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Regulation of Fuels and Fuel Additives; Standards for Reformulated Gasoline
[Federal Register: July 9, 1996 (Volume 61, Number 132)] [Rules and Regulations] [Page 35960-35962] From the Federal Register Online via GPO Access [wais.access.gpo.gov]
ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 80 [FRL-5532-6] RIN 2060-AD27 Regulation of Fuels and Fuel Additives; Standards for Reformulated Gasoline AGENCY: Environmental Protection Agency (EPA). ACTION: Petition for reconsideration; request for comment.
SUMMARY: EPA requests comment on a petition submitted to EPA by the American Petroleum Institute (API). The petition, submitted pursuant to section 553(e) of the Administrative Procedure Act, requests reconsideration of the Phase II reformulated gasoline reduction standard for oxides of nitrogen (NO<INF>X). DATES: Comments must be received on or before September 9, 1996. ADDRESSES: Interested parties may submit written comments (in triplicate, if possible) to: EPA Air and Radiation Docket, Attention Docket No. A-96-27, room M-1500 (mail code 6102), 401 M St., SW, Washington, D.C. 20460. The docket may be inspected at this location from 8:30 a.m. until 5:30 p.m. weekdays. The docket may also be reached by telephone at (202) 260-7548. As provided in 40 CFR part 2, a reasonable fee may be charged by EPA for photocopying. FOR FURTHER INFORMATION CONTACT: Debbie Wood, Office of Mobile Sources, Fuels and Energy Division, (202) 233-9000. [[Page 35961]] SUPPLEMENTARY INFORMATION: I. Introduction and Background On February 16, 1994, EPA published a final rule establishing emission reduction and other performance standards for reformulated gasoline (RFG), including provisions for the certification of RFG and enforcement of RFG standards, and establishing certain requirements regarding unreformulated or conventional gasoline (59 FR 7716). The purpose of the RFG program is to improve air quality by requiring that gasoline be reformulated to reduce emissions from motor vehicles of toxics and tropospheric ozone-forming compounds, as specified by section 211(k)(1) of the Clean Air Act (CAA or the Act). Section 211(k) mandates that RFG be sold in the nine largest metropolitan areas with the most severe summertime ozone levels; RFG must also be sold in other ozone nonattainment areas that choose to participate or ``opt in'' to the program. The Act further prohibits conventional gasoline sold in the rest of the country from becoming any more polluting than it was in 1990 by requiring that each refiner's and importer's gasoline be as clean, on average, as it was in 1990; this statutory prohibition has resulted in requirements referred to as the ``anti-dumping'' program. The Act mandates certain requirements for the RFG program. Section 211(k)(1) directs EPA to issue regulations that:
- * * require the greatest reduction in emissions of ozone forming volatile organic compounds (during the high ozone season) and emissions of toxic air pollutants (during the entire year) achievable through the reformulation of conventional gasoline, taking into consideration the cost of achieving such emission reductions, any nonair-quality and other air-quality related health and environmental impacts and energy requirements.
For the year 2000 and beyond, or Phase II of the RFG program, the Act specifies that the VOC and toxics performance standards must be no less than either a formula fuel or a 25 percent reduction from baseline emissions, whichever is more stringent. EPA can adjust these standards upward or downward taking into account such factors as feasibility and cost, but in no case can they be less than 20 percent. Shortly after passage of the CAA Amendments in 1990, EPA entered into a regulatory negotiation with interested parties to develop specific proposals for implementing both the RFG and anti-dumping programs. In August 1991, the negotiating committee reached consensus on a program outline, addressing emission content standards for Phase I (1995-2000), emission models, certification, use of averaging and credits, and other important program elements. The regulatory negotiation conducted by EPA did not, however, address Phase II VOC and toxics standards, nor did it address a reduction in NO<INF>X emissions beyond the statutory cap imposed under section 211(k)(2)(A). The final rule promulgated by EPA closely followed the outline agreed to in the negotiated rulemaking. The final rule also adopted a NO<INF>X reduction performance standard for Phase II RFG, relying on authority under section 211(c)(1)(A). In proposing and promulgating a NO<INF>X reduction standard, EPA analyzed the costs and benefits, along with other relevant factors, including EPA's view that NO<INF>X reductions are important to achieve attainment of the ozone National Ambient Air Quality Standard (NAAQS) in many nonattainment areas. In the final rule, EPA discussed recent studies which indicate that NO<INF>X control is an effective ozone control strategy for the northeast as well as the Lake Michigan area (59 FR 7751). EPA also noted that there are non-ozone benefits from NO<INF>X control, such as reduced acid rain and improved visibility (59 FR 7751). In considering the feasibility of section 202 motor vehicle controls prior to regulating fuels, EPA cited several reasons for the promulgation of a NO<INF>X reduction standard (59 FR 7752): (1) Significant emission reductions would be achieved right away, in the summer of 2000, with no delay based on fleet turnover time. (2) A NO<INF>X reduction standard for gasoline would act to reduce emissions from all mobile sources that use gasoline, whether on-highway or nonroad. (3) The fuel control is specifically aimed at areas of the country that are in nonattainment for ozone, and is limited in time to that part of the year when ozone is of most concern. (4) The expected increase in vehicle miles traveled over time leads EPA to believe that this fuel control is needed to continue to achieve the in-use NO<INF>X emission reductions necessary for many areas of the country to reach attainment for ozone. (5) The performance standard adopted minimizes any concern that a fuel control could interfere in the production process by directing refiners on how to make their product. EPA estimates that the Phase II NO<INF>X emission reduction standard of 6.8 percent on average will reduce summertime NO<INF>X emissions from gasoline-powered mobile sources by approximately 22,000 tons annually. Cost-effectiveness is estimated at $5,000 per ton of NO<INF>X reduction.
In December 1995, API submitted a petition to EPA requesting reconsideration of the Phase II RFG NO<INF>X standard or, at a minimum, suspension of the effective date of the standard. API bases its request for reconsideration on three arguments: (1) The standard is inconsistent with the CAA Amendments of 1990 and the 1991 negotiated rulemaking. (2) Air quality benefits of the standard are overstated. (3) The standard is not a cost-effective strategy for ozone control. These arguments were also submitted to EPA by API as comments during the RFG rulemaking; the final rule preamble discusses these arguments and explains EPA's reasons for promulgating the NO<INF>X reduction standard (see 59 FR 7716, 7744-7756).
An initial review of the API petition indicates that it presents no compelling new evidence or argument that would warrant revisiting the decision made in promulgating the Phase II NO<INF>X reduction standard. However, to ensure that our conclusions on the appropriateness of the NO<INF>X reduction standard remain well-founded, EPA will review any relevant and available new information on costs and benefits that has been developed since promulgation of the final rule. EPA solicits comment on the issues raised in the petition. The arguments presented in the API petition are summarized below. A complete copy of the API petition may be found in the docket for this notice. II. Summary of API Petition A. Consistency With CAA and Negotiated Rulemaking API's first argument is that EPA's Phase II RFG NOG5X standard is inconsistent with the CAA Amendments of 1990 and the 1991 negotiated rulemaking. API cites provisions of the Act that specifically require reductions in various pollutants, and contrasts that [[Page 35962]] with the ``no NO<INF>X increase'' approach taken toward RFG in section 211(k). API also notes that the 1991 negotiated rulemaking agreement does not address a Phase II NO<INF>X reduction, and that the focus of debate was whether de minimis increases in NO<INF>X would satisfy the no NO<INF>X increase standard. For discussion of these arguments in the RFG final rule, see, for example, 59 FR 7744-7745. B. Air Quality Benefits API's second argument is that the ozone benefits of the Phase II RFG NO<INF>X standard are overstated. API argues that the primary basis for the Phase II NO<INF>X standard is ozone attainment, and cites data from EPA's Trends Report (U.S. EPA, National Air Quality and Emissions Trends Report 1993, EPA 454/R-94-026, October 1994 at 6.) that progress toward ozone attainment has been made. API also notes that the Act imposes substantial obligations on states to attain ozone standards. API claims that in promulgating the Phase II RFG NO<INF>X standard, EPA emphasized those parts of studies (such as Rethinking the Ozone Problem in Urban and Regional Air Pollution, National Research Council, National Academy Press, Washington, D.C. 1991) that showed NO<INF>X to be an effective ozone control strategy, while discounting those which indicate that NO<INF>X control can be counterproductive. API discusses EPA's authority under CAA section 182 to grant waivers from certain CAA local NO<INF>X reduction requirements. The petition states that the section 182(f) waiver requirement recognizes that local NO<INF>X reductions may not be necessary or helpful to attainment of the ozone standard. Although the overwhelming majority of section 182(f) waivers have been granted because additional NO<INF>X reductions are not needed for attainment of the ozone NAAQS, the petition notes that, in a few cases, photochemical modeling has indicated that increased NO<INF>X reductions may exacerbate peak ozone in an urban core. The petition cites three cases where modeling has shown that increased NO<INF>X reductions may exacerbate peak ozone concentrations: Chicago, Milwaukee, and Houston, three of the nine cities required to use RFG. API notes the conditional nature of section 182(f) waivers.
API argues that given continued progress toward ozone NAAQS attainment, imposition of Phase II NO<INF>X reductions applicable in all RFG areas is ``plainly incongruous'' with the granting of waivers under section 182(f). API also argues that EPA's claim that air quality benefits in addition to reduced ozone will result from the Phase II NO<INF>X standard (e.g., less acid rain, reduced nitrate deposition, and improved visibility), is speculative. These arguments are discussed in the RFG final rule at, for example, 59 FR 7746 and 7751. C. Cost-effectiveness API argues that EPA has understated the impact of the Phase II NO<INF>X reduction standard on costs and refiner flexibility. API claims that if more accurate sulfur removal (``desulfurization'') costs were employed, EPA's cost per ton of NO<INF>X removed would increase to over $10,000. Moreover, API argues that EPA's cost effectiveness analysis does not take into account that NO<INF>X reductions in some areas do not contribute to ozone attainment; API claims that if the benefit of NO<INF>X reductions in Chicago, Milwaukee and Houston, which have been granted conditional section 182(f) waivers, is reduced to zero or less, EPA's cost-effectiveness estimate would rise from $5,000 to $7,500 per ton.
API also argues that EPA should have included a more extensive array of stationary source NO<INF>X control measures that compare favorably to EPA's cost-effectiveness estimate, particularly if that estimate is changed in light of API's arguments on desulfurization costs and reduced ozone benefits.
Finally, API argues that major stationary sources offer more potential for overall reduction in air pollution, and that the costeffectiveness of Phase II NO<INF>X controls is higher than stationary combustion sources with lower potential for overall NO<INF>X reduction. API argues that, unlike mobile source control, major stationary source control can be targeted to avoid the cost of NO<INF>X control where it is not needed and any adverse effect on ozone because of atmospheric chemistry. API's arguments are discussed in the RFG final rule at, for example, 59 FR 7752-7754. III. Request for Comment EPA requests comment on all the issues raised in API's petition for reconsideration. EPA is also interested in the potential impact of a delay in implementation or elimination of the Phase II RFG NO<INF>X standard on state implementation plans for attaining compliance with the ozone NAAQS. EPA solicits new information on costs and air quality benefits associated with the Phase II RFG NO<INF>X reduction standard, including non-ozone air quality benefits. IV. Conclusion After considering all public comments and any other relevant information available to EPA, the agency will make a decision regarding API's petition for reconsideration. Dated: June 28, 1996.
Mary D. Nichols, Assistant Administrator, Office of Air and Radiation.
[FR Doc. 96-17318 Filed 7-8-96; 8:45 am] BILLING CODE 6560-50-P