[Federal Register Volume 61, Number 131 (Monday, July 8, 1996)]
[Rules and Regulations]
[Pages 35673-35680]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-16668]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 80
[FRL-5528-6]
General Procedures to Opt Out of the Reformulated Gasoline
Requirements; Removal of Jefferson County, Albany and Buffalo, New
York; Twenty-eight Counties in Pennsylvania; and Hancock and Waldo
Counties in Maine From the Reformulated Gasoline Program
AGENCY: Environmental Protection Agency.
ACTION: Final rule.
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SUMMARY: This final rule establishes the criteria and general
procedures for states to opt out of the federal reformulated gasoline
program for ozone non-attainment areas where the state had previously
voluntarily opted into the program. This action describes the petition
process a state must follow to be removed from the program, the
criteria used by EPA to approve a petition, and the transition period
before the opt-out becomes effective. This final rule also removes
Jefferson County and the Albany and Buffalo areas in New York; twenty-
eight counties in Pennsylvania; and Hancock and Waldo counties in Maine
from the list of covered areas identified in Sec. 80.70 of the
reformulated gasoline rule.
Today's action only applies to opt-out requests submitted by states
prior to December 31, 1997, unless this final rule is superseded by
another rule which pertains to new criteria and general procedures for
reformulated gasoline program opt-outs. The Agency intends to propose
and solicit comments on separate opt-out procedures for subsequent
requests to opt out of the reformulated gasoline program.
EFFECTIVE DATE: This final rule is effective August 7, 1996.
FOR FURTHER INFORMATION CONTACT: Mark Coryell, U.S. Environmental
Protection Agency Office of Air and Radiation, 401 M Street, SW
(6406J), Washington, DC 20460, (202) 233-9014. Also, contact Christine
Hawk at (202) 233-9672 or Pat Childers at (202) 233-9415.
SUPPLEMENTARY INFORMATION:
Regulated Entities
Entities potentially regulated by this action are those which
produce, supply or distribute motor gasoline. Regulated categories and
entities include:
------------------------------------------------------------------------
Category Examples of regulated entities
------------------------------------------------------------------------
Industry............................... Petroleum refiners, motor
gasoline distributors and
retailers.
State governments...................... State departments of
environmental protection.
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This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be regulated by this
action. This table lists the types of entities that EPA is now aware
could potentially be regulated by this action. Other types of entities
not listed in the table could also be regulated. To determine whether
your business is regulated by this action, you should carefully examine
the list of areas covered by the reformulated gasoline program in
Sec. 80.70 of title 40 of the Code of Federal Regulations. If you have
questions regarding the applicability of this action to a particular
entity, consult the person listed in the preceding FOR FURTHER
INFORMATION CONTACT section.
A copy of this action is available on the OAQPS Technology Transfer
Network Bulletin Board System (TTNBBS). The TTNBBS can be accessed with
a dial-in phone line and a high-speed modem (PH# 919-541-5742). The
parity of your modem should be set to none, the data bits to 8, and the
stop bits to 1. Either a 1200, 2400, 9600, 24.4K, or 48.8K baud modem
should be used. When first signing on, the user will be required to
answer some basic informational questions for registration purposes.
After completing the registration process, proceed through the
following series of menus:
(M) OMS.
(K) Rulemaking and Reporting.
(3) Fuels.
(9) Reformulated gasoline.
[[Page 35674]]
A list of ZIP files will be shown, all of which are related to the
reformulated gasoline rulemaking process. Today's action will be in the
form of a ZIP file and can be identified by the following title:
OPTOUT.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. 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.
Extended Summary
Based upon public comments that were solicited in the Notice of
Proposed Rulemaking (60 FR 31269) published June 14, 1995, EPA has made
the following decisions that are contained in this final rule.
This final rule provides the Agency's general rules concerning
criteria and procedures for states to opt out certain non-attainment
areas from the federal reformulated gasoline (RFG) program. This action
applies to non-attainment areas where the state voluntarily opted into
the program, and subsequently decides to withdraw from the reformulated
gasoline program, an action referred to as ``opt-out.'' This rule
describes the process a state must follow to petition for removal from
the program, the criteria used by EPA to evaluate a request, and the
transition period before the opt-out becomes effective.
This final rule authorizes the EPA's Administrator to approve a
petition to opt out all or a portion of an opt-in area. The final rule
requires that the governor submit the opt-out petition, or the
governor's authorized representative. It must include specific
information on how, if at all, reformulated gasoline has been relied
upon by the state in state or local implementation plans, or revisions
to such plans, both pending or already approved.
This final rule specifies the effective date that an area will be
removed from the list of covered areas defined in Sec. 80.70 of the
reformulated gasoline rule. If reformulated gasoline was included as a
control measure in an approved State Implementation Plan (e.g. to
demonstrate attainment or maintenance), then the opt-out would not
become effective until 90 days from the effective date for Agency
approval of a revision to the state plan removing reformulated gasoline
as a control. If reformulated gasoline was relied upon in a plan
pending Agency approval, then the opt-out would become effective 90
days from the date EPA provides written notification to the state that
the petition has been approved. If the state does not have a plan or
did not rely on reformulated gasoline in a pending plan, then the
effective date is the same as for pending plans described above. The
Agency would also publish a Federal Register notice announcing the
approval of the petition and the effective date for the opt-out.
This final rule also removes Jefferson County and the Albany and
Buffalo areas in New York (a total of nine counties in New York); the
twenty-eight opt-in counties in Pennsylvania; and Hancock and Waldo
counties in Maine from the list of covered areas defined by Sec. 80.70
of the reformulated gasoline rule per the request of the States of New
York, Pennsylvania and Maine. This is based on requests from the
Governors of New York, Pennsylvania and Maine that these areas opt out
of this federal program. In a separate action signed by the EPA
Administrator on December 29, 1994, EPA stayed the application of the
reformulated gasoline regulations in these areas effective January 1,
1995 until July 1, 1995. 60 FR 2696 (January 11, 1995). EPA proposed to
extend this stay until final action was taken on the opt-out requests.
60 FR 31269 (June 14, 1995). In a separate action signed by the EPA
Administrator the Agency extended the stay on June 30, 1995. 60 FR
35488 (July 10, 1995).
The regulations adopted in today's action for processing opt-outs
from the reformulated gasoline requirements would be applicable for
opt-out petitions received or under Agency consideration beginning June
21, 1996, until December 31, 1997, unless superseded by a subsequent
rulemaking.
I. General Procedures for EPA's Processing of Future Opt-Out Requests
A. Background
The federal reformulated gasoline (RFG) program is designed to
reduce ozone levels in the largest metropolitan areas of the U.S. with
the worst ground level ozone problems by reducing vehicle emissions of
the ozone precursors, specifically volatile organic compounds (VOC),
through fuel reformulation. Reformulated gasoline also achieves a
significant reduction in air toxics. In Phase II of the program
nitrogen oxides (NOx), another precursor of ozone, are also
reduced. The 1990 Amendments to the Clean Air Act requires reformulated
gasoline in the nine largest cities with the highest levels of ozone.
In section 211(k)(6), Congress provided the opportunity for states to
opt-in to the RFG program for their other nonattainment areas.
EPA issued final rules establishing requirements for reformulated
gasoline on December 15, 1993. 59 FR 7716 (February 16, 1994). During
the development of the RFG rule a number of states inquired as to
whether they would be permitted to opt out of the RFG program at a
future date, or opt out of certain of the requirements. This was based
on their concern that the air quality benefits of RFG, given their
specific needs, might not warrant the cost of the program, specifically
focusing on the more stringent standards in Phase II of the program
(starting in the year 2000). Such states wished to retain the
flexibility to opt out of the program. Other states indicated they
viewed RFG as an interim strategy to help bring their nonattainment
areas into attainment sooner than would otherwise be the case.
The regulation issued on December 15, 1993 did not include
procedures for opting out of the RFG program because EPA had not
proposed and was not ready to adopt such procedures. However, the
Agency did indicate that it intended to propose such procedures in a
separate rule.
B. Statutory Authority
The statutory authority for this rule is granted to EPA by section
211(c) and (k) and section 301(a) of the Clean Air Act as amended, 42
U.S.C. 7545(c) and (k) and 7601(a). A discussion of EPA's statutory
authority may be found in the preamble to the proposal, at 60 FR 31271
(June 14, 1995).
C. General Rulemaking vs. Notice and Comment Rulemaking for Each Opt-
Out Request
In the NPRM, EPA proposed a general rule that would apply for all
future opt-out requests. Some industry representatives and associations
provided opposing comments. Some commenters argued that under section
307(d) of the Act, EPA must provide public notice and a comment period
for each opt-out request. They argued that EPA must conduct rulemaking
for each opt-out request to consider the
[[Page 35675]]
ramifications of each opt-out request, for example, on long-term costs
to state, local and tribal governments and private industry and
possible adverse regional air quality consequences. Other commenters,
however, preferred the Agency's proposal to develop general opt-out
procedures rather than conduct a rulemaking for each state opt-out
request.
EPA does not agree that a separate rulemaking must be conducted for
each future opt-out request. Through this rulemaking, EPA is
establishing a petition based process that will address, on a case by
case basis, future individual state requests to opt out of the federal
RFG program. The regulations establish clear and objective criteria for
EPA to apply in these future non-rulemaking, adjudication actions.
These criteria address when a state's petition is complete and the
appropriate transition time under the regulations. 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 a regulatory structure, in order 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 opt-out requests presented by states.
EPA believes that the general procedures adopted here will provide
consistent opt-out decisions. This rule will also provide greater
certainty in the market than individual rulemakings could provide.
Lastly, this rule will provide quick approval for opt-out requests
while maintaining a sufficient transition period to minimize costly
market disruptions.
In certain cases, the affected parties will be able to comment on
the state action. In those states where the reformulated gasoline
program is included as a part of an approved state implementation plan
(SIP), affected parties that are concerned with the impacts of an opt-
out would have the opportunity to comment on a state's revised plan
that removes reformulated gasoline as an air control measure.
The Agency is not taking action today on the portion of the
proposed notice concerning the question whether the Agency has the
discretion under section 211(k) of the act to allow attainment areas to
opt into this federal program. EPA has received comments on this
question and is reviewing options that would permit opt-in
opportunities to be expanded. EPA anticipates announcing a policy
shortly.
D. Applicability
The regulations adopted in today's action for processing opt-outs
from the reformulated gasoline requirements would be applicable for
opt-out petitions received or under Agency consideration beginning June
21, 1996, until December 31, 1997, unless superseded by a subsequent
rulemaking.
EPA received comments that complying with the Phase II reformulated
gasoline requirements involves significantly greater capital investment
than for the Phase I requirements. The transition periods set forth in
today's rule for opting out of Phase I reformulated gasoline
requirements would be, according to the comments, grossly inadequate
for industry to recover in a reasonable time frame investment costs
associated with the Phase II. EPA recognizes these different
circumstances may call for different opt-out provisions and intends to
propose separate rules for opting out areas from the Phase II
reformulated gasoline requirements.
E. Petition Process
In the NPRM, EPA proposed that a state may petition the EPA to opt
out of the reformulated gasoline program. Under the proposal, a
petition would have to include specific information about how the
program is used in a State Implementation Plan. If a state did include
the reformulated gasoline program as a control measure in such plan or
revision submitted to EPA for approval, then the state would have to
describe if and how it intended to replace reformulated gasoline as a
control measure. In addition, the state would need to identify whether
it intended to submit a revision and, if so, when.
Several commenters raised concerns about the impacts that approved
petitions would have on air quality, especially in nonattainment areas,
since reformulated gasoline provides significant clean air benefits. A
fuels association commented that petitions should demonstrate that
there will be no unacceptable adverse air quality impacts to other
areas or other states. Industry representatives commented that
nonattainment areas should not be permitted to opt out unless the state
has binding commitments to adopt substitute measures to achieve
attainment. Another commenter cautioned that a petition should not be
approved if there is adequate showing that opting out would cause the
area to return to nonatttainment status. Regarding opportunity for
public consideration, an association remarked that the petition process
should include a formal comment period.
EPA is committed to ensuring that areas around the country attain
the National Ambient Air Quality Standards (NAAQS), including the ozone
standard. EPA recognizes, however, that under the Clean Air Act the
states play a primary role in attaining the NAAQS, including choosing
those control measures they prefer to include in its plans to attain
and maintain the NAAQS. Today's action maintains the flexibility that
states have in air quality planning by honoring their right to opt out
and substitute alternative control measures where the state considers
appropriate. EPA believes that the state should retain flexibility to
revise the SIP by selecting control measures it desires to include in
its plan as long as it makes the necessary demonstrations under the
Act.
To begin the opt-out process, this final rule requires that a
Governor, or his or her authorized representative, submit an opt-out
petition to the Administrator of the Agency. The opt-out petition must
include information describing how, if at all, reformulated gasoline
has been relied upon by the state in its State Implementation Plans,
revisions to such plans, or redesignation requests, both pending or
already approved. This would include, for example, attainment as well
as maintenance plans. The petition must also include a geographic
description of the opt-out area.
In the case where a state has included reformulated gasoline in a
pending plan submission, the petition must identify whether the state
is withdrawing the plan and what alternative air quality control
measures, if any, that the state intends to use to replace RFG. In the
case where a state intends to submit a revision to an approved plan or
to a pending SIP submission, the petition must identify this intention
as well as the alternative air quality control measures that will be
substituted for reformulated gasoline to reach or maintain compliance
with the federal ozone standard. Furthermore, the petition must include
the status of any proposed revision to an approved plan or pending SIP
submission and the projected schedule for the revised plan. In the
event a state does not intend on
[[Page 35676]]
revising an approved plan or pending SIP submission, the petition must
include a description why no revision is considered necessary. A
revision may not be considered necessary, for instance, if the proposed
opt-out area does not need to rely on reformulated gasoline to achieve
or maintain attainment.
The purpose of the information required in the petition is to
provide EPA the assurance that a state has considered the programmatic
effects of the requested opt-out. For instance, EPA expects that states
will fully consider the effects that an RFG opt-out would have on its
SIP or 15% VOC rate of progress plan as well as its overall ability to
attain and maintain the federal ozone standard. Through this petition
exercise, a state may find that alternative control measures may not
offer the cost-effectiveness, immediate benefits, or ancillary benefits
such as toxics reduction that reformulated gasoline provides. Thus
careful planning is needed by the state since reductions from other
sources may be much less practicable, depending on the state's
circumstances. Reformulated gasoline is one of the most cost-effective
measures for ozone control available and also yields significant air
toxics benefits. EPA believes that the information requirement will
address some of the commenters' concerns that states consider the
effects on air quality of their decision to opt out, stated earlier in
this section.
After a state submits a petition, the Agency will review the
document to determine whether it contains all of the required
information. Once the Agency determines that the petition is complete
with the required elements, EPA will send a letter to the state
approving the petition and identifying the effective date of the opt-
out. For those instances where the state does not include federal RFG
in an approved plan, the effective date shall be 90 days from the date
of the notification to the state. When the state has included RFG in an
approved plan, the effective date will be 90 days from the effective
date for Agency approval of a revision to the plan that removes
reformulated gasoline as a control measure.
F. Transition Period
In the NPRM, EPA proposed to make the effective date for an opt-out
dependent upon whether or not a state has an approved plan in place. If
reformulated gasoline was relied upon as a control measure in an
approved plan, EPA proposed to make the opt-out effective 30 days after
the Agency had approved an appropriate revision to the state plan. If
reformulated gasoline was not relied upon in an approved or pending
SIP, SIP revision, or redesignation request, EPA proposed to make the
opt-out become effective 30 days from receipt of a complete opt-out
petition. If reformulated gasoline was relied upon as a control measure
in a plan revision that had been submitted to the Agency but was still
pending Agency approval, and the Agency had found the plan to be
complete and/or made a protectiveness finding under 40 CFR Secs. 51.448
and 93.128, EPA proposed to make the opt-out effective 120 days from
the date a complete petition is received. When the state had a pending
plan revision that the Agency had determined complete and/or for which
the Agency had made a protectiveness finding and the state decided to
withdraw the submission or indicated to the Agency the state's
intention to submit a revision, EPA proposed to make the opt-out
effective 30 days from receipt of a complete petition from the state,
as described above and specified in the proposed regulatory language.
EPA received numerous comments on two aspects of the proposal.
First, the majority of the commenters indicated that the proposed time
period between the approval of an opt-out and the date the opt-out
becomes effective (referred to in this preamble as the transition
period) is insufficient for industry to change the supply of gasoline
from reformulated gasoline to conventional without significant
disruption to the supply infrastructure. Second, commenters recommended
that the opt-out process should be more orderly, with the Agency giving
expeditious and clear notification to the public as to when the opt-out
becomes effective.
In response to the comments received on the timing of opt-outs, EPA
is adopting opt-out provisions that are modified from the proposal.
First, today's action provides for a single 90 day transition period.
In determining an appropriate length of time for the transition period,
EPA weighed the need for industry to plan and implement a change in
gasoline throughout the distribution system to the retail stations
against the request from states to opt out in a timely manner. The
majority of commenters indicated that 60 to 90 days would be adequate
for industry to turn over existing stocks of reformulated gasoline to
conventional gasoline. Also, based upon comments from state
associations, as well as EPA's experience in other opt-outs, states are
concerned that the Agency make a timely decision on the opt-out and
generally consider a 90-day transition period reasonable once the opt-
out approval by the Agency has been made.
This action finalizes a single transition period, not two periods
as proposed. In the NPRM, states with plan revisions containing RFG
pending before the Agency would be opted out of the RFG program in 120
days, but a state could shorten this period to 30 days simply by
withdrawing the pending plan revision or indicating to EPA the state's
intention to submit a revision to the pending plan. These two
conditions provide little impediment to a state to effectively opt out
in 30 days. Therefore, EPA believes that a single transition period
length will simplify an opt-out and maximize affected parties's ability
to plan for a smooth transition from the reformulated gasoline program.
EPA is also modifying the procedure for initiating the 90 day count
for the transition period. Several commenters noted, and EPA concurs,
that in some cases the proposed procedures not only would have created
uncertainty surrounding the transition period start date, but also
would have effectively shortened the proposed transition period. In the
NPRM, EPA proposed to make the transition period begin upon receipt of
a complete petition. As commenters pointed out, this method would
create uncertainty about whether the petition was complete on the day
that the Agency received the petition and did not provide a means for
communicating the petition's approval or effective date to the
regulated industry.
EPA believes that in those cases where reformulated gasoline is
relied upon as a control measure in an approved plan, the procedures
for re-approval of the state plan, with notice, comment, and
publication of the revision, would sufficiently address commenters'
concerns about clear notification of Agency action. Therefore, if RFG
is relied upon as a control measure in an approved plan, the opt-out
would become effective 90 days after the effective date of the Agency's
approval of an appropriate revision to the state plan. Notice of this
action would be published in the Federal Register. Prior to this notice
in the Federal Register, the state must also submit a complete petition
to opt out of the reformulated gasoline program.
Where reformulated gasoline is relied upon as a control measure in
a plan revision pending before the Agency, or is not relied upon in any
plan, the state must petition the Agency to opt out of the reformulated
gasoline program, and the opt-out will be effective 90 days after the
Agency notifies the state that the state's petition is approved. The
[[Page 35677]]
Agency will provide written notification to the state indicating EPA's
approval of the petition. The 90-day transition clock will start from
the date of the approval notification sent to the opt-out state. To
facilitate an orderly opt-out process and minimize any uncertainties
that may result from an opt-out, EPA intends to quickly review opt-out
petitions and expeditiously notify the public of the effective date of
opt-outs. EPA intends to make a decision on the state's petition within
two weeks from receipt of the petition. EPA will promptly notify the
state and publish a notice in the Federal Register notifying the public
of the effective date of the opt-out, thereby giving consistent and
timely information to the affected parties. The Agency will make every
effort to notify the associations of affected industries and states
after EPA has approved a state's opt-out petition. In addition EPA will
announce the opt-out's effective date on the OAQPS Technology Transfer
Network Bulletin Board System (TTNBBS). For information on how to
access this system, see the SUPPLEMENTARY INFORMATION section of this
rule for details.
Finally, at a state's request, the opt-out could be effective later
than 90 days after the start of the transition period. In such a case,
a state must indicate in its petition to the Agency the desired
effective date for the opt-out. In this scenario, EPA recommends that a
state consider an opt-out date which becomes effective on one of the
reformulated gasoline program's natural transition points. EPA received
comments supporting opt-out effective dates that are consistent with
the natural transition points. These natural transition points are
identified as January 1, the start of the averaging season, and May 1
and September 15, the beginning and end, respectively, of the VOC
control season. The Agency understands these concerns and will support
state efforts to accommodate these natural transition points.
G. Cyclic Opt-outs and Opt-ins by a State
The reformulated gasoline program is a cost-effective program
designed to reduce ozone levels in participating metropolitan areas.
But the cost effectiveness of the reformulated gasoline program is
jeopardized by regulatory uncertainty, as it pertains to the regulated
community's ability to plan for providing the manufacturing capacity to
produce oxygenate and reformulated gasoline to specified control areas.
Specifically, the uncertainty is increased by the perceived absence of
long term commitment to the reformulated gasoline program by those
states who opted into the reformulated gasoline program and by the
relatively simple process for states to opt out of the reformulated
gasoline program provided for in this final rule.
EPA understands and expects that before a state submits an opt-out
petition it will have given thoughtful consideration to the air quality
consequences of its action and considered the substitute control
measures that may be needed to achieve air quality standards and
protect the health of its citizens. Therefore, the Agency believes it
is improbable that a state would seek to reverse an opt-out decision by
shortly thereafter requesting to opt back into the program.
However, comments from the oil industry expressed their concern
that states may engage in a cycle of opt-ins and opt-outs. The Agency
agrees that the integrity of the reformulated gasoline program would be
jeopardized if states maintained a cycle of opt-ins and opt-outs, e.g.
to create a customized seasonal program. The reformulated gasoline
program is a year-round program.
Given the limited applicability of this final rule to December 31,
1997, EPA believes that it is unlikely that states would have the
opportunity to complete a cycle of opt-out and opt-in. Although this
final rule effectively allows states to quickly opt out of the
reformulated gasoline program, the Agency may set the effective date of
opt-in up to one year from the date of a governor's opt-in application.
Section 211(k)(6). States would not be able to plan, with any
certainty, the timing of opt-ins and opt-outs which would create a
seasonal reformulated gasoline program. EPA does not believe that
current conditions warrant any further restrictions on opt-ins and opt-
outs. EPA may promulgate restrictions in the future if it is determined
in the future that cyclic opt-outs and opt-ins are occurring.
H. Effect on Averaging
Under the RFG regulations, refiners and importers may elect to meet
certain RFG standards either on a per-gallon basis or on average. This
election, which must be made separately for each parameter and
separately for each calendar year, applies to all RFG produced at a
refinery by a refiner, or imported by an importer, during a calendar
year.
Some commenters indicated that a refiner or importer who elects to
comply with the RFG standards on average may be adversely affected by
an area opting out of the RFG program during an averaging period. This
could occur where a refiner's or importer's average is out of
compliance at the time of an unanticipated opt-out, and reduced future
production or importation of RFG due to the opt-out results in the
refiner or importer having insufficient volume in the remainder of the
averaging period to bring the average into compliance.
EPA believes that the 90 day (minimum) transition period provides
adequate time for refiners and importers to adjust to changes in the
RFG market which may be attributed to opt-outs and that it is unlikely
that a refiner's or importer's ability to comply with the RFG standards
on average would be significantly impaired if an area opts out of the
RFG program. As a result, EPA is not providing regulatory relief in
today's action for such a possibility. Nevertheless, in setting a
potential penalty in an enforcement action for violation of the RFG
averaging standards, EPA will consider the effects of any opt-outs if
the refiner or importer is able to demonstrate (1) that it would have
been in compliance but for the opt-out, and (2) that it took all
reasonable steps to address the averaging problem caused by the opt-
out.
II. New York's, Pennsylvania's and Maine's Requests to Remove Selected
Opt-In Areas From the Requirements of the Reformulated Gasoline Program
A. Introduction
In the NPRM, EPA proposed to grant the petitions from the governors
of the States of New York, Pennsylvania and Maine to remove Jefferson
County and the Albany and Buffalo areas in New York (a total of nine
counties in New York); the twenty-eight opt-in counties in
Pennsylvania; and Hancock and Waldo counties in Maine from the list of
covered areas defined by section 80.70 of the reformulated gasoline
rule.
Jefferson County and the other eight New York counties affected by
this proposal were included as covered areas in EPA's reformulated
gasoline regulations based on Governor Mario Cuomo's request of October
28, 1991, that these areas be included under the Act's opt-in provision
for ozone nonattainment areas (57 FR 7926, March 5, 1992). See 40 CFR
80.70(j)(10)(vi). On November 29, 1994, EPA received a petition from
the Commissioner of New York's Department of Environmental
Conservation, Mr. Langdon Marsh, to remove Jefferson County from the
list of areas covered by the requirements of the reformulated gasoline
program. EPA understands that Commissioner Marsh was acting for
Governor Cuomo in this
[[Page 35678]]
matter. The Administrator responded to the State's request in a letter
to Commissioner Marsh dated December 12, 1994, stating EPA's intention
to grant New York's request, and conduct rulemaking to implement this.
In the letter of December 12, addressing the opt-out request for
Jefferson County, the Administrator also indicated that effective
January 1, 1995, and until the rulemaking to remove Jefferson County
from the list of covered areas is completed, EPA would not enforce the
reformulated gasoline requirements in Jefferson County for reformulated
gasoline violations arising after January 1, 1995. This was based on
the particular circumstances in Jefferson County.
On December 23, 1994, Commissioner Marsh of New York's Department
of Environmental Conservation wrote to further request the opt-out of
the Albany and Buffalo areas which include the counties of Albany,
Greene, Montgomery, Rennsselaer, Saratoga, Schenectady, Erie and
Niagara. EPA Assistant Administrator for Air and Radiation, Mary
Nichols, responded to the state's request in a letter to Commissioner
Marsh dated December 28, 1994, stating EPA's intention to grant New
York's request, and conduct rulemaking to implement this. The December
28 letter also indicated EPA's intent to stay the reformulated gasoline
regulations from January 1, 1995, until July 1, 1995, in the specified
counties while the Agency completes rulemaking to appropriately change
the regulations. The letter stated, however, that the requirements of
the reformulated gasoline program would apply in these areas until the
stay becomes effective January 1, 1995.
Twenty-eight counties in Pennsylvania were included as covered
areas in EPA's reformulated gasoline regulations based on Governor
Robert P. Casey's request dated September 25, 1991. See 40 CFR
80.70(j)(11)(i) through (xxviii). The counties referred to are listed
as follows: Adams, Allegheny, Armstrong, Beaver, Berks, Blair, Butler,
Cambria, Carbon, Columbia, Cumberland, Dauphin, Erie, Fayette,
Lackawanna, Lancaster, Lebanon, Lehigh, Luzerne, Mercer, Monroe,
Somerset, Northhampton, Perry, Washington, Westmoreland, Wyoming and
York. On December 1, 1994, EPA received a petition from Governor Casey
to remove these twenty-eight counties from the list of covered areas
defined by Sec. 80.70 of the reformulated gasoline rule. As with New
York's request, the Administrator responded to the State's request in a
letter to Governor Casey dated December 12, 1994, stating EPA's
intention to grant Pennsylvania's request, and conduct rulemaking to
implement this. Effective January 1, 1995, and until formal rulemaking
to remove the twenty-eight counties from the list of covered areas is
completed, EPA would not enforce the reformulated gasoline requirements
in these twenty-eight counties for reformulated gasoline violations
arising after January 1, 1995. This was based on the particular
circumstances in Pennsylvania. EPA has reserved its authority to
enforce the reformulated gasoline program for violations that may have
occurred prior to January 1, 1995.
Hancock and Waldo Counties in Maine were included as covered areas
in EPA's reformulated gasoline regulation based on Governor John R.
McKernan's request of June 26, 1991, that these counties be included
under the Act's opt-in provision for ozone nonattainment areas. (56 FR
46119, September 10, 1991) See 40 CFR 80.70(j)(5)(viii) and (ix). On
December 27, EPA received a petition from the Acting Commissioner of
Maine's Department of Environmental Protection, Ms. Deborah Garrett, to
remove Hancock and Waldo Counties in Maine from the list of areas
covered by the requirements of the reformulated gasoline program. EPA
understands that Commissioner Garrett is acting for Governor McKernan
in this matter. EPA Assistant Administrator for Air and Radiation, Mary
Nichols, responded to the state's request in a letter to Commissioner
Garrett, dated December 28, 1994, stating EPA's intention to grant
Maine's request, and conduct rulemaking to implement this. The December
28 letter also stated EPA's intent to stay the reformulated gasoline
regulations from January 1, 1995 until July 1, 1995, in the specified
counties while the Agency completes rulemaking to appropriately change
the regulations. However, EPA has reserved its authority to enforce the
reformulated gasoline program for violations that may have occurred
prior to January 1, 1995.
In separate notices signed by the EPA Administrator on December 29,
1994, and June 30, 1995, and for the reasons described therein, EPA has
stayed the program in these thirty-nine counties, or portions thereof,
effective January 1, 1995, until such time as the Agency completed
rulemaking on the proposed opt-out for these areas. (60 FR 2696,
January 11, 1995; 60 FR 35488, July 10, 1995) Based on this chronology,
EPA proposed that these areas be removed from the reformulated gasoline
program effective upon the issuance of final action in this rulemaking.
(60 FR 31269, June 14, 1995)
B. EPA Grants New York's, Pennsylvania's and Maine's Requests To Remove
Selected Opt-In Areas From the Requirements of the Reformulated
Gasoline Program
EPA believes that it is appropriate to interpret section 211(k) as
authorizing states to opt out of the RFG program, provided that a
process is established for a reasonable transition out of the program.
60 FR 31269 (June 14, 1995). The Agency has considered two key aspects
in granting these opt-outs: the first involves coordination of air
quality planning, and the second involves appropriate lead time for
industry to transition out of the program.
With respect to air quality planning, EPA believes there is no
reason to delay the removal of the 39 affected counties, or portions of
counties, in New York, Pennsylvania and Maine. These areas do not
include or rely on reformulated gasoline as a control measure in any
state implementation plan, maintenance plan or 15% rate of progress
plan. Even if reformulated gasoline is included as a contingency
measure in a maintenance plan for the redesignation packages, allowing
an area to opt out now would not interfere with implementing that
contingency. The areas could opt into the reformulated gasoline program
in the future, if necessary, within the restrictions outlined in
section 211 (k)(6) of the Act.
As indicated above, the reformulated gasoline program is currently
stayed in all of the affected areas, and Agency consideration of an
appropriate lead time for industry to change the supply of gasoline is
unnecessary.
Therefore, in today's action, EPA removes Jefferson County and the
Albany and Buffalo areas in New York (a total of nine counties in New
York); the twenty-eight opt-in counties in Pennsylvania; and Hancock
and Waldo counties in Maine from the list of covered areas defined by
Sec. 80.70 of the reformulated gasoline rule as of July 8, 1996.
III. Environmental Impact
If an area opts out of the reformulated gasoline program, it will
not receive the reductions in volatile organic compounds, oxides of
nitrogen (NOX), and air toxics that are expected from this
program. Instead, the areas would be subject to the federal controls on
Reid vapor pressure for gasoline in the summertime, and would receive
control of NOX and air toxics through the requirements of the
conventional gasoline anti-dumping program. These latter requirements
are designed to ensure that gasoline quality does not
[[Page 35679]]
degrade from the levels found in 1990. These areas would be foregoing
the air quality benefits obtained from the use of reformulated
gasoline.
However, as discussed in the proposal, one of the central concepts
behind this rule is a recognition that states have the primary
responsibility to develop the mix of control strategies needed to
attain and maintain the NAAQS, and should have flexibility in
determining the mix of control measures needed to meet their air
pollution goals. EPA expects that states will in fact act prudently in
exercising their rights to opt out under these rules. Any environmental
impacts of opting out are therefore not expected to occur in isolation,
but in a context of states exercising their responsibility and
developing appropriate control strategies for their areas' air
pollution goals.
IV. Regulatory Flexibility Analysis
This rule is not expected to result in any additional compliance
cost to regulated parties and in fact is expected to decrease
compliance costs to those entities who previously supplied reformulated
gasoline to the area opting out. This rule also establishes a
transition period which maximizes affected parties's ability to plan
for smooth transition from the reformulated gasoline program,
minimizing disruption to the motor gasoline marketplace. This
transition period is reasonably expected to allow parties to turn over
existing stocks of reformulated gasoline to conventional gasoline.
Accordingly, EPA has determined that it is not necessary to prepare
regulatory flexibility analysis in connection with this final rule. EPA
has determined that this rule will have no significant adverse effect
on substantial number of small businesses.
V. Public Participation
A. Public Comments
The Agency received submissions during the comment period for the
NPRM from 36 commenters. Copies of all of the written comments
submitted to EPA, as well as records of all oral comments received
during the comment period, can be obtained from the docket for this
rule (see ADDRESSES).
The Agency received comments from the public on three major issues:
the opt-out process, EPA's authority to promulgate a rule on opt-outs,
and transition period. A summary of these comments along with the
Agency's responses are located throughout the preamble above.
Discussion of public comments on the proposed opt-out process and the
Agency response can be located in Section I, Parts C and E of this
preamble. Discussion of public comments on the proposed transition
periods and the Agency response can be found in Section I, Part F. The
Agency response to comments on statutory authority are located in
Section I, Part B and in the preamble to the proposal, at 60 FR 31271.
The docket also contains a document that provides a more detailed
summary of the comments, including some issues not covered in this
preamble because they were minor or less contentious issues, and EPA's
rationale for its response.
B. Public Hearing
The Agency held a public hearing on July 5, 1995 to hear comments
on the Notice of Proposed Rulemaking (60 FR 31269) published June 14,
1995. Comments at the hearing were provided by representatives of the
oil industry and fuel oxygenate producers. These comments have been
presented and addressed in the preamble above.
VI. Executive Order 12866
Under Executive Order 12866 1, the Agency must determine
whether a regulation 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\ See 58 FR 51735 (October 4, 1993).
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(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 of 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
this Executive Order.2
---------------------------------------------------------------------------
\2\ Id. at section 3(f)(1)-(4).
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It has been 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.
VII. Unfunded Mandates
Under section 202 of the Unfunded Mandates Reform Act of 1995
(``UMRA''), Pub.L. 104-4, EPA must prepare a budgetary impact statement
to accompany any general notice of proposed rulemaking or final rule
that includes a Federal mandate which may result in estimated costs to
State, local, or tribal governments in the aggregate, or to the private
sector, of $100 million or more. Under Section 205, for any rule
subject to Section 202 EPA generally must select the least costly, most
cost-effective, or least burdensome alternative that achieves the
objectives of the rule and is consistent with statutory requirements.
Under Section 203, before establishing any regulatory requirements that
may significantly or uniquely affect small governments, EPA must take
steps to inform and advise small governments of the requirements and
enable them to provide input.
EPA has determined that the final rule promulgated today does not
trigger the requirements of UMRA. The rule does not include a Federal
mandate that may result in estimated annual costs to State, local or
tribal governments in the aggregate, or to the private sector, of $100
million or more, and it does not establish regulatory requirements that
may significantly or uniquely affect small governments.
VIII. Judicial Review
Because this final action is nationally applicable, under section
307(b)(1) of the Clean Air Act judicial review of this action is
available only by the filing of a petition for review in the U.S. Court
of Appeals for the D.C. Circuit within sixty days of publication of
this action in the Federal Register.
VIIII. Submission to Congress and the General Accounting Office
Under section 801(a)(1)(A) of the Administrative Procedures Act
(APA) as amended by the Small Business Regulatory Enforcement Fairness
Act of 1996, EPA submitted a report containing this rule and other
required information to the U.S. Senate, the U.S. House of
Representatives and the Comptroller General of the General Accounting
Office prior to publication of the rule in today's Federal Register.
This rule is not a ``major rule'' as defined by section 804(2) of the
APA as amended.
List of Subjects in 40 CFR Part 80
Environmental protection, Air pollution control, Fuel additives,
Gasoline, Motor vehicle pollution.
Dated: June 21, 1996.
Carol M. Browner,
Administrator.
40 CFR part 80 is amended as follows:
[[Page 35680]]
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 80.2 is amended by adding paragraph (vv) to read as
follows:
Sec. 80.2 Definitions.
* * * * *
Opt-in area. An area which becomes a covered area under Sec. 80.70
pursuant to section 211(k)(6) of the Clean Air Act.
3. Section 80.70 is amended by revising paragraph (j) introductory
text; by removing paragraphs (j)(5)(viii), (5)(ix), (j)(10)(i),
(10)(iii), (10)(v) through (10)(xi); by redesignating paragraphs
(j)(10)(ii) and (iv) as (10)(i) and (10)(ii); by removing paragraph
(j)(11) and redesignating (j)(12) through (14) as (j)(11) through (13)
respectively; and by adding a new paragraph (l) to read as follows:
Sec. 80.70 Covered areas.
* * * * *
(j) The ozone nonattainment areas listed in this paragraph (j) are
covered areas for purposes of subparts D, E, and F of this part. The
geographic extent of each covered area listed in this paragraph (j)
shall be the nonattainment area boundaries as specified in 40 CFR part
81, subpart C:
* * * * *
(l) Upon the effective date for removal under Sec. 80.72(a), the
geographic area covered by such approval shall no longer be considered
a covered area for purposes of subparts D, E and F of this part.
4. Section 80.72 is added to read as follows:
Sec. 80.72 Procedures for opting out of the covered areas.
(a) For petitions received prior to and including December 31, 1997
and in accordance with paragraph (b) of this section, the Administrator
may approve a petition from a state asking for removal of any opt-in
area, or portion of an opt-in area, from inclusion as a covered area
under Sec. 80.70. If the Administrator approves a petition, he or she
shall set an effective date as provided in paragraph (c) of this
section. The Administrator shall notify the state in writing of the
Agency's action on the petition and the effective date of the removal
when the petition is approved.
(b) To be approved under paragraph (a) of this section, a petition
must be signed by the governor of a state, or his or her authorized
representative, and must include the following:
(1) A geographic description of each opt-in area, or portion of
each opt-in area, which is covered by the petition;
(2) A description of all ways in which reformulated gasoline is
relied upon as a control measure in any approved state or local
implementation plan or plan revision, or in any submission to the
Agency containing any proposed plan or plan revision (and any
associated request for redesignation) that is pending before the Agency
when the petition is submitted; and
(3) For any opt-in areas covered by the petition for which
reformulated gasoline is relied upon as a control measure as described
under paragraph (b)(2) of this section, the petition shall include the
following information:
(i) Identify whether the state is withdrawing any such pending plan
submission;
(ii)(A) Identify whether the state intends to submit a revision to
any such approved plan provision or pending plan submission that does
not rely on reformulated gasoline as a control measure, and describe
the alternative air quality measures, if any, that the state plans to
use to replace reformulated gasoline as a control measure;
(B) A description of the current status of any proposed revision to
any such approved plan provision or pending plan submission, as well as
a projected schedule for submission of such proposed revision;
(iii) If the state is not withdrawing any such pending plan
submission and does not intend to submit a revision to any such
approved plan provision or pending plan submission, describe why no
revision is necessary;
(iv) If reformulated gasoline is relied upon in any pending plan
submission, other than as a contingency measure consisting of a future
opt-in, and the Agency has found such pending plan submission complete
or made a protectiveness finding under 40 CFR 51.448 and 93.128,
demonstrate whether the removal of the reformulated gasoline program
will affect the completeness and/or protectiveness determinations;
(4) The Governor of a State, or his or her authorized
representative, shall submit additional information upon request of the
Administrator,
(c) (1) Except as provided in paragraph (c)(2) of this section, the
Administrator shall set an effective date for removal of an area under
paragraph (a) of this section of 90 days from the Agency's written
notification to the state approving the opt-out petition.
(2) If reformulated gasoline is contained as an element of any plan
or plan revision that has been approved by the Agency, other than as a
contingency measure consisting of a future opt-in, then the effective
date under paragraph (a) of this section shall be 90 days from the
effective date for Agency approval of a revision to the plan that
removes reformulated gasoline as a control measure.
(d) The Administrator shall publish a notice in the Federal
Register announcing the approval of any petition under paragraph (a) of
this section, and the effective date for removal.
[FR Doc. 96-16668 Filed 7-5-96; 8:45 am]
BILLING CODE 6560-50-P
