[Federal Register Volume 63, Number 131 (Thursday, July 9, 1998)]
[Notices]
[Pages 37112-37114]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-18080]
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ENVIRONMENTAL PROTECTION AGENCY
[FRL-6121-8]
Change in Minimum Oxygen Content Requirement for Reformulated
Gasoline
AGENCY: Environmental Protection Agency.
ACTION: Notice.
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SUMMARY: EPA's reformulated gasoline (RFG) program contains various
standards for RFG, including an oxygen content standard. When the RFG
program was implemented, the per-gallon minimum standard applicable to
RFG in all covered areas was 1.5% by weight. In 1997, pursuant to the
RFG regulations, EPA increased this standard by 0.1% to 1.6% by weight
for several of the RFG covered areas (and for certain refineries,
importers and blenders) because these areas failed a series of
compliance surveys for oxygen content in 1996. Certain covered areas
have failed the oxygen compliance survey series for 1997, and EPA is
increasing the per-gallon minimum standard applicable to these areas by
0.1%. Since the previous increases remain in effect, the per-gallon
minimum oxygen requirement in all but one of these areas failing in
1997 will increase to 1.7% by weight. This notice announces the
increased standard, and describes the covered areas and parties that
are subject to the increased standard. The increased standard will help
ensure that all covered areas receive the full benefit of the oxygen
content requirement in the RFG program.
FOR FURTHER INFORMATION CONTACT: Stuart Romanow, Fuels and Energy
Division, Office of Mobile Sources, Environmental Protection Agency,
Washington D.C. (6406J) 202-564-9296.
SUPPLEMENTARY INFORMATION:
I. Regulatory Entities
Regulatory categories and entities potentially affected by this
action include:
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Examples of affected
Category entities
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Industry.................................. Refiners, importers,
oxygenate blenders of
reformulated gasoline.
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This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be affected by this
action. This table lists the types of entities that EPA is now aware
could be potentially affected by this action. Other types of entities
not listed in the table could also be affected. To determine whether
your entity is affected by this action, you should carefully examine
the existing provisions at 40 CFR 80.41. 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.
II. Background
Section 211(k) of the Clean Air Act requires that EPA establish
standards for reformulated gasoline (RFG) to be used in specified ozone
nonattainment areas (covered areas). The RFG requirements contain
performance standards for reductions of emissions from motor vehicles
of ozone forming volatile organic compounds and toxic pollutants.
Standards for RFG are contained in 40 CFR 80.41. Refiners and other
parties subject to the standards can choose to comply on either a per
gallon basis or to comply on average. The standards for compliance on
average (``averaged standards'') are numerically more stringent than
the per gallon standards. The averaged standards for RFG are contained
in Sec. 80.41(b). These averaged standards include a per-gallon minimum
requirement of 1.5 weight percent oxygen. This 1.5% per-gallon minimum
oxygen requirement initially applied to all refineries, importers and
blenders of RFG who elected to comply with the averaged standard for
oxygen. However, as a result of oxygen survey series failures in 1996,
EPA required that certain refineries, importers and blenders comply
with a 1.6% minimum, beginning on September 29, 1997.1 (The
survey process and the consequences of oxygen survey series failures
are described below.) The per-gallon minimum requirement is in addition
to the requirement for 2.1 weight percent oxygen, on average. The
average standard for oxygen must be met by a refiner or oxygenate
blender for all of the RFG it produced at a refinery or blending
facility, or for RFG imported by an importer, but these parties are not
required to meet this standard for the RFG supplied to each covered
area separately.
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\1\ See ``Change in Minimum Oxygen Requirement for Reformulated
Gasoline'' 62 FR 41047 (July 31, 1997).
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Any refiner, importer or oxygenate blender has the option of
meeting the RFG standards on average or per gallon. If a party is
subject to the averaged standards, then the requirement to conduct
surveys, as specified in Sec. 80.68, must be satisfied. In these
surveys, RFG samples are collected at retail gasoline
[[Page 37113]]
stations within covered areas and analyzed to determine if the RFG
supplied to each covered area meets certain survey pass/fail criteria
specified in Sec. 80.68. An oxygen survey series failure occurs in a
covered area if the annual average oxygen content for all of the
samples is less than 2.00 weight percent. The purpose of the surveys
and the tightened standards which result if a survey is failed is to
ensure that averaging over a refiner's entire production as compared to
separate averaging for each covered area does not lead to the reduced
quality of RFG in any covered area.
Since the implementation of the RFG program in 1995, these surveys
have been conducted by the RFG Survey Association, a not-for-profit
association of refiners, importers and blenders, using an EPA-approved
survey design plan as required in the regulations. By letter dated
January 30, 1998, the RFG Survey Association reported to EPA the
results of its surveys for 1997, indicating that several survey areas
failed to meet the annual average requirements of 2.00% oxygen by
weight.2 After reviewing the data EPA determined that 7
areas did fail the survey series for oxygen content.3
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\2\ Letter dated January 30, 1998 from Frank C. Lenski,
President, RFG Survey Association, to Charles Freed, Director, Fuels
and Energy Division, EPA.
\3\ Letter dated March 4, 1998 from Charles Freed, EPA, to Frank
Lenski, RFG Survey Association. Also see Memorandum dated March 20,
1998 from Stuart Romanow, Mechanical Engineer, Fuels and Energy
Division to Charles Freed.
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The following covered areas failed the oxygen survey series:
1. Baltimore, MD area [Sec. 80.70(g)].
2. Houston-Galveston-Brazoria, TX area [Sec. 80.70(h)].
3. The entire State of Rhode Island [Sec. 80.70(j)(12)].
4. The Dallas-Fort Worth, TX area comprised of [Sec. 80.70(j)(13)]:
Collin County
Dallas County
Denton County
Tarrant County
5. Norfolk-Virginia Beach-Newport News (Hampton Roads), VA area
comprised of [Sec. 80.70(j)(14)]:
Chesapeake
Hampton
James City County
Newport News
Norfolk
Poquoson
Portsmouth
Suffolk
Virginia Beach
Williamsburg
York County
6. Richmond, VA area comprised of [Sec. 80.70(j)(14)]:
Charles City County
Chesterfield County
Colonial Heights
Hanover County
Henrico County
Hopewell
Richmond
7. Washington D.C. area comprised of [Sec. 80.70(j)(2), (j)(6),
(j)(14)]:
The District of Columbia
Calvert County, MD
Charles County, MD
Frederick County, MD
Montgomery County, MD
Prince Georges County, MD
Alexandria, VA
Arlington County, VA
Fairfax, VA
Fairfax County, VA
Falls Church, VA
Loudoun County, VA
Manassas, VA
Manassas Park, VA
Prince William County, VA
Stafford County, VA
The boundaries of the covered areas are described in detail in
Sec. 80.70.
Under Sec. 80.41(o), when a covered area fails an oxygen content
survey series, the minimum oxygen content requirement for that covered
area is made more stringent by increasing the per gallon minimum oxygen
content standard for affected RFG subject to the averaging standard by
0.1%. This more stringent requirement applies beginning the year
following the year of the failure. A more stringent requirement remains
in effect for a covered area unless the area passes all oxygen content
survey series in two consecutive years. Therefore, with the exception
of the entire State of Rhode Island, the minimum per gallon oxygen
requirement for the areas listed above is increased from 1.6% to 1.7%
by weight. The minimum per gallon oxygen requirement for the entire
State of Rhode Island is increased from 1.5% to 1.6% by weight. In
addition, the minimum per gallon oxygen requirement for the
Philadelphia-Wilmington-Trenton area and the Atlantic City, NJ area
(Atlantic County and Cape May County), which failed oxygen content
survey series in 1996, remains at 1.6% by weight.
The criteria identifying the refineries, importers and oxygenate
blenders subject to adjusted standards are stated in Sec. 80.41(q). In
general, adjusted standards apply to RFG that is subject to an
averaging standard (``averaged RFG'') that is produced at a refinery or
oxygenate blending facility if any averaged RFG from that refinery or
facility supplied a failed covered area during 1996, or supplies the
covered area during any year that the more stringent standards are in
effect. The regulation provides for an exception based on certain
volume limits [see 40 CFR Sec. 80.41(q)(1)(iii)].
Thus, if a refiner has elected for a refinery to be subject to the
average oxygen standard, and if even a small portion of the RFG
produced at the refinery is used in an area subject to an oxygen
ratchet, the entire volume of RFG produced at the refinery is subject
to the more stringent oxygen standard regardless of which area receives
the RFG. This result is true regardless of whether the refinery's
gasoline was supplied to the city in question during 1997 or during a
year when the more stringent oxygen standard applies.
Under Sec. 80.41(q)(2), the applicability of adjusted standards to
imported averaged RFG is specified by the Petroleum Administration for
Defense District (PADD) in which the covered area is located and the
PADD where the gasoline is imported. The covered areas that had oxygen
survey series failures are located in PADDs I and III. Therefore, all
RFG imported at facilities located in PADDs I, II, III or IV is subject
to the adjusted oxygen standard. The states included in each PADD are
identified in Sec. 80.41(r). In addition, if any RFG imported into any
other PADD supplies any of the covered areas with oxygen survey
failures, the adjusted standard applies to that RFG, as well.
Under Sec. 80.41(q)(3), any gasoline that is transported in a
fungible manner by a pipeline, barge or vessel is considered to have
supplied each covered area that is supplied with any gasoline by that
pipeline, barge or vessel shipment unless the refiner or importer is
able to establish that the gasoline it produced or imported was
supplied only to a smaller number of covered areas.
Consider, for example, gasoline transported on the Colonial
Pipeline, which supplies RFG to several cities that failed the oxygen
survey in 1997. If a refinery's RFG was transported by the Colonial
Pipeline any time during 1997, or any time during any year when the
more stringent oxygen standard applies, the more stringent oxygen
standard applies to all RFG produced at the refinery regardless of the
market. In addition, there is a presumption that, due to fungible
mixing, each refinery's RFG that is transported by the Colonial
Pipeline is in part supplied to each city supplied by the Colonial
Pipeline. This presumption is rebuttable, but the rebuttal normally
would require a refiner to have transported its RFG in a non-fungible
manner. Thus, the more stringent standard applies to a refinery whose
gasoline is transported on the
[[Page 37114]]
Colonial Pipeline regardless of whether the refiner takes delivery of
RFG in the specific cities that failed the oxygen survey.
The adjusted oxygen standard applies to all averaged RFG produced
by a refinery or imported by an importer identified in Sec. 80.41(q).
In accordance with Sec. 80.41(p), the effective date of this change is
October 7, 1998.
Thus, under Sec. 80.41(p) the more stringent oxygen standard
applies at all points of the distribution system beginning on October
7, 1998, including terminals supplying the affected covered areas and
retail outlets in the covered areas. However, EPA believes it may be
difficult for all regulated parties to transition to the new oxygen
standard by October 7, 1998. As a result, EPA intends to enforce the
new oxygen standard in a manner that gives parties additional time.
Refiners, importers, and oxygenate blenders will be required to meet
the new oxygen standard beginning October 7, 1998. In the case of
parties other than refiners, importers, oxygenate blenders, retailers
and wholesale purchaser-consumers, (e.g., pipelines and terminals
supplying gasoline to affected covered areas) EPA will enforce the new
oxygen standard beginning December 7, 1998.4 In the case of
retail outlets and wholesale purchaser-consumer facilities located in
the affected covered areas EPA will enforce the new oxygen standard
beginning January 5, 1999. EPA has initiated a rulemaking to revise
Sec. 80.41(p) to reflect the need for additional downstream transition
time when a standard is changed.
\4\ This supersedes the timing of the enforcement of the
downstream oxygen standards discussed in ``RFG/Anti-Dumping
Questions and Answers, November 12, 1996''. See question and answer
under topic ``SURVEYS 11/12/96''.
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Dated: June 9, 1998.
Richard D. Wilson,
Acting Assistant Administrator for Air and Radiation.
Sylvia K. Lowrance,
Acting Assistant Administrator for Enforcement and Compliance
Assurance.
[FR Doc. 98-18080 Filed 7-8-98; 8:45 am]
BILLING CODE 6560-50-P
