[Federal Register Volume 59, Number 96 (Thursday, May 19, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-12144]
[[Page Unknown]]
[Federal Register: May 19, 1994]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 80
[FRL-4885-9]
Commonwealth of the Northern Mariana Islands; Petition for
Exemption from the Diesel Fuel Sulfur Requirement
AGENCY: Environmental Protection Agency (EPA).
ACTION: Notice of direct final decision.
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SUMMARY: On August 31, 1993, the Governor of the Commonwealth of the
Northern Mariana Islands (CNMI) submitted a petition requesting that
the Northern Mariana Islands, a commonwealth of the United States, be
considered for an exemption from the sulfur content requirement for
motor vehicle diesel fuel, as specified in section 211(i) of the Clean
Air Act, as amended (Act). This action is a direct final decision that
grants an exemption to CNMI from the diesel fuel sulfur content
requirement of section 211(i) and related provisions in section 211(g).
The exemption is based on EPA's finding that it is unreasonable to
require persons in CNMI to comply with the sulfur content requirement
due to the islands' unique geographical, meteorological and economic
factors, as well as other significant local factors. CNMI did not
request an exemption from the minimum cetane index of 40.
This action is being taken without prior proposal because EPA
believes that this final decision is noncontroversial and because the
effect of this rulemaking is limited to CNMI.
DATES: This action will be effective on July 18, 1994 unless notice is
received by June 20, 1994 that someone wishes to submit adverse or
critical comments. If notice of intent to submit adverse comments is
received, EPA will publish in the Federal Register timely notice
withdrawing this action and a subsequent action requesting comment on
CNMI's petition. Please direct all correspondence to the addresses
shown below.
ADDRESSES: Comments or notice of intent to submit adverse or critical
comments should be submitted (in duplicate if possible) to both dockets
with a copy forwarded to:
Ms. Mary T. Smith, Director, Field Operations and Support Division
(6406J), U.S. Environmental Protection Agency, 401 M Street SW.,
Washington, DC 20460. As provided in 40 CFR part 2, a reasonable fee
may be charged for copying services.
Copies of information relevant to this petition are available for
inspection in public docket A-93-41 at the Air Docket (LE-131) of the
EPA, room M-1500, 401 M Street SW., Washington, DC 20460, (202) 260-
7548, between the hours of 8:30 a.m. to noon and 1:30 p.m. to 3:30 p.m.
on Monday through Friday. A duplicate public docket, R9-NM-93-1, has
been established at USEPA Region IX, 75 Hawthorne Street, San
Francisco, CA 94105, (415) 744-1224, and is available between the hours
of 8 a.m. to 12 p.m. and 1 p.m. to 5 p.m. on Monday through Friday.
FOR FURTHER INFORMATION CONTACT: Ms. Whitney Trulove-Cranor,
Environmental Protection Specialist, Field Operations and Support
Division (6406J), 401 M Street SW., Washington, DC 20460, (202) 233-
9036.
SUPPLEMENTARY INFORMATION:
I. Introduction
This document describes EPA's action to approve as a direct final
decision CNMI's request for exemption from the diesel sulfur content
requirement of section 211 of the Act and those related sections of
EPA's motor vehicle diesel fuel regulations (40 CFR part 80). The
remainder of this document is divided into eight parts. Section II
provides the background for this action. Section III summarizes the
contents of the petition by the Governor of CNMI. Section IV discusses
other relevant issues regarding this decision. Section V presents EPA's
proposed final action and underlying rationale. Finally, sections VI
through IX address EPA's statutory authority, regulatory designation
and the economic impacts of this decision.
II. Background
Section 211(i)(1) of the Act makes it unlawful, effective October
1, 1993, for any person to manufacture, sell, supply, offer for sale or
supply, dispense, transport, or introduce into commerce motor vehicle
diesel fuel which contains a concentration of sulfur in excess of 0.05
percent (by weight), or which fails to meet a cetane index minimum of
40 (or, alternatively, contains more than 35 percent aromatics).
Section 211(g)(2) makes it unlawful, effective October 1, 1993, for any
person to introduce or cause or allow the introduction into any motor
vehicle of diesel fuel which such person knows or should know contains
a concentration of sulfur in excess of the standard or fails to meet
the cetane index minimum. Although CNMI's petition did not specifically
request an exemption from section 211(g)(2) it is reasonable to read
the petition as including such a request. Section 211(i)(3) establishes
the sulfur content for fuel used in the certification of heavy-duty
diesel vehicles and engines. Section 211(i)(4) requires the
Administrator to take final action on any petition filed under section
3251, which seeks exemption from the requirements of section
211(i), within 12 months of the date of such petition.
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\1\Section 211(i)(4) mistakenly refers to exemptions under
section 324 of the Act (``Vapor Recovery for Small Business
Marketers of Petroleum Products''), while the proper reference is to
section 325. Congress clearly intended to refer to section 325, as
shown by the language used in section 211(i)(4), and the United
States Code citation used in section 806 of the Clean Air Act
Amendments of 1990, Public Law No. 101-549. Section 806 of the
Amendments, which added paragraph i to section 211 of the Act, used
42 U.S.C. 7625-1 as the United States Code designation for section
324. This is the proper designation for section 325 of the Act. Also
see 136 Cong. Rec. S17236 (daily ed. October 26, 1990) (statement of
Sen. Murkowski).
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Section 325 of the Act provides that upon application by the
Governor of Guam, American Samoa, the Virgin Islands, or the
Commonwealth of the Northern Mariana Islands, the Administrator may
exempt any person or source in such territory from various requirements
of the Act, including sections 211(i) and (g). An exemption may be
granted if the Administrator finds that compliance with such
requirements is not feasible or is unreasonable due to unique
geographical, meteorological, or economic factors of such territory, or
other local factors as the Administrator deems significant.
III. Petition for Exemption
On August 31, 1993, the Honorable Lorenzo I. DeLeon Guerrero,
Governor of the Commonwealth of the Northern Mariana Islands (CNMI),
submitted a petition to exempt motor vehicle diesel fuel in CNMI from
the sulfur content requirement of section 211(i)(1) of the Act, and the
EPA regulations promulgated at 40 CFR part 80. The petition is based on
geographical, meteorological, air quality, and economic factors unique
to CNMI.
The exemptions granted today will apply to all persons in CNMI
subject to the prohibitions of section 211(i)(1) and related provisions
of section 211(g)(2) of the Act and the diesel fuel requirements in 40
CFR part 80. The exemptions will apply to all persons who manufacture,
sell, supply, offer for sale or supply, dispense, transport, or
introduce into commerce motor vehicle diesel fuel, or who introduce
diesel fuel into motor vehicles, in CNMI. CNMI is not requesting an
exemption from the minimum cetane requirement for motor vehicle diesel
fuel as set forth in sections 211(i)(1) and 211(g)(2).
The following discussion summarizes the contents of the petition.
A. Geography and Location of the Northern Mariana Islands
The Commonwealth of the Northern Mariana Islands consists of 14
islands of volcanic origin that extend in a general north-south
direction for 388 nautical miles, with a dry land area of 176.5 square
miles. CNMI lies in the western part of the Pacific Ocean and is
located 1150 miles south of Tokyo; 1440 miles east of Manila; 108 miles
north of Guam; and 5280 miles from the U.S. mainland.
The population centers of CNMI exist on Saipan (38,896 pop.),
Tinian (2,118 pop.), and Rota (2,295 pop.). The Northern Islands of the
Commonwealth have populations estimated at 36 people.
CNMI has approximately 200 miles of roads, of which approximately
50 percent are paved. It is estimated that CNMI has less than 500
diesel vehicles, of which approximately 60 are the property of the CNMI
government.
B. Climate, Meteorology and Air Quality
CNMI has a tropical climate with consistently warm and humid
weather. Prevailing trade winds are westward. Development and the
population of Saipan, the most populated island, are predominately on
the western side. This meteorology combined with the geographic
development of the islands and the lack of heavy industry, have a
beneficial impact on CNMI's air quality.
At the present time, CNMI is in attainment with all primary
national ambient air quality standards (NAAQS). Given the small number
of diesel fueled vehicles on CNMI and the westward nature of the trade
winds, granting an exemption from the low-sulfur diesel standard is not
expected to have any significant impact on the ambient air quality of
CNMI.
C. Economic Factors
CNMI must rely totally on the costly importation of fuels
exclusively from refineries in Singapore. Oil companies in Singapore
are presently not capable of refining diesel fuel that meets the 0.05%
sulfur requirement. Consequently, in order to comply with the diesel
regulations, low-sulfur fuel would have to be imported from the U.S.
mainland at an estimated cost increase of 10 to 20 cents per
gallon.2 Because of the added costs of shipping materials to CNMI
for construction projects, construction costs on CNMI are generally 20
to 40 percent higher than the U.S. mainland. Consequently, a fuel
supplier on CNMI estimated that in order to comply with the low-sulfur
diesel fuel standard, four new storage tanks would need to be built for
the three islands, resulting in $2,000,000 in tank construction costs.
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\2\Cost estimate provided by CNMI's fuel suppliers.
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Currently, the cost of diesel fuel on Saipan is approximately 20
cents per gallon higher than the U.S. mainland, and even higher on the
islands of Rota and Tinian. The increased costs of using low-sulfur
fuel would be passed on to diesel fuel consumers on CNMI, which has an
average annual per capita income of under $7,200.
Unlike the U.S. mainland, CNMI relies on diesel fuel exclusively to
provide electrical power. Saipan has two bulk storage facilities for
diesel fuel, and Rota and Tinian each have one. The main use of this
diesel fuel is for electrical power generation with an insignificant
amount used for motor vehicles.
D. Environmental Factors
Any sulfur dioxide emitted from the diesel-powered vehicles on CNMI
is dispersed by the islands' trade winds and presents no health risk,
nor would it cause any air quality standards to be exceeded.
IV. Other Issues
EPA addressed several other issues in the American Samoa and Guam
decisions3 and is addressing them here in a manner consistent with
these earlier decisions.
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\3\The Agency granted American Samoa's petition for an exemption
from the diesel sulfur requirements on July 20, 1992, (57 FR 32010),
and exempted Guam from these same requirements on September 21,
1993, (58 FR 48968).
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Issue: Sale of Certified Engines
EPA believes that the prohibition against the sale of uncertified
engines in the Northern Mariana Islands (as in American Samoa and Guam)
should continue to apply. Beginning with model year 1994, some heavy-
duty diesel engines may be equipped with devices which will be
adversely impacted by the level of sulfur in diesel fuel allowed by the
exemption being granted today, but it is possible that some emissions
benefits can still be accrued. If the use of high-sulfur diesel fuel
causes vehicles equipped with aftertreatment devices to emit certain
pollutants at higher levels than would be emitted from such engines
without the aftertreatment devices, the Agency may consider, among
other things, allowing the sale of certified engines without the
affected devices. As expressed in the American Samoa and Guam
exemptions, the Agency believes such decisions should be made on a
case-by-case basis upon receipt of evidence to support those decisions.
Issue: Exemption from Tampering
EPA believes that a blanket waiver from the tampering prohibition
for model year 1994 and later heavy-duty engines would allow tampering
in situations where such tampering may result in an increase in
emissions. For example, removal of an emissions related device that is
not affected by the high-sulfur fuel or is rendered less effective but
not inoperative by the high-sulfur fuel would increase emissions over
what would have occurred in the absence of tampering.
Nevertheless, some model year 1994 and later heavy-duty engines may
be equipped with aftertreatment devices that may be rendered
inoperative by the use of diesel fuel with a sulfur content exceeding
0.05% (by weight). The exercise of enforcement discretion may be
appropriate to allow the removal of such aftertreatment devices.
However, EPA shall not allow tampering with an emissions control device
that has been or is likely to be rendered less effective, but not
rendered inoperative, as a result of the use of higher sulfur fuel
unless there is evidence that it may actually cause an increase in
certain pollutants as discussed above.
Issue: Warranty Exemption
The Agency acknowledges that vehicles which were certified with low
sulfur diesel fuel may be unable to meet Federal emissions standards if
they are fueled on high-sulfur diesel fuel. However, EPA believes an
exemption from the general warranty provisions of section 207 is not
necessary to protect manufacturers from unreasonable warranty
recoveries by purchasers. The emission defect warranty requirements
under section 207(a) of the Act require an engine manufacturer to
warrant that the engine shall conform at the time of sale to applicable
emission regulations and that the engine is free from defects which
cause the engine to fail to conform with applicable regulations for its
useful life. In practice, this warranty is applicable to a specific
list of emissions and emissions related engine components.
It has been consistent EPA policy that misuse and/or improper
maintenance of a vehicle or engine by the purchaser, including
misfueling, may create a reasonable basis for denying warranty coverage
for the specific emissions and emissions related engine components
affected by this misuse. In this case, while use of fuel exempted from
the sulfur content limitation cannot be considered ``misfueling,'' it
will have the same adverse effect on emissions control components.
Thus, EPA believes that where the use of high-sulfur diesel fuel will
have an adverse impact on the emissions durability of specific engine
parts or systems, such as a trap oxidizer or other aftertreatment
devices, the manufacturer will have a reasonable basis for denying
warranty coverage on that part or other related parts. However, as has
consistently been EPA's policy, those components not adversely affected
by the use of high-sulfur diesel should continue to receive full
emissions warranty coverage. In any event, the number of engines likely
to be covered on CNMI, and the potential for excessive costs or
disputes, are extremely small. EPA will expeditiously consider
manufacturers' suggestions for remedies to these situations on a case-
by-case basis as they occur.
Issue: Recall Liability
Heavy-duty engine manufacturers are responsible for recalling and
repairing engines that do not comply with emission requirements for
their useful lives. The EPA tests engine classes to determine whether
engines comply with applicable emission standards when properly used
and maintained. Under section 207(c), if a substantial number of
engines in a specific engine class do not comply when tested, that
entire class can be recalled. If a situation arose in which an engine
fueled with exempted diesel fuel were included in an EPA in-use
compliance test program, EPA would determine, on a case-by-case basis,
if the noncompliance were the result of the use of exempted diesel
fuel. If it were determined that the exempted diesel fuel was the cause
of the engine's failure to meet the applicable emission standards, that
fact would be considered before seeking a recall of the class. Given
the fact that only high-sulfur diesel fuel (over 0.05% by weight) will
be used in vehicles on CNMI, just as in American Samoa and Guam, the
Agency does not intend to use test results (emissions levels) from
those vehicles to show noncompliance by those engines for the purpose
of recalling an engine class. In cases in which it was determined that
the overall class was subject to recall, however, individual engines
would not be excluded from repair on the basis of the fuel used.
Manufacturers are responsible for repairing any engine in the recalled
class regardless of its history of tampering or malmaintenance. The
situation that would occur on CNMI is no different and, thus, the
manufacturers should remain liable for performing recall repairs on
these engines when required.
V. Final Action
Because of its remote location and lack of internal petroleum
supplies, CNMI must rely totally on the importation of diesel fuel and
other petroleum products. The Asian refineries currently supplying
CNMI's diesel fuel needs do not have the capability to produce diesel
fuel that meets the sulfur requirement of section 211(i) of the Act.
Given that CNMI has such a small market for motor vehicle diesel fuel,
those refineries are not likely to invest in the substantial
modifications necessary to produce low- sulfur diesel fuel.
Consequently, CNMI would have to import low-sulfur fuel from the U.S.
mainland at an increased cost of 10-20 cents per gallon, not including
the additional estimated capital expenditure of $2,000,000 to construct
separate storage facilities. Since the vast majority of diesel fuel
used on CNMI is for power generation, it would be economically
unreasonable for CNMI to use low-sulfur diesel for all of its diesel
fuel needs.
By requiring CNMI to comply with the sulfur requirement of section
211(i), a major economic burden would be placed on the citizens of CNMI
with little or no environmental benefit. Despite the possibility that
the use of high- sulfur diesel fuel may cause increased particulate
sulfate emissions in diesel vehicles equipped with trap systems or
oxidation catalysts, any increase in sulfate particulates emitted by
such vehicles would be dispersed by the islands' trade winds and would
present a minimal threat to public health or the environment. Because
of the small number of diesel vehicles on CNMI, granting this exemption
will not likely lead to future problems in maintaining compliance with
any National Ambient Air Quality Standards.
The Environmental Protection Agency has decided to exempt the
Commonwealth of the Northern Mariana Islands from compliance with the
sulfur content requirements for diesel fuel under sections 211(i)(1)
and (g)(2) of the Act, and EPA's motor vehicle diesel fuel regulations
at 40 CFR part 80. The Agency believes that compliance with the sulfur
requirement is unreasonable given the substantial increased costs to
persons on CNMI and the minimal benefits to the islands' air quality.
These cost increases are the direct result of geographical,
meteorological and economic factors unique to CNMI.
Although CNMI did not explicitly request an exemption from section
211(g)(2), it is reasonable to read the petition as including such a
request. Sections 211(g) and 211(i) both restrict the use of high
sulfur motor vehicle diesel fuel, and exempting CNMI from section
211(i)'s sulfur requirement but not from section 211(g)'s related
prohibition would provide no relief from the problems CNMI presented in
their petition. However, this action does not exempt CNMI from the
minimum cetane index requirement or the alternative aromatic level
requirement in these sections of the Act or EPA regulations.4
Thus, diesel fuel on CNMI that does not contain visible evidence of the
dye 1,4 dialkylamino-anthraquinone shall be presumed to be in
compliance with the cetane or alternative aromatic standard for motor
vehicle diesel fuel.
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\4\Information provided to the EPA subsequent to the petition
indicates that the current cetane index of diesel fuel used on CNMI
is generally near 50. Hence, CNMI will not have any difficulty
meeting the minimum cetane requirement of section 211(i)(1) of the
Act.
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This action is being taken without prior proposal because EPA
believes that the decision to exempt CNMI from the diesel fuel sulfur
requirements is noncontroversial and anticipates no significant adverse
comments on this action. In petitions involving very similar factors,
EPA exempted American Samoa and Guam from these same diesel fuel
requirements. Consistent with this decision, EPA has decided to approve
the exemptions requested by the Governor of the Commonwealth of the
Northern Mariana Islands as a direct final decision.
The public should be advised that this action will be effective
July 18, 1994, unless EPA receives notice by June 20, 1994 that someone
wishes to submit adverse or critical comments. If such notice is
received, this action will be withdrawn. If it is withdrawn, EPA will
publish a document announcing its withdrawal before the effective date
provided in today's document. A second document will then request
comments on a proposed decision regarding CNMI's petition.
This procedure allows the opportunity for public comment and for
oral presentation of data as required under section 307(d) of the Act.
This procedure also provides an expedited procedure for final action
where a decision is not expected to be controversial and no adverse
comment is expected. Since the October 1, 1993 effective date for the
low-sulfur fuel requirements has passed, EPA will regard CNMI as a low
priority for enforcement of the diesel sulfur requirement, pending the
final decision on CNMI's petition.
VI. Statutory Authority
Authority for the action described in this document is in section
325(a)(1) (42 U.S.C. 7625-1(a)(1)) of the Clean Air Act, as amended.
VII. Administrative Designation and Regulatory Analysis
Executive Order 12866
Under Executive Order 12866, (58 FR 51,735 (October 4, 1993)) the
Agency must determine whether the regulatory action is ``significant''
and therefore subject to OMB review and the requirements of the
Executive Order. The Order defines ``significant regulatory action'' as
one that is likely to result in a rule that may:
(1) Have an annual effect on the economy of $100 million or more or
adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or
communities;
(2) Create a serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
(3) Materially alter the budgetary impact of entitlements,grants,
user fees, or loan programs or the rights and obligations of recipients
thereof; or
(4) Raise novel or policy issues arising out of legal mandates, the
President's priorities, or the principles set forth in the Executive
Order.
The decision announced today alleviates any potential adverse
economic impacts on CNMI and is not a significant regulatory action as
defined in E.O. 12866. OMB has exempted this regulatory action from
E.O. 12866 review.
VIII. Impact on Small Entities
Pursuant to the Regulatory Flexibility Act, 5 U.S.C. 601 through
612, whenever an agency is required to publish a general notice of
rulemaking for any proposed or final rule, it is required to certify
that a regulation will not have asignificant adverse economic impact on
a substantial numberof small business entities. Today's final decision
will not have an adverse economic impact on small business entities, as
the action eases requirements otherwise applicable to affected
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.
IX. 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.
Dated: May 11, 1994.
Carol M. Browner,
Administrator.
[FR Doc. 94-12144 Filed 5-18-94; 8:45 am]
BILLING CODE 6560-50-F
