[Federal Register Volume 64, Number 110 (Wednesday, June 9, 1999)]
[Proposed Rules]
[Pages 30930-30937]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-14496]
=======================================================================
-----------------------------------------------------------------------
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 80
[AMS-FRL-6354-4]
RIN 2060-AI29
Regulation of Fuel and Fuel Additives: Modification of Compliance
Baseline
AGENCY: Environmental Protection Agency.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: With today's action the U.S. Environmental Protection Agency
(``EPA'', ``the Agency'', or ``we'') proposes to evaluate the
conventional gasoline emissions, from gasoline that a refiner sells in
Puerto Rico in excess of its baseline volume of Puerto Rico gasoline,
using only the summer version of the Complex Model. Accordingly, we
propose to modify the reformulated gasoline program's anti-dumping
compliance baseline calculation. This modification will replace the
annual average statutory baseline term with a summer statutory baseline
term for purposes of evaluating a refiner's excess Puerto Rico
gasoline. We also propose to replace the winter Complex Model with the
more climatically appropriate summer Complex Model for all baseline and
compliance calculations for Puerto Rico gasoline. The proposed
provisions would apply to any refiner that has Puerto Rico gasoline in
its individual baseline, has increased production of gasoline for sale
in Puerto Rico above its individual baseline volume of Puerto Rico
gasoline, and petitions the Agency to apply the proposed modified
compliance baseline to its Puerto Rico gasoline. EPA will require any
refiner submitting such a petition to recalculate its individual
baseline using the summer Complex Model for all Puerto Rico gasoline.
We anticipate that today's action will affect only a single
refiner. We have not yet fully evaluated the implications of a general
shift toward a climate-sensitive use of the summer and winter Complex
Models for other Puerto Rico refiners or gasoline suppliers, or for
similarly situated refiners in other regions. However, we request
comment from other refiners that produce gasoline for sale in areas not
subject to EPA's volatility requirements. Based on the comments we
receive, we may or may not proceed with similar future rulemaking
action.
DATES: Written comments on this notice must be submitted by July 9,
1999.
ADDRESSES: Interested parties may submit written comments in paper form
and/or by E-mail. To ensure their consideration by EPA, all comments
must be submitted to EPA by the date indicated under DATES above. Paper
copies of written comments should be submitted (in duplicate if
possible) to Public Docket No. A-99-16 at the following address: U.S.
Environmental Protection Agency (EPA), Air Docket Section, Room M-1500,
401 M Street, S.W., Washington, D.C. 20460. The Agency requests that a
separate paper copy also be sent to the person listed below under FOR
FURTHER INFORMATION CONTACT. EPA also encourages that an electronic
copy of comments (in ASCII format) accompany the submission of a paper
copy (by E-mail to A-and-R-Docket@epa.gov or on a 3.5 inch diskette).
Public comments may also be submitted by E-mail to the docket at the
address listed above without the submission of a paper copy. However,
to ensure the clarity of the submission, EPA encourages that a paper
copy accompany the E-mail submission. If comments are submitted by E-
mail alone, EPA requests that a copy of the E-mail message that
contains the comments be sent to the contact person listed below.
Materials related to this rulemaking are available for review at
EPA's Air Docket at the above address (on the ground floor in Waterside
Mall) from 8:00 a.m. to 5:30 p.m., Monday through Friday, except on
government holidays. The telephone number for EPA's Air
[[Page 30931]]
Docket is (202) 260-7548, and the facsimile number is (202) 260-4400. A
reasonable fee may be charged by EPA for copying docket materials, as
provided in 40 CFR part 2.
FOR FURTHER INFORMATION CONTACT: Christine M. Brunner or Felicia Seals-
Buchanan, U.S. EPA, National Vehicle and Fuels Emission Laboratory,
2000 Traverwood, Ann Arbor, MI 48105; Telephone (734) 214-4287 or
x4589, FAX (734) 214-4051, E-mail brunner.christine@epa.gov or buchanan.felicia@epa.gov.
SUPPLEMENTARY INFORMATION:
Regulated Entities
Entities potentially affected by this action include those involved
with the production, distribution and sale of gasoline motor fuel.
Regulated categories and entities include:
----------------------------------------------------------------------------------------------------------------
Examples of potentially regulated
Category NAICS \1\ codes SIC \2\ codes entities
----------------------------------------------------------------------------------------------------------------
Industry............................ 324110 2911 Petroleum Refiners.
----------------------------------------------------------------------------------------------------------------
\1\ North American Industry Classification System (NAICS).
\2\ Standard Industrial Classification (SIC) system code.
This table is not intended to be exhaustive, but provides a guide
for readers regarding entities likely to be regulated by this action.
This table lists the types of entities that EPA is now aware could
potentially be affected by this action. Other types of entities not
listed in the table could also be affected. To decide whether your
organization might be affected by this action, you should carefully
examine the proposed and existing regulations in 40 CFR part 80. If you
have any questions regarding the applicability of this action to a
particular entity, consult the persons listed in the preceding FOR
FURTHER INFORMATION CONTACT section.
Access to Rulemaking Documents Through the Internet
Today's notice is available electronically on the day of
publication from the EPA Internet Web site listed below. Electronic
copies of the preamble, regulatory language and other documents
associated with today's proposal are available from the EPA Office of
Mobile Sources Web site listed below shortly after the rule is signed
by the Administrator. This service is free of charge, except any cost
that you already incur for Internet connectivity.
EPA Web Site:
http://www.epa.gov/docs/fedrgstr/epa-air/
(Either select a desired date or use the Search feature.)
Office of Mobile Sources (OMS) Web Site:
http://www.epa.gov/omswww/
(Look in ``what's New'' or under the specific rulemaking topic.)
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.
I. Background
A. Anti-Dumping Standards
Section 211(k) of the Clean Air Act requires the U.S. Environmental
Protection Agency (``EPA'' or ``we'') to establish standards for
reformulated gasoline (RFG) to be used in specified ozone nonattainment
areas. In addition, EPA established standards for non-reformulated, or
conventional, gasoline used in the rest of the country. These standards
are called the anti-dumping standards. EPA adopted the anti-dumping
standards to prevent refiners from dumping into conventional gasoline
the dirty gasoline components that are removed when RFG is produced.
The anti-dumping standards require refiners to produce conventional
gasoline each year that is as clean as the gasoline produced by the
refiner in 1990.
In order to be in compliance with the anti-dumping standards, the
exhaust toxics and nitrogen oxides (NOX) emissions
performance of a refinery's conventional gasoline can be no dirtier
than the refinery's 1990 exhaust toxics and NOX emissions
performance, on an annual average basis. EPA requires refiners to
calculate the exhaust toxics and NOX emissions performance
of gasoline using the Complex Model,1 based on measured
properties, such as sulfur and benzene content, and Reid vapor pressure
(RVP). The Complex Model includes both a summer version and a winter
version. The anti-dumping requirements at 40 CFR 80.101(g) require
refiners to use the summer Complex Model to evaluate conventional
gasoline supplied to an area subject to EPA's gasoline volatility
standards when these standards are in effect, and requires them to use
the winter Complex Model to evaluate all other gasoline. The
regulations also require refiners to evaluate the exhaust toxics and
NOX emissions performance of gasoline sold in areas not
subject to those volatility standards, such as Puerto Rico, Hawaii, and
Alaska, using the winter Complex Model.
---------------------------------------------------------------------------
\1\ 40 CFR 80.45.
---------------------------------------------------------------------------
B. Compliance Baseline Calculation
In general, a refiner's standard for compliance is its individual
1990 refiner baseline. However, when a refiner's annual gasoline
production volume (including RFG, conventional gasoline and
reformulated gasoline blendstock for oxygenate blending) exceeds its
baseline volume (the volume of gasoline that the refiner produced in
1990), the refiner's conventional gasoline compliance standard for
exhaust toxics and NOX is different from its individual
baseline values for these emissions. The standard is different because
EPA requires refiners to compare the excess volume to the statutory
baseline instead of their individual baseline. Because the statutory
baseline was designed to reflect 1990 gasoline generally, the quality
of all the excess gasoline produced approximates the 1990 average
national quality.
In order to determine a refiner's compliance standard for the
averaging period, the anti-dumping provisions at 40 CFR 80.101(f)
require the use of a specified compliance baseline equation. This
equation establishes a single compliance baseline that compares a
refiner's conventional gasoline with that refiner's individual
baseline. However, a portion of the compliance baseline equation
compares the emissions of a refiner's excess volume of conventional
gasoline to the annual average statutory baseline emissions, a
combination of the summer and winter statutory baseline emissions. EPA
requires refiners to evaluate the emissions of gasoline sold in areas
not subject to EPA's volatility requirements using only the winter
Complex Model. Refiners must then compare these emissions to a
compliance baseline equation that is based in part on the summertime
[[Page 30932]]
portion of the statutory baseline. Because different assumptions drive
the summer and winter versions of the Complex Model, this may force
refiners to make quality changes in their gasoline pools, resulting in
unintended negative effects for refiners and the environment.
C. Seasonal Impacts of the Complex Model
A detailed discussion of the development of the summer and winter
versions of the Complex Model was included in the Final Regulatory
Impact Analysis (RIA) for Reformulated Gasoline.2 Both
models are based on MOBILE model outputs. MOBILE model outputs for the
summer model assume ambient temperatures of 69 deg.F-94 deg.F. MOBILE
model outputs for the winter model assume ambient temperatures of 39
deg.F-57 deg.F. Additionally, MOBILE model outputs show significantly
greater ``winter'' emissions due to longer engine and catalyst warm-up
times. As a result, for identical fuel compositions (based on those
fuel parameters evaluated in the Complex Model), the winter Complex
Model results in significantly higher emissions than the summer Complex
Model, on a mg/mile basis.
---------------------------------------------------------------------------
\2\ December 13, 1993.
---------------------------------------------------------------------------
D. July 11, 1997 Proposal
EPA proposed a variety of changes to the reformulated gasoline and
anti-dumping regulations on July 11, 1997 (62 FR 37337). Classifying
gasoline as summer or winter gasoline was one issue that EPA discussed
in that proposal. In that discussion, EPA stated that it would classify
all gasoline produced for use outside the continental U.S., where the
federal RVP standards do not apply, as winter gasoline year round
because:
(1) EPA required refiners to calculate the emissions of all
gasoline used outside of the continental U.S. using the winter Complex
Model for baseline purposes;
(2) The anti-dumping standards compare the emissions of a
refinery's gasoline during an averaging period with the refinery's
baseline emissions; and
(3) The comparison of baseline emissions to averaging period
emissions is valid only if the refinery uses the same criteria in the
baseline and in the averaging period for classifying gasoline as summer
or winter.
One commenter, Amerada Hess, stated that it was inappropriate for
refiners to use the winter Complex Model to evaluate the gasoline
produced for certain areas outside the continental U.S. and not subject
to the federal volatility requirements. They offered the following
reasons:
(1) In the proposal, ``EPA is acknowledging that the classification
of gasoline as winter or summer actually depends on the season in which
it is sold'' (and not just its RVP);
(2) EPA's MOBILE model, upon which EPA based the Complex Model,
reflects a temperature range of 39 deg. F-57 deg. F when used to
evaluate winter emissions;
(3) It is inappropriate for EPA to assign gasoline for tropical
climates such as Puerto Rico and Hawaii, to the winter category from a
``seasonal weather gasoline characteristic standpoint;''
(4) The RVP of the gasoline sold in these (tropical) areas reflects
summertime RVPs rather than wintertime RVPs;
(5) The July 1, 1994 RFG Question and Answer Document states that
refiners are to evaluate gasoline which remains seasonably the same
throughout the year using the seasonal Complex Model which matches the
year round season.
Additionally, when the volume of gasoline sold in such areas
increases over baseline levels, under 40 CFR 80.101(f)(4)(ii) EPA
requires refiners to calculate the standard for the extra volume using
annual exhaust toxics and NOX emissions values which include
both summer and winter Complex Model calculations. At the same time,
EPA requires calculation of emissions (of gasoline sold in such areas)
for compliance purposes using only the winter Complex Model.
Consequently, according to the commenter, the refiner is unfairly
penalized.
II. Proposal
A. Summary
With today's action, EPA proposes to allow refiners, upon petition,
to replace the winter Complex Model with the summer Complex Model for
all anti-dumping baseline and compliance calculations for conventional
gasoline sold in Puerto Rico, if the refiner has Puerto Rico gasoline
in their individual baseline, and if the refiner currently sells a
volume of gasoline in Puerto Rico greater than that refiner's 1990
Puerto Rico baseline volume. We are taking this action in order to
address specific circumstances where inconsistencies in the RFG
program's anti-dumping provisions have had significant unintended
negative impacts.
The anti-dumping regulations currently require conventional
gasoline sold in Puerto Rico to be evaluated using the winter Complex
Model, for purposes of both compliance calculation and baseline
calculation up to a refiner's 1990 baseline volume. However, the
current regulations require a refiner to use the statutory baseline for
evaluating volumes of Puerto Rico gasoline above that refiner's 1990
baseline volume. The statutory baseline includes both a summer and
winter Complex Model component. As a result, for excess gasoline, there
is an unintended mismatch between the refiner's baseline calculation
(which uses only the winter Complex Model) and the compliance baseline
calculation (which uses a combination of the summer and winter Complex
Models). This results in the appearance of greater emissions in
comparison to an analysis using the same seasonal version of the
Complex Model for both of these calculations. For those refiners with
Puerto Rico gasoline in their individual baseline, that have increased
the volume of gasoline that they sell in Puerto Rico above their 1990
baseline volumes of Puerto Rico gasoline, this incongruence has had a
significant adverse economic effect.
To solve this specific problem, EPA is proposing a provision under
the anti-dumping regulations that would change the compliance
determination of the gasoline a refiner sells in Puerto Rico above that
refiner's 1990 Puerto Rico baseline volume. Refiners would evaluate
such gasoline using only a single statutory seasonal term (the summer
term) in the compliance baseline determination. Additionally, given
Puerto Rico's consistently warm climate, we recognize that the summer
Complex Model is the most appropriate model for evaluating emissions in
Puerto Rico under the anti-dumping program. Thus, we are also proposing
to evaluate all of the conventional gasoline sold in Puerto Rico (by a
refiner that makes a successful petition under this provision) using
the summer Complex Model. The approval of a petition under this
proposed provision would require a refiner to recalculate the Puerto
Rico component of its individual baseline using the summer Complex
Model. As a result, such a refiner will evaluate all of its Puerto Rico
gasoline using a single seasonal version of the Complex Model. Today's
action applies to each batch of gasoline produced by an eligible
refiner and destined for Puerto Rico, even if a small portion of the
batch is subsequently sent to other nearby areas with climates similar
to Puerto Rico and which are also not subject to EPA's volatility
standards.
[[Page 30933]]
B. Modified Compliance Baseline Equation
As discussed in Section I.B., when refiners sell gasoline in excess
of their individual baseline volume in areas such as Puerto Rico, which
are not subject to the federal volatility requirements, use of the
current compliance baseline equation may have negative economic
implications for refiners and unintended negative environmental
effects. EPA requires refiners to evaluate such gasoline using the
winter Complex Model. However, in the compliance baseline equation, all
excess gasoline is compared to the annual average statutory baseline,
which is composed of summertime and wintertime components. Because the
winter Complex Model predicts higher emissions for exhaust toxics and
NOX than does the summer Complex Model, refiners in this
situation are forced to meet a more stringent compliance standard in
these areas than would be required if the seasonal Complex Models used
to evaluate such gasoline were the same. Accordingly, they must divert
cleaner gasoline from other areas.
To remedy this situation, EPA is proposing to modify the compliance
baseline equation at Sec. 80.101(f)(4)(ii). This modification will
ensure that the performance of gasoline sold in Puerto Rico in excess
of a refiner's baseline volume of Puerto Rico gasoline is compared to
the appropriate corresponding seasonal baseline. We believe that the
summer Complex Model is the most appropriate model for evaluating
Puerto Rico gasoline.
EPA proposes to include the following equation at 40 CFR 80.101
(f)(4). This equation includes separate terms for evaluating the
gasoline subject to the refiner's individual baseline and excess
gasoline subject to the summer model-only requirements. EPA requests
comments on the terms and definitions of this proposed equation.
[GRAPHIC] [TIFF OMITTED] TP09JN99.000
where:
CBi = the compliance baseline value for emissions
performance i
Bi = the refiner's or importer's individual annual baseline
for emissions performance i under Sec. 80.91 for gasoline supplied to
areas subject to volatility standards under Sec. 80.27
BSi = the refiner's or importer's individual baseline as
determined under Sec. 80.91 using the summer Complex Model, for
gasoline supplied to Puerto Rico, for emissions performance i
DBAi = annual anti-dumping statutory baseline value for
emissions performance i under Sec. 80.91(c)(5)(iv)
DBSi = the summer statutory baseline value for emissions
performance i under Sec. 80.45(b)(3), table 5
Va = total volume of RFG, conventional gasoline, RBOB,
oxygenates and California gasoline as defined under Sec. 80.81(a)(2)
produced or imported during the averaging period
V1990 = 1990 baseline volume under Sec. 80.91(f)(1)
V1990s=1990 baseline volume of gasoline supplied to Puerto
Rico
Vas=volume of conventional gasoline supplied during the
averaging period to Puerto Rico
i=exhaust toxics or NOX emissions performance
C. Seasonal Re-designation of Puerto Rico Gasoline
EPA is proposing to evaluate the emissions of Puerto Rico gasoline
using only the summer Complex Model for any refiner making a successful
petition under this proposed provision. As a result of comments in
response to the July 11, 1997 NPRM, EPA evaluated the average annual
climatic conditions and gasoline RVP levels for Puerto Rico.\3\ We have
concluded that Puerto Rico's relatively constant year round ambient
temperatures, as well as its gasoline RVPs, are more consistent with
the conditions under which EPA intended the summer Complex Model to
apply than they are with the conditions under which we intended the
winter Complex Model to apply. Additionally, Puerto Rico's ambient
temperature is consistent with conditions typical of a high ozone
season, when summertime gasoline, and thus the summer Complex Model, is
meant to be used. Because this proposed action involves the calculation
of compliance baselines for gasoline sold by refiners in Puerto Rico,
we are taking this opportunity to address the seasonal appropriateness
of the Complex Model that refiners must use to evaluate individual
batches of gasoline. Accordingly, we propose to require refiners to
evaluate all of their Puerto Rico gasoline using the summer Complex
Model for compliance and baseline purposes. We are, however, expressly
limiting the applicability of this change to refiners that petition
for, and are granted, compliance baseline corrections under the
provisions of this proposed rulemaking.
---------------------------------------------------------------------------
\3\ 30 year average maximum and minimum temperatures by month,
and RVP specifications.
---------------------------------------------------------------------------
D. Environmental Impact
We are presently aware of only one refiner for which the current
regulations have significant unintended negative economic and
environmental impacts. Specifically, the current anti-dumping
regulations applicable to Puerto Rico gasoline negatively affect the
quality of this refiner's mainland reformulated gasoline by requiring
the refiner to shift certain production from RFG to conventional
gasoline in order to comply with the requirements for its Puerto Rico
conventional gasoline. Thus the emissions in areas which most need
clean gasoline--ozone nonattainment areas participating in the RFG
program--are unnecessarily elevated. Conversely, Puerto Rico, which is
in attainment for ozone, is receiving cleaner conventional gasoline due
to the unintended results of the current anti-dumping rules.
The change proposed today helps to provide the cleanest gasoline
where it is needed most. It is possible that the gasoline supplied by
this refiner to Puerto Rico, and other conventional gasoline areas,
could see increases in the emissions regulated under the anti-dumping
requirements. However, this proposal will allow refiners to use the
most seasonally-appropriate Complex Model for gasoline sold in Puerto
Rico, and will not result in an increase in emissions from conventional
gasoline compared to 1990 levels. Thus, the goals of the anti-dumping
program will be preserved. Indeed, this adjustment simply works to
restore the proper balance to the distribution of environmental
benefits under the RFG program.
EPA is proposing that these requirements would apply to gasoline
produced for calendar year 1999 and beyond. EPA will need more
information from other refiners before proposing to broadly apply
similar provisions throughout Puerto Rico and
[[Page 30934]]
in other areas not subject to EPA's volatility requirement.
E. Economic Impact
EPA expects today's proposal to have minimal economic consequences.
Most affected refiners are operating satisfactorily under the current
requirements and are likely to be unaffected by this rule. EPA believes
that refiners satisfying the requirements of this provision, will
petition to re-evaluate the Puerto Rico gasoline in their baseline
using the summer Complex Model only if it is economically beneficial
for them to do so. Therefore, EPA anticipates no adverse economic
impacts as a result of today's proposal rule.
F. Limited Applicability
EPA is proposing today to apply the provisions discussed above
(i.e., the modified compliance baseline equation and the uniform use of
the summer Complex Model) to refiners that have Puerto Rico gasoline in
their individual baseline, that have increased the volume of gasoline
that they sell in Puerto Rico above their 1990 baseline volumes of
Puerto Rico gasoline, and that petition the Agency for such a change.
Once such a petition is made and granted, the new method for
determining compliance would apply from then on, regardless of any
future changes in the refiner's Puerto Rico gasoline production or
distribution. To date, only one refiner has notified EPA of potential
adverse effects due to the application of the current regulations.
While EPA believes that use of the modified compliance baseline
equation and seasonally-appropriate Complex Model may be technically
appropriate in all areas not subject to the federal volatility
requirements, there are a number of factors that EPA is unable to
evaluate at this time. Consequently, we believe it best to limit the
applicability of this proposal to refiners of Puerto Rico gasoline that
can fulfill the other requirements of this proposed rule. The following
section discusses the implications of a broader application of the
principles underlying today's proposed action, and highlights the
difficulties inherent in evaluating the appropriateness of such a
generally applicable provision.
III. Implications for Broader Future Action
Today's action is limited in applicability to Puerto Rico refiners
that meet the criteria enumerated in Section II of this notice.
However, we anticipate that a similar but more generally applicable
provision may be appropriate in the future. Such a provision would
presumably apply to all areas that are not subject to the federal
volatility requirements codified at 40 CFR 80.27.\4\ The substance and
scope of such a generally applicable provision would depend on many
considerations, including environmental and economic impacts, industry
practices, and the likely consequences for the RFG program in general.
Some of the factors that EPA believes warrant additional consideration
prior to the broad application of the provisions in today's proposed
action include:
---------------------------------------------------------------------------
\4\ EPA believes that gasoline sent to areas such as Puerto Rico
and Hawaii (and perhaps Guam, the U.S. Virgin Islands (USVI), the
Northern Marianas and American Samoa) might be most appropriately
evaluated using only the summer Complex Model. Similarly, EPA
believes that gasoline sold in Alaska might be most appropriately
evaluated using only the winter Complex Model, as is currently
required.
---------------------------------------------------------------------------
(1) Environmental impacts. Many refiners which have Puerto Rico
gasoline in their baseline, aggregate that baseline with baselines of
some or all of their other refineries. Currently, they may not actually
produce gasoline for Puerto Rico, or may produce a reduced amount
relative to their baseline volume of Puerto Rico gasoline. Thus, they
may be taking advantage of Puerto Rico gasoline baseline emissions
under the current regulations for the compliance of conventional
gasoline produced for other locales. If required to re-evaluate the
baseline of the Puerto Rico gasoline and to use the modified compliance
baseline equation, the gasoline quality in either Puerto Rico or in the
conventional or RFG areas of the continental U.S. may deteriorate
relative to the current situation. EPA is also unable to evaluate the
impact on the environment of the activities of refiners that have no
Puerto Rico gasoline in their baseline but would choose to sell
gasoline in Puerto Rico if such gasoline is allowed or required to be
evaluated using the summer Complex Model. Since the summer Complex
Model gives lower emissions for a given composition of gasoline, it
would be advantageous for refiners to produce gasoline for Puerto Rico
under such circumstances. However, because EPA is unable to anticipate
the actions of such refiners (e.g., future gasoline production plans)
it is currently impossible for the Agency to determine the overall
environmental impacts that such a regulatory provision might have.
(2) Economic impacts. EPA expects today's proposal to have minimal
economic consequences. Nonetheless, because of numerous uncertainties,
EPA is unable to determine what economic impacts might result from a
more general provision applicable to all areas not subject to the
federal volatility standards. Specifically, possible reactions by
refiners regarding aggregation and refinery changes would play a
critical role in assessing the economic consequence of any such Agency
action.
EPA understands that refinery aggregation decisions involve precise
and costly evaluations, and that changing such decisions might entail
another round of concerted deliberation. Thus, while the direct
economic impacts of such a broadly applicable provision might actually
be small, a refiner's choice to re-evaluate its aggregation decisions
might result in significant additional expense. Re-aggregation could
not only be time-consuming and costly for the refiner, but could have
anti-competitive effects for those refiners without applicable gasoline
in their baseline. Thus, EPA's current lack of information regarding
the impact that re-consideration of aggregation decisions might have on
the RFG and anti-dumping programs is one reason we are not proposing to
broadly apply the provisions proposed today.
(3) Disturbing the system. With the exception of the problems
addressed by today's proposed action, the current system for
implementing the RFG anti-dumping standards has been successful. Given
the concerns discussed above, EPA is unsure whether it would be
appropriate to disturb the current system for what may be minimal
environmental benefit at potentially high economic costs.
EPA requests comment on the proposed provisions from refiners that
produce gasoline for sale in any area that is not subject to EPA's
volatility requirements. EPA also requests comment from all interested
parties regarding the environmental and economic impacts of extending
the provisions proposed today to other areas not subject to EPA's
volatility requirements. EPA also requests comment on the appropriate
seasonal Complex Model for a refiner or refinery that sells
conventional gasoline in an area not subject to EPA's volatility
requirements but does not have such gasoline in its baseline. Based on
comments received, EPA may or may not proceed with future rulemaking
action proposing changes similar to those proposed today.
IV. Public Participation
EPA desires full public participation in arriving at its final
decisions and solicits comments on all aspects of this proposal.
Wherever applicable, full supporting data and detailed analysis
[[Page 30935]]
should also be submitted to allow EPA to make maximum use of the
comments. All comments should be directed, by July 9, 1999 to the EPA
Air Docket, Docket A-99-16 (See ADDRESSES).
Any proprietary information being submitted for the Agency's
consideration should be markedly distinguished from other submittal
information and clearly labeled ``Confidential Business Information.''
Proprietary information should be sent directly to the contact person
listed above, and not to the public docket, to ensure that it is not
inadvertently placed in the docket. Information thus labeled and
directed shall be covered by a claim of confidentiality and will be
disclosed by EPA only to the extent allowed and by the procedures set
forth in 40 CFR part 2. If no claim of confidentiality accompanies a
submission when it is received by EPA, it may be made available to the
public without further notice to the commenter.
V. Administrative Requirements
A. Administrative Designation and Regulatory Analysis
Under Executive Order 12866 (58 FR 51735 October 4, 1993), EPA must
determine whether the regulatory action is ``significant'' and
therefore subject to Office of Management and Budget (OMB) review and
the requirements of this Executive Order. The Order defines a
``significant regulatory action'' as one that is likely to result in a
rule that may:
(1) Have an annual effect on the economy of $100 million or more or
adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, Local, or Tribal governments or
communities;
(2) Create a serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
(3) Materially alter the budgetary impact of entitlements, grants,
user fees, or loan programs, or the rights and obligations of
recipients thereof; or
(4) Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.
EPA has determined that this rule is not a ``significant regulatory
action'' under the terms of Executive Order 12866 and is therefore not
subject to OMB review. The Agency has determined that this regulation
would result in none of the economic effects set forth in Section 1 of
the Order because it does not impose any mandatory obligations on the
regulated community beyond those specified in the current regulations.
B. Compliance With the Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) generally requires federal
agencies to conduct a regulatory flexibility analysis of any rule
subject to notice and comment rulemaking requirements unless the agency
certifies that the rule will not have a significant economic impact on
a substantial number of small entities. Small entities include
businesses, small not-for-profit enterprises, and small governmental
jurisdictions. This proposed rule would not have a significant impact
on a substantial number of small entities because it involves an
optional provision intended to promote successful implementation of the
RFG anti-dumping requirements and to minimize existing adverse economic
impacts. This proposed action may, in fact, reduce the burden of the
anti-dumping program on regulated entities. Therefore, I certify that
this action will not have a significant economic impact on a
substantial number of small entities.
C. Paperwork Reduction Act
Today's proposal does not involve the collection of information as
defined by the Paperwork Reduction Act of 1980, 44 U.S.C. 3501 et seq.
Therefore, the provisions of that Act do not apply to this action.
D. Intergovernmental Relations
1. Unfunded Mandates Reform Act
Title II of the unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory action on State, local, and tribal
governments and the private sector. Under section 202 of the UMRA, EPA
generally must prepare a written statement, including a cost-benefit
analysis, for proposed and final rules with ``Federal mandates'' that
may result in expenditures by State, local, and tribal governments, in
the aggregate, or by the private sector, of $100 million or more in any
one year. Before promulgation an EPA rule for which a written statement
is needed, section 205 of the UMRA generally requires EPA to identify
and consider a reasonable number of regulatory alternatives and adopt
the least costly, most cost-effective or least burdensome alternative
that achieves the objectives of the rule. The provisions of section 205
do not apply when they are inconsistent with applicable law. Moreover,
section 205 allows EPA to adopt an alternative other than the least
costly, most cost-effective or least burdensome alternative if the
Administrator publishes with the final rule an explanation why that
alternative was not adopted. Before EPA establishes any regulatory
requirement that may significantly or uniquely affect small
governments, including tribal governments, it must have developed under
section 203 of the UMRA a small government agency plan. The plan must
provide for notifying potentially affected small governments, enabling
officials of affected small governments to have meaningful and timely
input in the development of EPA regulatory proposals with significant
Federal intergovernmental mandates, and informing, educating, and
advising small governments on compliance with the regulatory
requirements.
Today's rule contains no Federal mandates (under the regulatory
provisions of Title II of the UMRA) for State, local, or tribal
governments or the private sector. The EPA has determined that today's
rule does not include a Federal mandate because it imposes no
enforceable duty on any State, local, and tribal governments, or the
private sector. Today's rule proposes an optional provision for
evaluating the emissions of conventional gasoline sold by certain
refiners in Puerto Rico. This proposed action may, in fact, reduce the
burden of the anti-dumping program on regulated entities. Therefore,
the requirements of the Unfunded Mandates Act do not apply to this
proposed action. For the same reason, EPA has determined that this rule
contains no regulatory requirements that might significantly or
uniquely affect small governments.
2. Executive Order 12875: Enhancing Intergovernmental Partnerships
Under Executive Order 12875, EPA may not issue a regulation that is
not required by statute and that creates a mandate upon a State, local,
or tribal government, unless the Federal government provides the funds
necessary to pay the direct compliance costs incurred by those
governments, or EPA consults with those governments. If EPA complies by
consulting, Executive Order 12875 requires EPA to provide to the Office
of Management and Budget a description of the extent of EPA's prior
consultation with representatives of affected State, local, and tribal
governments, the nature of their concerns, copies of any written
communications from the governments, and a statement supporting the
need to issue the regulation. In addition, Executive Order 12875
requires EPA to
[[Page 30936]]
develop an effective process permitting elected officials and other
representatives of State, local, and tribal governments ``to provide
meaningful and timely input in the development of regulatory proposals
containing significant unfunded mandates.''
Today's rule does not create a mandate on State, local, or tribal
governments. The rule does not impose any mandatory duties on these
entities. Accordingly, the requirements of Section 1(a) of Executive
Order 12875 do not apply to this rule.
3. Executive Order 13084: Consultation and Coordination With Indian
Tribal Governments
Under Executive Order 13084, EPA may not issue a regulation that is
not required by statute, that significantly or uniquely affects the
communities of Indian tribal governments, and that imposes substantial
direct compliance costs on those communities, unless the Federal
government provides the funds necessary to pay the direct compliance
costs incurred by the tribal governments, or EPA consults with those
governments. If EPA complies by consulting, Executive Order 13094
requires EPA to provide to the Office of Management and Budget, in a
separately identified section of the preamble to the rule, a
description of the extent of EPA's prior consultation with
representatives of affected tribal governments, a summary of the nature
of their concerns, and a statement supporting the need to issue the
regulation. In addition, Executive Order 13084 requires EPA to develop
an effective process permitting elected and other representatives of
Indian tribal governments ``to provide meaningful and timely input in
the development of regulatory policies on matters that significantly or
uniquely affect their communities.''
This proposed rule applies exclusively to refiners that sell
gasoline in Puerto Rico. The proposed rule does not create any mandates
or impose any obligations, and thus does not significantly or uniquely
affect the communities of Indian tribal governments. Accordingly, the
requirements of section 3(b) of Executive Order 13084 do not apply to
this rule.
E. National Technology Transfer and Advancement Act
Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272),
directs the EPA to use voluntary consensus standards (VCS) in its
regulatory activities unless to do so would be inconsistent with
applicable law or otherwise impractical. Voluntary consensus standards
are technical standards (e.g., materials specifications, test methods,
sampling procedures, business practices, etc.) that are developed or
adopted by voluntary consensus standard bodies. The NTTAA requires EPA
to provide Congress, through OMB, explanations when the Agency decides
not to use available and applicable voluntary consensus standards.
This proposed rulemaking does not involve technical standards.
Therefore, EPA is not considering the use of any voluntary consensus
standards. EPA welcomes comments on this aspect of the proposed
rulemaking and, specifically, invites the public to identify
potentially applicable voluntary consensus standards and to explain why
such standards should be used in this regulation.
F. Executive Order 13045: Children's Health Protection
Executive Order 13045: Protection of Children from Environmental
Health Risks and Safety Risks (62 FR 19885, April 23, 1997) applies to
any rule that: (1) is determined to be economically significant as
defined under E.O. 12866, and (2) concerns an environmental health or
safety risk that EPA has reason to believe may have a disproportionate
effect on children. If the regulatory action meets both criteria, the
Agency must evaluate the environmental health or safety effects of the
planned rule on children, and explain why the planned regulation is
preferable to other potentially effective and reasonably feasible
alternatives considered by the Agency.
EPA interprets E.O. 13045 as applying only to those regulatory
actions that are based on health or safety risks, such that the
analysis required under section 5-501 of the Order has the potential to
influence the regulation. This rule is not subject to E.O. 13045
because it does not establish an environmental standard intended to
mitigate health or safety risks. Additionally, this rule is not subject
to E.O. 13045 because it implements specific standards established by
Congress in statutes.
VI. Statutory Provisions and Legal Authority
The statutory authority for the actions proposed today is granted
to EPA by sections 114, 211(c) and (k) and 301 of the Clean Air Act, as
amended; 42 U.S.C. 7414, 7545(c) and (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: May 28, 1999.
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 FUEL AND FUEL ADDITIVES
1. The authority citation for part 80 continues to read as follows:
Authority: Secs. 114, 211, and 301(a) of the Clean Air Act, as
amended (42 U.S.C. 7414, 7545, and 7601(a)).
2. A new paragraph (d) is added to Section 80.93 to read as
follows:
Sec. 80.93 Individual baseline submission and approval.
* * * * *
(d) Requirements for petition applicable to Puerto Rico gasoline.
(1) Any refiner or importer with Puerto Rico gasoline, or Puerto
Rico and U.S. Virgin Islands gasoline, in its individual baseline may
petition EPA to use the summer Complex Model to evaluate its Puerto
Rico and Virgin Islands gasoline for compliance under Sec. 80.101.
(2) The petition must be sent to: U.S. EPA, Fuels and Energy
Division, 2000 Traverwood, Ann Arbor, MI 48105.
(3) The petition must include the following:
(i) Identification of the refinery;
(ii) Identification of contact person;
(iii) A revised individual baseline determination, wherein the
baseline Puerto Rico and U.S. Virgin Islands gasoline has been
evaluated using the summer Complex Model. The calculations should be
clearly and fully described and displayed.
(iv) Baseline auditor agreement with the revised baseline.
(4) EPA reserves the right to request additional information. If
such information is not forthcoming in a timely manner, the petition
will not be approved.
3. Section 80.101 is amended by revising paragraphs (f)(4) and
(g)(1)(ii) to read as follows:
Sec. 80.101 Standards applicable to refiners and importers.
* * * * *
(f) * * *
(4)(i) Reserved.
[[Page 30937]]
(ii) Reserved.
(iii) Any refiner or importer with Puerto Rico gasoline, or Puerto
Rico and U.S. Virgin Islands gasoline, in its individual baseline and
which has met the requirements specified in paragraph (g)(1)(ii)(B) of
this section, and whose total volume of conventional gasoline, RBOB,
reformulated gasoline, and California gasoline, as defined in
Sec. 80.81(a)(2), produced or imported by the refiner or importer
during the averaging period is greater than that refiner's or
importer's 1990 baseline volume as determined under Sec. 80.91(f)(1),
must calculate the compliance baseline for each parameter or emissions
performance according to the following formula:
[GRAPHIC] [TIFF OMITTED] TP09JN99.001
Where:
CBi = the compliance baseline value for emissions
performance i
Bi = the refiner's or importer's individual annual baseline
for emissions performance i under Sec. 80.91 for gasoline supplied to
areas subject to volatility standards under Sec. 80.27
BSi = the refiner's or importer's individual baseline as
determined under Sec. 80.91 using the summer Complex Model, for
gasoline supplied to Puerto Rico and the U.S. Virgin Islands, for
emissions performance i
DBAi = annual anti-dumping statutory baseline value for
emissions performance i under Sec. 80.91(c)(5)(iv)
DBSi = the summer statutory baseline value for emissions
performance i under Sec. 80.45(b)(3), table 5
Va = total volume of RFG, conventional gasoline, RBOB,
oxygenates and California gasoline as defined under Sec. 80.81(a)(2)
produced or imported during the averaging period
V1990=1990 baseline volume under Sec. 80.91(f)(1)
V1990s=1990 baseline volume of gasoline supplied to Puerto
Rico and the U.S. Virgin Islands
Vas=volume of conventional gasoline supplied during the
averaging period to Puerto Rico and the U.S. Virgin Islands
i=exhaust toxics or NOX emissions performance
* * * * *
(g) * * *
(1) * * *
(ii) Complex Model calculations.
(A) Exhaust benzene, exhaust toxics, and exhaust NOX
emissions performance for each batch shall be calculated in accordance
with the applicable model under Sec. 80.45.
(B) A refiner which has Puerto Rico gasoline, or Puerto Rico and
U.S. Virgin Islands gasoline, in its baseline shall use the summer
Complex Model to evaluate its averaging period Puerto Rico and U.S.
Virgin Islands gasoline provided it has petitioned the Agency, per
Sec. 80.93(d), and has received Agency approval on the petition, and
has revised its individual baseline, such that the Puerto Rico and U.S.
Virgin Islands gasoline in its individual baseline has been evaluated
using the summer Complex Model.
* * * * *
[FR Doc. 99-14496 Filed 6-8-99; 8:45 am]
BILLING CODE 6560-50-P
