Regulation of Fuels and Fuel Additives: Removal of Reformulated
Gasoline Oxygen Content Requirement
[Federal Register: May 8, 2006 (Volume 71, Number 88)]
[Rules and Regulations]
[Page 26691-26702]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08my06-11]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 80
[EPA-HQ-OAR-2005-0170; FRL-8167-5]
Regulation of Fuels and Fuel Additives: Removal of Reformulated
Gasoline Oxygen Content Requirement
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final Rule.
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SUMMARY: In the Energy Policy Act of 2005 (Energy Policy Act), Congress
amended section 211(k) of the Clean Air Act (CAA) to remove the oxygen
content requirement for reformulated gasoline (RFG). On February 22,
2006, EPA published a direct final rule to amend regulations to remove
the oxygen content standard and associated compliance requirements from
the RFG regulations. We stated in the direct final rule that if EPA
received adverse comment, we would publish a timely withdrawal of the
provisions on which we received adverse comment and address the adverse
comments in a subsequent final rule based on a parallel notice of
proposed rulemaking also published on February 22, 2006. We received
adverse comment on the amendments to remove the oxygen content standard
in the direct final rule. As a result, in a separate action we are
withdrawing those amendments from the direct final rule. This final
action addresses the adverse comments we received and finalizes the
removal of the oxygen content standard and associated compliance
requirements from the RFG regulations.
DATES: This final rule is effective on May 5, 2006.
ADDRESSES: EPA has established a docket for this action under Docket ID
No. EPA-HQ-OAR-2005-0170. All documents in the docket are listed on the
http://www.regulations.gov Web site. Although listed in the index,
some information is not publicly available, e.g., 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 through
http://www.regulations.gov or in hard copy at the Air and Radiation
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 and Radiation Docket is (202) 566-1742.
FOR FURTHER INFORMATION CONTACT: Marilyn Bennett, Transportation and
Regional Programs Division, Office of Transportation and Air Quality
(6406J), Environmental Protection Agency, 1200 Pennsylvania Avenue,
NW., Washington, DC 20460; telephone number: (202) 343-9624; fax
number: (202) 343-2803; e-mail address: Bennett.marilyn@epa.gov.
SUPPLEMENTARY INFORMATION:
I. General Information
A. Does This Action Apply to Me?
Entities potentially affected by this action include those involved
with the production and importation of reformulated gasoline motor
fuel. Regulated categories and entities affected by this action include:
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Category NAICS codes a SIC codes b Examples of potentially regulated parties
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Industry..................... 324110 2911 Petroleum Refiners, Importers.
Industry..................... 422710 5171 Gasoline Marketers and Distributors.
422720 5172
Industry..................... 484220 4212 Gasoline Carriers.
484230 4213
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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
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
your entity is regulated by this action, you should carefully examine
the applicability criteria of part 80, subparts D, E and F of title 40
of the Code of Federal Regulations. If you have any question regarding
applicability of this action to a particular entity, consult the person
in the preceding FOR FURTHER INFORMATION CONTACT section above.
B. Outline of This Preamble
I. General Information
II. Direct Final Rule/Notice of Proposed Rulemaking
III. Response to Comments and Discussion
IV. Conclusion
V. Action
VI. Statutory and Executive Order Reviews
VII. Statutory Provisions and Legal Authority
II. Direct Final Rule/Notice of Proposed Rulemaking
In the Energy Policy Act, Congress amended section 211(k) of the
CAA to remove the 2.0 weight percent oxygen content requirement for
RFG.\1\ Congress specified that the effective date for the removal of
the oxygen content requirement in the CAA is 270 days from enactment of
the Energy Policy Act for gasoline sold in all states except
California.\2\ To be consistent with the current CAA section 211(k), on
February 22, 2006, EPA published a direct final rule designed to remove
the oxygen content standard and associated compliance requirements from
the RFG regulations in 40 CFR part 80, effective on May 5, 2006 (270
days from enactment of the Energy Policy Act).\3\ 71
[[Page 26692]]
FR 8973. We stated in the direct final rule that if EPA received
adverse comment, we would publish a timely withdrawal of the provisions
on which we received adverse comment and address all public comments in
a subsequent final rule based on a parallel notice of proposed
rulemaking also published on February 22, 2006. We received adverse
comment on the removal of the oxygen content standard in the direct
final rule. As a result, in a separate action we are withdrawing those
amendments from the direct final rule. This final action addresses the
adverse comments we received and finalizes the amendments which remove
the oxygen content standard and associated compliance requirements from
the RFG regulations in 40 CFR part 80.
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\1\ Energy Policy Act of 2005, Public Law No. 109-58 (HR6),
section 1504(a), 119 STAT 594, 1076-1077 (2005).
\2\ Congress removed the oxygen content requirement in CAA
section 211(k) for California gasoline effective upon enactment of
the Energy Policy Act. In a direct final rule published on February
22, 2006, EPA removed the oxygen content requirement from the RFG
regulations for California gasoline, effective April 24, 2006. 71 FR
8965. Thus, this rule does not address California requirements.
\3\ The direct final rule also amended the regulations at 40 CFR
part 80 to revise a prohibition against commingling ethanol-blended
VOC-controlled RFG with non-ethanol-blended VOC-controlled RFG, and
implemented a provision of the Energy Policy Act which allows
retailers to commingle ethanol-blended RFG with non-ethanol-blended
RFG under certain limited circumstances. Energy Policy Act of 2005,
Public Law 109-58 (HR6), section 1513, 119 STAT 594, 1088-1090
(2005). We did not receive adverse comment on the amendments to the
commingling prohibition or on the retailer commingling provisions
during the 30-day comment period. The effective date for those
amendments and provisions is May 5, 2006.
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As discussed below, Congress considered the issue of lead-time
regarding the transition to an RFG program that does not mandate an
oxygen requirement, and specifically determined that 270 days from
enactment of the Energy Policy Act provides an appropriate amount of
lead-time. We believe it is appropriate to effect the removal of the
oxygen content standard from the RFG regulations in a manner that is
consistent with Congress' clear determination regarding lead-time.
Therefore, this final rule is effective May 5, 2006. Although the
Administrative Procedures Act generally requires that publication of a
rule in the Federal Register take place thirty days before its
effective date, this requirement is not applicable where, as here, a
rule relieves a restriction.
III. Response to Comments and Discussion
We received adverse comments on the direct final rule from three
parties. Two of the parties stated that the removal of the RFG oxygen
content requirement will result in the discontinued use of MTBE because
refiners believe that the oxygen requirement provides a legal defense
in leaking underground storage tank lawsuits involving MTBE. These
commenters believe that refiners will attempt to replace MTBE with
ethanol to meet the RFG performance standards, but argue that supplies
of ethanol are inadequate to provide the volumes needed to replace MTBE
in 2006. The commenters acknowledge that Congress eliminated the oxygen
content requirement to provide refiners with greater flexibility to
make RFG; nevertheless, they believe that an abrupt shift from MTBE-
blended RFG to ethanol-blended RFG will cause a shortage in gasoline
supplies, higher gasoline prices, and distribution problems relating to
rail, barge and terminal availability. These commenters also believe
that the removal of the oxygen content requirement will result in an
increase in aggregate ozone-causing emissions, since, relative to MTBE-
blended RFG, ethanol-blended RFG has a higher Reid Vapor Pressure
causing VOC emissions to increase, and yields higher emissions of air
toxics, NOX and VOC emissions associated with permeation. To
mitigate the impacts of removing the oxygen content standard, these
commenters urge EPA to issue a transition rule. The commenters suggest
that in developing such a transition rule, EPA should examine the
dynamics of gasoline production and assess any adverse impacts on
gasoline supplies and cost, determine the feasibility of transporting
increased quantities of ethanol and ascertain whether an adequate
delivery infrastructure exists to prevent gasoline shortfalls, and
quantify the effect of additional permeation emissions and take these
into account. They believe that the transition rule should expressly
preempt future state common law product defect claims regarding EPA-
approved fuels or fuel additives and affirm that MTBE is not a
defective product. They also believe that EPA should increase the RFG
VOC reduction requirement to address backsliding that they believe will
occur if MTBE-blended RFG is replaced with ethanol-blended RFG or non-
oxygenated RFG. One of the commenters believes that EPA should include
a VOC control season oxygen content standard under its CAA 211(c) authority.
EPA believes that it should revise the RFG regulations in a way
that is consistent with Congress' decision in enacting the Energy
Policy Act provisions to repeal the oxygenate requirement for RFG.
During the course of its consideration and final action to approve the
Energy Policy Act, Congress specifically determined that there should
not be an oxygen content requirement in the RFG provisions in section
211(k) of the CAA, and determined how much lead-time should be provided
for the transition to a program where the CAA did not mandate an oxygen
content standard. In the legislative provisions it drafted and approved
on this matter, Congress explicitly struck all oxygenate content
requirements for RFG from the CAA and provided precise applicability
dates for the removal of this requirement in California and the rest of
the United States. Given Congress' clear decision that the oxygen
content mandate is removed from the RFG provisions in the CAA in
California as of August 8, 2005 and in all other states as of May 5,
2006, EPA believes that it is appropriate to revise the RFG regulations
in a manner that conforms to this specific decision by Congress. As
discussed below, EPA does not believe that the current circumstances
warrant any different course of action. In fact, it is notable that
Congress had before it many of the issues involving MTBE that are
raised by the commenters, yet it did not act to condition removal of
the oxygenate requirement based on any finding or interpretation by EPA
with respect to these matters.
With respect to comments received with regard to promulgation of a
transition rule to mitigate the impacts of removing the oxygen content
requirement, EPA adopted the RFG regulations, including the oxygen
content requirement, in 1994. EPA noted that it was adopting the
regulations pursuant to its authority under section 211(k) of the CAA,
and explained that it was also appropriate to issue the regulations
under section 211(c)'s general authority to regulate fuels and fuel
additives. EPA issued the RFG rules under both parts of section 211 for
a limited reason, so that the express preemption provision in section
211(c)(4)(A) would apply to the federal fuel program issued under
section 211(k). See 59 FR 7716, 7809 (February 16, 1994). Now that
Congress has amended section 211(k) to remove the oxygen content
requirement, it is fully consistent with Congress' decision and with
the reasoning of EPA's prior rulemaking to remove this requirement from
the current RFG regulations.
We believe that delaying the removal of the oxygen content
requirement from the RFG regulations and issuing a transition rule is
likely to be more disruptive to the production and distribution of RFG
than removal by May 5 of the oxygen requirement from the regulations.
It is not likely to provide solutions to the concerns raised by
commenters. First, because of the refiner liability concerns discussed
above, and Congress' removal of the oxygen content requirement from
section 211(k) of the CAA and related adoption of a renewable fuels
mandate in the Energy Policy Act, the shift from MTBE-blended RFG to
ethanol-blended RFG will likely occur regardless of when EPA removes
the RFG oxygen content requirement from the regulations. It is
therefore uncertain
[[Page 26693]]
whether there would be any significant difference in MTBE use even if
EPA were to adopt a transition rule. In fact, major suppliers for
months have been planning and investing in a transition away from MTBE
and to ethanol before the 2006 summer driving season and they have in
many, perhaps most cases, already completed that transition.\4\ Second,
some refiners and distributors have indicated that uncertainty is of
the greatest concern to the RFG production and distribution industry,
and have urged EPA to finalize the removal of the oxygen requirement
from the regulations as soon as possible. These refiners and
distributors believe that certainty regarding the effective date of the
removal of the oxygen requirement is needed by refiners and
distributors to minimize potential supply impacts. No refiners or other
parties in the distribution system have indicated that the immediate
removal of the oxygen requirement would cause additional supply or
distribution problems, or would solve or reduce any difficulties in
making the transition. Many assumed that Congress's May 5 date was a
certain date for elimination of the oxygen content requirement.\5\ A
transitional delay in this program would create more uncertainty for
those planning on May 5 as the certain date and could clearly disrupt
potential plans for gasoline manufacturers who were considering the use
of non-oxygenated RFG. EPA believes that, if anything, delaying the
removal would disrupt the production and distribution of RFG and would
not solve or alleviate any of the economic or supply concerns raised by
commenters. Last, with regard to the commenters' air quality concerns,
the removal of the oxygen content requirement from the regulations does
not change any of the emissions performance standards that RFG must
meet. To the extent the commenters are raising concerns about the
underlying emissions performance standards for RFG, we believe that
this rulemaking is not the appropriate action in which to address these
concerns. We intend to conduct a broad analysis of the impact of
ethanol-blended gasoline on air quality in the context of a separate
rulemaking to implement the renewable fuels mandate in the Energy
Policy Act. In addition Congress mandated that within two years of
enactment of the Energy Policy Act, that EPA conduct a study of the
effects on public health related to substitutes (such as ethanol) for
MTBE in gasoline. See amended CAA section 211(b)(4). EPA believes it is
not appropriate to try to resolve the questions raised by commenters
prior to the development of the information expected through these
analyses, and that EPA should not delay removal of the oxygen content
requirement for the reasons described above. For these reasons, we
believe that the benefits of finalizing the removal of the oxygen
requirement from the regulations and the likely adverse impact of a
transition rule clearly outweigh the uncertain benefits of a transition
rule.
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\4\ Memorandum to Docket from Chris McKenna (April 24, 2006);
Energy Information Administration, ``Eliminating MTBE in Gasoline in
2006'' (February 22, 2006).
\5\ Letter to William Wehrum, USEPA, from Edward Murphy,
American Petroleum Institute, Bob Slaughter, National Petrochemical
and Refiners Association, Gregory M. Scott, Society of Independent
Gasoline Marketers Association, John Eichberger, National
Association of Convenience Stores, Joe Sparano, Western Petroleum
Association, dated December 9, 2005.
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A third commenter expressed concern that use of non-oxygenated RFG
may result in increased air toxics and other harmful air pollutants.
This commenter believes that the rule removing the oxygen content
requirement should require non-oxygenated RFG to maintain the air
quality benefits derived from the oxygen requirement. The commenter is
particularly concerned that over-compliance with the air toxics standards
may not be maintained with the introduction of non-oxygenated RFG.
First, we note that, although refiners will have the flexibility to
produce RFG without oxygen, they nevertheless must meet all other
standards and requirements for RFG, including the VOC, NOX
and toxics emissions performance standards. In addition, the Mobile
Source Air Toxics (MSAT) rule imposes baseline requirements designed to
maintain 1998-2000 levels of over-compliance with the toxics emissions
performance standards.\6\ We believe, and discussions with refiners
confirm, that many, probably the vast majority of refiners and
importers will continue to use oxygenates in order to meet these
standards. In the Energy Policy Act, Congress considered the need for
even more stringent controls on air toxics, and addressed this need by
requiring EPA to revise the baseline years for toxics compliance.\7\
Finally, EPA recently proposed additional controls on benzene and other
air toxics, which we believe will meet or exceed the additional
controls mandated by the Energy Policy Act.\8\ We believe that these
controls are appropriate and will ensure that there will be no loss in
air quality benefits resulting from the removal of the RFG oxygen
content requirement. In summary, first, Congress considered the need
for increased toxics controls in association with other measures in the
Energy Policy Act and EPA will defer to the decisions made by Congress
and, second, EPA has already proposed other methods of controlling
toxics under its authority in section 211 of the Clean Air Act.
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\6\ 66 FR 17230 (March 29, 2001).
\7\ Energy Policy Act of 2005, Public Law No. 109-58 (HR6),
Sec. 1504(b), 119 STAT, 1077-1078 (2005).
\8\ 71 FR 15804 (March 29, 2006).
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IV. Conclusion
EPA concludes that it is appropriate to remove the oxygen content
requirement from the RFG regulations at this time. This is consistent
with Congress' recent decision on this issue, and a delay in making
this change to the RFG regulations would not be appropriate under
current circumstances.
V. Action
This action finalizes, as proposed, the amendments to 40 CFR part
80 which remove the oxygen content standard and associated compliance
requirements from the RFG regulations. The affected sections are listed
in the following table: \9\
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\9\ This final action also lifts a stay, previously published on
November 28, 1994 (59 FR 60715), which was in effect regarding Sec.
80.65(d)(2)(vi) and Sec. 80.129(a), (d)(3)(iii), (d)(3)(iv), and
(d)(3)(v). The stay is no longer appropriate in light of today's
amendments to these sections.
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Sec. 80.2(ii).............. Removes oxygen in the definition of
``reformulated gasoline credit.'' With
the removal of the oxygen standard,
there is no basis for the generation of
oxygen credits.
Sec. 80.41(e) and (f) \10\. Removes the per-gallon and averaged
oxygen standards for Phase II Complex
Model RFG.
Sec. 80.41(o).............. Removes the provisions relating to oxygen
survey failures. With the removal of the
oxygen standard, oxygen surveys will no
longer be needed.
Sec. 80.41(q).............. Removes reference to Sec. 80.41(o).
Also removes reference to oxygenate
blenders since oxygenate blenders were
subject only to adjusted standards in
the case of an oxygen survey failure and
not any other survey failure.
[[Page 26694]]
Sec. 80.65 heading......... Removes oxygenate blenders from the
heading since oxygenate blenders were
only responsible for demonstrating
compliance with the oxygen standard
which has been removed.
Sec. 80.65(c).............. Removes requirements relating to
compliance with the oxygen standard
which have been removed.
Sec. 80.65(d).............. Removes the designation requirement
relating to oxygen content, removes the
RBOB designation categories of ``any
oxygenate'' and ``ether only,'' and adds
a requirement for RBOB to be designated
regarding the type and amount of
oxygenate required to be added.
Sec. 80.65(h).............. Removes the requirement for oxygenate
blenders to comply with the audit
requirements under subpart F since they
will no longer be required to
demonstrate compliance with the oxygen
standard.
Sec. 80.67(a).............. Removes the option to comply with the
oxygen standard on average for oxygenate
blenders since there no longer is an
oxygen standard. Also removes provisions
for refiners and importers to use
gasoline that exceeds the average
standard for oxygen to offset gasoline
which does not achieve the average
standard for oxygen.
Sec. 80.67(b).............. Removes requirements relating to
oxygenate blenders who meet the oxygen
standard on average, since there no
longer is an oxygen standard.
Sec. 80.67(f).............. Removes requirements relating to
compliance with the oxygen standard on
average since there no longer is an
oxygen standard.
Sec. 80.67(g).............. Removes requirements relating to
compliance calculations for meeting the
oxygen standard on average, since there
no longer is an oxygen standard. Also
removes requirements relating to the
generation and use of oxygen credits.
Specifies two compliance calculation
options for average xygen content for
2006.
Sec. 80.67(h).............. Removes requirements relating to the
transfer of oxygen credits.
Sec. 80.68(a) and (b)...... Removes references to oxygenate blenders
since, with the removal of the
requirement for oxygen survey, they are
no longer subject to survey
requirements. Also removes reference to
oxygen regarding consequences of a
failure to conduct a required survey.
Sec. 80.68(c).............. Removes general survey requirements
relating to oxygen surveys.
Sec. 80.73................. Clarifies the applicability of this
section to oxygenate blenders.
Sec. 80.74(c).............. Removes recordkeeping requirements for
oxygenate blenders who comply with the
oxygen standard on average, since they
no longer will be required to
demonstrate compliance with an oxygen
standard. Also removes reference to
``types'' of credits, since there now is
only one type of credit (i.e., benzene.)
Sec. 80.74(d).............. Revises this paragraph to clarify
recordkeeping requirements for oxygenate
blenders.
Sec. 80.75 heading and Removes reporting requirements for
paragraph (a). oxygenate blenders since they no longer
will be required to demonstrate
compliance with an oxygen standard.
Sec. 80.75(f).............. Removes requirement for submitting oxygen
averaging reports since there no longer
is a requirement to comply with the
oxygen standard.
Sec. 80.75(h).............. Removes credit transfer report
requirements for oxygen credits, since
oxygen credits will no longer be
generated.
Sec. 80.75(i).............. Removes requirement for oxygenate
blenders to submit a report identifying
each covered area that was supplied with
averaged RFG, since they no longer will
be required to demonstrate compliance
with an oxygen standard.
Sec. 80.75(l).............. Removes reporting requirement for
oxygenate blenders who comply with the
oxygen standard on a per-gallon basis,
since they are no longer required to
demonstrate compliance with an oxygen
standard.
Sec. 80.75(m).............. Removes requirement for oxygenate
blenders to submit a report of the audit
required under Sec. 80.65(h), since
oxygenate blenders will no longer be
required to comply with the audit
requirement.
Sec. 80.75(n).............. Removes requirement for oxygenate
blenders to have reports signed and
certified, since they no longer will be
required to submit reports under this
section.
Sec. 80.76(a).............. Clarifies registration requirements for
oxygenate blenders.
Sec. 80.77(g).............. Removes product transfer documentation
requirement for oxygen content.
Sec. 80.77(i).............. Removes requirement for RBOB to be
identified on product transfer documents
as suitable for blending with ``any-
oxygenate,'' ``ether-only,'' since these
categories have been removed.
Sec. 80.78(a).............. Removes the prohibition against producing
and marketing RFG that does not meet the
oxygen minimum standard since the oxygen
standard has been removed. Also removes
requirements to meet the oxygen minimum
standard during transition from RBOB to
RFG in a storage tank. (Today's rule
also removes the provision in Sec.
80.78(a)(1) regarding compliance with
the maximum oxygen standard in Sec.
80.41 for simple model RFG. See footnote
3.)
Sec. 80.79................. Removes quality assurance requirement to
test for compliance with the oxygen
standard.
Sec. 80.81(b).............. Removes exemptions for California
gasoline survey and independent analysis
requirements for oxygenate blenders
since they are no longer subject to
these requirements.
Sec. 80.125(a), (c) and (d) Removes attest engagement auditor
requirements for(c) and (d) oxygenate
blenders, since they are no longer
required to conduct attest engagement
audits.
Sec. 80.126(b)............. Revises attest engagement definition of
credit trading records to remove
reference to oxygen credits.
Sec. 80.128(e)............. Removes reference to RBOB designations
of``any-oxygenate'' and ``ether-only''
with regard to refiner and importer
contracts with downstream oxygenate
blenders, since these designations have
been removed from the regulations.
Sec. 80.129................ Removes and reserves this section which
provided for alternative attest
engagement procedures for oxygenate
blenders, since they are no longer
required to conduct attest audits.
Sec. 80.130(a)............. Removes requirement for a certified
public accountant or an internal auditor
certified by the Institute of Internal
Auditors, Inc. to issue an attest
engagement report to blenders, since
they are no longer required to conduct
attest audits. Removes requirement for
blenders to providea copy of the
auditor's report to EPA.
[[Page 26695]]
Sec. 80.133(h)............. Removes references to ``any-oxygenate''
and ``ether-only'' RBOB under Sec.
80.69(a)(8) since this section has been
removed.
Sec. 80.134................ Removes this section which provides
attest procedures for oxygenate blenders
since they are no longer required to
conduct attest audits.
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Today's rule also modifies the provisions for downstream oxygenate
blending in Sec. 80.69. Under the current regulations, some refiners
and importers produce or import a product called ``reformulated
gasoline blendstock for oxygenate blending,'' or RBOB, which is
gasoline that becomes RFG upon the addition of an oxygenate. The
refiner or importer of the RBOB determines the type(s) and amount (or
range of amounts) of oxygenate that must be added to the RBOB. The RBOB
is then transported to an oxygenate blender downstream from the refiner
or importer who adds the type and amount of oxygenate designated for
the RBOB by the refiner or importer. The RBOB refiner or importer
includes the designated amount of oxygenate in its emissions
performance compliance calculations for the RBOB; however, it is the
oxygenate blender who actually adds the oxygenate to the RBOB to comply
with the 2.0 weight percent oxygen standard for the RFG that is
produced by blending oxygenate into the RBOB. The regulations require
oxygenate blenders to conduct testing for oxygen content to ensure that
each batch of RFG complies with the oxygen standard. With the removal
of the oxygen standard, the current requirement for oxygenate blenders
to conduct testing to ensure compliance with the oxygen standard will
no longer be necessary. Accordingly, the provisions for oxygenate blenders
in Sec. 80.69 have been modified to remove the requirement for oxygenate
blenders to test RFG for compliance with the oxygen standard.
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\10\ The regulations also include oxygen minimum standards for
simple model RFG and Phase I complex Model RFG, and an oxygen
maximum standard for simple model RFG. See Sec. Sec. 80.41(a)
through (d), and (g). These standards are no longer in effect and
today's rule does not modify the regulations to remove these
standards or compliance requirements relating to these standards,
except where such requirements are included in provisions requiring
other changes in today's rule.
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Although there will no longer be an oxygen content requirement for
RFG, we believe that many refiners and importers will want to continue
to include oxygenate blended downstream in their emissions performance
compliance calculations. As a result, the category of RBOB is being
retained and RBOB refiners and importers will continue to be required
to comply with the contract and quality assurance (QA) oversight
requirements in Sec. 80.69.\11\ Because oxygenate blenders will no
longer be conducting testing to ensure compliance with the oxygen
standard, we believe that RBOB refiner or importer compliance with the
contract and QA oversight requirements will be necessary for RBOB
designated to be blended with any amount of oxygenate, including an
amount of oxygenate that would result in RFG containing 2.0 weight
percent (or less) oxygen. As a result, the generic categories of
oxygenate in Sec. 80.69(a)(8) are eliminated by today's rule and RBOB
refiners and importers will be required to comply with the contract and
QA oversight requirements in Sec. 80.69 for any RBOB produced or
imported. This approach is consistent with the oversight requirements
in Sec. 80.101(d)(4) for refiners and importers of conventional
gasoline who wish to include oxygen added downstream from the refinery
or importer in anti-dumping emissions compliance calculations.
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\11\ EPA intends to promulgate a rule which will allow RBOB
refiners and importers to use an alternative method of quality
assurance (QA) oversight of downstream oxygenate blenders in lieu of
the contract and QA requirements in Sec. Sec. 80.69(a)(6) and
(a)(7). This alternative method consists of a QA sampling and
testing survey program carried out by an independent surveyor
pursuant to a survey plan approved by EPA. EPA is currently allowing
use of this alternative QA method under a grant of enforcement
discretion that is scheduled to expire when the rule is promulgated,
or December 31, 2007, whichever is earlier. See Letter to Edward H.
Murphy, Downstream General Manager, American Petroleum Institute,
dated December 22, 2005, from Grant Y. Nakayama, Assistant
Administrator, Office of Enforcement and Compliance Assurance, U.S.
Environmental Protection Agency.
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Although oxygenate blenders will no longer be subject to the oxygen
standard and associated testing requirements, we believe that the
current requirements for oxygenate blenders to be registered with EPA,
to add the specific type(s) and amount (or range of amounts) of
oxygenate designated for the RBOB, and to maintain records of their
blending operation continue to be necessary in order to ensure
compliance with, and facilitate enforcement of, the emissions
performance standards for the RFG produced by blending oxygenate with
RBOB downstream. As a result, these oxygenate blender requirements are
being retained.
The effective date for the removal of the oxygen requirement will
occur during 2006. As a result, refiners, importers and oxygenate
blenders will be subject to the oxygen standard for the months in 2006
prior to the effective date of this rule. The current regulations allow
parties to demonstrate compliance either on a per-gallon basis or on an
annual average basis. Since the oxygen content standard is being
removed during an annual averaging period, EPA has modified the
regulations to reflect this change and to clarify how parties would
demonstrate compliance with the average oxygen content standard for
2006. Parties may demonstrate compliance based on the average oxygen
content of RFG during the months prior to the effective date for the
removal of the oxygen content requirement. In addition, any refiner,
importer or oxygenate blender may demonstrate compliance based on all
of the oxygenated RFG it produces or imports during 2006. This means a
refiner or importer has two options to show compliance with the average
oxygen content standard for 2006. The first option looks only at the
RFG produced or imported from January 1, 2006 through the effective
date of this rule. During this time period, the per-gallon minimum was
in place for RFG, so all of the RFG would have been oxygenated. The
refiner or importer would be in compliance if they could show that they
meet the 2.1% average standard based on the volume and oxygen content
of all of the RFG produced or imported during this time period. The
second option looks at the RFG produced or imported from January 1,
2006 through December 31, 2006. Since there is no per gallon minimum
for oxygen content starting from the effective date of this rule, some
but not necessarily all of the RFG produced during the year would have
been oxygenated. The refiner or importer would be in compliance if they
could show that they meet the 2.1% average standard based on the RFG
volume and oxygen content of all of the oxygenated RFG produced or
imported during this time period, i.e., the entire year. Any non-
oxygenated RFG produced or imported after the effective date of the
rule may be excluded from compliance calculations.
[[Page 26696]]
VI. Statutory and Executive Order Reviews
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 direct final rule does not satisfy
the criteria stated above. As a result, this rule is not a
``significant regulatory action'' under the terms of Executive Order
12866 and is therefore not subject to OMB review. Today's final rule
removes certain requirements applicable to refiners, importers and
oxygenate blenders of RFG. As such this rule is expected to reduce overall
compliance costs for all refiners, importers and oxygenate blenders.
B. Paperwork Reduction Act
This action does not impose any new information collection burden.
This rule will have the effect of reducing the burdens on certain
regulated parties under the reformulated gasoline regulations. All
parties currently subject to the requirement to submit an annual oxygen
averaging report will no longer be required to submit such report.
Oxygenate blenders currently subject to the following requirements will
no longer be subject to these requirements and associated burdens: RFG
batch reports, RFG annual reports, RFG survey reports, and RFG attest
engagement reports. The Office of Management and Budget (OMB) has
previously approved the information collection requirements contained
in the existing regulations at 40 CFR part 80 under the provisions of
the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and has assigned
OMB control number 2060-0277, EPA ICR number 1591. 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 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 in 40 CFR are listed in 40 CFR part 9.
C. Regulatory Flexibility Act
EPA has determined that it is not necessary to prepare a regulatory
flexibility analysis in connection with this rule.
For purposes of assessing the impacts of today's rule on small
entities, small entity is defined as: (1) A small business as defined
by the Small Business Administration's regulations at 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 rule on small
entities, EPA has concluded that this action will 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 conclude 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.
This final rule removes certain requirements applicable to all
refiners, importers and oxygenate blenders of RFG, including small
business refiners, importers and oxygenate blenders. Specifically, this
rule removes the burden on refiners, importers and oxygenate blenders
to comply with the RFG oxygen requirement and associated compliance
requirements. Although in certain situations some refiners and
importers, including some small refiners and importers, may be required
to conduct some additional oversight of oxygenate blenders, we believe
that the burden of any additional oversight will be of minor
significance compared to the relief from the burden of complying with
the oxygen requirement. We have therefore concluded that today's final
rule will relieve regulatory burden for all small entities subject to
the RFG regulations.
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
[[Page 26697]]
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 final 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 that will result in
expenditures of $100 million or more. This rule affects gasoline
refiners, importers and oxygenate blenders by removing the oxygen
content requirement for RFG and associated compliance requirements. As
a result, this rule will have the overall effect of reducing the burden
of the RFG regulations on these regulated parties. Therefore, the
requirements of the Unfunded Mandates Act do not apply to this action.
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'' 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 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. This rule removes the oxygen
standard for RFG. The requirements of the rule will be enforced by the
Federal government at the national level. Thus, Executive Order 13132
does not apply to this 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'' 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 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.
This rule applies to gasoline refiners and importers who supply RFG,
and to other parties downstream in the gasoline distribution system.
Today's action contains certain modifications to the federal
requirements for RFG, 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 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.
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 the Order has the potential to influence
the regulation. This final rule is not subject to Executive Order 13045
because it is not economically significant and does not establish an
environmental standard intended to mitigate health or safety risks.
H. Executive Order 13211: Acts That Significantly Affect Energy Supply,
Distribution, or Use
This final 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. This rule eliminates the oxygen content requirement for RFG and
associated compliance requirements. This change will have the effect of
reducing burdens on suppliers of RFG, which, in turn, may have a
positive effect on gasoline supplies. RFG refiners and blenders may
continue to use oxygenates at their discretion where and when it is
most economical to do so. With the implementation of the renewable
fuels standard also contained in the Energy Act, the blending of
ethanol, in particular, into gasoline is expected to increase
considerably, not decrease. Therefore, despite this action to remove
the oxygenate mandate in RFG, when viewed in the context of companion
energy legislation, overall use of oxygenates is expected to increase
in the future.
I. National Technology Transfer and Advancement Act
Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (``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 consensus standards.
This final rule does not establish new technical standards within
the meaning of the NTTAA. Therefore, EPA did not consider the use of
any voluntary consensus standards.
[[Page 26698]]
J. 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. EPA will submit a report containing this rule and other
required information to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller General of the United States prior
to publication of the rule in the Federal Register. A ``major rule''
cannot take effect until 60 days after it is published in the Federal
Register. This action is not a ``major rule'' as defined by 5 U.S.C.
804(a).
K. Clean Air Act Section 307(d)
This rule is subject to section 307(d) of the CAA. Section
307(d)(7)(B) provides that ``[o]nly an objection to a rule or procedure
which was raised with reasonable specificity during the period for
public comment (including any public hearing) may be raised during
judicial review.'' This section also provides a mechanism for the EPA
to convene a proceeding for reconsideration, ``[i]f the person raising
an objection can demonstrate to the EPA that it was impracticable to
raise such objection within [the period for public comment] or if the
grounds for such objection arose after the period for public comment
(but within the time specified for judicial review) and if such
objection is of central relevance to the outcome of the rule.'' Any
person seeking to make such a demonstration to the EPA should submit a
Petition for Reconsideration to the Office of the Administrator, U.S.
EPA, Room 3000, Ariel Rios Building, 1200 Pennsylvania Ave., NW.,
Washington, DC 20460, with a copy to both the person(s) listed in the
preceding FOR FURTHER INFORMATION CONTACT section, and the Director of
the Air and Radiation Law Office, Office of General Counsel (Mail Code
2344A), U.S. EPA, 1200 Pennsylvania Ave., NW., Washington, DC 20004.
VII. Statutory Provisions and Legal Authority
The statutory authority for the actions in today's direct final
rule comes from section 211 and 301(a) of the CAA.
List of Subjects in 40 CFR Part 80
Environmental protection, Air pollution control, Fuel additives,
gasoline, Motor vehicle pollution, Reporting and recordkeeping requirements.
Dated: May 2, 2006.
Stephen L. Johnson,
Administrator.
? 40 CFR part 80 is 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. The stay on Sec. 80.65(d)(2)(vi) and Sec. 80.129(a), (d)(3)(iii),
(d)(3)(iv), and (d)(3)(v), published on November 28, 1994 (59 FR 60715)
is lifted.
Subpart A--[Amended]
? 3. Section 80.2 is amended by revising paragraph (ii) to read as follows:
Sec. 80.2 Definitions.
* * * * *
(ii) Reformulated gasoline credit means the unit of measure for the
paper transfer of benzene content resulting from reformulated gasoline
which contains less than 0.95 volume percent benzene.
* * * * *
Subpart D--[Amended]
? 4. Section 80.41 is amended by:
? a. In the table in paragraph (e), removing the entry
``Oxygen content (percent, by weight) (does not apply to gasoline
subject to the provisions in Sec. 80.81) * * * >=2.0 ;''
? b. In the table in paragraph (f), removing the entry
``Oxygen content (percent by weight) (does not apply to gasoline
subject to the provisions in Sec. 80.81):
Standard * * * >=2.1
Per-Gallon Minimum >=1.5''
? b. Removing and reserving paragraph (o); and
? c. Revising paragraph (q) heading and introductory text and (q)(1) to
read as follows:
Sec. 80.41 Standards and requirements for compliance.
* * * * *
(o) [Reserved]
* * * * *
(q) Refineries and importers subject to adjusted standards.
Standards for average compliance that are adjusted to be more or less
stringent by operation of paragraphs (k), (l) (m) or (n) of this
section apply to average reformulated gasoline produced at each
refinery or imported by each importer as follows:
(1) Adjusted standards for a covered area apply to averaged
reformulated gasoline that is produced at a refinery if:
(i) Any averaged reformulated gasoline from that refinery supplied
the covered area during any year a survey was conducted which gave rise
to a standards adjustment; or
(ii) Any averaged reformulated gasoline from that refinery supplies
the covered area during any year that the standards are more stringent
than the initial standards; unless
(iii) The refiner is able to show that the volume of averaged
reformulated gasoline from a refinery that supplied the covered area
during any years under paragraphs (q)(1)(i) or (ii) of this section was
less than one percent of the reformulated gasoline produced at the
refinery during that year, or 100,000 barrels, whichever is less.
* * * * *
? 5. Section 80.65 is amended by:
? a. Revising the heading;
? b. Revising paragraphs (c)(1)(ii) and (c)(3), removing paragraph
(c)(1)(iii) and removing and reserving paragraph (c)(2);
? c. Removing and reserving (d)(2)(v)(D); revising paragraph (d)(2)(vi)
and (d)(3); and
? d. Revising paragraph (h) to read as follows:
Sec. 80.65 General requirements for refiners and importers.
* * * * *
(c) * * *
(1) * * *
(ii) Those standards and requirements it designated under paragraph
(d) of this section for average compliance on an average basis over the
applicable averaging period.
(2) [Reserved]
(3)(i) For each averaging period, and separately for each parameter
that may be met either per-gallon or on average, any refiner shall
designate for each refinery, or any importer shall designate its
gasoline or RBOB as being subject to the standard applicable to that
parameter on either a per-gallon or average basis. For any specific
averaging period and parameter all batches of gasoline or RBOB shall be
designated as being subject to the per-gallon standard, or all batches
of gasoline and RBOB shall be designated as being subject to the
average standard. For any specific averaging period and parameter a
refiner for a refinery, or any importer may not designate certain
batches as being subject to the per-gallon standard and others as being
subject to the average standard.
(ii) In the event any refiner for a refinery, or any importer fails
to meet
[[Page 26699]]
the requirements of paragraph (c)(3)(i) of this section and for a
specific averaging period and parameter designates certain batches as
being subject to the per-gallon standard and others as being subject to
the average, all batches produced or imported during the averaging
period that were designated as being subject to the average standard
shall, ab initio, be redesignated as being subject to the per-gallon
standard. This redesignation shall apply regardless of whether the
batches in question met or failed to meet the per-gallon standard for
the parameter in question.
(d) * * *
(2) * * *
(v) * * *
(D) [Reserved]
* * * * *
(vi) In the case of RBOB, the gasoline must be designated as RBOB
and the designation must include the type(s) and amount(s) of oxygenate
required to be blended with the RBOB.
(3) Every batch of reformulated or conventional gasoline or RBOB
produced or imported at each refinery or import facility shall be
assigned a number (the ``batch number''), consisting of the EPA-
assigned refiner or importer registration number, the EPA facility
registration number, the last two digits of the year in which the batch
was produced, and a unique number for the batch, beginning with the
number one for the first batch produced or imported each calendar year
and each subsequent batch during the calendar year being assigned the
next sequential number (e.g., 4321-54321-95-000001, 4321-543321-95-
000002, etc.)
* * * * *
(h) Compliance audits. Any refiner and importer of any reformulated
gasoline or RBOB shall have the reformulated gasoline and RBOB it
produced or imported during each calendar year audited for compliance
with the requirements of this subpart D, in accordance with the
requirements of subpart F, at the conclusion of each calendar year.
* * * * *
? 6. Section 80.67 is amended by:
? a. Revising paragraphs (a)(1) and (a)(2)(i)(A);
? b. Removing and reserving paragraph (b)(3);
? c. Removing and reserving paragraph (f);
? d. Revising paragraphs (g) introductory text, (g)(3), (g)(5)
introductory text, (g)(6) introductory text, removing and reserving
paragraphs (g)(5)(i) and (g)(6)(i); adding paragraph (g)(7); and
? e. Revising paragraphs (h)(1) introductory text, (h)(1)(iv), (h)(1)(v)
and (h)(3)(ii), and removing paragraphs (h)(1)(vi), (h)(1)(vii) and
(h)(1)(viii), to read as follows:
Sec. 80.67 Compliance on average
* * * * *
(a) * * *
(1) Any refiner or importer that complies with the compliance
survey requirements of Sec. 80.68 has the option of meeting the
standards specified in Sec. 80.41 for average compliance in addition
to the option of meeting the standards specified in Sec. 80.41 for
per-gallon compliance; any refiner or importer that does not comply
with the survey requirements must meet the standards specified in Sec.
80.41 for per-gallon compliance, and does not have the option of
meeting standards on average.
(2)(i)(A) A refiner or importer that produces or imports
reformulated gasoline that exceeds the average standard for benzene
(but not for other parameters that have average standards) may use such
gasoline to offset reformulated gasoline which does not achieve this
average standard, but only if the reformulated gasoline that does not
achieve this average standard is sold to ultimate consumers in the same
covered area as was the reformulated gasoline which exceeds the average
standard; provided that:
* * * * *
(b) * * *
(3) [Reserved]
* * * * *
(f) [Reserved]
(g) Compliance calculation. To determine compliance with the
averaged standards in Sec. 80.41, any refiner for each of its
refineries at which averaged reformulated gasoline or RBOB is produced,
and any importer that imports averaged reformulated gasoline or RBOB
shall, for each averaging period and for each portion of gasoline for
which standards must be separately achieved, and for each relevant
standard, calculate:
* * * * *
(3) For the VOC, NOX, and toxics emissions performance
standards, the actual totals must be equal to or greater than the
compliance totals to achieve compliance.
* * * * *
(5) If the actual total for the benzene standard is greater than
the compliance total, credits for this parameter must be obtained from
another refiner or importer in order to achieve compliance:
(i) [Reserved]
* * * * *
(6) If the actual total for the benzene standard is less than the
compliance totals, credits for this parameter are generated.
(i) [Reserved]
* * * * *
(7) In 2006 only, compliance with the oxygen standards in Sec.
80.41 may be based on the volume and oxygen content of all reformulated
gasoline produced or imported during the period January 1, 2006,
through May 5, 2006 or the volume and oxygen content of all oxygenated
reformulated gasoline produced or imported during the 2006 annual
averaging period (January 1 through December 31).
(h) * * *
(1) Compliance with the averaged standards specified in Sec. 80.41
for benzene (but for no other standards or requirements) may be
achieved through the transfer of benzene credits provided that:
* * * * *
(iv) The credits are transferred, either through inter-company or
intra-company transfers, directly from the refiner or importer that
creates the credits to the refiner or importer that uses the credits to
achieve compliance; and
(v) Benzene credits are not used to achieve compliance with the
maximum benzene content standards in Sec. 80.41.
* * * * *
(3) * * *
(ii) No refiner or importer may create, report, or transfer
improperly created credits; and
* * * * *
? 7. Section 80.68 is amended by revising paragraphs (a) introductory
text, (a)(3), (b) introductory text, (b)(4)(i), (b)(4)(ii), (c)(3),
(c)(4)(i), and (c)(13)(v)(L), and removing and reserving paragraph
(c)(12) to read as follows:
Sec. 80.68 Compliance surveys.
(a) Compliance survey option 1. In order to satisfy the compliance
survey requirements, any refiner or importer shall properly conduct a
program of compliance surveys in accordance with a survey program plan
which has been approved by the Administrator of EPA in each covered
area which is supplied with any gasoline for which compliance is
achieved on average that is produced by that refinery or imported by
that importer. Such approval shall be based upon the survey program
plan meeting the following criteria:
* * * * *
(3) In the event that any refiner or importer fails to properly
carry out an approved survey program, the refiner or
[[Page 26700]]
importer shall achieve compliance with all applicable standards on a
per-gallon basis for the calendar year in which the failure occurs, and
may not achieve compliance with any standard on an average basis during
this calendar year. This requirement to achieve compliance per-gallon
shall apply ab initio to the beginning of any calendar year in which
the failure occurs, regardless of when during the year the failure occurs.
(b) Compliance survey option 2. A refiner or importer shall be
deemed to have satisfied the compliance survey requirements described
in paragraph (a) of this section if a comprehensive program of surveys
is properly conducted in accordance with a survey program plan which
has been approved by the Administrator of EPA. Such approval shall be
based upon the survey program plan meeting the following criteria:
* * * * *
(4) * * *
(i) Each refiner or importer who supplied any reformulated gasoline
or RBOB to the covered area and who has not satisfied the survey
requirements described in paragraph (a) of this section shall be deemed
to have failed to carry out an approved survey program; and
(ii) The covered area will be deemed to have failed surveys for VOC
and NOX emissions performance, and survey series for benzene
and toxic and NOX emissions performance.
(c) * * *
(3)(i) A VOC survey and a NOX survey shall consist of
any survey conducted during the period June 1 through September 15;
(ii) A sample of gasoline taken at a retail outlet or wholesale
purchaser-consumer facility that has within the past 30 days commingled
ethanol blended reformulated gasoline with non-ethanol blended
reformulated gasoline in accordance with the provisions in Sec.
80.78(a)(8) shall not be used in a VOC survey required under this section.
(4)(i) A toxics and benzene survey series shall consist of all
surveys conducted in a single covered area during a single calendar year.
* * * * *
(12) [Reserved]
(13) * * *
(v) * * *
(L) The average toxics emissions reduction percentage for simple
model samples and the percentage for complex model samples, the average
benzene percentage, and for each survey conducted during the period
June 1 through September 15, the average VOC emissions reduction
percentage for simple model samples and the percentage for complex
model samples, and the average NOX emissions reduction
percentage for all complex model samples;
* * * * *
? 8. Section 80.69 is amended by:
? a. Revising paragraphs (a)(6)(ii) and (iii), (a)(10) introductory text,
removing and reserving paragraphs (a)(8) and (a)(9), and removing
paragraph (a)(6)(iv);
? b. Revising paragraph (b);
? c. Removing and reserving paragraph (c);
? d. Revising paragraph (d); and
? e. Revising paragraph (e), to read as follows:
Sec. 80.69 Requirements for downstream oxygenate blending.
* * * * *
(a) * * *
(6) * * *
(ii) Allow the refiner or importer to conduct the quality assurance
sampling and testing required under this paragraph (a); and
(iii) Stop selling any gasoline found not to comply with the
standards under which the RBOB was produced or imported.
* * * * *
(8) [Reserved]
(9) [Reserved]
(10) Specify in the product transfer documentation for the RBOB
each oxygenate type or types and amount or range of amounts which, if
blended with the RBOB will result in reformulated gasoline which:
* * * * *
(b) Requirements for oxygenate blenders. For all RBOB received by
any oxygenate blender, the oxygenate blender shall:
(1) Add oxygenate of the type(s) and amount (or within the range of
amounts) specified in the product transfer documents for the RBOB; and
(2) Meet the recordkeeping requirements specified in Sec. 80.74.
(c) [Reserved]
(d) Requirements for distributors dispensing RBOB into trucks for
blending. Any distributor who dispenses any RBOB into any truck which
delivers gasoline to retail outlets or wholesale purchase-consumer
facilities, shall for such RBOB so dispensed:
(1) Transfer the RBOB only to an oxygenate blender who has
registered with the Administrator or EPA as such; and
(2) Obtain from the oxygenate blender the oxygenate blender's EPA
registration number.
(e) Additional requirements for oxygenate blenders who blend
oxygenate in trucks. Any oxygenate blender who obtains any RBOB in any
gasoline delivery truck shall on each occasion it obtains RBOB from a
distributor, supply the distributor with the oxygenate blender's EPA
registration number.
? 9. Section 80.73 is amended by revising the introductory text to read
as follows:
Sec. 80.73 Inability to produce conforming gasoline in extraordinary
circumstances.
In appropriate extreme and unusual circumstances (e.g., natural
disaster or Act of God) which are clearly outside the control of the
refiner, importer, or oxygenate blender and which could not have been
avoided by the exercise of prudence, diligence, and due care, EPA may
permit a refiner, importer, or oxygenate blender, for a brief period,
to distribute gasoline which does not meet the requirements for
reformulated gasoline, or does not contain the type(s) and amount(s) of
oxygenate required under Sec. 80.69(b)(1), if:
* * * * *
? 10. Section 80.74 is amended by revising paragraph (c) introductory
text, (c)(2), and (d) introductory text to read as follows:
Sec. 80.74 Recordkeeping requirements.
* * * * *
(c) Refiners and importers of averaged gasoline. In addition to
other requirements of this section, any refiner or importer who
produces or imports any reformulated gasoline for which compliance with
one or more applicable standard is determined on an average shall
maintain records containing the following information:
* * * * *
(2) For any credits bought, sold, traded or transferred pursuant to
Sec. 80.67(h), the dates of the transactions, the names and EPA
registration numbers of the parties involved, and the number of credits
transferred.
(d) Oxygenate blenders. Any oxygenate blender who blends any
oxygenate with any RBOB shall, for each occasion such blending occurs,
maintain records containing the following:
* * * * *
? 11. Section 80.75 is amended as follows:
? a. By revising the introductory text;
? b. By revising paragraph (a) introductory text and removing and
reserving paragraph (a)(2);
? c. By removing and reserving paragraph (f); and
[[Page 26701]]
? d. By revising paragraphs (h), (i), (l), (m), and (n)(2).
The revisions read as follows:
Sec. 80.75 Reporting requirements.
Any refiner or importer shall report as specified in this section,
and shall report such other information as the Administrator may require.
(a) Quarterly reports for reformulated gasoline. Any refiner or
importer that produces or imports any reformulated gasoline or RBOB
shall submit quarterly reports to the Administrator for each refinery
at which such reformulated gasoline or RBOB was produced and for all
such reformulated gasoline or RBOB imported by each importer.
* * * * *
(2) * * *
(vii) [Reserved]
* * * * *
(f) [Reserved]
* * * * *
(h) Credit transfer reports. As an additional part of the fourth
quarterly report required by this section, any refiner or importer
shall, for each refinery or importer, supply the following information
for any benzene credits that are transferred from or to another
refinery or importer:
(1) The names, EPA-assigned registration numbers and facility
identification numbers of the transferor and transferee of the credits;
(2) The number(s) of credits that were transferred; and
(3) The date(s) of the transaction(s).
(i) Covered areas of gasoline use report. Any refiner that produced
any reformulated gasoline that was to meet any reformulated gasoline
standard on average (``averaged reformulated gasoline'') shall, for
each refinery at which such averaged reformulated gasoline was produced
submit to the Administrator, with the fourth quarterly report, a report
that contains the identity of each covered area that was supplied with
any averaged reformulated gasoline produced at each refinery during the
previous year.
* * * * *
(l) Reports for per-gallon compliance gasoline. In the case of
reformulated gasoline or RBOB for which compliance with each of the
standards set forth in Sec. 80.41 is achieved on a per-gallon basis,
the refiner or importer shall submit to the Administrator, by the last
day of February of each year beginning in 1996, a report of the volume
of each designated reformulated gasoline or RBOB produced or imported
during the previous calendar year for which compliance is achieved on a
per-gallon basis, and a statement that each gallon of this reformulated
gasoline or RBOB met the applicable standards.
(m) Reports of compliance audits. Any refiner or importer shall
cause to be submitted to the Administrator, by May 31 of each year, the
report of the compliance audit required by Sec. 80.65(h).
(n) * * *
(2) Signed and certified as correct by the owner or a responsible
corporate officer of the refiner or importer.
* * * * *
? 12. Section 80.76 is amended by revising paragraph (a) to read as follows:
Sec. 80.76 Registration of refiners, importers or oxygenate blenders.
(a) Registration with the Administrator of EPA is required for any
refiner and importer that produces or imports any reformulated gasoline
or RBOB, and any oxygenate blender that blends oxygenate into RBOB.
* * * * *
? 13. Section 80.77 is amended by removing and reserving paragraph
(g)(2)(ii) and revising paragraph (i)(2) to read as follows:
Sec. 80.77 Product transfer documentation.
* * * * *
(g) * * *
(2) * * *
(ii) [Reserved]
* * * * *
(i) * * *
(2) The oxygenate type(s) and amount(s) that are intended for
blending with the RBOB;
* * * * *
? 14. Section 80.78 is amended by removing and reserving paragraph
(a)(1)(ii) and revising paragraph (a)(11)(iv) to read as follows:
Sec. 80.78 Controls and prohibitions on reformulated gasoline.
* * * * *
(a) * * *
(1) * * *
(ii) [Reserved]
* * * * *
(11) * * *
(iv) When transitioning from RBOB to reformulated gasoline, the
reformulated gasoline must meet all applicable standards that apply at
the terminal subsequent to any oxygenate blending;
* * * * *
? 15. Section 80.79 is amended by revising paragraph (c)(1) to read as
follows:
Sec. 80.79 Liability for violations of the prohibited activities.
* * * * *
(c) * * *
(1) Of a periodic sampling and testing program to determine if the
applicable maximum and/or minimum standards for benzene, RVP, or VOC
emission performance are met.
* * * * *
? 16. Section 80.81 is amended by revising paragraphs (b)(1) and (b)(2)
to read as follows:
Sec. 80.81 Enforcement exemptions for California gasoline.
* * * * *
(b)(1) Any refiner or importer of gasoline that is sold, intended
for sale, or made available for sale as a motor fuel in the State of
California is, with regard to such gasoline, exempt from the compliance
survey provisions contained in Sec. 80.68.
(2) Any refiner or importer of California gasoline is, with regard
to such gasoline, exempt from the independent analysis requirements
contained in Sec. 80.65(f).
* * * * *
Subpart F--[Amended]
? 17. Section 80.125 is amended by revising paragraphs (a), (c) and (d)
introductory text, to read as follows:
Sec. 80.125 Attest engagements.
(a) Any refiner and importer subject to the requirements of this
subpart F shall engage an independent certified public accountant, or
firm of such accountants (hereinafter referred to in this subpart F as
``CPA''), to perform an agreed-upon procedures attestation engagement
of the underlying documentation that forms the basis of the reports
required by Sec. Sec. 80.75 and 80.105.
* * * * *
(c) The CPA may complete the requirements of this subpart F with
the assistance of internal auditors who are employees or agents of the
refiner or importer, so long as such assistance is in accordance with
the Statements on Standards for Attestation Engagements.
(d) Notwithstanding the requirements of paragraph (a) of this
section, any refiner or importer may satisfy the requirements of this
subpart F if the requirements of this subpart F are completed by an
auditor who is an employee of the refiner or importer, provided that
such employee:
* * * * *
? 18. Section 80.126 is amended by revising paragraph (b) to read as follows:
Sec. 80.126 Definitions.
* * * * *
(b) Credit Trading Records. Credit trading records shall include
worksheets and EPA reports showing actual and complying totals for
benzene; credit calculation worksheets; contracts; letter
[[Page 26702]]
agreements; and invoices and other documentation evidencing the
transfer of credits.
* * * * *
? 19. Section 80.128 is amended by revising paragraph (e)(2) to read as
follows:
Sec. 80.128 Alternative agreed upon procedures for refiners and importers.
* * * * *
(e) * * *
(2) Determine that the requisite contract was in place with the
downstream blender designating the required blending procedures;
* * * * *
Sec. 80.129 [Removed]
? 20. Section 80.129 is removed and reserved.
? 21. Section 80.130 is amended by revising paragraph (a) to read as follows:
Sec. 80.130 Agreed upon procedures reports.
(a) Reports. (1) The CPA or CIA shall issue to the refiner or
importer a report summarizing the procedures performed in the findings
in accordance with the attest engagement or internal audit performed in
compliance with this subpart.
(2) The refiner or importer shall provide a copy of the auditor's
report to the EPA within the time specified in Sec. 80.75(m).
* * * * *
? 22. Section 80.133 is amended by revising paragraphs (h)(1) and (h)(4)
to read as follows:
Sec. 80.133 Agreed upon procedures for refiners and importers.
* * * * *
(h) * * *
(1) Obtain from the refiner or importer the oxygenate type and
volume, and oxygen volume required to be hand blended with the RBOB, in
accordance with Sec. 80.69(a)(2).
* * * * *
(4) Perform the following procedures for each batch report included
in paragraph (h)(4)(i)(B) of this section:
(i) Obtain and inspect a copy of the executed contract with the
downstream oxygenate blender (or with an intermediate owner), and
confirm that the contract:
(A) Was in effect at the time of the corresponding RBOB transfer;
and
(B) Allowed the company to sample and test the reformulated
gasoline made by the blender.
(ii) Obtain a listing of RBOB blended by downstream oxygenate
blenders and the refinery's or importer's oversight test results, and
select a representative sample, in accordance with the guidelines in
Sec. 80.127, from the listing of test results and for each test
selected perform the following:
(A) Obtain the laboratory analysis for the batch, and agree the
type of oxygenate used and the oxygenate content appearing in the
laboratory analysis to the instructions stated on the product transfer
documents corresponding to a RBOB receipt immediately preceding the
laboratory analysis and used in producing the reformulated gasoline
batch selected within the acceptable ranges set forth at Sec.
80.65(e)(2)(i);
(B) Calculate the frequency of sampling and testing or the volume
blended between the test selected and the next test; and
(C) Agree the frequency of sampling and testing or the volume
blended between the test selected and the next test to the sampling and
testing frequency rates stated in Sec. 80.69(a)(7).
* * * * *
Sec. 80.134 [Removed]
? 23. Section 80.134 is removed.
[FR Doc. 06-4252 Filed 5-5-06; 8:45 am]
BILLING CODE 6560-50-P