[Federal Register Volume 61, Number 58 (Monday, March 25, 1996)]
[Rules and Regulations]
[Pages 12030-12041]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-7162]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 80
[AMS-FRL-5444-7]
RIN 2060-AG17
Regulation of Fuels and Fuel Additives: Revision to the Oxygen
Maximum Standard for Reformulated Gasoline
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rulemaking.
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SUMMARY: The Environmental Protection Agency (EPA or the Agency) today
revises the regulations for reformulated gasoline in two ways. These
changes only apply to reformulated gasoline certified using the Simple
Model, which applies until January 1, 1998. First, the maximum allowed
level of oxygen in reformulated gasoline is set at 3.2 percent by
weight (``wt%''), where a state notifies the Administrator that a limit
is needed for various air quality concerns. Second, absent such a state
notification, the maximum limit on oxygen content for reformulated
gasoline certified using the Simple Model would be that set by the
valid range limits of the Simple Model. In addition, the provisions of
section 211(f) of the Clean Air Act (``CAA'' or ``the Act'') continue
to apply to reformulated as well as other gasolines. These provisions
independently set a maximum oxygen content for motor vehicle gasoline.
EFFECTIVE DATE: This rule will be effective on March 18, 1996.
ADDRESSES: Materials relevant to this FRM are contained in Public
Docket No. A-95-29. Materials relevant to the reformulated gasoline
final rule are contained in Public Dockets A-91-02
[[Page 12031]]
and A-92-12. Public Docket A-93-49 contains materials relevant to the
renewable oxygenate requirement for reformulated gasoline; some of
these materials may also be relevant to today's action. These dockets
are located at Room M-1500, Waterside Mall (ground floor), U.S.
Environmental Protection Agency, 401 M Street SW., Washington, D.C.
20460. The docket may be inspected from 8:00 a.m. until 5:00 p.m.
Monday through Friday. A reasonable fee may be charged by EPA for
copying docket materials.
FOR FURTHER INFORMATION CONTACT: Christine M. Brunner, U.S. EPA, Fuels
and Energy Division, 2565 Plymouth Road, Ann Arbor, MI 48105.
Telephone: (313) 668-4287. To request copies of this document, contact
Delores Frank, U.S. EPA, Fuels and Energy Division, 2565 Plymouth Road,
Ann Arbor, MI 48105. Telephone: (313) 668-4295.
SUPPLEMENTARY INFORMATION:
I. Electronic Copies of Rulemaking Documents Through the Technology
Transfer Network Bulletin Board System (TTNBBS)
A copy of this notice is also available electronically on the EPA's
Office of Air Quality Planning and Standards (OAQPS) Technology
Transfer Network Bulletin Board System (TTNBBS). The service is free of
charge, except for the cost of the phone call. The TTNBBS can be
accessed with a dial-in phone line and a high-speed modem per the
following information:
TTN BBS: 919-541-5742
(1200-14400 bps, no parity, 8 data bits, 1 stop bit)
Voice Help-line: 919-541-5384
Accessible via Internet: TELNET ttnbbs.rtpnc.epa.gov
Off-line: Mondays from 8:00 AM to 12:00 Noon ET
A user who has not called TTN previously will first be required to
answer some basic informational questions for registration purposes.
After completing the registration process, proceed through the
following menu choices from the Top Menu to access information on this
rulemaking.
GATEWAY TO TTN TECHNICAL AREAS (Bulletin Boards)
OMS--Mobile Sources Information
Rulemaking and Reporting
<3> Fuels
<9> File Area #9 * * * Reformulated gasoline
At this point, the system will list all available files in the
chosen category in reverse chronological order with brief descriptions.
These files are compressed (i.e., ZIPed). Today's notice can be
identified by the following title: OXCPFRM.ZIP. To download this file,
type the instructions below and transfer according to the appropriate
software on your computer:
ownload, rotocol, xamine, ew, ist, or elp Selection
or to exit: D filename.zip
You will be given a list of transfer protocols from which you must
choose one that matches with the terminal software on your own
computer. The software should then be opened and directed to receive
the file using the same protocol. Programs and instructions for de-
archiving compressed files can be found via ystems Utilities from
the top menu, under rchivers/de-archivers. After getting the files
you want onto your computer, you can quit the TTNBBS with the oodbye
command. Please note that due to differences between the software used
to develop the document and the software into which the document may be
downloaded, changes in format, page length, etc., may occur.
II. Introduction
A. Background
As stated in the proposal (NPRM) to this rule (60 FR 52135, October
5, 1995), 40 CFR 80.41 contains the standards for certification under
the reformulated gasoline program. Paragraph (g) of section 80.41
specified that reformulated gasoline designated as VOC-controlled (i.e.
for sale during the summertime ozone season) must have no more than 2.7
wt% oxygen per gallon. The regulations further specified that if a
state notifies the Administrator that it wishes to have the oxygen
standard increased for VOC-controlled reformulated gasoline, a higher
cap of 3.5 wt% would be approved by the Administrator, provided that
there have been no occasions within the three preceding years when the
ozone ambient air quality standard was exceeded within any covered area
within the state. The requirements of this paragraph (g) apply to
reformulated gasoline certified under the Simple Model, which is
applicable until January 1, 1998.
In reexamining this reformulated gasoline provision, EPA determined
that the maximum oxygen content for VOC-controlled reformulated
gasoline generally was an unnecessary regulatory burden on gasoline and
oxygenate producers, and that the requirements for a state to choose a
higher oxygen level were also too rigid.
Therefore, EPA proposed to raise the maximum oxygen content of VOC-
controlled reformulated gasoline to a higher oxygen level than was
allowed by the regulation. Additionally, EPA proposed that upon request
of the Governor to the Administrator, the maximum oxygen content of
reformulated gasoline sold in that state would be capped at a lower
level on the basis of air quality concerns. These two changes would
make the maximum oxygen content provisions for VOC-controlled
reformulated gasoline similar to those for non-VOC-controlled
reformulated gasoline.
Today's action promulgates the provisions contained in the NPRM,
with the exception that the references to the maximum oxygen content
allowed under section 211(f) of the Act are deleted as unnecessary.
This deletion does not change the substantive effect of the regulation.
The maximum oxygen content allowed under section 211(f) continues to
apply to reformulated gasoline and does not need to be referenced in
this regulatory provision. There are a number of benefits to be gained
by these changes to the regulation. These benefits include the
potential for reduced burden on the states and industry, reduced cost
of compliance with the reformulated gasoline requirements, and reduced
costs to consumers. Discussion of the changes promulgated today,
comments received on the proposal, and EPA's responses to these
comments are presented below.
B. Final Rule
The maximum cap on oxygen content is deleted from section 80.41(g),
so that the maximum amount of oxygen allowed in reformulated as well as
other gasolines would be that allowed under section 211(f) of the Act
subject to the limits of the valid range for use of the Simple
Model.1 There is an exception to this general rule. Where a state
notifies the Administrator that the use of an oxygenate will interfere
with attainment or maintenance of an ambient air quality standard or
will contribute to an air quality problem, then the maximum amount of
oxygen shall not exceed 3.2 wt% oxygen from ethanol.2 The state
[[Page 12032]]
may request this maximum for either VOC-controlled or non-VOC-
controlled reformulated gasoline.
\1\ The maximum amount allowed under section 211(f) of the Act
is the amount that is substantially similar to gasoline used in the
motor vehicle certification process, or allowed under a waiver
granted under section 211(f)(4). In 1991, EPA issued an interpretive
rule increasing the maximum amount of oxygen that EPA believes is
allowed under the substantially similar criteria of section 211(f)--
from 2.0 to 2.7 wt% oxygen. See 56 FR 5352 (February 11, 1991). In
addition, the valid range of the Simple Model sets a maximum of 4.0
wt% oxygen. See 40 CFR 80.42(c).
\2\ The maximum content is phrased as a limit on the amount of
oxygen from ethanol because that is the only oxygenate that
currently may be blended lawfully above approximately 2.7 wt%
oxygen, under section 211(f) of the Act.
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This is in effect the same revision that EPA proposed. It revises
the current regulation in the following ways: (1) It treats VOC-
controlled and non-VOC-controlled reformulated gasoline the same, under
the Simple Model, as far as the maximum oxygen standard, (2) it deletes
the oxygen cap in the regulation except where a state notifies EPA of
air quality problems, (3) it revises the criteria for imposing an
oxygen cap on request from a state, and (4) it changes the oxygen cap
to 3.2 wt% oxygen from ethanol where a state requests a cap.
III. Summary of and Response to Comments
A. General
EPA received over 50 comments on this proposal. Over half of the
comments were from individual citizens supporting the proposal and
thanking EPA and the Administration for their continued efforts to
enhance ethanol's usage in the reformulated gasoline program. EPA
agrees that the use of ethanol in reformulated gasoline is an important
issue of public policy. From the remaining comments, the substantive
remarks applicable to this rulemaking are addressed here. Several
commenters also remarked on issues not related to this rulemaking, for
example, suggestions for other rules and other aspects of the
reformulated gasoline program they would like modified. These remarks
are not addressed here.
Several commenters that supported the rule indicated that EPA had
not addressed many of the benefits of higher oxygenate and/or
specifically ethanol use, such as reducing U.S. dependence on imported
oil; stabilizing greenhouse gas emissions; benefits if the oxygenate is
from a renewable feedstock; benefits to the rural economy; and
development of alternative energy sources.
EPA had proposed that today's rule would be effective 60 days after
publication in the Federal Register. However, commenters suggested
making the rule effective immediately since VOC-controlled reformulated
gasoline can be certified/used anytime prior to the beginning of the
ozone season and a delay in the effective date would disrupt marketing
plans and perpetuate the burden which EPA was attempting to reduce. EPA
agrees with the commenter and thus is making today's action effective
immediately upon signature of the Administrator.
B. Reformulated Gasoline Regulatory Negotiation
In developing the reformulated gasoline rulemaking, EPA
participated in a regulatory negotiation (RegNeg) with interested
parties. The result of this process was an agreement in principle (AIP)
which contained an outline of the proposed reformulated gasoline rules.
As a signatory to the AIP, EPA agreed to draft proposed rules
consistent with the AIP outline and to give serious consideration to
the outline in developing the final rule.
The AIP states that reformulated gasoline under the Simple Model
would be deemed to result in no increase in NOX emissions if it
contained no more than 2.1 wt% oxygen or 2.7 wt% oxygen solely from
MTBE. The AIP also states that other oxygenates may be approved at 2.7
wt% if no adverse NOX impacts can be shown. As discussed in the
NPRM, in the February 26, 1993 proposal (58 FR 11722) EPA proposed to
allow all oxygenates to be used up to a 2.7 wt% oxygen contribution. At
that point, EPA believed that increasing oxygen content to 3.5 wt%
might increase NOX emissions, so it limited use of the higher
oxygen content to those states which requested a higher oxygen content
and could provide supportive test data. In the December 1993 final rule
(59 FR 7716, February 16, 1994), EPA maintained the 2.7 wt% cap, but
allowed a state to request a higher cap of 3.5 wt% if it had had no
ozone exceedances for the previous three years.
Only a few commenters addressed this issue. One commenter stated
that during RegNeg, 2.7 wt% oxygen was deemed to not increase NOX
emissions. The commenter stated that that conclusion was subject to
reassessment, and thus it was appropriate to consider modifying that
portion of the rule at this time. Two other commenters, however, stated
that the proposal was a breach of RegNeg which specifically limited the
maximum summertime oxygen content. One commenter indicated they could
only support this change if all RegNeg participants approved.
EPA does not believe that today's rulemaking to increase the
maximum oxygen content of summertime reformulated gasoline is a breach
of the RegNeg agreement. EPA did follow the AIP by drafting proposed
rules consistent with the AIP outline and seriously considering the
outline when developing the final reformulated gasoline rule. In fact,
the 2.7 wt% summertime oxygen cap was part of that rule. In any case,
EPA's regulatory actions at this time, several years after the AIP,
must be based on a current exercise of discretion, taking into account
present facts and circumstances. For example, EPA's Complex Model, one
of the models used to certify reformulated gasoline, shows no increase
in NOX emissions with increased fuel oxygen content. Second, EPA
believes that other factors (such as increasing base gasoline levels
for sulfur and other fuel parameters in anticipation of lower levels in
the final gasoline blend due to dilution when oxygenate is added) will
not occur and thus will not increase NOX emissions when higher
oxygen contents are allowed. Additionally, today's rule simply modifies
the final reformulated gasoline rule which contained provisions (which
were not part of the AIP) allowing the higher oxygen content under
certain circumstances.
C. Substantially Similar
Today's rule allows all oxygenates to be used in summertime
reformulated gasoline (which is certified under the Simple Model) up to
the limits in oxygen and/or oxygenate content specified for that
oxygenate or combination of oxygenates under the substantially similar
requirements of section 211(f) of the Act, or up to the limits which
have been granted a waiver under that section, subject to the valid
range limits of the Simple Model. Realistically, because of compliance
requirements and oxygenate/gasoline economics, EPA expects only a few
oxygenates to be used in reformulated gasoline.
A few commenters expressed concern that raising the maximum oxygen
cap for all oxygenates to the highest allowable levels could
potentially have negative effects on vehicles. One commenter stated
that EPA should consider the American Automobile Manufacturer's
Association's (AAMA's) recommended oxygenate limits. AAMA's fuel
specifications (which also address other fuel components) are based on
automotive requirements for optimum performance and maximum durability.
In some cases, as with ethanol, the AAMA limits agree with the limits
specified or waivered under section 211(f), but for other oxygenates,
like isopropyl alcohol, they do not. Additionally, the commenter stated
that under AAMA's fuel specification, use of certain oxygenates, e.g.,
methanol, at waivered or substantially similar levels is undesirable.
Finally, one commenter stated that EPA should clarify specific
oxygenate/maximum oxygen content values.
Although EPA understands the intent of the AAMA fuel specification,
and the
[[Page 12033]]
desire to have the most optimum fuel for automotive use, today's rule
will not result in a fuel which is significantly different from fuels
already in the marketplace or which could be in the marketplace. This
rulemaking simply allows summertime reformulated gasoline to have a
slightly higher maximum oxygen content, under the Simple Model, than it
did last summer. Currently, all conventional gasoline and wintertime
reformulated gasoline, with the exception of California gasoline, could
contain oxygenates up to those levels specified or waivered under
section 211(f). The ``substantially similar'' or waivered limits of
section 211(f) apply to all gasoline in the country, conventional and
reformulated gasoline. Additionally, it would not be technically sound,
and could result in anti-competitive effects, to allow the
``substantially similar'' definitions to be valid for one fuel but not
for another. For these reasons, EPA is retaining the intent of its
proposal language on this aspect, namely that for summertime
reformulated gasoline the maximum oxygen content shall be the maximum
allowed under the provisions of section 211(f). This includes fuels
with oxygen/oxygenate contents deemed ``substantially similar'' under
211(f) and fuels which contain oxygen/oxygenates at levels which have
been waivered under 211(f).
EPA also proposed to increase the maximum oxygen content of non-
VOC-controlled reformulated gasoline from the current 3.5 wt% oxygen
(which was meant to be akin to 10 vol% ethanol) to the maximum allowed
under the section 211(f) ``substantially similar'' provision and any
waivers granted under that section. All comments received on this issue
supported this change.
Today's rulemaking does not change the maximum oxygen and/or
oxygenate contents allowed for the various oxygenates under the
``substantially similar'' and waiver provisions, and as a result these
provisions are not addressed here.
D. Environmental Impacts
Some comments supported the proposal as having no significant
environmental impact. One commenter stated that, assuming that this
proposal results primarily in increased ethanol use, ethanol production
is both energy-efficient and environmentally sound. Several other
commenters opposed the proposal based on expected environmental harm,
and questioned EPA's environmental assessment. One commenter stated
that it opposes the rule until EPA can demonstrate, with more
appropriate analyses, that no detrimental environmental impacts result.
These commenters were particularly concerned with increases in NOX
and VOC emissions. Their comments are discussed in more detail below.
One commenter questioned the use of models to estimate environmental
impact, asserting that it is scientifically dishonest to draw
conclusions from a scientific model, since model output is a
mathematical reflection of model input. This commenter felt that EPA
should draw its conclusions solely from measured data. One commenter
said that concerns about water and soil implications of increased corn
farming for ethanol production do not reflect the increasing use of
sustainable agricultural practices which save money and better protect
the environment.
EPA has examined the environmental impacts of modifying the oxygen
cap requirements under the Simple Model, and those impacts are expected
to be minimal. As will be discussed (section E), EPA stands by its use
of the Simple and Complex Models to estimate environmental impact, as
they are the basis of the reformulated gasoline program.
1. NOX Emissions Impacts
As stated in the NPRM, EPA has clearly determined that changing the
oxygen content of reformulated gasoline is unlikely to have any
negative impact on NOX emissions, regardless of the type of
oxygenate under consideration, for purposes of compliance with the no
NOX increase requirements for reformulated gasoline 3. In
addition, an increase in the maximum oxygen content is not expected to
increase NOX emissions from reformulated gasoline compared to a
gasoline with a lesser oxygen content when viewed from the perspective
of the entire in-use fleet.
\3\ Under section 211(k)(2), reformulated gasoline is not
allowed to increase NOX emissions from baseline vehicles when
compared to the statutory baseline gasoline.
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Some commenters disagree with EPA's determination that an increase
in the maximum oxygen content would not be expected to increase
NOX emissions. These commenters feel that EPA has not provided
adequate justification that environmental detriment will not occur, and
that EPA does not adequately justify the expected impact on NOX
emissions. One commenter pointed out that the Auto-Oil research studies
show increased NOX with increased oxygenate use, and even that all
data sets show the same or increased NOX emissions. Theoretically,
oxygenated fuels are used to reduce CO by enleaning the air/fuel
mixture and should therefore increase NOX emissions. Further, this
commenter pointed to EPA's 1989 Guidance, and other Agency studies,
which conclude that ethanol blends increase NOX.
The MOBILE model is EPA's best model available for predicting
emissions from the in-use fleet because it accounts for the current in-
use technology distribution as well as the mix of normal and high-
emitting vehicles, i.e., vehicles of different ages. EPA believes that
accounting for both normal-emitters and high-emitters is crucial in the
estimation of in-use emissions. The current MOBILE model shows no
increase in NOX emissions with increased fuel oxygen content.
EPA recognizes that much of the currently available data suggests
that increases in oxygen content will increase NOX emissions.
However, most of this data was collected on normal-emitting, properly
maintained vehicles representing a subset of the technologies available
in-use. EPA has concluded that robust conclusions concerning the in-use
fleet cannot be drawn from such data. Both the MOBILE model and the
Complex Model, which is essentially a major subset of the MOBILE model
because it represents 1990 technology, include emission estimates for
both normal-emitting and high-emitting vehicles, and thus may provide
more accurate estimates of the effects of oxygen on NOX. For
example, the high-emitter portion of the Complex Model indicates that
increases in oxygen content decrease NOX emissions. Such an effect
might be due to the cooler burn that oxygenates effect on combustion,
or a suppression of preignition by the high octane value of the
oxygenate. Regardless, a weighted representation of normal-emitter and
high-emitter effects in the Complex Model results in oxygen having
essentially no effect on NOX overall. The MOBILE model, which is
designed to represent the in-use distribution of vehicle technologies
and emission levels, concurs with the Complex Model in this respect.
Conversely, other commenters agreed that increased oxygenate use
would not result in increased NOX emissions. Assuming that ethanol
use would increase, one commenter stated that ethanol displaces other
gasoline components which have greater NOX impacts. Additionally,
as noted in the NPRM, increased E200 does increase NOX, but the
overall effect is decreased NOX. This commenter included data
which showed no statistically significant NOX emissions increase
from splash-blending ethanol to get 3.5 wt% oxygen. Another commenter
pointed out that preliminary data show that the
[[Page 12034]]
summer 1995 reformulated gasoline program reduced NOX emissions
somewhat. In general, this commenter believed that NOX emissions
will be lower and sulfur, olefins and aromatics will not increase
(supported by the 1995 data), but stated that this cannot be concluded
for all batches.
EPA has concluded, on the basis of results generated by the Complex
Model, that the use of greater levels of oxygen would not by itself
increase NOX emissions (although the associated higher levels of
oxygenates could theoretically increase emissions due to the
unpredictable impacts of dilution--as discussed below). As will be
discussed, use of the Complex Model in determining the emissions
impacts of reformulated gasoline is appropriate and correct. However,
EPA recognizes that, in-use, individual states may still have some
concerns about the impact of increased oxygen levels on NOX
emissions from the in-use fleet. EPA is retaining an option whereby
states could elect to maintain the currently promulgated lower maximum
oxygen content.
One commenter pointed out that a no NOX increase is specified
in the Clean Air Act. This commenter believes that oxygen use in
gasoline leads to increased NOX emissions and that this regulation
is in violation of the Act by allowing any oxygenation of reformulated
gasoline. This commenter feels that allowing 10% ethanol, which results
in the highest NOX increases, would seem to compound the
``marginally legal'' interpretation of the Act.
As stated above, EPA has determined that increased oxygen does not
result in increased NOX emissions when evaluated with the Complex
Model. Therefore this action in no way violates section 211(f) of the
Act.
2. VOC Emissions Impacts
Several commenters were opposed to the proposal to increase the
maximum oxygen content because it would result in increased summertime
VOCs, at a time when those emissions present the greatest problem. One
commenter pointed out that a result of this proposal could be to
displace MTBE with ethanol, increasing the market-share of ethanol-
containing reformulated gasoline and increasing VOC emissions in those
areas. Another commenter felt that EPA's argument that most of the VOC
reductions are due to RVP incorrectly suggests that the reactivity of
the VOC emissions has little to do with ozone formation. However, other
commenters agreed that, as long as there is no RVP allowance for 10%
ethanol blends, increases in evaporative VOC emissions should be
minimal. A final commenter felt that the proposal would result in
beneficial VOC impacts.
EPA continues to believe that increased maximum oxygen content is
unlikely to negatively affect VOC emissions, and could have slightly
positive impacts. Although ethanol does slightly increase the RVP of
gasoline to which it is added, there is no potential for an increase in
RVP in a VOC-controlled reformulated gasoline under the Simple Model
because the RVP specifications are not being changed. A fuel producer
would have to use other means to reduce RVP when ethanol is added.
Two commenters noted apparent inconsistencies in the assumption of
ethanol use and potential increases in evaporative emissions.
Specifically, commenters pointed out that in the December 1993 final
rule, EPA had stated that a 1 psi RVP allowance for ethanol blends
could forfeit all VOC emissions reductions of the reformulated gasoline
program. Yet, they say, in this proposal, EPA stated that ethanol
``slightly'' increases the RVP of gasoline to which it is added. They
suggest that EPA should correctly characterize the RVP impact.
The statements are not inconsistent. As stated above, while ethanol
does increase RVP if RVP is not otherwise controlled, the reformulated
gasoline standards limit RVP for all reformulated gasolines.
E. Complex Model
Several commenters thought EPA had inappropriately used the Complex
Model to estimate the impact of higher oxygen content on NOX
emissions from reformulated gasoline. They stated that the Complex
Model was designed for reformulated gasoline certification and that it
was not an air quality or emissions inventory model. Most of these
commenters stated that EPA's MOBILE model is the most appropriate tool
for forecasting emissions and demonstrating air quality impacts. Other
commenters said that the MOBILE model, the Complex Model and the CARB
Predictive Model should all be used in any evaluation of NOX
emissions impacts. One commenter said that neither the Complex Model
nor the CARB model is directly applicable to EPA's analysis regarding
this rulemaking.
The Complex Model is not an air quality or emissions inventory
model, and EPA did not propose using the Complex Model for such
purposes. Improved air quality is the purpose of the reformulated
gasoline program, and significant reductions in ozone-forming VOC
emissions and toxics emissions will be realized because of the program.
The MOBILE model is a valuable tool for estimating the air quality
impacts of fuels for an in-use fleet, as it includes a wide variety of
vehicle ages and technologies. The impact of Federal reformulated
gasoline (but not California Phase 2 reformulated gasoline at this
point) on in-use emissions can be estimated using the MOBILE model.
However, for certification purposes, the effects of the reformulated
gasoline program must be determined relative to 1990 technology
vehicles run on 1990 baseline gasoline. This rulemaking is aimed at
establishing the requirements for certification of gasoline as meeting
the reformulation requirements established under the CAA, including
compliance with the oxygen content and no NOX increase
requirements. For this reason and the reasons discussed in section D,
EPA believes that the Complex Model is the most appropriate tool for
estimating changes in NOX emissions due to this rulemaking, for
purposes of compliance with the no NOX increase requirement for
reformulated gasoline under section 211(k)(2) of the Act. EPA did
evaluate the air quality impacts of this rulemaking, which are
addressed in section D. As indicated there, both the Complex Model and
the MOBILE model show no increase in NOX emissions with increased
oxygen content.
EPA certifies fuels as meeting the reformulated gasoline
requirements on the basis of a comparison to 1990 technology vehicles.
Both the Simple and Complex Models are tools through which this
certification is carried out. There are no oxygen caps under the
Complex Model other than the upper limits for the valid range of the
model, set at 4.0 wt% oxygen. For reformulated gasoline, the Complex
Model results must show no increase in NOX emissions over
statutory baseline levels. As discussed, the Complex Model shows no
increase in NOX emissions when oxygen content is increased. EPA
has made and continues to make a variety of decisions, including
setting the Phase II reformulated gasoline standards, based on the
Complex Model, again, because that it is the basis for reformulated
gasoline certification.
Several commenters indicated that EPA's finding that increased
oxygen will not increase NOX emissions is due to statutory
constraints placed on the model and certain key assumptions. EPA agrees
that certain statutory requirements and certain assumptions have
affected the emission effects estimated by the Complex Model.
[[Page 12035]]
Commenters expressed concern about the size of the high-emitter
database and the fact that the Complex Model represents only a portion
of the in-use fleet, which could make it an inappropriate tool for
estimating emissions impacts of the overall fleet. EPA's conclusions
regarding oxygen effects on NOX are based on test data from 1986
and later closed-loop, adaptive-learning vehicles with 3-way or 2-way
plus oxidation catalysts (i.e., 1990 technology), and would apply to
much of the fleet. EPA acknowledges that the results of the Complex
Model do not automatically apply to the entire in-use fleet, but
nonetheless believes that it is not inappropriate, especially given the
agreement between the Complex Model and the MOBILE model with regard to
the impact of oxygen content on NOX emissions.
Several commenters indicated that, theoretically, due to air/fuel
enleanment and combustion theory, NOX emissions should increase
with increased oxygen content. EPA believes however, that NOX
emissions increases due to increased oxygen content would not
necessarily occur. The fundamental science behind closed-loop,
adaptive-learning designs (i.e., the 1990 technology contained in the
Complex Model) argues that enleanment due to oxygenate addition would
be offset by reduced air intake. Because of the offset enleanment
effects, NOX emissions will not necessarily increase with
increased oxygen content. The test data on which the Complex Model is
based supports this.
One commenter stated that numerous studies, including Auto-Oil
studies, have shown increased NOX emissions with increased fuel
oxygen content. EPA does not refute these studies--vehicle technologies
and ages certainly affect emissions results, and EPA recognizes that in
these instances, NOX increases were observed. However, as
discussed earlier in section D, the Complex Model, which is the basis
of EPA's analysis for this rulemaking, has both a normal-emitter
portion and a high-emitter portion. The effect of oxygen on NOX
emissions for these two emitter groups, when weighted, yields
essentially no negative change in NOX emissions with increased
oxygen content.
One commenter stated that the normal emitter part of the Complex
Model is consistent with theory but the high emitter part is not, and
therefore, overall, the model is incorrect. EPA does not believe that
simply because one part of the model ``disagrees'' with theory and
another part of the model ``agrees'' with theory that the model is
incorrect. Many factors affect the emission results predicted by the
Complex Model, and it is inappropriate to discount those results simply
because they do not agree with theory. The Complex Model was adopted
after rigorously analyzing a broad spectrum of empirical test data. The
commenters objections fail to show the invalidity of this test data or
the analysis leading to the Complex Model.
Unlike the Complex Model, the CARB Predictive Model, also a fuel
certification model, shows that NOX emissions increase with
increased fuel oxygen content. According to most commenters on this
issue, the difference in NOX predictions between the models is due
to differences in approach to model development. Commenters mentioned
that the CARB model contains more data, represents more of the in-use
fleet and differs in its treatment of high emitters. For these reasons,
commenters say, the CARB model is more appropriate for estimating
emissions impacts in California associated with oxygen changes. EPA
agrees that the difference in NOX predictions between the two
models is due to different approaches to model development. Factors
such as vehicle technologies, vehicle age, and quality control during
testing all affect predicted emissions results. Because of the manner
in which normal-emitting and high-emitting vehicles are included in the
Complex Model, EPA believes that the Complex Model is the more
appropriate tool for estimating NOX impacts due to fuel changes,
for certification of reformulated gasoline. Together with the MOBILE
model, the Complex Model is also appropriate for in-use evaluation
purposes, from a national perspective.
In contrast with most of the comments on this issue, one commenter
stated that EPA's suggestion that the Complex Model was not
representative of the in-use fleet is unfounded. The reformulated
gasoline program is meant to reduce ozone through VOC (and NOX)
emissions reductions. Based on the Complex Model, these reductions
should occur. EPA believes that the Complex Model and the MOBILE model
are sound tools for predicting the impact on in-use NOX emissions
from the regulatory change adopted today from the perspective of the
fleet nationwide. It may not be the most appropriate tool for
predicting local in-use emissions, however, given differences in local
fleets versus the fleet on which the Complex Model is based. That is
one of the reasons EPA is providing states with an option that would
lower the oxygen maximum to 3.2 wt % oxygen from ethanol.
F. Dilution
In the proposal, EPA stated that it expected no NOX increases
due to this rulemaking because (1) the Complex Model shows no increase
in NOX emissions with increased oxygen content, (2) the addition
of oxygenate to a base gasoline dilutes other fuel parameters which
overall should yield a net reduction in NOX emissions, and (3) EPA
does not expect fuel producers to offset the dilution effects, i.e., to
purposely take fuel parameters back toward their original value in the
base gasoline. Several commenters agreed with EPA. In fact one
commenter stated that the argument that dilution effects should result
in net decrease in NOX can be strengthened by reviewing California
data and the outstanding performance of reformulated gasoline during
the summer of 1995.
One commenter stated that the proposal relies heavily on
``expected'' fuel changes. Because these changes are not guaranteed,
the commenter stated that they should not be counted in estimating
NOX emissions. This commenter also stated that EPA does not allow
such latitude (i.e., the use of ``expected'' fuel changes) with state
implementation plans (SIPs) and should not take advantage of it in this
case. The focus of this rulemaking is determining what regulatory
controls, if any, are appropriate to implement the Act's requirement
that reformulated gasoline not increase NOX emissions compared to
baseline gasoline. In that context, expected fuel changes are quite
relevant. Fuel producers must determine for themselves the most cost-
effective means for complying with the reformulated gasoline
requirements. When complying under the Simple Model, which is all that
is affected by today's rulemaking, refiners must meet the Simple Model
RVP and toxics requirements, oxygen and benzene content requirements
and ensure that the finished gasoline and reformulated gasoline
blendstock for oxygenate blending, or RBOB, (plus oxygenate) they
produce will not exceed their baseline values for sulfur, olefins and
T90. The values of these latter three fuel parameters then, on average,
should be less than or equal to the baseline values, and reductions in
these values have been shown to reduce NOX emissions. It is
possible but highly unlikely that E200 could increase (aside from the
increase due to dilution), and no data to refute EPA's assumption on
this matter has been submitted. Thus EPA is highly confident that the
expected fuel changes will occur, on average, and that there will be no
net increase in NOX
[[Page 12036]]
emissions. An additional maximum cap on oxygen is not reasonably needed
to achieve this result.
It is not possible, nor necessary, for EPA to know exactly what
fuel changes each refiner will make, as long as the requirements of the
reformulated gasoline program are met. The overall premise of this rule
is that the Complex Model shows--even without the effects of other fuel
changes--no increase in NOX emissions with increased oxygen. Any
other fuel changes will either increase or decrease NOX emissions,
and EPA is simply saying that it believes, given the other requirements
of the program, that the net effect of these other fuel changes will be
to further reduce NOX. EPA's discussion of ``expected'' fuel
changes are based on refinery studies as well as discussions with the
industry, have been discussed in other works and rules related to the
reformulated gasoline program and have not been significantly refuted.
G. Ethanol Market Share
Several comments were received regarding how this change to the
reformulated gasoline regulation would impact ethanol use. Several felt
that this change would result in increased ethanol use. However, one
commenter felt that since EPA is not changing RVP standards for
reformulated gasoline, summer 10 vol % ethanol blends would be produced
only by using sub-RVP blendstock, which is in short supply.
Assuming that ethanol use would increase, commenters cited many
benefits that would be realized by this change. One commenter stated
that even a modest increase in the use of ethanol would provide
associated energy gains and environmental benefits. Another commenter
felt a potential effect of the change may be to shift ethanol use from
conventional areas, and most likely would reduce ethanol exports. Other
commenters noted that increased ethanol use would benefit rural America
by increasing grain production.
One commenter felt that an expanded market opportunity for ethanol
would not necessarily harm the domestic MTBE/methanol market. This
commenter pointed out that domestic MTBE is not able to meet
reformulated gasoline demand. As much as 895 million gallons of MTBE
could be imported to satisfy reformulated gasoline demand, and this
deficit is 30 times the potential demand this change will create for
ethanol. This commenter also pointed out that this change creates a
demand for ethanol which is only a fraction of that which would have
been created by the renewable oxygenate standard.
EPA recognizes that this change in the maximum oxygen content
allowed in reformulated gasoline may result in slightly increased
ethanol use. This increase in the ethanol market could well result in
the benefits these commenters have mentioned. However, today's action
does not guarantee an increase or decrease in marketshare for any
oxygenate. EPA today is simply removing a regulatory burden, the
current oxygen content cap. Ultimate use of any oxygenate, including
ethanol, will depend on the economic situation of each fuel producer.
H. Commingling
One commenter stated that the commingling concern discussed in the
proposal was exaggerated. However, many commenters on this issue
disagreed with EPA's comment that there may be a slight commingling
benefit due to this rule if (under an assumption of constant ethanol
volume) there are fewer gallons of reformulated gasoline at the 10 vol%
ethanol rather than more gallons at 7.8 vol%. Most believed that
summertime VOC emissions in nonattainment areas would increase, due to
commingling, as a result of this rule. Commenters said that if ethanol
use increases (or MTBE market share decreases) during the summer, there
will be more gallons of ethanol-containing reformulated gasoline, and
more instances of commingling. One commenter stated that commingling
effects are complex and dependent on a number of factors--oxygenate
market share, consumer purchase patterns, etc. This commenter stated
that EPA's analysis cannot justify a conclusion that commingling
impacts are improved or worsened by the proposed rule. Another
commenter stated that EPA should evaluate the persistence of the
commingling RVP boost. This commenter stated that the persistence will
be increased since there will be a higher concentration of ethanol in
the tank.
EPA agrees with the commenter's statement that a reduction or
increase in commingling impacts cannot be concluded. In the proposal,
EPA discussed some scenarios under which the impact of today's rule
could increase or decrease the commingling effects. However, as
indicated in the Regulatory Impact Analysis (RIA) to the December 1993
final rule, commingling is affected by several factors including
ethanol marketshare and ethanol content. This rulemaking may result in
changes in ethanol marketshare in reformulated gasoline and/or
conventional gasoline areas, or in changes in the ethanol content of
reformulated gasoline and/or conventional gasoline, compared to last
year. Depending on whether such changes occur, and their magnitude, it
is possible that VOC emissions could increase or decrease, due to
commingling, as a result of this rule. EPA believes, however, that it
would be difficult to quantify or compare the commingling impact of
ethanol at 7.8 vol% (as in 1995) to the 10 vol% which is allowed by
today's action.
Several commenters indicated that EPA appeared to be contradicting
itself not only in the proposal, but in conflict with earlier work not
directly related to this rulemaking. For instance, one commenter stated
that EPA was inconsistent with its expected change (or no change) in
ethanol use--``should contribute to ethanol increase'' and ``* * *
total ethanol volume remains the same''. EPA does not agree with
commenters in this regard. EPA cannot be assured of any one outcome,
e.g., whether ethanol marketshare increases or decreases, whether more
ethanol is used in fewer gallons of reformulated gasoline compared to
last year, or whether ethanol volumes will shift from conventional to
reformulated gasoline areas or from one reformulated gasoline area to
another. These factors will be resolved in the marketplace after
promulgation of this rule. The language contained in the proposal
represented EPA's thoughts about possible outcomes for given scenarios.
One commenter mentioned that in the Renewable Oxygenate proposal,
EPA excluded ethanol as a renewable oxygenate when used in VOC-
controlled reformulated gasoline because the commingling VOC increase
were unacceptable. In that proposal, commingling VOC increases were
deemed unacceptable because the increased use of ethanol could approach
a 30% marketshare. An ethanol marketshare of that magnitude would
certainly have unacceptable increases in VOC emissions due to
commingling. However, although the effect of today's action on
oxygenate marketshare cannot be definitively determined, it almost
certainly will not approach the 30% level (for ethanol) discussed in
the Renewable Oxygenate proposal. For this reason, EPA's commingling
concerns regarding that proposal are not applicable to today's
rulemaking.
A few commenters were concerned that any commingling benefits would
occur in attainment areas--where it's not needed. Again, as stated
above, EPA can only estimate the commingling impact of today's rule.
Marketplace dynamics will determine, among other things, whether more
ethanol is produced, whether it is used in
[[Page 12037]]
conventional or reformulated gasoline areas, and whether ethanol
volumes shift geographically. One commenter expressed concern that by
referring to a national basis, EPA has lost sight of the specificity of
reformulated gasoline to nonattainment areas. EPA has not lost sight of
the area specificity of the reformulated gasoline program but again was
attempting to estimate potential impacts of today's rule.
I. Energy Impacts
One commenter stated that EPA was underestimating the potential
energy benefits, including benefits for increased displacement of
gasoline and imported MTBE (energy security, trade balance). A few
commenters questioned the DOE study mentioned in the proposal--one
mentioned that the cited study was draft--and provided a copy of the
final report which had a more positive energy balance attributable to
ethanol production. It showed that ethanol production is 25% more
energy efficient than gasoline. Another commenter indicated that recent
USDA studies have shown a positive energy balance for the production of
ethanol.
EPA agrees that use of ethanol has some positive energy
implications, depending on various circumstances, including whether it
is used in VOC-controlled or non-VOC-controlled reformulated gasoline.
However, because the additional ethanol use allowed by today's rule
will be only be roughly 2.2 vol% (per gallon) over 1995 levels, EPA
does not expect the energy impacts of the overall reformulated gasoline
program to change significantly due to this rulemaking.
J. Economic Impacts
As stated in the NPRM, the largest part of the cost associated with
Phase I reformulated gasoline is the oxygen content required by the
Act. Lifting the oxygen cap may provide an economic advantage by
allowing some refiners to use ethanol during the ozone season when they
would not otherwise be able to do so. However, as discussed in the
NPRM, refiners must consider a variety of factors when selecting an
oxygenate for reformulated gasoline (or any other fuel).
Several commenters supported EPA's economic assessment of the
impact of today's action. Some suggested that further economic benefit
may occur due to an expanded industrial base and additional jobs from
increased domestic oxygenate production. Additional positive economic
impacts suggested by commenters include reduced consumer reformulated
gasoline cost and increased farm income. One commenter felt the higher
oxygen cap would allow refiners to maximize the displacement value of
ethanol, reducing the cost of RBOB and ethanol-containing reformulated
gasoline. This commenter also stated that since ethanol costs are lower
than MTBE costs, additional use of ethanol would increase market
penetration of ethanol and provide greater savings for consumers. One
commenter explained that the current cap denies refiners the dilution
benefits of higher ethanol blends to meet the reformulated gasoline
toxics requirements cost-effectively. This commenter indicated that to
use ethanol now, refiners must produce a blendstock lower in RVP and
aromatics.
One commenter was concerned that EPA's economic assessment ignored
the effect of this rule on alkylates. This commenter stated that both
alkylates and oxygenates (ethers) use olefins as a feedstock, are high
octane blending components, and can contribute to emissions reductions.
If olefin feedstocks are limited, by maximizing oxygenates, alkylate
feedstocks will also be limited, therefore limiting the emissions
benefits of alkylates. A refiner's lowest cost option will likely be to
substitute oxygenates for alkylates, leaving olefins and aromatics in
gasoline. According to this commenter, the California reformulated
gasoline program regulates out olefins and aromatics by increasing
alkylates and oxygenates while the Federal reformulated gasoline
program has shifted gasoline from alkylates to oxygenates with
questionable improvement in emissions. Further, this commenter states
that by replacing alkylates with oxygenates, consumers will be paying
substantially more per mile driven, since alkylates increase fuel
economy. This commenter concludes that EPA neglected these issues in
its economic analysis and only superficially addressed economic burden,
without regard for actual impact on consumers. This commenter suggests
that the Agency review what has actually occurred in the marketplace,
and consider the economic burden on consumers.
EPA did not intend to evaluate the impact of oxygenate as a whole,
but merely the impact of slightly increased oxygenate use, as this
rulemaking seeks only to increase the maximum allowable oxygen content,
one limited aspect of the oxygen content requirements in the
reformulated gasoline program. EPA believes increasing the maximum
allowable oxygen content increases flexibility in oxygenate choice for
refiners, which can only be economically beneficial for fuel producers
and consumers. As most of this increased oxygenate use is likely to be
ethanol, this provision will have little impact on the refinery trade-
off between alkylate and oxygenate production.
K. Compliance Burden
As stated in the NPRM, EPA expects today's action will reduce the
regulatory burden on gasoline and oxygenate producers, and will
simplify the requirements for a state to choose a different maximum
oxygen level. Several commenters agreed that this change in the
regulation would reduce the burden on fuel producers and on the states.
This change would provide increased flexibility in meeting the
reformulated gasoline requirements and maximize the efficiency of
oxygenate use. One commenter pointed out that it would also reduce the
burden for blenders, simplifying logistics and inventory management by
eliminating the need to change ethanol blending volumes on a seasonal
basis. However, some commenters felt that this change could increase
the burden on the states by requiring them to request a lower cap.
These commenters felt that estimating a reduced burden on the states
assumes that the states want to increase oxygenates. Finally, one
commenter felt that when proposing these changes, EPA must address
actual or potential regulatory conflicts between technical changes and
fuel changes, and not focus solely on attempts to reduce administrative
burden.
EPA continues to believe that this regulatory change in the maximum
oxygen content of reformulated gasoline will reduce the regulatory
burden on gasoline and oxygenate producers and blenders, and on the
states. Even if the majority of states prefer to keep the lower oxygen
cap, the requirements for doing so are minimal. The Complex Model has
revealed that there is no technical reason to limit the oxygen content
of gasoline certified as reformulated gasoline, hence the reduction in
burden is justified.
L. California
Several commenters felt that California should be exempt from the
requirements of this regulation for a variety of environmental and
regulatory reasons. First, California has unique air quality problems.
One commenter stated that the higher maximum oxygen content allowed
under today's action could have a detrimental effect on California's
ability to meet the National Ambient Air Quality Standards (NAAQS).
Additionally, California retains its authority to regulate fuels.
[[Page 12038]]
See section 211(c)(4)(B) of the CAA. Under this authority, California
has limited the oxygen content of gasoline sold in the state to 2.7
wt%. Commenters felt that, for these reasons, California should not be
required to go through the bureaucratic opt-out hurdle and should be
specifically exempted from the rule.
EPA recognizes California's unique environmental problems and
regulatory authority. While the Federal standards for reformulated and
conventional gasoline do apply in California, if California has imposed
its own more stringent regulations, as it has regarding oxygen content,
then fuel producers must abide by California's more stringent
standards. Thus, because California's oxygen maximum is more stringent
than EPA's, that maximum would be the controlling maximum in the state,
and the Governor of California would not be required to request a lower
oxygen maximum.
M. State Requests for Lower Oxygen Maximum (Cap)
In the NPRM, EPA proposed that the maximum oxygen content of
reformulated gasoline sold in a state will be limited to a lower level
upon the request of the state on the basis of local air quality
concerns. EPA expects that such a request would come from the Governor
of the state or their authorized representative. To obtain the lower
maximum oxygen content, the state must notify the Administrator that
the use of an oxygenate at higher levels would interfere with
attainment or maintenance of an ambient air quality standard, or will
contribute to an air quality problem. EPA proposed that the lower
oxygen cap would become effective 30 days after the Administrator
announced the lower standard in the Federal Register.
Some commenters had concerns regarding the procedures and
requirements for the lowering of the maximum oxygen content by the
Governor. One commenter stated that the EPA must include notice and
comment rulemaking procedures for any change to an reformulated
gasoline rule, per section 307(d)(1), including states requesting a
lower cap. EPA disagrees with this comment. EPA does not agree that a
separate rulemaking must be conducted in response to each state's
request for a lower oxygen maximum. Through this rulemaking, EPA is
establishing a petition-based process that will address, on a case-by-
case basis, future individual state requests for a lower oxygen maximum
standard under the Simple Model. The regulations establish a clear and
objective criteria for EPA to apply in these future non-rulemaking,
adjudication actions. These criteria specify that a state's
notification to the Administrator must include a notification that the
use of an oxygenate will interfere with attainment or maintenance of an
ambient air quality standard or will contribute to an air quality
problem. This application of regulatory criteria on a case-by-case
basis to future individual situations does not require notice and
comment rulemaking, either under section 307(d) of the Clean Air Act or
the Administrative Procedure Act.
It is not uncommon for the Agency to establish such a petition-
based process within its regulations as a way to apply the criteria
established in a regulation to a wide variety of individual cases. The
reformulated gasoline regulations, for example, include a petition
process for approval of individual baseline, augmentations of the
Complex Model, exemptions, alternative test procedures, and the like.
EPA believes that approach is most appropriate here as well, as it will
allow for expeditious and consistent Agency action on the individual
request presented by states.
The provision allowing a Governor to request a lower maximum oxygen
content is the same as allowed for non-VOC-controlled reformulated
gasoline in the December 1993 rule. No notice and comment procedures
were specified in that situation, and similarly, none are required
under today's rulemaking. This commenter also objected to the proposed
30 days from publication (in the Federal Register) effective date for
the lower cap. This commenter felt that refiners would need at least 90
days to sell off stocks of 10 vol% ethanol reformulated gasoline.
Another commenter supported the states rights to have a lower cap, but
suggested that it become effective in 60 days rather than 30 days. A
third commenter felt that as much as 6 months would be needed before a
new, lower oxygen maximum took effect. A final commenter suggested that
if a request would take effect 30 days after publication, the
announcement should be published within 15 days of EPA's receipt of the
request. These timing concerns were supported by another commenter who
could not support allowing states to impose different oxygen caps,
suggesting that this could strain gasoline distribution bulk storage
capacity.
EPA agrees with commenters that 30 days may be too short a
transition for fuel producers. Therefore the period has been extended
to 60 days. A longer extension would not be practical, since this
change only applies to the Simple Model during the summer seasons of
1996 and 1997. Based upon information previously supplied to the
Agency,4 EPA believes that 60 days will be sufficient to use the
higher-oxygen content reformulated gasoline, thus minimizing storage
and distribution problems. While this provision could potentially add
another layer of fuel distinction to the reformulated gasoline program,
the impact is expected to be small, primarily because the use of
specific oxygenates tends to occur in geographic pockets. Use of
ethanol (in reformulated gasoline) for instance, is prevalent in
certain areas of the country and is very limited in other areas. Those
states where it is widely used are not likely to request a lower oxygen
maximum, because in those states, ethanol likely provides significant
economic benefits. In states which request a lower maximum, it is
likely that ethanol use in that state has always been minimal. For
clarification purposes, states are not allowed to choose any lower
maximum oxygen content. The lower oxygen maximum would be 3.2 wt%
oxygen for ethanol for all cases where a lower maximum is requested by
a state.
\4\ U.S. EPA, ``Final Regulatory Impact Analysis and Summary and
Analysis of Comment For: Renewable Oxygenate Requirement for
Reformulated Gasoline,'' June 29, 1994.
---------------------------------------------------------------------------
Comments were mixed regarding the requirements which states must
fulfill when requesting the lower oxygen maximum. One commenter stated
that EPA needed to verify in the final rule that a state would merely
have to notify EPA of its intent to have a lower cap. Those commenters
opposed to allowing states to request a lower maximum oxygen cap felt
that a state should be required to demonstrate ``to the satisfaction of
the Administrator'' that unique localized circumstances exist which
require the lower oxygen. According to these commenters, states should
be required to include specific modeling and test data.
Another commenter felt that states should be allowed to use models
more appropriate to their region (than the Complex Model) to make
demonstrations for the lower oxygen maximum.
EPA believes that each state should retain the greatest flexibility
in addressing local concerns over increased oxygenate use. This will
minimize the risk that increased oxygenate use will interfere with
local air quality problems. Thus, EPA is retaining its proposed
language on this issue. This provisions will maintain
[[Page 12039]]
EPA's intent of increased flexibility and reduced burden for the
states, as well as other parties which may benefit by today's action.
Several commenters questioned the need for a lower cap at all.
These commenters felt that EPA's technical findings on the air quality
effects of higher ethanol reformulated gasoline blends shows no adverse
impact and are technically sound. Additionally, these commenters felt
that many stakeholders have participated in the research, and the
conclusions should therefore be difficult to challenge. While EPA is
confident of its technical findings, it recognizes that general
modelling will not apply to all regions of the country, and that there
may exist unique regions that may be negatively impacted by the
increased oxygen content. Therefore the option of requesting the lower
standard is appropriate.
Finally, some commenters were concerned that a state's request for
a lower maximum oxygen content be to control average oxygen content,
and not to discriminate against a particular oxygenate. They did not
want the lower cap to be a marketplace barrier to ethanol. States must
request a lower maximum oxygen content based on air quality concerns.
Regardless of which oxygen maximum a state has, the reformulated
gasoline program is neutral with respect to the type of oxygenate used
to satisfy the oxygen requirement.
N. Performance
In the proposal, EPA did not address potential engine or vehicle
performance problems that might occur as a result of this rulemaking,
primarily because none attributable solely to this rulemaking are
expected. Although this rule will essentially allow a slightly higher
ethanol content in summertime reformulated gasoline than was allowed
last summer, the increase will not result in gasoline ethanol contents
which are greater than those currently in the marketplace in
conventional gasoline and wintertime reformulated gasoline.
Additionally, if a refiner was determining compliance based on the
Complex Model, he could have produced reformulated gasoline containing
10 vol% ethanol last summer. Thus, since this rulemaking does not allow
a significantly different fuel into the marketplace, no performance
problems are expected, and thus the issue was not addressed in the
proposal. A few comments were, however, received on this issue.
One commenter expressed concern that an increase in allowable
ethanol content will increase compatibility problems for consumer
vehicles, resulting in higher maintenance costs. This commenter also
stated that truck mixing, typically how ethanol blends are produced,
can be insufficient--stratification can occur with one layer having a
higher (than 10 vol%) alcohol content. Although it is possible that
fuels containing greater than 10 vol% ethanol could result in vehicle
or engine performance problems, and that truck mixing could result in a
non-complying fuel, such concerns are not directly or solely applicable
to this rulemaking. As discussed above, the maximum oxygen content of
summertime reformulated gasoline allowed by today's rule is limited to
the maximum ethanol content allowed under section 211(f), namely 10
vol%. The potential performance and mixing problems cited could occur
with any gasoline containing up to the maximum amount of ethanol
allowed under section 211(f).
Another commenter expressed concern about the impact of this
regulation on small engines, particularly nonroad engines. This
commenter stated that EPA had not considered the effects of this
rulemaking on small engines. The commenter was concerned that increased
oxygenates would lead to deterioration in the condition and performance
of small two-cycle engines, and cited several potential performance
problems. The performance problems included vapor lock; warm start;
increased fuel consumption; deposition problems; separation of mixing
oil; swelling of rubber parts; corrosion; extraction of rubber material
and deposition at other locations. Although the commenter claimed that
some of these problems had occurred recently in tests with 10 vol%
ethanol blends, no data was provided to support this claim. The
commenter noted that with present levels of allowable oxygenates, some
performance problems have been noted and was concerned that increasing
the allowed level would cause more serious performance problems. Of
particular concern were enleanment-related problems which can occur
with oxygenated fuels. As stated by the commenter, small engines
without oxygen sensors cannot compensate for changing oxygen levels.
EPA understands the concerns expressed by this commenter regarding
oxygenated fuels and small, particularly nonroad, engines. EPA
evaluated the impact of oxygenated fuels with regard to potential
performance and other related problems in its April 1995 ``Technical
Overview of the Effects of Reformulated Gasoline on Automotive and Non-
Automotive Engine Performance'' (EPA420-R-95-001) and concluded that
``Reformulated gasolines are expected to have little or no influence on
the incidence of many engine performance concerns * * *.'' Regarding
enleanment-related problems, EPA did state that, as with any oxygenated
fuel, minor adjustments to the fuel intake system may be required to
compensate for an enleanment effect. Nonetheless, as stated before,
since today's rulemaking does not result in a fuel which is
significantly different than other oxygenated fuels currently
available, EPA does not expect new or unique performance problems, for
either automotive or non-automotive engines, due to the higher oxygen
content allowed by today's action.
This same commenter also stated that EPA had not considered the
impact of increased oxygenate levels on other EPA rulemakings involving
small engine technology and emission levels. The commenter stated that
several regulatory programs for small nonroad engines were in the
development process, e.g., Phase 2 exhaust emission regulations for
small gasoline engines. These programs may require significant changes
in technology, and today's rulemaking may undermine the purpose and
effect of those regulatory programs and create regulatory conflict
between fuel and technology changes.
As stated earlier, EPA did not address potential performance
problems in the proposal to today's FRM because none were expected. The
fuel changes that might occur as a result of today's rule will not
create a significantly different fuel than is already in commerce. In
any case, today's regulatory changes only apply under the Simple Model
which may not be used to certify reformulated gasoline after December
31, 1997. EPA has reviewed the upcoming nonroad engine regulations.
Phase 1 of the nonroad regulatory program was promulgated on July 3,
1995 (60 FR 34582), and the program takes effect in 1997. Engine
certification began about January 1996. Because the fuels allowed under
today's rule are not significantly different than current fuels, EPA
does not believe that engine design changes would have occurred for
engines designed to meet the Phase 1 nonroad regulations. Additionally,
the final Phase 2 nonroad regulations will not take effect until some
model years after 1997. Today's rulemaking is therefore not expected to
affect compliance under either Phase 1 or 2 of this nonroad program.
The commenter also expressed concern about the possible increased
use of methanol, particularly with regard to material deterioration and
phase separation. Methanol use in
[[Page 12040]]
reformulated gasoline or any other gasoline is limited to those
methanol blends which have received a waiver under section 211(f).
Today's rulemaking does not change this requirement in any way.
O. Alternatives
In the notice of proposed rulemaking, EPA requested comment on two
alternatives to the proposal. The first alternative was to remove the
oxygen cap entirely, allowing up to the maximum oxygen content
permitted under section 211(f), (including up to 10 vol% ethanol,
roughly 3.5-4.0 wt% oxygen, or 15 vol% MTBE, roughly 2.7--3.2 wt%
oxygen), year-round for both VOC- and non-VOC-controlled reformulated
gasoline. Under this option, the regulations would not limit the oxygen
content of reformulated gasoline even if a state notifies EPA of the
environmental reasons for such a limit.
The comments received on this first alternative were mixed. One
commenter opposed the alternative because they felt it eliminated
flexibility for the states in meeting their air quality needs. In
addition, the commenter stated that this alternative plan could create
uncertainty in the marketplace for areas with programs which currently
limit reformulated gasoline's oxygen content. Two other commenters
supported this alternative to remove the oxygen cap entirely, and not
allow states to restore the cap simply by notifying the Agency. They
felt this approach would provide incentives to use ethanol in non-
traditional markets, such as the East Coast. A final commenter stated
that the proposal was preferable to either of the alternatives
suggested by EPA.
The second alternative presented by EPA in the NPRM would maintain
the oxygen cap at 2.7 wt% in the summertime, but allow states to
request a higher maximum oxygen content, up to the maximum allowed
under section 211(f). Currently states may request a higher cap, but
must show that no ozone exceedances had occurred in a covered area
during the previous three years. This alternative would remove the ``no
ozone exceedances'' requirement.
This alternative was not opposed by commenters, though it was felt
that the proposal was the better option. Those supporting this second
alternative felt it would be far less disruptive to the reformulated
gasoline program than the first alternative would be.
EPA is proceeding with the original proposal, and did not choose to
implement either of these alternatives. EPA believes it is important to
maintain flexibility for the states in meeting their air quality goals,
and thus does not desire to implement the first alternative. Since
there was little support for the second alternative, and since it does
less to accomplish the goals of the proposal, EPA has also rejected the
second alternative.
IV. Compliance With the Regulatory Flexibility Act
The Regulatory Flexibility Act of 1980 requires federal agencies to
examine the effects of their regulations and to identify any
significant adverse impacts of those regulations on a substantial
number of small entities. Pursuant to section 605(b) of the Regulatory
Flexibility Act, 5 U.S.C. 605(b), the Administrator certifies that this
rule will not have a significant economic impact on a substantial
number of small entities. In fact, today's proposals are designed to
remove overly burdensome regulations and make it easier for refiners to
use ethanol in reformulated gasoline, and thus to ensure market access
for ethanol in reformulated gasoline.
V. Administrative Designation
Pursuant to 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 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.
Pursuant to the terms of Executive Order 12866, it has been
determined that this notice of proposed rulemaking is not a
``significant regulatory action''.
VI. Paperwork Reduction Act
The Paperwork Reduction Act of 1980, 44 U.S.C. 3501 et seq., and
implementing regulations, 5 CFR Part 1320, do not apply to this action
as it does not involve the collection of information as defined
therein.
VII. Unfunded Mandates Act
Under section 202 of the Unfunded Mandates Reform Act of 1995
(``Unfunded Mandates Act''), signed into law on March 22, 1995, EPA
must prepare a budgetary impact statement to accompany any proposed or
final rule that includes a Federal mandate that may result in
expenditure by state, local, and tribal governments, in the aggregate;
or by the private sector, of $100 million or more. Under Section 205,
EPA must select the most cost-effective and least burdensome
alternative that achieves the objectives of the rule and is consistent
with statutory requirements. Section 203 requires EPA to establish a
plan for informing and advising any small governments that may be
significantly or uniquely impacted by the rule.
EPA has determined that the action proposed today does not include
a Federal mandate that may result in estimated costs of $100 million or
more to either state, local or tribal governments in the aggregate, or
to the private sector. This action has the net effect of reducing
burden of the reformulated gasoline program on regulated entities, as
well as the states. Therefore, the requirements of the Unfunded
Mandates Act do not apply to this action.
VIII. Statutory Authority
The statutory authority for the actions proposed today is granted
to EPA by Sections 211(c), (k) and 301 of the Clean Air Act, as
amended; 42 U.S.C. 7545(c),(k), and 7601.
List of Subjects in 40 CFR Part 80
Environmental protection, Air pollution control, Fuel additives,
Gasoline, Motor vehicle pollution, Reporting and recordkeeping
requirements.
Dated: March 18, 1996.
Carol M. Browner,
Administrator.
For the reasons set out 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 80.41 is amended by revising paragraph (g) to read as
follows:
[[Page 12041]]
Sec. 80.41 Standards and requirements for compliance.
* * * * *
(g) Oxygen maximum standard.
(1) The per-gallon standard for maximum oxygen content, which
applies to reformulated gasoline subject to the simple model per-gallon
or average standards, is as follows:
(i) Oxygen content shall not exceed 3.2 percent by weight from
ethanol within the boundaries of any state if the state notifies the
Administrator that the use of an oxygenate will interfere with
attainment or maintenance of an ambient air quality standard or will
contribute to an air quality problem.
(ii) A state may request the standard specified in paragraph
(g)(1)(i) of this section separately for reformulated gasoline
designated as VOC-controlled and reformulated gasoline not designated
as VOC-controlled.
(2) The standard in paragraph (g)(1)(i) of this section shall apply
60 days after the Administrator publishes a notice in the Federal
Register announcing such a standard.
* * * * *
[FR Doc. 96-7162 Filed 3-22-96; 8:45 am]
BILLING CODE 6560-50-P
