain of these specifications and
incorporated an updated version of the California predictive model.\10\
Refiners may produce complying California gasoline using a ``recipe''
that meets these parameter specifications. Alternative specifications
for complying gasoline can be established by using the California
predictive model to demonstrate that emissions are equivalent to those
of a gasoline meeting the established specifications. Six of the
parameters are also input parameters for the EPA Complex Model. The
remaining two, T50 and T90, are closely related to E200 and E300, the
remaining two Complex Model inputs.\11\
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\10\ The California predictive model, like the Complex Model, is
used to predict emissions performance of gasoline.
\11\ There is a strong correlation between T50 (the 50%
distillation temperature) and E200 (the percent distilled at 200F).
Likewise, there is a strong correlation between T90 (the 90%
distillation temperature) and E300 (the percent distilled at 300F).
For the analysis in table 1, E200 and E300 were estimated from the
flat limit T50 and T90 specifications using conversions found in
EPA's complex model spreadsheet.
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If CaRFG3 provides emission benefits equivalent to Federal Phase II
RFG, then a gasoline formulation meeting the CaRFG3 flat limit
specifications should provide emission reductions, as calculated by the
complex model, which meet Federal Phase II performance standards. The
following table compares the emissions performance of the CaRFG3
``recipe,'' evaluated using the Federal Complex Model, to the Federal
Phase II RFG performance standards:\12\
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\12\ Oxygen was assumed to be 2.0 wt%, the midpoint of the 1.8-
2.2 wt% specification and RVP was 6.90, the RVP used with the
evaporative compliance option in the predictive model.
Table 1.--Comparison of CaRFG3 Flat Limit Recipe Complex Model
Performance With Federal Phase II RFG Standards
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VOC (% Toxics (% NOX (%
reduction) reduction) reduction)
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CaRFG3 Flat Limits with ethanol...... 27.7 30.0 14.5
CaRFG3 Flat Limits with MTBE......... 27.7 32.2 14.5
Federal per gallon standards......... ³27.5 ³20.0 ³5.5
Federal averaged standards........... ³29.0 ³21.5 ³6.8
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Table 1 shows two sets of results; one where the oxygenate was assumed
to be MTBE and the other where the oxygenate was assumed to be ethanol.
The specific oxygenate affects the toxics performance estimate. Two
sets of Federal standards are shown, the per gallon standards and the
averaged standards. (These numerically more stringent averaged
standards are applicable if a refiner chooses to comply on average,
rather than on a per gallon basis.) The emissions performance of the
flat limit recipe gasoline is better than the Federal RFG per gallon
standards for VOC, toxics and NOX reductions, and better
than the Federal RFG averaged standards for toxics and NOX
reduction. Thus, gasoline produced in compliance with the CaRFG3 flat
limits (which are somewhat analogous to Federal per-gallon standards)
would achieve performance limits at least as stringent as the Federal
Phase II RFG per-gallon standards for VOCs and at least as stringent as
the averaged standards for toxics and NOX. Thus, CaRFG3
would meet Federal standards if every gallon were produced according to
this recipe.
However, we anticipate that most refiners will use the CaRFG3
predictive model to certify alternative specifications with emissions
equivalent to or better than the flat limit recipe. While there are
similarities between the California Phase 3 predictive model and the
Federal Phase II Complex Model, there are also substantial differences.
Consequently, two recipes found to have equal emissions with the
California predictive model may not have equal emissions when evaluated
by the Federal Complex Model. In other words, a finding that the
Complex Model emissions performance of the flat limit recipe is equal
to or better than the Federal standards does not guarantee that the
Complex Model emissions performance of all gasoline blends that may be
produced in compliance with CaRFG3 will meet or surpass the Federal
standards.
For purposes of determining whether or not CaRFG3 produced and
certified under the predictive model would be equivalent to Federal
Phase II RFG, we considered several reasonably likely ``real world''
CaRFG3 formulations. These formulations were developed in connection
with California's recent request for a waiver from the Federal oxygen
content requirement for reformulated gasoline.\13\ The CaRFG3
formulations depicted in Tables 2 and 3 do not represent each and every
possible gasoline formulation under the California's regulations, but
we believe that they provide a representative sample of that universe
of gasoline formulations that are likely to be produced under the
CaRFG3 program. This analysis is discussed in more detail in the
following paragraphs.
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\13\ The California waiver analysis considered the effect of
changes in gasoline composition on the entire on-road and off-road
gasoline-power fleet. The analysis for this proposed rule considers
only Complex Model performance, which considers a portion of the on-
road gasoline-powered fleet.
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In April of 1999, California applied for a waiver of the Federal
oxygen content requirement for reformulated gasoline. In order to
complete an evaluation of the technical basis for this waiver request,
we determined that
[[Page 48831]]
additional refinery modeling was needed to forecast the likely
composition of CaRFG3, after California's phase-out of methyl-tertiary-
butyl-ether (MTBE), with and without an oxygen waiver.\14\
Consequently, EPA commissioned MathPro to conduct this modeling, which
estimated the composition of ethanol-oxygenated and non-oxygenated
CaRFG3 under various scenarios.\15\ These scenarios varied in terms of
the continued or reduced use of MTBE outside of California, whether or
not refiners avoid the patent held by Unocal on certain reformulated
blends, and whether ethanol is used at 2.0 or 2.7 weight percent
oxygen. Although these modeling results were intended for use in the
waiver evaluation, they are also helpful when considering the
appropriateness of extending the existing enforcement exemptions to
CaRFG3. EPA believes that these modeling results are likely to be the
most accurate and comprehensive forecasts of the likely properties of
the CaRFG3 that will be sold in Federal RFG areas in California. For
the purpose of this proposal, we have considered both oxygenated and
non-oxygenated CaRFG3 blends.
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\14\ One of the reasons for this determination was that earlier
modeling was done before the CaRFG3 predictive model was finalized.
This may have affected the estimates of CaRFG3 properties developed
from these earlier studies. EPA's Technical Support Document for the
waiver decision ``Analysis of California's Reformulated Gasoline
Oxygen Content Requirement for California Covered Areas'' discusses
this in greater depth. A copy of this document has been placed in
the docket.
\15\ See ``Analysis of the Production of California Phase 3
Reformulated Gasoline With and Without an Oxygen Waiver'', MathPro,
Inc. (January 19, 2001). A copy of this document has been placed in
the docket.
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Table 2, below, shows that oxygenated CaRFG3 produced under each of
the scenarios that EPA evaluated meets Federal RFG performance
standards. All of these fuels had better performance than the Federal
RFG per gallon standards. With one exception (underlined in Table 2),
these fuels also met or surpassed the Federal RFG averaged standards.
The one exception is a fuel that was estimated to provide a VOC
reduction of 28.9%. Since the Federal per gallon standard is ³27.5%
and the averaged standard is ³29.0%, this fuel would meet the Federal
per gallon but not the averaged standard. However, we believe for
purposes of today's analysis, that the Federal per gallon standard is a
more appropriate reference point.
MathPro's modeling assumed that essentially all CaRFG3 is certified
with the flat limit variant of the Predictive Model. Therefore, the
formulations which they forecast have California predictive model
emissions performance equivalent to, or better than, the flat limit
recipe, but do not necessarily meet California predictive model
averaged limit requirements. As previously noted, California's flat
limit option requires refiners to meet parameter standards on an every-
gallon, rather than averaged basis. The California flat limits are
analogous to the Federal RFG per-gallon standards. In both cases,
refiners elect to meet less stringent standards on an every-gallon
basis, rather than more stringent standards, on average. Consequently,
it is appropriate to expect the complex model performance of these
CaRFG3 formulations to meet the Federal Phase II per-gallon performance
standards, but not necessarily to meet the Federal Phase II averaged
standards.
Table 2.--Complex Model Performance of Oxygenated CaRFG3 Using MathPro Gasoline Property Estimates
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Ethanol Sulfur Aromatics Olefins Benzene
(wt%) oxygen (ppm) RVP (psi) E200 (%) E300 (%) (vol%) (vol%) (vol%) VOC (%) Toxics (%) NOX (%)
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2.0 15 6.66 47.20 87.60 24.10 4.40 0.64 30.2 32.9 14.8
2.0 10 6.74 46.40 88.70 23.30 3.90 0.57 29.6 34.1 15.4
2.7 10 6.85 46.90 88.10 23.20 3.80 0.70 29.0 32.8 15.4
2.7 9 6.84 46.60 88.00 23.30 3.80 0.68 29.0 32.9 15.4
2.0 17 6.60 46.80 88.30 26.50 3.40 0.62 30.1 32.0 14.3
2.0 17 6.60 45.20 90.60 19.10 4.60 0.77 30.8 33.8 16.4
2.0 13 6.62 46.20 87.70 24.30 3.70 0.60 30.1 33.2 15.0
2.0 12 6.60 46.10 88.20 28.60 2.90 0.51 29.6 32.1 14.2
2.7 10 6.76 46.20 88.60 25.70 2.80 0.66 29.1 32.1 14.9
2.7 12 6.60 44.90 87.70 22.40 2.80 0.71 30.2 32.9 15.7
2.7 8 6.73 45.40 89.00 26.30 1.90 0.63 28.9 32.1 15.0
2.7 10 6.69 45.40 88.30 25.30 2.80 0.65 29.4 32.3 15.1
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Table 3 below, shows that non-oxygenated CaRFG3 produced under each
of the scenarios that EPA evaluated meets Federal RFG performance
standards. These fuels are not currently permissible, because they do
not contain the equivalent of 2.0 weight % oxygen. All of the fuels
shown in Table 3, which EPA believes to be reasonably representative of
the fuel formulations that refiners would produce in California without
an oxygen content requirement are predicted to perform better than the
Federal RFG per gallon and averaged standards.
Table 3.--Complex Model Performance of Non-Oxygenated CaRFG3 Using MathPro Gasoline Property Estimates
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Ethanol
(wt%) Sulfur RVP (psi) E200 (%) E300 (%) Aromatics Olefins Benzene VOC (%) Toxics (%) NOX (%)
oxygen (ppm) (vol%) (vol%) (vol%)
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0.0 8 6.60 47.7 87.4 23.0 5.9 0.57 30.7 32.5 15.1
0.0 7 6.60 48.7 87.6 28.6 4.7 0.51 30.0 30.4 14.0
0.0 8 6.60 48.1 87.2 26.9 2.4 0.46 29.7 32.0 14.3
0.0 10 6.60 47.7 88.0 24.3 3.9 0.49 30.3 32.9 14.8
[[Page 48832]]
0.0 12 6.60 49.0 85.8 24.8 6.0 0.52 30.5 32.2 14.3
0.0 10 6.60 49.2 87.4 28.6 4.1 0.53 30.0 30.2 13.8
0.0 12 6.60 47.6 86.8 21.2 6.3 0.52 31.0 33.8 15.3
0.0 9 6.60 47.9 87.6 25.7 3.9 0.49 30.1 32.2 14.5
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Based upon a comparison of the CaRFG3 flat limit ``recipe'' and
Federal Phase II Complex model standards, as well as a consideration of
possible California fuel formulations certified using the California
Phase 3 predictive model, we have concluded that the NOX,
VOC and toxics emissions reductions resulting from the CaRFG3 standards
would be equal to or greater than the Federal Phase II RFG standards.
The content standard for benzene for CaRFG3 is equivalent to the
Federal Phase II standards. The California flat limit benzene standard
is 0.80 volume percent and the averaged standard is 0.70 volume percent
with a 1.10 volume percent cap. By comparison, the Federal per gallon
benzene standard is 1.00 volume percent and the averaged standard is
0.95 volume percent with a 1.30 volume percent cap.
The enforcement exemptions do not excuse California refiners from
meeting the 2.0 weight % oxygen requirement or any other Federal
standard in RFG covered areas. The limited oxygen compliance surveys in
Sec. 80.81 would continue to apply to CaRFG3, since they are designed
to ensure that gasoline in Federal RFG areas meets the Federal oxygen
content standards. EPA retains its authority to sample and test
California gasoline to make sure that it meets all applicable Federal
standards, including the oxygen content standard.
We have also considered the design and implementation of CARB's
enforcement program, which includes enforcement at refineries, import
facilities, terminals, and service stations. CARB's enforcement program
is generally outlined in its regulations and includes requirements that
refiners submit annual compliance plans,\16\ which outline how they
will meet CaRFG3 requirements, and that refiners and importers conduct
testing and maintain records of testing performed on batches of
gasoline.\17\ CARB staff summarized information on its actual
enforcement activities in fiscal years 1999-2000 and 2000-2001,
indicating that 6.6% and 6.5% of gasoline sold in California was
inspected, during each respective period. In 1999-2000, the violation
rate was 1.9% (based on volumes sampled) and 0.5% (based on the number
of samples). In 2000-2001, the violation rate was 0.16% (based on
volumes sampled) and 1.06% (based on the number of samples). We believe
that, considering the presence of adequate enforcement provisions in
its regulations and CARB's actual enforcement activities, that the CARB
enforcement program is sufficiently stringent to ensure that the
California standards will be met. For all these reasons, we believe it
is appropriate to apply the enforcement exemptions at 40 CFR 80.81 to
refiners, importers, and blenders of CaRFG3.
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\16\ Title 13, CCR section 2269.
\17\ Title 13, CCR section 2270.
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C. Definition of California Gasoline
This proposed rule also restores the definition of ``California
gasoline,'' which was previously included in Sec. 80.81, but which was
erroneously removed from the Code of Federal Regulations. Today's
proposed rule would restore this definition, which describes the
gasoline to which the enforcement exemptions may apply.
IV. Administrative Requirements
A. Executive Order 12866: Regulatory Planning and Review
Under Executive Order 12866, 58 FR 51735 (October 4, 1993), the
Agency must determine whether the regulatory action is ``significant''
and therefore subject to OMB review and the requirements of the
Executive Order. The Order defines ``significant regulatory action'' as
one that is likely to result in a rule that may:
(1) Have an annual effect on the economy of $100 million or more or
adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or communities;
(2) Create a serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
(3) Materially alter the budgetary impact of entitlements, grants,
user fees, or loan programs or the rights and obligations of recipients
thereof; or
(4) Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.
It has been determined that this rule is not a ``significant
regulatory action'' under the terms of Executive Order 12866 and is
therefore not subject to OMB review.
B. Paperwork Reduction Act
This proposed rule does not impose any new information collection
burden. Today's proposed rule would extend enforcement exemptions to
refiners of CaRFG3 and would reduce burdens associated with overlapping
Federal and State requirements, including recordkeeping and reporting
requirements. However, the Office of Management and Budget (OMB), under
the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.,
has previously approved the information collection requirements
contained in the final reformulated gasoline (RFG) and anti-dumping
rulemaking and gasoline sulfur control rulemaking, and has assigned OMB
control number 2060-0277, EPA ICR number 1591.14. A copy of the OMB
approved Information Collection Request (ICR) may be obtained from
Susan Auby, Collection Strategies Division, U.S. Environmental
Protection Agency (2822T), 1200 Pennsylvania Ave., NW., Washington, DC
20460 or by calling (202) 566-1672.
Burden means the total time, effort, or financial resources
expended by persons to generate, maintain, retain, or disclose or
provide information to or for a Federal agency. This includes the time
needed to review instructions; develop, acquire, install, and utilize
technology and systems for the purposes of collecting, validating, and
verifying information, processing and maintaining information, and
disclosing and providing information; adjust the existing ways to
comply with any previously applicable instructions and
[[Page 48833]]
requirements; train personnel to be able to respond to a collection of
information; search data sources; complete and review the collection of
information; and transmit or otherwise disclose the information.
An Agency may not conduct or sponsor, and a person is not required
to respond to a collection of information unless it displays a
currently valid OMB control number. The OMB control numbers for EPA's
regulations are listed in 40 CFR part 9 and 48 CFR chapter 15.
C. Regulatory Flexibility Act
The RFA generally requires an agency to prepare a regulatory
flexibility analysis of any rule subject to notice and comment
rulemaking requirements under the Administrative Procedure Act or any
other statute unless the agency certifies that the rule will not have a
significant economic impact on a substantial number of small entities.
Small entities include small businesses, small organizations, and small
governmental jurisdictions.
For purposes of assessing the impacts of today's proposed rule on
small entities, small entity is defined as: (1) A small business that
has not more than 1,500 employees (13 CFR 121.201); (2) a small
governmental jurisdiction that is a government of a city, county, town,
school district or special district with a population of less than
50,000; and (3) a small organization that is any not-for-profit
enterprise which is independently owned and operated and is not
dominant in its field.
After considering the economic impacts of today's proposed rule on
small entities, I certify that this action would not have a significant
economic impact on a substantial number of small entities. In
determining whether a rule has a significant economic impact on a
substantial number of small entities, the impact of concern is any
significant adverse economic impact on small entities, since the
primary purpose of the regulatory flexibility analyses is to identify
and address regulatory alternatives ``which minimize any significant
economic impact of the proposed rule on small entities.'' 5 U.S.C. 603
and 604. Thus, an agency may certify that a rule will not have a
significant economic impact on a substantial number of small entities
if the rule relieves regulatory burden, or otherwise has a positive
economic effect on all of the small entities subject to the rule.
We have therefore concluded that today's proposed rule will relieve
regulatory burden for all small entities. Today's proposed rule would
extend enforcement exemptions to refiners of CaRFG3 and would reduce
burdens associated with overlapping Federal and State requirements,
including recordkeeping and reporting requirements. We continue to be
interested in the potential impacts of the proposed rule on small
entities and welcome comments on issues related to such impacts.
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 that
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.
Today's proposed rule contains no Federal mandates (under the
regulatory provisions of title II of the UMRA) for State, local or
tribal governments or the private sector. The proposed rule would
impose no enforceable duty on any State, local or tribal governments or
the private sector.
E. 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'' are 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 proposed rule does not have federalism implications. It would
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 proposed rule would
extend enforcement exemptions to refiners of CaRFG3 and would reduce
burdens associated with overlapping Federal and State requirements,
including recordkeeping and reporting requirements. Thus, Executive
Order 13132 does not apply to this proposed rule.
F. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments
Executive Order 13175, entitled ``Consultation and Coordination
with Indian Tribal Governments'' (59 FR 22951, 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'' are 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 proposed 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.
This proposed rule would apply to refiners, importers and blenders of
[[Page 48834]]
CaRFG3 and does not impose any enforceable duties on communities of
Indian tribal governments. Thus, Executive Order 13175 does not apply
to this rule.
G. Executive Order 13045: Protection of Children From Environmental
Health & 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.
EPA interprets Executive Order 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 proposed rule is not
subject to Executive Order 13045, entitled ``Protection of Children
from Environmental Health Risks and Safety Risks'' (62 FR 19885, April
23, 1997), because it does not involve decisions on environmental
health risks or safety risks that may disproportionately affect children.
H. Executive Order 13211: Actions That Significantly Affect Energy
Supply, Distribution, or Use
This proposed rule is not an economically ``significant energy
action'' as defined in Executive Order 13211, ``Actions Concerning
Regulations That Significantly Affect Energy Supply, Distribution, or
Use'' (66 FR 28355 (May 22, 2001)) because it does not have a
significant adverse effect on the supply, distribution, or use of energy.
I. National Technology Transfer and Advancement Act
Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (NTTAA), Public Law No. 104-113, 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 consensus standards. Today's rule
does not affect technical standards and raises no issues under the NTTAA.
J. Statutory Provisions and Legal Authority
Statutory authority for today's proposed rule comes from sections
211(c), 211(i) and 211(k) of the CAA (42 U.S.C. 7545(c) and (k)).
Section 211(c) and 211(i) allows EPA to regulate fuels that contribute
to air pollution which endangers public health or welfare, or which
impairs emission control equipment. Section 211(k) prescribes
requirements for RFG and conventional gasoline and requires EPA to
promulgate regulations establishing these requirements. Additional
support for the fuels controls in today's proposed rule comes from
sections 114(a) and 301(a) of the CAA.
List of Subjects in 40 CFR Part 80
Environmental protection, Air pollution control, Fuel additives,
Gasoline, Imports, Motor vehicle pollution, Reporting and recordkeeping
requirements.
Dated: August 5, 2004.
Michael O. Leavitt,
Administrator.
For the reasons set forth in the preamble, part 80 of title 40
chapter I of the Code of Federal Regulations is proposed to be amended
as follows:
PART 80--REGULATION OF FUELS AND FUEL ADDITIVES
1. The authority citation for part 80 continues to read as follows:
Authority: 42 U.S.C. 7414, 7545 and 7601(a).
2. Section 80.81 is amended as follows:
a. Revising paragraph (a).
b. Revising paragraph (c) introductory text.
c. Revising paragraph (e)(2) introductory text.
d. Revising paragraphs (h)(1) introductory text, (h)(1)(ii)(C) and
(h)(2)(i).
Sec. 80.81 Enforcement exemptions for California gasoline.
(a)(1) The requirements of subparts D, E, F, and J of this part are
modified in accordance with the provisions contained in this section in
the case of California gasoline.
(2) For purposes of this section, ``California gasoline'' means any
gasoline that is sold, intended for sale, or made available for sale as
a motor vehicle fuel in the State of California and that:
(i) Is manufactured within the State of California;
(ii) Is imported in the State of California from outside the United
States; or
(iii) Is imported into the State of California from inside the
United States and that is manufactured at a refinery that does not
produce reformulated gasoline for sale in any covered area outside the
State of California.
* * * * *
(c) Any refiner, importer, or oxygenate blender of California
gasoline that is manufactured or imported subsequent to March 1, 1996
and that meets the requirements of the California Phase 2 or Phase 3
reformulated gasoline regulations, as set forth in Title 13, California
Code of Regulations, section 2250 et seq. (May 1, 2003), is with regard
to such gasoline, exempt from the following requirements (in addition
to the requirements specified in paragraph (b) of this section:
* * * * *
(e) * * *
(2) Such exemption provisions shall not apply to any refiner,
importer, or oxygenate blender of California gasoline with regard to
any gasoline formulation that it produces or imports and that is
certified under Title 13, California Code of Regulations, section 2250
et seq. (May 1, 2003), unless:
* * * * *
(h)(1) For the purposes of the batch sampling and analysis
requirements contained in Sec. 80.65(e)(1) and Sec.
80.101(i)(1)(i)(A), any refiner, importer, or oxygenate blender of
California gasoline may use a sampling and/or analysis methodology
prescribed in Title 13, California Code of Regulations, section 2250 et
seq. (May 1, 2003), in lieu of any applicable methodology specified in
Sec. 80.46, with regard to:
* * * * *
(ii) * * *
(C) The refiner or importer must correlate the results from the
applicable sampling and/or analysis methodology prescribed in Title 13,
California Code of Regulations, section 2250 et seq. (May 1, 2003) with
the method specified in Sec. 80.46, and such correlation must be
adequately demonstrated to EPA upon request.
(2) * * *
(i) The samples are properly collected under the terms of a current
and valid
[[Page 48835]]
protocol agreement between the refiner and the California Air Resources
Board with regard to sampling at the off site tankage and consistent
with the requirements prescribed in Title 13, California Code of
Regulations, section 2250 et seq. (May 1, 2003); and
* * * * *
[FR Doc. 04-18380 Filed 8-10-04; 8:45 am]
BILLING CODE 6560-50-P