Regulation of Fuel and Fuel Additives: Reformulated Gasoline
Adjustment
Related Material
[Federal Register: July 17, 2001 (Volume 66, Number 137)]
[Rules and Regulations]
[Page 37156-37165]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17jy01-20]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 80
[FRL-7011-2]
RIN 2060-Ai98
Regulation of Fuel and Fuel Additives: Reformulated Gasoline
Adjustment
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
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SUMMARY: With today's action, EPA is adjusting the volatile organic
compound (VOC) performance standard under Phase II of the reformulated
gasoline (RFG) program for ethanol RFG blends containing 3.5 weight
percent oxygen (10 volume percent ethanol) sold in the Chicago and
Milwaukee RFG areas. As discussed in the Notice of Proposed Rulemaking
for this adjustment, the EPA is exercising its discretion under Section
211(k)(1) of the Clean Air Act which directs EPA, in promulgating
emission reduction standards for RFG, to consider the cost of achieving
such emission reductions as well as any nonair-quality and other air-
quality related health and environmental impacts.
This adjustment reduces by 2.0 percentage points (equivalent to an
increase in Reid Vapor Pressure (RVP) of approximately 0.3 pounds per
square inch (psi)) the summertime VOC performance standard applicable
to RFG blends containing 10 volume percent ethanol.
DATES: This rule is effective on July 17, 2001. For additional
information on the effective date, see SUPPLEMENTARY INFORMATION.
FOR FURTHER INFORMATION CONTACT: For further information about this
rule, contact Barry Garelick, Environmental Protection Specialist,
Office of Transportation and Air Quality, Transportation and Regional
Programs Division, at (202) 564-9028.
SUPPLEMENTARY INFORMATION: EPA believes that it is appropriate to make
today's final rule effective immediately upon today's publication in
the Federal Register. Because of the limited geographic scope of this
rule, and because this rule generally provides for additional
flexibility, it should not be problematic for regulated parties to
immediately utilize and/or comply with the provision of this rule.
Although this final rule includes some new requirements, these
requirements are reasonable and necessary to provide the increased
flexibility also included in this rule. EPA notes that the general
requirement in 5 U.S.C. 553(d) of the Administrative Procedure Act
(APA), concerning publication or service of a substantive rule not less
than 30 days prior to its effective date, does not apply here. CAA
section 307(d)(1) provides that section 553 of the APA does not apply
to promulgation or revision of any regulation pertaining to fuels or
fuel additives under section 211 of the CAA. Even if section 553(d) of
the APA were to apply, there is good cause under section 553(d)(3) to
provide less than 30 days notice, for the reasons noted above.
The purpose of the RFG program is to improve air quality in
specified areas of the country by requiring reductions in emissions of
ozone-forming volatile organic compounds (VOCs) and oxides of nitrogen
(NOX), and in emissions of toxic air pollutants, through the
reformulation of gasoline, pursuant to 211(k) of the Clean Air Act (CAA
or the Act), as amended. In the Act, Congress specified that RFG
contain at least 2.0 weight percent oxygen. MTBE and ethanol are the
two forms of chemical oxygen (or oxygenates) that gasoline producers
most commonly use to add oxygen to gasoline. MTBE and ethanol have also
been used in conventional gasoline, as octane enhancers, since the
1970s.
In September 1996, EPA awarded a contract to the National Research
Council (NRC) to determine whether the reactivity (i.e., ozone-forming
capacity) of VOCs can be taken into account in the RFG program without
adversely impacting RFG's air quality benefits. In a report released in
May 1999, the NRC found significant air quality benefits from RFG and
recommended that ``the contribution of carbon monoxide (CO) to ozone
formation should be recognized in assessments of the effects of RFG.''
Ozone-Forming Potential of Reformulated Gasoline, National Academy
Press, at p. 6 (1999). Mobile sources are a major source of CO
emissions, contributing approximately 90 percent of the total CO for
Chicago and Milwaukee.
In December 1998, EPA established the Blue Ribbon Panel on
Oxygenates in Gasoline, a panel of independent experts, to examine
MTBE's performance in gasoline, its presence in water, and alternatives
to its use. (While EPA established the panel for reasons that were
independent of ethanol issues and the NRC study on RFG, its relevance
to this rulemaking is discussed further below.) Panel recommendations
made to EPA in July 1999 include:
Ensure no loss of current air quality benefits from RFG.
Reduce the use of MTBE, and seek Congressional action to
remove the RFG oxygen requirement in the Act.
Strengthen the nation's water protection programs,
including the Underground Storage Tank (UST), Safe Drinking Water, and
private well protection programs.
On July 12, 2000, EPA proposed to adjust the VOC performance
standard for RFG with 3.5 weight percent oxygen (equivalent to 10
volume percent ethanol) by 1.0 percentage point. As proposed, this
adjustment to the VOC performance standard would apply to RFG marketed
in all areas of the nation using RFG. As discussed in the Notice of
Proposed Rulemaking for this
[[Page 37157]]
adjustment (65 FR 42922; July 12, 2000), EPA proposed to exercise its
discretion under Section 211(k)(1) of the Clean Air Act which directs
EPA, in promulgating emission reduction standards for RFG, to consider
the cost of achieving such emission reductions as well as any nonair-
quality and other air-quality related health and environmental impacts.
The intent of the proposed rule was to increase the flexibility
available to refiners to formulate RFG with ethanol while continuing to
achieve ozone benefits similar to those of the current Phase II RFG
program. Finally, the proposed rule was also intended to implement the
NRC recommendation that EPA take into consideration the contribution of
CO to ozone formation.\1\
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\1\ Additionally, the NPRM discussed reduction and avoidance of
increased MTBE as a potential benefit. We recognize, however, that
EPA's evaluation of the potential water quality impacts of using
MTBE and the strategies available to minimize any such impacts is
incomplete. Therefore, we believe that today's rule is appropriate
regardless of any effects on MTBE use. We do not specifically rely
on MTBE-related benefits as a justification for this adjustment of
the VOC performance standard.
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In the proposal for the 1.0 percentage point adjustment (equivalent
to an increase in RVP of approximately 0.2 psi), we also solicited
comment on a recommendation by the Illinois Environmental Protection
Agency (IEPA) for a VOC adjustment of 3.7 percentage points (equivalent
to an increase in RVP of 0.5 psi). IEPA's recommendation was based in
part on a photochemical modeling study conducted for the lower Lake
Michigan region.
We received approximately 30 comments on the proposed rule, from
states and state associations, refiners and their trade associations,
automobile manufacturing associations, oxygenate producer associations,
and 200 post cards from citizens of Illinois advocating adoption of the
larger adjustment recommended by IEPA. Comments from refiners generally
expressed concern that the adjustment as proposed would not provide
sufficient flexibility to switch from MTBE to ethanol because the size
of the adjustment would not result in a significant cost reduction.
Ethanol industry representatives commented that the adjustment should
be larger than proposed, specifically endorsing IEPA's recommendation
of an adjustment equivalent to a 0.5 psi increase in RVP. States were
divided on the proposal which was not restricted to Chicago and
Milwaukee; some maintained that the adjustment would have an adverse
effect on air quality, while others supported an adjustment.
Refiners and representatives of the ethanol industry opposed the
proposed prohibition of oxygen credit generation for batches of RFG
that comply with the adjusted VOC standard and argued that the
prohibition might increase the use of MTBE among refiners that would
otherwise rely upon such credits. Refiners also opposed the Product
Transfer Document requirements, claiming that they would result in
higher costs because refiners would need to build more tankage to
ensure segregation of VOC adjusted RFG from other RFG.
After evaluating all of the comments, EPA has decided to finalize
the VOC adjustment rule, with certain modifications and clarifications.
We are limiting application of the adjusted VOC standard to the Chicago
and Milwaukee RFG areas where ethanol RFG currently makes up 100
percent of the market. With 100 percent ethanol penetration, there is
no mixing of ethanol and non-ethanol RFG in vehicle gas tanks. When
gasoline with ethanol is mixed with non-ethanol gasoline in a car's
fuel tank (often referred to as ``commingling''), the evaporation rate
of the mixture is increased, resulting in an increase in emissions of
smog-causing pollutants and which is not currently accounted for in the
RFG program. In areas like St. Louis, where less than 100 percent of
the RFG contains ethanol, the rule as proposed had the potential to
cause more ethanol RFG to be made in these mixed RFG areas. If more
ethanol RFG is used, the amount of commingling will tend to increase,
resulting in an increase in emissions of VOC in addition to those
associated with the adjustment to the VOC performance standard itself.
To avoid the possibility of any significant VOC increases associated
with commingling (which EPA has not fully analyzed or evaluated), the
rule as finalized will be restricted to Chicago and Milwaukee. Analysis
and quantification of the VOC increases--as well as the existing
unaccounted for VOC emissions--associated with commingling would need
to be factored into any consideration of a potential adjustment of the
RFG performance standard in areas outside of Chicago and Milwaukee.
Finally, the adjusted standard is based on photochemical modeling
conducted by IEPA that is unique to the Chicago/Milwaukee area
(discussed in further detail in Section I.G. below). We do not believe
that the results of this modeling can be extended to areas outside this
region and we currently lack photochemical modeling similar to IEPA's
for other regions that would allow us to make conclusions about the
appropriateness of adjustments to the VOC standard in other RFG areas.
While we are not adopting IEPA's recommended adjustment of 3.7
percentage points, we are increasing the 1.0 percentage point
adjustment to 2.0 percentage points (equivalent to an increase in RVP
of approximately 0.3 psi). We have concluded that IEPA's approach does
not provide sufficient confidence that adverse ozone effects would not
occur in the Chicago nonattainment area with the larger adjustment of
3.7 percentage points. We found several deficiencies in the emission
calculations which IEPA used in its justification of a 0.5 psi
adjustment. These are discussed in detail in Section I.G. below.
Finally, we are not taking or proposing action at this time
regarding elimination or adjustment of the 1.5 weight percent oxygen
minimum. We are continuing to review the comments received, however,
and may consider action in the future.
The contents of today's preamble are listed in the following
outline.
I. Adjusted VOC Standard Under Phase II of the RFG Program
A. Regulated Entities
B. Regional Applicability
C. Commingling Effects
D. Oxygen Credit Generation for VOC Adjusted RFG
E. Segregation
F. Effect of Rule on NOX and Toxics
G. Consideration of Recommendation of Illinois EPA
H. Impact of Adjusted Standard on SIPs
II. Administrative Requirements
A. Submission to Congress and the Comptroller General
B. Executive Order 12866
C. Executive Order 13132 (Federalism)
D. Executive Order 13084: Consultation and Coordination With
Indian Tribal Governments
E. Regulatory Flexibility
F. Paperwork Reduction Act
G. Unfunded Mandates Reform Act
H. Executive Order 13045: Children's Health Protection
I. National Technology Transfer and Advancement Act of 1995
(NTTAA)
J. Statutory Authority
K. Executive Order 13211 (Energy Effects)
I. Adjusted VOC Standard Under Phase II of the RFG Program
A. Regulated Entities
Regulated categories and entities potentially affected by this
action include:
[[Page 37158]]
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Examples of regulated
Category entities
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NAICS 32411............................... Refiners, importers,
oxygenate producers, and
oxygenate blenders of
reformulated gasoline.
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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
an entity is regulated by this action, one should carefully examine the
RFG provisions at 40 CFR Part 80, particularly Sec. 80.41 dealing
specifically with the RFG standards. If you have questions regarding
the applicability of this action to a particular entity, consult the
person listed in the preceding FOR FURTHER INFORMATION CONTACT section.
B. Regional Applicability
EPA has determined that a 2.0 percentage point adjustment to the
VOC performance standard for 10 percent ethanol RFG (equivalent to an
increase in RVP of approximately 0.3 psi) is appropriate in the Chicago
and Milwaukee RFG areas. As expressed in our notice of proposed
rulemaking (65 FR 42920, 42924, July 12, 2000), EPA's intent is to
offset partially the incremental cost associated with the production of
ethanol-blended RFG in order to provide additional flexibility to
refiners.\2\ EPA is also taking a reasonable approach to ensure that
RFG will continue to provide a similar level of overall benefits.
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\2\ The ethanol industry originally feared that the increased
stringency of the Phase II VOC standard would result in ethanol
being ``locked out'' of the RFG market. Last summer's RFG market
proved otherwise, however. This suggests that with economic
conditions similar to last summer's the current Phase II standard
should not prevent refiners from making RFG with ethanol. More
importantly, however, it suggests that an adjustment will offer
increased flexibility to refiners. Thus even if market conditions
change, we believe an adjustment will provide an incentive to make
more RFG with ethanol than without such adjustment. Finally, one
refiner commented that the 1 percentage point adjustment would
result in that refiner making approximately 5 percent more RFG with
ethanol than without the adjustment. We believe, therefore that the
2 percentage point adjustment will allow even greater flexibility to
refiners, and will help to prevent increased use of MTBE in these
areas.
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By limiting application of the VOC adjustment to the Chicago and
Milwaukee RFG areas, we will provide additional flexibility for fuel
providers that currently produce RFG for ethanol blending in the two
metropolitan areas that use ethanol exclusively in RFG. This
flexibility will help to ensure that the refiners that make ethanol RFG
are able to continue to do so at reduced cost. Moreover, we are
confident based on modeling that Illinois Environmental Protection
Agency (IEPA) has conducted (discussed in more detail in Section I.G.)
that a 2.0 percentage point adjustment to the VOC standard (equivalent
to an RVP increase of approximately 0.3 psi) for these areas will still
realize ozone benefits similar to those of the current Phase II
program.
Based on our evaluation of the relevant data, however, we have
concluded that there is sufficient uncertainty regarding the potential
for adverse environmental consequences from a VOC adjustment in RFG
areas outside of Chicago and Milwaukee to allow such an adjustment at
this time. Specifically, several commenters \3\ pointed out that in
areas where both MTBE-blended and ethanol-blended RFG are used,
increased VOC emissions could occur due to the additional commingling
of MTBE and ethanol RFG in automobile gasoline tanks. (See the
discussion of commingling in section I.C. for further details.)
Therefore, commenters suggested that if EPA established a VOC
adjustment for RFG areas where ethanol is not the predominant oxygenate
(i.e., areas other than Chicago and Milwaukee), EPA would need to
consider the emissions impact of commingling. Additionally, several
comments suggested that any increase in ethanol use might be
accompanied by an increase in evaporative VOC emissions due to
increased permeation of ethanol through vehicle fuel system components
such as hoses and seals. We agree that any evaluation of the
appropriateness of a VOC adjustment should include consideration of
commingling and permeation as well as other emission-related impacts.
Based on uncertainty regarding the potential emissions impact of mixed
ethanol/MTBE pools in RFG areas outside of Chicago and Milwaukee, we
are unable to conclude at this time that a VOC adjustment is
appropriate for such areas.
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\3\ Commenters were Alliance of Automobile Manufacturers,
Oxygenated Fuels Association, American Lung Association, California
Air Resources Board, and NESCAUM.
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In addition, the size of the adjusted VOC standard itself is
derived from data specific to the Chicago/Milwaukee region. As
discussed in detail in Section I.G below, the 2.0 percentage point
adjustment (equivalent to an RVP increase of 0.3 psi) was based on
photochemical modeling that Illinois Environmental Protection Agency
(IEPA) conducted. The modeling represents the specific lower Lake
Michigan region to which the standard will apply. As such, because the
modeling results are dependent on the pollutant mix and geographic and
meteorological features specific to that region, the photochemical
modeling results cannot be extended to other areas.
Overall, we believe that a 2.0 percentage point adjustment to the
VOC performance standard (equivalent to an RVP increase of
approximately 0.3 psi) is appropriate for RFG with 10 volume percent
ethanol sold in the Chicago and Milwaukee RFG area. Because ethanol RFG
constitutes virtually 100 percent of the RFG market in the Chicago and
Milwaukee area, they are significantly different from other RFG areas.
Today's rule is unlikely to change this market share. For this reason,
and because EPA is relying on modeling data specific to these areas, we
believe it is appropriate to limit the rule to Chicago and Milwaukee.
(See Section I.C. for a more detailed discussion of commingling.)
Several questions remain regarding the impact that such a VOC
performance standard adjustment might have on overall emissions from
RFG in the future. Specifically, newer car technology and low sulfur
gasoline will tend to lower CO emissions generally, and therefore
decrease the amount of CO reduction resulting from the higher oxygen
levels associated with RFG containing 10 volume percent ethanol. Also,
while it is our expectation that the market share of ethanol-blended
RFG in the Chicago and Milwaukee areas will remain at 100 percent, some
question exists regarding the future market share of ethanol blends in
these areas based in part on future demand for ethanol in other areas
of the U.S. and how that might affect supply, prices, and penetration
level in the Midwest. Therefore, EPA will continue to evaluate the
effect of Tier 2 technology and Tier 2 low sulfur gasoline on CO
emissions as well as market conditions with respect to ethanol and MTBE
use.
C. Commingling Effects
Several parties commented that, in areas that currently use RFG
with MTBE, increases in the use of ethanol-blended RFG associated with
the proposed rule would result in an increase of commingling of MTBE
and ethanol RFG blends in automobile gasoline tanks. Since the presence
of ethanol causes an increase in the volatility of gasoline (as
measured by Reid Vapor Pressure or RVP), such additional commingling
would
[[Page 37159]]
contribute to an increase in VOC emissions beyond that associated with
the adjustment itself. Some comments raised this issue, and pointed out
that our estimates of VOC emission increases resulting from the VOC
adjustment should have taken commingling effects into account.
In Chicago and Milwaukee, however, virtually 100 percent of the RFG
has been oxygenated with ethanol since 1995, and EPA generally does not
expect that pattern to change significantly in the foreseeable future;
in fact, one of the outcomes of this rule is to help ensure that this
pattern continues, by making ethanol use more cost-effective. EPA
believes that this rule will not result in any additional VOC emissions
due to commingling in the Chicago and Milwaukee RFG areas.
Given that there may be unaccounted commingling emissions in other
areas (unlike in Chicago and Milwaukee), and that EPA has not fully
evaluated such areas, we are finalizing the VOC adjustment only for the
Chicago and Milwaukee areas.
D. Oxygen Credit Generation for VOC Adjusted RFG
Today's final rule allows refiners to trade oxygen credits that are
generated by production of VOC adjusted RFG. EPA proposed to prohibit
refiners from generating oxygen credits for adjusted VOC RFG because we
believed that trading such credits might result in less overall ozone
reduction from the oxygen content requirement than the statute
implicitly anticipates. Many comments opposed EPA's proposed
prohibition on oxygen credit generation for adjusted VOC RFG, arguing
that the prohibition would limit refiner flexibility and could result
in increased use of MTBE by refiners that would otherwise rely on
oxygen credits. Comments further argued that the emission benefits in
the region where RFG containing 3.5 weight percent oxygen is used are
not diminished even if the oxygen credits are traded, because such
credits are traded to other areas that use predominantly MTBE.
Currently, some RFG contains oxygen in excess of 2.0 weight percent
(e.g., most ethanol blends contain 3.5 weight percent oxygen). Such
blends provide greater CO reductions than RFG blends with 2.0 percent
or lower oxygen. Oxygen trading allows refiners to bank and trade
credits for the oxygen content of their RFG above 2.0 by weight (or
above 2.1 percent if the refiner complies on average). The refiner may
then sell these credits to other refiners that produce RFG with less
than 2.0 weight percent oxygen, allowing them to meet the oxygen
content limit. However, no gallon of RFG may contain less than 1.5
weight percent oxygen (subject to EPA raising--or ratcheting--the per
gallon minimum if an RFG area fails an annual oxygen content survey).
See 40 CFR 80.67. The oxygen credit trading program may result in
different CO benefits for different areas of the country; i.e., where
oxygen is used at higher rates, RFG provides a greater CO benefit, and
where oxygen is used at lower rates, RFG provides less CO benefit. The
minimum oxygen requirement, however, limits the potential for differing
effects and assures some degree of CO benefit everywhere RFG is used.
The RFG program has not generally accounted for the impact that its
various requirements may have on CO emissions. Today's rule is the
first rule under the RFG program that attempts to take CO emissions
into account. Nonetheless, this rule is not intended to establish a
comprehensive mechanism for recognizing the CO benefits of the RFG
program.
Conceptually, a limit on the trading of oxygen credits for VOC
adjusted RFG might help to ensure that the greater CO benefits from
ethanol RFG areas are not used to both offset a VOC increase in the
ethanol RFG areas and result in less CO benefits in non-ethanol RFG
areas through credit trading. However, this would be, at best, an
indirect approach to addressing the issue of a comprehensive accounting
for CO. Additionally, such a restriction would not, in fact, have
provided any assurance that greater CO reductions would have actually
been achieved by non-ethanol blends. That is, refiners wishing to
market gasoline with less than 2.0 percent oxygen by weight might
simply turn to other sources of oxygen credits.
Moreover, because the actual gasoline oxygen content in a non-
ethanol RFG area is not likely to be below 2.0 weight percent for all
the gasoline in the area (and if it is, there is already a mechanism in
the regulations to address the situation), and because the level cannot
fall below 1.5 percent for any gallon of RFG (subject to ratcheting),
the reduction in CO benefits for non-ethanol areas (if any) will be
small relative to the increase in benefits associated with ethanol RFG.
In any event, implementation of today's VOC adjustment, without any
restriction on credit generation or trading, will not result in any
increase or change in emissions in non-ethanol areas above current
levels.
Finally, because oxygen credits are generally used by refiners
producing non-ethanol gasoline sold in Northeast RFG areas, any
shortage of credits resulting from a trading restriction is likely to
result in an increase in MTBE use in the Northeast, which would run
directly contrary to one of the reasons for today's action.
Based on the above considerations, EPA has determined that it is
not appropriate at this time to prohibit the generation and trading of
oxygen credits for batches of RFG that are subject to the adjusted VOC
standard.
E. Segregation
In the proposed rule, we introduced a requirement that refiners
identify RFG blendstock for oxygenate blending (RBOB) destined to be
used in making adjusted VOC RFG. We also proposed that the Product
Transfer Document specify the use of the RBOB. Several comments pointed
out that EPA's establishment of VOC adjusted RFG would create
additional slates of RFG requiring segregation. Additional tankage for
segregation would increase refiner costs and the complexity of gasoline
storage and distribution.
Since EPA is not requiring refiners to choose between taking
advantage of the adjusted VOC standard and generating oxygen credits,
as we proposed, segregation is of minimal importance. EPA expects that
refiners providing RFG for the Chicago and Milwaukee markets will
produce adjusted VOC RFG. Enforcement of the downstream per-gallon VOC
standard in the Chicago and Milwaukee RFG areas will be to the level of
the adjusted VOC standard. Mixtures of adjusted VOC RFG with non-
adjusted VOC 10 volume percent ethanol RFG will not result in VOC
noncompliance, since the non-adjusted standard is stricter. As a
result, EPA does not believe that mixing VOC adjusted and non-VOC
adjusted RFG together will result in any harmful environmental
consequences. For RFG sold in areas outside the Chicago and Milwaukee
RFG areas, the downstream per-gallon VOC standard will be enforced to
the ordinarily applicable Phase II limit.
For the reasons above, therefore, EPA is not requiring segregation
of VOC adjusted RFG from non-VOC adjusted RFG in those areas where the
VOC adjustment applies. In the final rule, segregation is not required
downstream of the refinery. Refiners must still keep track of the
volume of adjusted VOC RFG or RBOB that they produce, but the Product
Transfer Document will not track whether RBOB is destined to be used
for adjusted VOC gasoline beyond the refinery gate. Instead, we will
require refiners to specify on the
[[Page 37160]]
Reformulated Gasoline and Anti-Dumping Batch Report that RFG with 10
volume percent ethanol complies with either the current (i.e., non-
adjusted) VOC performance standard, or the adjusted standard as
``adjusted VOC gasoline'' per the fuel certification procedures in 40
CFR 80.40.
F. Effect of Rule on NOX and Toxics
Some comments stated that the VOC adjustment rule could adversely
impact NOX and toxics overcompliance in the RFG program
because RFG areas that switch from MTBE to ethanol may experience
increased toxics, mostly attributable to increased acetaldehyde
emissions, and increased NOX, from increased oxygen. EPA
does not believe any loss of overcompliance is likely. In December
2000, EPA promulgated a gasoline toxics emission performance standard
that will maintain the current level of toxics overcompliance in the
RFG program. Additionally, changes in NOX performance are a
function of many fuel properties, particularly sulfur content and
olefins. The overall impact of the VOC adjustment on NOX
emissions is highly uncertain given the variety of other fuel
parameters such as aromatics, olefins, and other gasoline components
that can affect NOX emissions. Specifically, there is no
adequate basis to conclude what the effect on NOX would be
absent information about what impact this rule (or oxygen levels) will
have on how refineries reformulate their gasoline for all of the fuel
parameters relevant to NOX. In any event, today's action
will not result in an increase in ethanol use in the Chicago and
Milwaukee RFG areas above current levels.
G. Consideration of Recommendation of Illinois EPA
As discussed in the Notice of Proposed Rulemaking for this
adjustment (65 FR 42922; July 12, 2000), the VOC adjustment is
motivated primarily by Section 211(k)(1) of the Clean Air Act which
directs EPA, in promulgating emission reduction standards for RFG, to
consider the cost of achieving such emission reductions as well as any
nonair-quality and other air-quality related health and environmental
impacts. We then proposed an adjustment to the VOC performance standard
specific to that provision in the Clean Air Act in order to limit cost,
but based the adjustment ultimately on a level that we felt achieved
ozone air quality benefits similar to those for the Phase II RFG
program.
Prior to publication of the Notice of Proposed Rulemaking (NPRM),
the Illinois Environmental Protection Agency (IEPA) submitted to EPA a
proposal and supporting analysis which suggested that EPA should allow
a VOC adjustment of 3.7 percentage points, approximately equal to an
increase in RVP of 0.5 psi, for RFG using 10 percent volume ethanol.
(See Documents II-D-4, 5 and 6 in Docket A-99-32.)
Briefly, IEPA's analysis compared the VOC and CO emissions
associated with a complying fuel with an RVP of 6.8 psi, and an oxygen
content of 2.0 weight percent, to the emissions associated with a fuel
having an RVP of 7.3, representing an increase in RVP of 0.5 psi, and
an oxygen content of 3.5 weight percent. IEPA concluded that the ozone
impact of these two fuels would be identical, and that EPA should
therefore provide an adjustment that corresponds to an RVP increase of
0.5 psi.
The IEPA analysis used a combination of urban airshed modeling (see
Document II-D-4 in Docket A-99-32), and VOC and CO emission
calculations (see Document II-D-6 in Docket A-99-32) to establish the
relationship between VOC and CO and its effect on ozone formation. We
evaluated IEPA's analysis (see Document II-D-13 in Docket A-99-32) and
believe that the photochemical modeling portion of the analysis is
generally useful for evaluating the conditions studied in the Chicago
area. While the modeling covered only a portion of the Lake Michigan
airshed and a single 4-day ozone episode, this portion of the airshed
contained projections of significant ozone violation. Also, the episode
was fairly typical of ozone episodes in the lower Lake Michigan region
inclusive of Milwaukee, based on geographic proximity and the lake-
influenced meteorology.
In contrast, we found several deficiencies with IEPA's emission
calculations \4\ which were used in their justification of a 0.5 psi
adjustment. Specifically, the motor vehicle VOC emission rates were
taken from the EPA Complex Model and represent emissions from solely
1990 model year vehicles rather than those of the in-use fleet post-
2000. IEPA then obtained the emission factor for CO by multiplying the
Complex Model-derived VOC emission factor by a ratio of nationwide CO
to VOC emissions for onroad vehicles, taken from the 1997 EPA Emissions
Trends report rather than using values contained in the emission
inventory for this region. This method is highly inaccurate, in that it
represents a blend of emissions in areas with conventional and
reformulated gasoline, summer and winter conditions and a wide range of
local emission control programs, such as I/M, rather than the specific
conditions existing in Chicago during the ozone episodes. Finally,
IEPA's estimate of a 10 percent reduction in CO due to 10 volume
percent ethanol in RFG relative to the required 2.1 weight percent
oxygen is overstated; using draft MOBILE6 methodology, \5\ we estimate
a reduction of approximately 7 percent. We therefore found that their
approach did not provide adequate technical support for an adjustment
to the VOC standard of 3.7 percentage points (0.5 psi). Also, IEPA
relied upon the use of relative reactivity factors for exhaust and
evaporative VOC emissions. EPA does not support the use of relative
reactivity factors, for reasons stated in the preamble of the NPRM. See
65 FR 42924.
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\4\ IEPA compared the emissions (expressed in mg/mi) of a
``complying fuel'' (assumed to have an RVP of 6.8 psi and 2.0 weight
percent oxygen; other parameters are described in Document II-D-6 in
Docket A-99-32) with an alternative fuel consisting of a 7.3 psi RVP
and 3.5 weight percent oxygen, with the other parameters defined for
the complying fuel held constant). IEPA calculated the ozone impact
from the ``complying fuel'' versus the 7.3 psi fuel using a
relationship of ozone forming potential between CO and VOC derived
from photochemical modeling. Using this technique, IEPA calculated
that the ozone capacity of complying fuel is 4,289 mg ozone/mi and
the ozone capacity of the 7.3 psi fuel with accompanying CO
reductions due to the 3.5 weight percent oxygen would be 4,291 mg
ozone/mi-a comparable amount.
\5\ MOBILE is an integrated set of FORTRAN routines for use in
the analysis of the air pollution impact of gasoline-fueled and
diesel-powered highway mobile sources. MOBILE is used in the
preparation of all projection year emission inventories required by
the Clean Air Act Amendments of 1990 for non-California areas.
MOBILE calculates emission factors for gasoline-fueled light-duty
vehicles (LDGVs), light-duty trucks (LDGTs), heavy-duty vehicles
(HDGVs), and motorcycles. MOBILE also contains provisions for
modeling the impact on emission factors of oxygenated fuels (i.e.,
gasoline/alcohol and gasoline/ether blends) and of participation in
the reformulated gasoline (RFG) program under the 1990 Clean Air Act
Amendments.
---------------------------------------------------------------------------
While we do not accept IEPA's recommendation for an adjustment
equivalent to 0.5 psi, we find that the photochemical modeling that
IEPA conducted does reasonably support a larger adjustment to the VOC
standard than we originally proposed when more recent information on
emissions of CO and VOC from onroad vehicles is used. The photochemical
modeling consisted of a four day ozone episode from 1991. IEPA modeled
reductions in VOC and CO emissions independently, determining the
impact of each on peak ozone during each day. A comparison of the
impact of differing levels of VOC and CO emissions on peak ozone during
each day showed that, on a mass basis,
[[Page 37161]]
CO was 4.3 to 8.6 percent as effective in producing ozone as VOC.
At the lower end of this range, the results indicate that for each
ton of VOC increase, approximately 23 tons of CO decrease are necessary
to maintain ozone levels. At the high end of the range, a 12 ton
reduction in CO emissions would be required to compensate for a one ton
increase in VOC emissions. As discussed in the Response to Comment
Document for this rulemaking (see Document II-B-3 in Docket A-99-32),
at the VOC adjustment level of 1.0 percentage point (i.e., an
equivalent RVP increase of approximately 0.2 psi), CO emissions would
be reduced by 45 tons for each one ton increase in VOC emissions.\6\ We
believe that in light of IEPA's photochemical model results, the
proposed level of 1.0 percentage point (0.2 psi equivalent increase in
RVP) is overly conservative.
---------------------------------------------------------------------------
\6\ We calculated the ratio of CO decrease to VOC increase for
varying adjustments of RVP using the following procedure: Using the
MOBILE 5.b model, we calculated VOC emissions for RVP varying from
6.7 to 7.7 psi in increments of 0.1 psi. We multiplied the resulting
VOC emission rates (expressed in g/mi) by the respective Vehicle
Miles travelled (VMT) estimates for Chicago and Milwaukee to obtain
the tons per day VOC emissions for each RVP level in each area. (VMT
was obtained from the 1996 inventories of the Illinois Environmental
Protection Agency (IEPA) and Wisconsin Department of Natural
Resources (DNR), respectively.) Taking 6.7 psi RVP as the baseline,
the increase in VOC for each 0.1 psi incremental increase above 6.7
was computed for the two areas. To calculate the CO decrease EPA
obtained the baseline CO emission rates at 2.0 weight percent oxygen
from the Chicago and Milwaukee inventories (from IEPA and Wisconsin
DNR) inventories. We then computed the emission rates for gasoline
at 3.5 weight percent oxygen using an equation derived from those in
MOBILE 6 and which have undergone peer review. This equation is
discussed in further detail in the Response to Comment document for
this rulemaking (EPA 420-R-01-017). We then calculated the ratio of
CO decrease to VOC increase for the varying RVP values. Since CO is
a function of oxygen content, the CO reduction is constant, while
the VOC emissions, which are a function of RVP, vary. The emission
increases for the Mobile 5b runs as well as the respective ratios of
CO decrease to VOC increase are summarized in Table 1 of the
Response to Comment document.
---------------------------------------------------------------------------
The mean value of the CO to VOC ozone forming capacities obtained
from IEPA's analysis is 6.8 percent, at which level the minimum ratio
of CO reductions to VOC increase needed to maintain ozone levels is
14.7:1. As shown in the above referenced Response to Comment Document
for this rulemaking, we determined that the use of RFG with ethanol at
10 volume percent (3.5 weight percent oxygen) in these areas can
generally be expected to reduce emissions of CO (compared to RFG with
2.0 weight percent oxygen) by approximately 15 tons for every 1 ton
increase in VOC emissions associated with a VOC adjustment of 2.0
percentage points (i.e., the equivalent RVP increase of 0.3 psi).
Significantly, the modeled day producing the ratio of 15:1 yielded
the highest ozone concentration of the four days modeled. Because the
highest ozone concentration is associated with the 15:1 ratio,
adjustments based on lower ratios (i.e., 12:1 and 13:1) should not be
used. We believe, therefore, that IEPA's analysis provides reasonable
assurance that the 0.3 psi adjustment level is appropriate and would
tend to preserve the ozone air quality benefits of the Phase II RFG
program.
Finally, we note that the photochemical analysis for Chicago can be
said to be generally representative of the Milwaukee area due to the
similarity in fuel formulations (100 percent ethanol blended RFG),
their geographical proximity (less than 100 miles apart), and the fact
that lake effects on local meteorology would be expected to be
similarly important in the formation of ozone in these two areas.
Consequently, we are promulgating an adjustment of 2.0 percentage
points to the VOC performance standard for 10 percent ethanol RFG sold
in the Chicago and Milwaukee RFG areas (RVP equivalent increase of
approximately 0.3 psi). We believe that IEPA's photochemical modeling
reasonably supports a finding that the level of CO decrease likely to
occur in the Chicago and Milwaukee areas will offset the potential
ozone air-quality impacts of a 2.0 percentage point adjustment to the
VOC performance standard (0.3 psi equivalent RVP increase). As such, we
believe the adjustment will result in ozone air quality benefits
similar to those generally achieved under Phase II of the RFG program.
H. Impact of Adjusted Standard on SIPs
In the proposal, EPA explained that it believed states should not
be required to account in their ROP plans, in the near term, for any
potential increase in mass VOC emissions associated with the VOC
adjustment, based on uncertainty related to market conditions and the
predictability of such emission. We proposed to amend the ``Guidance on
the Post-1996 Rate-of-Progress Plan and the Attainment Demonstration''
to indicate that, for several years, states are not required to
evaluate whether their ROP plans would be affected by will be an
increase in mass VOC emissions as a result of adjusted VOC gasoline. We
also proposed to assess the impact of any mass VOC increases on state
attainment of the 3.0 percent rate of progress goal at a later date,
when more data on oxygenate use and distribution and the effect of the
VOC adjustment are available. No comments were received on the
appropriateness of this approach, and we will assess the impact of any
VOC increases on state attainment of the 3.0 percent rate of progress
goal as a component of our continued evaluation of this adjustment.
II. Administrative Requirements
A. Submission to Congress and the Comptroller General
Under 5 U.S.C. 801 (a)(1) (A), 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 report, which includes a copy of the rule, to each House of
the Congress and to the Comptroller General of the United States. We
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 the publication
of the rule in today's Federal Register. This is not a ``major rule''
as defined by 5 U.S.C 804 (2).
B. Executive Order 12866
Under Executive Order 12866 (58 FR 51735, October 4, 1993), the
Agency must determine whether the regulatory action is ``significant''
and therefore subject to Office of Management and Budget (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 entitlement, 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.
The Agency has determined that this regulation results in none of
the adverse economic effects set forth in Section 1 of the Order
because it generally relaxes the requirements of the RFG program by
providing regulated parties with more
[[Page 37162]]
flexibility with respect to compliance with the RFG requirements.
Pursuant to the terms of Executive Order 12866, OMB has notified EPA
that it considers this a ``significant regulatory action'' within the
meaning of the Executive Order because it raises novel legal or policy
issues. EPA submitted this action to OMB for review. Changes made in
response to OMB suggestions or recommendations will be documented in
the public record.
C. 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.'' Under
Executive Order 13132, EPA may not issue a regulation that has
federalism implications, that imposes substantial direct compliance
costs, and that is not required by statute, unless the federal
government provides the funds necessary to pay the direct compliance
costs incurred by state and local governments, or EPA consults with
state and local officials early in the process of developing the
proposed regulation. EPA also may not issue a regulation that has
federalism implications and that preempts state law unless the agency
consults with state and local officials early in the process of
developing the proposed regulation.
If EPA complies by consulting, Executive Order 13132 requires EPA
to provide to the Office of Management and Budget (OMB), in a
separately identified section of the preamble to the rule, a federalism
summary impact statement (FSIS). The FSIS must include a description of
the extent of EPA's prior consultation with state and local officials,
a summary of the nature of their concerns and the agency's position
supporting the need to issue the regulation, and a statement of the
extent to which the concerns of state and local officials have been
met. Also, when EPA transmits a draft final rule with federalism
implications to OMB for review pursuant to Executive Order 12866, EPA
must include a certification from the agency's Federalism Official
stating that EPA has met the requirements of Executive Order 13132 in a
meaningful and timely manner.
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. The rule provides regulatory
relief, by adjusting the VOC performance standard, for refiners that
choose to make RFG with 10 volume percent ethanol. As discussed in the
preamble, we believe that the increased VOC associated with the
adjusted VOC standard should not affect states' ROP plans in the near
term, and does not impose any substantial direct effects on the states.
Thus, the requirements of section 6 of the Executive Order do not apply
to this rule.
D. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments
On November 6, 2000, the President issued Executive Order 13175 (65
FR 67249) entitled, ``Consultation and Coordination with Indian Tribal
Governments.'' Executive Order 13175 took effect on January 6, 2001,
and revokes Executive Order 13084 (Tribal Consultation) as of that
date. EPA developed this final rule, however, during the period when
Executive Order 13084 was in effect; thus, EPA addressed tribal
considerations under Executive Order 13084.
Under Executive Order 13084, EPA may not issue a regulation that is
not required by statute, that significantly or uniquely affects the
communities of Indian tribal governments, and that imposes substantial
direct compliance costs on those communities, unless the federal
government provides the funds necessary to pay the direct compliance
costs incurred by the tribal governments, or EPA consults with those
governments. If EPA complies by consulting, Executive Order 13084
requires EPA to provide to the Office of Management and Budget, in a
separately identified section of the preamble to the rule, a
description of the extent of EPA's prior consultation with
representatives of affected tribal governments, a summary of the nature
of their concerns, and a statement supporting the need to issue the
regulation. In addition, Executive Order 13084 requires EPA to develop
an effective process permitting elected and other representatives of
Indian tribal governments ``to provide meaningful and timely input in
the development of regulatory policies on matters that significantly or
uniquely affect their communities.''
Today's rule does not significantly or uniquely affect the
communities of Indian tribal governments. Today's rule does not create
a mandate for any tribal governments. This rule applies to gasoline
refiners, blenders and importers that supply gasoline to RFG areas.
Today's action generally relaxes certain RFG requirements, and does not
impose any enforceable duties on communities of Indian tribal
governments. Accordingly, the requirements of section 3(b) of Executive
Order 13084 do not apply to this final rule.
E. Regulatory Flexibility
EPA has determined that it is not necessary to prepare a regulatory
flexibility analysis in connection with this final rule. EPA has also
determined that this rule will not have a significant economic impact
on a substantial number of small entities. For purposes of assessing
the impact of today's rule on small entities, small entities are
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 final 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 analysis is to identify
and address regulatory alternatives ``which minimize any significant
economic impact of the proposed rule on small entities.'' 5 U.S.C.
sections 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. Today's rule provides regulatory relief by making the VOC
standard for RFG that contains 10 volume percent ethanol used in
Chicago and Milwaukee slightly less stringent. This action will provide
more flexibility for refiners to
[[Page 37163]]
reduce MTBE use by decreasing the cost of ethanol-blended RFG. We have
therefore concluded that today's final rule will relieve regulatory
burden for all small entities.
F. Paperwork Reduction Act
The information collection requirements in this rule have been
approved by the Office of Management and Budget (OMB) under the
Paperwork Reduction Act, 44 U.S.C. 3501 et seq. An Information
Collection Request (ICR) document was prepared by EPA (ICR No. 1591.11)
and a copy may be obtained from Sandy Farmer by mail at OP Regulatory
Information Division; U.S. Environmental Protection Agency (2137); 401
M St., SW; Washington, DC 20460, by e-mail at farmer.sandy@epa.gov, or
by calling (202) 260-2740. A copy may also be downloaded off the
internet at http://www.epa.gov/icr.
The action will result in revision of the Reformulated Gasoline and
Anti-Dumping Batch Report form (EPA Form 3520-20C) that refiners must
complete. The form would be revised to include under Item 4.0 a new
product type called ``Adjusted VOC gasoline.'' This revision does not
represent significant new reporting requirements, nor a substantial
increase in the amount of time spent filling out the form.
Burden means the total time, effort, or financial resources
expended by persons to generate, maintain, retain, 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 are
listed in 40 CFR Part 9 and 48 CFR Chapter 15.
G. 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 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. The rule imposes no
enforceable duty on any state, local or tribal governments or the
private sector. This rule applies to gasoline refiners, blenders and
importers that supply RFG areas. Today's action provides regulated
parties with more flexibility with respect to compliance with RFG
requirements.
H. Executive Order 13045: Children's Health Protection
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 final rule is not subject
to Executive Order 13045, 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. For reasons stated
in the preamble, we believe that the adjusted VOC standard for RFG with
10 volume percent ethanol will continue to provide a similar level of
ozone benefits to those anticipated from the current standard, and will
assure that the Phase II RFG program will continue to achieve the
significant environmental benefits that it was designed to provide.
I. National Technology Transfer and Advancement Act of 1995 (NTTAA)
Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (NTTAA), Public Law 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.
This rule does not involve technical standards, and does not
specify the use of technical methods. Therefore, EPA did not consider
the use of any voluntary consensus standards.
J. Statutory Authority
Sections 114, 211, and 301(a) the Clean Air Act as amended (42
U.S.C. 7414, 7545, and 7601(a)).
K. Executive Order 13211 (Energy Effects)
This rule is not subject to Executive Order 13211, ``Actions
Concerning
[[Page 37164]]
Regulations That Significantly Affect Energy Supply, Distribution, or
Use'' (66 FR 28355 (May 22, 2001)) because it is not a significant
regulatory action under Executive Order 12866.''
List of Subjects in 40 CFR Part 80
Environmental protection, Fuel additives, Gasoline, Imports,
Labeling, Motor vehicle pollution, Penalties, Reformulated gasoline,
Reporting and recordkeeping requirements.
Dated: July 5, 2001.
Christine Todd Whitman,
Administrator.
For the reasons set forth in the preamble, part 80 of title 40, of
the Code of Federal Regulations 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: Sections 114, 211, and 301(a) of the Clean Air Act as
amended (42 U.S.C. 7414, 7545, and 7601(a)).
2. Section 80.40 is amended by adding paragraph (c) to read as
follows:
Sec. 80.40 Fuel certification procedures.
* * * * *
(c)(1) ``Adjusted VOC gasoline'' for purposes of the general
requirements in Sec. 80.65(d)(2)(ii), and the certification procedures
in this section is gasoline that contains 10 volume percent ethanol, or
RBOB intended for blending with 10 volume percent ethanol, that is
intended for use in the areas described at Sec. 80.70(f) and (i), and
is designated by the refiner as adjusted VOC gasoline subject to the
less stringent VOC standards in Sec. 80.41(e) and (f). In order for
``adjusted VOC gasoline'' to qualify for the regulatory treatment
specified in Sec. 80.41(e) and (f), reformulated gasoline must contain
denatured, anhydrous ethanol. The concentration of the ethanol,
excluding the required denaturing agent, must be at least 9% and no
more than 10% (by volume) of the gasoline. The ethanol content of the
gasoline shall be determined by use of one of the testing methodologies
specified in appendix F to this part.
(2) Refiners may choose not to designate as adjusted VOC gasoline
or RBOB that otherwise meets the requirements of paragraph (c)(1) of
this section, in which case the more stringent VOC standards in
Sec. 80.41 apply.
(3) For purposes of Sec. 80.78(a)(1)(v), the ``Adjusted VOC
gasoline'' standards under Sec. 80.41 are the applicable VOC emissions
performance standards only for adjusted VOC gasoline that is intended
for use in or sold for use by an ultimate consumer in the covered areas
described at Sec. 80.70(f) and (i). For purposes of
Sec. 80.78(a)(1)(v), gasoline designated as adjusted VOC gasoline that
is intended for use or that is sold for use by an ultimate consumer in
any covered area in VOC-Control Region 2 other than those described at
Sec. 80.70(f) and (i), is subject to the VOC performance standards in
Sec. 80.41 applicable to all other gasoline designated for VOC-Control
Region 2.
3. Section 80.41 is amended by revising paragraphs (e) and (f) to
read as follows:
Sec. 80.41 Standards and requirements for compliance.
* * * * *
(e) Phase II complex model per-gallon standards. The Phase II
``complex model'' standards for compliance when achieved on a per-
gallon basis are as follows:
Phase II--Complex Model Per-Gallon Standards
------------------------------------------------------------------------
------------------------------------------------------------------------
VOC emissions performance reduction
(percent):
Gasoline designated for VOC-Control ³27.5
Region 1.
Adjusted VOC gasoline designated for ³23.9
VOC-Control Region 2.
All other gasoline designated for VOC- ³25.9
Control Region 2.
Toxic air pollutants emissions performance ³20.0
reduction (percent).
NOX emissions performance reduction
(percent):
Gasoline designated as VOC-controlled. ³5.5
Gasoline not designated as VOC- ³0.0
controlled.
Oxygen content (percent, by weight)....... ³2.0
Benzene (percent, by volume).............. 1.00
------------------------------------------------------------------------
(f) Phase II complex model averaged standards. The Phase II
``complex model'' standards for compliance when achieved on average are
as follows:
Phase II Complex Model Averaged Standards
------------------------------------------------------------------------
------------------------------------------------------------------------
VOC emissions performance reduction
(percent):
Gasoline designated for VOC-Control
Region 1
Standard.......................... ³29.0
Per-Gallon Minimum................ ³25.0
Adjusted VOC gasoline designated for
VOC-Control Region 2
Standard.......................... ³25.4
Per-Gallon Minimum................ ³21.4
All other gasoline designated for VOC-
Control Region 2
Standard.......................... ³27.4
Per-Gallon Minimum................ ³23.4
Toxic air pollutants emissions performance ³21.5
reduction (percent).
NOX emissions performance reduction
(percent):
Gasoline designated as VOC-controlled. ³6.8
Gasoline not designated as VOC- ³1.5
controlled.
Oxygen content (percent, by weight):
Standard.............................. ³2.1
Per-Gallon Minimum.................... ³1.5
Benzene (percent, by volume):
Standard.............................. 0.95
Per-Gallon Maximum.................... 1.30
------------------------------------------------------------------------
[[Page 37165]]
* * * * *
4. Section 80.65 is amended by revising paragraph (d)(2)(ii) and by
removing ``[Reserved]'' in paragraph (d)(2)(iii), to read as follows:
Sec. 80.65 General requirements for refiners, importers, and oxygenate
blenders.
* * * * *
(d) * * *
(2) * * *
(ii) In the case of gasoline or RBOB designated as VOC-controlled:
(A) Either intended for use in VOC-Control Region 1 or VOC-Control
Region 2 (as defined in Sec. 80.71); or
(B) Designated as ``adjusted VOC gasoline'' (as defined in
Sec. 80.40(c)(1));
* * * * *
4. Section 80.67 is amended by revising paragraph (g)(1) to read as
follows:
Sec. 80.67 Compliance on average.
* * * * *
(g) * * *
(1)(i)(A)The compliance total using the following formula:
[GRAPHIC]
[TIFF OMITTED] TR17JY01.000
Where:
Vi=the volume in gallons of gasoline batch i.
std=the standard for the parameter being evaluated.
n=the number of batches of gasoline produced or imported during the
averaging period.
(B) For computation of the VOC performance standard compliance
total, Std for each VOC control region is determined by the following
formula:
[GRAPHIC]
[TIFF OMITTED] TR17JY01.001
Where, for gasoline and RBOB designated for that VOC control region:
Std=the value to be used in the compliance total formula.
Stdu=the averaged VOC emissions performance reduction
standard applicable to reformulated gasoline and RBOB not designated
for compliance with the adjusted VOC gasoline standard.
Stda=the averaged VOC emissions performance reduction
standard applicable to reformulated gasoline and RBOB designated for
compliance with the adjusted VOC gasoline standard.
VUi=the volume of batch i not designated for compliance
with the adjusted VOC gasoline standard.
VAi=the volume of batch i designated for compliance with
the adjusted VOC gasoline standard.
nu=the number of batches produced or imported and not
designated for compliance with the adjusted VOC gasoline standard.
na=the number of batches produced or imported and
designated for compliance with the adjusted VOC gasoline standard.
(C) The actual total using the following formula:
[GRAPHIC]
[TIFF OMITTED] TR17JY01.002
Where:
Vi=the volume in gallons of gasoline batch i.
parmi=the parameter value of gasoline batch i.
n=the number of batches of gasoline produced or imported during the
averaging period.
(ii) [Reserved]
* * * * *
5. Section 80.68 is amended by removing the period at the end of
paragraph (c)(8)(ii)(B) and adding in its place a semicolon and by
adding paragraph (c)(8)(ii)(C) to read as follows:
Sec. 80.68 Compliance surveys.
* * * * *
(c) * * *
(8) * * *
(ii) * * *
(C) For adjusted VOC gasoline sold in the covered areas described
at Sec. 80.70(f) and (i), the covered area shall have failed the
complex model VOC survey if the VOC emissions reduction percentage
average of all survey samples is less than the weighted average of the
applicable per-gallon standards for VOC emissions reduction calculated
according to the following formula:
[GRAPHIC]
[TIFF OMITTED] TR17JY01.003
Where:
WSTD=Weighted average of the applicable per-gallon VOC standards.
VOCU=Per gallon VOC standard applicable in the covered area to RFG
containing less than 10 percent ethanol by volume.
VOCA=Per gallon VOC standard applicable in the covered area to RFG
containing 10 percent ethanol by volume.
nu=Number of samples in the VOC survey with oxygen
content less than 3.5 percent by weight.
na=Number of samples in the VOC survey with oxygen
content equal to or greater than 3.5 percent by weight.
n=Total number of samples in the VOC survey.
* * * * *
6. Section 80.69 is amended by revising the introductory text to
read as follows:
Sec. 80.69 Requirements for downstream oxygenate blending.
The requirements of this section apply to all reformulated gasoline
blendstock for oxygenate blending, or RBOB, to which oxygenate is added
at any oxygenate blending facility, except that paragraph (a)(7) of
this section does not apply to adjusted VOC gasoline as defined in
Sec. 80.40(c).
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[FR Doc. 01-17563 Filed 7-16-01; 8:45 am]
BILLING CODE 6560-50-P